Lawyer Monthly - May 2022

EXPERT INSIGHT 42 WWW.LAWYER-MONTHLY.COM | MAY 2022 This applies to the European Union’s trade policy, which aims to combat the effects of climate change and achieve sustainable international relations, for example through bilateral free trade agreements. The current warlike events in Eastern Europe have hijacked the discussion and attention of politicians and the population. The long-term problem of climate change has been lost from view. Worldwide, though, this problem must be seen and solved. However, the EU is only one actor in the global economy. Over the last few years, we have seen a global development towards “mega” free trade agreements. Examples of this are the NAFTA successor agreement USMCA (USA, Mexico, Canada), the Asia-Pacific Partnership CPTPP (Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, Vietnam) or the new free trade agreement with a focus on Asia, the RCEP (Australia, Brunei, Cambodia, China, Indonesia, Japan, Laos, Malaysia, Myanmar, New Zealand, Philippines, Singapore, South Korea, Thailand, Vietnam). The RCEP is the most populous and economically strongest free trade agreement. Through the membership of the People’s Republic of China, it has the greatest global weight and will influence the entire world economy. It creates the world’s largest production area and sales market. Neither the American nor the European economies can keep up with it. If we look at the parties to the individual free trade agreements, we see that some countries are involved in different free trade zones at the same time. It will be interesting to see how the multiple memberships will affect the development of the agreements. For example, FTAs regularly aim to harmonise technical standards. Conflicts are therefore to be expected if there is no agreement on standards that apply in the same way in different free trade areas. Conflicts are also to be expected with regard to sustainable environmental protection policy. Some agreements provide for sustainability clauses (for example USMCA, CPTPP). The RCEP lacks such a clause. What should internationally operating companies prepare for in the near future? It is to be feared that Russian policy is not only aimed at neutralising Ukraine, but also at destabilising security policy in Europe. I therefore expect sanctions against Russia to last longer. Economic relations with Russia will therefore not be possible for a long time. All the more reason for all internationally active companies to make an effort to be represented in the economically interesting markets. Due to the different free trade agreements, however, this can mean that global sources of supply, supply chains and sales markets become more difficult. It may mean that companies have to become more regionally oriented. Sourcing, production and sales will be regionalised. Technical and economic synergy effects will be lost as a result. However, I do not see the end of globalisation, but rather a shift towards glocalisation. Due to local or regional peculiarities, internationally operating companies will adapt their products to the respective local or regional conditions in terms of raw material procurement, design, technical standards, manufacturing process and marketing. About Hans-Michael Wolffgang Hans-Michael Wolffgang is the head of AWB, which offers specialised advice in the areas of customs, export control, value added tax and excise duty for internationally active companies. The boutique firm advises companies of all sizes and industries in these specialised areas. After many years of working as a university lecturer and judge, Hans founded AWB in 2005 together with colleagues from his consulting practice. AWB now has 35 advisors in its offices in Münster, Hamburg and Munich. Its team includes tax advisors, lawyers, economists and former customs and tax officials, as well as specialists from business and academic teaching who now use their extensive knowledge at AWB for the benefit of internationally active companies. Hans-Michael Wolffgang Founder AWB Steuerberatungsgesellschaft mbH Königsstraße 46, D-48143 Münster Tel: +49 251-620-3069 – 140 Fax: +49 251-620-3069 – 1 E:

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