At the end June 2025 the European Commission presented several scenarios of building the EU’s network of trade alliances, with the one deemed the most promising being the link-up between the EU and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP)[1], a regional trade pact of 11 Pacific Rim countries and the UK[2]. If created this alliance would give rise to one of the largest free trade platforms in the global economy that rivals the likes of the Regional Comprehensive Economic Partnership (RCEP). The implication for BRICS economies is that the urgency of devising a framework for bringing together the regional blocs of the Global South becomes all the more significant, given that the race of the “integrations of integrations” (or the mega-regional race) has in effect begun.
The move by the EU to build an alliance with the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) at this stage is not so much about an altruistic contribution to the creation of a global platform for regional integration arrangements[3], but rather a move to create the largest platform for mega-regionalism in the global economy that has the weight to attract more trade flows and to drive the reform of international trade rules at the global level. The choice of CPTPP may be driven by several considerations on the part of the EU:
- Takes advantage of the existing momentum and foundations in mega-regionalism – rather than building platforms from scratch, the EU builds on the existing framework of integration and trade liberalization in one of the fastest growing regions of the world economy
- Builds on the existing network of Europe’s trade alliances, with the EU already securing economic partnership accords with the majority of CPTPP members.
- Positions the EU with the first-mover advantage to lead the race of “integration of integrations” in the global economy after the finalization of FTA negotiations with Mercosur
- Targets the reconstruction of global economic architecture via WTO reform: the weight of the EU-CPTPP link-up enables the mega-regional to drive the global trade agenda and to compensate for the lack of trade liberalization impulses from the WTO through mega-regionalism
- Enables the EU to forge closer trade ties with ASEAN as the center of the cob-web of international trade alliances
- Fills the void in Western-led mega-regionalism created by the withdrawal of the US from the TPP project, positioning the EU to replace the US in the mega-regional with the coastal economies of the Pacific
What could the EU do next? A potential extension of its link-up with CPTPP could be an expansion into the Indo-Pacific[4] and the integration of the regionals such as BIMSTEC. Another possible direction could be the Gulf Cooperation Council (GCC), with which the EU has already been building economic ties since 1989 when the Cooperation Agreement was signed. In the longer term, the EU is likely to continue to target the possibility of building trade alliances across the Atlantic, with the CETA agreement with Canada, the EU-Central America Association Agreement and the EU-Mercosur agreements being potentially complemented by efforts to rebuild trade ties with the US.
The economic result is a network of alliances predicated on the “integration of integrations” framework and focused on the coastal regions of the global economy that are more easily integrated into global markets. In terms of the gravity model, trade flows are likely to be more swayed towards the regions that form part such mega-alliances, with the focal position of Southeast Asia as one of the most attractive trade hubs in the world economy further reinforced. In effect EU’s mega-regional alliances are advancing on the basis of trans-Atlantic and trans-Pacific accords that gain substantial weight for the resulting free trade platform to affect global trade and investment flows. And while the benefits largely accrue to the coastal regions involved in the operation of such a platform, the void in the “integration of integrations” in the Hinterland of Eurasia may stand to experience the effects of trade diversion.
Accordingly, for BRICS the challenge of devising a competitive response to the EU-CPTPP alliance lies in finally advancing a trade liberalization agenda in the context of BRICS+ and the BEAMS[5] framework. Bringing together the main regional integration blocs of the Global South may enable BRICS not only to build an extensive trade platform, but may also position the bloc for working together with other platforms on the reform international institutions such as the WTO. Thus far, the paradigm within the BRICS+ framework has largely focused on the addition of individual countries to the core and to the partnership belt, with trade liberalization largely undertaken on the basis of bilateral accords. At this stage, there are several economies such as Malaysia and Vietnam that form part of the CPTPP and are at the same time BRICS partners – in terms of sheer economic effects and trade flows for these economies, the effects of joining the EU-CPTPP free trade platform could outweigh the effects that their BRICS partnership status entails in its current form.
For international institutions like the WTO the implications of the EU-CPTPP alliance could be a double-edged sword. On the one hand, some of the European leaders have indicated that the new alliance could serve as a substitute for the WTO, though other EU officials denied such claims[6]. At the same time, mega-regionalism could be a powerful force that breaks the current gridlock in the international trade system to bring a new framework of trade liberalization. In the end, for global institutions such as the WTO it may be better if there are competing mega-regional and “integration of integrations” platforms (rather than one sole platform) driving reforms and the reconfiguration of global governance. Be it as it may, the reform of the international economic architecture is increasingly likely to be driven by regional and mega-regional integration blocs and the Global South needs to develop a vision of how it is to compete in these changing conditions. The upcoming BRICS summit in Rio, Brazil may shed light on the degree to which the BRICS can get its act together in meeting these competitive challenges.
[1] https://www.politico.eu/article/eu-leaders-donald-trump-us-trade-tariffs-ursula-von-der-leyen/
[2] The Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) is a free trade agreement between Australia, Brunei Darussalam, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the United Kingdom and Vietnam.
[3] This was our hope and expectation in the past as one of the possible scenarios in the evolution of “integration of integrations”, though we did foresee the possibility of the EU aiming to lead the process via building larger mega-regionals: https://brics-plus-analytics.org/what-are-the-potential-alternatives-to-brics/
[4] https://www.iss.europa.eu/publications/commentary/momentum-not-membership-three-ways-eu-can-engage-indo-pacific-trade
[5] https://brics-plus-analytics.org/beams-of-the-sunrise-a-look-at-brics-5-year-cycles/
[6] https://www.reuters.com/en/eu-alliance-with-pacific-rim-could-lead-wto-redesign-von-der-leyen-says-2025-06-27/
Yaroslav Lissovolik, Founder, BRICS+ Analytics
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