The European Union (EU) is widely regarded as a global trade power. Since its formation, the 27-member political and trade coalition has risen as a dominant region in world trade, accounting for roughly 30% of international trade.1
Currently, the EU is considered the world’s largest trading bloc, giving it a favourable trade position with other countries and regions. Companies and small businesses planning to export from the EU can benefit from this strong trade position. Your export business can potentially enjoy free trade with EU member states and other countries in Europe and treaty-protected exports to third countries worldwide.
Here, we’re exploring some of the facts and figures behind the EU’s dominant trade position, including its export profile during COVID-19 and prospects for lucrative exports in 2022.
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2020 was challenging for most countries and regions, including the EU. By 2019 figures, the EU racked up an export value of $5.51 trillion (30.4% of international exports), with most of its trade going to Germany, the United States, France, the United Kingdom (UK), and Italy.2
However, the difficulties of COVID-19 brought about an immediate drop in export volumes. Due to health concerns and a spate of global sit-at-home orders, exports decreased sharply in March and April 2020, falling from €176 billion to €125 billion.3
Over the following months, export figures continued to trend lower than recorded for the same months in 2019. Although trade picked up slightly (by 2%) in December 2020, driven by the expected end of the Brexit transition period and the UK’s formal exit from the EU, 2020 figures were still low.3
Overall, EU exports fell by 9.4% in 2020, although the country maintained a positive trade surplus.3
Despite this, the EU has rebounded quite well from the lows of the pandemic period. According to Eurostat, the region’s export value in the first quarter of 2021 was higher than 2019 (pre-COVID) figures.4 Additionally, export trade in the second and third quarters picked up, with reported values of $214 billion in June5 and €186 billion in September 2021.6
Significantly, one of the EU’s recovery drivers was its increased trade with China. While trade with the EU’s major export destinations suffered, import and export trade with China grew. China has overtaken the United States as the EU’s largest trade partner.4
Although challenges persist, with concerns over new COVID variants and supply chain disruptions, EU trade remains strong. Greater compliance with vaccine mandates and a growing transition to e-commerce globally will help produce even stronger performance, which is good news for prospective EU exporters.
Because of its dominant trade position, selling from within the EU is an exporter’s dream. As a region, the EU boasts the world’s second-largest economy, with a GDP of $21.7 trillion.7 Due to this, the EU can exert its trade might to secure advantageous treaties, low tariffs, and privileged treatment.
Manufacturers, traders, and wholesale suppliers benefit from these arrangements when they ship products from the EU. You have your pick of exports to EU member states like Spain and prospective EU states like Turkey. The EU is also a sound base from which to sell globally, whether to North American countries like Canada and the US, Asia, or Africa.
For the coming year 2022, there are a couple of policy changes and free trade agreements that provide an avenue for exporting opportunities. They are:
Exporting outside of the EU means that you have to be aware of the trade policy of your target country. Depending on the country you have in mind, finding information might be difficult. Fortunately, the EU Access2Market portal has product by product information on trade policies for over 120 countries.8
The portal provides information on the following:
From time to time, individual countries enact unfavourable policies specifically targeted at European Union companies and industries.9
Fortunately, the European Union doesn’t leave companies to fend for themselves when things like this happen. Steps are taken to ensure that investigations are conducted without bias against the EU company. The EU also takes steps to make these countries comply with their obligations as provided under the WTO agreement.
The latest trade policy document from the European Union has sustainable development as one of its medium term goals. This means that the European Union would favor companies and industries that tie into the European Green Deal.10
In essence, industries with technology that aims to mitigate the effects of climate change would get a huge boost from the European Union. In addition to this, the EU also wants companies to give environmental sustainability a priority throughout their value chain.
The European Union trade policy document also focuses on support for digital technology especially in fields like Artificial Intelligence and ecommerce.10 This means that making use of platforms like Alibaba is something the EU encourages.
This is because it ensures that companies in the European Union also have a sizable digital footprint.
The European Union is negotiating a host of trade agreements like the EU-China Comprehensive Agreement on Investment, EU-New Zealand trade agreement, and the EU-Mexico Trade Agreement.11
The EU-China Comprehensive Agreement on Investment is currently being negotiated and was agreed in principle on 30 December 2020.12 The agreement would give EU investors more access to the Chinese market. It would ensure that EU businesses are not affected by issues like forced technology transfer, and are treated fairly.
The EU would also make sure that other existing trade agreements are implemented. It takes steps to engage in bilateral discussions with countries over sticking to their responsibilities under the WTO.
As an exporter, this opens a door of opportunity for you and ensures that you aren’t hampered with things like tariffs and hostile subsidies. Some countries the EU has trade agreements with include Mexico, Singapore, South Korea, and Egypt.11
Due to its commitment to stringent international standards, the EU area has some of the most trustworthy exports globally. These standards are most apparent in machinery, pharmaceutical, and automotive exports. Unsurprisingly, these are also some of the region’s top-performing industries, making them useful to target for exporters.
According to Eurostat, products from the following industries have enjoyed the lion’s share of EU exports since 2016:12
Exporters and other stakeholders must show full cooperation with EU standards in every consignment before shipping out of the region. While this can seem like a hassle, implementation of these standards will be valuable since it breeds trust in your products.
While exporting from the EU puts traders in a strong position, the possibilities can get even better. Alibaba.com gives B2B sellers the means to reach more customers and make more sales without unnecessary overhead or expenses.
You can meet buyers, negotiate with them, finalize profitable deals, and fulfil orders - all from one convenient storefront on the world’s largest B2B marketplace.
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