Another way of doing things: the major EU-India agreement

After almost two decades of negotiations, with their corresponding ups and downs, the European Commission, which has jurisdiction over trade, and the Indian government have concluded “the mother of all trade agreements,” which will mean a significant improvement for both the more than 450 million Europeans and the nearly 1.5 billion inhabitants of the most populous country on Earth. In other words, a treaty that affects 2 billion people, or one in four of the individuals who populate our planet.

Much of the credit for the conclusion of this agreement must go to the most powerful man on Earth, US President Donald Trump, whose approach to international relations has left peoples and leaders around the world in a state of uncertainty, alarmism, and fear for the immediate future.

The free trade generated by this agreement is based on a trade exchange of €180 billion (the latest official figure available for 2024), an amount that the European Union believes will have doubled by 2032, thanks to the total elimination or reduction of tariffs that EU exports to India have suffered until now.

The reductions will immediately mean a reduction of more than €4 billion in tariffs on European products, including Spanish wine and oil. Both of these agri-food gems will become cheaper in the populous Indian market; wine will go from paying a tariff of 150% to 30%, while olive oil will see the 55% tariff it has been subject to until now disappear completely. Other widely consumed agri-food products such as pasta and chocolate will see their current 50% tariffs disappear completely.

The European Commission has managed to maintain protection for the most sensitive products, specifically chicken and beef, as well as rice and sugar, which will be the subject of further negotiations until they are also included in the agreement signed by Ursula von der Leyen and Antonio Costa, on the one hand, and Narendra Modi, head of the Indian government, on the other.

Both the President of the European Commission and the President of the European Council are thus making up for the “setback” suffered by the European Parliament's referral of the EU-Mercosur Agreement to the Court of Justice of the European Union (CJEU), also a milestone in the history of world trade (a free trade area for 700 million people on both sides of the Atlantic), but which could be left fallow if its actual entry into force is delayed for a long time, due to the time it takes for the CJEU to decide whether or not the EU-Mercosur agreement is in line with the Union's treaties. 

Both agreements are comprehensive, so they do not affect just one sector. In the case of the EU-India agreement, European industry will also benefit greatly. Tariffs on automobiles will be gradually reduced from the current 110% to 10% over a maximum period of ten years. Taxes on capital goods, chemicals, and pharmaceuticals will also be drastically reduced or even eliminated altogether.

In short, the EU is looking out for itself, having realized that its close friend and ally, the US, is keeping its promise of “America First,” even if it means stepping over the corpse of its best friend. It also knows that if each of the 27 member states goes it alone, they will all be easy prey for the American giant.

It also sends a message to the US and the rest of the world that things can be done differently, through dialogue, cooperation, and rules respected by all. In other words, the EU has finally decided to start speaking the language of power, which it has, and to shake off its despondency and propensity for vassalage.

Incidentally, Spanish farmers have announced an “invasion” of Madrid with thousands of tractors in February. Even if their legitimate demands are not questioned, someone should persuade them that savage protectionism, similar to that being instituted by Trump, is by no means the best solution for competing in a globalized and, even to their regret, integrated world.