Let's not let the turmoil prevailing in the world confuse us. When elephants fight, the grass gets trampled! If you're not a great power, you'll have to be in an alliance. From this perspective, everything happening in Europe today is far more vital than it was yesterday. We saw some clues about the outlines of the new world order, which is slowly emerging, at the Davos meeting, especially in the speech of Canadian Prime Minister Marc Carney. The out-of-control global economic order must be put back on track before it collapses on everyone. In his speech, Carney pointed out that the way to do this is through cooperation among the middle powers. Much has been written about these middle powers since this speech. For example, Simon Kuper's article in the Financial Times was titled "The 'Little West' of the New Order: A Europe that includes Britain and Canada."

Europe is perhaps the country that will suffer the most from the collapse of the post-World War II global order, and is also the one to which the most responsibility is attributed in shaping the new global order. After all, its founding principles are based on liberal values, institutions, and rules. Let's not let the turmoil prevailing in the world confuse us. When elephants fight, the grass gets trampled! If you're not a great power, if you're a medium-sized power, you'll be in an alliance. From this perspective, everything happening in Europe today is far more vital than it was yesterday.

The EU is taking significant steps in trade and industrial policies. Against the protectionist policies of the US and the growing global influence of China, the EU first completed 25 years of negotiations with Mercosur countries, and then, after a nearly 20-year-long, tumultuous negotiation process with India, signed Free Trade Agreements (FTAs). The FTA with India was described by European Commission President Ursula von der Leyen as the "Mother of All Deals." Covering two billion people and approximately a quarter of global GDP, the agreement supports both the EU's and India's efforts to reduce their dependence on the US and China and gain "strategic autonomy." The agreement completely eliminates or significantly reduces tariffs on more than 90% of goods traded between the parties. This agreement will allow India to export to the European market without facing the average 34.5% tariff imposed by Trump.

India's €105 billion in goods and services exports to the EU are roughly the same volume as its $129 billion in exports to the US. The economic structures of India and the EU complement each other: India's exports are dominated by labor-intensive sectors, while the EU's are dominated by high-tech products. On the other hand, India is the EU's ninth-largest trading partner. Exports to India, amounting to €76 billion, represent only 0.4% of the EU's GDP. Nevertheless, the EU will gain a significant long-term competitive advantage in exports to India and, more importantly, will reduce its dependence on China for critical products, providing alternative supply opportunities. EU goods exports to India are expected to double by 2032. The agreement also includes the gradual reduction of tariffs on some agricultural products and covers the service sector. The EU gains market access in sectors such as banking, finance, and logistics, while India gains access in areas such as professional mobility and professional and digital services.

Another initiative is in the field of industrial policy. Increasing competitiveness is one of the areas where the EU has been seeking solutions for many years without much success. Now, the need for strategic autonomy has been added to this. After the pandemic, then Russia's invasion of Ukraine, and subsequently Trump's discarding of the rules-based liberal system, the importance of reducing external dependence and achieving self-sufficiency in "strategic sectors" has been increasingly emphasized in Europe. The industrial policy outlined in the Draghi and Letta reports, and subsequently in the Competitiveness Compass based on these reports, is becoming clearer.

Similar to America's "Buy American" and China's "Made in China" policies, "Made in Europe" (or "European Preference / Buy European") aims to prioritize European-made products, technologies, and services, particularly in public procurement and strategic sectors within the European Union. One of the most significant legal initiatives embodying this approach is the draft Industry Accelerator Act, expected to be released on February 25th. According to the draft law obtained by Politico, the EU aims to increase the share of industrial production in its gross value added from 14.3% in 2020 to at least 20% by 2030. While the idea of ​​supporting European goods, once unthinkable, is gaining popularity, many controversial issues remain. First and foremost, the debate continues between "protectionism versus free market." Furthermore, deep divisions of interest exist within the EU, among both large and small countries and sectors. Will Europe refer to the EU, or a broader Europe encompassing countries like Norway, Switzerland, and the United Kingdom? What will be the critical sectors?

The EU's DNA is built on institutional processes for its decision-making mechanisms. Last week, eight thinkers, including Thomas Piketty and Étienne Balibar, penned an article titled "Europe Needs a New Social Federalism," calling for Europe to move beyond being merely a "market" and instead build a new transnational social alliance based on the democratic survival aspirations of its communities.