As part of its updated 2020 Industrial Strategy, the EU Commission noted that the pandemic has highlighted the trading bloc’s technological and industrial strategy dependencies, which need to be analysed and addressed as part of Europe’s economic recovery.

The Commission identified 137 products out of 5,200 products imported into the EU (representing 6% of the value of the EU’s total import value of goods) on which the EU is highly dependent in notably sensitive sectors. These dependencies are found primarily in energy intensive industries (such as raw materials) and health sector (such as pharmaceutical ingredients) as well as in the supply of essential products relevant to Europe’s green and digital transformations. Of these, 34 products (representing 0.6% of the EU’s total import value of goods) were identified as more vulnerable given their low potential for diversification and substitution.

Additionally, the Commission presented the results of six in-depth reviews providing insights on the origin of strategic dependencies and their impact on the import of raw materials, batteries, active pharmaceutical ingredients, hydrogen, semiconductors, and cloud and edge technologies. The Commission proposes a second stage of reviews to assess dependencies in products, services or technologies key to the green and digital transformations including renewables, energy storage and cybersecurity, with the goal of developing a monitoring system through the Commission’s Observatory of Critical Technologies.

The Commission emphasized that the EU will continue to work towards diversifying international supply chains and pursuing international partnerships to increase preparedness, by supporting new industrial alliances in strategic areas including industrial alliances that attract private investors to discuss new business partnerships and models in an open, transparent and competition-compliant manner, and have a potential for innovation and job creation. In this vein, the Commission is preparing to launch the Alliance on processors and semiconductor technologies and the Alliance for Industrial Data, Edge and Cloud; and is considering establishing an Alliance on Space Launchers and on Zero Emission Aviation. It will continue to support, including through the EU budget, Member States’ efforts to pool public resources via Important Projects of Common European Interest (“IPCEIs”) in areas where the market alone cannot deliver breakthrough innovation.

As part of this overall review, the EU has also proposed controls on foreign subsidies, please see our client alert here. The US has been undertaking similar reviews, including on the resilience of supply chains for agricultural commodities and food products, please see our client alert here.


Sunny Mann is a Partner and leads the EMEA and UK International Trade team, ranked Tier 1 by Legal 500. His practice includes a focus on national security, foreign investment, export controls and trade sanctions matters. He has worked on a number of foreign investment review cases, including obtaining clearance for a high profile acquisition triggering potential defence and national security concerns, one of the very few cases to go through a full UK statutory review. In the Legal 500, Sunny is ranked as a "Leading Practitioner".