Can the European Union offset the impact of trade tariffs, accelerate economic growth and compete with China and the United States to attract large businesses, all by fiddling with labeling requirements and online paperwork?  It’s damn well going to try.  On Wednesday, the Commission will publish its single market strategy, the latest in a long line of attempts to knock down all the little obstacles that make it impossible, or at the very least difficult, for businesses in one EU country to sell their wares in another. The bloc’s single market was launched in 1987 and in theory allows businesses to operate across the entire EU. In practice, however, a host of national regulations mean the union remains very much 27 separate markets. The economics of tearing down internal barriers to trade make sense: The Commission estimates that a 2.4 percent increase in trade among EU countries would cancel out a 20 percent tariff-induced drop in U.S. exports. The political winds are also blowing in the right direction: Two landmark reports in 2024 called for more integration to boost the bloc’s competitiveness; and EU countries — which are responsible for erecting the trade barriers in the first place — specifically tasked the Commission with drawing up this strategy. The plan, at least the draft POLITICO got its hands on, is dry, boring and full of seeming trivialities. But could it actually make a difference? Here’s what to expect. WHAT’S THE PLAN?  Every time a country implements individual sets of, say, nutritional labeling on packaging, or forms to fill out to display items on grocery shelves, it makes it much harder for businesses from another EU country to enter that market. The Commission wants to hack away at these obstacles bit by bit, reducing friction everywhere it can. There’s a planned regulation on packaging that seeks to make labeling more uniform. Current divergences “are forcing producers to develop different versions of the product for different markets or to relabel or even repackage products when moving them across borders,” the draft reads.   There’s a push to digitize paperwork so companies can easily submit the checks required to place their products on a European market. The Commission wants to expand the Digital Product Passport, a kind of digital product leaflet that contains all the necessary information required by EU rules to prove compliance. Can the European Union offset the impact of trade tariffs, accelerate economic growth and compete with China and the United States to attract large businesses? | Erik Lesser/EPA There are also plans to make it easier to set up a new business across the EU, something that in many countries remains slow and expensive. The draft strategy proposed the creation of a “28th regime” that would allow entrepreneurs to opt into a common digitalized procedure to start a company. The first step will be a pilot program that aims to get companies up and running in 48 hours, with a legislative proposal planned for the first quarter of next year.  WHAT WON’T BE INCLUDED?  Banks and other providers of financial services remain highly national industries. Cross-border takeovers are rare and politically fraught. Just look at the attempt by Italy’s UniCredit to buy out German rival Commerzbank.  A more cohesive financial sector could help get badly needed capital to young, tech-savvy startups. It would also mean better deals for investors and savers. But the financial sector is for the most part excluded from the single market strategy, as the Commission has shunted standardization and simplification of finance regulation onto a separate track, known as the savings and investments union. IS IT JUST ABOUT STUFF?  It’s services, not goods, that account for about three-quarters of Europe’s gross domestic product. A lot of these services will realistically never go beyond their national borders, or even their neighborhoods. No one is traveling internationally to get a haircut, after all.  But for plenty, there is scope for cross-border selling. Think of things like supermarket chains, or consulting. The strategy does include measures to smooth access to services among member countries. Construction makes up more than 10 percent of the bloc’s economy, but only a fraction of that, 1 percent of GDP, is conducted across borders. It’s a similar story with postal deliveries, a booming sector with the rise of e-commerce, as well as retail and telecoms. The Berlaymont is planning measures in all of these areas to deepen market access and allow for more cross-border competition.  WILL IT WORK?  In theory, everyone is a fan of the single market. At the macro level it really is win-win: Consumers get more choice, businesses get more buyers, and governments benefit from greater tax revenues. But at the micro level there are losers: Firms face more competitors and people get laid off. Those losers will lobby hard not to face the brunt of competition. In the end it’s up to member countries — who asked for the single market strategy but who are also responsible for many of the barriers it aims to remove — to play ball. The Commission has included a set of measures to ensure that the strategy has teeth. The draft calls for capitals “to appoint a high level Sherpa for the Single Market in their prime minister’s or president’s office with authority towards all parts of the government.” In effect, this would be the Berlaymont’s inside person, tasked with ensuring skittish governments don’t go back on their word. The Commission is also proposing to take stock of the situation at the end of 2026, and if necessary propose a new Single Market Barriers Prevention Act in 2027.  The single market has other issues that extend beyond mere politics. The world’s mega single markets, the U.S. and China, benefit from relatively uniform language and culture. Europe, meanwhile, contains 27 different member countries, with tastes, language, culture and weather all varying dramatically from place to place. The Commission can ensure the most frictionless trade rules in the world, but it will still be a challenge to get Italians to buy Birkenstocks, or for Poles to choose bacalao over sausages. 

Do you think the European governments and industry leaders like Ericsson who began collaborating on the Global System for Mobile Communications (GSM) standard four decades ago could have envisioned the conversations we’d be having about advanced mobile connectivity today?   Not likely, but times have changed. The creation of a single cellular standard, which would have once felt like science fiction, has grown from something we dreamed of to the foundation of a mobile-first world. It has become a driving force behind major cross-industry trends such as electrification, decarbonization, resilient supply chains and industrial automation. What we’re really talking about here is advanced connectivity that will enable European competitiveness.  As the cornerstone of digital innovation across Europe, it is a driver of Europe’s tech leadership, enabling progress in artificial intelligence (AI), quantum and clean tech. So, if advanced connectivity is vital, why are we treating it like an afterthought? The European telecom market has suffered from an investment gap since the 4G era, with other regions securing digital leadership and seeing a stronger emergence of digital businesses. So, what needs to change? We need to prioritize advanced connectivity and create the conditions for it to thrive. > Shared connectivity standards are crucial for driving innovation – but they > also possess power beyond that, shaping the technology ecosystems that set the > foundation for Europe’s economic growth and global influence. 6G technology will be vital for driving the next innovation cycle that Europe needs to stay competitive with the US and China. Ericsson is already heavily investing in 6G research and leading the development of this next-generation technology, positioning itself as a key partner in securing Europe’s competitive edge on the global stage. As Mario Draghi’s report on the future of European competitiveness makes clear, Europe’s telecoms sector needs significant investments if it is to remain strong. This means the right incentives to make those investments attractive, which in turn necessitates the right legal and regulatory framework to maximize the force and effect of European innovation. What we need, therefore, is a ‘new deal for mobile’, with the same political focus and commitment to delivery that drove the GSM success over 40 years ago. At the heart of this should be reinforcing standardization and an intellectual property rights (IPR) framework that incentivizes innovation by rewarding inventors and protecting their rights. via Ericsson Reinforcing global standardization for European innovation Shared connectivity standards are crucial for driving innovation – but they also possess power beyond that, shaping the technology ecosystems that set the foundation for Europe’s economic growth and global influence. Mobile networks are one such engine for growth. Every generational advance in connectivity starts a new wave of innovations because these are built on standardized technologies, and we want to see that continue. With 3G, phones became smart; 4G led to the app revolution; and 5G is enabling everything from AI and self-driving cars to telemedicine. The standardization underpinning these advances in connectivity is achieved through the 3rd Generation Partnership Project (3GPP). > We need Europe to continue to lead by actively supporting the critical role > that standardization plays in enhancing access to technology and innovation > and promoting the participation of European companies in the process. As a global European champion in the telecoms sector and a key contributor to 3GPP, Ericsson is actively leading the development of global standards for all major communication systems, creating the largest innovation platform for consumers, industries and society. Advances in global connectivity coupled with global ubiquity have connected billions of people and contributed a significant proportion of global GDP. We want to see this growth continue, but to do so we need Europe to continue to lead by actively supporting the critical role that standardization plays in enhancing access to technology and innovation and promoting the participation of European companies in the process. For European companies to continue to invest in innovation and contribute to the development of global industry-led standards, there must be fair compensation that can sustain the innovation cycle and corresponding investment needs. Draghi rightly emphasizes the critical role of patents in delivering these incentives and ensuring a return on investment for innovation. Getting the IPR framework right now to unleash long-term innovation EU policies adopted in the next five years will be foundational for Europe’s innovative ecosystem to thrive in the long term, improving conditions for the next wave of intellectual property lifecycles that can take over a decade to bear fruit. A smart and strategic policy approach to standardization, security, future spectrum, research and AI will all play a role, as will improved investment conditions for advanced connectivity, but it ultimately comes down to how policy on IPR and innovation plays out in the new mandate. > If we want innovative companies to be able to effectively invest, protect and > commercialize their research and development output, we need to ensure a > robust, efficient and predictable IPR framework. If we want innovative companies to be able to effectively invest, protect and commercialize their research and development output, we need to ensure a robust, efficient and predictable IPR framework. Draghi’s report sees this clearly, calling for the simplification of IPR procedures, particularly through the support and further adoption of the unitary patent system. To accelerate innovation and future-proof Europe’s competitive advantage, we need to avoid creating bureaucratic hurdles. But the proposed Standard Essential Patents Regulation threatens to do exactly the opposite, stifling Europe’s ambition to lead in global standardization and jeopardizing its status as a net exporter of innovations in advanced connectivity. To support innovation, EU institutions must urgently reassess this regulation and reformulate its approach. This starts with improving on what we already have rather than upending existing systems. We must take the opportunity to recognize the importance of European IPR and policies that strengthen the global standardization system. Serving the world well, that system also assures leadership, prosperity and security for Europe. Only then can we ensure that innovation in telecoms continues to support European competitiveness.