Europe and the World

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Europe and the World
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Topics

• External Trade Relations
• Foreign Policy
• Preferential Relations
• Special Matters

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External Trade Relations

• The concept of civilian power
• The record of external trade
• Focal points
• Common external tariff (CET)
• Other measures for liberalization of commerce
• Negotiations in international trade organizations
  (GATT, WTO since 1995)

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External Trade Relations (contd-1)

• The special issue of agriculture
• Institutional aspects

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External Trade RecordEU Trade by Trading
Partners
1970 Imports 1970 Exports 1994 Imports 1994 Exports
Non-EU Western Industrialized 54.6 59.3 58.1 53.3
Central-Eastern Eur and former USSR 8.4 7.3 9.1 8.1
Developing Countries 38.0 31.0 29.7 34.2
ACP 8.9 7.6 3.4 2.8
Mediterr 9.4 10.3 7.9 10.2
Asian nics 1.5 2.1 5.5 5.2
China 0.5 0.9 4.2 2.3
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External Trade Record (1)

• As of GDP, EC/EU external trade has not changed
  much (about 10)
• Strong regional concentration
• EFTA trade largest component before accession of
  former EFTA members
• ¾ of total trade of average EU member consists of
  intra-European trade

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External Trade Record (2)

• Trade with Developing Countries
• Big decline since early 1970s oil crisis
• Biggest decline for ACP countries
• Noteworthy increase for Asian NICs and China
• Import penetration into EC/EU
• Machinery and transport equipment
• Dynamic high technology sectors
  (telecommunications, data processing, etc.)

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External Trade Record (3)

• Strong EU export presence in
• Chemicals and steel
• High-end textiles and clothing
• Self-sufficiency in food role of CAP
• Growth areas
• Services
• Financial markets
• Internationalized production (intra-industry and
  intra-firm trade)

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External Trade CET and Other Measures

• Foundation for EC/EU commercial policy and
  international actor role
• The central role of the Commission as the one
  voice in external commercial activity
• Limited to trade in goods
• Other measures quotas, export policy,
  anti-dumping, anti-subsidies

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External Trade International Organizations and
Forums (1)

• GATT and its Rounds (eg Kennedy, Tokyo,
  Uruguay- 1986-94)
• The Commission as single voice for EC/EU
  countries
• Items of GATT trade liberalization
• reduction in tariffs 6 CET for manufactured
  goods in Tokyo Round
• Elimination of quantitative restrictions (QR)

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External Trade International Organizations and
Forums (2)

• Growing attention to NTBs (Tokyo, Uruguay)
• The thorny problem of agriculture
• Left outside of original GATT framework at USA
  insistence
• Bone of contention between USA and EU in the
  1990s

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External Trade International Organizations and
Forums (3)

• World Trade Organization (WTO)
• Successor to GATT, founded in 1995 as a result of
  the Uruguay Round
• Strong EU commitment to WTO agenda and methods
• Strong multilateral emphasis
• Ongoing negotiating forum
• Code of conduct
• Strengthened dispute-settlement and surveillance
  mechanisms

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External Trade - Agriculture

• CAP as centerpiece of both internal market
  integration and external trade policy
• The technical components of CAP
• 3 core elements levy, price, financing
• Guarantee (price support) and Guidance
  (structural funds)
• Politically expedient high price (for wheat
  especially) caused huge surpluses and very
  expensive price support

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External TradeAgriculture (2)

• External implications of CAP
• Heavily subsidized agricultural exports from
  EC/EU countries
• 1975-1984 exports grow 256, imports only 14
• Developing countries plus USA, Canada,
  Australia, New Zealand hit hardest
• Need for reform of CAP both internal and
  external imperative

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External TradeAgriculture (3)

• The 1992 reform of the CAP, leading to a
  substantial reduction in intervention prices,
  opened the way for an EU-US agreement which in
  turn eliminated one of the main stumbling blocks
  of the Uruguay Round. (Tsoukalis, p. 235)

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External Trade - Institutions

• DGs

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European Foreign Policy (1)

• Historical Precedents
• The failed initiative of the European Defense
  Community (EDC) 1952-54
• A French initiative (Pleven Plan) motivated by
  the issue of West German re-armament
• Military integration common army, budget, and
  institutions
• Idealized as a rapid move towards political union
  (European Political Community)
• Dramatic rejection by French National Assembly

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European Foreign Policy (2)

• West European Union (WEU) 1955
• Weak (loose intergovernmental) structure
• Includes Britain
• Redundant with NATO, which overshadows it
• Nonetheless serves to coordinate or synchronize
  European cooperation within NATO
• A way for France to stay connected after
  withdrawing from NATO military command
• Over time, especially in the 1990s, emerges as a
  new possibility for coordinated defense

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European Foreign Policy (3)

• European Political Cooperation (EPC)
• Cooperation among Member States on foreign policy
  through increasing mutual consultation and
  selective identification of common positions
• Operates outside of EC structure
• Intergovernmental and voluntary
• A club of foreign policy experts in EC
  governments who readily achieve a union of views
  and perspectives where crucial national interests
  do not clash

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European Foreign Policy (4)

• Highlights of common positions
• Soviet invasion of Afghanistan 1979
• Polish Solidarity movement in 1981
• Falklands War and Argentina 1982
• South Africa in 1986
• Clout in two major global contexts
• Middle East
• Conference on Security and Cooperation in Europe
  (CSCE) Helsinki 1975 (includes USSR)
• Assessment not insignificant, but uneven and
  with limited results

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European Foreign Policy (5)

• The Big Innovation Common Foreign and Security
  Policy (CFSP)
• An outgrowth of concern for consistency in
  external policy actions of EC and EPC
• First steps towards institutional congruence
  taken in SEA
• CFSP as within the framework - an outgrowth of
  IGC on Political Union in 1990

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European Foreign Policy (6)

• CFSP (contd)
• CFSP as a late addition to Political Union
  (focus of latter is institutional reform,
  especially the role of Parliament)
• CFSP as an outcome of Mitterrand-Kohl
  collaboration global vision of European foreign
  policy, without clear details
• CFSP as shaped by the Gulf War, with a priority
  on security and defense

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European Foreign Policy (7)

• Maastricht creates CFSP, as CFSP shapes the EU
• The pillar idea as a result of CFSP
• CFSP becomes part of (integral to, within the
  framework of) EU
• CFSP structure
• European Council as the key body determines
  foreign and security policy and general guidelines

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European Foreign Policy (8)

• CFSP structure (contd)
• Council of European Union (Council of Ministers)
  takes necessary decisions to implement common
  policy and guidelines
• Political Committee, Political and Security
  Committee, Military Committee
• Secretary General of the Council High
  Representative for the CFSP assists Council and
  acts on its behalf
• European Union Military Staff (military experts)
  attached to High Representative
• Presidency of the EU represents EU in CFSP
  externally

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European Foreign Policy (9)

• CFSP Procedure
• Initiative belongs to Presidency, Member State,
  High Representative
• Policy instruments common position, joint
  action, decision, conclusion of international
  agreements, declaration
• Example joint action on Union Monitoring
  Mission in the Federal Republic of Yugoslavia
  (adopted 2000)
• Decision-making
• Unanimity as norm, and obligatory for military or
  defense matters
• Constructive abstention allowed
• Qualified majority voting (with a higher majority
  threshold than in EC decisions) for
  implementation by Council of Ministers

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European Foreign Policy (10)

• Relationship to EC (economic pillar of EU)
• Commission participates as integral member of
  CFSP bodies, but without special powers as in the
  EC. However, like any Member State, it can
  submit initiatives to CFSP
• Directorate-General for External Relations of the
  Commission has specialized role in preparing work
  of the Council, in follow-up to its actions, and
  especially in coordinating relationship to
  international organizations

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European Foreign Policy

• CFSP