The leaders of the United States and the European Union announced that they had reached an agreement on the terms of a trade deal. According to Donald Trump, goods from the EU will be subject to a 15% tariff in the U.S. At a press conference, Trump stated that the import tariff on goods from EU countries to the U.S. would be no less than 15%. In addition, he said that EU countries will purchase military equipment and energy resources from the United States worth $750 billion over the next four years, and will also invest $600 billion in the American economy.

According to media reports, von der Leyen said that the parties had managed to strike a beneficial deal.

The United States and the European Union account for nearly one-third of global trade in goods and services. Imports of goods from the EU to the U.S. significantly exceed American exports to Europe (according to last year’s data: $606 billion versus $370 billion).

The creation of transatlantic and transpacific free markets for capital, trade, and the transport sector has been under discussion since the beginning of the century, but so far, proposed agreements have failed mainly due to concerns about consumer market quality. This was the case with the suspension of the U.S.-led Trans-Pacific Partnership (TPP), which involved 12 countries: Australia, Brunei, Vietnam, Canada, Malaysia, Mexico, New Zealand, Peru, Singapore, the United States, Chile, and Japan. According to estimates, the agreement would have covered around 40% of global trade. A similar initiative between the U.S. and the EU — the Transatlantic Trade and Investment Partnership (TTIP) — saw its negotiations effectively put on hold. If successfully implemented, the agreements (TPP and TTIP), aimed at deregulating trade and investment relations in a market representing up to 86% of global GDP, could have contributed to a threefold increase in global GDP by 2030.

However, until now, probably the only successful trade agreement is CETA between the EU and Canada on the creation of a free trade area, which was signed on October 30, 2016, at the EU-Canada summit. The document was then signed by European Council President Donald Tusk, European Commission President Jean-Claude Juncker, and Canadian Prime Minister Justin Trudeau. The agreement provides for the elimination of 99% of customs duties between the parties and includes a provisional application mechanism, which allowed it to come into effect even before being ratified by the parliaments of the EU member states and Canada. According to the European Commission, the volume of bilateral trade between Canada and the European Union (EU) was $77.4 billion in 2015, while in 2024, the trade turnover amounted to 76 billion euros. This does not support the case for the globalization of world trade, as CETA was supposed to serve as a prototype for larger-scale trade deals. However, it has shown that the agreement’s conditions provided a good opportunity for small and medium-sized businesses to enter new markets, strengthening the economic competitiveness and investment attractiveness of both the EU countries and Canada.

Author:

First Deputy Chairman and Editor-in-Chief of Caspian Energy International Media Group

Natalia Susel