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TRADE POLICY OF THE EUROPEAN UNION

TRADE POLICY OF THE EUROPEAN UNION. EU’s Role in Global Trade. Current Challenges in Trade Policy. Globalisation Including fragmentation of value chains Emergence of new economic powerhouses China , India , Brazil Economic downturn Trade is part of the solution .

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TRADE POLICY OF THE EUROPEAN UNION

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  1. TRADE POLICY OFTHE EUROPEAN UNION

  2. EU’s Role in Global Trade

  3. CurrentChallenges in TradePolicy • Globalisation • Including fragmentation of value chains • Emergence of new economic powerhouses • China, India, Brazil • Economicdownturn • Trade is part of the solution

  4. EU as a TradingPower

  5. The EU in WorldTrade: ExportPartners

  6. The EU in WorldTrade: ImportPartners

  7. The EU in WorldTrade: Share in WorldTrade in Goods

  8. Investmentgoingintoandfromthe EU

  9. EU’sInvestments in theWorld

  10. TradePolicy of the EU

  11. What is tradepolicy? • Tradepolicy (orcommercialpolicy) is a set of rules and regulations that are intended to change international trade flows, particularly to restrict imports. • The purpose of trade policy is to help a nation's international trade run more smoothly, by setting clear standards and goals which can be understood by potential trading partners. • Multilateralandbilateralagreements

  12. TradePolicy of the EU • The EU manages trade and investment relations with non-EU countries through the EU's trade and investment policy. • Tradepolicy is executedby DG Trade • EU's exclusive powers covers not just trade in goods, but also: • services • commercial aspects ofintellectual property • foreign direct investment

  13. TradePolicy of the EU • The European Parliament decides jointly with the Council on the framework of EU trade policy – through the ordinary legislative procedure. • While the Commission maintains the right of initiative, for its proposals to be formally adopted, agreement has to be reached between the co-legislators. • International agreements are adopted by the Council, after the Parliament has given its consent.

  14. Negotiation of TradeAgreements

  15. Evolution of EU’s Trade Policies

  16. TradePolicybased on Regionalism • Formationof the EEC in 1957 and EFTA in 1960: the first remarkable examples of regional trade agreements. • EEC tradepolicypriority in the 1970s and 1980s waspreferential trade agreements mainlywithneighbouringcountries (enlargement, EFTA, Turkey, Israel)

  17. EU TradePolicyand WTO • Establishmentof the WTO in 1995flourished the expectations that a world trading system based on common rules and multilateral liberalization can be formed. • EU turned its attention to multilateralism • Pascal Lamyappointed as the Commissioner for Trade in 1999. • EU maintained an effective suspension on the opening of bilateral or regional negotiations to conclude FTAs, and championed the multilateral trading system.

  18. Lamy explained this policy as one “pursuing all existing mandates for regional negotiations with vigour and fairness, but not to begin any new negotiations”. • two reasons: • it favored the multilateral approach of the Doha Development Agenda and the EU did not want to take any initiative that might detract from its completion; • EU had a ‘deep integration’ approach in FTAs and these agreements were complex and time-consuming to negotiate • Increasing the number of bilateral agreements has been labeled as ‘spaghetti bowl’ of overlapping trade rules

  19. DisturbancestoEU’sMultilateralPosition • USAhad started to pursue an activist FTA policy based on ‘competitive liberalization’, the Bush Administration had restored the Fast Track Negotiating Authority in 2002, which had expired and not been in effect since 1994. • DDA, which was set to conclude in December 2006, started to show significant slowdown in progress towards multilateral liberalization.

  20. Pushfor a New TradePolicy • Expansion of Trade flows • Increasing global trade in goodsandservices • Fragmentation of global value chain production in goods and services • Production through global value chains dominated by multinationals. • 2/3 of world imports concern intermediate inputs • The rise of the emerging economies

  21. CurrentTrade Policy of the EU

  22. New Trade Policy of the EU • DDA officially suspended in July 2006. • Multilateralistposition of the EU has lost its ground and the Commission has been forced to change its trade policy focus. • New tradepolicy “Global Europe” revealed in October 2006

  23. Global Europe • “rejection of protectionism at home, accompanied by activism in creating open markets and fair conditions for trade abroad” • focuses on the need to identify and remove tariff and non-tariff barriers (NTBs) to market access for goods and services that are important for the European exporters. • influence the forces driving change, to seize the opportunities of globalization and to manage the risks and challenges posed by the emerging economies especially in Asia and South America.

  24. Global Europe: CriteriaforFTAs • Economic criteria:market potential and the level of protection (tariffs and NTBs) against EU export interests • Target countries: • Prior FTA partners: ASEAN, Korea and Mercosur • Countries of direct interest: India, Russia and the Gulf Cooperation Council • Countryof special attention: China • Coverage:the highest possible degree of trade, investment, and services liberalization, in addition to a ban on export taxes and quantitative import restrictions.regulatory convergence, non-tariff barriers and stronger provisions on intellectual property rights and competition

  25. EU’sFTAs • Agreements withneighbours:(EFTA, Turkey, Central and Western European countries and West Balkans- Association Agreements for potential future EU countries) • Agreements designed primarily to foster stability around the EU borders:(Mediterranean countries, Gulf States, Ukraine) • Agreements with a historical and development focus:(EPAswithAfrican, Caribbean and Pacific (ACP) regions) • FTAs with strategic partners: countries and regions where EU’s objective is to neutralise potential discrimination against EU exports and investments resulting from FTAs between third countries or to secure commercial benefits via increased market access (e.g Korea, Chile, South Africa, Singapore etc.)

  26. EU’sFTAs • Globally more than 200 FTAs • Covering more than 35% of global trade • FTAs top up what can be done in WTO • ‘Extended’ regionalism

  27. TradeAgreements in Europe • Norway - 01 July 1973 (EEA) • Iceland - 01 April 1973 (EEA) • Switzerland - 01 January 1973 • Faroe Islands - 01 January 1997 • Macedonia - Stabilisation and Association Agreement, 01 May 2004 • Albania - Stabilisation and Association Agreement, 01 April 2009 • Montenegro - Stabilisation and Association Agreement, 01 May 2010 • Bosnia and Herzegovina - Interim Agreement on trade and trade related matters, 01 July 2008 • Serbia - Interim Agreement on trade and trade related matters, 01 February 2010

  28. TradeAgreements in theMediterraneanRegion • PalestinianAuthority - AssociationAgreement, 01 July 1997 • Syria - Co-operationAgreement, 01 July 1977 • Tunisia - AssociationAgreement, 01 March 1998 • Morocco - AssociationAgreement, 01 March 2000 • Israel - AssociationAgreement, 01 June 2000 • Jordan - AssociationAgreement, 01 May 2002 • Lebanon - InterimAgreement, 01 March 2003 • Egypt - AssociationAgreement, 01 June 2004 • Algeria - AssociationAgreement, 01 September 2005

  29. TradeAgreements in OtherCountries • Mexico - Economic Partnership, Political Coordination and Cooperation Agreement, 01 July 2000 • South Africa - Trade, Development and Co-operation Agreement, 01 January 2000 • CARIFORUM States - Economic Partnership Agreement, Provisionally applied • Chile - Association Agreement and Additional Protocol, 01 February 2003 (trade) / 01 March 2005 (full agreement) • Madagascar, Mauritius, the Seychelles, and Zimbabwe Interim Partnership Agreement signed in August 2009 • Korea - New Generation Free Trade Agreement, signed 06 October 2010 • Papua New Guinea and Fiji - Interim Partnership Agreement ratified by Papua New Guinea in May 2011 • EU-Iraq - Partnership and Cooperation Agreement, signed on 11 May 2012 • Colombia and Peru - Trade Agreement, signed 26 July 2012 • Central America - Association Agreement with a strong trade component, signed 29 June 2012

  30. Customs Unions • Andorra - 01 July 1991 • San Marino - 01 December 1992 • Turkey - 31 December 1995

  31. Generalised System of Preferences (GSP) allows exporters fromdeveloping countriesandLDCs to pay lower duties on their exports to the EU • Standard GSP scheme: tariff reductions to developing countries. partial or entire removal of tariffs on 2/3 of all product categories. • GSP+: fullremoval of tariffsto countries which ratify and implement international conventions relating to human and labour rights, environment and good governance • Everything but Arms (EBA): scheme for LDCs, duty-free quota-free access to all products, except for arms and ammunitions

  32. EBA

  33. TradePolicyAgenda • Pursue active negotiating agenda • Multilateral Trade Agreements (Doha Round) • Bilateral Trade Agreements (ASEAN, India, Canada, Euromed, Mercusor, Gulf States) • Deepen relations with strategic partners • USA, China, Russia, Japan, India, Brazil • Enforce EU rights, tackling trade barriers

  34. BeyondtheBorders • Trade is no longer just about tariffs… • Standards • Licensingpractices • Domestictaxes • Investment • Trade is not just about trade… • Environment • HumanRights • LabourRights

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