The age of globalization requires agreements between world powerhouses and other countries. The European Union is no exception – EU trade relations impact the performance of assets related to this region.
EU trade deals in Europe
Trade deals within the European Union are crucial to the region’s economic landscape. In this integrated market, members can trade goods, services, and capital freely across borders without tariffs. Free trade has transformed the EU by giving consumers more choices at lower prices.
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However, EU trade relations do not apply to the other European countries that are not Union members. Brexit has redefined trade relations and brought new challenges. The effects of Brexit are profound. It does not impact trade but also the broader economic interactions between the UK and the EU.
While EU trade deals typically promote economic stability, as seen in benchmark assets like EURUSD. The impact of Brexit is the opposite – adaptability and strategic planning are crucial in the constantly changing economic landscape of Europe.
Transatlantic trade: The U.S. and Canada
Transatlantic trade is vital for the EU’s international strategy. It reflects the Union’s status as the world’s second-largest exporter of goods between China and the U.S.
The EU signed the Comprehensive Economic Trade Agreement (CETA) with Canada. It not only embodies the EU’s commitment to expanding its trade reach. Moreover, the Union focuses on tightening relationships with countries that uphold similar standards. Even though fossil fuels such as oil play a vital role in Canada’s economy, this country also approves most of the Green Deal’s objectives.
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Meanwhile, relations with the U.S. are continually evolving. The European Parliament actively negotiates to eliminate tariffs on industrial goods. This move can potentially streamline trade processes and reduce costs for exporters on both sides. This negotiation is part of a broader effort to enhance the EU-U.S. trade relationship.
EU Trade With Other Regions
As a global trade powerhouse, the European Union actively engages with diverse economies across the world, forging partnerships that foster mutual economic growth.
One of the key regions is Asia, where the EU has successfully negotiated the EU-Japan Economic Partnership, which came into effect on February 1, 2019. On the other hand, the EU’s trade relations with China do not include free trade negotiations. Instead, both economic powerhouses have focused on protecting geographical indications and the authenticity of regional products.
The EU trade relations can be seen worldwide. One of the most recent deals is the trade agreement with Chile, effective from February 29, 2024. This updated agreement grants tariff-free access to almost 100% of EU exports to Chile. Additionally, it enables easier import of crucial raw materials like lithium and copper from this South American country.
