Increased uncertainties in global politics have accelerated the debate on the EU’s strategic autonomy, EU’s ability to act independently in crucial sectors, and its’ capacity to disentangle itself from structural supply dependencies. Päivi Wood, Chief Policy Adviser, and Karoliina Rasi, Senior Adviser from the Confederation of Finnish Industries’ Brussels Office bring forth views on this current phenomenon in the EU.
The COVID-19 crisis and Russia’s attack on Ukraine exposed the vulnerabilities of global supply chains and Europe’s dependency on oil and gas from outside-EU sources. These events have led to greater emphasis on strengthening Europe’s strategic autonomy. Although the concept of strategic autonomy was initially focused on military/defense capabilities, the concept has now expanded to encompass decoupling dependencies in the fields of defense, trade, industry, digital, economic, and monetary, as well as health policy.
Protectionism in disguise or Realpolitik?
The idea of strategic autonomy materializes in a series of European Commission’s initiatives, such as more aggressive trade defense measures like a carbon border adjustment mechanism for imports with high emissions and a mechanism to monitor recipients of foreign state aid. The Commission aims to establish EU’s independence from single-country supplies, ranging from pharmaceutical ingredients to raw materials for batteries.
To achieve this, the recently proposed regulation on critical raw materials aims to secure access to these materials within the EU, thus promoting its’ strategic autonomy and reducing its’ reliance on third countries. The proposal acknowledges the EU’s dependence on raw materials from China but refrains from explicitly naming the country. The Commission has set targets such as purchasing only 65% of its annual consumption of critical raw materials and rare earths from a single third country by 2030.
Discussions on strategic autonomy have largely focused on semantics, with political differences arising between various countries. Small Member States have expressed skepticism about the concept, seeing it as a threat to European openness, while France and Germany, who introduced the idea, see it as an opportunity to promote European industry and support large “champion companies” that are more competitive on a global scale.
On the one hand, the idea is attractive – it aims to give other global players (China and the US) a taste of their own medicine, for example by providing state aid to selected large companies and ignoring trade policy rules. However, the EU’s efforts to promote strategic autonomy may also result in others becoming more independent from the EU. This reduces their need to cooperate with the EU, and small Member States may be sidelined by big Member States. To maintain European unity, larger Member States must avoid acting alone on the global stage. The big question is how the EU can promote its own interests instead of those of individual large member states.
Is Europe turning inwards?
The European Union is pursuing strategic autonomy and self-sufficiency across multiple sectors and levels simultaneously. Traditionally, the EU has emphasized free trade with minimal government intervention in markets, and level playing field on the single market. However, in today’s rapidly changing world, these principles alone are no longer enough to ensure strategic autonomy. The global order has shifted dramatically, and the EU can no longer rely on the liberal international order it has promoted since its’ early creation. In this old world, there was no need for autonomy.
However, the endevours for strategic autonomy should not mean that acting alone will be the ultimate goal of the Union. Instead, strategic autonomy should be a tool for the EU to secure its’ future by mitigating vulnerabilities and minimizing unhealthy dependencies.
The European Union has traditionally renewed through crises. Currently, we are witnessing intense global competition over the technological and economical leadership. The question is: what are the new rules for international trade, and what is the role of Finland in helping to shape the new European landscape?