#BlueStarBrief July 2020

European Union Update

EU Cracks Down on Foreign Subsidies

At a moment when the European Union is doubling down on efforts to reach a global level playing field on trade, the EU signals its intention to ensure fair competition between European companies and foreign subsidized companies.

Click here to read.


EU Lifts Travel Restrictions While Excluding US Visitors

On June 30, the Council of the European Union adopted a non-legally binding recommendation on the gradual lifting of temporary restrictions on non-essential travel into the EU beginning on July 1. The recommendation encourages EU member states to lift travel restrictions into the EU for 14 countries spanning the globe.

The United States is not on the listand Washington is now in talks with European capitals and the EU on how to re-open busy transatlantic routes. The EU Council recommended including China only if it confirms travel reciprocity.

The EU's criteria for determining the list of countriesapplied cumulativelyare based on epidemiological and containment measures, including physical distancing and economic and social considerations. Specific categories of persons remain exempted from temporary travel restrictions, including seasonal and essential workers, diplomats, international organizations, military, aid workers, medical professionals, EU citizens’ family members, transport personnel, asylum seekers, and third-country students and workers.

The current EU list of countries will be reviewed every two weeks and may be updated by the Council after consultations with the European Commission and relevant EU agencies. Notably, some EU member states have decided not to abide by the EU's recommended list of countries and are instead restricting visitors to their countries based on their own criteria.

Ukraine's Enhanced NATO Relationship

Relations between NATO and Ukraine have often been trying and complicated as the country's move towards Euro-Atlantic integration has been stymied and NATO has lost credibility on its "open door policy." This strategic mistake was somewhat corrected in June when NATO recognized Ukraine as an Enhanced Opportunities Partner, an important development as it demonstrates that NATO continues to evolve and rewards Ukraine for its long standing cooperation and contributions to the Alliance.

Click here to read.

Spotlight on USMCA: NAFTA No More

By Daniel P. Erikson and Willa Lerner

On July 1, the North American Free Trade Agreement (NAFTA) replacement process reached completion with the official implementation of the U.S.-Mexico-Canada Agreement (USMCA). The USMCA was ratified by Congress and signed into law by President Trump in January 2020, signaling the fulfillment of one of the Trump Administration’s key promises from the early days of the 2016 presidential campaign.

Click here to read.

OECD Global Economy Outlook Amid COVID-19

In its June 2020 OECD Economic Outlook, the Organisation for Economic Co-operation and Development focuses on two equally probable scenarios amid the ongoing COVID-19 global pandemic. The OECD is an intergovernmental economic organization with 37 member countries founded in 1961 to stimulate economic progress and world trade.

Two core scenarios:

  • A second outbreak of the virus is avoided, with global GDP almost regaining its pre-crisis level by the end of 2021, or

  • A second COVID-19 outbreak occurs in most economies before the end of 2020, leading to renewed shutdowns and global GDP remaining well short of pre-crisis levels by the end of 2021.

Whether or not a second viral outbreak occurs, the global economy is facing recession and uncertainty—with global economic output not expected to reach 2019-Q4 levels for at least two years. To address the crisis, the OECD recommends governments pursue policies that:

  1. Invest in and strengthen health care systems while limiting virus outbreaks,
  2. Support the transition to build resiliency, while helping people and businesses,
  3. Plan for recovery by supporting economic activity, well-being, and fairness

Click here to see 2020 projected changes in GDP for individual countries.

While a sustainable economic recovery from the crisis remains uncertain, the OECD's recommendations focus on facilitating coordinated policy responses across countries and the global action needed to confront the enormity of this collective challenge.

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