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Economic security and the impact of the Middle East conflict on trade
EU trade ministers received an update on economic security, with a particular focus on the impact of the conflict in Middle East on global trade flows, supply chains, and energy markets. They exchanged views on both the short- and long-term consequences for the EU economy, particularly in light of the blockade of the Strait of Hormuz. The debate revolved around the expected impacts on energy prices and logistical delays, and how these factors collectively threaten the competitiveness of European industries.
In the current geopolitical landscape, it is clear more than ever that we need to diversify and derisk. Trade can play an important role in this respect, strengthening the EU’s resilience and strategic autonomy – a key priority for the Cyprus Presidency.
Michael Damianos, Minister of Energy, Commerce and Industry of the Republic of Cyprus
Ministers also exchanged on strategic responses, highlighting the crucial role of trade policy in strengthening the EU's economic security and resilience. The focus was placed on accelerating the diversification of supply sources and transport routes to mitigate exposure to critical supply disruptions without creating new long-term dependencies. The need to ensure closer horizontal coordination with the EU industrial and competitiveness polices was raised as well.
Ministers also discussed which specific sectors are facing the most severe competitiveness pressures, while at the same time exchanging on the adequacy of the EU’s current regulatory toolbox to protect EU’s interests against emerging threats.
WTO reform: follow up to the 14th WTO Ministerial Conference (MC14)
Following up to the 14th WTO Ministerial Conference (MC14) of 26-30 March 2026 in Yaoundé, Cameroon, the FAC Trade discussed the issue of the WTO reform. MC14 concluded without an agreed package of outcomes, including on WTO reform and on the extension of the moratorium on customs duties on e-commerce. During the discussion, Ministers regretted the negative outcome of MC14, as well as the unsuccessful efforts to finalise these issues at the WTO General Council meeting in early May.
Despite these setbacks, the Council reaffirmed its strong commitment to the multilateral trading system, emphasising the WTO's continued relevance for ensuring the predictability and fairness of international trade and investment. Ministers discussed the next steps and strategy moving forward beyond MC14, focusing on how to advance the EU’s core priorities.
Ministers also exchanged views on recent plurilateral developments, such as the interim e-commerce agreement and the investment facilitation for development agreement.
Over lunch, ministers reviewed the progress in ongoing trade negotiations, including those with Thailand, Malaysia, the Philippines and the United Arab Emirates. It was also an opportunity to take stock of the work towards the finalisation of recently negotiated agreements, namely with Indonesia, India and Australia. To facilitate a faster rollout of these major trade deals, ministers exchanged on potential avenues to accelerate internal EU procedures.
Overall, the Council welcomed the recent progress of the EU's trade agenda, emphasising that expanding the EU’s preferential trade network is critical for supply chain resilience, global competitiveness and economic diversification.
Ministers also welcomed the signing of the EU-Mexico Interim Trade Agreement, taking place during the eighth EU-Mexico summit on 22 May 2026.
