The problems experienced by the single market have been compounded by disruptions in global trade due to a slump in demand and distortions in global value and supply chains. This has had a significant impact on EU companies, as many are integrated in these chains. In 2018, the Commission estimated that EU companies supplying goods and services to exporters sustain millions of jobs along respective supply chains within the single market: ‘on average, almost one fifth of the jobs supported by extra-EU exports are facilitated by the single market’. The EU economy is open and global in character: some studies suggest that global value chain trade is roughly equally divided between the EU and third countries. The system is highly interlinked, as the production processes are fragmented and different phases take place in various locations, based on the international division of labour. Problems with regard to manufacturing in the EU were reported already in February due to the lockdown in Wuhan (China). Ensuing closures of factories and offices in Europe, increased prices of some goods and their components as well as disrupted transport corridors have upset the operation of most supply chains on the single market. The latest EU Economic Outlook (from April 2020) reported that since the onset of the pandemic, the supply chains have recorded the longest delays since May 2000. There have been further disruptive changes: while consumers have switched to e-commerce, (see Figure 4) logistics at companies such as Amazon and at delivery firms have also been put under increased pressure, a growing number of drivers have been reported absent, and many warehouse workers have questioned the safety of their workplace. After these short-term effects are over, the more permanent risk of decoupling some parts of the intra-EU supply chain, due to the disappearance (bankruptcy) of other parts, will become more pertinent.
Retail trade turnover by sector, 2015 = 100
We write about
Disclaimer and Copyright statement
The content of all documents (and articles) contained in this blog is the sole responsibility of the author and any opinions expressed therein do not necessarily represent the official position of the European Parliament. It is addressed to the Members and staff of the EP for their parliamentary work. Reproduction and translation for non-commercial purposes are authorised, provided the source is acknowledged and the European Parliament is given prior notice and sent a copy.
For a comprehensive description of our cookie and data protection policies, please visit Terms and Conditions page.
Copyright © European Union, 2014-2023. All rights reserved.