Dear Chair,
Honourable Members.
It might be only the end of January, but we have already seen a lot of developments in the sphere of trade policy in 2025.
That is why I am glad that we meet again here, in your Committee.
Time is limited though, so let me get straight into things, by starting with where I see our trade relations with the United States.
The EU and the US are strategic allies and no other economies in the world are as integrated as we are. Indeed, this is the largest bilateral trading relationship in the world, and our ties go far beyond trade.
When engaging with the US, it is important to highlight that we each have an objective interest to protect, nurture, and develop this unique relationship. A lot is at stake for both of us.
In 2023, bilateral trade flows reached EUR 1.5 trillion (EUR 850 billion of trade in goods and EUR 690 billion of trade in services). More than EUR 4 billion of goods and services cross the Atlantic every day. In terms of investment, the EU and US have more than EUR 5 trillion invested in their respective economies.
It is against this general backdrop that we will engage on trade issues with the new US administration, while following the lines of what President von der Leyen said in Davos last week.
We should prioritise our role as a strong partner, expressing our readiness to engage with the US and discuss common interests. We will be ready to explore and negotiate for mutually beneficial outcomes in a pragmatic manner. At the same time, we will stand by our principles to protect our interests and uphold our values – also in case of disruptive scenarios.
In concrete terms there are several elements that a positive transatlantic trade cooperation could include:
- It should reflect overall openness from our side to agree on steps to increase bilateral EU-US trade and investment.
- One commercial area is, of course, LNG purchases. But more broadly, we should be open to discuss sector-specific approaches to developing trade.
- We should also be ready to explore deeper EU-US cooperation on economic security – an area where both the EU and the US want to progress – including on how on to deal with joint challenges coming from China’s non-market policies and practices.
As always, our unity is our strong asset – and I know that the European Parliament will also demonstrate it when engaging with its US interlocutors via the transatlantic dialogue.
On Inauguration Day, President Trump signed a wide range of Executive Orders and memoranda.
Among these, two stand out at this stage in terms of more direct relevance to EU-US trade relations.
First, President Trump signed a memorandum on an ‘America First Trade Policy’. In that memorandum he tasked his Administration to review individual trade policies and provide him with recommendations by 1 April, focusing specifically on unfair and unbalanced trade, China and economic security.
Second, President Trump signed an Executive order on the OECD Global Tax Deal. This could result in potential divergence between the US and the EU or some Member States if the US decides to depart from its previously agreed implementation of the OECD global consensus for corporate taxation – specifically Pillars 1 and 2.
So, we will continue to monitor developments and explore opportunities in areas of shared interests, while we continue our contingency planning for all scenarios.
Meanwhile, we will continue to pursue our trade policy goals around the world, notably by strengthening our trade ties with other countries. The deals struck with Mercosur and Mexico and the progress achieved with Malaysia are good examples of this.
Many countries appreciate their trade links with us and see the EU, more than ever, as an attractive, reliable, and trustworthy partner – bilaterally but also multilaterally at the WTO.
Another trading partner that we must touch on today is China.
China is our third biggest and most challenging trading partner – we need to rebalance this relationship around transparency, predictability, and reciprocity.
This means being more assertive in challenging China’s structural imbalances and unfair practices, such as non-market policies driving overcapacity. We need a level playing field.
Our recent use of the Foreign Subsidies Regulation, the imposition of definitive duties on Battery Electric Vehicles imports from China, and most recently the launch of the investigation under the International Procurement Instrument have already demonstrated our ability to do so.
And we must also continue de-risking our strategic dependencies so as to minimise our vulnerabilities.
But there also is room to expand our trade and investment ties with China at the same time. As has always been clear, we do not seek to decouple from China, but rather to pursue a more balanced relationship, in a spirit of fairness and reciprocity.
And when it comes to de-risking, one of the obvious things we can do is to open and develop new markets, sourcing new supply chains, and boosting our exports.
As you know, we concluded Mercosur at the end of last year, followed by the conclusion of the modernised agreement with Mexico.
Negotiations with Malaysia have also been relaunched this month, which demonstrates the renewed interest we see from countries around the globe, including the ASEAN region as well as the GCC and its constituent members.
Malaysia indeed joins our already advanced agenda of negotiations with key ASEAN countries, including Indonesia, the Philippines, and Thailand, not forgetting our ongoing efforts to move forward, in an accelerated manner, with India.
In fact, I recently met India’s Commerce Minister Piyush Goyal to take political stock of these negotiations. We will focus on delivering the foundations of a commercially meaningful package. The upcoming College meeting and TTC that are set to take place in India this February demonstrate our commitment to building a broader Strategic Partnership with India.
Turning to Mexico, let me start by addressing the issue of prior notice about the deal’s conclusion.
We entered what were to become the final conversations with the Minister of Economy of Mexico with some outlying uncertainties.
Moreover, the negotiations accelerated – on the Mexican side – over the Christmas holidays.
Also, with the start of the new mandate, the Monitoring Groups had not been fully up and running for some time, which led to a gap in communication.
Nevertheless, the Committee Chair and the Standing Rapporteur were given advanced warning shortly ahead of the announcement, as per the usual procedures.
On 17 January, I had a call with Minister Ebrard and concluded the negotiations for a modernized EU-Mexico agreement.
This agreement will replace the Global Agreement that has been in force since 2000 and that has delivered strong benefits, seeing the EU become Mexico’s 3rd largest trading partner, and Mexico our 2nd biggest trading partner in Latin America.
Nearly thirty years on, however, it needed to be modernised. The new deal will:
- Enhance our economic security, including by securing the supply of materials critical for the green and digital transitions.
- Offer strong potential to increase EU agri-food exports to Mexico by removing high tariffs, benefitting European farmers and agri-food companies. In practice, it will remove tariffs on 95% of all EU agricultural and fisheries exports to Mexico, while protecting 568 EU Geographical Indications and thus, safeguarding Europe’s famous food and drink products from imitation.
- The deal will also make it easier for EU companies to bid for government contracts in Mexico. This includes unprecedented access to public procurement contracts at State level that no other trading partner has.
So, what are the recent changes when compared to 2020?
In recent years, Mexico embarked on a process of reforms, particularly in its energy sector. The finalisation of those changes, most notably in terms of its constitutional reform on energy, provided us with a stable environment to bring the negotiations to a close.
In the energy chapter, we take account of these reforms, while at the same time making sure that Mexico guarantees that EU investors will be treated on a level footing with investors from the other preferential trading partners of Mexico – including the United States, Canada, Japan, and South Korea. At the same time, we have preserved the commitments on raw materials.
In exchange for our flexibility on this point, and to ensure that the overall balance of the negotiated outcome was recalibrated to the benefit of EU economic operators, we reduced some of our agricultural concessions to Mexico on some sensitive products, notably beef, poultry, and ethanol. We also made the rules of origin for components of electric vehicles stricter for Mexican exports to the EU.
On the subject of agriculture, I underscore that Mexico is a net importer of EU agricultural goods. The value of the EU’s agri-food exports to Mexico exceeds EUR 2 billion every year, including over EUR 200 million of dairy products.
We have also updated the review clause of the sustainable development chapter, which is similar in content to the joint declaration we have in our agreement with Chile.
So all in all, this represents a very comprehensive deal, and one that comes at an opportune moment, bringing the EU and Mexico closer together as key political, strategic and economic allies.
But since this is a new year and a new mandate, it is only appropriate that we look at new forms of engagement with third countries, and here I am talking particularly about the advent of Clean Trade and Investment Partnerships.
This is one of the flagship policies announced as part of the new Commission and they are intended to bring a holistic approach to our engagement with third countries, better aligning our engagement on trade, investment, and development and strengthening a project-based approach.
This will be a core trade competence when it comes to the articulation of the EU’s new Foreign Economic Policy, and I want to get to work on this immediately.
Our work to fully define the content of these agreements continues, and we are now assessing appropriate potential third country partners that we could negotiate the first of these with.
I will of course update the Parliament once these plans have further progressed.
And, let me remind you, that this supplements some of the work we already began towards the end of the last mandate in extending the offer of our engagement with third countries.
We saw the launch of the first Sustainable Investment Framework Agreement with Angola, we concluded a Digital Trade Agreement with Singapore, and we continue to negotiate a Digital Trade Agreement with South Korea.
We have also concluded a host of Critical Raw Material Partnerships with countries ranging from Canada to Kazakhstan.
Now turning to another priority of this mandate – economic security, which is part of my portfolio and reflected accordingly in my title as the Commissioner in charge of Trade and Economic Security.
As with most things, a solid foundation is essential for delivering results. Thus, I have dedicated a lot of effort to establishing a clear governance structure underpinning our work within the Commission.
In terms of next steps, there are two new deliverables we are working on as a matter of priority:
- A new Economic Security Doctrine; and
- Economic Security Standards for key supply chains.
At the same time, we continue to implement the Economic Security Strategy from June 2023.
Our work keeps advancing under all three pillars – Promote, Partner, and Protect.
Already this month, we conducted high-level discussions on economic security with both Japan and Canada. More will follow.
Earlier this month, we also published the Commission’s Recommendation on Outbound Investments calling on Member States to screen investments in non-EU countries in three key technology areas:
- semi-conductors;
- Artificial Intelligence; and
- quantum technologies.
We intend to conclude this review in 15 months with some preliminary feedback expected already this summer. As a result, we will have the necessary facts to decide whether or not policy action is needed.
I want to emphasise that we have been – and will continue to be – mindful of not placing an excessive burden on our businesses, including by testing the approach with stakeholders beforehand.
The revision of the Foreign Direct Investment Regulation is also ongoing. I know that work has started in this committee to conclude a negotiating position for the Parliament.
On the Council side, I can assure you that work is progressing well, and I am actively encouraging Member States to arrive at an ambitious Common Position, so that trilogues can start before the summer.
Before I conclude, let me mention the legislative proposal on the General Scheme of Preferences. As you know, it was not possible to reach an agreement during the last term due to two remaining sensitive matters: the link with readmission of own nationals and additional protections for agricultural products, with rice in particular.
However, we must acknowledge that this is a key trade instrument for the EU’s engagement with 65 developing countries. Thanks to its generosity, the EU has a voice in parts of the world, where other global players also vie for influence. Without timely agreement, all innovations of the review risk being lost.
I trust we can avoid this, and I will do everything possible to support a political agreement on this important instrument.
Honorable Members, let me stop here and pass the floor back to the Chair. I now look forward to your questions.
Source – EU Commission