Revitalizing Global Trade: EU and CPTPP Consider a Strategic Partnership
EU contemplating increased partnerships with the transpacific alliance amid Trump's disruptive trade policies
The recent return of Donald Trump to the White House has kicked off a new wave of discussions to create a strategic partnership between the European Union (EU) and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), a mighty coalition consisting of 12 nations including Japan, Canada, and Mexico.
This revised plan was initially sparked by Trump's April announcement of "liberation day" tariffs. Now, EU officials and senior diplomats are eager to collaborate with the CPTPP, asserting that it's "still early days," but both sides are willing to explore a structured cooperation.
European Commission president Ursula von der Leyen explained that their primary objective is to establish rules for fair trade on a global scale, beneficial to all mankind. Both the EU and the CPTPP wish to use the current economic upheaval to rectify issues within the World Trade Organization (WTO) and strengthen their partnership to make it happen.
In 2023, an attempt to deepen ties with the CPTPP failed to gain diplomatic traction. However, a report at the time by Sweden's National board of Trade suggested that a deal between these two trading giants could make them the center of gravity in world trade. If successful, the partnership could account for approximately 30% of global GDP, indicating its potential global significance.
The CPTPP, founded in 2018, includes Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the UK, and Vietnam. It offers equal treatment for investors and more deeply integrated goods trade. The EU already has bilateral agreements with nine CPTPP members.
Encouraged by Europe's new approach, CPTPP members such as New Zealand, Canada, and Singapore have shown vocal support for closer ties with the EU, while Japan has reportedly remained quietly enthusiastic. Canada's foreign ministry has emphasized its commitment to strengthening trade relations with Europe and the Indo-Pacific region, but cautioned that no decisions or agreements have been finalized. Nevertheless, recent endorsements from the prime ministers of New Zealand and Singapore suggest a growing interest in deepening cooperation between the two blocs.
Meanwhile, discussions between the EU and CPTPP have yet to culminate in a formal dialogue process. However, the expectation is that the formation of a new Australian government, following their recent general election, will lead to a resumption of stalled EU-Australia bilateral trade deal talks. These discussions could act as a platform for a wider EU-CPTPP dialogue. CPTPP officials also plan to raise the issue of improved EU cooperation at the upcoming Asia-Pacific Economic Cooperation (APEC) meeting.
Former EU trade commissioner Cecilia Malmström, now at the Peterson Institute for International Economics, feels that a deal is gaining momentum. "If this happens, it needs to happen quickly - this year," she declared, noting the EU's tendency to move slowly. The parameters of any future arrangement are still undecided, with no plans for the EU to join the CPTPP.
The EU and the CPTPP must navigate a complex path filled with challenges, as their vastly different economic and geopolitical interests necessitate careful negotiation and compromise. However, if successful, the partnership stands to significantly expand trade opportunities for both blocs and serve as a counterbalance to major global players, like the United States and China.
- The EU and CPTPP officials are actively discussing potential tariff adjustments as they aim to strengthen their strategic partnership, aligning their politics and converting economic upheavals into opportunities for rule-setting in global trade.
- The ambitious plan to establish a partnership between the EU and CPTPP, if successful, could potentially convert approximately 30% of global GDP, thereby positioning the two trading giants as the center of global economic gravity, rivaling major players such as the US and China.
- The renewed interest in a partnership between the EU and CPTPP has received endorsements from several CPTPP member countries, including New Zealand, Canada, and Singapore, who are keen on strengthening their trade relations with Europe, with the goal of converting the partnership into a significant counterbalance in global politics.
