On Monday the European Commission issued guidelines to member states on how to best manage a system of ‘green lanes’ it adopted at critical border junctions in the European Union to ease the flow of goods in the bloc’s much-vaunted single market. But what do these guidelines really resolve?
The glut of stranded goods at national borders in Europe is becoming larger by the day. The ‘green lanes guidelines’ are a response to this situation: they follow on border closures introduced by member states unilaterally in recent weeks to help contain the spread of the COVID-19 virus.
Anna Stellinger, the head of Sweden’s employer’s association Confederation of Swedish Enterprise tweeted that “82% of Swedish companies have difficulties in exports/imports due to Corona”. These are today’s figures, she said. Last week the number was 70%.
The new EU guidelines enjoin member states to ease paperwork at designated critical border crossings, and make it easier for transport personnel to go to work and to be allowed to cross a border through streamlined paperwork and health checks. The move was largely welcomed in business circles.
But it is far from resolving critical issues on the ground.
Several member states – including France – are reportedly still restricting exports of critical medical products within the single market, despite injunctions by the Commission to refrain from doing so.
The EU executive is in fact struggling to get member states to listen and follow its guidelines. Everyone continues to act on their own.
“It’s a real catastrophe. There is medical equipment produced by Swedish companies that – due to trade restrictions – can’t reach the patient,” Stellinger told Borderlex. Products affected include masks and surgery medical kits.
The closure of intra-EU borders to workers is compounding the problem. A Swedish-owned Czech-based company that produces surgery medical kits can’t operate properly as a large chunk of its staff commute in from next-door Poland but now face up to five-hour long queues at border crossing points on their way to work.
Customs staff shortages within EU
There is a major issue of customs staff shortages at internal EU border crossing points. EU customs infrastructure within the EU has been dismantled over the years. Customs officers thus are scarce. Moreover, they are often obliged to stay in confinement with the rest of the population.
This means that, in practice, fulfilling the EU’s goal to get goods trade cleared in 15 minutes as foreseen in Monday’s guidelines is likely to largely remain an aspiration.
Then there is trade with countries outside the EU. Here the Commission has remained discreet if not silent.
Its own Schengen-area wide travel restrictions are playing a big role in fostering chaos in supply chains – not least medical supplies. There is a sense that global industrial supply chains are in fact broken, as these decisions follow on China’s own coronavirus-induced production stoppages and recent trade tensions and tariff wars.
As regards trade with direct neighbours and countries in the EU’s single market orbit – Western Balkans, EEA countries, the UK, Switzerland – the Commission’s guidelines only say EU member states “are invited to closely work with the EU contact point network.”
Fear for medical imports
On Sunday, Medicines for Europe’s chief Adrian van den Hoven told Borderlex: “The Serbian border to Romania is totally shut down – we have some factories there. As a result Romanian hospitals running short of intravenous medicines they need to treat patients with the infection”. Serbia is a relatively important manufacturing centre – critical for countries like Romania but also Germany.
Swedish business sources say they are worried that countries – mainly in Asia – that have not been exempted from the EU’s export restrictions on medical protective gear might start retaliating by restricting exports themselves.
95% of global medical protective glove production, for instance, is based in Malaysia.
Another issue the Commission has not yet tackled is air transport.
“Air freight is the new big problem”, said van den Hoven.
Luisa Santos, who heads internationa relations at BusinessEurope, the Brussels-based business umbrella organisation, concurs: “A lot of air freight goes through commercial flights. The issue is critical in the transatlantic relationship,” where a lot of medical supplies transit via standard commercial flights – which are now largely cancelled.
“We need to bring in low-volume low-value ingredients from India and trade with the US,” said van den Hoven, whose organisation represents generic drug and biosimilars businesses.
The next area where business will be seen to seek help from European institutions is the issue of customs duties. Some are already seeking to request temporary waivers on import duties for critical imports to ease rising cash flow problems