Germany’s chancellor is doubling down on Europe’s push to strengthen global trade alliances, signalling that a long-awaited free trade agreement between the EU and India could be signed within weeks. The announcement comes as Europe presses ahead with controversial new trade deals and faces growing political backlash at home.
Merz Signals Momentum on EU-India Agreement
Speaking during a visit to India, German Chancellor Friedrich Merz said European Commission President Ursula von der Leyen and European Council President Antonio Costa could finalize and sign a free trade agreement with India before the end of the month. He hinted that EU leaders may travel to New Delhi soon to close the deal.
Merz praised India as the fastest-growing economy in the G20 and described the country as a key strategic partner in the Indo-Pacific. He framed the agreement as a crucial step toward reinforcing free trade at a time when protectionist policies are resurging globally.
Negotiations for an EU-India trade pact have dragged on for years, with an original target of reaching an agreement by the end of 2025 falling short. However, intensified talks in recent months have raised expectations that a breakthrough is now close.
Europe’s Trade Strategy Beyond the US and China
Merz’s comments come just days after EU member states approved the Mercosur free trade agreement with South American nations — a deal strongly backed by Germany as part of Europe’s strategy to diversify trade partnerships beyond the United States and China. Both global powers have adopted increasingly nationalist trade policies, pushing the EU to broaden its economic alliances.
Senior Indian and EU trade officials have held recent high-level meetings in Brussels, though sticking points remain. Disagreements over environmental standards, dispute settlement mechanisms, and the EU’s Carbon Border Adjustment Mechanism have complicated negotiations, particularly for India.
Despite these hurdles, Merz expressed confidence that talks have entered their final phase, calling the prospective deal a strong signal of Europe’s commitment to open markets.
French Backlash Grows Over EU Trade Expansion
While Germany pushes ahead, Europe’s trade agenda is stirring political turbulence in France. Paris opposed the Mercosur agreement, arguing that cheaper Latin American agricultural imports could threaten French farmers’ livelihoods.
Tensions are now rising between President Emmanuel Macron’s government and opposition parties, with both far-right and far-left factions pushing for a vote of no confidence. Meanwhile, von der Leyen is expected to travel to Paraguay later this month to formally sign the Mercosur agreement, further fuelling domestic debate in France.
As Europe accelerates its push for global trade partnerships, the EU finds itself balancing economic ambition abroad with political resistance at home — a challenge likely to shape its next chapter in international trade.
