A Guide to the European Union
Trade Relations: Multilateral
Expanding Exports helpdesk: Advice for Developing Countries Exporting to the EU (external database)
As the world's largest trader with perhaps 40% of aggregate trade both inside and outside the EU, with a 20% share of external trade, the EU is a firm supporter of free and open international trade.
Since 1960, world trade has grown 15-fold, world production has quadrupled and world per capita income has more than doubled. Freer trade has had a major impact on world growth and employment - and the EU has played a key role in that process.
It is a process which has served the EU well in that its current account balance of payments surplus reached €63bn by 1997, this was a 56% increase on the previous year and over 350% up on 1995.
The EU is a key member of the World Trade Organisation (WTO) and in each of the eight Rounds of negotiations, Europe has remained a firm supporter of market liberalisation. In the Uruguay Round, with agriculture on the agenda for the first time, the EU both committed itself to, and indeed successfully carried out, a thorough reform of domestic and export assistance to this sensitive area. In addition, a cut in average tariffs of 38%, together with agreements on trade in services, trade-related investment measures and intellectual property rights, sanitary and phytosanitary arrangements to define permissable arrangements plus a disputes settlement process, all made for a sound set of international rules within which the bilateral relationship has flourished.
One sign of the EU's eagerness to embrace the new openness in global trade was to create a comprehensive market access database giving details of an extensive range of trade barriers in third country markets. The current 1,250 identified barriers plus 400 to be assessed suggest that vigilance is still the price of a more open trading system. As for any impression that the EU is substantially on the receiving end of challenges under the dispute settlement mechanism, it is noteworthy that the EU has launched an unprecedented number (41) of consultations since 1996.
1999 sees the agenda build up for a proposed Millenium Round in 2000. Accompanying this process are the issues of accessions to the WTO, the integration of developing countries into the WTO and the need to ensure that increased transparency is transmitted to our civil society. Support for the system of global free trade may be increasingly conditional and cannot be taken for granted.
As for the new Round, the Council has unanimously supported the launching aim for 2000 as it will provide a vehicle for improved European growth as part of global expansion and development. A comprehensive agenda will afford the best way of a successful management of globalisation.
Further liberalisation or rule-making in the areas of agriculture and services, non-agricultural tariffs, investment, competition, trade facilitation and trade and environment are all areas of EU interest. They are able to contribute to sustainable economic growth and development. Clearly the recent regional economic and financial crises serve to emphasise the need for a more certain rather than a more relaxed trading framework.
A comprehensive Round will need careful preparation and should deliver results as rapidly as required by the speed of economic change. In its approach to the negotiations, the EU will have regard to the multifunctional role of agriculture and the need to delivery social and environmental outcomes together with a successful defence of the "blue box" which is essential to the implementation of CAP reform.
With regard to services, more and better commitments from WTO members will be sought on market access and national treatment. A priority would be a binding of autonomous levels of liberalisation since the entry into force of the GATS.
As the world's leading international investor the EU has a need to secure a more stable and predictable climate for investment worldwide. The WTO remains the sole multilateral forum that can fully take into account the interests of both developed and developing countries in their position as home and/or host countries to international investors. Access to investment opportunities, protection of investment and the right to regulate will be important areas requiring attention.
As regards tariff policy in aggregate, the Community advocates a comprehensive tariff negotiation aimed at reducing tariffs, removing all peaks and harmonising structures of all Members across all non-agricultural goods without exception. This should be accompanied by a comprehensive non-tariff initiative.
A central component of the Millenium Round should be the WTO's overall aim of sustainable development. Trade and environmental policies should play a mutually supportive role in this regard. While there is a need to avoid the use of rules for protectionist purposes it is clear that consumers increasingly demand that global trade develops in an environmentally friendly way.
There is a need for further work on the TRIPS Agreement, itself a major step forward in the global protection of intellectual property rights through creating minimum rights for right-holders and adequate enforcement mechanisms. A review of the level of protection especially on patents and geographical indications is envisaged.
Government procurement accounts for up to 15% of many GDPs. As EC firms have only limited guaranteed access to this market. The EC will therefore press for a high degree of transparency in procurement coupled with a phased programme of market opening.
The new Round also provides an opportunity to deal further with the numerous barriers in terms of technical regulations, standards and conformity assessment provisions. The Technical Barriers to Trade Agreement, presently having only a limited role in dealing with the underlying cause of trade disputes, should be clarified and expanded in the light of good regulatory practice.
