AEGIS Europe calls for balanced FTAs to ensure fair competition and Industry Competitiveness
/Brussels, April 2025. As the European Union is engaging in negotiations for the conclusion of several Free Trade Agreements (FTAs), AEGIS Europe emphasizes the need for an ambitious approach that prioritizes the European Industry’s strategic interests, based on the principles of fairness, transparency, and reciprocity. While FTAs can be valuable tools to foster economic growth and international cooperation, trade openness must be carefully balanced by ensuring the design of agreements that are able to uphold Europe's economic security, sustainability commitments and reciprocity.
The current energy price crisis and massive—subsidized—overcapacities, combined with unfair pricing strategies that have a permanently disruptive impact on the market, cannot be ignored. Fairness, based on the principle of reciprocity, should therefore be the central principle guiding FTA negotiations.
The EU must ensure a tailored tariff liberalization approach distinguishing between sectors where domestic industries face unfair global competition and those where the EU currently lacks adequate domestic capacity. Unwarranted tariff reductions can undermine industries vital to the EU's strategic autonomy, such as ceramics, steel and glass to name few, and generate dangerous dependencies, particularly when it comes to critical raw materials such as aluminium, silicon and base metals. Sectors already injured by increasing unfair imports of foreign goods manufactured with poor social and environmental standards should therefore be excluded from any trade liberalization scope.
With regard to Trade Defence Instruments (TDI), AEGIS Europe has experienced a lack of procedural transparency in third countries’ investigations, including those with whom FTAs have been signed or are currently under negotiations. It is therefore essential to ensure the continued right of the EU to undertake trade defence investigations against unfair trade and to ensure agreement by all third countries on WTO compliance in their investigations.
Additionally, any public procurement chapter in new FTAs must be approached with caution, to avoid undermining the enforcement possibilities under the International Procurement Instrument and the ability to exclude bidders from countries not complying with fair access obligations.
During trade agreement negotiations, it has also come to our attention that the EU may relax its Rules of Origin (RoO). On the contrary, FTAs must include strict RoO designed in collaboration with EU stakeholders, particularly when FTA negotiations involve countries with lower environmental and governance standards than those of the EU or are profiting from neighboring countries state-induced market distortions. The respect of this principle will prevent the circumvention of our standards and boost investments exclusively in sustainable value chains.
Along the same lines, FTAs should incorporate binding commitments on environmental protection, social standards, and climate goals, reflecting the EU's Green Deal objectives. AEGIS Europe advocates for a progressive mirror clause aligned with ILO conventions and environmental targets, upholding European production standards as a benchmark. Sustainability chapters must include clear provisions on child and forced labor, full compliance with the Carbon Border Adjustment Mechanism (CBAM), and adherence to WTO principles.
In the attached Annex I, AEGIS Europe has gathered the comments of its members regarding the ongoing EU-India FTA negotiations, as an example of the many hurdles that must be overcome to ensure a fair and balanced approach.
To conclude, the European Commission must ensure that all future trade agreements are based on the principles of reciprocity, transparency and fairness. The EU cannot afford to compromise on economic security, environmental goals, or fair competition. AEGIS Europe therefore welcomes the various trade recommendations displayed in the Clean Industrial Deal, which overall align with efforts to preserve Europe’s economic security and resilience.
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AEGIS Europe is an industry alliance that brings together more than 25 European manufacturing associations representative of the whole value chain, from commodities down to consumer end products. Our Members account for more than €500 billion in annual turnover, as well as for millions of jobs across the EU.
Annex I: EU-India Free Trade Agreement
The EU-India FTA exemplifies the challenges of ensuring fair and reciprocal market conditions. While India benefits from significant tariff-free access to the EU market, most European exports to India remain restricted due to high import duties, complex regulatory barriers, untransparent customs procedures, and burdensome certification requirements such as Quality Control Orders (QCOs). The EU must insist on greater transparency and regulatory harmonization to prevent these measures from serving as disguised trade barriers.
From a sustainability dimension, India falls short of European standards, with significant challenges in environmental protection, social welfare, and labour rights. India's reliance on carbon-intensive production methods poses a risk of carbon leakage and weakens the competitiveness of EU firms, which continue to face high energy costs. For instance, Indian metal producers rely almost entirely on coal-fired plants, which generate about 80% of the country's electricity, resulting in significantly higher carbon emissions compared to their European counterparts. Furthermore, as highlighted in the European Commission’s Trade Sustainability Impact Assessment (SIA), India’s excessive water usage, chemical pollution, and labour abuses linked to many of its manufacturing activities cannot be overlooked. Without binding climate provisions and higher sustainability standards, increased access to Indian products will undermine the EU’s decarbonization efforts and the ability of EU producers to compete in the internal market.
Moreover, India’s extensive state subsidies, particularly in the metals, textiles, ceramics and sugar sectors, extend along the whole value-chain and contribute to global trade distortions, requiring stricter scrutiny in the FTA negotiations. According to the OECD, India could add up to 36,4 million tonnes of coal-based steel capacity by 2026. By way of reference, India exported 2,8 million tonnes of finished steel products to the EU in 2023, becoming the second largest source of EU steel imports. Furthermore, India maintains a series of export subsidies and import tariff relief on products such as cast iron products and PET. The European paper and board sector also faces significant trade imbalances, with EU exports to India amounting to just 3% of total EU shipments – half the volume exported to China – despite India’s paper consumption per capita being 15 times lower than in Europe and its market growing by 47% between 2010 and 2021.
India’s aluminium industry is significantly larger than the EU’s, producing 4.1 million tonnes of primary aluminium in 2023 – four times the EU’s output and accounting for 6% of global production. Its largest smelter alone produces nearly twice as much as all eight operational EU smelters combined. Since 2019, EU imports from India have surged by 244%, with the majority consisting of aluminium ingots. Additionally, India’s aluminium industry is expanding both upstream, leveraging competitive access to raw materials, and downstream, leading to a sharp rise in imports of semi finished products.
Similarly, India has quickly become the second largest producer and exporter of ceramic tiles at global level, behind China, as well as the first source of extra-EU imports of ceramic tiles in the Union, with an astonishing 138% increase in imports in five years despite antidumping duties in place since 2023. High overcapacities coupled with low internal demand and ongoing trade defence investigations in several States are likely to boost imports of Indian aluminium and ceramic goods into the EU, which cannot be facilitated further by any trade liberalization.
There is also evidence of dumping in respect to many products originating in India including the dumping of titanium dioxide (TiO2) following the coming into force of anti-dumping measures against China. This is also observed in the case of manhole covers. We urge that India's TDIs be applied in full compliance with WTO rules to ensure a level playing field. Transparency in procedures, access to all non-confidential information, sufficient time to provide comments, and consideration of the public interest are key when conducting investigations.
Finally, India’s reliance on export restrictions for domestic price control, dependence on Russian raw materials and energy supplies, and aggressive use of TDIs – especially anti-dumping measures, making it the top user of such tools at the WTO2 – create further concerns about fair competition and potential abuse of international trade rules. This is further exemplified by India’s behaviour in the India – Tariffs on ICT Goods WTO dispute, and the EU should effectively use the Enforcement Regulation to protect its industries and uphold the rules-based international trade system.
Ensuring that EU exporters have access to transparent procedures and a non-discriminatory trade framework, as well as reciprocity of environmental and social commitments, must be key priorities in the negotiations.