Reshoring by Decree? The Effects of Decoupling Europe from Global Value Chains

Authors

• Sandkamp
• A.

Publication Date

DOI

10.1007/s10272-022-1087-9

JEL Classification

Key Words

Related Topics

Decoupling from certain countries may be both politically necessary and economically feasible, at least in the long run. However, a general shift of production back to Europe would be accompanied by significant losses in real income. In addition, while reducing dependence from third countries, it would make the EU more vulnerable to local shocks. Instead of decoupling, the EU should therefore pursue an active policy of increased international cooperation in order to diversify its suppliers and thus increase resilience of its economy. This should be accompanied by initiatives that encourage firms to find technical solutions to supply chain disruptions such as improved recycling techniques and 3D printing. If done correctly, Europe can emerge from the current crises stronger and more open, thus securing prosperity for both its own citizens as well as its partners.

Kiel Institute Expert