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Hello from Brussels. Belgium goes on lockdown today, the radical French version rather than the extreme Italian version. Non-essential shops are shut and we’ve all been told to work from home, but we’re allowed to go for walks (even jogging, in moderation). Our favourite restriction: hairdressers can open, but only for one customer at a time. Look for longer styles to be all the rage in Belgium this year. Meanwhile, to general scepticism, the UK government is haplessly insisting in public it won’t apply for an extension to the Brexit talks even though they have been closed down by coronavirus.
Today’s main piece is on how its rickety internal construction makes the EU an unconvincing leader of the multilateral trading system at times of crisis like these. Today’s person in the news is Zhao Lijian, spokesman for the Chinese foreign ministry, while our chart of the day looks at EU imports likely to be affected by the US travel ban.
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For Europe, it’s always all about EU
For a bloc that makes such a big deal out of its commitment to co-operation, unity and the multilateralist spirit, the EU certainly can look slow and selfish in a crisis to outsiders. The Serbian president Aleksandar Vucic said as much on Sunday, calling European solidarity “a fairytale on paper” after being unable to import equipment from the EU to combat the coronavirus. Instead, he said, Serbia would turn to China for medical kit and doctors.
Serbia is already politically close to Beijing and has received Chinese financing and infrastructure. But still, the EU has given Vucic some strong material to work with. For a region at the centre of the global pandemic, its response in terms of trade and travel has been, let’s say, less than coherent. It has spent a week thrashing about as member states have disjointedly and contentiously put export restrictions on medical equipment and closed borders to goods and people. On Sunday the member states gave themselves the power collectively to impose restrictions on exports of protective gear from the EU as a whole, not just individual countries.
Meanwhile, it has made few efforts to rally global multilateral support to keep open trade in medical devices or other necessities. Global Trade Alert, the monitoring service of restrictive practices worldwide — maintained by the redoubtable Simon Evenett at the University of St Gallen — notes that export bans for drugs and medical goods are common and spreading. The EU itself has been threatened by a ban on exports of paracetamol and other basic meds from India, one of the world’s major producers.
Some of the reasons for this are fairly straightforward, if not always well recognised outside the bloc. The European Commission doesn’t have much centralised authority over many of the issues involved, such as health systems. Often all it can do is get out of the way, for example by relaxing rules on state aid, which it has done, or generally exhorting member states to co-operate.
But there’s also a less obvious motive. The EU adopted the collective ability to restrict exports outside the bloc this week because it was keen to keep trade in face masks and other equipment flowing between the member states. The commission threatened Berlin with infringement proceedings if it didn’t relax its ban on mask exports to Italy. But to prevent uproar in Germany, it had to reassure Berlin that the masks wouldn’t leak out of the EU. To get member countries to think like Europeans rather than nation-states, they had to stop them thinking like global citizens.
Aleksandar Vucic, Serbia’s president, has described European solidarity as ‘a fairytale on paper’ after being unable to import equipment from the EU to combat coronavirus © Darko Vojinovic/AP
Defenders of the EU’s response — see this thread on Twitter — note that the capacity to do export restrictions is not the same as an outright ban. The ability to block exports can be calibrated to the supply of equipment within the EU and indeed worldwide. If the EU’s procurement efforts to increase production work, it might relax its external stance: the export restrictions are currently authorised for six weeks. But there’s no doubt that the global dimension has weighed little in the EU debate so far.
Brussels often likes to portray internal and external integration as complements, the EU building open markets at home and then exporting the approach to the world. In fact they are often substitutes: a single market becoming a walled garden, as the UK has slowly been discovering in the Brexit talks. Another example: migration. The EU instinctively backing Greece’s thuggish response to the recent increase in refugees from Turkey reflected a concern that a surge in migration would threaten free movement within the EU and particularly the Schengen area (in the event, the coronavirus has achieved what the refugees couldn’t).
What does this mean? Unfortunately, that the EU will mainly be looking inward in the response to the crisis rather than leading a drive to keep trade open. That’s not helpful, given that the US and China are in a voluble blame game. Some governments like Japan’s have been successful against the virus at home and are helping abroad, but they aren’t big enough to fill the global governance gap.
The EU is a highly integrated market in goods, people and even services. But it is also a fragile one with a lot of pan-regional policy wiring missing. Will it get better at co-operating to protect its own citizens? Probably, yes. Will it become a global leader in keeping markets open to help combat coronavirus? Not for a while, if at all.
Charted waters
With travel bans from Europe now in place in the US, imports could also be affected as air freight is expected to be limited by the loss of belly-hold cargo capacity from passenger airlines. Pharmaceuticals, electronics and luxury goods are the sectors most dependent on air freight from the EU to the US.
Person in the news
Zhao Lijian, new spokesman for China’s foreign ministry, said in a tweet that the US army might have brought the coronavirus to Wuhan in the first place © Andy Wong/AP
Who is it?
Zhao Lijian, the new spokesman for the Chinese foreign ministry.
Why are they in the news?
He’s on a bit of a roll when it comes to public relations controversies in the past few days. Firstly he tweeted that the US army might have brought the coronavirus to Wuhan in the first place. That prompted Donald Trump to (equally unhelpfully) label it the “Chinese virus”, a move that drew criticism from the World Health Organization. Then on Tuesday the foreign ministry revoked the press credentials of US journalists at key media organisations, after the US effectively expelled 60 Chinese journalists this month. Suffice to say that relations between the two nations are somewhat tense, which does not bode well for any phase-two trade talks in the future.
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Tokyo talk
The best trade stories from the Nikkei Asian Review
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