EU takes new trade initiative

European Commission chief Ursula von der Leyen has proposed to EU leaders the launch of a Europe-led initiative to establish a structured trade cooperation with Asian countries, potentially laying the groundwork for an alternative to the gridlocked World Trade Organisation (WTO).

At Thursday’s EU summit in Brussels, European leaders discussed the possibility of overhauling the WTO’s institutional framework, including its stalled dispute resolution mechanisms, to better reflect the current global trade landscape.

“The WTO hasn’t worked for years,” German Chancellor Friedrich Merz said in a press conference following the summit, referencing persistent dysfunction under both the Trump and Biden administrations.

Commission President Ursula von der Leyen presented leaders with different options of trade deals, labelling as the most attractive a closer cooperation between the EU and members of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), a regional trade pact of 11 Pacific Rim countries and the UK.