2023 promises a high level of tension in the area of trade policy for various reasons. First and foremost, there are final negotiations on numerous trade agreements, which are to be observed critically, especially from the perspective of sustainability. The potential acceleration of the entry into force of already concluded trade agreements by splitting off the investment part is also explosive from a democratic policy perspective.
Key trade agreements that will continue to be negotiated in 2023 include the trade agreement with Australia, which is expected to be concluded in the coming months. There will also be further meetings of EU representatives with India on a comprehensive trade agreement, as well as with Indonesia.
With regard to the negotiations already concluded at political level on the Mercosur Agreement, which includes Argentina, Brazil, Paraguay and Uruguay, it will be particularly important to see to what extent the EU Commission sticks to its plan to split future association agreements (“splitting”). The associated endangerment of the democratic co-determination of individual Member States by circumventing the unanimity principle in the Council of the EU and the omission of the approval of national parliaments was already criticised by AK and other civil society organisations shortly after the plan became known.
With regard to US-EU trade relations, a fourth meeting of the Trade and Technology Council (TTC) is planned for the middle of the year to discuss progress to date and to develop new cooperation opportunities. Particularly worthy of attention in the context of EU-US relations are the ongoing negotiations of the specially established Task Force on the Inflation Reduction Act (IRA), which aims to mitigate the potentially adverse effects of this multi-billion US Subsidy Programme on European industry and related jobs through joint compromise solutions.
Priorities of the Swedish Presidency
Sweden, which took over the six-month rotating Presidency of the Council from the Czech Republic on 1 January 2023, has already announced its trade policy priorities for the upcoming meetings of the EU Council. Accordingly, on the one hand, the aforementioned negotiations on trade agreements still to be concluded are to be advanced. Support for the reconstruction of Ukraine through closer trade relations is also given high priority. In addition, the advancing digitalisation is to be given a more prominent role in the negotiations on future agreements, as is the aspect of sustainability. Finally, Sweden also wants to work for the further development of the WTO reforms initiated at the last Ministerial Conference (MC12).
AK emphasises the importance of sustainable trade partnerships
From AK’s point of view, the EU must increasingly push sustainable trade partnerships against the background of the climate crisis and the prevailing global inequality. The environmental and social challenges cannot be managed without explicit and binding sustainability chapters, which is why the inclusion of such clauses is essential. In this context, last year's revision of the TSD ("Trade and Sustainable Development") approach is an important step in the right direction, although the effectiveness of these new requirements will only become apparent in the negotiations on the various trade agreements due in 2023.
The new ”Coalition of Trade Ministers on Climate” which was launched by the EU and 26 partner countries on 19 January 2023 at the World Economic Forum in Davos, could also make an important contribution to building sustainable trade partnerships. The aim of this international coalition is to expand and intensify trade policy measures that can contribute to tackling climate change. The strategies and recommendations developed in this context are intended to help in particular those countries that are particularly affected by the impacts of a changing climate.
AK EUROPA Position Paper: The power of trade partnerships – together for green and just economic growth
AK EUROPA: Sustainable trade partnerships - cornerstones of the green transition?
European Commission: Trade and Climate – EU and partner countries launch the ‘Coalition of Trade Ministers on Climate’