Opinion of the European Economic and Social Committee – Competitiveness and economic security – how should EU trade policy contribute to the objectives of the Draghi report? (exploratory opinion)
Date: 2025-03-26
Institutions: European Economic and Social Committee
Subjects: EU energy policy, EU growth strategy, European security, clean technology, competition policy, competitiveness, digital transformation, economic development, market access, sustainable development








C_202502962EN.000101.fmx.xml












Official Journal of the European Union


EN
C series













C/2025/2962


16.6.2025






Opinion of the European Economic and Social Committee

Competitiveness and economic security – how should EU trade policy contribute to the objectives of the Draghi report?


(exploratory opinion)

(C/2025/2962)


Rapporteur: 
Georgi STOEV






Advisor


Arnaldo ABRUZZINI




Plenary Assembly decision


24.10.2024




Legal basis


Article 304 of the Treaty on the Functioning of the European Union




Section responsible


Section for External Relations




Adopted in section


10.3.2025




Adopted at plenary session


26.3.2025




Plenary session No


595




Outcome of vote
(for/against/abstentions)


157/0/0




1.   Conclusions and recommendations









1.1.


Within the framework of European Union (EU) trade policy, the intertwining of competitiveness and economic security has gained significant attention in recent years. With the global economic landscape constantly evolving, the EU is facing the imperative of crafting strategies that not only bolster its competitive edge but also safeguard its economic security. Member States should address policy issues affecting competitiveness in the fields of research and innovation, the business environment and labour market, energy and resource efficiency, and skills and training.












1.2.


The EESC believes that if trade is to make an effective contribution to the objectives of the Draghi report, trade policy must be closely coordinated with industrial policy and European economic security policy, with sustainability being one of its drivers. This requires a common European foreign policy and security strategy, one of the main components of which is a foreign economic and trade policy.












1.3.


The EESC points out that the main objectives of this policy coordination should be in line with an integrated concept of open, sustainable and assertive trade policy, aimed at: a) securing the supply of critical raw materials and sustainability of supply chains in general; b) enabling Europe to be competitive and produce using the most advanced technologies and to lead just and sustainable ecological and digital transitions; and c) contributing to a significant reduction in energy prices – a major factor in the loss of competitiveness of the European economy.












1.4.


The EESC believes that, in view of the current circumstances, which are evolving day by day, there is a need for unified action, and potentially for a response at EU level; this will require strong leadership, including making use of existing trade-defence tools if tariffs are imposed illegally, including retaliatory tariffs, economic diplomacy action, and WTO challenges. Trade diversification is also strongly recommended.












1.5.


In the EESC’s view, the enforcement of EU standards in trade should be adapted to enable trade to shield EU citizens and their interests. Thus, EU standards should not be confused with protectionism, as they are in place to safeguard our principles, manufacturers, and consumers. To ensure that EU trade standards remain effective in protecting the wider interests of the EU, civil society must have a role in the negotiation procedures. The structured participation of civil society organisations in the form of consultations during negotiations would provide an opportunity to highlight certain critical issues regarding the impact of agreements before they are approved. The negotiation procedures for and follow up to EU free trade agreements should be updated. We need to speed up the entire process, increasing credibility and making it more appealing for foreign partners to sit at a negotiation table that will deliver substantive results in an acceptable time.












1.6.


At this stage, security and lower prices for imports of critical raw materials and energy could be facilitated by a common European procurement policy. The EESC recommends developing public procurement with an SME angle and active participation at regional level to enable them to draw on other markets abroad. The EESC has proposed the establishment of a EU Investment Fund for Economic Resilience and Sustainable Competitiveness (1) to help strengthen the financial capacity of the EU and the EIB’s lending capacity for supporting InvestEU programmes. The completion of the Banking Union and the Capital Markets Union would facilitate the transfer of private capital into investment at a significantly higher rate.












1.7.


The EESC is aware that EU Member States should close the productivity and competitiveness gaps with the economies of China and the USA in order to promote an environmentally friendly and socially sustainable model for economic development.












1.8.


Measures in favour of European industry should focus on productive innovation systems, by attracting investment and retaining top talent, and supporting common European programmes and European enterprises, in particular SMEs; most importantly, though, EU trade policy should focus on eliminating bureaucratic burdens and ensuring competitive access to energy resources and critical raw materials.












1.9.


Trade liberalisation and technological exchange can spur innovation and economic growth. Integrating financial markets can enhance the European capital market to mobilise private capital and ensure a solid banking sector that provides competitive access to finance.












1.10.


The Cross Border Adjustment Mechanism should be extended to all products and services along with strong support to develop trade on a multilateral basis and in line with WTO standards. Nevertheless, recognising the difficulties that multilateralism is facing in the global geopolitical scenario, a network of bilateral agreements with international partners based on common principles and standards could be a practical solution.












1.11.


The EESC recommends targeting new markets in Asia, Africa and Latin America, investing in strategic supply chains, innovations and alternative raw materials, strengthening the EU single market and adapting to geopolitical shifts. Building an SME-friendly AI ecosystem in the EU can help to: a) ensure access to data; b) boost resilience against cognitive and hybrid threats in a world shaped by technological competition, economic weaponisation and the blurring of economy and security; and c) lower entry barriers for SMEs to adopt AI technologies and foster SME-led innovation in strategic sectors such as defence.




2.   Introduction and Background









2.1.


In a changing world with new challenges, the European Union is focused on staying competitive and prosperous. This is why Mario Draghi was tasked by the European Commission to prepare a report on his vision on the future of European competitiveness.












2.2.


The report looks at the challenges faced by the industry and companies in the single market. The findings of the report will contribute to the Commission’s work on a new plan for Europe’s sustainable prosperity and competitiveness, and to the development of the new Clean Industrial Deal for competitive industries and quality jobs, which will be presented in the first 100 days of the new Commission mandate. Today, Europe stands united in its pursuit of inclusive economic growth, focusing on:






—


sustainable competitiveness










—


economic security










—


open strategic autonomy










—


fair competition





They all serve as pillars of prosperity, though additional questions arise about how to defend them.












2.3.


This exploratory opinion requested by the European Parliament’s Committee on International Trade (INTA) reveals how EU trade policy can be leveraged to achieve certain objectives outlined in the Draghi report by focusing on the interplay between trade, economic growth, digital transformation, environmental sustainability, and social equity. The other way to deal with geopolitical risks and the current deteriorating international political situation is, in the EESC’s view, to strengthen the EU, its economic and trade policies, the development and funding of programmes that provide common European goods and its level of economic and political integration.












2.4.


In the EESC’s view, the Draghi report provides a guide to the policies and decisions that need to be taken for the EU to close the productivity, innovation and competitiveness gaps with the economies of China and the USA and, especially after the recent declaration of the new American President on the tariffs and duties, how to promote an environmentally and socially sustainable model of competitiveness.












2.5.


The EESC is aware that achieving the objectives of the Draghi report requires a huge investment effort, mobilising public and private, national and European capital through all existing instruments. At EU level, the EESC has proposed the creation of an EU Investment Fund for Economic Resilience and Sustainable Competitiveness (2). In order to contribute to the investment process in European common goods, the EU needs to strengthen its financing capacity by increasing its own resources and, if necessary, by issuing new European common debt. The financing of the major investment effort, at European and national level, must be supported by strengthening the EIB’s lending capacity and its InvestEU-type programmes. The completion, without further delays, of the Banking Union and the Capital Markets Union would facilitate the transfer of Europe’s private savings into investment at a significantly higher rate than is currently the case.




3.   General Comments









3.1.



European trade policy plays a central role in shaping the continent’s economic future. In Mario Draghi’s comprehensive report, which focuses on achieving economic growth, stability, digital transformation, environmental sustainability and social equity, trade policy is highlighted as an essential tool to realise these goals. The EU’s trade policy not only influences global economic interactions but also defines the internal growth strategies. By ensuring efficient market access, enhancing innovation, fostering environmental sustainability and promoting social equity, the EU can position itself as a global leader in a rapidly transforming world economy. These pillars not only form the foundation of the EU’s competitiveness strategy but should also shape its external trade policies.












3.2.


In addition, the report acknowledges trade policy as being fundamental to combining decarbonisation with competitiveness, securing supply chains, growing new markets and offsetting state-sponsored competition. In times of global competition, it is essential that trade policy is well coordinated with other EU policies and priorities, in particular industrial policy, in order to strike the right balance between the latter and an open, sustainable and assertive trade policy. It must not only guarantee a level playing field, where trading partners are systematically not playing by the rules, but also to open new doors for European companies in the world’s top growth centres, considering our raw material dependencies and the fact that most of global growth will be coming from outside the EU in the coming years. However, market opening is not an end in itself and should not be the only objective pursued by EU trade policy. The WTO’s own founding agreement states ‘to use trade as a means to raise living standards, create jobs, and promote sustainable development’.












3.3.


The report rightly underlines the need for Europe to strengthen multilateral rules and make them fit for purpose, with the explicit mention of the needed WTO reform and the reform of dispute settlement, especially considering the new circumstances surrounding its own role. It emphasises sectoral polices, which include energy-intensive sectors, critical raw materials, the broadband network, computing and AI, and semiconductors as well as horizontal policies, which include innovation, skills, investments, EU governance, trade and the single market.












3.4.


Further recognition should be given to the importance of growing new markets and the importance of Europe’s network of trade agreements for supplying key inputs and raw materials and giving companies the ability to grow in foreign markets. A strategic and open trade policy for European competitiveness is of vital importance for European business, labour and consumer organisations.












3.5.


Trade policy is a key driver of economic growth by fostering a more open and integrated global economy. Through carefully crafted agreements, the EU can reduce trade barriers, open new markets and support sectors with high growth potential, while helping to raise global standards.




4.   Specific Comments









4.1.



Reducing Trade Barriers: The EU’s trade policy emphasises the importance of reducing tariffs, quotas and administrative and bureaucratic barriers to trade. This encourages more efficient global supply chains and enhances the competitiveness of European companies. The EESC believes that attracting foreign direct investment (FDI) should become a priority; enhanced coordination is needed for the EU’s FDI decisions. This principle comes directly from the Draghi report and is a concrete example of how EU Member States can (and should) enhance their internal coordination mechanisms as a means of protecting their trade policies. This could also help EU trade policies strike a more assertive tone and signal the intention to jointly protect strategic sectors.












4.2.



Enhancing Market Access: Trade agreements are vital in providing European businesses access to emerging markets, thus promoting exports and boosting local development. The EU has been proactive in including trade and sustainable development (TSD) chapters in its trade agreements and the EESC welcomed the Commission’s new TSD benchmark in 2022 (3). Environmental clauses focus on promoting clean energy, reducing emissions and encouraging sustainable agriculture and production methods. Comprehensive security includes several dimensions: health and environmental security, civil and societal preparedness, defence and high technological capacity, productive innovation systems, and a strong industrial base. The EU’s trade agreements often include provisions on intellectual property protection, technology transfer and access to advanced markets, which foster innovation and make European industries more competitive.












4.3.



Digital Transition is central to the EU’s future prosperity, with trade policies designed to harness the potential of digital trade. By encouraging digital trade, which is becoming increasingly important, the EU’s trade policies aim to break down digital barriers, such as inconsistent regulations, enabling a seamless flow of digital goods and services across borders. The EU has strict data protection regulations, such as the General Data Protection Regulation (GDPR), which must be incorporated into its trade agreements. Ensuring data privacy is a crucial aspect of fostering trust in digital trade.












4.4.



Supporting Technology Transfer: The EU supports the global transfer of technology, particularly to developing countries, by including provisions in its trade agreements that facilitate the sharing of technological innovations and knowledge.












4.5.



Environmental Sustainability: As part of its broader environmental goals, the EU’s trade policy incorporates green initiatives to ensure that trade not only contributes to economic growth but also promotes sustainable practices. The EU is committed to promoting sustainable practices in trade agreements, including policies aimed at supporting the circular economy, reducing resource consumption and tackling waste and pollution. The EU is exploring carbon border adjustment mechanisms to prevent carbon leakage, to ensure that its climate policies are not undermined by cheaper, less environmentally friendly imports, and to secure a low-carbon energy supply.












4.6.



Social Equality and Fair-Trade Practices: The EU’s trade policy is also closely aligned with its social fairness goals. It aims to ensure that trade policies benefit all segments of society and do not exacerbate existing inequalities. The EU’s trade agreements emphasise fair trade practices, ensuring that both the EU and partner countries respect, implement and enforce international labour, environmental and social standards and protections.












4.7.


The EU insists on the inclusion of labour rights protections in its trade agreements, aiming to prevent exploitation and promote decent working conditions globally. These efforts can increase labour market participation, facilitate labour mobility and support training activities. Trade policies can play a role in reducing income inequality by supporting sectors that provide high-paying jobs, investing in education and training, and ensuring that the benefits of trade are more evenly distributed across regions and populations. All of this can contribute to the development of an EU strategy aimed at preventing brain drain from Member States. Supporting technology start-ups and scale-ups will contribute to the growth of innovative technologies, and the resulting high technological capacity can facilitate the adoption of advanced technology and help develop the single market for data.












4.8.


If the EU wants to lead in the area of economic security and competitiveness through its trade policy, it should focus on the following principles to strike a balance between an open and assertive trade policy. Through collaboration and mutual understanding, Europe can lead the way in global sustainability without compromising the principles of free and fair trade. To achieve this, a bold new finance plan on sustainability/climate should be considered, which should have both internal and external aspects/consequences. The external part should focus on financing third countries (developing countries) where the EU wants to boost its trade and reduce the climate impact of the target country. The financing should come with the condition of importing green technologies and goods from the EU. This would have the effect of supporting sustainability abroad, improving the overall global climate footprint, increasing exports of EU products, and potentially influencing these third countries to adopt sustainability rules similar to the EU’s. We can strengthen our industrial base and make the EU more investment friendly by:






—


implementing our REPowerEU Plan to secure our energy supplies and reduce our dependence on oil and gas imports;










—


developing the Green Deal Industrial Plan to enhance the competitiveness of Europe’s net-zero industry;










—


building a European Health Union where medical supplies are available, affordable and innovative. The five-point plan for a more competitive Europe aims at ensuring that we can continue to deliver high levels of prosperity for all people in the EU and that we are placing competitiveness at the heart of our economic agenda for 2025 and beyond.










Brussels, 26 March 2025.


The President


of the European Economic and Social Committee

Oliver RÖPKE
               





(1)  
            OJ C, C/2024/6862, 28.11.2024, ELI: http://data.europa.eu/eli/C/2024/6862/oj.

(2)  
            OJ C, C/2024/6862, 28.11.2024, ELI: http://data.europa.eu/eli/C/2024/6862/oj.

(3)  
            
OJ C 140, 21.4.2023, p. 69.


ELI: http://data.europa.eu/eli/C/2025/2962/oj
ISSN 1977-091X (electronic edition)