Machine translation
Cologne-US President Donald Trump threatened the European Union (EU) and member states with customs duties at every opportunity, while the EU signed free trade agreements with quick moves against it. First, on January 17th, the Mercosur treaty, which was planned to be signed with four Latin American countries for 25 years, was signed. Today, the world’s largest market, India, signed a free trade agreement. For 20 years, the parties have been negotiating for the India-EU Free Trade Agreement, which includes a market of about 1.5 billion people in India and 450 million in the EU. German Prime Minister Friedrich Merz, who recently traveled to India, announced that the agreement would be signed by the end of January after meeting with Indian Prime Minister Narendra Modi.
Today, the President of the EU Commission, Ursula von der Leyen, who went to New Delhi, and Antonio Costa, President of the Council of the EU, signed under the agreement drafted with Modi. “The EU and India are making history today and deepening the partnership between the world’s largest democracies,” EU Commission President von der Leyen said after the signing ceremony.
With the abolition of customs duties between India and the EU, the exchange of goods and services between the parties will be duty-free, so the trade is expected to come alive in a short time. The goal was to promote growth and investment in the economy and reduce dependence on other countries. The new Chinese of the EU: India
The scope and impact of the agreement signed between the EU and India is much wider than Mercosur. India, which has been growing rapidly in recent years, has been a growing economy in Europe for a long time. European monopolies, which have taken important steps in both production and sales by using the Chinese market since the early 1990s, have brought up the shift of production to India as part of the tension with China through the “Taiwan problem.” EU countries and monopolies, which do not want to be affected by the new sanctions imposed by the United States against China, due to the tension, have therefore raised the urgent signing of the free trade agreement with India.
The negotiations initiated in 2007 were suspended and restarted in 2022. Trump’s threats to customs duties have prompted the EU to sign earlier negotiations in a short time.
The daily Die Welt declared the deal “the mother of all agreements”. Indeed, the start of free trade between India and the EU offers huge “opportunities”, especially in terms of selling goods and the new market in terms of cheap labor. Companies from many EU countries are expected to shift their production to India due to its cheap labor force. Relocating some of the investments in China to India is also among the options. At the same time, however, it will lead to India’s rapid growth. Just as it had caused China’s growth before.
The agreement with the EU is also a way for India to exceed US customs duties. The United States is currently imposing a 50 per cent customs duty on Indian products. 25 per cent of this tax stems from India’s commercial transactions with Russia. India supplies much of its oil and gas needs from Russia.
India is now the fifth largest economic power in the world. In a few years, it is expected to cross Japan and Germany and third place after the United States and China. A new Sunday for German car monopoly
India has imposed up to 110 per cent customs duties on vehicles imported from the EU so far, so the German automotive industry can benefit from this agreement, according to the report in the daily Die Welt. Automobile taxes will gradually be reduced to 10 per cent for at least 250,000 vehicles a year. For auto parts, customs duties will be completely removed within 5-10 years. In addition, 44 per cent of heavy industrial machinery, 22 per cent for chemical products, and 11% on drugs will be greatly lifted. Germany is one of the most exported countries in the EU. Therefore, it is not in vain that the most efforts to sign the agreement is spent by Germany.
The EU aims to double its exports to India by 2032. According to EU data, more than 6,000 European companies still operate in India. Of these, 2,000 are German companies.
Meanwhile, the agreement must also be ratified by the EU member states and the European Parliament. Mercosur signed despite objections
Europe’s independence from China and the United States has been intensely debated for some time. The United States is of great importance for the EU, especially Germany, in terms of foreign trade. Trump’s 15 per cent customs duties last year, however, threatened new customs duties, raised options to increase options to avoid dependence on the United States. In this context, the first Mercosur agreement was signed on 17 January this year. The deal envisions free trade between 27 EU countries and Argentina, Brazil, Paraguay and Uruguay. Mercosur, which covers nearly 700 million people and is one of the largest free trade zones in the world, continues to receive criticism from within the EU. The latest European Parliament decided to address the agreement at the European Court of Justice within the framework of the objections. However, EU Commission President Ursula von der Leyen said the agreement would take effect before it was signed in the parliaments of the member states. From the four Latin American countries to the EU, mainly agricultural and animal products are expected to be sold to the EU and industrial products from Europe to these countries duty-free. Agreements signed with 76 countries, new ones are next
The EU has already signed a free trade agreement with more than 76 countries. It plans to join the Comprehensive and Progressive Trans-Pacific Partnership Agreement, which is composed of 12 Asian-Pacific countries, where only Britain is members from Europe.
Last year, the EU agreed on a modernized version of the current trade agreement with Mexico. In the same year, an economic partnership and investment agreement was signed with Indonesia. Agreements with Malaysia, the Philippines and the United Arab Emirates (UAE) continue to be negotiated.
The developments show that the EU and other countries remain silent against US customs imposing, signing new trade agreements in their own interests. If the signatures are fulfilled, the US superiority in global trade seems to be further shaken.
