The EU’s approach to relocation and restructuring.(1996-2002 - Summary of reports - ECN331A)Relocation and restructuringof industry and services are permanentfeatures of the Union.However the coincidence of a number of critical developments in the Union makes restructuring aparticular political and economic issue at this point in time. These developments are thedevelopment of the Single Market (an Internal Market) in the context of high unemployment andthe aftermaths of the past march for convergence (1990-1999), and huge increases in the stocksand flows of Foreign Direct Investment made convenient by liberalized capital markets.Technological and organizational changes which make it easy for value added chains to be splitand distributed across the world, contribute further to extend the pace and impact ofrestructuring and relocation. The extent of the impact of restructuring and relocation, on the operations of the Union, and onthe tasks assigned to it under its Treaty obligations, adds further significance to the issue. Theissue impinges on the Union’s activities from competition and concerns for its distortions in theglobal arena, trade policies, tax and fiscal policies, currency stability, to employment andenvironmental issues. The EU’s approach to relocation and restructuring would also determine the operationaleffectiveness of the Union’s own and ongoing key policies and instruments. These would includethe use of Community support frameworks, the distribution and effectiveness of the StructuralFunds, environmental policies, Trans European Networks, and the positions the EU takes in itsinternational trade negotiations and its relations with key players like the WTO, the World Bank,the ILO, and US and ASEAN countries. Relocation and restructuring not only raise issues forpolicy consideration based on the EU’s competence for global subsidiarity, it also raisesquestions of the effectiveness in EU-programmesin areas such as regional, industry,competition, trade, environment and employment policies.The Union has an obligation to act to ensure that the impulses generated from, and caused by, itsown central position in the relocation and restructuring process within the EU and globally, are putto effective and managed use in the interests of the Union and its citizens. Political action by theEU must concentrate on those areas where intervention can be effective and work at theappropriate level of subsidiarity. At the global level the need for a new approach in internationaltrade-and investment-policy should be a key priority: a shift from a relatively narrow focus ongrowth and preservation of free trade and investment, to the more complex goal of sustainabledevelopment is overdue.