This decline was the first decline in EU domestic trade in a decade, unless you count the COVID-19 pandemic period, notes Financial Times.
The British publication emphasizes the fact that trade between EU countries is declining despite efforts to reset the single market in the face of economic threats from the United States and China. This is reflected in the European Commission’s draft annual report on the EU single market. The document is due to be published later this month and is subject to change, the newspaper said.
The report notes improvements in some areas of trade within the union, such as the recognition of professional qualifications at the EU level and the introduction of digital technologies, but in others there is a “clear deterioration,” the Financial Times writes. In particular, the share of EU foreign direct investment has fallen by 22% over the past five years, the report said. It emphasizes that “fragmented” national legal regulations “continue to make it more difficult and expensive to set up and manage companies across the EU, with no progress to date.”
According to BusinessEurope, external markets are becoming more attractive than domestic markets for European manufacturers.
Improving the integration of the single market is at the heart of the EU’s efforts to improve the EU economy in the face of the imposition of U.S. tariffs and competition from Asian producers with lower energy and employment costs than European companies.
Last year, European Commission chief Ursula von der Leyen promised to present a roadmap for completing the single market in the EU by 2028. Preparation of this strategy is expected to be finalized by September, writes FT.
The Financial Times article said that the European Central Bank estimates that the hidden costs of intra-EU trade are equivalent to a 65 percent tariff on goods and a 100 percent tariff on services.
