Transcript Globalisation

Meeting the New Challenges
for the Single Market
Juan Delgado
29 November 2007
Bruegel – www.bruegel.org

A European think tank
– Created in 2004, started operations in 2005
– Based in Brussels
– Supported by Members = EU Governments + International Companies
– Independent, nonpartisan, research-based, policy-oriented (focus on
economic policy)
– Outward-looking perspective: a global perspective on European issues,
a European perspective on global issues

Bruegel’s aim
– "contribute to the quality of economic policymaking in Europe through
open, fact-based and policy-relevant research, analysis and
discussion"
16 State Members
Austria Ireland
Belgium Italy
Cyprus Luxembourg
Denmark Netherlands
Finland Poland
France Slovenia
Germany Spain
Hungary UK
83 % of EU Population
92 % of EU GDP
+ open to all others!
28 Corporate Members
Challenges of the Internal Market
1. Competition, market entry and EXIT
2. Globalisation
3. Innovation-driven economy
4. Services economy
1. Competition, market entry and EXIT

Enhance competition

Facilitate market entry

And if things go wrong…….
1. Competition, market entry and EXIT

Enhance competition
– Antitrust and merger policies
– Liberalisation policies

Facilitate market entry
– Emphasis in domestic reforms
– Remove economic-based restrictions

And if things go wrong…….
– Simplify exit regulation
– State aid policies not aimed to protect ailing industries
2. Globalisation

Delocalisation of production processes

Globalisation of capital markets
2. Globalisation: Delocalised production
processes
The Travels of a T-Shirt in the Global Economy, by Pietra Rivoli
2. Globalisation: Delocalised production
processes

Offshoring and outsourcing
– New patterns of trade
– New industry geography
 Suffering from globalisation or taking advantage of it?
Globalisation: Do EU firms meet the challenge?
Exports are concentrated in very few hands
Source: The Happy Few: The internationalisation of European firms. By T. Mayer and G.I.P. Ottaviano. Bruegel Blueprint 3/2007
Globalisation: Do EU firms meet the challenge?
The situation has not evolved in the last few years
Source: The Happy Few: The internationalisation of European firms. By T. Mayer and G.I.P. Ottaviano. Bruegel Blueprint 3/2007
Globalisation: Do EU firms meet the challenge?
Exporters are more productive than domestic firms and
FDI-makers even more productive
Belgian FDI-makers are more productive than Belgian exporters
Source: The Happy Few: The internationalisation of European firms. By T. Mayer and G.I.P. Ottaviano. Bruegel Blueprint 3/2007
3. Innovation-driven economy
1. Productivity growth is driven by innovation
2. Innovation policies

Competition and innovation

Intellectual property and patent policies
4. Services economy
Services directive is a good start but……
how do we implement it?
Services is not a “sector”
One-size suit does not fit all services and all countries
5. Services: Benefits from trade
All services are not equally tradable nor have the same economic
importance. Regulation should focus on domestic reforms or
reforms “at the border” depending on the nature of the service.
High
Retail trade
Whosale
Business and
Trade
professional
Health
services
services
Integration
not feasible
Financial services
Value added
Media
Water
Low economic
supply
importance
Low
Low
Source: Bruegel
High
Tradability
Concluding remarks

Prioritising: First, screening and then monitoring
– Searching for market imperfections with large direct/indirect impact

Taylor-made solutions (in addition to general rules)
– Barriers to entry/trade are increasingly sector/country specific

Implementing general rules: Implementation toolkits
– What are the tests a regulation should pass to comply with the internal
market rules?

Make markets work rather than regulate market
outcomes/structures
– Sustainable solutions instead of temporary solutions

“Internal market policies” not isolated from other policies
– What are the tests other policies should pass to comply with the internal
market rules?
Thank You For Your Attention
Juan Delgado
+32 2 227 4285, [email protected]
Rue de la Charité 33, B-1210 Brussels
www.bruegel.org