{
  "title": "Geoeconomic Fragmentation: What’s at Stake for the EU",
  "publication": "IMF Working Papers, November 30, 2023",
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  "summary": "Geoeconomic fragmentation (GEF) is becoming entrenched worldwide, and the European Union (EU) is not immune to its effects. This paper takes stock of GEF policies impinging on—and adopted by—the EU and considers how exposed the EU is through trade, financial and technological channels.",
  "sections": [
    {
      "heading": "Summary and scope",
      "content": "- Geoeconomic fragmentation (GEF) is becoming entrenched worldwide, and the European Union (EU) is not immune to its effects.\n- The paper takes stock of GEF policies impinging on—and adopted by—the EU and considers how exposed the EU is through:\n  - trade channels,\n  - financial channels,\n  - technological channels.\n- Motivated by current policies adopted by other countries, the paper simulates how various measures would affect the EU economy, including:\n  - raising costs of trade,\n  - raising costs of technology transfer,\n  - raising fossil fuel prices,\n  - imposition of sectoral subsidies."
    },
    {
      "heading": "Key findings",
      "content": "- Due to its high-degree of openness, the EU is found to be exposed to GEF through multiple channels.\n- Simulated losses for the EU differ significantly across scenarios.\n- From a welfare perspective, the results suggest the need for a cautious approach to GEF policies.\n- The EU’s best defence against GEF is to strengthen the Single Market while advocating for a multilateral rules-based trading system."
    },
    {
      "heading": "Scenarios and channels analyzed",
      "content": "- Trade-cost increases (raising costs of trade).\n- Technology-transfer barriers (raising costs of technology transfer).\n- Energy-price shocks (raising fossil fuel prices).\n- Distortions from policy interventions (imposition of sectoral subsidies)."
    },
    {
      "heading": "Policy implications and recommendations",
      "content": "- Adopt a cautious approach to GEF policies, given heterogeneous welfare outcomes across scenarios.\n- Strengthen the Single Market to reduce exposure through trade, financial, and technological channels.\n- Advocate for a multilateral rules-based trading system as a primary strategic defence against GEF.\n\n---\n\n Content in this bundle\n\n- Working Paper\n  - Working Paper (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - Working Paper (PDF){rel=\"external\" type=\"application/pdf\"}\n\n---\n\nSource: https://www.imf.org/en/publications/wp/issues/2023/11/29/geoeconomic-fragmentation-whats-at-stake-for-the-eu-541864"
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    "Authors: Chikako Baba, Ting Lan, Aiko Mineshima, Florian Misch, Magali Pinat, Asghar Shahmoradi, Jiaxiong Yao, Rachel van Elkan",
    "Published: November 30, 2023",
    "Series: IMF Working Papers",
    "DOI: https://doi.org/10.5089/9798400259098.001",
    "Geoeconomic fragmentation (GEF) is becoming entrenched worldwide, and the European Union (EU) is not immune to its effects.",
    "The paper takes stock of GEF policies impinging on—and adopted by—the EU and considers how exposed the EU is through:",
    "Motivated by current policies adopted by other countries, the paper simulates how various measures would affect the EU economy, including:",
    "Due to its high-degree of openness, the EU is found to be exposed to GEF through multiple channels.",
    "Simulated losses for the EU differ significantly across scenarios.",
    "From a welfare perspective, the results suggest the need for a cautious approach to GEF policies.",
    "The EU’s best defence against GEF is to strengthen the Single Market while advocating for a multilateral rules-based trading system.",
    "Trade-cost increases (raising costs of trade).",
    "Technology-transfer barriers (raising costs of technology transfer).",
    "Energy-price shocks (raising fossil fuel prices).",
    "Distortions from policy interventions (imposition of sectoral subsidies).",
    "Adopt a cautious approach to GEF policies, given heterogeneous welfare outcomes across scenarios.",
    "Strengthen the Single Market to reduce exposure through trade, financial, and technological channels.",
    "Advocate for a multilateral rules-based trading system as a primary strategic defence against GEF.",
    "**Working Paper**"
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