Economic diplomacy can be understood and deployed in many ways. From the use of sanctions to discourage hostile behaviour, to investing in poorer countries to create jobs and hope and minimise the pressures to migrate.

We need fair trade for our companies to grow and create jobs for our citizens. This will also protect and finance our social model. The economic crisis has underlined our inter-dependency and the need to act together through the G20 for example to shape the emerging global economy.

So economic diplomacy is about using all the levers we have to promote our own economic interests beyond our borders. The moment to act is now and everyone in this room will have a critical role to play.

Even after the crisis, the EU is still the largest world economy. We account for a quarter of the world's GDP[1]. We therefore have real weight when we act together in a coherent way.

In addition European companies are still global leaders in many sectors. I am delighted that many business leaders were able to join us and look forward to your perspectives. You will be crucial partners in taking this forward.

As Vice President for Jobs, Growth, Investment and Competitiveness, I am working together with my colleagues in this Commission to make sure that we have the right internal policies to boost our competitiveness and ensure a sustainable and inclusive economic recovery.

We need structural reforms in all of our Member States to make product and labour markets work better. We need economic and tax policies that ensure sustainable public finances and encourage more investment.

Thanks to our close co-operation with Werner Hoyer and his team at the European Investment Bank, the Investment Plan for Europe is up-and-running, delivering more than €60 billion of additional investment already.

All this is important. But in this fast-changing world, it is not enough. We also need the right mix of external economic policies.

90% of world growth is expected to happen outside the EU in the next decade. Emerging economies are not only growing fast but moving up the value chain. How that impacts on our prosperity depends on how we, in the EU, respond.

I firmly believe that, in order to continue to grow and create jobs at home, we must engage pro-actively with the world economy. By projecting our values and interests outside our frontiers, we can try to shape globalisation so that it works for us – not against.

Using all our networks including EU Delegations we must first understand better the economic realities outside the EU: how markets and industries are evolving, the risks and opportunities of other governments' economic policies.  

Secondly we must then use these insights to shape our own policies and engagement with our partners.

Economists love to talk about 'Macro' and 'Micro' and both are equally important to deliver jobs and growth.

For me, 'Macro-Economic diplomacy' is about steering the world economy and writing the global rulebook together with our partners.

'Micro-economic diplomacy' is about helping EU companies export their products and invest abroad.

We could add a middle tier – perhaps called 'Meso-economic diplomacy' -  which is about our trade and investment partnerships with other countries and increasingly regions, such as ASEAN or Mercosur.

These are the broad objectives that I would assign to European economic diplomacy.

But now we need to be more concrete. To kick off discussion I can see four specific areas where, together, we could make a difference:

  1. First, we need to remove barriers to trade and investment. This is the cornerstone of our Common Commercial Policy, an exclusive competence of the EU for decades. But increasingly the barriers are behind the border. Our external economic action therefore needs to go beyond trade policy into regulatory policy. Convergence on new 5G telecom standards is a good example.

  2. Second, once we have the right frameworks, we need to support EU businesses that want to go abroad, so that they can sell their products, invest, and make deals in international markets. This will ensure our trade deals deliver jobs and growth back home. But global competition is tough and getting tougher. We need to work together and use all our instruments and resources to give our companies the competitive edge.

  3. Thirdly, we need to shape globalisation and strengthen the multilateral system by working with our partners to write the global economic rulebook. This will ensure that there is a level playing field that respects as much as possible our own values and interests. The EU voice in the G20 is critical in this regard.

  4. And fourth, we must attract more foreign investment into the EU. Our new European Fund for Strategic Investment (EFSI) is already working well but we have large investment gap to close. Much of the capital we need will come from outside the EU. Next week I will be in the US, meeting investors in Wall Street as well as my counterparts in Washington.

As you can see, many Commission services, the European External Action Service and other EU actors are already active in all these areas, as are Member States and European business organisations.

The Commission, for instance, is currently negotiating 27 Free Trade Agreements. We also have tools to address unfair practices, such as dumping, which harm our interests. We have a number of regulatory dialogues with third countries

Member States, for their part, organise business missions through their trade and investment promotion agencies in third countries. Many are here today. The Commission also has programmes to support EU businesses abroad. And there are many EU Chambers of Commerce in third countries to represent their interests.

At a multilateral level the Commission is active in, for example, the World Trade Organisation. Both EU and Member States representatives sit in the G20, G7 and the IMF. We meet bilaterally with other governments to coordinate macroeconomic policies, minimize risks of financial crises, create the conditions for sustainable growth, and fight distortions such as tax evasion or currency manipulation.

There is lot of good practice but I am sure we can improve. We need to ensure the best possible coordination and exchange of information, not only within the EU institutions, but also between the EU institutions and the Member States as well as with business.

Today in several sessions we will have a chance to see how things work on the ground and we want your ideas on how to make it better.

For example, Europe is a world leader in the field of civil aircraft. Member States already use high-level diplomatic events, such as bilateral summits, to close deals. We invest in public R&D and education to maintain our cutting-edge technologies. The EU promotes high air transport standards globally. And we eliminate customs duties on aircraft parts with our partners as part of our FTA negotiations. All these actions help the sector to flourish internationally.

Could this example be replicated in other sectors where EU companies are competitive such as pharmaceuticals, automobiles, industrial machines and parts, chemicals, fashion, quality food and beverages, cultural products, or renewable energies? Could we have more assertive and coordinated actions?

As another example you will discuss later today China's One Belt One Road initiative, which aims at building new infrastructure between Asia and Europe. This is Chinese economic diplomacy in action.

It aims at developing neighbouring regions of China, investing their foreign capital reserves but also at providing new business opportunities for Chinese firms.

We can cooperate with China on this initiative to ensure our own companies and Member States benefit from this major project. This is exactly our objective, following the EU-China High Level Economic and Trade Dialogue in September 2015 where China confirmed its interest in participating in the Investment Plan for Europe.

Like all diplomacy, economic diplomacy does not have to be zero-sum and I am sure we can find other good examples.

To conclude: by working together within the EU as one team to support our economy on the global stage we can make a real difference.

I am looking forward to hearing your views and ideas on this important topic today.

Thank you for your attention.

 

[1] Nominal GDP of USD 18.5 trillion in 2015 according to the IMF (or 24% of the total world GDP). US is second with USD 17.3 trillion, China third with USD 10.3 trillion, and Japan fourth with USD 4.6 trillion.