Diversification: the Commission’s solution to “dangerous” dependencies from third countries

When dealing with “dangerous” dependencies from third countries, the European Commission’s solution is a simple one: diversify. This was the key message from Maria Martin-Prat’s In Conversation With at Friends of Europe, where the European Commission Deputy Director-General for Trade (DG TRADE) also emphasised the impossibility of “cancelling China out”. “China is a very complicated partner and a very important partner for the European Union. There are certain dependencies we have with China which we want to address by diversification”, said Martin-Prat.

Describing an economic model based on efficiency that shifted to an economic model based on resilience, the Deputy Director-General at DG TRADE explained the implications of such a shift: “What you will see is an attempt to maintain the openness in our economy while, at the same time, trying to ensure that we avoid dependencies that could be dangerous. For the first time, you have to engage as well into risk assessment if you have dependencies with certain territories who could use those dependencies as a weapon.”

“What you do as well is diversify. You reach out to more countries”, explained Martin-Prat, naming countries such as New Zealand, Chile, Mexico, Australia, Thailand, Malaysia, Philippines and Indonesia. However, emphasised Martin-Prat, there are a number of objectives that must be defended by the Commission. “What are those objectives? A level-playing field is absolutely necessary.”

Addressing the “China question”, the Deputy Director-General at DG TRADE ruled out cancelling trade with China, pointing out that “we trade 2.3 bn goods with China per day […] We have an interest in engaging with China precisely because [it has a population of] 1.4bn people and it is the second economy in the world. You don’t want a world that cancels China out. In any event, it is not a possibility.

“The world would be a very insecure place if we were to trade only with those who are like us. Actually, we would be trading with very few. If we were to have problems with political systems, we should have them across the board.”