Brussels reports that goods exports to preferential partners rose by 250 billion euros in 2025 and grew at more than twice the rate of overall trade, offsetting the collapse of the Russian market.
BRUSSELS, September 28, 2026
The European Commission published its sixth annual report on the implementation and enforcement of European Union trade and economic security policy on Monday, and the headline finding is that the bloc’s preferential agreements are now carrying a disproportionate share of its export growth.
According to the report, which covers calendar year 2025, European Union goods exports to free trade agreement partners increased by 250 billion euros. Trade with preferential partners grew by 3.1 percent against overall trade growth of 1.4 percent, better than double the rate. In agriculture the divergence was sharper still, with agri-food exports to agreement partners rising 4.6 percent while exports to non-preferential destinations fell 3.6 percent.
The Commission summarised the effect in a single line that will be quoted in trade ministries for the next year. “EU trade agreements play a crucial role in increasing the resilience and competitiveness of EU operators,” the report said.
The network now comprises 45 trade agreements in force covering 81 preferential partners, accounting for 46.3 percent of the bloc’s external trade. Nearly half of what Europe buys and sells now moves under negotiated terms rather than most favoured nation tariffs.
The Russian offset
The most consequential number in the report is not the headline growth figure but the one it absorbed. European goods exports to Russia fell by 54.5 billion euros over the period covered, the cumulative result of successive sanctions packages and the withdrawal of European firms from the Russian market.
A decline of that magnitude in a single destination would, in an earlier configuration of European trade, have registered as a serious drag on aggregate export performance. The report’s finding is that gains with agreement partners more than covered it.
That is a substantive vindication of a policy choice that was contested when it was made. The European Union spent the years after 2019 accelerating a negotiating programme that many member states regarded as politically costly, particularly in agriculture. The Mercosur agreement, the modernised Mexico agreement, the Chile advanced framework agreement, the New Zealand agreement and the Kenya economic partnership agreement all attracted domestic opposition from farming constituencies. The argument made in their defence was that diversification was a form of insurance. The 2025 numbers are the first clear instance of that insurance paying out.
It is worth stating the limit of the claim carefully. The report does not assert that trade agreements caused the offset in any strict counterfactual sense. Exports to agreement partners would have grown to some degree without the agreements, and some of the redirected volume would have found other destinations. What the report establishes is an association between preferential coverage and above-trend growth, sustained across goods and agri-food and observed in a year when the non-preferential aggregate was close to flat.
What the numbers describe
A closer reading of the composition matters for anyone trying to use these figures commercially.
The 3.1 percent versus 1.4 percent gap is a growth rate comparison, not a level comparison. Preferential partners account for 46.3 percent of external trade, so the faster growth on that base translates into a larger absolute contribution than the percentage gap alone suggests. Roughly speaking, the preferential half of the book delivered the bulk of the year’s incremental export value.
The agri-food divergence is the more striking of the two. A 4.6 percent gain against a 3.6 percent decline is a swing of more than eight percentage points between covered and uncovered destinations in a single sector. Agriculture is the sector where tariff peaks outside agreements are highest and where preferential margins are therefore largest. It is also the sector where non-tariff barriers, sanitary and phytosanitary requirements, and geographical indication protection bite hardest, and where trade agreements do the most work beyond the tariff line. European exporters of cheese, wine, spirits, olive oil and processed foods depend on negotiated recognition of protected designations as much as on duty rates.
The 81 preferential partners figure is larger than the 45 agreements figure because several agreements cover multiple countries. Economic partnership agreements with regional African groupings, the agreement with the Southern African Development Community group, the association agreements with Mediterranean partners and the various Central American and Andean arrangements each bring in several states under one instrument.
Background: how the network was built
The scale of the current agreement network is easy to take for granted, and the report’s figures are better understood against the sequence that produced them.
The European Union’s preferential trade architecture has three distinct layers, built in different eras for different reasons.
The oldest layer is the neighbourhood and development layer. Association agreements with Mediterranean partners, the customs union with Turkey, the agreements with the Western Balkans, and the economic partnership agreements with African, Caribbean and Pacific states were driven substantially by foreign policy and development objectives rather than by commercial calculation. They cover a large number of the 81 preferential partners while accounting for a modest share of trade value.
The second layer is the modern commercial layer, beginning with the South Korea agreement that entered into force in 2011 and continuing through Canada, Japan, Singapore, Vietnam and the United Kingdom. These were negotiated as comprehensive agreements covering services, procurement, investment and regulatory cooperation as well as goods, and they account for a disproportionate share of trade value relative to their number.
The third layer is the current wave, driven explicitly by diversification and economic security after 2020. New Zealand, Chile, Kenya, Mercosur, Mexico’s modernised agreement, and the pending India and Philippines files belong to this generation. The negotiating rationale shifted during this period from market access economics toward resilience, critical raw materials access and strategic alignment.
The 2025 figures the report presents are largely the product of the second layer operating at maturity while the third layer begins to contribute. That matters for forecasting. The growth attributable to agreements already bedded in will moderate as those markets saturate, while the newer agreements have yet to show their full effect.
The economic security dimension
The report’s full title refers to trade and economic security policy, and that framing is not decoration.
Over the reporting period the European Union has assembled a set of instruments that did not exist five years ago. The anti-coercion instrument gives the bloc a basis for responding to economic pressure from third countries. The foreign subsidies regulation allows scrutiny of subsidised foreign investment in the internal market. The international procurement instrument creates leverage over partners that close their public procurement markets. The carbon border adjustment mechanism extends carbon pricing to imports. Export controls on dual-use items were updated again on September 14.
Each of these is a unilateral instrument, and each sits alongside rather than inside the preferential agreement network. The relationship between the two is the central design question in European trade policy. An agreement partner that finds itself subject to a foreign subsidies investigation, a procurement restriction and a carbon border levy may reasonably ask what the agreement secured.
The Commission’s answer has been that the instruments target conduct rather than countries, and that partners who comply have nothing to fear. Partners have not universally accepted that answer. The tension is most visible with countries that are simultaneously agreement partners and significant sources of the conduct the instruments target.
For businesses, the practical consequence is that a preferential agreement no longer determines the whole of a trade relationship’s regulatory content. A product may enter duty-free under an agreement and still face a carbon border adjustment liability, a technical barrier, or a supply chain due diligence requirement. Tariff planning and regulatory planning have to be done together, and the report’s export figures capture only the first.
Enforcement is the other half of the story
The annual report is formally an implementation and enforcement report, and the enforcement half deserves the attention that the export figures will take from it.
The Chief Trade Enforcement Officer function was created precisely because a negotiated market access commitment is worth nothing if it is not honoured. Over the reporting period the Commission has pursued market access barriers through the single entry point complaint mechanism, through the trade barriers regulation, through dispute settlement under individual agreements, and through the World Trade Organization system where it remains functional.
The enforcement agenda has been running alongside an unusually heavy trade defence docket. A separate Commission report published on September 18 found that demand for trade defence action remained strong in 2025 and that the Commission again opened an above-average number of investigations. In the ten days before the annual report appeared, the Commission imposed provisional safeguard measures on grain-oriented electrical steel and definitive anti-dumping duties on pea protein from China.
That combination is the defining characteristic of current European trade policy. The bloc is simultaneously the most active negotiator of new preferential agreements among the major economies and one of the most active users of trade defence instruments. Those two postures are not contradictory. They are two halves of a strategy that opens markets to partners who accept disciplines and closes them to trade that does not.
Reaction
European business federations have welcomed the report in predictable terms, pointing to it as evidence that the negotiating programme should continue rather than pause. The specific ask that follows from these numbers is ratification. Several concluded agreements are sitting in the ratification pipeline, and the report’s implicit argument is that the value of an agreement accrues only once it enters into force.
That argument has immediate application. The Commission presented the landmark agreement with India to the Council for signature on September 11, reached substantial agreement with the Philippines on September 22, and presented the Ecuador sustainable investment facilitation agreement to the Council on the same day as the India proposal. The Mercosur agreement’s ratification process continues. Each of those files will be argued in national capitals over the coming months, and the annual report will be exhibit one for the Commission’s side.
Agricultural organisations will read the same document differently. The agri-food export figure is the strongest data point the Commission has produced for the proposition that European farming benefits from trade agreements rather than being sacrificed by them. Farm groups in France, Poland, Ireland and elsewhere have argued the opposite, focusing on import competition in beef, poultry, sugar and ethanol rather than on export gains in dairy, wine and processed foods. The aggregate figure does not resolve that dispute, because the sectors that gain and the sectors that lose are different sectors.
Third country partners will note the report’s framing. The emphasis on resilience, diversification and economic security signals that European trade policy is being justified increasingly in strategic rather than purely commercial terms. For partners negotiating with Brussels, that framing cuts both ways. It raises European willingness to conclude agreements with partners who are strategically useful, and it raises the non-commercial conditions attached to them.
Economic impact analysis
For the European economy, the report describes a structural shift rather than a one-year result.
The share of external trade running under preferential terms has been climbing steadily and now sits just below half. Once that share crosses fifty percent, which the current pipeline makes likely within a few years, the arithmetic of European trade policy changes. Most favoured nation tariff schedules become the exception rather than the rule for European exporters, and the marginal value of each additional agreement declines as the uncovered residual shrinks toward a core of large economies with which agreements are politically difficult.
The diversification achieved has a defensive logic that the Russian figure makes concrete. Concentration risk in export markets is the mirror of concentration risk in import supply, and Europe has spent four years learning the latter lesson expensively in energy and critical raw materials. The export side has attracted less attention because the failure mode is slower, but a manufacturer that depends on a single large export destination is exposed to that destination’s policy in exactly the way a manufacturer dependent on a single input supplier is exposed to that supplier’s.
There are limits worth naming. Preferential coverage does not guarantee preferential use. Utilisation rates for European Union agreements vary widely by partner and by product, and a trade agreement that businesses do not claim under delivers no tariff benefit at all. The report’s export figures measure trade with agreement partners, not trade conducted under agreement preferences, and those are different quantities. Where preference margins are small, where rules of origin are demanding, or where documentation is burdensome, exporters routinely pay the most favoured nation rate rather than incur the compliance cost.
There is also a composition question. Export growth concentrated in a few large agreement partners looks different from growth spread across many. The report’s aggregate does not disclose that distribution, and the resilience argument depends on it. Diversification that substitutes dependence on one partner for dependence on another is not diversification.
Implications for importers, exporters and supply chains
For businesses, the practical reading of this report is a prompt to audit preference usage rather than to celebrate an aggregate.
The first question any European exporter should be able to answer is what proportion of its shipments to agreement partners actually claim preferential treatment. That figure is calculable from customs data and is frequently lower than management assumes. Where it is low, the cause is usually one of three things: the product does not meet the applicable rule of origin, the documentation process is not set up, or nobody has checked whether a preference exists.
The second question is whether the rules of origin are being applied correctly rather than conservatively. Origin rules in European agreements offer alternative qualifying criteria for many products, including value added thresholds, change of tariff heading tests and specific processing rules. Exporters frequently qualify under one criterion while testing only against another. Cumulation provisions, which allow inputs from other partners to count as originating, are especially underused, and the pan-Euro-Mediterranean cumulation zone in particular is a source of qualification that many firms never examine.
The third question is whether the supplier base is aligned with the agreement network. A manufacturer sourcing inputs from a country outside the relevant cumulation area may fail an origin test that a differently sourced equivalent would pass. That is a procurement decision with a tariff consequence, and it is frequently made by people who do not know the tariff consequence exists.
For importers into the European Union, the same report carries a different signal. A network covering 46.3 percent of external trade means that the tariff treatment of a given good depends heavily on where it originates, and that origin verification is where value is won and lost. The enforcement emphasis in the report indicates that verification activity is rising, not falling.
For supply chain planners globally, the report is a data point in a larger pattern. The world’s major trading powers are pursuing divergent strategies. The European Union is expanding a rules-based preferential network and defending it with trade remedies. Others are relying more heavily on unilateral tariff instruments. Firms that operate across both systems face the task of maintaining compliance architectures for each, and the costs of that duality are rising.
Reading the report against the trade defence docket
One tension in the document deserves to be drawn out, because it is the question every trade counsel will be asked about it.
The report presents a picture of an open, expanding, rules-based trading bloc. The Commission’s own trade defence review, published ten days earlier, presents a picture of a bloc opening an above-average number of investigations and imposing measures at a brisk pace. Both are accurate, and the reconciliation is in where each operates.
Trade defence measures in the European Union are overwhelmingly directed at a narrow set of origins and a narrow set of product categories: commodity and semi-commodity manufactures, chemicals, steel and steel derivatives, and increasingly food ingredients, arriving predominantly from China and a handful of other large producers. Preferential agreements, by contrast, are concluded with partners whose export profiles are complementary rather than directly competitive with European production in those categories.
The network and the defence docket therefore rarely collide, and where they do the agreements generally preserve the right to apply trade remedies. That is standard practice. Almost every European Union agreement retains World Trade Organization trade defence rights, and a few include bilateral safeguard mechanisms on top.
The exception worth watching is the growing set of cases where a preferential partner is itself named. Trade defence actions against agreement partners are not unknown, and they generate disproportionate friction because they cut against the political premise of the relationship. As the network expands to cover half of external trade, the statistical likelihood of such cases rises.
What to watch
Three things will determine whether the 2025 result proves durable.
The first is ratification. The India agreement, the Philippines agreement and the Mercosur package each face national processes that can stall for years. The export growth the report celebrates came from agreements already in force. Sustaining it depends on converting the current pipeline.
The second is utilisation. The Commission has been working to improve preference uptake, including through the Access2Markets platform and through simplification of origin procedures. Whether utilisation rates rise alongside coverage is the difference between a network that works and one that exists.
The third is the response of partners. A bloc that simultaneously opens markets and intensifies trade defence action invites the question of reciprocity. Several partners have their own trade remedy programmes and have shown willingness to use them. The annual report describes European enforcement of European rights. The partners in these 45 agreements are running the same exercise in reverse.