EU doubles down on global trade, a look beyond India and Mercosur

The EU’s recent trade push looks less like a sprint off the starting blocks and more like a decisive gear change on the home straight. With two highly strategic trade partnerships signed within days — India and the Mercosur countries (Argentina, Brazil, Uruguay and Paraguay) — the European Union has finally aligned itself with the tempo and logic of a new global market; one that is increasingly shaped by deals between countries or blocs, rather than by international institutions.

With these two signatures, the EU’s trade or preferential agreements rise to 44, covering 76 partners worldwide. The recent political and institutional crises at the WTO, the World Bank and the UN are plain to see. So are the warning signs: tariffs threatened, introduced, withdrawn, postponed, raised and lowered by the Trump administration within a single year of a second presidential term. The same applies to initiatives like the nascent Board of Peace for Gaza, which for now is openly commercial in nature.

Not only is it personally led by The Donald. Its statute provides for permanent seats to be sold (for a modest $3 billion) and membership for 27 countries. These include not just Israel, but all Arab states, plus European fellow travellers such as Hungary and Bulgaria, South American players led by Argentina, Asian countries including Pakistan and Vietnam, and several close to Putin, from Belarus to Albania. 

Russia and China have been invited, but have yet to decide. Most Western democracies are more or less firmly opposed, led by France and Germany, with Italy following.

If the international economic and financial institutions have created a vacuum, that space has already been partly filled by the United States and by China, through its quieter influence. The EU has gone along with this competitive push and adapted. More than that. This may only be the beginning of a broader acceleration.

The EU’s trade agreements around the world

The trade partnerships with India and Mercosur are not entirely new. They add to a dense web of free trade agreements, advanced economic deals and binding arrangements with key markets.

In North America, cooperation with the United States comes first. There is no full free trade agreement, but there is intense sectoral cooperation. The main vehicle is the EU-US Trade and Technology Council (TTC). The sectors benefiting most are steel, aluminium, technology and supply chains.

A full trade partnership exists with Canada, thanks to CETA, the Comprehensive Economic and Trade Agreement. Most reciprocal tariffs have already been eliminated. Public procurement markets are mutually open, and common standards apply on labour and the environment.

Elsewhere in the Americas, the agreement with Mexico has been politically concluded and now awaits commercial implementation. The deal has been modernised, with a focus on trade, investment and public procurement. It can also be considered an advanced trade partnership.

In Asia, beyond the very recent deal with India, the EU already has the Economic Partnership Agreement with Japan in force. One of the bloc’s largest trade agreements, it covers goods, services and investment, and is paired with a Strategic Partnership Agreement. For 15 years, the EU has also had an FTA with South Korea, with a strong focus on digital, labour and environmental standards. For Brussels, this is a solid and mature partnership.

In the Middle East, the EU’s most advanced trade relationship is with Israel. The focus is on technology, research, digital and pharmaceuticals. Brussels is Tel Aviv’s largest trading partner worldwide, under the EU-Israel Association Agreement.

With Arab countries, trade ties are already very strong. Formal negotiations are still under way with the Gulf Cooperation Council. Saudi Arabia is the key player, alongside the United Arab Emirates. The ongoing dialogue centres on energy, hydrogen, investment, supply chains and digital. It could well mark the next chapter in the EU’s trade acceleration.