How Can Europe Respond to an Authoritarian Russia?Russia’s invasion of Crimea has sent shock waves through the international community but is not surprising in light of the Kremlin’s authoritarian and imperialistic ideology. As was shown in two papers by Fredrik Erixon and Iana Dreyer, Russia has been building military and economic statecraft on the back of its energy riches – and the EU has been far too weak to diminish its economic dependency on Russia. Broad economic sanctions by the EU is therefore highly unlikely, even if Russia’s investment in and export to Europe is so big that sanctions could put Russia Inc out of business. As Hosuk Lee-Makiyama has argued, economic sanctions usually do not work. And what it is important now for the EU, in addition to shaping a response to the Crimean occupation, is to reshape its approach to Russia with the effect of cutting its dependency on an authoritarian regime.
Immigration and Labour-market IntegrationWhile the debate about immigration in Europe is heating up immigration is likely to continue its growth because of low birth rates and increased longevity. But what could be done to boost labour-market participation among immigrants? In a new study examining possible factors behind the difference in rates of participation on the labour market between immigrants and native-born people, economist Andreas Bergh finds two patterns of statistical significance. First, welfare state generosity keeps immigrants away from the labour force. Second, given that immigrants enter the labour force, collective bargaining agreements explain higher incidence of immigrant unemployment.
Ill fares the ITA. Again.Another attempt to update the Information Technology Agreement (ITA) seems to have failed after China declaring almost half of the new product list as politically sensitive and requested exemptions or lengthy phase-out periods. Hosuk Lee-Makiyama with Lisa Brandt read a funeral litany over the negotiations and ask the question whether China is ready for the free trade agreements it wants, and what modern trade agreements entail in terms of concessions and managing domestic protectionist interests.
Who’s Afraid of China’s High-Tech Challenge?Over the last 30 years, the speed and scale of China’s economic rise have stunned the world. Now its government has mapped out bold plans for the next phase of the nation’s development. China’s ambitions and the government’s central role have evoked mixed responses elsewhere. In his new paper, Guy de Jonquières examines China’s policies and its current level of industrial development. As for China, the evidence to date suggests that it is trying move too far too fast and probably in the wrong direction. The kind of dramatic breakthroughs that its state planners yearn for almost certainly exceed the current capacity of its industries to deliver and risk being frustrated by constraints on creativity.
EU Biofuels Reform and ILUC Proposals Breach WTO RulesThe European Union is about to change its biofuels policy – but, argues Fredrik Erixon in a new paper, the reform will reinforce the incompatibility of EU biofuels policy with basic rules of the World Trade Organisation. A central plank of the biofuels reform is to establish new rule for indirect land-use change (ILUC) emissions. Erixon says that ILUC is a “riddle wrapped in a mystery inside an enigma” as no one knows the actual ILUC emissions and that the models used to estimate emissions come to profoundly different results. Trade and environmental rules are in most cases not in opposition, but Erixon argues that EU biofuels policy has reached a point when it is driven by so many other different sentiments than sound environmental science.
China’s Rise to Global Power – and Europe’s ResponseIs China’s rise to global power inevitable? In two new ECIPE papers, two distinguished scholars and statesmen examine China’s current position in global economic and foreign policy. China will, they argue, take up a greater role in world policy making, but continued growth in power and affluence is neither inevitable nor likely to be linear. Krishnan Srinivasan, a former Foreign secretary of Indian, and Frank Lavin, former U.S. Undersecretary of Commerce, argue that China’s high economic growth and social stability can be continued under the new leadership, and radical reforms of its foreign policy under an international framework are not expected. They both argue that the EU should treat China as a true counterpart, and to plan and engage more strategically in the whole Asian region.