EU exports are expected to fall by around 285 billion euro while imports will see a financial hole of around 240 billion euro, the EU trade commissioner has said.
Phil Hogan told the Institute of International and European Affairs (IIEA) that the EU’s export of goods and services is expected to slump by around 9.2% and while imports will drop by 8.8% after the coronavirus pandemic.
Mr Hogan said 35 million European jobs depend on exports and 16 million on foreign investment.
“In other words, one out of seven jobs is dependent on exports, and in Germany and in Ireland that figure is a remarkable one in four. This is two-thirds more than in 2000,” he said.
Concluding his remarks Commissioner @PhilHoganEU says of the #Covid19 response âWe are talking of a recovery fund of 1.5 trillion euros. Itâs not small money. The @EU_Commission will continue to play a coordinating role in the best interests of our peopleâ— IIEA (@iiea) May 6, 2020
“The choices we make in the coming months will determine not only our success in defeating the virus, but also the speed of our post-corona economic recovery.”
He said the EU cannot be self-sufficient as it has a poor stock of raw material, adding that imports are “indispensable”.
He added that lessons should be learned from the health crisis and there is a need to review the bloc’s dependencies and supply chains.
Mr Hogan told an IIEA webinar that the challenge is to reduce trade dependencies that make the EU vulnerable.
“Instead, (we need) to invest in strategic value chains and build more resilient infrastructure,” he added.
We are short of raw materials in the European Union and many people would be surprised at the extent of thatPhil Hogan
“Diversifying and solidifying supply chains is the safer and the most efficient solution allowing us to respond to all sorts of crisis situations, not just repeats of the current pandemic.
“If more countries pursue the track of self-sufficiency, it will increase competition for scarce resources, drive up prices and deepen international hostilities.
“It would be a lose-lose situation for our citizens and our economies.
“We must strengthen our armoury so that no-one can take advantage of our openness; this means being ready with robust enforcement actions so that we get what we bargained for in our trade agreements and that we protect our economy from hostile actions.
“We are short of raw materials in the European Union and many people would be surprised at the extent of that.
“The EU needs imports so it’s in our interests to be able to remain open in a global way.
Our leaders owe it to our citizens, who have sacrificed so much this year, to be brave, outward-looking & honest about choices ahead. That is the true definition of leadership in a time of crisis: @PhilHoganEU @iiea webinar on international trade in post #Covid19 recovery#FoEU27 pic.twitter.com/9ISEQWwBmi— EU Commission in Ireland (@eurireland) May 6, 2020
“We have to recognise we have vulnerabilities and we have the need for diversification – we cannot all be dependent on medical supplies from China or South Korea.
“It’s worth noting that at the start of the coronavirus there was only about 10 companies in Europe producing masks, now there is about 550 companies producing masks.
“We need a reserve and a resilient stockpile for around 90 days.”
Mr Hogan also criticised Donald Trump after he vowed to bring pharmaceutical manufacturing back to America from Ireland.
The US president referred specifically to Ireland and China in his comments, saying: “Everybody makes our drugs except us.”
Mr Hogan said these American companies do not locate in Ireland for the love of the country, but because “they can make money”.
“They save 1.7 billion euro in tariffs by the fact they are located in Ireland,” he added.
“It’s not always recognised by the US that about 60% of the products that are manufactured in places like Ireland go back to the United States for intermediate treatment and then they come back to the EU so the figures of exports are often distorted by this movement of goods coming back and forth.
“Of course, when we are discussing trade arrangements between the United States and the EU, all is fair in love and war and all comes into play, but we need to have the right basis for arguments and for figures.”