The EU’s top diplomat to the UK has said that the ‘Made in Europe’ proposal is not an example of the EU going down the protectionist track
Elsewhere in today’s (19 February) trade news, the UK steel industry has secured a major exporting contract that could change the industry’s future and China has received a warning about its export-led growth strategy from the International Monetary Fund (IMF).
'No EU protectionism'
The EU’s ambassador to the UK, Pedro Serrano, has told Global Trade Today (GTT) that the EU will not be “going into isolationism” with its ‘Made in the EU’ economic plan.
Responding to a question last night (18 February), during a lecture given at King’s College London, Serrano told GTT that the purpose of the economic plan is not to bring in protectionist policies, and that the EU would work with “trusted partners” like the UK.
As reported previously by GTT, the plans include measures meant to protect domestic industry and would include restrictions on foreign companies in procurement and direct investment.
“It’s a discussion that is ongoing within the EU,” the ambassador said. “The EU is very conscious of its own interests in keeping strong relationships with cherished partners who [we] need also.”
“We’re not going to go into isolationist economic policy… but we do need to ensure that, in certain critical areas, we have the structural capacity we need to be resilient.”
The full legislation – the Industrial Accelerator Act – will be published 25 February.
In his address, he pointed to initiatives like the Safe defence imitative and various other programmes that the UK has been invited to join.
Serrano, a longtime Spanish and EU diplomat, also said that the EU would work with “whomever was elected” by the UK public in the future, after being asked about the prospect of a Nigel Farage-led government.
During his address, he said that Brussels was working with China as both a friend and a rival, recognising it as a “power”.
“It is a partner, but it is also a competitor, and it could be a rival,” he told the room, while also acknowledging the “major shift” that had taken place within US circles since the election of US President Donald Trump.
IMF on China
“China cannot count on ever higher exports to drive durable growth in the coming years”, IMF researchers have said in a working paper on China’s economy.
The Chinese economy has been resilient, boosted by “robust exports”, as well as significant government stimulus, despite multiple economic shocks.
“Despite this resilience, the growth model of the world’s second-largest economy faces increasing challenges,” the team of economists, led by IMF mission chief for China, Sonali Jain-Chandra, said.
They pointed to a protracted property slump combining with a weak social safety net hurting domestic demand and making China reliant on exporting their products to drive growth.
Over the past few years, countries in Europe, South America and Asia have complained about the Chinese ‘dumping’ of products onto their domestic markets, with accusations that Beijing’s policy of heavy state support for its manufacturing sectors hurts other nations’ industries.
Researchers recommended that these policies of public investment and industrial strategy should be “pared back” in favour of other spending priorities, such as social spending.
IMF directors told the Chinese government that it expected growth to continue to decelerate, while warning that risks for the world’s second largest economy remained “tilted to the downside.”
British Steel win
British Steel has won a bid to produce 36,000 tonnes of rail products in a major boost for the UK industry.
According to a press release from the company, the eight-figure contract is to support a high-speed rail project between Ankara and İzmir in Türkiye.
The bid, which was supported by UK Export Finance (UKEF), will also now permit British Steel to ramp up production in the UK, less than a year after the government was forced to bail out the company and keep its two blast furnaces operational.
British Steel’s commercial director for rail, Craig Harvey, called the contract a “catalyst” for re-starting 24-7 rail manufacturing operations in the company’s Scunthorpe branch.
“We are also optimistic we can supply other steel products into this project and are working with ERG to support its future needs.”
Industry minister Chris McDonald, Labour MP for Stockton North, said: “UK-made steel is renowned for its high quality, and this order is welcome news for British Steel. Supporting deals like this is at the heart of our Steel Strategy.
“Every tonne of British made steel used in projects at home and abroad helps sustain skilled employment and reinforces its quality for the world's most ambitious engineering projects.”
Other news
- Ukrainian president, Volodymyr Zelensky, has said that mediations between Russia and Ukraine have not resolved the most contentious political issues, despite some movement on lesser topics
- Reform UK’s new business and trade spokesperson Richard Tice told Politico that his party would ditch the UK’s planned Carbon Border Adjustment Mechanism, prompting warnings from businesses about the possible impact on trade with Europe
- Peru has selected Jose Maria Balcazar as its new president, after previous leader José Jerí was removed from office by the country’s congress, following undisclosed meetings with a Chinese businessman
Yesterday in trade
- The EU launched an investigation into Chinese ecommerce firm Shein
- Japan and the US announced a wave of new bilateral projects on oil, gas and critical minerals
- UK inflation fell to 3%
You can read yesterday’s trade news here.
