Europe should accelerate its trade agenda with confidence
An essay by Danfoss
As political attitudes towards globalisation harden, we are seeing a shift away from the global integration we have experienced in the past few decades towards increasing fragmentation. Leaving aside what this means for people and political partnerships, for international trade this creates a number of barriers and blockers. Predictably, these slow growth, weaken innovation and mean fewer opportunities. When this happens, trade agreements offer a strategic opportunity to recalibrate partnerships and markets.
Europe’s history shows how economic cooperation can transform rivalry into resilience: what began with an agreement for coal and steel evolved into the world’s most sophisticated single market and that experience has implications. Openness, when anchored in rules and shared standards, creates strength. Europe now has an opportunity to project that model outward and the case to do so has become urgent.
Recent trade agreements point in the right direction. The EU–India deal is a standout achievement, connecting nearly two billion people and removing tariffs on the vast majority of European exports (including machinery and electrical equipment, both of which previously faced duties as high as 44%.)
The implications are immediate for exports, jobs, and a deeper economic partnership with one of the world’s fastest-growing markets. All of which strengthens Europe’s strategic position by diversifying economic ties in a contested global landscape that saw European exports to the United States declined in 2025 under the weight of tariffs and shifting industrial policies.
Progress with Mercosur carries similar weight. The agreement would open a market of more than 270 million consumers while cutting both tariff and non-tariff barriers that currently limit European companies. For industry, the benefits go beyond sales. Access to raw materials from the region supports Europe’s green and digital transitions, both of which depend on reliable and competitively priced inputs. The agreement also provides a platform to advance sustainability, including commitments to halt illegal deforestation. Trade, in this sense, becomes part of the solution rather than a source of tension.
The EU–Australia agreement reinforces the same logic. It strengthens ties with a trusted partner and improves access to critical raw materials that underpin advanced manufacturing and clean technologies. For Europe’s technology industries, which remain highly competitive in industrial equipment and energy systems, diversified supply chains are a prerequisite for long-term success. Competitiveness today depends as much on securing inputs as it does on innovation itself.
These agreements reflect a broader shift in European thinking. Openness and resilience are increasingly seen as mutually reinforcing. By building a wider network of trade partnerships, Europe reduces exposure to economic shocks and political pressure while preserving the benefits of global integration. This approach sits at the heart of the EU’s competitiveness agenda, which aims to strengthen industry, scale innovation, and support high-value sectors.
Much of the world’s future growth will take place outside Europe, and as an export-oriented economy, access to global markets is essential for maintaining prosperity. And while Europe may have lost ground in some digital platforms, it continues to lead in advanced industrial technologies. These sectors depend on global markets and international collaboration. They also intersect with emerging areas such as dual-use technologies, where civilian and strategic applications overlap. A stable trading environment allows these industries to grow responsibly while remaining globally competitive.
The broader point is straightforward. Trade agreements are not abstract policy instruments. They shape real outcomes: whether European companies can compete, whether supply chains remain secure, whether innovation scales, and whether jobs are created. They also reinforce a basic principle that has held for centuries. Exchange benefits all participants. From the Silk Road to today’s global economy, prosperity has followed connection.
Europe has both the experience and the leverage to lead. Agreements with India, Mercosur, and Australia show what is possible. Extending this approach to other regions, including Africa, would further strengthen Europe’s role as a connector in a divided world.
Fragmentation leads to stagnation, but cooperation creates opportunity. Europe should act accordingly and accelerate its trade agenda with confidence.
About the author
Miha Bobič, Head of Balancing and Control, Danfoss
Miha Bobič (born 4 September 1972) is Head of Balancing and Control at Danfoss, a multinational engineering company specializing in energy-efficient solutions for heating, cooling, and industrial applications. He graduated from the University of Ljubljana in 1996 with a degree in fluid mechanics and earned a Master of Science in Measurements and Control in 2000. He joined Danfoss in 1996 as an engineer and progressed to Director
of R&D for Mechanical Controls in 2004, later becoming Senior Director of R&D in 2010, overseeing electronic and mechanical controllers, heat exchangers, and district heating substations. He transitioned into business development in 2017 and served as Vice President from 2019, responsible for multiple business units.
