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Needless to say, Europe does not operate in a vacuum. Which requires a second pillar in our approach.
New risks are emerging as a result of increasing geopolitical tensions, uneven global economic integration, and profound technological shifts. We have learned that we are heavily dependent on critical raw materials imports from China, and until recently on fossil fuels from Russia.
We have also learned that our supply chains are vulnerable to actions by even our closest allies. Remember when in 2021, in the name of the America First principle, the Biden administration started to block access to some of the most crucial ingredients for producing vaccines: we had to weigh in with our export control mechanism to rebalance our relation and restore the vaccine supply chain across the Atlantic.
Europe is and will remain an open continent and a major destination of foreign investment, including from China.
But we need to rebalance our international relationships so they are balanced, reciprocal and mutually beneficial. De-risking our economy is a precondition to any competitiveness agenda.
It is about the resilience of our supply chains, with specific attention to risks of price surges and shortages of critical products and inputs.
It is about the physical and cyber-security of critical infrastructure such as pipelines, undersea cables, or electronic communication networks.
It is about preventing risks to technological security and leakages – through espionage, for example – that could undermine Europe’s competitive edge, but also peace and security, especially through dual-use technologies.
And it is about protecting ourselves against the now well-known risk of weaponisation of economic dependencies or economic coercion by third countries.
In short, economic security is the antonym of naivety.
To make this strategy operational, we have already identified ten areas of technologies that are critical for our economic security, especially due to their risk of civil-military fusion. Out of those ten, we considered that four were most likely to present the most sensitive and immediate risks: advanced semiconductors, artificial intelligence, quantum, biotechnologies. We are now finalising a detailed collective assessment with the Member States of the level and nature of the risks to these for technologies, in order to inform any potential measures to “promote, partner or protect” on any of these technology areas.
We need to continuously monitor our critical technologies, assess our risk exposure and – as and when necessary – take measures to preserve our strategic interests and our security. To do so, we need to strengthen our existing toolbox, and reflect on the need for additional economic security instruments. We are reflecting on ways to improve the functioning of our foreign direct investment screening and export control systems, mitigate technology leakage and increase research security, as well as whether it is time to consider any scrutiny of investments that flow out of the EU to third countries. We will present our proposals in the coming weeks.
But let me be very clear: this is not the protectionist pillar of our competitiveness agenda. On the contrary: we also need to enhance cooperation with our partners. Building economic security should be a joint project. We must engage with international partners, for example through the G7 and the Global Gateway initiative, and stakeholders, in particular with the private sector.
In this respect, I am personally particularly pleased with the progress we have made via partnerships. We already concluded nine partnerships on raw materials that will allow us to diversify supply chains, and we have concluded digital partnerships with Japan, South Korea, Singapore and Canada.
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Source: European Commission
Speaker: Thierry Breton, European Commissioner for Internal Market
Format: Speech
China Policy Research 