Key factors likely to shape the EU’s trade agenda in the next five-year term

Abstract

The landscape in which European Union trade policy operates has changed drastically in recent years. In addition to, and partly in competition with, its traditional objective of economic wellbeing, EU trade policy has become increasingly shaped by two other considerations: geopolitics and concerns over the resilience of supply chains, and climate change. This briefing note examines the emergence of this new landscape, how it has already affected EU trade policy with measures to increase European economic security and complement the European Green Deal, how it might affect EU trade policy in the next five years, and how the new landscape has already impacted and might affect in future the multilateral trading system. EU policymakers should be cautious about the economic and climate costs associated with geopolitical-driven policies, particularly in trade. The note ends with recommendations for EU trade policy, calling for a comprehensive assessment of costs in economic terms and climate objectives to safeguard living standards and maintain opportunities for international cooperation in the current context of heightened economic security concerns. Despite evident internal divisions over the EU's approach to multilateralism, finding a strategic balance between its traditional stance and fostering key trade partnerships is imperative.