Competitiveness Check—January 30 Edition

The Quick Take

The EU and India concluded a free trade agreement after nearly two decades of negotiations. The deal brings together two economies that comprise roughly a quarter of the world’s population and of global GDP. Read Senior Fellow Garima Mohan’s analysis here.

The pact comes on the heels of a turbulent week at the World Economic Forum annual meeting in Davos, where US tariff threats against eight European countries—linked to tensions over Greenland—were withdrawn. Read Senior Vice President Penny Naas’ piece on the framework agreement among the Denmark, Greenland, NATO, and the United States here.

Top Transatlantic Trade-Related Developments

January 19: The European Commission announced EU Inc., a proposed optional bloc‑wide corporate structure (“28th regime”) aimed at enabling startups to digitally incorporate within 48 hours and operate under a harmonized EU company-law framework, alongside national regimes.

January 20: Indonesia and the United Kingdom signed a new Economic Growth Partnership, establishing a nonbinding framework to deepen cooperation on trade, investment, and supply‑chain resilience, with a view toward a more comprehensive economic arrangement.

January 21: The European Parliament voted to refer the EU‑Mercosur trade agreement to the European Court of Justice, suspending the legislature’s approval process until a legal review of the deal’s structure is completed. The process could take up to two years.

January 26: At the North Sea Summit, the EU, the United Kingdom, and North Sea partner countries signed the Hamburg Declaration, committing to deliver 100 gigawatts of joint offshore wind capacity through cross‑border projects and coordinated grid infrastructure.

That same day, the European Commission launched a formal investigation of Grok, the AI chatbot integrated into X, and expanded an ongoing probe into X's recommender systems. The Commission also designated WhatsApp as a Very Large Online Platform (VLOP) under the Digital Services Act.

Also that day, US President Donald Trump announced in a Truth Social post that the United States would raise tariffs on South Korean imports from 15% to 25%. He blamed delays in parliamentary approval of a previously agreed trade and investment package for the move, which will raise levies on autos, pharmaceuticals, and lumber. No implementation notice had been formally issued at the time of the announcement.

January 28: Reuters reported that the Trump administration may be reconsidering plans to guarantee a minimum price for US critical minerals projects. That would reverse previous commitments made to industry. The shift would mark a departure from emerging G7 discussions about joint price‑support mechanisms or similar tools to boost critical minerals production.

Figure of the Fortnight

1.1%: The annual growth rate of national income per adult in the United States and Europe since 2010, according to economist Gabriel Zucman. He argues that, while aggregate GDP growth has been higher in the United States than in Europe over the period, per‑adult national income growth has been the same once differences in population growth, depreciation, and net foreign income are considered.

Quote Unquote

“We are in the midst of a rupture, not a transition. … When the rules‑based order no longer protects you, you must protect yourself. … Middle powers must act together because if you are not at the table, you are on the menu.”

Canadian Prime Minister Mark Carney in a special address at the World Economic Forum annual meeting in Davos on January 20.

“The EU and India make history today, deepening the partnership between the world's biggest democracies. We have created a free trade zone of 2 billion people, with both sides set to gain economically. We have sent a signal to the world that rules-based cooperation still delivers great outcomes. And, best of all, this is only the start— we will build on this success and grow our relationship to be even stronger.”

European Commission President Ursula von der Leyen in the press release announcing the EU-India free trade deal.