EU: Accelerating Trade Negotiations with Other Countries Amid Rising Geopolitical Risks

■ Given rising geopolitical risks, the EU is accelerating trade negotiations with other countries, aiming to mitigate risks associated with the US and China.  

■ However, strengthening economic security guarantees will be a challenging path for the EU, given the difficulty in forming a unified internal position. 

Amid rising geopolitical uncertainty, the European Union (EU) is accelerating strategic actions to strengthen economic security. A key initiative is the Free Trade Agreements (FTAs) with Mercosur and India, which have been approved since 2026. The European Commission (EC) first published its EU economic security strategy in 2023, proposing to diversify supply chains, including those for key raw materials, and to strengthen partnerships through FTAs. Initially seen as primarily aimed at "de-risking" China (a strategy of maintaining economic ties with specific regions while avoiding over-reliance and reducing risks), this trend has accelerated, especially after 2025, with the Trump administration announcing new tougher measures, and it now clearly includes the United States in its considerations. 

The EU is accelerating the signing of trade agreements with the most populous and economically powerful countries in the "Global South." According to the European Commission's list, the EU's trade agreements with various countries and regions are divided into four categories: (1) Trade agreements with 80 countries, including Japan, are already in effect; (2) Agreements with 27 countries are in the ratification process, including Indonesia, which reached a final agreement last year, and Mercosur and India, which completed negotiations this year; (3) There are 8 countries currently under negotiation, mainly Asian countries such as Australia, India (with investment protection agreements), Malaysia, and the Philippines, actively discussing new trade relations; (4) The "deferred" list mainly consists of African and Middle Eastern countries, totaling 20 countries, with the longest delay dating back to 1990 and the shortest to 2015, having been shelved for over 10 years. 

 
In the medium to long term, the economic effects of these trade agreements are expected to be considerable. The European Commission estimates that the agreement with Mercosur will increase EU exports by 39% (approximately €50 billion) by 2024, while the agreement with India could increase exports by 107.6% (approximately €50 billion*) by 2032. Furthermore, European Central Bank (ECB) President Christine Lagarde stated in a speech last October that increased US tariffs could lead to a "reduction of approximately €66 billion" in EU exports to the US. While these calculations are based on unclear preconditions, making simple comparisons difficult, if these agreements take effect smoothly and demonstrate economic benefits, they are expected to offset the impact of reduced trade with the US in the medium to long term. However, the agreement with Mercosur, negotiated over 25 years, may face significant delays in taking effect. The European Parliament passed a resolution on the 21st to request the European Court of Justice to provide opinions on the legal issues of the trade agreement. This is against the backdrop of deep-seated concerns among major agricultural countries like France about the large influx of cheap South American agricultural products. Given internal discord, the EU's path to strengthening its economic security is destined to be fraught with difficulties.