Brussels Edition: Repairing global trade

Follow Us Get the newsletter Welcome to the Brussels Edition, Bloomberg's daily briefing on what matters most in the heart of the European Union. We return from the holiday break this week with a preview of the EU's major policy plans for 2021. Today, our primer on trade. Trade will preoccupy the EU in 2021 on several fronts. With U.S. President Donald Trump almost out of office, the 27-nation bloc will spend much of this year trying to repair the damage caused by his "America First" policies. For starters, it's working on a proposal for the incoming Joe Biden administration, including settling a longstanding aircraft dispute that's resulted in tariffs on $11.5 billion of each other's exports. The EU will also pursue its global free-trade push, which began before Trump shook the post-war order. And the bloc will keep a close eye on the U.K. after last month's hard-fought deal, ensuring continued tariff-free commerce now that Britain has left the single market. — Jonathan Stearns What to Expect This Year Transatlantic Reunion | With Biden and European leaders promising each other renewed cooperation, the EU hopes for several early-harvest results including U.S. support for Nigeria's Ngozi Okonjo-Iweala as the next head of the WTO and for a revival of its appellate body. The EU also wants Biden to move toward ending a tariff fight triggered by Trump's protection of the American metals industry. Mercosur Deal | The EU is facing an uphill struggle to ratify its landmark draft free-trade accord with the Mercosur group of Argentina, Brazil, Paraguay and Uruguay. After the deal provoked grass-roots rumblings across Europe, largely as a result of deforestation in the Amazon region, supporters are scrambling to win stronger Brazilian pledges on environmental protection. U.K. Test | With the EU more assertively exercising its WTO rights to protect domestic manufacturers from lower-cost foreign competitors, imports of goods from the U.K. will be on the bloc's radar screen in the first year of their free-trade accord. It's worth recalling that fair competition was a big sticking point in the talks leading up to the last-minute agreement. Oceania Aims | The EU will push ahead with negotiations begun in mid-2018 on free-trade agreements with Australia and New Zealand. Like the Mercosur pact, these efforts risk provoking objections from Europe's vocal agriculture industry given the farm-export prowess of the two countries. Steel Fight | The European steel industry's political clout will be put to the test when the EU decides on the fate of special import restrictions triggered in 2018. With European Trade Commissioner Valdis Dombrovskis signaling the curbs will lapse in mid-2021 and with Chinese-fueled global oversupply still a concern, his team may step up the use of tariffs to counter alleged unfairly cheap EU imports of steel. In Other News... Trump's Tweets | German Chancellor Angela Merkel questioned the decision by social media platforms including Twitter and Facebook to shut down President Trump's accounts. And France's Minister for EU Affairs Clement Beaune told us in an interview that such decisions should be regulated by law, instead of being left to tech CEOs. Here's why the move has triggered a growing global backlash.  Sovereign No More | The U.K. isn't "fully sovereign" anymore as it needs to abide by EU rules for market access without a say in how those rules are made, Beaune told us. And our reporting shows that the cost of moving goods across the English Channel is rising, due to additional health certificates, taxes and paperwork created by Brexit. Vaccine Rollout | Beaune also denied that there was any pressure on the European Commission from France to favor French drugmaker Sanofi at the expense of other vaccines in its purchase agreements. Meanwhile, Pfizer and BioNTech raised their Covid-19 vaccine production target for this year to 2 billion shots, from 1.3 billion previously, which is good news for all of us.  Double Dip | The euro-area economy is set to shrink again at the start of this year, with the resurgent pandemic plunging the region into a double-dip recession. Analysts are downgrading their forecasts to account for renewed lockdowns — in some places tougher than ever — and the prospect that the new coronavirus variant ravaging the U.K. will do the same on the continent. Chart of the Day The City of London is coming to a hardening realization about its post-Brexit future: a financial services accord with the EU may be too little, too late to protect its dominant position in finance. Negotiations are set to kick off soon to determine the outlines of regulatory co-operation between the U.K. and the EU, after the financial industry was largely sidelined in the trade deal that marked Britain's split from the bloc on Dec. 31. Today's Agenda All times CET. 9 a.m. European Parliament's Environment, Public Health and Food Security Committee will hold a debate with Commission Director-General of Health and Food Safety Sandra Gallina, who is the EU's lead negotiator on Covid-19 vaccine contracts Like the Brussels Edition? Don't keep it to yourself. Colleagues and friends can sign up here. For even more: Subscribe to Bloomberg.com for unlimited access to trusted, data-driven journalism and gain expert analysis from exclusive subscriber-only newsletters. How are we doing? We want to hear what you think about this newsletter. Let our Brussels bureau chief know. You received this message because you are subscribed to Bloomberg's Brussels Edition newsletter. 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