As the European Union advances on trade, the United States appears to be faltering.
In the past week, the EU has settled two major trade deals. In the same time, the U.S. has postponed tariffs in China, leaving an agreement on trade up in the air, slapped 400% tariffs on Vietnamese steel, and threatened new tariffs on $4 billion worth of EU products.
The two nations’ paths appear divergent, to say the least.
Last Friday, the EU and Mercosur reached an agreement on trade that’s expected to “give European companies an important head start into a market with an enormous economic potential,” the European Commission said in announcing the news.
The agreement between the EU and the bloc comprising Argentina, Brazil, Paraguay and Uruguay will remove the majority of tariffs on EU exports to the countries — which will spell an opportunity for textiles, too.
“This will help boost exports of EU products that have so far been facing high and sometimes prohibitive tariffs,” the Commission said.
For clothing and footwear, the EU-Mercosur agreement will see 35% tariffs eliminated, and the 26% tariff on knitted fabrics will also be removed.
“I measure my words carefully when I say that this is a historical moment. In the midst of international trade tensions, we are sending today a strong signal with our Mercosur partners that we stand for rules-based trade,” European Commission president Jean-Claude Juncker said.
“Through this trade pact, Mercosur countries have decided to open up their markets to the EU. This is obviously great news for companies, workers and the economy on both sides of the Atlantic, saving over 4 billion euros ($4.51 billion) worth of duties per year. This makes it the largest trade agreement the EU has ever concluded,” Juncker added.
Just two days later, the European Commission and Vietnam signed a Free Trade Agreement and the Investment Protection Agreement, calling it in a joint statement “the most ambitious free trade deal between the EU and an emerging economy to date.”
The deal is set to strengthen trade relations between the EU and not just Vietnam but the entire ASEAN region, which also comprises Indonesia, Malaysia, the Philippines, Singapore, Thailand, Brunei Darussalam, Vietnam, Laos, Myanmar and Cambodia.
The EU, according to the European Commission statement, is “aiming towards closer trade and investment relations between the two regions.”
The EU-Vietnam FTA is now being reviewed for ratification, which the Commission said it hopes to wrap “in the coming months” so companies and consumers on both sides can “reap their benefits as soon as possible.”
Editor’s Note: This story was reported by FN’s sister magazine Sourcing Journal. For more, visit Sourcingjournal.com.
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