BRIK-landene: en mulighed eller en trussel for EU? En analyse af handelsrelationer og EU’s aktørstatus i Europa-2020 vækststrategien

Abstract

This thesis examines the challenges for the European Union (EU), in regards to the BRIC countries and the current economic and financial crisis. The EU has, in recent years, experienced a growing competition from the BRIC countries, which have seen huge growth rates. At the same time, the economic and financial crisis has affected the EU, and most member countries have seen falling growth rates and rising account deficits. Because of these challenges, this thesis will discuss whether to protect the union from the exogenous challenges or to improve its competitiveness. According to this, the thesis has identified two hypotheses: Hypothesis I: The EU should opt for a free trade approach to solve the economic challenges, as this will ensure a higher level of growth and prosperity. Hypothesis II: The EU is partially an actor in regards to implementing the Europe 2020 growth strategy, as the union has no direct way of intervening to ensure a successful implementation, but can create influence through its economic and political tools. In order to analyse this, the thesis has included two different trade theoretical approaches; one advocating free trade and one advocating protectionism, and an actor theory, which examines the actorness of the EU. The free trade approach involves the theories on absolute and comparative advantages by Adam Smith and David Ricardo, and the New Trade Theory by Paul Krugman. The protectionist approach is advocated by the French Economist, Jean Luc Greau, who believes the EU will benefit from protectionist measures, in certain areas. The actor theory looks into the opportunity, presence, and capability of the EU. These are the external events that create opportunity for the EU to act, the ability to exert influence outside its borders; and the capability to formulate consistent policies, and to use economic and political tools. The results, obtained from the analysis, support the above-mentioned hypotheses. The analysis, of the trade relations between the EU and the BRIC countries, illustrates that a growing trade with the BRIC countries has enhanced the interdependence between the regions. It show that a growing purchasing power, in these countries, has benefitted the EU and increased the union’s exports, and it states that more open borders will enhance the incentives and demands for an increased competitiveness. The experiences with The Single European Market have shown that free trade has increased the competitiveness of firms and that not only low cost countries have benefitted from the breakdown of trade barriers. The analysis of the EU’s actorness shows that the EU is partially an actor in regards to the implementation of the Europe 2020 strategy. The EU has no direct way of intervening in the Open Method of Coordination, where the strategy is to be implemented, but several other tools make way for EU influence. This happens for instance through economic tools like The European Semester. The political will of national governments play a very significant role in regards to Europe 2020, and although the last ten years have shown a lack of political will, the crisis has, in certain ways, increased the will to act. This will benefit the implementation of the strategy, and a successful implementation will increase the Union’s presence towards the BRIC countries. Therefore, to stand up to the exogenous challenges, the EU needs both free trade and a higher competitiveness; In order to gain from free trade, a country needs to be competitive, but in order to gain from a high level of competitiveness, a country needs to be able to trade freely.