The EU benefits 270 billion euros from trade agreements.

According to the French economic daily Les Echos, trade agreements continue to be an important pillar of the European Union's (EU) economic strength.

According to the French economic newspaper Les Echos, trade agreements continue to assert their role as a key pillar of the European Union's (EU) economic strength, with the bloc recording a trade surplus of approximately 270 billion euros (317 billion USD) in 2024, despite increasing pressure from US protectionist policies and a wave of cheap goods from China.

To date, the EU has signed 44 trade agreements with nearly 80 countries and territories worldwide . Thanks to this vast network of partners, total trade between the EU and its partner countries is expected to reach approximately €2.3 trillion in 2024, helping the EU maintain its position as one of the leading global trading powers.

In this context, delaying or failing to implement the free trade agreement between the EU and the Southern Common Market (Mercosur) – comprising Brazil, Argentina, Paraguay, and Uruguay – is considered by many experts to be a serious strategic mistake. The main reason for opposition stems from concerns about protecting agriculture , particularly in France, from the risk of beef, poultry, or sugar from South America flooding the European market. However, according to economic analyses, this risk is considered exaggerated, while the cost to trade and industry could be enormous.

The Mercosur countries currently have a population of around 270 million and together form the world's sixth-largest economy, with an estimated Gross Domestic Product (GDP) of €2.7 trillion. This stalled agreement is expected to open up numerous export opportunities for the EU, particularly in the automotive, wine and alcoholic beverage, services, and transport sectors, while also diversifying the supply of essential raw materials for European industry. It is estimated that removing nearly 90% of tariff barriers could save EU businesses around €4 billion in taxes annually.

In reality, trade agreements have brought clear benefits to the EU, even in sensitive areas like agriculture. In 2024, the EU's agricultural and food trade surplus reached approximately 40 billion euros, the highest level ever. The number of jobs directly or indirectly linked to EU exports has also steadily increased, from 21.7 million in 2000 to around 38 million in 2019, meaning that one in five jobs in Europe depends on exports.

A prime example is the Canada Trade Agreement (CETA), which came into provisional effect in September 2017. Since then, EU exports to Canada have increased by 51%, while EU exports to the rest of the world have only increased by 20% during the same period. In the agricultural sector alone, a previously concerning area, EU exports to Canada have increased by as much as 40%.

Beyond their economic significance, trade agreements are also important "soft power" tools for the EU. Through provisions on labor, climate, hygiene and quarantine standards, the EU promotes the dissemination of its standards globally, thereby strengthening its position against increasingly fierce competition from the US and China.

Conversely, turning its back on Mercosur risks undermining its own influence in South America, while the market share of European businesses in the region has already fallen sharply from 35% to 18% over the past 20 years.

In the context of increasingly fierce global trade competition, many believe that the early completion and implementation of trade agreements, particularly with Mercosur, is vital to the economic strength and long-term strategy of the EU.

Source:VTV