EU FTAs ​​export EU regulations: Do they represent the order of international trade?

In the last two years, the European Union (EU) has negotiated or concluded nine free trade agreements (FTAs) with Chile (February 2024), India (relaunched in 2022 and due to expire in September), Indonesia (relaunched in 2024), Kenya (June 2023), Mercosur (December 2024), Mexico (modernized in January 2025), the Philippines (March 2024), Singapore (July 2024), and South Korea (March 2025). All of them export European regulations to countries that are unlikely to comply with them.

On February 21, Harvard economist and professor Jeffrey Sachs argued before the European Parliament that the EU lacks a common foreign policy and consequently recommended the creation of a unified diplomatic corps capable of participating in political and trade negotiations. He explained that a European diplomacy would actively participate in ending the war in Ukraine and take advantage of the planet's abundant resources to ensure the European standard of living, which, according to its annual report released this month by World Happiness.report, is one of the best in the world.

The proposal tormented a Parliament steeped in political strata and ultimately ended up in the hands of the new Commission, which was determined to increase the arms budget, fearing, according to Sachs, a possible Russian attack. Europe's diplomatic deficit reflects regulatory inadequacies and the new generation of FTAs, forcing the EU into unnecessary protectionism.

Milongas and reciprocities for April 2nd

It takes two to tango, on April 2nd, when reciprocity disrupts the negotiated balance of international trade and retaliation begins. The precursors of the tango, milongas originate in Mercosur, and dancing them captivates us but also disappoints us for not offering the grace and elaboration of the tango. Dancing milongas under international trade law would mean not being able to demand free trade or obstructing the application of strict European regulations that are unlikely to be enforced, knowing that the response to the deception of liberalization would generate safeguards, retaliation, and more milonga regulations.

On April 2, the world's largest importer will apply widespread reciprocal tariffs, a flawed technique for a country desperately trying to reduce its monumental trade deficit. This is a critical message for the principles of international trade liberalization: the largest buyer is tired of losing money, and it's time to make up for it. Without much success or diplomacy, the EU seeks to regulate the world order at its discretion. The scheming disputes at the WTO have been raging for seven years. In June 2018, the EU initiated a complaint against the United States (Case DS 548) for the application of tariffs (Section 232) of 10% to 25% on its steel and aluminum exports. After imposing retaliation, the EU obtained a favorable ruling, but the case was only resolved with the change of US administration. On April 2, another global slew of tariffs and retaliation begins, culminating in a review of all FTAs ​​with the US. The regulatory export of EU FTAs ​​will change its two protectionist lies.

The story of digital protectionism

The new US administration views the EU Digital Markets and Services Regulation (2022/2065) as a trade barrier . For South Korea (CS) and the EU, however, following the GDPR (EU Regulation 2016/279) ensures predictable data flow protection and privacy.

The EU-CS digital trade agreement was just signed in March and complements the bilateral trade agreement of July 2011. It liberalizes digital flows and data localization with a triennial review, under the prudential carve-out to protect the European financial system. Regulatory cooperation exports European rules on direct marketing, consumer protection, and employment platforms, including the control of algorithms.

The story of sustainable development as an international value

A concept founded on cultural and political diversity that seeks to establish itself as a globally accepted interest, but curiously, defined in Europe. Under this framework, the US accused the SC of violating Article 13.4.3 of the FTA by not offering sufficient freedom of association, concluding that it was straying from the established goals. Undoubtedly, when it signed the FTA in 2011, the EU was already familiar with the Korean labor legal system.

Sustainable development began as an environmental commitment, generating internal taxes in Canada, for example, and European free trade agreements have shifted it toward social, egalitarian, and even non-discrimination issues, such as the FTA with Chile, which raised the price of medicines, for example. This nonsense, which is not tango, has not reduced inequalities in global trade, but has instead benefited Chinese imports of cheap products.

In principle, FTAs ​​do not propose a reduction in inequalities or impose a specific culture, but rather respect national asymmetries to increase trade. Otherwise, they play a protectionist role. The export of standards has never yielded a fair solution.

The conquest of Mexico

Without serious trade disputes and a CUSMA partner, Mexico is a key player in global agribusiness. More competitive and less regulated than Canada, it has attracted spin-off industries that export to the US. In the eyes of Europe, they rushed to modernize the FTA, in force since January. Digital trade regulations were incorporated, competing with China and the US. The principles of sustainability, investment protection, human rights, intellectual rights, and an innocent project of ecological harmonization aimed at Latin America were added. Since Mexico has ratified nine of the 11 fundamental ILO conventions and approved a labor reform in 2024, the milongas dance like tango even though they haven't corrected, for example, Mexican (or European) marginalized labor.

Mexico's tireless fight against illegal deforestation continues to represent 70% of timber extraction, while the new European deforestation regulations applicable to the FTA will come into force by the end of 2025. They added 350 EU geographical designations and only 20 from Mexico, a milestone for European intellectual property. The EU is familiar with Mexican regulations and yet exports its standards, in contrast to the typical Mexican temperance. Currently, China's significant investment in Mexico makes it easier for it to sign any FTA, both north and east, something that only diplomacy can detect.

Fast-track to Mercosur

Creator of the milonga, 19 years without concluding an agreement with the EU, Mercosur has served as a protection for Brazilian industry and exports, which on April 2 will begin to bear the weight of US reciprocity, despite the fact that their main destination is now China. Mercosur will soon debate between the free individual negotiation of FTAs ​​or their dissolution to allow Argentine, Uruguayan, and Paraguayan exports to gain momentum. The text of the EU-Mercosur agreement will remain open to renegotiation. The FTA was concluded in the shadows, criticized by the European Ombudsman and environmentalists for attempting to divide it to expedite its ratification, violating the principle of Article 13 of the Treaty on the Functioning of the Union. This FTA best demonstrates that the EU lacks a free trade objective and only seeks to regulate international economic law in an integrative manner. In terms of access to natural resources, it competes with Chinese interests in the region, precisely when the EU's dependence on the Asian giant is being questioned.

The EU and Brazil brought a standardized text to the Mercosur summit in December 2024 to demonstrate that an agreement could finally be reached, despite the fact that both countries' trade efforts are geared toward globalizing their commerce. For Brazil, food and agricultural trade with China is a priority, and the EU-Mercosur FTA lacks volume, despite exportable surpluses. Regulatory protectionism and European diplomatic disunity are losing markets and opportunities. The signatory nations of these FTAs ​​risk modernizing their rules on digital trade, environmental protection, security, and even social discrimination in the European style. Many of them are not yet ready or will never be.

Step into Chilean tango

The EU-Chile FTA model, on the other hand, was negotiated with greater pragmatism and awareness of each party's capabilities, peacefully separating the political from the economic. The renewal of this FTA has modernized the concept of origin through an interim agreement (IA) and expanded the list of products with tariff preferences, replacing proof of origin with a self-certification system. However, the environmental chapter is very ambitious, and the social chapter includes a gender equality clause. Finally, it incorporates access for Chilean SMEs to the European stock market and contains interesting rules for mining trade. Its model resembles the FTA with Canada.

Chile is the most advanced Latin American model for trade liberalization thanks to its FTAs ​​with North America and Europe, yet it has cleverly stayed out of Mercosur. It's now reasonable to expect other countries to give way to the legally synchronized Chilean tango capable of managing the export of European regulations.