EU seeks trade pact with Pacific Ocean partnership

Today's announcement by the European Union and the Pacific Partnership takes the EU's relationship with one of the world's largest trading blocs to a new level. Trade Commissioner Maroš Šefčovič officially launched the first EU-CPTPP Trade and Investment Dialogue in Australia, which he opened together with twelve CPTPP ministers.

Given the economic weight of the two blocs, this initiative is not merely a diplomatic gesture: together, the EU and the CPTPP account for 32% of global GDP and 37% of world trade, making this a joint platform for players with real influence in shaping global economic rules.

Speaking at the opening ceremony, Šefčovič emphasized that the EU, which accounts for around 16% of world trade, remains committed to a transparent and predictable rules-based system. He said that cooperation with the CPTPP countries is not a symbolic step, but the beginning of a process focusing on five specific areas: trade diversification, digital trade, reducing barriers to trade and investment, making supply chains more resilient, and strengthening the global trading environment, including the World Trade Organization (WTO).

The Commissioner also held bilateral talks with Australian Trade Minister Don Farrell on strengthening EU-Australia economic relations and with Minister Madeleine King on accelerating planned project-based cooperation in the field of critical minerals. The latter is particularly important in the EU's economic security strategy, as Australia is a stable, reliable partner with high environmental standards in the field of critical raw materials.

The joint ministerial statement issued in Melbourne clearly states that the parties believe that open markets, transparent rules, and predictable trade policies are essential for economic growth and security.

The CPTPP countries and the EU have confirmed that they will continue to fulfill their obligations under existing multilateral and bilateral trade agreements and that disputes will be settled through existing mechanisms.

There was also broad agreement that global phenomena such as market-distorting state subsidies, artificial overcapacity, and economic pressure threaten the trading system and that joint action is needed against such practices. This was mainly a message to China, which is trying to destroy production in other countries, even at a loss.

Special emphasis was placed on the digital economy. The parties acknowledged that, given the growing importance of digital trade, rules are needed that ensure both cross-border data flows and a high level of data, consumer, and privacy protection. The statement also highlighted the WTO's plurilateral negotiations on electronic commerce: the participants' goal is to incorporate the agreement into WTO law and create a long-term, predictable regulatory environment.

The parties unanimously confirmed the maintenance of the moratorium on tariffs on digital products, which has been a fundamental pillar of the global digital economy for the past 27 years.

WTO reform was a key part of the talks. Participants agreed that the multilateral trading system is under serious pressure right now, so it's important to improve decision-making processes, update rules, and fully restore the dispute settlement system. The CPTPP and the EU confirmed their support for efforts to restore the appeal mechanism and encouraged greater participation in the Multi-Party Interim Appeal Arbitration Arrangement. They also pledged their joint support for Cameroon, which will host the 14th WTO Ministerial Conference in 2026.

Practical issues were at the forefront of the dialogue. With regard to trade diversification, the parties discussed which sectors and markets could be used to expand trade in goods and services between the EU and the CPTPP, and where there were sectoral opportunities that could be exploited to reduce both sides' dependence on certain markets. In the field of digital trade, the parties showed openness to closer cooperation, given the significant interest on both sides in interoperable digital regulation based on data security.

On the topic of trade and investment facilitation, discussions focused on simplifying customs procedures, reducing non-tariff barriers, and making cross-border administrative processes more transparent.

With regard to global supply chains, both sides emphasized that the coronavirus pandemic, energy market shocks, and geopolitical tensions have shown that supplier structures work well when they are sufficiently diversified, transparent, and able to respond quickly to disruptions. Participants shared national policies and practices that can strengthen the security of supply of critical raw materials and key products, such as raw materials for battery production or high-tech components. The parties indicated that

supply chains will remain a priority area in the coming years, as both the EU and the CPTPP countries are placing increasing emphasis on economic security.

The dialogue that has just begun is the start of a long-term process. The ministers have tasked high-level officials from both sides with preparing a detailed work plan on selected areas of cooperation by 2026 and reporting on tangible progress next year. The goal is not to reach a single, comprehensive agreement, but to develop cooperation in several specific areas that can significantly increase trade and investment between the EU and the CPTPP.

The overall picture emerging from the Melbourne meeting shows that the EU is now seeking to strengthen its position in the global economy not through new free trade agreements, but by deepening cooperation between existing trading systems. Although the dialogue established with the CPTPP is still in its early stages, the opening statement already indicates that the parties expect tangible regulatory and practical results from it in the coming years, particularly in the areas of the digital economy, investment facilitation, and supply chain security.

Cover photo (for illustration purposes only): Portfolio