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Export Controls: Boosting EU Competitiveness (Draghi Report)

Mario Draghi's recent report on EU competitiveness highlights the critical role of export controls in driving the EU's economic edge.


In today’s rapidly evolving global economy, the European Union must stay ahead of emerging challenges to preserve its competitive edge. A critical tool to maintain this advantage lies in the strategic application of export controls, which ensures the protection of key technologies, intellectual property, and strategic industries. Mario Draghi’s recent report on EU competitiveness provides vital insights into how the EU can enhance its global standing while navigating a complex geopolitical landscape.


What Questions We Will Answer in this blog:

  • How do export controls contribute to the EU's competitive edge?

  • What role does innovation play in EU competitiveness, and how is it linked to export control?

  • How can Europe balance sustainability and competitiveness in light of export controls?


Introduction

Export controls are not just a security measure; they are a cornerstone of the EU’s strategy to remain competitive on the global stage. As Mario Draghi’s report highlights, innovation, sustainability, and strategic foresight are central to the future of the EU’s industrial competitiveness.


"Export controls are an indispensable tool for safeguarding Europe's strategic industries and ensuring that innovation stays at the heart of our economic growth."— Arne Mielken, Managing Director of Customs Manager Ltd

Abbreviations We Use in this Blog

To make this article easier to follow, we will define some key abbreviations:

  • EU: European Union

  • R&I: Research and Innovation

  • AI: Artificial Intelligence


How Do Export Controls Contribute to the EU's Competitive Edge?


Export controls are often seen as a bureaucratic hurdle. However, when viewed strategically, they are a tool for preserving a competitive advantage. By controlling which technologies leave European borders, we safeguard our most valuable intellectual property from competitors and adversaries.

The EU’s global value chains are deeply integrated, making it imperative to ensure sensitive technologies, particularly dual-use items (those with both civilian and military applications), do not undermine our industries. When Europe controls the export of cutting-edge technologies—like AI, drones, and semiconductor components—it retains its leadership in sectors crucial to economic growth and security.

Export controls create a safety net that ensures innovation happens within the EU, allowing companies to commercialise breakthroughs before competitors can catch up. By precisely implementing these controls, we protect our technologies and foster an environment that rewards innovation.


What Role Does Innovation Play in EU Competitiveness, and How is it Linked to Export Control?


The Draghi report makes it clear: innovation is the key to closing the gap between the EU and global superpowers like the US and China. Right now, Europe is lagging in some high-growth, innovative industries. Our industrial structure has remained static, limiting opportunities for new companies to disrupt the status quo or emerge as global leaders. This is where export controls play a decisive role.


When we control the flow of new technologies abroad, we create an environment where European innovators have time to scale and dominate before facing international competition. However, the EU spends €270 billion less than the US on research and innovation. Our lack of investment is compounded by regulatory barriers that stifle the commercialisation of new technologies.


Imagine sprinting through a minefield of rules and restrictions to bring a new product to market. It’s no wonder many promising European startups seek financing and scaling in the US. When applied strategically, export controlshelp slow the race long enough for European firms to find their footing.

However, these controls must be accompanied by a strong push for innovation. If Europe fails to translate its technological prowess into commercially viable products, we risk becoming obsolete in industries that will define the future, such as AI and green technologies.


How Can Europe Balance Sustainability and Competitiveness in Light of Export Controls?


Europe is at the forefront of the global decarbonisation movement, with ambitious targets to reduce its carbon footprint and transition to clean energy. Yet, achieving these goals comes with a set of challenges—particularly when it comes to energy costs and dependence on external suppliers for critical raw materials.


Export controls are a double-edged sword here. On one hand, they help protect emerging green technologies from falling into the hands of countries that don’t share the EU’s sustainability goals. On the other hand, they could slow down collaboration on developing the very technologies needed for decarbonisation.


A key theme in the Draghi report is the need for a joint plan for decarbonisation and competitiveness. High energy prices in the EU—especially when compared to the US—pose a significant challenge to European industries. Export controls could help mitigate this by ensuring that Europe’s clean tech advancements stay within the bloc, driving down costs through home-grown innovation and production.


However, the EU must tread carefully. Too many controls could stifle collaboration, particularly with countries like China, which is rapidly advancing in clean technologies. As Europe strives to be a sustainable and industrial growth leader, we must balance export controls with open trade policies that foster innovation across borders.

"Decarbonisation is not just an environmental goal; it's an opportunity for Europe to lead in clean technologies and secure its future competitiveness."— Arne Mielken

Arne’s Takeaway

Export controls are about more than just security—they’re a strategic tool that can either enhance or hinder Europe’s global competitiveness. To stay ahead, the EU must close the innovation gap, invest in cutting-edge industries, and balance sustainability and growth. By doing this, we protect our industries and pave future where Europe remains a global leader.


Expert Recommendation

  • Invest in innovation: European industries need to boost R&I spending to match global competitors.

  • Streamline export control processes: Simplifying regulations can encourage compliance without stifling growth.

  • Foster collaboration: Work with like-minded partners to advance dual-use technologies, balancing openness and security.


How My Team and I Can Help

Together with my dedicated team of experts, we offer comprehensive support for all your import-export operations, including consultancy on export controls and sanctions. We also provide bespoke training tailored to the needs of customs professionals, importers, and exporters. Explore our services at www.customsmanager.org.


Sources That We Base Our Information in This Blog On

This blog draws on the Draghi Report on European Competitiveness, EU Commission publications, and trade policy updates.


Where To Find More Information On Topic

  • Subscribe to The Export Control & Sanctions Watch – our weekly consolidation of updates to law, guidance, and policy.

  • Visit our Knowledge Hub at www.customsmanager.info.


I am New To Your Website; what Do I do?

Welcome! If you found this content valuable, we invite you to join our STANDARD Membership, where you can receive tailored updates on customs, export control, and sanctions straight to your inbox. Get started at www.customsmanager.info.


Learn With Me

We offer in-depth training on export controls and customs. Visit www.customsmanager.org/events to learn more.


About the Author

Arne Mielken is a customs, export control, and sanctions expert with over 20 years of experience. He is passionate about helping businesses navigate the complexities of global trade.


Disclaimer: The information in this blog is for educational purposes only. For legal advice, consult a professional. Book a free consultation with Customs Manager Ltd for tailored guidance.


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