© 2005 West Legal Studies in Business/Thomson Learning 1 European Union and other Regional Trade Areas Chapter 14

2 The Philosophy of Economic Integration Political unionEconomic union Economic unionPolitical union

3 Models Federal Free trade area Customs Union Common Market Conflict with GATT?

4 European Union Treaty of Rome (1957) creates European Community Single European Act (1987) set 1992 deadline of achieving single market Maastricht Treaty (1993) created European Union and set path for monetary union

5 European Union Treaty of Amsterdam: 1999 (incorporated the principle of freedom of movement from the Schengen Agreement) Treaty of Nice: 2000, voting rights for new members; 10 members to join May 2004, (Poland, Lithuania, Estonia, Latvia, Hungary, Czech republic, Slovenia, Slovakia, Malta and Cyprus). Population of 440 million eclipsing NAFTA

6 European Union Constitution for Europe? What are the issues? What is its status?

7 Monetary Union Criteria Budget deficit no greater than 3% of GDP Public debt no greater than 60% GDP Price stability (inflation controlled) Long term interest rates within 2% of the best 3 countries Exchange rate stability

8 Timetable January 1, Euro single currency is born National currencies continue to exist and work in parallel switched to single currency Not all countries have joined? Why?

9 EU Members Belgium, Germany, France, Luxembourg, Netherlands, Italy (1973) Denmark, Ireland, United Kingdom (1981) Greece (1986) Portugal, Spain (1995) Austria, Finland

10 EU Organization Council Commission Parliament Court of Justice

11 Law-Making Within the EU Regulations vs. directives Role of Council, Commission and Parliament Court of Justice review

12 Privacy in the EU: A Different Approach from the U.S. What is the philosophical difference? How is it reflected in the law?

13 Common Agricultural Policy (CAP) What is it? What conflicts have occurred? How are the goals described now? “transparency, quality and safety and a farm sector in tune with the environment and animal welfare.. A sustainable farm and food sector for the future” How does the expansion of the EU affect this?

14 National Farmer’s Union (France) The Commission adopted emergency measures to protect against BSE ( Bovine spongiform encephalopathy) or mad cow disease. The UK was temporarily prohibited from exporting beef to the Continent. The Court found that since there was a procedure in place to protect the public upon the resumption of exports, France

15 National Farmer’s Union (France) Could not invoke Article 30 to block imports.

16 Business Implications of the EU What are the ramification for business of the expansion of the EU? What impact does the trade friction between the U.S. and the EU have on business ventures?

17 Cotonou Agreement 2000 EU, African, Caribbean and Pacific countries EU had GSP program since 1971 and in effect until new “partnerships” will begin

18 Other Economically Integrated Trade Areas Mercosur: Argentina, Brazil, Paraguay, Uruguay Andean Common Market: Bolivia, Venezuela, Colombia, Ecuador, Peru ASEAN: Indonesia, Malaysia, Philippines, Singapore, Thailand, Brunei, Myanmar, Laos, Cambodia, Vietnam

19 African trade areas( AEC, COMESA, SADC) Caricom Arab League Gulf Cooperation Council NAFTA FTA ( Free Trade in the Americas) Trade Areas

20 Trade Areas APEC Others?

21 How are these groups different from the EU and the US? Scope of agreement Court Currency Army

22 Free Trade and Protectionism Debate Winners and losers? Compatibility with GATT and WTO? Role of trade areas

23 Current Issues EU: adherence to the criteria for monetary union, price of unification, expansion, “wider and deeper,” CAP, labor, two tiered Europe?, subsidiarity (let the decision be made at the lowest level possible- a hedge against over-reaching by the EU), foreign policy expansion of NAFTA- connection to US politics and national elections?