Europe in 2025
Well-embedded and respected in global markets
Europe should remain a respected international economic partner, flourishing in an open and dynamic global economy based on the World Trade Organisation’s rules-based multilateral trading system. This system should be supported by other multilateral agreements and structures that enable the free cross-border flow of all goods, services, capital, key personnel and knowledge. Completion of the Doha Development Agenda has the potential to re-energise open trade, enabling companies from around the world to fully participate in a dynamic global market, and creating the basis for more effective global economic governance. This economic governance should include more effective global rules for financial markets, a new regime for foreign direct investment (FDI) and further efforts at the global level to protect all forms of intellectual property.
“By 2025 the ‘spaghetti bowl’ of preferential trade agreements should be converted into a global zero-tariff regime.”
Following a period where the EU strove to conclude bilateral free trade agreements with a number of emerging economies, by 2025 all major economies should refocus on multilateralism and converting the ‘spaghetti bowl’ of preferential trade agreements into a global zero-tariff regime under the umbrella of the WTO. This will support effective dispute resolution, while allowing negotiation of multilateral disciplines in important new fields, including services, to stimulate trade and investment growth.
The EU itself should go further. The attractiveness of its tariff-free, dynamic and completed Single Market, including in financial, digital and other services as well as energy, should enable it to negotiate non-tariff barrier agreements with the world’s most dynamic economies and regional trading blocs. These agreements should, amongst others, cover technical barriers to trade, competition, investment and public procurement. Such agreements would ensure that European companies are able to capitalise fully on global market opportunities, so that 2025 could see a continuing increase in both the absolute volume and global share of EU imports and exports.
Europe’s strong performance as a trading region and its powerful Single Market should maintain attractiveness to foreign investors and Europe must aim to sustain its share in both inflows and outflows of global foreign direct investment (FDI). The Euro should be one of the major global currencies, increasing exchange rate stability – thus reducing companies’ vulnerability to sudden exchange rate movements – and setting an example for common currencies that are likely to be created in other regions of the world.
“Deeper economic cooperation will ensure stability and prosperity across the entire European continent.”
Europe’s ability to reaffirm its position as a major player in the global economy would be reinforced by the further strengthening of competition within the Single Market and the successful integration of countries that have completed negotiations to join the EU and thus carried out the reforms required to integrate successfully with the EU. Deeper economic cooperation with the countries surrounding the enlarged EU will play a key role in ensuring stability and prosperity across the entire European continent.