The agreed non-agreement between the three states pertains to some of the most complex machinery and most miniscule components humankind has ever produced. With their accord, the countries effectively restricted the export to China of the most advanced microchips and the tools to produce them. These items have become a focal point in international power politics because of their use in developing artificial intelligence and their centrality to many of the 21st century’s most important technologies.

As news on the matter emerged, the Dutch prime minister confined his remarks to saying: “Those talks have been going on for a long time and we’re not saying anything about it.” The reason for reticence was clear; in response to their decision, China threatened retaliation against the Netherlands and Japan.

The move followed on from measures unilaterally implemented by the US in October 2022 to restrict the trade of advanced semiconductor technologies with China for reasons of international security. And it now appears that the Dutch national measures could soon be followed by a decision by the German government to restrict the export to China of chemicals needed for chip production.

As these sorts of incidents mount amid the escalating US-China strategic technology competition, the EU and its member states will find themselves increasingly caught in the crossfire. Washington will maintain pressure on its allies to align with its China policy. China’s military build-up will continue to change the balance of power. And Beijing’s willingness and ability to weaponise trade will likely continue to grow – it will no longer be possible for the EU to keep its pursuit of free trade separate from these powerful currents. If a rules-based order is to remain, the rules will need to change to take account of the ways in which economic security forms part of this wider competition.

To steer a course according to its own interests in this new era of strategic trade controls, the EU must urgently develop its own strategy and upgrade its tools to deliver on it. If it is to promote and defend its own sovereignty, it must start to draw its own red lines in technology engagement with China and upgrade its export control policy.

Tobias Gehrke is a senior policy fellow at the European Council on Foreign Relations, based in the Berlin office. He leads ECFR’s Geoeconomics Initiative. His area of focus includes economic security, European economic strategy, and great power competition in the global economy.

Julian Ringhof is a policy fellow with the European Power programme at the European Council on Foreign Relations. His research focuses on the implications of digital and emerging technologies for international affairs, including the topics of EU digital diplomacy and EU technological sovereignty.

To read the full policy brief, please click here.

The post The Power of Control: How the EU Can Shape the New Era of Strategic Export Restrictions appeared first on WITA.

While powerful megatrends like global trade tensions, climate change, new technology innovations, and the current COVID-19 crisis impact all parts of the globe, the reality of those impacts – and therefore the necessary responses to them – are inherently driven by unique regional characteristics and the regional enabling environments. The Global Network of Advanced Manufacturing Hubs (AMHUBs) connects regional manufacturing ecosystems to help rapidly transform manufacturing to keep pace with the global megatrends that might otherwise create disruptions for manufacturers around the globe.

The post The Impact of COVID-19 on the Future of Advanced Manufacturing and Production: Insights from the World Economic Forum’s Global Network of Advanced Manufacturing Hubs appeared first on WITA.

Some recent PTAs contain ambitious provisions to reduce regulatory barriers in digital trade and facilitate cross-border data flows. However, most PTAs fail to holistically support the five pillars of digital trade integration, and are particularly deficient in supporting digital development and inclusion, incorporating adequate digital trade facilitation measures, and facilitating meaningful international regulatory cooperation. This paper provides various policy recommendations to address such deficiencies. This paper also contains a case study of digital trade integration in the Association of Southeast Asian Nations (ASEAN). It argues that the ASEAN framework currently functions as a weak form of digital trade integration, focusing mainly on political goodwill and high-level cooperation. Although the ASEAN Members are committed to enhancing regulatory cooperation and strengthening their institutions on electronic commerce, the development asymmetry coupled with the conflicting policy preferences of ASEAN Members remains a key obstacle.

Andrew D. Mitchell and Neha Mishra (2020), “Digital Trade Integration In Preferential Trade Agreements”, ARTNeT Working Paper Series, No. 191, May 2020, Bangkok, ESCAP.

Available at http://artnet.unescap.org 

The post Digital Trade Integration In Preferential Trade Agreements appeared first on WITA.