The European Union (EU) exports to preferential partners surpassed the EUR1 trillion (US$900bn) mark for the first time in 2021, according to the European Commission's Second Annual Report on the Implementation and Enforcement of EU Trade Agreements.

The European Commission explains in its new report on EU trade agreements that the EU’s exports in 2021 were EUR7.2bn higher thanks to the removal of several trade barriers between 2015 and 2020, and points out EU trade deals mean increased exports, more stable economic relations and secure access to resources.

The report also reveals that EU efforts to break down trade barriers and support small businesses are helping EU exports and thus supporting European jobs.

The European Commission believes that making the most of trade agreements and their effective implementation is becoming increasingly important. For example, it says almost half (44%) of the EU’s trade took place under preferential trade agreements in 2021, with this expected to rise to 47.4% with the incorporation of agreements currently under adoption or ratification.

It states exports from the EU to preferential partners (minus the UK) grew more (16%) than EU exports to all trading partners (13%) between 2020 and 2021.

Executive Vice-President and Commissioner for Trade, Valdis Dombrovskis, explains: “This report provides welcome news in the face of the many economic and geostrategic challenges Europe faces. It highlights that our EU trade strategy is bearing fruit: we have removed more market access barriers and we have been able to better support our SMEs. Our focus now is on growing the EU’s broad network of trade agreements, which play a crucial role in helping our economies to grow at this time of economic uncertainty, securing privileged access to key inputs and raw materials via diversified and resilient supply chains. Cooperation with reliable global partners matters more than ever in this changing geopolitical landscape.”

The report explains that in 2021, 39 trade barriers (six more than in 2020) were fully or partially removed, mostly through cooperative engagement with the trading partners concerned. Their elimination had an immediate positive effect on EU exporters, notably in the food sector as most of them concerned sanitary and phytosanitary measures.

Dispute settlement activity at the World Trade Organization (WTO) continued despite the paralysis of the latter’s Appellate Body. Progress was also made on implementing the panel report in the EU’s bilateral dispute with South Korea on trade and labour, with three fundamental ILO Conventions entering into force in April 2022. The Commission also launched several new challenges of breaches of trade rules that harm EU economic interests, including against China and Egypt.