Turkey is the biggest threat if the EU expands further

Turkey is a candidate for entry into the European Union (EU), one of the industries that will create the greatest competitiveness in Portugal and pose a serious threat to it is the automotive sector, which accounts for 12% of Portuguese exports. Among export destinations, our second client, the French market, appears to be a landscape where competition from new additions is strong.

It is already known that the enlargement of the European Union to include eight more candidates will have a severe impact on the Portuguese economy. But a surgical assessment of this 'cost' has now been advanced by a comprehensive study carried out by a group of Portuguese academics for the Economic and Social Council (CES) as part of a report entitled “From Epidemic to War”. The Impact of Geopolitical Changes on the Portuguese Economy”, which Express There was primary access.

Two political messages

The global study was coordinated by Sandra Fernandez from the University of Minho, and a specific analysis of the impacts of future enlargement was written, covering Albania, Bosnia-Herzegovina, North Macedonia, Moldova, Montenegro, Serbia, Turkey and Ukraine. By Nuno Crespo, Professor of Economics at ISCTE, Lisbon.

In the report presented to the CES, there are two messages regarding the expansion of the Union. From a political-diplomatic point of view, “Portugal should be particularly careful in assessing very rapid and very broad enlargement processes”.

For exporting companies, analyzing the results of assessment of sectoral impacts and target markets is essential to “anticipate specific shocks”. The Portuguese economy is the fourth most affected by the effects of this enlargement in the current 27-member Union, after Croatia, Poland and Romania, according to the study. Therefore, the Portuguese situation is particularly vulnerable.

The Portuguese economy is the fourth most affected by the effects of this enlargement in the current 27-member Union, after Croatia, Poland and Romania, according to the study. Therefore, the Portuguese situation is particularly vulnerable.

An expansion of this scale changes the Union's place in geoeconomic terms and strengthens the geopolitical weight of Brussels. The study builds on this possibility in a so-called “plus scenario,” a “high-end scenario” that experienced a hopeful boost with Ukraine's candidacy under Russian occupation, but continues with frozen negotiations with Turkey. Economies of the G20 and one of the intermediate powers on the geopolitical chessboard mentioned in the study.

See also  Zelensky is preparing to replace the head of the armed forces

Turkey and Serbia may be more affected than China

The two candidates with the greatest impact on Portugal are Turkey (the world's 17th economy) and Serbia (whose GDP is less than a third of Portugal's), as there are some structural similarities in exports. The greater this similarity, the greater the competitive pressure in the common space. The study even points out that those two countries represent “a more significant competitive threat, in terms of structural similarity, than that posed by China.”

“Turkey is a very significant case”, Nuno Crespo tells us, stressing that the competitive pressure comes not only from specialization in similar export sectors, but also from the potential competition of sectors with similar characteristics in the future. The Portuguese economy was heavily affected by Turkish entry, the first and second customers of Portuguese exports in the Spanish and French markets, respectively, in the Union as a whole.

The Portuguese economy was heavily affected by the Turkish entry, the first and second customers of Portuguese exports in the Union as a whole and in the Spanish and French markets respectively.

Nuno Crespo highlighted that “France is clearly a market where we can face more competition” from future new members of the European Union.

The report presented to CES therefore points to the strategic importance of diversifying target markets for Portuguese exports. The study states that the Portuguese economy has “the highest degree of spatial concentration of its export structure”. More than half of exports are destined for four customers in the euro zone: Spain, France, Germany and Italy.

See also  In the second round, Macron defeated Le Pen again

Portuguese fields are under threat

And with a high or very high threat in the event of EU enlargement

At risk is the automotive sector, but not only

The Portuguese automotive sector – which covers a wide range of vehicles from parts and accessories – appears particularly vulnerable, and in the case of motor vehicles, particularly from Turkey. The French market is the main export market for passenger vehicles manufactured in Turkey. According to the Turkish Association of Manufacturers in the sector, car production has already risen to 1.3 million units per year (four times more than Portuguese production).

Nuno Crespo also draws attention to the electric power sector, which is “not under too much threat from any of the candidate countries, but under too much threat from many”.

Ukraine appears to be a threat in four areas, the academic says, but “in terms of competition it is less than paid by many who could enter the Union”.

An in-depth study of the economic fabric of those considered in the World Customs Organization covers more than a hundred sectors and specific categories of products.

Leave a Reply

Your email address will not be published. Required fields are marked *