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24 December 2024

EU Faces Trade Tensions Amid New Parliament Session

Bernd Lange leads efforts to navigate geopolitical challenges and trade disputes with China and Global South nations.

EU lawmakers are poised to navigate significant trade and geopolitical challenges as they enter the new 2024-2029 session of the European Parliament. Spearheading these efforts is Bernd Lange, the seasoned German social democrat who begins his third consecutive term as chair of the International Trade Committee (INTA).

With over two decades of experience as a Member of the European Parliament (MEP), Lange is recognized as one of the few lawmakers with the depth of knowledge required to tackle the complex issues facing the EU's trade policy. Currently, the spotlight is on the EU's discord with China. Recent tensions escalated when the EU imposed tariffs on Chinese electric vehicles, citing illegal subsidies from Beijing. This action prompted China to retaliate, launching trade probes against EU dairy, pork, and cognac imports.

“We of course also need to extend our view toward the competition between China and the US,” Lange remarked, underscoring the gravity of the situation not only surrounding the electric vehicle dispute but also the broader geopolitical struggle for access to valuable raw materials. These materials—such as cobalt and lithium—are integral to the green transitions undergoing in major economies worldwide.

During the last legislative term, the EU approved the Critical Raw Materials Act, laying the groundwork for strategic partnerships with resource-rich nations like the DR Congo, Zambia, Namibia, and Rwanda. Lange anticipates heated discussions within the Parliament over the coming years, particularly surrounding the contentious debate between open trade and protectionism.

“Another main challenge will be working on all three pillars of the economic security strategy, not just the ‘protect’ pillar,” Lange explained. He stresses the necessity for any tariff or protective measures to be based not on political motives, but on hard facts. “We should always keep our trading partners' potential reactions in mind.” He also advocates for adherence to World Trade Organization (WTO) rules, pointing out the difficulty of sticking to multilateral regulations when many trading partners deviate from them.

Access to raw materials is pivoting the EU's relationships with countries from the Global South. Many of these nations argue their trade agreements with the EU are fundamentally imbalanced and call for revisions, particularly as the African Continental Free Trade Area gains momentum. This agreement heightens the continent’s call for trade deals with the EU to be reassessed, allowing for national and regional industrialization.

Lange sees this as pivotal, asserting, “One of my main priorities is to conclude fair and broad partnerships with the Global South so the EU remains relevant.” He reinforces the need for EU policymakers to develop comprehensive strategies to strengthen ties with countries around the globe, especially those undergoing development, highlighting the changing dynamics of global trade.

The EU’s Global Gateway initiative, projected to deliver up to €300 billion worth of infrastructure investments to developing nations, is highlighted as a key aspect of this broadened approach to international trade. Lange envisions his committee taking on substantial roles concerning the design and execution of the EU's partnerships focused on raw materials.

“I hope we will be able to conclude and ratify some additional trade agreements,” Lange told EUobserver, yet he cautioned, “we need to recognize these agreements might not provide immediate solutions.”

With the INTA committee composed of various representatives, including Jörgen Warborn (EPP, Sweden), Brando Benifei (S&D, Italy), Thierry Mariani (PfE, France), and others, the upcoming term is set to feature lively debates and collaborative efforts to redefine the EU's international trading stance.

Trade relations, particularly those concerning raw materials, will be at the forefront of Lange's agenda, as he strives to address the changing needs and expectations from both competitive and developmental perspectives. The coming years may prove to be pivotal not just for the EU but for global trade dynamics altogether.

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