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Towards a new normal? Employment and social impacts of changing supply chains and declining trade intensities

Globalization has expanded the value and supply chains and shifted trade patterns and dynamics. On the one hand, the fall of transportation costs, the accelerating digitalisation and the reduction of obstacles to international trade have facilitated the integration of EU companies in global value chains and supported job creation. On the other hand, the profound transformations of global value chains, trade and production networks have raised significant social, economic and environmental challenges, including increasing divergence in productivity, labour market effects in the EU, decent work and working conditions in low-cost production countries slow progress towards resource-efficiency and decarbonisation, lack of security of and access to strategic supplies.

Research should first conceptualise the actual global and sectoral trade patterns, value chains, supply chains and production networks in light of the EU’s long-term policy priorities of social resilience and competitive sustainability. It should then analyse the impacts of different trade patterns, value chains and production networks on the EU value added, labour market, income inequalities, decent work and social cohesion in urban and rural areas, taking into account gender differences. Research should develop a comparative assessment with the main strategic partners and provide innovative, forward-looking policy scenarios with recommendations for future global value chains, trade patterns and trade intensities, which will ensure security of strategic supplies, promote a high level of employment and tackle income inequalities in the EU, while safeguarding job quality and social and territorial cohesion. The policy scenarios should take into consideration analytical approaches, which will improve the economic and environmental performance of supply chains in the EU. The policy scenarios and recommendations should focus on EU, national and sectoral strategies, policy measures and targeted actions aimed at shaping fair, inclusive and sustainable trade patterns, value and supply chains as well as production networks. They should be coherent with the EU long-term policy priorities of social and economic resilience, competitive sustainability and the twin transition (digital and green).

The proposals should take into consideration the impacts of the coronavirus pandemic and the related public health crisis on trade patterns and global value chains as well as the impacts of international trade disruptions, due to the lockdown measures, on added value, EU employment, job quality, income inequality and social cohesion.

Proposals will further develop innovative methodologies for assessing and monitoring, quantitatively and qualitatively, level playing field developments in trade, value chains, supply chains and employment. The innovative methodologies should also cover level playing field developments in key policy areas of taxation, competition and social policies.

The research will deploy multi-disciplinary methodologies and target multi-dimensional aspects, developing cross-sectoral and forward-looking responses, involving external stakeholders and experts, including European social partners, regional and national authorities and international trade, labour market and social policy experts.