EU South America Malaysia Switzerland Trade Agreement China Brazil ‘Reorganization Excluding the US’
The European Union is reorganizing into a ‘global trade excluding the US’ as it has signed three trade agreements with South America, Switzerland, Malaysia, etc., and China, Brazil, and India are getting closer.
On December 6, the European Union (EU) agreed to create the world’s largest trade zone connecting four South American countries and a market with a population of 850 million.
The EU signed a trade agreement with Switzerland in two weeks ago, strengthened its trade agreement with Mexico in January, and resumed talks on a free trade agreement (FTA) with Malaysia that had been delayed for 13 years.
The trade deal between the European Union (EU) and Mercosur (Argentina, Brazil, Paraguay, Uruguay) is the world’s largest trade bloc, and aims to cut tariffs for European carmakers like BMW, Fiat, Peugeot, and Volkswagen, as well as European pharmaceutical giants like Novartis and Sanofi, to gain easier access to the massive healthcare market.
The new trade deal will have to be ratified by EU member states and the European Parliament before it can take effect, and tariffs on key products such as meat, cars, wine, and chocolate will be eliminated.
The New York Times reported on December 6 that “despite strong French opposition to the deal, Paris appears to have failed to convince other European countries to vote against it, and a date for the ratification vote has not yet been set,” adding that “as European leaders brace for the possibility that a second term for President Trump could further fragment the global economy, the EU’s largest trade deal in history is a significant victory for free trade advocates, linking a market of more than 700 million people.”
The European Union (EU) and Switzerland reached a bilateral agreement on trade volume estimated at about 550 billion euros on December 20.
“The purpose of the agreement is to integrate Switzerland into the EU single market,” Euronews reported on the day, adding that “it updates existing agreements on the free movement of people, transport and agricultural trade, and new agreements are also signed to integrate Switzerland into the EU’s internal electricity market and allow Swiss researchers to participate in some EU research programs such as Horizon Europe.”
The European Commission said in a press release on January 17 that the enhanced trade agreement with Mexico “will eliminate high tariffs on EU exports of food and agricultural products, including cheese, poultry, pork, pasta, apples, jams, chocolate and wine, and protect traditional European products.” “The agreement includes trade and sustainability provisions that set out binding commitments on labour rights, environmental protection, climate change and responsible corporate products, and a dispute resolution mechanism to ensure enforcement of these provisions,” the Commission said.
The trade elements of the agreement “will strengthen an already thriving” trade relationship, the Commission said, adding that EU-Mexico trade in goods will be worth €82 billion in 2023 and two-way trade in services will be worth €22 billion in 2022.
Mexico will also eliminate high tariffs on several EU agri-food products, including tariffs of up to 45 percent on cheese, up to 50 percent on milk and 45 percent on pork loin. The number of traditional EU products protected by this agreement almost doubles to 232 spirits and 336 wines, beers and food products.
URACTIV reported on January 17 that “one of the most controversial issues in the negotiations was investment protection and the recognition of traditional EU food and beverage products (geographical indications) in Mexico,” adding that “the other issue is access to the Mexican electricity market, which has been delayed due to Mexico’s plan to change its constitution in favor of its state-owned power company. In return for the EU losing access to the Mexican electricity market, Brussels has imposed quotas on the export of certain “sensitive” agricultural products to Mexico.”
The bilateral trade agreement was originally negotiated for beef, with a quota of 10,000 tonnes subject to a 7.5% tariff, but the 2024 agreement halves this to 5,000 tonnes, the same as beef offal (offal), and reduces the poultry quota from 10,000 tonnes to 6,667 tonnes.
The duty-free ethanol exports for “other uses” other than spirits are reduced from 18,000 tonnes to 5,500 tonnes.
Mexico will respond by eliminating high tariffs on EU agri-food exports, imposing tariffs of up to 45% on cheese, up to 50% on milk and 45% on pork loin.
“The number of traditional EU products protected by this agreement almost doubles to 232 spirits and 336 wines, beers and food products,” said URACTIV.
On January 22, the EU Reporter reported that “EU Commission President Ursula von der Leyen and Malaysian Prime Minister Anwar bin Ibrahim announced the resumption of negotiations for an ambitious, modern and balanced EU-Malaysia Free Trade Agreement (FTA).” “The EU is Malaysia’s fourth largest trading partner, with trade in goods reaching 45 billion euros in 2023 and trade in services reaching 11 billion euros in 2022.”
In a statement that day, EU Commission President von der Leyen said, “Europe and Malaysia share a commitment to a rules-based international order, economic openness, sustainable development and regional stability.” “As the third largest trading partner in ASEAN and the current chair, Malaysia plays a central role in shaping the direction of the EU, and today’s announcement reaffirms Europe’s commitment to strengthening relations with Malaysia and ASEAN as a whole.”
“The EU Reporter” said, “This agreement builds on the EU-Malaysia partnership based on strong commitments to labor rights, climate and environmental protection, while also promoting the EU’s strategic engagement in the fast-growing Indo-Pacific region,” adding, “The EU and Malaysia are committed to advancing the FTA negotiations quickly, with the aim of holding the first substantive negotiations in the coming months.”
Euronews reported that day, “The purpose of the agreement is to integrate Switzerland into the EU single market,” adding, “It updates existing agreements on the free movement of people, transport and trade in agricultural products, and a new agreement was also signed to integrate Switzerland into the EU internal electricity market and allow Swiss researchers to participate in some EU research programs such as Horizon Europe.”
The New York Times reported on the 3rd that “Indonesia joined BRICS, which was established in 2009 along with Brazil, Russia, India, China, and South Africa, in January, becoming the 10th member country.” “This economic club currently accounts for half the world’s population and more than 40% of total economic output, and eight countries, including Bolivia, Thailand, Kazakhstan, and Uganda, are in the process of becoming official partners.”
The New York Times continued that “China has already begun renewing its free trade agreement (FTA) with ASEAN, which includes Cambodia, the Philippines, Indonesia, and Vietnam, and trade and investment with India, the world’s most populous country, are deepening.” “The United Kingdom also officially joined the Trans-Pacific trade bloc, which includes Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, and Vietnam, as a new trading partner in December, and is attempting to repair its strained economic relationship with the European Union, which it had withdrawn from, and Brazilian and Mexican officials have begun to expand trade agreements.”
The New York Times said of India, “New Delhi has demonstrated its economic independence by refusing to go along with Western sanctions on Russia, and now, along with China, it has become the largest buyer of cheap Russian oil.” “Persian Gulf states such as Saudi Arabia and the United Arab Emirates (UAE) have also turned their attention to India and China, increasing their energy exports to meet growing demand.”
A HSBC Global Research report said, “The reorganization of global trade is led by Asia, with nearly 60% of trade occurring within the region.” “Half of the world’s fastest-growing trade corridors are in Asia, and by 2023, China’s exports to ASEAN countries will surpass those to the United States.”
“India’s trade has expanded across the geopolitical spectrum,” said the McKinsey Global Institute’s January 27 report, Geopolitics and the Geometry of World Trade: 2025 Update. “India is on track to become a major exporter of tariff-free digital services, and a growing number of European, Australian, and Japanese multinationals are opening operational hubs here, known as Global Capability Centers.”
A May 28 report from CARNEGIE said, “Asia accounts for more than 70% of the Gulf region’s total oil and gas exports.”
Following China as a global economic powerhouse, India is set to overtake the UK to become the world’s fifth-largest economy by 2022.
On the 31st of last month, Democratic Party leader Lee Jae-myung said, “Korea is a member of the liberal democratic camp,” and “I have no objection to further deepening relations with Japan and continuing trilateral cooperation among Korea, the US, and Japan,” and expressed his ‘jointness’ with Trump’s tariff war.
On that day, Lee also recommended Trump as a candidate for the Nobel Peace Prize through his closest aide, Rep. Park Sun-won, and opposed US-excluded trade agreements with Europe, South America, Southeast Asia, and India, and supported Trump’s ‘absorption of ownership of the Gaza Strip’ policy.