BRUSSELS — Europe is getting fed up with Donald Trump’s trade threats — and is exploring a bold move to look east instead of west to find partners who want to play by the rules.Trump’s unilateral and arbitrary tariffs — which could ratchet up to 50 percent from July 9 if EU and U.S. negotiators fail to cut a trade deal — have tested EU chief executive Ursula von der Leyen’s patience and resolve. Her response? To team up with the CPTPP, a Pacific-centric trade group that includes like-minded nations such as Japan, Australia, Canada and Mexico.
Between them, the 39 countries of the EU and (deep breath) Comprehensive and Progressive Agreement for Trans-Pacific Partnership account for 30 percent of world trade. Forming a coalition of the willing could, boosters argue, mark a first step toward reconfiguring the international trade order and escaping the institutional paralysis besetting the World Trade Organization.
In a pitch to EU leaders, von der Leyen turned previous comments on possible cooperation with the CPTPP into more of a reality. The new grouping would redesign the rules of global trade, she said, reforming or perhaps even replacing the global trade rules body.
Such a plan would “show to the world that free trade with a large number of countries is possible on a rules-based foundation,” von der Leyen said after an EU summit on Thursday night. “This is a project where I think we should really engage on, because CPTPP and the European Union is mighty.”
Making the pledge
But how could forming such a coalition of the willing work?
One idea would be to make an up-front pledge to uphold the established rules of multilateral trade, veteran trade negotiators Tim Groser, Steve Verheul and John Clarke said in exclusive commentary shared with POLITICO.
Groser, a former New Zealand trade minister; Verheul, previously Canada’s chief trade negotiator; and Clarke, until recently a senior EU trade negotiator, said the 39 EU and CPTPP countries should, in a first step, commit to a “Standstill Agreement” to keep their markets open to each other.
“What it would do is send a massive signal to Washington that a very substantial part of the global economy, including nearly all the traditionally closest partners of the United States, remains committed to the rules-based system,” they said.
The U.S. had the chance to join the CPTPP, previously known as the Trans-Pacific Partnership, during the Barack Obama administration. But Trump withdrew in 2017, after taking office for the first time, before the pact could be finalized.
When asked on Thursday if the U.S. would join the new initiative between the EU and CPTPP, von der Leyen replied, “As far as I understand, the Americans left at a certain point.” It would be up to the two blocs to decide if they want to let them in, she added.
Ignacio García Bercero, a former chief EU trade negotiator, believes that the potential partnership shouldn’t close the door to the Americans just yet, nor should it be seen as a move to antagonize Trump.
However, “if the U.S. is not ready to join because they don’t believe that the solution to these problems is rules, others are going to have to move ahead without the U.S.”
You’ve got a friend
The United Kingdom has also spearheaded efforts as a newer CPTPP member to welcome the EU’s drive to strengthen ties between the two potential partners.
“I’ve been talking to the leaders in Japan, in Singapore, in Australia, New Zealand, Canada, about how we, the U.K., can trade in an easier, better way with them — whether we as a group of countries can trade with other countries in an easier and better way,” Prime Minister Keir Starmer said as he launched the U.K.’s first Trade Strategy since Brexit on Thursday.
Those countries are all members of the Asia-Pacific bloc, which the U.K. joined in December.
Starmer’s government has been open to the idea of the bloc and EU teaming up. “I do think that it’s [a] difficult environment, but there are significant opportunities if we’re agile about it, if we understand the world we’re living in, and get ahead of the curve,” the prime minister told businesses during his Trade Strategy launch in Westminster.
If the EU and CPTPP can establish a new community of values and interests, that could serve as the basis to address trade challenges that have accumulated since the WTO was founded 30 years ago — but that it has been unable to resolve because the Geneva-based trade club works by consensus and its largest member, the U.S., won’t play ball.
“This must start outside Geneva with a group of countries that can move more decisively,” argued Groser, Verheul and Clarke. “In the medium term, we contend that this grouping could be a focal point for developing new rules and commitments to a trading system that can deliver continued growth and prosperity to their people.”
Von der Leyen is already courting the leaders of CPTPP countries, issuing a joint statement with Kiwi Prime Minister Christopher Luxon after their meeting this week in which both supported the launch of a dialogue between the EU and CPTPP “as soon as possible.” That echoed an appeal by CPTPP ministers meeting in Jeju, Korea, in mid-May.
A meeting at ministerial level is planned in July, according to an EU official.
“To be clear, the EU is not joining [the CPTPP] as such, but we are building bridges between the two blocs,” the official, speaking on condition of anonymity as is customary in Brussels, said before the EU summit.
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