The EU in the world trading system

1
The EU in the world trading system

• Repetition

2
The EU is an important economic power

• EU accounts for 25 of world GDP USA 23, Japan
  12
• EU accounts for one-fifth of world exports and
  imports
• EU has a market of 480 million people (US market
  290 m, Japan 127 m
• Many countries heaviliy reliant on the EU market
  for their exports

3
Trade Policy of the EU
Increased trade is likely to boost world growth
to everybodys advantage. It brings consumers a
wider range of products to choose from.
Competition between imports and local products
lowers prices and raises quality. The EU believes
that globalisation can bring economic benefits to
all, including the developing countries, provided
appropriate rules are adopted at the multilateral
level and efforts are made to integrate
developing countries in world trade.The EU seeks
to help developing countries by giving them
better access to its market in the short term,
while allowing them more time to open their own
markets to European products. At the same time,
the EU is reforming its agricultural policy and
this too will benefit developing countries.
Source http//ec.europa.eu/world/what/trade_polic
y/index_en.htm
4
Two levels of EUs trade policy

1. World Trade Organisation (WTO) lays down a set
   of rules to help open up global trade and ensure
   fair treatment for all participants.
2. Bilateral trade agreements with countries or
   regional groups of countries.

5
EUs committment to liberal trade policy has some
inconsistencies

• Priorities during WTO-negotiations lowering of
  international custom duties, removal of
  non-tariff barriers to trade, opening markets
  which used to be restricted
• Legitimate inconsistency impositon of
  anti-dumping duties
• Problematic inconsistency protectionism in
  agriculture, motor vehicle industriy and textiles

6
Beyond strict trade issues the EU brings other
issues into trade negotiations

• Trade agreements provide a framework for
  political dialogue and contain a clause which
  enables the Union to suspend or cancel trade or
  aid if the partner violates agreed principles.

Labour Standards
Environmental- Protection
Human Rights
7
Trade Policy as part of EUs development policy

• EU-approach trade can boost the economic growth
  and productive capacities of poor nations
• Generalised system of preferences (GSP) reduced
  or no tariffs and quotas on its imports from
  developing countries.
• Everything but arms initiative grants the 49
  least-developed countries free access to the EU
  market for all their products, except weapons.

8
Agreements with third countries deal with trade
and non trade matters

• Trade agreements are based on Art. 133 and imply
  a common commercial policy
• Trade and economic cooperation agreements
  Additionally to Art. 133 othter articles are
  involved assistance of the EU, HR dimension,
  partnership programs, free trade as objective
• Association agreements based on article 310
  preferential access to EU market, financial aid,
  prospect of membership

9
There are three categories of countries with
bilateral agreements

• Countries with prospects of membership CEECs
  pre-accession strategy, Turkey pre-accession
  strategy, EUs stability Programme für South East
  Europe
• Mediterranean States EUs Mediterranean policy
  without prospect of membership
• Non EU-countries of European Economic area
  Iceland, Norway, Liechtenstein all four freedoms
  apply trade, services, capital and people

10
The policy process vary along the articles
concerned

• Trade agreements on the basis of Article 133 are
  essentially in the responsibility of the
  Commission and the Council deciding with QMV, the
  EP has no automatic right to be consulted
• Cooperation and association agreements Unanmity
  in the Council, EP must be consulted on
  cooperation agreements and its assent is required
  for some cooperation and all association
  agreements (ex. EP blocked EU-Turkey custom union
  agreement)

11
The procedure for trade agreements (art. 133)

• Commission makes a recommendation to GAERC
• COREPER discuss recommendation, Council give to
  the Commission a (tight) negotiating mandate
• Commission negotiates on behalf of all MS
• Council Committe is in touch with C. and can
  adjust mandate, sensitive issue are referred to
  COREPER or GAERC
• Council approval necessary for authorisation of
  agreements

12
The institutional setting cause difficulties

• Council tries to ensure that Commission remains
  under ist control vs. Commissions need to be
  able to act in an effective manner
• Different approches among the member states
  (protectionism vs. trade liberalisation) lead to
  complex mandate for the commission
• Dispute among commissioners among
  responsibilities (Farm Commissioner vs. Trade
  Commissioner)