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Wallenberg warns against using Covid as an excuse for protectionism

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According to one of Europe’s leading manufacturers, European politicians use the Covid-19 pandemic as an excuse for protectionism in areas such as the production of vaccines and face masks.

Jacob Wallenberg, the head of Swedish companies whose family controls large stakes in companies from AstraZeneca and Ericsson to ABB and Nasdaq, told the Financial Times that the vaccines had worked well as they were treated “at a truly international level”. , ”while most facial masks come from China.

To use this as “an excuse for reshoring goes too far,” he said. “When I listen to politicians I hear about the concept of reshoring, the concept that Europe should do more things at home. My concern is that we end up with more protectionist tendencies.”

The European Commission and key politicians have argued that the EU should have “open strategic autonomy” in certain sectors and trade areas to ensure that the region has independent supply chains.

Speaking as head of the committee on trade and market access for the European Round Table on Industry – a group of 60 top executives and presidents from across the continent – Wallenberg warned that this strategy risks creating barriers to global supply chains, which had effectively helped Europe navigate the pandemic.

“There has been a discussion about the principle of producing vaccines in all countries, including myself,” said the Swedish industrialist. “I think the fact that vaccines were being treated at a truly international level is the reason why we got vaccines as quickly as we did. Here, the avoidance of autonomy has been very important. ”

France’s decision at the start of the pandemic to remove millions of face masks shipped to the rest of the EU by Mölnlycke, which is owned by the Wallenberg family holding company, has upset both the industry and the Swedish government. .

In May the European Commission unveiled an update of its industrial strategy, calling for action to address vulnerabilities in the supply chain identified during the pandemic. The commission identified 137 products in the most sensitive ecosystems – such as raw materials, batteries, pharmaceutical ingredients, hydrogen, semiconductors and cloud technologies – where the EU was heavily dependent on imports from third countries, particularly China. .

In a report released Monday, the European Round Table warned that any intervention to promote the resilience of European supply chains – even on critical goods – “should be the exception, not the rule”.

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It called for wider openness in European supply chains, and greater engagement with industry over relations with China, despite growing tensions over repression in Hong Kong and human rights abuses in Xinjiang. .

Earlier this year, interests in the Wallenberg family were picked up in a row over Sweden’s ban on Huawei’s access to 5G networks.

Wallenberg, who had publicly criticized Huawei’s Swedish ban, said the only way forward was to “find common ground” with China. As the world’s second largest economy, China was “a very important partner of ours,” he said. “The alternative, to stop doing this… Is a dramatic change of the world.”

However, he added that the EU needed to be ready to defend its companies from unfair practices. “I think it’s important for the EU to have a strong stance and to stand up for it,” he said.

Wallenberg welcomed European initiatives to look more closely at foreign investment.

“I think it’s very appropriate that we have tools of this nature in place. I think it’s a matter of ensuring that principles of game equality can be applied,” he said. “If we end up in a situation where this doesn’t work… Of course there must be consequences.”

The European Round Table called on Brussels to form a dedicated unit to manage the China relationship.

He insisted that, although the United States has been a key strategic partner, Europe should not “copy and paste” the more aggressive position taken by Washington when it comes to relations with China. Europe has to “get on its feet,” he said.


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