ECB Tells Europe: Adopt Open Strategic Trade Autonomy

In a path-breaking speech at the Macro Week hosted by the Peterson Institute for International Economics (PIIE) from April 18 to April 22, European Central Bank (ECB) President Christine Lagarde said trade policies must adjust to a “new global map.”

Photo Insert: The European Union (EU) is well-positioned to adapt to the new trading environment, with deep regional ties, common institutions, and some pooled resources.

She argued that at this critical juncture for globalization, trade policies must adjust to a "new global map" in which supply chains are becoming increasingly diverse, regionalized, and reflective of security concerns.

The twin shocks of the pandemic and war in Ukraine exposed vulnerabilities in Europe's supply chains and the European Union needs to make trade safer but not at the cost of open trade.

Europe's embrace of "open strategic autonomy" is like "friendshoring" on trade enunciated by US officials, a scheme that was devised to avoid protectionism but mitigate risks.

The European Union (EU) is well-positioned to adapt to the new trading environment, with deep regional ties, common institutions, and some pooled resources. More integration may be needed, however, she concluded.

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