Derailing the EU-Japan trade talks?

As the EU member states now take stock of the EU-Japan trade talks ahead of a coming summit, Patrick Messerlin looks at one of its most difficult issues: Government procurement and the railway sector. The Japanese railway sector is organized in a radically different manner than in the EU: the three major Japanese passenger rail companies are totally privatized, and not operating under government licenses like in Europe. Still, the EU rail equipment industry argues that the Japanese companies should be covered by government procurement rules, which would set a dangerous precedence and open for similar claims against Europe's unbundled former monopolies, e.g. telecom operators. The FTA negotiations are complicated - but if they are done right, they also offer more opportunities for both Japanese and EU railway companies in a global world.

In focus

Next-generation trade defence: government-sponsored patent funds?

While there is an increasing interest for FTA disciplines that restricts state-owned enterprises, there is less debate on governments using intellectual property to engage in discriminatory industrial policy against foreign competition. A new report by Patrick Messerlin and Hosuk Lee-Makiyama points to how some SPFs, like France Brevets, even admit to being retaliatory or discriminatory instruments against foreign actors regardless of whether the original claim is legitimate or not. Such use of patents threatens to become a new trade defence instrument.

Investing in Obesity Treatment would Reduce Healthcare Spending

The obesity rate is growing fast – in Europe and around the world – and no government has effective policies for preventing obesity to increase healthcare expenditures. Yet while governments have been slow to react, medical scientists have now a good view of “what works” and “what doesn’t work” in policies to reduce obesity. A new study by ECIPE economists estimates that European countries stand to make huge savings in future healthcare expenditures if they use effective lifestyle weight management programmes to treat obesity today. If governments invest in smart obesity treatment, the UK and Spain could reduce healthcare expenditures related to obesity in 2030 by 10 and 12 percent. Germany could save around 6 percent while Sweden could “save” as much as 55 percent of future healthcare expenditures related to obesity.

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 Integration

While 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. 

Latest Publications

ECIPE Policy Brief No. 06/2014
Sovereign Patent Funds (SPFs): Next-generation trade defence?
By Hosuk Lee-Makiyama, Patrick Messerlin
Summary | Download (PDF)

ECIPE Occasional Paper No. 06/2014
Cities and the Wealth of Nations: How can Helsinki, London, Paris and Stockholm prosper from TTIP?
By Fredrik Erixon, Martina Francesca Ferracane
Summary | Download (PDF)

ECIPE Occasional Paper No. 05/2014
Demystifying Investor-State Dispute Settlement (ISDS)
By Fredrik Erixon, Roderick Abbott, Martina Francesca Ferracane
Summary | Download (PDF)

ECIPE Policy Brief No. 05/2014
The Problematic Politics of China’s Economic Reform Plans
By Guy de Jonquières
Summary | Download (PDF)

ECIPE Bulletin No. 11/2014
The Impact of Data Localisation on Vietnam’s Economy
By Bert Verschelde
Summary | Download (PDF)

Upcoming Events

ECIPE Seminar: China, Europe and the World Economy: Imbalances and Reform
China has embarked on an economic reform programme to re-balance its economy and improve its prospects for stable and sustained economic growth. Any government with the ambition to reform the economy faces political obstacles. For China, still a heavily regulated economy with substantial government interference, the task is even bigger. What are its chances for success? What reforms are critical to deliver on its ambition? Can it get reform momentum with the assistance of global economic institutions like the WTO? And if China reforms itself successfully, what does it mean for EU-China economic relations?
Speakers: Guy de Jonquières, Fraser Howie, Dr Ye Yu, Marjut Hannonen
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ECIPE Seminar: The diverging path of French and Korean film industries: Lessons on audiovisual policy
In the last two years, the French audiovisual sector has witnessed an intense fight between the defensive and traditional vested interests against new forces that are eager to seize the opportunities presented by digital technology – This debate is taking place against a stagnating domestic market share of French movies despite a doubling of public subsidies. Based on some new exhaustive data, Patrick Messerlin’s new report assesses the failure of the current French audiovisual policy – from both an economic and cultural perspective.
Speakers: Patrick Messerlin, Jimmyn Parc
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ECIPE Lunch Seminar: Energy security and economic recovery: Impact of Ukraine, Fukushima and reforms on Japan and Europe
The world enters into a new-old paradigm where energy security and economic growth are closely entwined. Energy costs, access and variety of supply are now affecting a country’s competitiveness on the export markets, and are increasingly key strategic considerations for economic statecraft.
Speakers: Takayuki Sumita, Jaroslaw Pietras, Hosuk Lee-Makiyama
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Past events

Articles, Opinion and Commentary

How Asian cities stay ahead
Razeen Sally and Janamitra Devan on the competitiveness of Asian cities in The Straits Times

Railways derailing EU-Japan talks?
Patrick Messerlin writes on EU-Japan trade talks in EurActiv

ECIPE experts write on India in the WTO and the Bali Package in CFO India

States, Investors, Disputes
Fredrik Erixon opines in E!Sharp about investment protection in TTIP

Responsible Stakeholder or Just a Guest?
Miriam Campanella opines in Caixin about China's role in global leadership

More articles