POLICY BRIEF – No. 08/2024 - Trading Up: - An EU Trade Policy for Better Market

In the past five years, the EU has established several trade17 and digital18 - including the Carbon Border Adjustment Mechanism and the Artificial Intelligence Act – barriers that are likely to raise import costs and potentially drive a wedge between the EU and the global economy. [...] The parallel development is that China’s exports in the two sectors (and China has a much larger share of the global market than both the EU and the US) to the EU and the US would decline. [...] TABLE 2: ECONOMIC EFFECTS OF EU-US MRA ON CONFORMITY ASSESSMENT EQUAL TO A 2 AND 6 PERCENT REDUCTION IN TRADE COSTS, PERCENTAGE CHANGE Change in exports (%) – 2% reduction Change in exports (%) – 6% reduction EU exports to US exports to China exports EU exports to US exports to China exports the US the EU to the EU and the US the EU to the EU and the US the US Machinery 11 14 -3 34 41 -10 Electric. [...] The objective of an adequacy decision is to level the playing field in the processing of personal data between the EU and its trading partner, regardless of whether the processing takes place in the EU.33 Bridging between regulatory models is an effective way to reduce trade costs and administrative barriers. [...] The TTC also addressed the critical issue of access to raw materials crucial for digital and environmental technologies.35 Generally, the initiative aimed to focus on the important intersection of trade policy and rules, on the one hand, and fast-paced technological change, on the other hand.