The EU is increasingly engaging in trade relations with authoritarian and dictatorial regimes.

BrusselsOne of the founding values of the European project is to contribute to the democratization of third countries Through trade relations. That is, taking advantage of the attraction of the European Union market to force foreign economies to improve their internal democracy in exchange for opening the European bloc's trade borders. However, the reality of the European power's alliances is increasingly moving away from what is proposed on paper, and over the last 25 years, the EU has increased trade relations with autocratic and dictatorial regimes, according to a report by the European Central Bank (ECB).

Although this is not the only factor, the financial institution notes that it is largely due to the increase in imports from China. The European Union has been debating for years what type of relationship it should have with Beijing, also for security and geopolitical reasons, but it has not yet made a decision, and transactions between the two powers are growing substantially. For example, from 2014 to 2024, the Asian giant's exports to the EU grew by 101% and now exceed €500 billion annually.

Beyond China, the ECB report points to a general trend within the EU toward increasing trade transactions with all types of autocratic and dictatorial states. The financial institution asserts that this is not due to a decline in current democratic indices, as they have improved overall, but that it has contributed to the deterioration of the democracies of some of the EU's closest partners, and the study cites Turkey as an example.

On the contrary, the financial institution points out that between 1985 and 1999, the trend in democratic indices of the EU's trade relations was positive, largely thanks to the general democratization of Latin America, Eastern Europe, and some East Asian countries. Furthermore, the study suggests that both Brussels and member states are increasingly less cautious when it comes to closing trade agreements with autocratic or dictatorial countries.

The EU's highest historical score in terms of trade relations with democratic countries was in 1999, and the ECB gave it a score of 0.59 out of 1. Since then, this score, which assesses the democratic nature of the average country with which the EU has relations, has steadily declined until the start of the invasion. In 2022, it reached its lowest level, 0.41, and in 2023 it increased slightly, although the report does not specify this.

The European Union's sanctions against Russia have been key. In more than three years of war, the European bloc has already approved 18 sets of restrictions against Moscow and, among other measures, has substantially reduced the import of Russian-made fossil fuels. In this regard, the study's authors, Claudia Marchini and Alexander Popov, note that the EU has the capacity to improve its score in terms of trade relations with democratic countries and attribute this directly to the European Club's trade sanctions on Russia.

More conditions

In the wake of the Russian invasion of Ukraine, the European Union's mindset regarding trade relations has completely changed. As the ECB report warns, it is aware of the danger posed by these types of alliances, depending on the country and especially if there are dependencies, as was the case with Russia and still is with China. "Of course, these relations weaken our economies," the ECB researcher told ARA. think tank European Bruegel, Niclas Poitiers.

The expert also points out in a conversation with ARA that Brussels has already promoted various measures in recent years that aim to increase the European bloc's autonomy and diversify its allies to stop being at the mercy of regimes like those of Russia or China. Along the same lines, Poitiers recalls that historically there has been a general consensus—and now it seems to be gaining strength again—that it is necessary to include conditions in trade agreements, both for human rights reasons and to increase security in value chains.

The Bruegel researcher believes that conditions in trade agreements—that is, requiring the implementation of democratic measures in exchange for being able to export to the EU—are a good way to contribute to the democratization of third countries and, at the same time, boost their economies. In this way, Poitiers points out that it is possible to avoid "reinforcing" autocratic regimes or authorities without forcing them to improve their democratic performance and, furthermore, "lift many people out of poverty."