Question 2: Improving Africa-Europe trade relations (30 points)

For 20 years, the European Union has been working on a regional free trade agreement, but it has not taken off. For the next six months, France holds the presidency of the European Union. One of the main goals the country has set is to strengthen political, but certainly also economic relations with Africa. Africa is becoming increasingly important as a sales market and location for products and services that can be made within global value chains. But of course, natural resources are also an important reason for the cooperation that the European Union envisions, especially with China as a strategic rival. On the other hand, last year, African countries concluded a free trade agreement among themselves, which is surprisingly well opening up the internal market. Of course, there are all kinds of sentiments in Africa toward the European Union, and certainly toward large corporations often associated with colonial history. Therefore, it is important that the role of multinational corporations and global value chains is adequately considered in proposals to strengthen trade relations.

Based on insights from modern trade theory, write a short argument based on three points on how cooperation can be designed so that a better investment climate for European companies also results in better social outcomes in Africa. An essential part of this argument is to correctly identify how changes in the institutional structure can

impact investment agreements and thus labor market outcomes. But indeed, also the position of sustainability and small and medium enterprises is an integral part of attention.

introduce a short argument (in around 500 words) that could be the first three paragraphs of President Macron's opening at the Africa-EU summit.