Legal development

Towards New Markets in Complex Times: How New Free Trade Agreements Reshape Global Business

By Claus Zimmermann, Giovanna Ventura and Shishir Mehta

09 April 2026

The global trade landscape is shifting at a breakneck pace, and geopolitical fragmentation is redrawing the trade map. Amid uncertainty surrounding US tariffs and continued market volatility linked to military conflicts in Ukraine as well as Iran and large parts of the Middle East, both the EU and the UK have responded with the same strategic logic: diversify, liberalise, and secure alternative market access through new free trade agreements.

What you need to know

The EU and UK have shifted toward more geopolitically aligned partners.
Despite current uncertainties, many of the structural shifts underway in global trade are likely to persist.
Businesses should assess how the new trade landscape affects their market access, pricing and supply chains, and review their export strategy accordingly.

Free Trade Agreements as Geopolitical Tools

In our recent Ashurst Trade Pulse Webinar Series, we explored the most recent and significant trade deals negotiated and concluded by both the EU and UK, amid the recent protectionist wave and geopolitical fragmentations reshaping the trade landscape. The main insights are set out below.

Key EU Trade Deals at a Glance

EU – Mercosur: After 25 years of negotiation, the trade component of the Partnership Agreement will enter into provisional application from 1 May 2026, liberalising 91% of Mercosur tariff lines over up to 15 years and 95% of EU tariff lines over up to 10 years, with significant reductions across key sectors: tariffs on chemicals, pharmaceuticals, medical instruments, plastics, rubber products and iron and steel will fall to zero; tariffs on cars will be phased out subject to quotas; and duties on machinery and electrical equipment will be mostly eliminated. As a result, EU exports to the region are projected to increase by approximately 40% by 2040. Beyond goods, the agreement opens up new opportunities in financial services, telecoms, maritime transport, e-commerce, and government procurement; for the 1st time, Mercosur countries enter into an agreement on government procurement with a major global player. One significant risk remains: the European Parliament has referred the agreement to the Court of Justice of the EU, a process likely to take up to two years and which could require renegotiation in case any incompatibilities with the EU treaties were to be identified.

EU – India: Negotiations concluded in January 2026 in what the European Commission described as the largest deal ever concluded by either party. Covering two economies that together represent close to a quarter of global GDP, the agreement will liberalise 97% of EU goods exports to India (with 90% going to zero), and will eliminate 86% of Indian tariff lines, a very significant outcome commercially. Machinery, chemicals, pharmaceuticals, aerospace and medical equipment will be mostly liberalised over up to 10 years. Motor vehicle tariffs drop from 110% to 10% within a quota of 250,000 units, while wines and spirits, currently subject to tariffs of up to 150%, will see substantial reductions. The European Commission expects EU goods exports to India to double by 2032. The deal also improves market access for financial services, telecoms, and digital trade, though it contains no government procurement chapter. More politically than economically significant at this stage, given also the absence of an investment protection chapter, its entry into force remains at least a year away, pending legal scrubbing, translation into all EU official languages and the completion of the required procedural steps.

EU – US: A 15% single tariff ceiling on most EU goods was agreed in July 2025, but the framework has since been buffeted by Section 122 tariffs and new Section 301 probes targeting the EU. The EU and US remain major trade partners, however, the European Commission has acknowledged that pre-Trump transatlantic trade conditions will not return, and estimates that the Mercosur and India agreements combined could recover up to 75% of lost US export value. The EU is implementing the US deal through two legislative proposals currently progressing through the ordinary legislative procedure. The European Parliament finally adopted its position on 26 March, paving the way for inter-institutional negotiations to begin.

Wider networks: The EU is looking to expand trade further and is pursuing trade agreements with fast-growing markets. The EU signed a deal with Australia on 24 March 2026, removing over 99% of tariffs on EU goods and securing access to critical raw materials, including lithium, rare earths and cobalt. The renewed EU-Mexico agreement is expected to be signed in May 2026, and the EU-Indonesia deal is targeted for entry into force next year. Negotiations are advancing with the Philippines, Malaysia, Thailand, confirming European's interest in the region which is becoming a global connector. The EU is also deepening its engagement with the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). Beyond these headline agreements, the EU is pursuing a broader strategy of "mini-deals" with partners across the world, including Clean Trade and Investment Partnerships with South Africa, Sustainable Investment Facilitation Agreements with Angola and Ecuador, and Digital Trade Agreements with Singapore and South Korea. This policy shift is also driven by the time and complexity involved in negotiating full free trade agreements. The European Commission is also considering how to accelerate ratification processes.

Key UK Trade Deals at a Glance

UK – India: The Comprehensive Economic and Trade Agreement signed in July 2025, is, by the UK Government’s own assessment, the most economically significant bilateral FTA concluded since Brexit. Around 90% of tariff lines will be removed or reduced. In particular, the agreement will deliver significant tariff reductions, including on motor vehicles (from 110% to 10%, plus quotas) and whiskies and gin (from 150% to 75% at entry into force, falling to 40% after staging), while certain sensitive products, including sugar, milled rice, pork, chicken, and eggs, have been excluded from liberalisation. UK services firms will gain improved access to India's financial, telecoms and environmental services markets, and UK businesses will obtain, for the first time, access to India's central government procurement. The deal is not yet in force; investment protection remains unresolved, and the exclusion of legal services is a notable limitation. Its long-term potential will depend heavily on implementation.

UK – US: The Economic Prosperity Deal, concluded in May 2025, was the first deal any country secured after Liberation Day. It is more limited in scope, providing preferential terms across a number of sectors: automotive exports benefit from a quota at 10%, aerospace goods attract a zero tariff, and steel and aluminium are subject to quotas under reduced tariffs. The deal also includes provisions to facilitate paperless and digitalised trade. However, the macroeconomic impact remains unclear, pending the outcome of continuing negotiations.

Rest of the world. The UK joined the CPTPP in 2024, adding a trade area covering approximately 14% of global GDP to its network. An updated agreement with South Korea was reached in December 2025. Negotiations with the Gulf Cooperation Council and Türkiye are ongoing, the latter to replace a rolled-over EU-era agreement that lacks services and digital provisions. The UK Trade Strategy also identifies Brazil and Argentina as priorities for targeted partnerships focused on customs cooperation, regulatory alignment and export credits.

What Businesses Should Do Now

Every deal discussed reflects a deliberate strategic choice: the EU is using Mercosur and India to offset US unpredictability; the UK is using CPTPP and its India deal to build post-Brexit credibility. Securing access to critical raw materials is also an explicit objective running through the Mercosur, Australia and UAE negotiations alike.

For businesses the message is clear: they should be proactively assessing how these new agreements affect their market access, pricing models, and supply chain structures. The global trade environment will continue to evolve, and companies that move early to understand and leverage these agreements will be best placed to capture the opportunities they present.

In practical terms, this means conducting FTA readiness assessments including verifying rules of origin compliance, updating customs procedures, and reviewing supply chain structures, while developing strategic market entry plans.

If you missed the session, the full recording is available here.

Our International Trade Team is well placed to support businesses in navigating this complex and fast-moving landscape.