No more euro-champions? The interaction of EU industrial and trade policies

Abstract

Trade liberalization makes markets more contestable and so opens opportunities for firms: it also exposes domestic firms to more severe competition. Governments come under conflicting pressures to ensure foreign market access whilst preventing ‘unfair’ competition from abroad in the domestic market. Liberalization under both the single market and the WTO has placed greater emphasis on innovation policy as a mechanism to encourage firm adjustment and raise competitiveness. These policies tend to be ‘horizontal’, economy-wide attempts to enhance competitiveness. However, some recent calls for returns to national or European champions are a reminder of the attractiveness of sector-specific policies in the face of international competitive pressures.

Keywords:

• Liberalization
• manufacturing
• services trade
• technology policy.

Acknowledgements

An earlier version of this paper was presented at the European Union Studies Association meeting in Austin, Texas, 1 April 2005. The author is grateful to Jim Rollo, Andreas Falke, Cornelia Woll and the journal's editors and referees for their comments.

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