On 12 November the EU Commission published its 4th Annual Report on the Implementation of the European Union’s Trade Agreements in 2019, showing an overall growth in economic strength and international trade.
Trade with the 65 preferential partners covered in the report grew by 3.4% in 2019, while the EU's total external trade grew by 2.5% overall.
The EU-Japan Economic Partnership Agreement and the EU-Canada Agreement (CETA) have especially boosted trade, by nearly 6% and 25%, respectively, since their entry into force. Overall, agreements contributed €113 billion to the EU’s overall trade surplus of €197 billion and proved particularly important for European SMEs that trade outside of the EU with a growth of about 6% from 2014 to 2017. EU agri-food exports increased by 8.7% and EU industrial goods exports grew from 1.9% in 2018 to 3.7% in 2019.
Executive Vice-President and Commissioner for Trade Valdis Dombrovskis applauded the good news, stating that “our trade agreements make it easier for EU companies to grow by trading outside the internal market. Tariff cuts boost trade, and we see this borne out in our growing trade with Canada and Japan”.
Additionally, the report analyses the progress of the Trade and Sustainable Development (TSD) chapters, which are now part of all modern EU trade agreements. These chapters allow the EU to “maximise the leverage of increased trade and investment to achieve progress on key issues”, according to the EU press release.
While this is good news for overall growth of the economy in the EU, the impacts of COVID-19 have changed that outlook for 2020-2021. While trade did not fall as heavily as expected in earlier predictions from this year, June forecasts from the EU Commission predict the economy will contract by -7.4%. DG Trade’s Chief Economist Unit estimates a decrease of between 9-15% for extra-EU27 exports and 11-14% for extra-EU27 imports. Predictions as of the fourth quarter of 2020 are still to be determined as the EU enters another stage of full lockdown.