The Economy Made Us Lose Our Innocence

Due to the latest economic change throughout the world, the European Union is ready to find new solutions, or the solutions they are exposed to are not sufficient to cover the real inflation that is affecting families all over the world. 

I am a big fan of the European Union and I follow all the videos that are available to see.
It's clear that the United States of America is changing the rules of play, and last April President Trump said during one of his speeches that the taxes for Europe are going to be bigger than ever.
And he is not alone in creating some difficulties for the EU. Also, China sees Europe as a good place to sell the things that they produce, but with some limits on the way to creating another difficulty, for the products already on the market and also for the technological parts that need to be completed in Europe.
After exposing all this information, it is clear that Europe is searching for new countries that have the raw materials, such as India, Mexico, Indonesia, bloc Mercosur, to be the new answer to the economic problems. But can a new trade agreement really repair an economy that is moving slowly inside its own borders?

The European Union likes to present trade as a road to growth. More partners should mean more exports, more investment and more jobs. The agreement negotiated with India is described as a historic opportunity, joining a market of almost two billion people. It sounds impressive, as European announcements usually do. But a large population does not automatically become a large market for European products.

India is growing, but it is also a very different economy. Income levels, production costs, labor conditions, environmental standards and consumer needs are not the same as in Europe. European companies may gain access to India, but Indian companies will also gain easier access to Europe. Who will be more competitive when one side produces under expensive European rules, high energy prices and heavy taxation, while the other can often produce at a much lower cost?

An agreement removes some tariffs. It does not remove distance, bureaucracy, cultural differences, local regulations or the difficulty of selling expensive European products to consumers with very different purchasing power. India can become an important partner, but treating it as the solution to European weakness risks confusing potential with reality. The same applies to agreements with Latin America or Asia. Signing papers is easier than creating real growth.

Trade agreements can open doors. They cannot force companies to walk through them, and they cannot guarantee that European workers will receive the benefits.

Before Europe promises that the next agreement will bring prosperity, it should answer a simpler question: if our own market is still divided and our economy barely moves, why should a new partner be able to solve what we have refused to solve ourselves?

Europe also carries one of the heaviest tax burdens in the world. Taxes finance healthcare, schools, infrastructure and social protection, which are real benefits. But they also increase the cost of labour, reduce investment capacity and make every new employee a more difficult decision. In 2024, taxes and social contributions represented approximately 39.4% of EU GDP. At the same time, the Commission expects EU economic growth of only around 1.1% in 2026. Europe collects like a strong economy but grows like a tired one.

Then there are the laws. Europe wants safe products, protected workers, clean production, digital privacy and lower emissions. These are valuable objectives. But every objective creates rules, controls, reports, permits and costs. Large companies can build departments to manage them. Small businesses lose time, money and sometimes the desire to grow. Meanwhile, products made under less demanding systems enter the European market and compete on price.

This does not mean Europe should abandon its standards. It means that preventing standards puts other countries at a big disadvantage.

Of course, being in the Union means more possibilities to trade inside and outside the Union, but also means that there are 27 members that are different and do not experience trade in the same way.

Currently, the EU has over 40 different trade agreements with more than 70 countries on six continents. Some of them are broad, others are more specialized, focusing on intellectual property, investments, geographical indications, or other specific areas.
“The great political advantage is that the European Union can speak on behalf of everyone. It must speak on behalf of everyone and must set the terms of trade relations on behalf of all 27 countires. The power that comes from having a market of 440 million inhabitants is not the same as that of a President of a government of 27 member states. If they want to negotiate independently of what the European Union represents.” [1]

I really hope for the future because every day we see different scenarios in the economy and politics, and Europe has to answer to all these opportunities, to be competitive without losing its own principles. I don't like to think that from this, 27 countries there are only 3 or 4 that make laws that come only to their own rules. And for us that are not living in those countries, the situation is going to be more difficult giving no chances for future generations that are already thinking about living and working in other places over the world.

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[1] Juan Ignacio Zoido Alvarez (EPP, Spain) Lead menber on the role of trade in strengthening the EU’s economic security.