Against the background of supply shortages with respect to medical products during the COVID-19 pandemic, and the shift in the international order towards geopolitical rivalry between the US and China, reshoring of production has become a topical issue in the recent EU policy debate.
The study discusses economic and political justifications for reshoring with respect to security of supply concerns and the debate on the EU’s strategic autonomy. With reshoring pre-COVID-19 having remained an empirical phenomenon of limited significance, potential for reshoring at the sector and GVC level are assessed in light of recent economic changes, the digital transformation and the changing geopolitical environment.
Though reinforced in the recent past, the success of reshoring policies of the US, the UK and Japan is found to have been modest. While a more proactive policy approach to mitigate security of supply concerns and to promote strategic autonomy in the EU is important, reshoring should be primarily focused on specific critical sectors and products with pronounced supply bottlenecks.
Source : © European Union, 2021 – EP