Brussels: For the past year, countries around the world have been in panic mode as the United States added tariffs or threatened trade wars. The sheer uncertainty of President Donald Trump's whims has added a real sense of urgency to the situation.
According to Deutsche Welle, the old global trading order is gone, and the realignment is pushing countries into each other's arms in new constellations. China has seen much of the tariff headlines, but the US's neighbors and biggest trading partners, Mexico and Canada, have not been spared.
Across the Atlantic, the European Union has been on the tariff roller coaster, too, and is questioning long-standing partnerships. The contempt that Trump threw at European governments at the World Economic Forum in Davos was yet another loud wake-up call.
To counterbalance US hostility, the EU has been trying to scrape together deals, and finalize others long in the making, to show that the bloc is a reliable trading partner and an alternative to the United States. But trade deals are notoriously complex and take time to put together even in the best circumstances.
On January 17, European Commission President Ursula von der Leyen went to Asuncion, Paraguay, to sign the EU-Mercosur trade agreement. The deal between the 27-member EU and Argentina, Brazil, Paraguay, and Uruguay covers a market of 700 million people, making it one of the largest free trade zones in the world.
"We are sending a very clear message to the world that Mercosur and European Union countries are for low tariffs, for smooth trade, for creating better quality and better prices for our consumers," EU Trade Commissioner Maros Sefcovic told DW after the signing. However, the European Parliament later halted the deal by voting for a lengthy review process by the European Court of Justice.
Ursula von der Leyen will be hoping for better luck at the EU-India summit on Tuesday in New Delhi. At the meeting, which will be hosted by Indian Prime Minister Narendra Modi, it is expected that bilateral ties will be intensified. The European Union is especially keen to finalize a free trade deal with the world's largest democracy and the fifth-largest economy.
Negotiations on the EU-India Free Trade Agreement first started in 2007, were paused in 2013, and then restarted in 2022. A breakthrough in talks would be consequential for both sides and cover a market of 2 billion people and a quarter of global gross domestic product.
The EU already has preferential trade agreements with 76 countries and has shown renewed interest in joining the Comprehensive and Progressive Agreement for Trans-Pacific Partnership. In recent years, the EU was able to negotiate updates to its agreements with Mexico and finalize negotiations for a trade and investment agreement with Indonesia.
Agreements with Malaysia, the Philippines, and the United Arab Emirates are being negotiated. Furthermore, the EU-UK Trade and Cooperation Agreement is up for review this year, which is hoped to repair relationships and enhance cooperation.
Peter Chase, a visiting senior fellow at the Brussels office of the German Marshall Fund of the United States, emphasized the importance of reestablishing the rule of law. "Only the EU can help build the coalition of countries that will be needed to do this," he said, to push back against both "America's breaking of its commitments and China's long-standing refusal to keep the promises it made when it joined."