BRUSSELS — The European Union and Australia are expected to conclude talks on a long-awaited trade deal early next week, with Commission President Ursula von der Leyen on Wednesday announcing she would visit from March 23-25.  Von der Leyen will meet Australian Prime Minister Anthony Albanese in Canberra, according to a Commission statement. Trade Commissioner Maroš Šefčovič is also expected to join the trip, although planning might yet change due to flight disruptions in the Middle East. Albanese confirmed the visit, saying in a statement that he would meet both von der Leyen and Šefčovič on March 24. Brussels and Canberra relaunched trade negotiations after Donald Trump’s return to the White House last year. They had collapsed amid acrimony at the end of 2023 amid disagreements over quotas on beef and lamb. The breakthrough comes as the EU looks to get closer to the Pacific-centered CPTPP trade bloc through its deepening bonds with Australia. In a letter to EU leaders shared Monday, von der Leyen said the EU and Australia were in “the final stretch towards concluding” their trade agreement.  “In addition to removing trade barriers, it will also facilitate access to critical raw materials — such as lithium, cobalt, rare earth elements, and hydrogen — and strengthen Europe’s presence in one of the world’s most dynamic economic regions,” she wrote, as part of a list on the Commission’s efforts to boost competitiveness. Negotiators had grappled in the home stretch to close the gap on access for Australian beef and lamb to the European market; EU trade protections on specialty foods; critical minerals; and an Australian tax on luxury cars. Canberra and Brussels are also looking to seal a security and defense partnership, which is finalized.  The EU top diplomat Kaja Kallas, who would be signing the defense deal, known as Security and Defense Partnership, is however not expected to be part of the trip. The pace would come on the heels of similar partnerships signed with the U.K., Canada and most recently India. Speaking last week at at the annual gathering of diplomats with the External Action Service, the EU’s diplomatic body, Kallas said that the deal was coming as she announced that “later this week, I will sign the tenth [SDP] with Australia and subsequent ones with Iceland and Ghana in the coming days.”     James Panichi, Zoya Sheftalovich, Sebastian Starcevic and Nette Nöstlinger contributed reporting.

BRUSSELS — The European Commission will adopt the Industrial Accelerator Act (IAA) on Wednesday, finally backing the landmark measure that would define a European preference in green public procurement after several delays. Haggling over the planned regulation went right down to the wire, with a meeting of cabinet chiefs that began on Monday spilling into Tuesday, the day before Ursula von der Leyen’s College of Commissioners will now sign off on an agreed text. According to one Commission official, another 44 changes were made to the draft at the meeting that ran into overtime. Paula Pinho, the Commission’s chief spokesperson, confirmed at Tuesday’s regular midday briefing that “commissioners are expected to adopt a proposal for an Industrial Accelerator Act.” The landmark measure would define a “Made in EU” preference in green public procurement — while pushing back a decision for six months on whether friendly third countries can be included in its scope. This means that, even after Wednesday’s announcement, countries like the U.K. or Switzerland will still need to lobby to get inside the tent. The IAA would also set restrictions on inward investment for dominant players in strategic green industries. These would mainly have China in mind, and cover batteries and energy storage, electric vehicles and components, solar photovoltaic, and the extraction, processing and recycling of critical raw materials, according to a draft obtained by POLITICO last week. An earlier version of the proposal, which is being overseen by Industry Commissioner Stéphane Séjourné, was panned last month by as many as nine departments of the EU executive. By the end of last week that was down to three, including the Commission’s powerful trade department, according to one person familiar with the discussion. They were granted anonymity to discuss the closed-door talks. Germany also led a rearguard action by 10 EU countries — which styled themselves as the Friends of Industry — who support less industry regulation and more open trade, with Economy Minister Katherina Reiche saying it would create “a regulatory wasteland that nobody can understand anymore.” With so many changes being made at the last minute, including dropping entire industries like tech from the purview of the legislation, critics say the bill is nowhere near ready for prime time and is at risk of being heavily revised when it goes for review by the Council of the EU, which represents the bloc’s 27 member countries, and European lawmakers. Additional reporting by Gerardo Fortuna.

BERLIN — Faced with Donald Trump’s decision to strike Iran, German Chancellor Friedrich Merz has a notably resigned message for the U.S. president: Who are we Europeans to judge? Despite the German leader’s deep concern that the conflict in the Middle East will spiral out of control, with potentially grave consequences for Europe, Merz said ahead of his Tuesday Oval Office meeting with Trump that he was in no position to criticize the U.S. president. After all, he argued, Germany’s own approach to Iran has been ineffectual — and Europe needs the U.S. to end Russia’s war in Ukraine. “Now is not the time to lecture our partners and allies,” Merz said in Berlin one day before his departure to the U.S. “The German government’s view of developments in Iran is determined by our own geopolitical vulnerability, as Russia’s war against Ukraine is in no way less than the injustice of the Iranian regime.” Merz has judiciously been making the right noises in the build-up to the Washington visit. He sounded tough against Beijing’s market-distorting trade practices after a meeting with Chinese leader Xi Jinping last week, and is admitting Europe’s failures in trying to deal with Iran. That’s exactly what Trump wants to hear. The chancellor has established a relatively good rapport with Trump, according to people close to him, and is certain to leverage this to try to cajole the president to align with Europe on two issues of vital, immediate interest to the EU —  support for Ukraine, and the administration’s tariff plans in a moment of great uncertainty following the U.S. Supreme Court’s rejection of Trump’s tariff regime. The visit may not resemble Merz’s stop at the White House last year, when foreign leaders were more often subjected to lengthy public inquisitions before a phalanx of press in the Oval Office. Last time, Merz sat deferentially as Trump did most of the talking. This time, Trump may seize the opportunity to try to get Merz to back him on Iran in front of cameras.  One of Merz’s main goals will be to convince Trump to put more pressure on Russian President Vladimir Putin to end the war in Ukraine. | Guido Bergmann/Bundesregierung via Getty Images Merz’s statements ahead of the meeting suggest he could try to curry favor with the president by potentially addressing U.S. Republican claims that Europe has been “pathetically soft” on Iran — as Trump ally U.S. Senator Lindsey Graham put it — by arguing they have a point. Merz on Sunday said his government is “drawing sober conclusions” from the failures of its policy toward Tehran. “Appeals from Europe” and packages of sanctions had failed because Europe was “not prepared to enforce fundamental interests with military force,” the chancellor said. Even as Germany stays out of the military conflict with Iran, Merz hopes his conciliatory tone will work to draw Trump closer on Ukraine and tariffs — the two issues that have most tested transatlantic ties. German officials don’t expect to convert Trump on these issues, but remain hopeful they can make incremental progress.  “Merz and Trump still get along well,” said Metin Hakverdi, a center-left lawmaker who serves as the German government’s transatlantic coordinator. “That doesn’t mean Trump will stop being Trump. But it does mean that you can clearly articulate your interests to him.” UKRAINE AND TARIFFS One of Merz’s main goals will be to convince Trump to put more pressure on Russian President Vladimir Putin to end the war in Ukraine by toughening American sanctions on Moscow, say people familiar with the chancellor’s thinking. To do so, the chancellor is likely to cast the U.S. fight against the regime in Tehran in terms of a larger struggle. Helpfully for that argument, Putin has referred to the killing of Khamenei as “a cynical violation of all norms of human morality and international law.” As Stefan Kornelius, Merz’s spokesperson, told reporters on Monday: “We have also seen in Russia’s reaction to the American actions in Iran that there is once again a clear taking of sides here that the U.S. will not share … I believe this conflict shows once again where right and wrong lie in Ukraine.” Russia’s rising battlefield casualties — which it can no longer compensate for with new recruits — may also provide an opening for Merz to convince Trump to pressure Russia, said Norbert Röttgen, a senior lawmaker in Merz’s conservative party. “There are both military and economic problems for Russia that are increasing and becoming more and more apparent,” said Röttgen. “That is a certain new factor.” At the same time, Merz — who was in China last week — will likely talk to Trump about what he sees as the need for the U.S and the EU to draw closer together to confront common challenges posed by Beijing, including Chinese subsidies to loss-making companies and dependencies on Beijing for critical raw materials. “In this context, the chancellor will probably also point out that the U.S. tariff policy of course makes de-risking even more problematic, because it puts us in a situation where we are under pressure from two sides,” Röttgen said of the EU’s position. It may help Merz’s cause that he sounded almost Trumpian last week during his visit to Beijing. After meeting Chinese President Xi Jinping, Merz bemoaned his country’s ballooning trade deficit with China in language Trump would likely endorse, calling Germany’s trade dynamic with China “unhealthy.” Whether Merz’s conciliatory tone will work to draw Trump closer on Ukraine and tariffs — the two issues that have most tested transatlantic ties — remains a big question. | Pool photo by Evan Vucci via AFP/Getty Images Merz may also have some direct leverage to exert in discussions in Washington. Trump is eager for foreign companies to move more of their production facilities to the U.S., including German automotive manufacturing facilities, a U.S. official said last week. A primary focus of their meeting will be deepening the economic cooperation between the U.S. and Germany, the official added. But given Trump’s steadfast commitment to tariffs, the most Merz may be able to realistically hope for is clarity on the administration’s plans for EU levies — especially in light of the president’s uneven response to the Supreme Court decision that derailed the EU–U.S. trade deal. German and EU leaders at least want to ensure that tariffs under the new regime will not exceed the 15 percent tariff cap agreed in the summer. “We therefore expect clarity from the U.S. government on the next steps,” Sebastian Hille, a spokesperson for Merz’s government, said last week. “We want to achieve stability and predictability in trade relations. This is essential for us and also for U.S. companies.” At the same time, Merz will want to ensure there’s no broader escalation in the president’s trade wars. “The tariff screw can be turned again as a geostrategic tool,” said Hakverdi, Berlin’s transatlantic coordinator. “That is the central problem, and that is precisely why personal exchanges at the highest level are so important.”

LONDON — U.K. Foreign Secretary Yvette Cooper will announce a critical minerals deal with Kazakhstan on Thursday as the West scrambles to diversify its supply chains away from China. Britain’s top diplomat will host foreign ministers from the five Central Asian countries — Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan, Uzbekistan — at Lancaster House in London. Cooper will unveil the critical minerals deal with Kazakh Foreign Minister Yermek Kosherbayev, alongside pacts with the other countries covering carbon capture and higher education. “Central Asia is an important region with huge potential to boost economic growth,” Cooper told POLITICO in a statement. “These agreements deliver for British businesses, strengthen economic security and are a clear demonstration of U.K. support for the independence of the Central Asian states.” The new plan of action will diversify U.K. supply chains by supporting British investment in critical minerals in Kazakhstan. The MoU was signed by Kazakhstan’s Deputy Minister for Industry Olzhas Saparbekov and Trade Minister Chris Bryant. “Global demand for critical raw materials is rising rapidly, driven by clean energy technologies, advanced manufacturing and defence industries,” Kosherbayev wrote in a recent op-ed. Kazakhstan, he noted, produces 22 of the 36 minerals identified in the U.K.’s Critical Minerals Strategy last November, including uranium, titanium, silicon and rhenium. Kazakhstan is a global critical minerals powerhouse, supplying over 40 percent of the world’s uranium and leading in titanium production. It is a top‑ten copper and zinc exporter. Early this month, U.K. Foreign Minister Seema Malhotra was in Washington for a key meeting of 50 nations to diversify critical mineral supply chains away from China. The U.K. set out a Critical Minerals Strategy last November to ensure that by 2035 no more than 60 percent of Britain’s supply of any one critical mineral comes from a single country. In further efforts to support the economic security and independence of the Central Asia republics, Cooper will also announce a new agreement on U.K. education cooperation with Tajikistan, Turkmenistan and Uzbekistan, alongside a second campus for Coventry University in Almaty, Kazakhstan, and a new AI Center at the university’s campus in Astana. She will also unveil a deal for British start-up Valor Carbon and the Government of Kyrgyzstan to develop carbon capture projects and a £100 million deal to plant 25,000 hectares of forest.

BERLIN — China was once the promised land for German industry. Now it’s a massive strategic headache for Chancellor Friedrich Merz, who departs on his inaugural visit to Beijing on Tuesday. For years, Berlin was the driving force behind closer EU relations with China — brushing aside human rights concerns to lobby for a landmark investment deal in 2020. Closer trade relations with China, German leaders argued, would have a moderating effect on the regime in Beijing, a justification encapsulated with the mantra Wandel durch Handel, or change through trade. For a long time, it was also good for business. Germany was one of the few EU countries to run surpluses with Beijing, supplying the vital components and machinery that fueled China’s economic ascent. Its industrial giants like carmaker Volkswagen and chemical company like BASF made huge investments to harness the Chinese market. But that all-in approach to China now increasingly appears to be a historic policy miscalculation on par with Germany’s misguided energy dependence on Russia before the Kremlin’s full-scale invasion of Ukraine four years ago. In public, Merz hasn’t admitted the scale of the challenge. Last week, he told fellow conservatives that he is traveling to China to forge closer cooperation. “We have a strategic interest in finding partners around the world who think like us, who act like us,” he said. But many German industry leaders are now urging the chancellor to take a far tougher line and are howling over what they call the “China shock.” Since the Covid pandemic, the trade relationship has flipped to an eye-watering deficit — €90 billion in 2025 — and China is widely blamed for much of the hemorrhaging of jobs in Germany’s all-important manufacturing sector — now running at roughly 10,000 job losses per month. Frustratingly for the reflexive transatlanticist Merz, pivoting to President Donald Trump’s U.S., which is locked in an unpredictable tariff showdown with Europe, is hardly a viable option. That means Merz has to find some way to engage with Chinese leader Xi Jinping. Jörg Wuttke, a long-time China watcher who briefed the chancellor on Feb. 17 ahead of his visit, said he was surprised by how “well prepared he was.” For close to two hours, Merz took notes from a group of six China experts, saying little beyond asking questions. His priority, Wuttke said, was conveying the problems in a way that would connect with Xi. “He realizes he is possibly the most important politician for China in Europe,” Wuttke said. But China seems to have the best cards. Germany has over time become reliant on critical raw materials imported from China, giving Beijing the power to shut down German plants almost at will even as Berlin tries to pursue a longer term policy of reducing such dependencies or “de-risking.” That goal will take years to realize, however. By then, a growing number of German industry leaders are arguing, much of the damage will have been inflicted as German companies buckle due to massive Chinese price advantages resulting from subsidies, deliberate dumping and an undervalued currency. Merz himself admits that Germany should hold no “illusions” about China and its ambition to “define a new multilateral order according to its own rules.” “Merz is going at the worst possible time in terms of the impact of the China shock on the German economy,” said Andrew Small, director of the Asia program at the European Council on Foreign Relations. “The numbers are obviously absolutely horrible, with no projection that they’ll get better.” WHO HAS THE LEVERAGE? In many ways, the trip will look like those taken by chancellors in the past, when China’s vast and fast-growing market was considered the hope of German industry. Merz is traveling with a delegation of some two-dozen business executives. Over the course of three days, with stops in Beijing and the tech hub of Hangzhou, he will dine with Xi and visit the Forbidden City as well as outposts of Mercedes Benz and Siemens Energy. But few expect any sweeping deals will be reached. German industry leaders are instead calling for more concrete and immediate progress to improve their circumstances. “Our companies are coming under increasing pressure because key competitive conditions are being systematically distorted,” Thilo Brodtmann, the managing director of VDMA, said in a statement ahead of Merz’s trip. As a consequence, he said, German machinery exports to China fell by 8.5 percent during the first 11 months of last year, while machinery imports from China rose by 12.5 percent. Brodtmann called on the chancellor to address Chinese export controls on rare earths and to end China’s practice of subsidizing loss-making “zombie companies” that offer cut-rate prices. “German companies are not competing with other companies, but with the Chinese treasury,” he said of subsidies more broadly. The most powerful tool Merz has at his disposal is China’s growing dependence on the European market, which only increased as Chinese domestic demand has fallen. For Merz, a longtime free-trade purist, a push to threaten defensive tariffs within the framework of the EU is not only anathema — it’s potentially reckless at time when Germany is also dealing with the fallout of Trump’s trade wars. Trump’s attempt to confront China also provides something of a cautionary tale. In the midst of a trade feud between the U.S and China last year, Beijing announced sweeping export controls on rare-earth magnets and the raw materials needed to make them. Weeks later, Trump and Xi reached a detente, with Beijing agreeing to delay rare earth export restrictions for one year. But Nicolas Zippelius, a lawmaker focusing on China relations for Merz’s conservatives, said Merz may be more forceful than he lets on in public. “I would say that China and Germany can hurt each other very badly,” said Zippelius. “We must not underestimate Germany’s strong voice within the EU. And the EU has shown in the past that it has power, for example through tariffs and other measures.” Such conversations would happen in private, Zippelius added. “I don’t think it helps to take risks against each other in the open,” he said. “But in closed-door talks, you can communicate that very clearly. And there you definitely have leverage.” To that end, Merz could choose to ally itself more closely with France, which has emerged as one of the loudest voices warning that China is steadily hollowing out Europe’s industrial base while the continent is distracted by Trump. The only question is whether China would take Merz’s warnings seriously. “The leverage is there,” said Small of the European Council on Foreign Relations. “But on the Chinese side, the assessment is that Europe is not willing to use it.” Indeed, China knows the EU has backed off in the past over potential trade conflicts with Beijing in sectors such as solar panels and telecommunications due to fear of Chinese retaliation. As Merz and other European leaders look for an answer, time is on China’s side, added Small. “Unless there is more serious concerted action on the European side, China will calculate that it can get away with exactly what it’s doing at the moment and all of these problems will continue,” he said. Nette Nöstlinger contributed to this report.

EUROPE’S VANISHING CARS ARE JEOPARDIZING ITS RAW MATERIALS SECURITY Used cars are a treasure trove of metals essential in energy technology, but the EU is letting them vanish without a trace. By MARIANNE GROS in Brussels Illustration by Natália Delgado/ POLITICO EU decision-makers don’t have to look far to find cheap critical raw materials: Just 5 kilometers away from the EU quarter, car dealers up and down Heyvaert Street are scooping them up and shipping them to Africa. Dealerships in this industrial precinct in southwest Brussels send European used vehicles — many too polluting to be allowed on the continent’s roads — to African countries like Senegal, Sierra Leone and Nigeria, where the market for Europe’s unwanted automobiles is thriving. That one street intimately connects the capital of the EU — where some 10 million new cars hit the roads each year — to a global supply chain of used vehicles that sustains road transport in developing markets. One day these cars will end up in junkyards far away, and with them tons of valuable metals that the EU could recycle and reuse to run its economy. But Europe’s age-old habit of exporting unwanted goods is coming back to bite it as the bloc looks to recycle its way out of its reliance on raw materials imported from China.  The EU is scrambling to secure new sources of critical metals and minerals necessary for clean energy and military technology — a task of increasing urgency as geopolitical tensions disrupt traditional supply chains. For a small continent like Europe that is poor in natural resources but rich in consumer goods, old cars are a promising source of these materials. The vehicles are full of metals such as copper, platinum and steel that are essential in a long list of critical industries such as clean energy and military technology. And they’ll become even more valuable as early generations of electric vehicles — full of battery metals like lithium, cobalt and nickel — reach the end of their lifespans. But the EU isn’t close to taking advantage of this prospect. Along with those that are legally exported, between 3 million and 4 million end-of-life cars disappear without a trace from the EU each year. That’s a third of all cars that get deregistered. Some go missing because of a gap in the paper trail. Others get exported through obscure trade routes. Many are dismantled illegally, with the more valuable parts sold online or in non-compliant dealerships — while the rest are dumped, creating a pollution risk. “We see big and currently unused potential in recycling, reuse and also substitution” of critical raw materials, said Keit Pentus-Rosimannus, a member of the European Court of Auditors who last month co-authored a report on the EU’s difficulties in securing a supply of critical raw materials.  But that recycling and reuse can only happen if the waste products, e.g. cars, make it to recycling hubs in the first place.  The market for Europe’s unwanted automobiles is thriving in cities like Lagos in Nigeria. | Olympia De Maismont/AFP via Getty Images “The illegal dismantling and export of [end-of-life vehicles] is mainly motivated by profits from the sale of spare parts and metals,” the German Environment Agency wrote in a study on the topic back in 2020. Unauthorized dismantlers are “neglecting proper depollution, to avoid additional costs,” the study explained.  In a separate paper published in 2022, the agency estimated that 20 percent of all German vehicles that “go missing” — over 72,000 cars — are exported illegally.  According to Interpol data, nearly 3.6 million vehicles and vehicle parts from Europe — not just EU countries — were registered in the Stolen Motor Vehicles database as of Dec. 31, 2025. EUROPE’S MISSED OPPORTUNITY  The EU has made materials recycling a strategic pillar of its mission to reduce reliance on imports from China in an increasingly hostile geopolitical environment. Europe’s economy runs on importing critical raw materials, such as nickel, copper and lithium, as well as rare earths and so-called platinum group metals like palladium or platinum. It needs them to build car engines, weapons and products that contribute to the bloc’s green tech transition, including batteries, chips and solar panels.   While the metals are mined all over the world, China overwhelmingly dominates the processing and refining of these critical raw materials.  To address this, the European Commission says it wants to launch new mining projects, sign deals with other countries to diversify its supply, and promote recycling projects.  With the introduction of the Critical Raw Materials Act in 2024, EU governments are required to adopt national circularity measures to boost the recovery of critical raw materials and simplify permitting processes for recycling and recovery projects. The law says that 25 percent of the EU’s annual strategic raw material consumption should come from domestic recycling by 2030. Last December, the Commission announced additional measures as part of a new plan called RESourceEU.  But many argue that progress is too slow. “Most EU targets that are in place do not incentivize the recycling of specific individual materials. High processing costs, limited availability of materials, technical and regulatory issues also make the use of the recycling sector less competitive,” the Court of Auditors’ Pentus-Rosimannus said. Others say the EU is doing little to reduce consumption in the first place. Policymakers need to be “addressing [materials] consumption aspects to accelerate this process in addition to everything else that is being done on the recycling part” said the European Environment Agency’s head of the clean and circular economy group, Daniel Montalvo. EU policies should tackle “how we can change this upstream part of the material cycle so that we use products more intensively and for longer,” he added. RECYCLERS NEED HELP  End-of-life vehicles should all end up in one of Europe’s 13,000 authorized treatment facilities like the one in Menen, Belgium, which straddles the country’s border with France and is run by recycling company Galloo.   Running a recycling center is expensive and illegal dismantlers create unfair competition because they avoid regulatory and compliance costs. | Sebastian Kahnert/picture alliance via Getty Images “We can dismantle 17 cars at once here. Usually, we treat 10 to 15 thousand cars a year, but this year we’re around 3 or 4 thousand on this site,” said Emmanuel Katrakis, the company’s director of public and regulatory affairs. Galloo set up Valorauto, a joint venture with French-Italian automaker Stellantis, in 2023. Valorauto runs a vehicle take-back and recycling service through 300 authorized treatment facilities in Western Europe. The low turnover in Europe’s car fleet — a result of stagnating sales since the Covid pandemic due to Europe’s weaker economy — means fewer cars end up in recycling centers. Once the vehicles reach what can only be described as a cemetery for cars, the vehicles get scrubbed of polluting substances and taken apart. Most of the plastic, rubber, glass and iron can be recycled. Crucially, the more precious resources in their engines, catalytic converters and electrical systems can be collected. Two thirds of vehicles that reach end-of-life status end up in this system.  But running a recycling center is expensive. Illegal dismantlers create unfair competition because they avoid regulatory and compliance costs, which drives the price down, while also diverting some of the end-of-life-vehicle flow — and therefore revenue — away from authorized centers.  “We’re tired of having bad actors in our sectors who are willing to work with a completely illegal market,” Katrakis said.  Cars also get dropped off with missing parts.”We’re going to buy their car for €150, maybe €200, but they know they can sell their catalytic converter separately for €60. They do the math,” he added.  For Valorauto’s general manager, Thomas Delgado, online marketplaces should be held responsible for enabling the car dismantling grey market, saying they don’t monitor the sellers properly. “There are several marketplaces that should do their part to help [us] fight this system” he said, by preventing individual sellers from selling a car part unless they can prove they are registered as an authorized treatment facility.   Then there are Europe’s faulty registration systems. A lot of these cars go missing because they are sold second-hand in another country but are never deregistered in their country of origin. “Today we have national computer systems that are supposed to track things, but they’re totally overwhelmed,” Delgado said.  There are also gaps between the car registries and the database of insured vehicles. Responsibility for monitoring these systems is often shared by several national ministries.  National governments have tried to address the issue by creating incentives for car owners to drop their vehicles off at authorized centers. In Denmark, for example, owners can get a “scrapping premium” when their vehicle is dropped off at an approved dealer.  A new regulation on end-of-life vehicles aims to clarify when a car is legally considered waste.  | Nicolas Tucat/AFP via Getty Images At the EU level, a new regulation on end-of-life vehicles aims to address the issue with “clearer rules on the distinction between a used vehicle and an end-of-life vehicle” and “a strict framework for transfers of ownership,” but some of the technical aspects of the law are still being discussed. The law also aims to clarify when a car is legally considered waste.  The automotive sector is glad to see the EU will “implement an EU-wide registration/deregistration system and regulate the export of ELVs outside the EU, preventing valuable raw materials from leaving the European market,” according to ACEA, the sector’s main lobby.  GETTING A SECOND LIFE  Over 800,000 used vehicles are exported from the EU each year, mainly to African countries, according to EU data. The revised end-of-life vehicle regulation states that only roadworthy cars can be exported from the EU.   Just because a car isn’t allowed on the streets of a European city doesn’t mean it should be dismantled immediately, however.   “It’s important to make the distinction because they are not necessarily at the end of life everywhere,” said Pierre Hajjar, chief executive officer of Socar Shipping Agencies, a vehicle shipping company on Brussels’ Heyvaert St. Last December local police raided the street, seizing 45 vehicles and forcing several dealerships to close for not complying with national rules on cash payments or for not having the right environmental permits.   With the revised end-of-life-vehicle regulation, the EU wants to increase traceability so “only high-quality, technically fit European vehicles will be exported.” But for African markets, Hajjar says that’s already the case.  “For Africa, everything goes by boat, everything is extremely traceable,” he said, because port authorities and maritime shipping companies have high thresholds for the kind of vehicles that can be exported. “Whereas in Eastern countries it’s road transport … there isn’t really any traceability, they cross the borders quite easily,” he added.  

ALDEN BIESEN, Belgium — The European Union should open up more to its trade partners in public procurement and curb Chinese investment in sectors like green tech, according to a new draft of a landmark industry act obtained by POLITICO on Thursday. Free-trade partners like the United Kingdom and Japan will breathe a sigh of relief as the draft Industrial Accelerator Act (IAA) foresees a definition of “Made in EU” that includes “trusted partners.” Brussels wants to throw up a higher barrier to investment from China by imposing a cap on foreign direct investment by countries that dominate a given global industry. The leak of the bill came as EU leaders held a retreat at a Belgian castle to wargame ways to reverse the bloc’s industrial decline in the face of China’s export dominance and America’s tech supremacy. European Commission President Ursula von der Leyen is trying to find a balance between France’s protectionist instincts and calls for more openness led by Germany, Italy and the EU’s Nordic contingent. Leaders played down differences as they gathered at the Alden Biesen estate, with Italian Prime Minister Giorgia Meloni saying her views on industrial strategy converged with those of German Chancellor Friedrich Merz, and brushing off suggestions the duo were trying to isolate French President Emmanuel Macron. “It is not something that we do against someone else, by excluding someone else,” she told reporters. Leaders reached a form of consensus on areas including the concept of a European preference, where there was openness to examining what it may mean and where it may be needed, according to a person briefed on the talks. The meeting kicked off an intense month of politicking on restoring EU competitiveness and its single market project, with the IAA due out on Feb. 25 and leaders to reconvene for a full-blown summit on March 19-20. The draft drew a swift and strong rebuke from Chinese business. “The latest version of the Industrial Accelerator Act is likely to undermine the investment confidence of leading Chinese companies,” the Chinese Chamber of Commerce to the EU said. “Beyond the political signaling, many of the proposed measures raise serious practical concerns, including the feasibility of mandatory local partnership requirements, which in many cases may simply not be commercially or technologically viable.” A big question mark over the industry push, which is being led by Industry Commissioner Stéphane Séjourné, is whether it can be sufficiently decisive to turn the economic tide. “Whatever new FDI rules will be enacted will be ineffective,” said Yanmei Xie, a senior associate fellow at the Mercator Institute for China Studies. Each EU member country has a different agenda and building a united front against Chinese dominance is a near impossibility. “Whoever is the lowest denominator becomes the de facto gatekeeper.” TRUSTED PARTNERS The latest draft of the IAA, which runs to 96 pages, broadens the definition of a European preference as it would apply to public procurement and other taxpayer-funded programs in energy-intensive industries, net-zero technologies and the automotive sector. In so doing it should allay fears among friendly trading nations of a “Fortress Europe” scenario.  The scope of Made in EU should include content originating from the EU and the European Economic Area, which spans Norway, Iceland and Liechtenstein. The draft also leaves the door open to “trusted partners” whose manufacturing “should be deemed equivalent to Union origin content.” Earlier on Thursday, Séjourné dismissed the notion that the Made in EU push would exclude trade partners. His cabinet said there was broad support, both politically and in industry for the work of the Commission, although “opinions diverge on the conditions and modalities of its implementation.” A broader Made in EU concept will be welcome in the U.K. after the country’s finance minister, Rachel Reeves, said on Wednesday that Britain needed to be part of the Made in EU club. “I actually support the idea of some sort of ‘Made in Europe’ or ‘Made in countries that share each other’s values,’” she told an event. Japan, a major auto exporter, will also welcome the shift. The country “very much meets the definition of a Trusted Partner of the EU,” Patrick Keating, Honda Europe’s head of government affairs, told POLITICO.  GETTING TOUGHER The EU executive doubled down on its efforts to curb foreign direct investments from China in its latest draft.  Should the current form hold, the IAA would limit investments by companies based in countries that control more than 40 percent of global manufacturing capacity across four sectors: batteries, electric vehicles, solar technologies, and the processing and recycling of critical raw materials. “The sectors indicated — those in which Beijing is a leader — as well as the reference to the 40 percent manufacturing capacity, highlight how the increasingly clear target of these measures are Chinese foreign direct investments,”said Luca Picotti, a lawyer at Italy’s Osservatorio Golden Power. The Commission’s proposal, which effectively mirrors Beijing’s 1980s forced joint venture policy, remains in the new draft. Chinese automakers that could be forced to give up some of their technology to their European competitors are pushing back on that strategy. BYD CEO Stella Li has called the model “outdated.” “It’s not efficient: We take decisions in a second, a joint venture takes months. It’s a model of the past,” she told Italian daily Corriere della Sera at the Davos World Economic Forum last month. Governments would also be compelled under the IAA to buy more climate-friendly materials, though the scope of the requirement remains elusive in the latest draft of the upcoming industry booster. The act also proposes introducing voluntary green steel labels.  The scale of the Commission’s intervention remains unclear in the draft, which is missing a section devoted to specific materials as well as a set of annexes, though hints are sprinkled throughout the document. “Public procurement is a powerful lever,” von der Leyen told industry representatives at an event in Antwerp on Wednesday, noting it amounts to 15 percent of EU GDP. “This is massive financial firepower controlled by European governments. But too often, we see that our public buyers have to take the subsidized foreign products instead of the high-quality European alternatives. That is homegrown value that we are leaving on the table.”  Aude van den Hove reported from Alden Biesen, Francesca Micheletti, Jordyn Dahl and Sebastian Starcevic from Brussels, and Zia Weise from Antwerp.

BRUSSELS — Next up on Ursula von der Leyen’s trade to-do list: Australia. The EU’s ally Down Under is ready to tango again as Donald Trump’s tariffs push the rest of the world closer together. Both Brussels and Canberra worry about China. And they already see eye-to-eye on issues, ranging from research funding to defense cooperation. The EU and Australia came close to a deal in October 2023, on the sidelines of a G7 meeting in Osaka, Japan. But Aussie Trade Minister Don Farrell pulled out at the last minute under pressure from the beef lobby back home. Sticking points remain: access for Australian beef and lamb to the European market; EU trade protections on specialty foods; critical minerals; and an Australian tax on luxury cars. Farrell visits Brussels on Thursday to meet the EU’s trade and agriculture commissioners, Maroš Šefčovič and Christoph Hansen. Only if they resolve those differences would the Commission chief get to fly to Australia to finally conclude a formal agreement. “I don’t do bad deals,” Farrell said before heading to Brussels. Here are five issues that need to be sorted out for a good deal to happen: ANGRY FARMERS The biggest obstacle is whether the EU will grant more access to Australian farm produce, chiefly beef and lamb. Farrell needs a deal he can sell to vocal farmers back home who effectively blocked the deal just over two years ago. It’s not only meat but also sugar, rice and dairy — even though quotas for those are less sensitive. The Australian National Farmers’ Federation said this week that it’s still looking for “significantly increased access” on all of those fields. The crux here: Australia might want more, but if the EU gives more it risks the ire of European farmers ready to protest on the doorstep of the Berlaymont. The European Parliament’s referral of the EU’s agri-heavy deal with the Latin American Mercosur bloc for judicial review adds to the uncertainty. PROTECTING PARMIGIANO While the matter of protected European products on the market down under was all but solved in 2023, it’s likely this chapter will return to haunt negotiators. Australia knows very well how to use anything the EU says against it: Nothing is agreed until everything is agreed, after all. Canberra signaled it was ready to set up its own version of Europe’s system of geographical indications. These, for instance, denote that Champagne can only be called that when it’s made in the eponymous region of France. They are also some non-Greek supermarkets that have to resort to calling their feta imitations “white cheese.” Australia might want more, but if the EU gives more it risks the ire of European farmers ready to protest on the doorstep of the Berlaymont. | Geoffroy van der Hasselt/AFP via Getty Images Australia is a peculiar case because, for example, Italian-heritage farmers have made parmesan cheese for generations in the same way as around Parma. They could now face limits on what they can call their product — but probably not Parmigiano Reggiano. A likely solution would allow established brands to continue to use product names for a grace period. This is why prosecco, pecorino, parmesan and feta are still under discussion, the Australian Associated Press reports. On the flip side, the EU usually offers to protect some of the other side’s products on its own market. Let’s hope they don’t come after our flat whites. RAW MATERIALS (AND THEIR PRICE) Australia holds the world’s largest lithium reserves but lacks the refining capacity to monetize them. As a result, China processes virtually all of the raw lithium that Australia produces, enabling Beijing to dominate global supply. Brussels and Canberra continued talking on this topic after the Osaka debacle, concluding a memorandum of understanding in early 2024. Australia is also a partner in Europe’s RESourceEU program to reduce dependencies on a subset of critical raw materials. And the European Investment Bank is teaming up with Australia. Ideally, a trade deal would unlock exports from Australia to Europe and also boost the confidence of European companies to invest in local refining capacity. This is true not only for lithium, but also uranium, silver, bauxite used for aluminum, and a host of others. It cuts both ways: One example of an existing project getting a boost is the Australian-owned lithium producer Vulcan Energy in Germany. So is this really a hurdle? There’s a technical one: Europe wants to avoid a dual pricing system for critical raw materials (and energy sources like natural gas) that favors domestic customers. Australia hasn’t signaled it’s ready to end the practice, however. TAXING LUXURY CARS Australia still taxes luxury vehicle imports — a relic of a bygone era when it still had a car industry of its own. The tax is a 33 percent charge on models above a certain price threshold. There’s also a 5 percent import duty on all foreign cars. Trading partners that have deals with Canberra — like Korea and Japan — saw that removed but are still charged the luxury car tax. The potential is there: Japan sold $8 billion worth of vehicles to Australia in 2024, with German only in fifth position at $2 billion. While the EU would love to pave the way for more high-end German autos to be sold Down Under, the tax is domestic legislation and not formally part of the talks. Australia was rumored in 2023 to be willing to get rid of the tax, and Albanese hinted at it again late last year. That could be a sweetener for the EU to stomach a slightly higher beef quota. THE POLITICS OF IT ALL The EU is on a roll with new trade agreements: it has signed the Mercosur deal, closed talks with India and an Australian win is close. The streak serves von der Leyen’s geopolitical agenda for Europe to stand on its own two feet economically. On the other side of the world, Albanese is in more dire need of a win. He’s under pressure over his response to the Bondi Beach terror attack in December. And even though Trump only hit Australia with a 10 percent tariff, the country needs strong alliances if it wants to weather both Chinese and American pressure. The same is true for Europe, which sees the deal as underlining its cultural and historic ties with Australia, lifting an already-strong working relationship to the next level, as with Canada. And Australia is a key member of “the West” in the Indo-Pacific where Europe needs and wants to expand its attraction and influence. Zoya Sheftalovich contributed to this report.

OPTICS SERBIANS PUSHED OUT AS CHINA TAKES OVER A MINING EMPIRE Beijing’s investment is transforming the landscape in Bor — and the lives of the people who call it home. Text and photos by MATTEO TREVISAN in Bor, Serbia Ixeca, a farmer, observes a landslide in his orchard in Slatina, which he believes was caused by irregular operations at the underground mine owned by China’s state-owned group Zijin Mining. In northeastern Serbia, the town of Bor rose around some of Europe’s most significant copper and gold deposits. From the 1940s, the region quickly drew workers from all over Yugoslavia. Majdanpek, located just 70 kilometers away, expanded around another massive reserve, estimated at more than 600 million tons of ore. For decades, these mining centers sustained Yugoslav heavy industry, but today that legacy is increasingly fragile. Since 2018, the mining complex has been taken over by Chinese state-owned group Zijin Mining, which has invested €2.3 billion to increase production. The expansion goes far beyond industry — it is transforming the land and the lives of its inhabitants. Whole families are watching their homes, properties, and memories disappear as settlements are engulfed by the mine. The Serbian government has failed to provide meaningful alternatives for resettlement. Advertisement The environmental toll is profound: forests and rivers are being destroyed, wildlife is under threat, and residents endure some of the most polluted air in Europe. Meanwhile, a growing Chinese workforce — now numbering in the thousands — remains largely segregated in closed camps, seldom mixing with locals, leaving behind a vast yet intangible presence. Bor and Majdanpek illustrate a broader pattern. In 2022, Chinese investment in Serbia equaled the combined input of all 27 EU countries for the first time, raising questions about sovereignty and neocolonial influence. The debate grew sharper after the collapse of a Chinese-renovated railway station in Novi Sad that killed 16 people in 2024, sparking waves of protest. As Zijin Mining continues to expand its footprint, the region and its people are left suspended in a battle between economic profit and the slow erosion of collective memory — the disappearing homes, traditions and history of threatened communities. Feeling the change: Once a small village, the Serbian town of Bor experienced dramatic growth last century following the discovery of large gold and copper deposits. Above, Željko, who has worked at the mine for more than a decade, says that safety regulations have worsened and accidents have increased since China’s state-owned Zijin Mining bought the complex. Željko lost 40 percent of mobility in his right arm following a workplace accident in 2023. Also in the photos above, the Zivkovic family inside their home in Slatina, near Bor. The family’s main source of income is agriculture. In recent years, their land has been expropriated due to the expansion of Zijin Mining’s operations. The son now works as a driver for the mine, like many others in the area who can’t find other employment. CHAPTER 1 THE CHINESE New audience: A Chinese cook in a Chinese restaurant in Bor. The text on her apron could be translated as “I make money by the shovelful.” Next, large screens outside the Zijin Mining headquarters in Bor display videos promoting the company’s activities in the region. The company has brought in thousands of workers from China, housing them in camps within the mining area and preventing them from integrating with the local population. “This is colonization,” says Ixeca, whose family has lived off farming for generations. Now, the expansion of mining activity threatens their livelihood. Some of their lands have already been expropriated and they are suing Zijin Mining. Neighbors? The Chinese and Serbian flags inside a Chinese restaurant in Bor. The contract between Serbia and Zijin Mining remains classified, raising concerns over its legality. The Chinese presence in the area is overwhelming but often invisible. Only Zijin Mining managers and senior staff are allowed to leave the company’s camps, unlike regular workers from China. Leaving a mark: Top, one of the buildings used as offices by Zijin Mining in Bor. Serbia stands out as a focal point of the Chinese footprint not only in the Western Balkans but also across Central and Eastern Europe. Beijing has emerged as the largest individual investor in Serbia. Health risks: Above, an X-ray of the lungs of a woman from Krivelj, a village near Bor, who died of lung cancer at a young age. Her family blames pollution from mining activities. The effects of intensive extraction and smelting are felt across the region. Air quality is a major concern: A report from January 2024 revealed frequent spikes in sulfur dioxide levels around Bor, contributing to both acute and chronic respiratory issues, as well as acid rain. The study also found fine particulate matter containing heavy metals such as lead, cadmium, nickel and arsenic. No systematic assessment of public health has been carried out since Zijin took over operations. Hard at work: Next, a view of the copper and gold mine in Majdanpek. Bor and Majdanpek hold one of the largest copper reserves in the world and one of the biggest gold deposits in Europe. In 2023, Serbia exported approximately 1.06 million tons of copper ores and concentrates, worth $1.46 billion. The main buyer was China. Advertisement CHAPTER 2 THE SERBIANS Perspective: “It’s become like we’re sleeping on gold but dying of cancer,” says 73-year-old Joleht, seen inside her home in Slatina, right. Neighbors say that their homes are slowly collapsing due to the underground copper and gold mining operations. They face cracks and water infiltrations throughout the walls. Anger: People protest against the central government and widespread corruption march through the streets of Majdanpek in February 2025. Dead river: Bottom, the Borska Reka River, notoriously known as one of the most polluted waterways in Europe. It is the main tributary of the Veliki Timok River. Sediment analysis has shown high concentrations of copper, arsenic, and nickel, exceeding remediation thresholds, particularly near mining areas. As a result, the Borska Reka is considered a “dead river,” devoid of aquatic life, with severe environmental impacts that extend to the Danube via the Timok. The Batut Institute of Public Health published a study showing an increased mortality risk for both men and women in Bor across all age groups. Local NGO Ne damo Jadar was founded to demand that the Majdanpek mine comply with environmental regulations and to advocate for solutions for residents whose homes are threatened by the mine’s expansion. Over the years, several incidents of violence have occurred between the NGO’s members and the private guards patrolling the mine. Hunter: Miodrag, a farmer from the village of Slatina, hunts near the land now occupied by Zijin Mining. His family relied heavily on agriculture, but their property has now been reduced to just a few hectares. Miodrag is currently suing the Chinese company, claiming the land was unfairly expropriated. “One day, we’ll have a mine under our house.” He also says that hunting has become impossible due to constant noise and explosions: “I can feel my house shake.” Family business: Father, son, and grandfather from the Jovic family in the yard of their home in Slatina. Some of their farming lands have been expropriated. “It’s over, there’s nothing else to be done,” says Ivica Jovic. “At this point, I accept they’ll take my land, but at least give me another place and let me continue farming.” Jovic has received cease-and-desist letters from Zijin Mining, after allegedly verbally confronting Chinese workers operating on what was once his land. Expansion: One of the many facilities owned by Zijin Mining, near the village of Slatina, just outside of Bor. The city, born thanks to the mine, and the nearby villages are now at risk of disappearing due to its expansion. Advertisement CHAPTER 3 THE FUTURE Staying put: Jasna Bacilovic, with her daughter Katarina Tomić, inside their home in the village of Krivelj. The village is slowly disappearing due to the expansion of the mine, but both Jasna and her entire family are committed to preserving their home, which has belonged to them since the 1800s, and to defending the village. “I don’t want to live anywhere else. This is home. I remember when I was a child, I used to play with my friends on a hill not far from here, but now that hill doesn’t exist anymore. My children may never even see this village because it might disappear forever,” says Tomić. Krivelj used to have up to 22 kafane —family-run taverns and restaurants. Today, only one remains and the village is slowly disappearing. “The village sounds are disappearing. I no longer hear shutters opening, the radio coming from my uncle’s house, or my neighbors talking. I open the window and hear nothing,” says Bacilovic. The departed: The bus stop in Majdanpek covered with death notices of local residents. Today, the municipality of Bor is one of the wealthiest in Serbia, despite local salaries remaining low, as in the rest of the country. The mine has expanded to the point of becoming one with the town. There are plans to relocate the entire community to Metovnica, an undeveloped area with only a few scattered farms, but nothing has been confirmed yet. Keeping watch: Bottom, a resident of Majdanpek looks toward the mine owned by the Chinese company Zijin Mining. An activist who has been fighting for years against pollution and the uncontrolled expansion of the mine, he has received both verbal and physical threats for his social engagement. Last train: A glimpse inside the train station of Bor, now abandoned after a fire that some locals believe was intentional. They suspect Zijin is interested in acquiring the railway land and expanding its operations in the area. Past lives: Below, the black and white photos show houses abandoned due to the expansion of the mine. Many families have sold their homes to Zijin Mining, as the company continues to buy land. The expansion of its activities threatens to wipe out entire villages. Next chapter: “This is not the end of the world, but from here you can see it,” says Aladin Zekypy, pictured with his two children, aged 10 and 7, inside their home, which stands just a few dozen meters from the open-pit mine in Bor. He dreams of one day being able to afford a healthier place for his family.

Dora Meredith is the director of ODI Europe. John Clarke is a former senior trade negotiator for the European Commission and former head of the EU Delegation to the WTO and the U.N. He is a fellow at Maastricht University and the Royal Asiatic Society, and a trade adviser for FIPRA public affairs. The EU rarely gets second chances in geopolitics. Yet last week, the European Parliament chose to throw one away. By voting to refer the long-awaited trade agreement with the Mercosur bloc to the Court of Justice of the EU for a legal opinion — a process that may take up two years — lawmakers dealt a serious blow to Europe’s credibility at a moment when speed and reliability matter more than ever. After more than two decades of negotiations, this deal was meant to signal that Europe could still act decisively in a world of intensifying geopolitical competition. As European Commission President Ursula von der Leyen argued this month, it was the ultimate test of Europe’s continued relevance on the world stage. Oblivious to this, the Parliament’s decision reinforces the perception that the bloc is unable to follow through, even when an agreement is finally within reach. It is, by any reasonable measure, a strategic own goal. The consequences of this go well beyond trade. Mercosur governments spent years negotiating this free trade agreement (FTA) in good faith, navigating Europe’s hesitation, shifting demands and inconsistent political signals. Understandably, they are now interpreting the referral to the court as a political move. For partners already hedging their bets in an increasingly contested global landscape, it reinforces doubts over whether Europe can be relied on. Meanwhile, for Europe, the true damage is to a deeper truth it all too often obscures: That its real power comes from the ability to make such agreements and then implement them seriously, consistently and at scale. The EU–Mercosur agreement isn’t just another trade deal. It was designed as a framework for long-term economic, political and strategic partnership with a region where Europe’s influence has been steadily eroding. It offers comprehensive market access in goods and services, clearer investment rules, access to critical materials, structured political dialogue and a cooperation-based approach to managing disputes. Taken together, it is meant to anchor Europe more firmly in South America at a time when others, most notably China, have moved faster and with fewer constraints. And while that level of ambition hasn’t disappeared with the Parliament’s vote, it has been put at serious risk. Over the years, much of the criticism surrounding the Mercosur deal has focused on sustainability. Indeed, if eventually passed, this will be the litmus test for whether the EU can translate its values into influence. And to that end, the deal makes a wide set of previously voluntary commitments legally binding, including the implementation of the Paris climate targets and adherence to international conventions on labor rights, human rights, biodiversity and environmental protection. However, it does so through dialogue-based enforcement rather than automatic withdrawal in the face of noncompliance — an approach that reflects the political realities in both Brussels and the Mercosur countries. This has disappointed those calling for tougher regulation, but it highlights an uncomfortable truth: Europe’s leverage over sustainability outcomes doesn’t come from pretending it can coerce partners into compliance but from sustained engagement and cooperation. That was a red line for Mercosur governments, and without it there would be no agreement at all. The deal’s novel “rebalancing mechanism” sits within this logic, as it allows Mercosur countries to suspend concessions if future unforeseen EU regulations effectively negate promised market access. Critics fear this provision could be used to challenge future EU sustainability measures, but Mercosur countries see it as a safeguard against possible unilateral EU action, as exemplified by the Deforestation Regulation. Moreover, in practice, such mechanisms are rarely used. Plus, its inclusion was the price of securing an additional sustainability protocol. Most crucially, though, none of this will resolve itself through legal delay. On the contrary, postponement weakens Europe’s ability to shape outcomes on the ground. Research from Brazil’s leading climate institutes shows that ambitious international engagement strengthens domestic pro‑environment coalitions by increasing transparency, resources and political leverage. Absence, by contrast, creates space for actors with far lower standards. South American and EU leaders join hands following the signing of the now-delayed Mercosur agreement, Jan. 17, 2026., Paraguay. | Daniel Duarte/AFP via Getty Images The same logic applies to the deal’s economic dimension. The Commission rightly highlights the headline figures: Billions of euros in tariff savings, expanded market access, secure access to critical minerals and growing trade. According to a recent study by the European Centre for International Political Economy, each month of delay represents €3 billion in foregone exports. But these numbers matter less than what lies beneath them: Europe will be gaining all this while offering limited concessions in sensitive agricultural sectors; and Mercosur countries will be gaining access to the world’s largest single market — but only if they can meet demanding regulatory and environmental standards that could strain domestic capacity. Again, the real power lies in the deal’s implementation. If managed well, such pressures can drive investment, modernize standards and reduce dependence on raw commodity exports as Latin American think tanks have argued. This transition is precisely what the EU’s €1.8 billion Global Gateway investment package was designed to support. And delaying the agreement delays that as well. The Parliament’s decision isn’t just a procedural setback — it damages Europe’s greatest strength at a time when hesitation carries real cost. It also creates an immediate institutional dilemma for the Commission. Despite the judicial stay, the Commission is legally free to apply the agreement provisionally, but this is a difficult call: Apply it and enter a firestorm of criticism about avoiding democratic controls that will backfire the day the Parliament finally gets to vote on the agreement; or accept a two-year delay and postpone the deal’s economic benefits possibly indefinitely — Mercosur countries aren’t going to hold out forever. If it is going to recover, over the coming months Europe has to do everything possible to demonstrate both to its Mercosur partners and the wider world that this delay doesn’t amount to disengagement. This means sustained political dialogue, credible commitments on investment and cooperation — including the rollout of the Global Gateway — as well as a clear plan for the deal’s implementation the moment this legal process concludes. Two years is an eternity in today’s geopolitical climate. If Europe allows this moment to pass without course correction, others won’t wait. The deal might be imperfect, but irrelevance is far worse a fate. Europe must be much bolder in communicating that reality — to the world and, perhaps more urgently, to its own public.