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Asst. Prof. Dr. Alexander Bürgin IUE1 The EU in the world trading system Repetition.

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Presentation on theme: "Asst. Prof. Dr. Alexander Bürgin IUE1 The EU in the world trading system Repetition."— Presentation transcript:

1 Asst. Prof. Dr. Alexander Bürgin IUE1 The EU in the world trading system Repetition

2 Asst. Prof. Dr. Alexander Bürgin IUE2 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 Asst. Prof. Dr. Alexander Bürgin IUE3 Trade Policy of the EU Increased trade is likely to boost world growth to everybody’s 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:

4 Asst. Prof. Dr. Alexander Bürgin IUE4 Two levels of EU’s 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 Asst. Prof. Dr. Alexander Bürgin IUE5 EU‘s 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 Asst. Prof. Dr. Alexander Bürgin IUE6 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 Asst. Prof. Dr. Alexander Bürgin IUE7 Trade Policy as part of EU’s 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 Asst. Prof. Dr. Alexander Bürgin IUE8 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 Asst. Prof. Dr. Alexander Bürgin IUE9 There are three categories of countries with bilateral agreements Countries with prospects of membership: CEEC‘s pre-accession strategy, Turkey pre- accession strategy, EU‘s stability Programme für South East Europe Mediterranean States: EU‘s 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 Asst. Prof. Dr. Alexander Bürgin IUE10 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 Asst. Prof. Dr. Alexander Bürgin IUE11 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 Asst. Prof. Dr. Alexander Bürgin IUE12 The institutional setting cause difficulties Council tries to ensure that Commission remains under ist control vs. Commission‘s 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)

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