Recent Evolution in International Trade in the Transatlantic Area: Unexpected Consequences or Nothing New Under the Sun?

Abstract

Since January 2017, the US Government has taken some controversial positions in international trade. This includes, most notably, the renegotiation of the North American Free Trade Agreement (NAFTA) with Canada and Mexico, the implementation of higher tariffs on steel and aluminum, and the suspension of the Trans-Pacific Partnership (TPP) and Transatlantic Trade and Investment Partnership (TTIP). The present contribution wishes to study whether the US trade positions have caused any effect in transatlantic trade relations, with a specific focus on the EU, Canada and Mexico. Formal trade talks between the EU and Canada and the EU and Mexico go back at least to the 1970s. Currently, EU–Canada and EU–Mexico trade relations revolve mainly around the EU–Canada Comprehensive Economic and Trade Agreement (CETA), provisionally entered into force in September 2017, and the modernization of the Global Agreement between the EU and Mexico, the trade part of which was concluded in principle in April 2018. This contribution argues that the US trade agenda has generated some effects in transatlantic trade relations, such as strengthening the economic and geopolitical alliance between the EU, Canada and Mexico and accelerating their agreements negotiation and/or approval. These effects, however, are not surprising. Indeed, they perfectly follow a historical pattern according to which the EU, Canada and Mexico have always tried to strengthen their economic and political ties as a reaction to US moves. That notwithstanding, it is argued that the CETA and the modernized Global Agreement are innovative in a number of areas and this is the result of a number of circumstances and US moves that predate President Trump administration.