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A mother and a son with mask were riding on a motorcycle in a street of Bangkok. The capital of Thailand experienced high level of PM2.5 particle pollution. Credit: Pexels/Maksim Romashkin

By Keran Wang, Sheryl Rose Reyes and Taisei Ukita
BANGKOK, Thailand, Jan 14 2026 (IPS)

Take a deep breath.

Did you know that in many countries in Asia and the Pacific, the air we breathe falls short of the safety standards for air quality set by the World Health Organization? While the start of a new year signals new beginnings, it also marks the continuation of the recurring air quality crisis across many countries in the region.

In 2024, 25 of the most polluted cities were in the Asia-Pacific region, with dangerous levels of fine particulate matter (PM2.5) that significantly exceeded the annual maximum levels of 5 micrograms per cubic meter.

Oftentimes, when we think of air pollution, we associate it with car exhaust and factory chimneys belching black smoke. But air pollution is not just the cost of urban development – it is a multi-hazard crisis caused by wildfires, sand and dust storms, and volcanic eruptions that respect no borders. Access to clean air is a human right and countries who contribute the least to air pollution are often the most vulnerable.

Rising temperatures create a vicious cycle: rising heat leads to intensifying wildfires, releasing toxic smoke composed of carbon dioxide, carbon monoxide, and PM2.5 into the air we breathe. Furthermore, heat accelerates the breakdown of waste, generating even more pollutants.

Volcanic eruptions add sulfur dioxide and volcanic ash to the mix, and these pollutants can linger in the atmosphere for months. The result? Climate change exacerbates air pollution, which in turn aggravates the climate crisis — a feedback loop that puts both human health and ecosystems at risk and transforms local hazards into regional challenges.

Can a heavily polluted environment be restored? In principle, yes, but doing so requires transformative change and collective action in our economy and society. Improving urban mobility requires prioritizing efficient public transport, including low-emission vehicles, cleaner, greener alternatives such as walking, cycling, and ride-sharing.

Nature-based solutions, including green cooling corridors, can further improve air quality by lowering surface temperatures and providing buffers against desertification, land degradation, drought, and sand and dust storms.

However, not all sources of air pollution can be addressed through emission reductions alone. There are inherent limits to prevention at the source, particularly for air pollution caused by natural hazards. This requires a shift in focus from mitigation toward adaptation and preparedness.

Earth observation plays a critical role in monitoring, early warning, and informed decision-making. Advanced sensors aboard platforms such as Sentinel-5 Precursor and Geostationary Environment Monitoring Spectrometer (GEMS) detect key atmospheric pollutants including nitrogen dioxide (NO2), sulfur dioxide (SO2), tropospheric ozone, and carbon monoxide at unprecedented spatial and temporal scales.

The collaboration of ESCAP with regional partners for the Pan-Asia Partnership for Geospatial Air Pollution Information exemplifies how satellite data can be integrated with surface observations to create robust monitoring systems. These datasets enable tracking transboundary pollution events, from agricultural fire smoke to volcanic sulfur emissions to urban photochemical smog.

Satellites bridge the existing gaps from ground-based observations, providing authorities with the spatial coverage needed to understand and monitor air pollution and formulate effective policies.

The Clean Air for Sustainable ASEAN project recognizes that addressing the transboundary air pollution crisis requires strengthened monitoring and decision-making capacities enabled by technology-driven solutions. The application, Check Phoon (Thai: Phoon, meaning dust), or the PM2.5 Monitoring System, developed by the Geo-informatics Information and Space Technology Development Agency of Thailand, is an innovative platform that leverages space technology to support air quality monitoring and public health protection by providing real-time, high-resolution PM2.5 concentration data across Thailand.

The application is available in both web-based and mobile applications, and the system integrates satellite data, such as from Himawari, meteorological information, PM2.5 sources including hotspots (active fire detections), and ground-based validation from PM2.5 monitoring stations.

Building on the framework of SatGPT for flood hotspot mapping, an iteration of SatGPT for volcanic hazards has been proposed with potential to support the understanding and management of air pollution linked to volcanic activity. has been proposed with potential to support the understanding and management of air pollution linked to volcanic activity.

The Regional Action Programme on Air Pollution advances air quality management through science-based cooperation, sharing of best practices, and strengthened technical and financial support across ESCAP member States.

Complementing this effort, the Regional Space Applications Programme facilitates the sharing of Earth observation data and expertise that are critical for monitoring air pollution and assessing the impacts.

These initiatives contribute to accessible and actionable geospatial information that strengthens early warning systems, enabling authorities to forecast and quantify air quality with greater precision.

The transboundary nature of air pollution demands a stronger and more urgent call to action. While the Asia-Pacific region has demonstrated remarkable resilience in the face of cascading disasters, regional cooperation must accelerate to match the scale and pace of this evolving crisis.

Keran Wang is Chief of Space Applications Section, ESCAP; Sheryl Rose Reyes is Consultant, Space Applications Section, ESCAP; Taisei Ukita is former Intern, Space Applications Section, ESCAP.

The authors would like to thank Sangmin Nam, Director of the Environment and Development Division of ESCAP, for his contributions to this article.

IPS UN Bureau

 

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DRAFT REPORT on a European Parliament recommendation to the Council, the Commission and the Vice-President of the Commission / High Representative of the Union for Foreign Affairs and Security Policy on the 81st session of the United Nations General Assembly
Committee on Foreign Affairs
Andrey Kovatchev

Source : © European Union, 2026 - EP

Nigeria face a huge semi-final against Africa Cup of Nations hosts and favourites Morocco on Wednesday.

In early 2025, the new US administration announced a series of tariff increases in violation of its commitments in the World Trade Organization (WTO), undermining the very system of trade rules that the US had helped establish after World War II. The US actions led to many retaliatory responses of increased tariffs by trading partners including the European Union (EU). Over the next several months, the US engaged in a series of negotiations leading to so called ‘framework’ agreements with the EU and others.

This paper explores first, the short term implications of these chaotic changes in the world trading regime on the economies of the EU and Greece. Second, it considers how the world trading system will evolve in the medium to longer term and its policy implications for the EU and Greece. The paper concludes that the recent turmoil in international trade should be addressed through the implementation of a basic set of policies to strengthen European integration and institutions as articulated by recent major studies commissioned by the EU, as well as, through trade agreements between the EU and like-minded countries.  These policies should help the European Union rise to the challenges created by the current turmoil and lead to a future strengthening of the WTO.

Read here the policy paper by Constantine Michalopoulos, ELIAMEP Senior Policy Advisor; former senior official World Bank and USAID; Adjunct Professor, American University, School of Advanced International Studies, Johns Hopkins University.

Introduction 

In early 2025, the Greek economy had mostly recovered from the disastrous calamities of a decade earlier and the pandemic’s aftermath. Although income levels had not regained pre debt crisis levels, the economy had been growing steadily for three years. However, continued structural deficiencies, an aging population, as well as technology and climate change, all presented serious challenges to long term economic prospects; and there were two raging wars in the near vicinity. [1]As if these challenges were not enough, the new US administration announced a series of tariff increases in violation of its commitments in the World Trade Organization (WTO), undermining the very system of trade rules that the US had helped establish after World War II.

In the US, the administration’s actions prompted numerous challenges to their constitutionality.[2] Internationally, they led to many retaliatory actions by trading partners including the European Union (EU), China and others. Over the next several months, the US backed off a number of the very large early tariff increases and engaged in a series of negotiations leading to so called ‘framework’ agreements with many countries, including the EU. But throughout 2025, the US continued to introduce arbitrary tariff changes, all in violation of the fundamental Most Favored Nation (MFN) non-discrimination principle, enshrined in the WTO, thereby raising significantly the degree of uncertainty in trading transactions.

The purpose of this paper is twofold: first, to explore the short-term implications of these chaotic changes in the world trading regime on the Greek economy; and second, to consider how the world trading system will evolve in the medium to longer term and its implications for the EU and Greece. The analysis, by its very nature, will be tentative, as the policy changes are relatively recent and have not had the time to make a serious impact on trade transactions. Besides, the main new element introduced by the US actions is increased policy uncertainty.

The EU- US Agreement 

The US administration introduced peremptorily and unilaterally a number of tariff changes in early 2025 without offering an authority or justification for them. For example, President Trump announced plans on February 26, 2025, to impose tariffs of 25 percent on imports from the European Union. The major executive action that prompted reaction from the EU occurred on April 2, when the US announced a set of so called “reciprocal” tariffs affecting more than 60 countries, some as high as 50% depending on the countries’ trade balance with the US. According to these, International Economic Emergency Powers Act (IEEPA) tariffs, the US reciprocal rate on imports from the EU would have been set at 20 percent. On May 23, President Trump announced he would be imposing a 50 percent reciprocal tariff on the EU beginning June 1. On May 25, he announced these tariffs would take effect July 9 instead. On July 12, President Trump announced the reciprocal tariffs for the EU would be set at 30 percent by August 1 [4].

In the meantime, the EU retaliated by lifting the suspension of previous tariffs, with rates of up to 50 percent, affecting $8 billion of US exports scheduled for April 1, 2025 and increased tariffs to an additional $20 billion of US exports scheduled for April 13. Finally, on July 15, the EU released a list of $84 billion worth of US goods that would face retaliatory tariffs, if no deal was reached by August 1 [5].

On August 4, 2025, the US and the EU reached a framework agreement on tariffs and other economic issues which governs the tariff rates affecting trade between them to date.

On August 4, 2025, the US and the EU reached a framework agreement on tariffs and other economic issues which governs the tariff rates affecting trade between them to date.

According to the main trade related commitments of the agreement, the US will:

• Apply a maximum, all-inclusive 15% tariff ceiling for EU products, including cars and car parts, pharmaceuticals, and semiconductors [6] and [7].
• Apply only MFN tariffs, (which are effectively zero or close to zero) to the following EU products: unavailable natural resources (including cork), all aircraft and aircraft parts, generic pharmaceuticals and their ingredients and chemical precursors.
• Impose tariffs of 50% to aluminum and steel products justified by the US under a different exemption, on grounds on national security (US Section 232, of the 1962 Trade Expansion Act).

The EU agreed to:

• Eliminate completely tariffs on a large number of industrial products imported from the US—with an estimated value of €5 billion [8].
• Improve significantly market access to US exports through tariff reductions for certain seafood, nuts, dairy products, fresh and processed fruits and vegetables, processed foods, grains and planting seeds, soybean oilseeds, pork and bison meat and lobster  all implemented via product-specific Tariff Rate Quotas (TRQs).

In addition, the two sides agreed to work together to eliminate non-tariff and technical barriers to trade, accept and provide mutual recognition of each other’s standards in automobiles as well co-operate on a number of other important issues affecting trade with China—for example, regarding the latter’s imposition of export controls on rare earths. Finally, the agreement contains a number of EU commitments to ease procedural requirements which the US feels restrain its exports as well as to purchase $40 billion worth of AI chips [9].

There was widespread criticism that the deal was too one-sided favoring the US. But there were also voices suggesting that this was the best the EU could do under the circumstances and that, in any case, there was no logical response to the US requests.

There was widespread criticism that the deal was too one-sided favoring the US. But there were also voices suggesting that this was the best the EU could do under the circumstances and that, in any case, there was no logical response to the US requests [10].

The US actions regarding tariffs were expected to be implemented in some cases as of September 1, 2025 and in others as soon as the EU Commission submitted the needed legislative proposals, which it did in September, 2025. The EU Council took the necessary steps to implement the agreement, including through the establishment of tariff quotas for US products [11].  It is expected that the EU Parliament will complete approval of the relevant legislation by February 2026. At this point it is unclear whether the Parliament will introduce changes in the agreement or what will happen, if such changes are introduced.

Economic Impact on the EU- short term

In the course of 2025 various studies concluded that the US tariffs would result in significant GDP losses both to the US and to the global economy, as well as increased inflationary pressures in the short term. As the year progressed, the estimates of the damage the tariff actions would cause were reduced for several reasons: exporters absorbed some of the increased tariff costs; many importers anticipating the tariffs, had stocked up during the year and the original tariff increases were subsequently reduced.

In the course of 2025 various studies concluded that the US tariffs would result in significant GDP losses both to the US [12] and to the global economy, as well as increased inflationary pressures in the short term [13]. As the year progressed, the estimates of the damage the tariff actions would cause were reduced for several reasons: exporters absorbed some of the increased tariff costs; many importers anticipating the tariffs, had stocked up during the year and the original tariff increases were subsequently reduced [14].

The economic impact of the EU-US trade agreement on individual EU countries will depend on several factors: (a) the amount and composition of each country’s exports to the US; (b) the amount and composition of its imports from the US whose tariffs will be reduced; (c) the specifics of the pass-through in each traded good; (d) any exchange rate changes following the imposition of the tariffs; and (e)  the indirect effects on each country’s future trade of changes in income resulting from the EU-US agreement.

Early studies on the issue [15], suggested that the US tariffs will result in a decline of approximately 0.2-0.3% of EU GDP in 2025. A more recent study [16] confirmed the 0.3 % GDP decline on average and suggested that different countries will have different results depending on the importance of the US in their export market and the composition of their exports. Using a model that took into account the longer term second order effects adversely affecting EU exports as a result of declines in EU and other countries incomes as a consequence of the tariffs, the study suggested a decline of 0.5% on average for 2026. Similar views were expressed by European business in a survey in November 2025 [17]. The most recent IMF World Economic Outlook [14] includes two risk scenarios for 2026: in the worst case, GDP of the euro area would decline by about 1%t below its original baseline in 2026; in the best case, output of the euro area could increase by around 0.7–0.8 percentage points above baseline despite the tariffs. But no studies appear to have included the longer term positive but likely small effects of EU incomes rising as a result of the future reduction of tariff barriers against US imports.

In the first 8 months of 2025, US exports to the EU increased by about 10% and imports, slightly less—around 9.5%. This resulted in an increase in the US trade deficit with the EU in the first eight months of the year from $151.9 billion in 2024 to $165.8 billion in 2025. The results are skewed however, because of very large anticipatory US imports in early 2025. In the months June- August 2025, US imports from the EU declined relative to 2024 [18].

Economic Impact on Greece-short term

Early commentary on the impact of the EU-US agreement on Greece suggested a much higher decline in Greece’s exports and GNP in 2026 than that presented in the above studies. Kathimerini [19] predicted a GDP decline of 0.5%-1.0% in 2025, and smaller effects ranging from 0.2% to 0.4% in 2026 and even smaller declines in 2027.

…the effect of the US tariff increases and the subsequent US-EU trade agreement will result in significantly lower adverse effects on Greek GDP. The main reason for this is that Greece depends much less on the US market for its exports than the EU average.

It is unclear on what analysis these projections were based and no model estimates based on an econometric model of Greece appear to exist. Nevertheless, given the projections for EU as a whole and the size and composition of Greek exports, the analysis below will argue that the effect of the US tariff increases and the subsequent US-EU trade agreement will result in significantly lower adverse effects on Greek GDP. The main reason for this is that Greece depends much less on the US market for its exports than the EU average. Table 1 below shows the evolution of Greek trade with the EU, the US and the rest of the world (ROW) over the 2018-2024, period, i.e. after the Greek economy stabilized from the debt crisis.

Table 1 shows that Greek exports to the US account pretty steadily for about 4% of total Greek exports and about 10% of Greek exports outside the EU. This compares to an average of EU exports to the US of 21% of EU exports to the rest of the world [16]. Roughly speaking, Greece is about half as much exposed to the US market for its exports relative to the average EU member, and much less than countries like Germany or Ireland. The story is similar for Greek imports. Greece has run a small surplus in its trade balance with the US in the last two years while running a persistent huge trade deficit overall. Greece offsets its traditional large trade deficits by running a large surplus in services, especially through earnings from shipping and tourism [21].

The composition of Greek exports to the US does not suggest that Greece would be hit harder than the average EU member by the increased US tariffs. While no detailed estimates are available, the main problem appears to derive from Greece exports of aluminum and steel products which are subject to 50% tariffs (see below Table 2). It should be noted however, that the US tariffs on aluminum (and steel) had been earlier imposed by the US on the grounds of security (Sec. 232) and separately from the IEEPA tariffs that ultimately led to the US- EU agreement.

 

Table 2 shows two dimensions of the importance of aluminum and steel on the Greek economy: first, they are small relative to Greek exports to the US, 7.0% and 2.1% respectively; and second, that the proportion of Greece’s exports of aluminum and steel products to the US are quite small relative to the total Greek exports of these products, 5.1% and 6.5% respectively. The latter would imply that Greek exporters could shift sales of these products elsewhere.[3]

Of the products in which the US is an important market accounting for more than 10%  of total exports, only the agricultural products in the categories of Vegetables and Fruits (20.9%), Essential oils (10.5%) and Edible fruits (16.2%) are likely to be affected by the new US tariffs. And the US has committed that these will not exceed 15%. Greece is not an oil producer and the large exports of oil products  to the US as well as the rest of the world are determined primarily by decisions of the oil companies, some US owned, which import crude oil from the Middle East refine it in Greece and ship out oil products all over the world.  The US importance of the category ‘Aircraft, spacecraft’ probably reflects transactions of air carriers and repairs of aircraft engines and parts as Greece does not produce either aircraft or spacecraft. Greece does produce a variety of crude materials, salt earth etc., for which the US market is significant (21.6%), but as noted earlier, the US will maintain minimal tariffs on these products.

 

Estimates of US trade with Greece for the first eight months of 2025 showed the US to have decreased both its export and its imports to and from Greece- in the case of exports by 10% in the case of imports—i.e. exports from Greece by 3.3% [19].  These data suggest that the pattern of Greece’s trade with the US is somewhat different than that noted earlier for the EU as a whole. It remains to be seen how this pattern will be affected in the longer term by the emerging changes in the world trading system.

Recent reports confirmed the mixed impact of the US tariffs on Greek exports to the US.  Tariffs on edible fruits have been recently removed, but exports of dairy products have been adversely affected. Despite high tariffs, “iron/steel pipes, rose from a zero base in 2023, to €21.8 million in 2024 and to €49.2 million in the April-September 2025 period. Electrical conduits reached €38.4 million in 2024 but during the tariff period they experienced a decrease of 88.1%” [22]. 

On balance, given the relatively small importance of the US market to Greece, compared to other EU countries, it is fair to conclude that the impact of the US-EU agreement on Greek GDP will be significantly smaller than for the EU as a whole. We would guess that the impact could be in the neighborhood of 0.1% to 0.15% reduction of GDP relative to baseline forecasts for 2025 and 2026, much smaller than earlier estimates.

On balance, given the relatively small importance of the US market to Greece, compared to other EU countries, it is fair to conclude that the impact of the US-EU agreement on Greek GDP will be significantly smaller than for the EU as a whole. We would guess that the impact could be in the neighborhood of 0.1% to 0.15% reduction of GDP relative to baseline forecasts for 2025 and 2026, much smaller than earlier estimates. That size of an effect could easily be overwhelmed by other developments in Greece or in the global economy.

The World Trade System

…the US actions on tariffs violated its commitments to the core principle of the WTO of not unilaterally increasing duties that have been capped in previous agreements with its partners (Article II of the GATT) . Similarly, the bilateral deals, such as those with the UK as well as the EU, China, and other countries violate US commitments to the most-favored nation (MFN) non-discrimination clause (Article I of the GATT).

Throughout 2025, the US actions on tariffs violated its commitments to the core principle of the WTO of not unilaterally increasing duties that have been capped in previous agreements with its partners (Article II of the GATT)[4]. Similarly, the bilateral deals, such as those with the UK as well as the EU, China, and other countries violate US commitments to the most-favored nation (MFN) non-discrimination clause (Article I of the GATT). Such preferential deals are permitted only if they are part of an established Free Trade Area or Customs Union. These deals also defy the WTO approach of promoting trade through multilateral negotiations [23] and [24].

For a while, it appeared that the US may wish to leave the WTO. It had withdrawn from other multilateral institutions such as UNESCO and WHO and it had not paid its WTO dues for two years. There were even some voices suggesting that the trading system as a whole would be better off if the US did leave the WTO [25]; or for that matter that it could be expelled [26]. But the US did pay its dues, and others have argued that the US should stay in the WTO as it could provide a useful counterbalance to China which has also been guilty of significant WTO violations.

It is also fair to argue that, in the last twenty years, the WTO based trade system has been undermined by an erosion of global commitments to multilateral rules by many countries including the EU.

It is also fair to argue that, in the last twenty years, the WTO based trade system has been undermined by an erosion of global commitments to multilateral rules by many countries including the EU. It started first, with the failure of completion of the Doha Round of negotiations, which were abandoned after more than a decade of trying—for which, countries like India and China, were as responsible as the EU and the US.  Later, economic and political and developments resulted in reduced emphasis on multilateral approaches to improve firms’ participation in international trade:

• Attempts to facilitate small and medium enterprises foreign trade participation led to “mini-deals” that may be beneficial for a subset of firms in certain sectors but undermine global standards. “The EU has concluded over 2,000 such mini-deals, which cumulatively cover a large share of EU trade participation in global supply chains” [27].
• Countries, and the EU in particular, have established regulatory standards based on concerns about the environment, health and safety, cross border data flows, cyber-security, consumer or worker protection. The national agencies tasked with implementing regulations generally have not wanted, even if they are permitted — to adjust regulatory norms simply to facilitate trade [28].
• The Covid-19 pandemic resulted in a sudden and large contraction in global trade, revealing deep vulnerabilities in international supply chains. This led many countries to introduce policies that promote strategic autonomy, meaning steps that would the ensure availability of critical goods without dependence on foreign suppliers. Governments adopted export restrictions, stockpiling, and incentives for domestic production or near-shoring [27].
• A direct consequence of the strategic autonomy logic was a renewed interest and justification of a wide range of industrial policy measures. Industrial policy became more fashionable and acceptable [29].

Despite, or one would argue, in parallel with these developments, the WTO continued to function. A fisheries agreement came in to force in mid-summer and the EU finalized a WTO compatible agreement with Mercosur that had been under negotiation for more than a decade. And as WTO Director Ngozi Okonjo-Iweala noted in a September 17, 2025 speech, following the US measures there was an 8% decline of trade conducted under MFN rules, but MFN rules continued to apply to 72% of world trade.

In light of these developments, what can be said about the future of rules that would govern world trade? As of November 1, the US average effective tariff rate was 13.1% compared to 2.5% in 2024 [31]. Clearly the most important new element is the introduction of additional uncertainty, for better or worse. On November 14, 2025, the US administration, facing increasingly unfavorable reaction by the US public to the imposition of tariffs on consumer goods, eliminated the   IEEPA tariffs on a whole lot of food and agriculture products. And the constitutionality of all of the IEEPA tariffs is uncertain with the US Supreme Court expected to rule on the issue in the spring of 2026.

Still, given the apparent attraction of tariffs as a foreign policy instrument to President Trump, it is expected that in the event the US Supreme Court rules that the IEEPA tariffs are unconstitutional, the US Administration will seek to justify tariffs under different legislative provisions, such as under section 301 or 202 of the US code or under section 122 of the Trade Act of 1974 which gives the President the authority to impose a temporary tariff of up to 15 percent for up to 150 days to address “large and serious United States balance-of-payments deficits”. All these measures are likely to be challenged in US courts, resulting in litigation that could easily last another 1-2 years.

This means essentially, that global uncertainty on the rules of international trade is likely to continue at least until the end of the current US administration in 2028.

This means essentially, that global uncertainty on the rules of international trade is likely to continue at least until the end of the current US administration in 2028. A look into the Trade Policy Uncertainty (TPU) Index is quite telling in this respect: it shot up in early 2025, came down for a while and shot up again [32]. Other things equal, this factor alone is going to affect adversely the volume of future world trade.

Medium Term Scenarios

The uncertainties surrounding the future of the world trade system have led to the elaboration of many alternative scenarios. In considering these scenarios, one should keep in mind that trade negotiations take a long time to conclude as they involve detailed analysis of data, something that the ‘framework’ agreements concluded by the US did not do. Nevertheless, all scenarios about the future of word trade in the medium term—until 2028, are bleak.

The scenarios discussed below do not include what might happen, if there is a major political or military conflict involving the three major protagonists in world trade, the US, the EU and China. Also, for reasons discussed above, the scenarios do not include a ‘Retreat’ scenario in which the US administration, faced with a recession and declining public support, reverses course and abandons its WTO inconsistent tariff policy.

Scenario 1- Malaise

Under this scenario, WTO members would tolerate higher tariffs and US-dictated deals for as long as they last, while continuing to go about their other WTO business as usual. “The relevance of the WTO will continue to be eroded, though its stabilizing influence may not disappear entirely”[5]. But this scenario contains a lot of complex issues for WTO members. For example, Brazil may file a complaint in the WTO that the US-EU agreement that gives preferential treatment to US exports to the EU damages Brazil’s interests. In this case the EU may not wish to jeopardize its agreement with the US or face counter-measures, in which case it may need to appeal through the Multi-Party Interim Appeal Arbitration Arrangement (MPIA) members [33].

It is unclear how long WTO members would be willing to accept this situation. Perhaps they will wait until the end of the current US administration- while in the meantime they pursue other options. In the case of the EU, it is clear that it would be desirable to explore links with the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). A free trade agreement between the EU and CPTPP will account for 30% of world trade. Krueger has argued that the two groups should combine to establish a new organization, the GTO without the US [25].

Scenario 2 –Fragmentation

Under this scenario fragmentation accelerates. The MFN principle and multilateralism are further weakened and give way to a new logic: every country or exporting firm cuts the best deal for itself.[6]

The scenario has many regional variants. If the WTO continues to produce nothing and the EU combines with CPTPP and others to produce a modern agreement, is it necessary to anchor it in the WTO ?

A lot will depend on what role China will want to play. Under one variant, China could take the lead in organizing a large group of countries, for example through an expanded BRICS, to set up their own system. But many countries are worried about unfair Chinese policies that support Chinese firms as it promotes its manufacturing exports because of over capacity at home; and/ or countries may be concerned about China’s willingness to employ trade as a coercive instrument for foreign policy purposes.

Still, such an initiative by China could force Europe to work with Japan, South Korea, and Australia to create their own group and the US with some Latin American and Caribbean to establish yet another. Africa would strengthen its regional trade institutions and possibly ally itself with the BRICS. In all these variants, the WTO is not closed down, but becomes increasingly irrelevant. On the other hand, China has recently indicated that it is willing to abandon its WTO treatment as a ‘developing country’ suggesting a willingness to work within the WTO and thereby dropping a source of a lot of disputes.

The Future of EU Trade Policy

In these uncertain times, it would be natural for the EU to take the lead in strengthening the global multilateral trade system, to the benefit of its members, including Greece but also to the benefit of global trade and the reduction of global poverty.

Co-operation in trade was the essence of what started European integration through the Treaty of Rome more than 70 years ago. In these uncertain times, it would be natural for the EU to take the lead in strengthening the global multilateral trade system, to the benefit of its members, including Greece but also to the benefit of global trade and the reduction of global poverty.

EU should start working hard to strengthen its links with CPTPP. Combined with the EU- Mercosur agreement, this would make a formidable group of countries which could become the basis of attracting other members from Africa and Latin America.

The EU Commission views at this point is that an EU-CPTPP link is a complement and not a substitute to the WTO [34].[7]. In my view, EU should start working hard to strengthen its links with CPTPP. Combined with the EU- Mercosur agreement, this would make a formidable group of countries which could become the basis of attracting other members from Africa and Latin America. It could then work with China and possibly the US to strengthen the multilateral trade system and the WTO.

Such an effort should have two dimensions: first, work with others to establish needed reforms to the WTO; second, adopt internal EU policies that use trade to support equitable and sustainable economic growth for its people.

Regarding WTO reform Mavroidis [24] suggests that it may be useful for the international community to attempt a last-ditch negotiation to bring the US back to the multilateral house, and they should be prepared to amend the WTO’s rules in order to lure the US back to the spirit of the multilateral agenda that would benefit the institution at large. This initial agenda should take care of the US’s concerns such as the introduction of more flexibility in the current Safeguards Agreement or to deal with oversupply in particular sectors as well as amending the Compulsory Third-Party Adjudication (CTPA).

This is certainly worthwhile. The question is at what point it should be done. The current administration has in mind a totally different non- multilateral approach to international trade, feels that the “ancient régime” is obsolete, and should be substituted with a new supposedly more fair and balanced scheme. In any case, putting together an EU- CPTPP understanding will take time, after which a different US administration may be in place which may be more agreeable to global trade agreements. 

There is a need to revise the basis of participation in the WTO by different groups of countries.

It is clear that WTO reforms are needed in several areas in addition to the ones noted above that bother the US. These include the following five areas:

• There is a need to revise the basis of participation in the WTO by different groups of countries. The existing provisions regarding special and differential treatment that permit a group of countries to participate on the basis of more limited commitments to general rules for being ‘developing’ based on ‘self-selection’ proved unworkable during the Doha Round[8]. Yet, there is a need to reduce differences in national regulatory regimes that impact international trade through the mutual adoption of agreed good regulatory practices to which not every WTO member can or may be willing to adhere. Such efforts can be pursued among like-minded states — that is, on a plurilateral and variable-geometry basis. Open Plurilateral Agreements (OPAs) — agreements between groups of countries on specific policies that significantly affect international trade costs and that are open to participation to any country willing to implement a set of agreed rules and disciplines can make a major contribution to facilitating trade. Such agreements can be pursued in several areas such as Digital Trade, Climate and Environment [28], as well as subsidies (see below).[9]

• The WTO subsidies agreement should be revised in order to address several issues: first, is the issue of how to deal with subsidies that provide public goods—including those that address environmental issues. A subsidy that reduces world market prices for products like solar panels or wind turbines has positive consequences for the energy transition, but negative economic repercussions for local producers. Revisiting current WTO rules that center on the adverse effects of foreign subsidies on national firms to recognize that some types of subsidies may be appropriate and desirable to address market failures, in the process benefiting foreign countries, is an important subject for plurilateral negotiations. Still other issues arise from the complexities involving subsidies of trade in global value chains, as well as the desire to pursue ‘industrial’ policies.

• The definition of ‘economic security’ needs to be clarified as the relevant WTO provisions are too vague.

• There is a need to make meaningful progress of liberalizing trade in services. Everybody is infatuated with the desire to protect and restore production of goods, in particular manufacturing, forgetting that services will inexorably rise as a share of incomes and output.

• The link between trade policy and environmental action needs to be clarified especially as the EU is starting to implement its Carbon Border Adjustment Mechanism (CBAM) in January 1, 2026. As noted above, this is an area where an OPA can be especially useful as it is quite clear and it is internationally agreed that poorer countries are not in a position to make the same kind of commitments as more developed economies. A specific proposal for an OPA of such a ‘club’ is contained in [37].

This is a tall order of reforms that need to be undertaken. They will take time to negotiate in part because the political economy of negotiating trade issues resulting from regulatory regimes is more difficult than negotiating a mutual reduction of quotas or tariffs where the costs to some domestic producers can be offset by gains of exporters.  Also, the Doha failure suggests that countries are not likely to want to try to have a ‘Round’ where nothing is agreed until everything is agreed by every participant. A more modest approach using OPAs may be a better avenue for future reform.

These efforts must be accompanied by EU policies that use trade to support a sustainable and equitable growth of incomes. In this connection, measures that raise productivity of EU producers are critical.

These efforts must be accompanied by EU policies that use trade to support a sustainable and equitable growth of incomes. In this connection, measures that raise productivity of EU producers are critical. Since 2019 labor productivity in the EU grew by 2% compared to 10 % in the US [38]. According to a recent study, the main difference between US and EU in labor productivity growth is that EU productivity rose much less than that of the US in the services sector since 2000 [39].

The Draghi study commissioned by the EU in 2024 contains a large number of recommendations on how to raise productivity, some of which are only now slowly being implemented [40]. In particular, there is concern that the EU is lagging far behind the US and China in the application of AI which is critical to future productivity growth. According to Draghi’s report, the General Data Protection Regulation (GDPR), introduced by the EU to protect citizen’s privacy in 2018, is a drag on Europe’s competitiveness. “Europe must move beyond fragmented and overly rigid regulatory structures if it wants to remain competitive in a fast-changing digital landscape. Evidence already shows that GDPR data transfer rules have constrained export potential, and additional regulatory layers introduced through the AI Act risk amplifying these pressures”[41].

Measures to promote diversification of imports of oil and natural gas, by accelerating the green energy transformation are of obvious importance to future trade policy as well as steps to diversify supply of critical minerals away from China. These efforts, however, should not lead to generalized promotion of import substitution through protection incompatible with WTO provisions or commitments with regional trade partners.

“A ‘manufacturing-first’ attitude has taken hold in the European economic policy discussion. New strategies and industrial policies are designed with the ambition of boosting development and output in traditional industrial sectors” [42].[10] There is a clear danger, that disturbances in international trade will encourage the establishment of inefficient EU production —reshoring or home-shoring justified on the vagaries of ensuring adequate supplies of ‘critical’ products from global supply chains—while the future lies in services where growth has been and likely will continue to be greater than in manufacturing; and where the EU is the largest exporter in the world.

Implications for Greek Policy

For Greece, foreign trade policy is determined at the EU level.

For Greece, foreign trade policy is determined at the EU level. This should be helpful in protecting its interests through the large weight that Brussels would bring to bear in any negotiations with China or the US. [11] There are also serious limits to what individual countries can do to promote exports. As Greece has a very small share of exports relative to its GDP, there is a temptation to suggest that export promotion agencies can correct this problem [43]. They obviously can be of some help, but they are not likely to be determinant of overall performance, and in a country like Greece, where there is a tendency of cronyism, there are dangers of trying to pick winners by supporting friends. The best way to promote exports is through general policies that increase productivity and reduce bureaucratic hassles [44].

In this connection, the recommendations of the Draghi report are especially relevant. In many respects, the report sounds as if it was talking specifically about problems facing Greek industry and more generally the Greek economy. The importance of productivity growth to export performance has been well established. In this connection, I argued long ago that the export performance of the ‘Asian Targets’ in the 1960’s was critically dependent on the growth of total factor productivity [45].

Among the Draghi’s report many recommendations are proposals to raise productivity through more training as well as improved technology through increased expenditures on research and development. Implementing these proposals in Greece would require significant increases in both public and private investment from the current levels of roughly 15% of GDP.

Among the Draghi’s report many recommendations are proposals to raise productivity through more training as well as improved technology through increased expenditures on research and development. Implementing these proposals in Greece would require significant increases in both public and private investment from the current levels of roughly 15% of GDP. EU support can be helpful to Greece in this area, but it cannot substitute for stronger and better implemented public sector investments.

Conclusion

In sum, the recent turmoil in international trade should not result in a deviation from the basic set of policies that Greek governments need to pursue in collaboration with their European counterparts to strengthen European integration and institutions. They should do so based on the policy recommendations contained in the several studies referred to above. As it has done in the past, Europe can rise to the challenges created by the current turmoil and restore faith in the prospects of a sustainable and equitable future for its people. This will not happen through retrenchment and protection but through openness to trade. The EU is in the best position to lead a future restoration of a trade system governed by multilateral rules and agreements and a strengthened WTO.

[1]For a discussion see [1] and [2].

[2] Lower US courts judged the IEEPA tariffs to be unconstitutional, but the US Supreme Court permitted them to be retained until it passed a final judgement on them expected in early 2026 [3].

[3] There may be limit to such a shift, as both products, especially aluminum, appear to be in global over supply.

[4] GATT-General Agreement on Tariffs and Trade- incorporated in the treaty establishing the WTO.

[5] This scenario is basically the same as what Cernat [30] called ‘Sclerosis”.

[6] This is similar to Cernat’s’[30] third scenario ‘contagion’.

[7] Experience with international organizations over the last century suggests that they are almost as difficult to shut down—even after their usefulness is questionable [35] as to create new ones

[8] For a detailed discussion of the absurdities in the current system see [37]. For example, Turkey and Israel just like China were considered ‘developing countries’ just because they said so.

[9] Such agreements can also be pursued outside the WTO and at some point brought into the system.

[10] As well as in the United States.

[11] But EU membership may not provide cover in the wider US-China conflict: The recently appointed US Ambassador to Greece expressed her concerns to Prime Minister Mitsotakis about the 67% ownership of the Port of Piraeus by the Chinese firm Cosco and suggested that Greece may wish to force a sale of it in the future. To which the Prime Minister responded that agreements have to be respected [46].

 

 

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Deuxième sacre en 2025
UBA Bénin se positionne aujourd'hui comme une banque leader en matière de digitale avec une part de marché de 50%. Ce dynamisme aura permis de décrocher le prix de la « Meilleure banque digitale au Bénin » en 2024. Pour le compte de l'année 2025, UBA Bénin décroche en Avril 2025, le trophée du ”Leader de la transformation digitale ».

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