Hildegard Müller: European Commission’s new trade strategy brings opportunities for German automotive industry

On February 18, 2021, the European Commission published a communication on the EU’s new trade policy. The German Association of the Automotive Industry (VDA) welcomes its clear signals concerning multilateral cooperation, free and fair world trade and sustainable growth.

“The new alignment of European trade policy can contribute greatly to a sustainable growth model consistent with European business interests by providing clear guidelines,” said VDA President Hildegard Müller.

The new strategy shows, according to Müller, that the European Commission was rightly  adding sustainability and fairness to its free trade and globalization agenda. In addition, it aimed for a “level playing field” with appropriate countermeasures permitted to tackle cases of unfair competition.

Müller continued: “However, it is important that the new alignment does not lead to protectionist measures. An impact assessment should therefore be undertaken for each measure.”

Furthermore, given the economic impacts of the corona pandemic Müller sees the Commission’s new strategy as sending out an important signal in times of global uncertainties, increasing trade disputes and growing unilateralism. The European Commission was right to emphasize that other countries would also have to take on greater obligations within the international trade rules, for example as set out in the Comprehensive Agreement on Investment reached between the EU and China.

“The new trade strategy sets priorities and provides impetus. The Commission is underscoring the topics relevant to the automotive sector, from the need to reform the WTO and sustainability in supply chains, to digitization and the protection of intellectual property, and all the way to the important regulatory dialog with key trading partners,” the VDA president explained. The strategy can have a first concrete application in rebuilding the transatlantic relationship.

The VDA therefore supported the commitment to the WTO and the will to contribute its reform. Its Appellate Body had to be made fully functional again as quickly as possible. “With a new EU trade strategy, the reform commitment from the new Director-General Ngozi Okonjo-Iweala, and the new US administration, the main framework is now in place for reforming the WTO,” Hildegard Müller said.

She added that also from a development-policy viewpoint, the VDA welcomed the measures listed in the EU’s trade strategy for continuing to expand partnerships with emerging continents and economic regions such as Africa and Asia. The VDA was actively involved in shaping these approaches and supported interregional economic cooperation in the auto industry, e.g. through partnerships with its sister associations in Africa and India.

The agreements with major trading partners such as Mercosur should also be partnerships benefiting all the members and should foster sustainable development. VDA President Hildegard Müller now wishes to see courageous and responsible progress: “Agreements that have already been negotiated should now be ratified so that Europe does not lose credibility.”