EUROPEAN UNION TRADE POLICY

To a great extent, the policies of the European Union and Parliament are determinated by the Union’s values, objectives and principles. At the beginning, European Union started as an Economic community. Therefore, economic policy is a very important area in the European Union. On the other hand, European Union tries protecting enviroment and nature assets and stop the climate change. In addiction, European Union aims to protect wellbeing, security and interest of its citizens.

The Union wishes to keep EU economy stable and competitive compared the other conturies in the world. Efforts are made to prevent internal disagreements. Every attempt is made to solve problems trough negotiations. EU has got many types of policies.

The European Union policy is the set of directives that the European Union decides to implement within the framework of the treaties on various issues, such as economy, health, agriculture, culture, environmental problems, foreign relations and home affairs.

Why EU has got policies? How they work? Before, answering these questions, we need to know what policy is.

A policy is a deliberate system of principles to guide decisions and achieve rational outcomes. A policy is a statement of intent and is implemented as a procedure or protocol. Policies are generally adopted by a governance body. Policy is a word or concept that is commonly bandied about and use with relative ease.  “Policy analysis draws on concepts from a number of disciplines, as economics, political science, sociology, public administration and history, and emerged as a subdiscipline in the 1960s, mainly in the United States”. 

Policy analysis has intellectual roots in the political analysis of Harold Lasswell (1940s) and Tony Downs (1960s) and in the development of cost benefit analysis, in the 1950s, by scholars such as John Krutilla and Otto Eckstein. In the late 1960s, well funded by Lyndon Johnson's Great Society, it was extended from military and water resource problems to health, education, poverty, etc.

The European Union is  fundamentally different from other organizations that produce public policy. The European Union affects our daily lives. National governments implement regulations and laws which have been made at the EU level. The EU removes barriers between Member States, and we all profit from the freedom of movement of people and services in the EU. However, it is not always clear how these decisions are made, what policies are in place or the consequences these have for citizens and the EU as a whole. With much ongoing debate about reforming Europe, it is now more important than ever to know more about EU policies.

Trade policy

There are no customs duties between EU member states. Also, imports from developing countries are duty-free or the duties are lowered. This is one way in which the EU tries to eliminate poverty. The European Union holds an important position in the World Trade Organization (WTO).

Trade relations are maintained, in particular, with the Mediterranean countries, Russia, the United States and China. The European Union seeks to promote the trade relations and interests of its member states every way it can. Member states may also sign bilateral trade agreements with other countries as long as they are not in conflict with the EU laws and agreements.

The EU has a common international trade policy, often referred to as the common commercial policy. In other words, the EU acts as a single entity on international trade and investment issues, with the European Commission negotiating on behalf of its 28 Member States. Article 206 of the Treaty on the functioning of the European Union (TFEU) specifies that the common commercial policy should contribute to ‘the harmonious development of world trade, the progressive abolition of restrictions on international trade and on foreign direct investment, and the lowering of customs and other barriers’.
To strengthen its international trade relationships, the European Commission has highlighted its desire to complete the Doha round of multilateral trade negotiations launched by the World Trade Organization (WTO), but also to conclude a wide range of bilateral free trade agreements. Indeed, the EU is currently negotiating more than 20 separate trade agreements.

The Eu is a major trading power. European manufacturing industry has broadly maintained its share of GDP in volume in the face of globalization. There is a highly innovative economy. Services account for 77% of GDP. The EFTA economy has similar strengths and weaknesses. EFTA countries are the second most important region for EU exports. EFTA is the third largest importing region.

A competitive European Economy in an open world trade system organized by three multilateral rules. First of them is ensuring that the European economy is open to the world and competitive in foreign markets. (Secure real market access in foreign countries). Second one is to support strong multilateral trading system. (Most effective means of managing trade and enforcing rules). Finally, it envisages promoting European values on democracy, rule of law, environment, social rights.

European Union Trade Policy has three dimensions such as: Multilateral, Bilateral/Regional, Unilateral. Multilateral is mostly implemented in the framework of the WTO (the most effective means of managing trade) aiming at promoting market access with rules, in the context of effective global governance, including the promotion of EU values, Environmental concerns, food safety, cultural diversity. In addition to the WTO’s multilateral negotiations, the EU concludes bilateral agreements with third countries and regional areas. This is the Bilateral/regional dimension. The last one, Uniteral, is the EU implements uniteral measures as an additional trade policy instrument in the interest of development and/or political stability in line with the Union’s key political priorities, such as General System of Preferences (GSP), Everything but Arms (EBA), Asymmetrical Preferences. Member states usually stick to common line by the way, community mandate from council. European Parliament only plays a limited role.

The EU’s external trade policy contributes to Europe’s competitiveness in foreign markets. Being an open economy, the EU aims at securing improved market access for its industries, services and investments, as well as enforcing the rules of free and fair trade (intellectual property rights, trade defense rules…). In addition, EU Trade Policy initiatives maintain the WTO at the center of the international trading system, propose a new generation of free trade agreements, strengthen intellectual property enforcement, open up public procurement abroad, reinforce the EU Market Access Strategy, a reflection process on EC trade defense.

Trade in goods and services make a significant contribution to increasing sustainable growth and creating jobs for EU. More than 30 million jobs in the EU depend on exports outside the EU. 90% of future global growth is predicted to happen outside Europe’s borders. Hence trade is a vehicle for growth and a key priority for the EU. Responsible EU Trade Policy is accompanied by a high level of transparency and an effective communication with citizens about the benefits and challenges of trade in open markets.

Trade policy is an exclusive EU competence. This means the EU and not the member states legislates on trade matters and concludes international trade agreements. If the agreement covers topics of mixed responsibility, the Council can conclude it only after ratification by all member states.

Conclusion

EU constitutes the largest trading bloc in the world accounting for more than a fifth of global imports and exports. İt is the world largest exporter and the second largest importer of goods. The EU  is the largest economy in the world with a GDP  per head of 25 000 euros for its 500 million consumers. The EU ranks first in both inbound and outbound internatinal investments. The EU is the top trading partner for 80 countries. The EU  manages trade and investment relations with non-EU  countries through the EU’s trade and investment policy. Trade policy is an exclusive power of the EU. Trade Policy is set down in Article 207 of the Treaty on the Functioning of the EU.

European Union Trade Policy has got objectives such as create a global system for fair and open trade, open up markets with key partner countries, make sure others play by the rules, ensure trade is a force for sustainable development. The European Parliament decides jointly with the Council on the framework of  European Union 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 colegislators. International agreements are adopted by the council, after the Parliament has given its consent.

ZEYNEP NAZ OZHAN

[artigo de opinião produzido no âmbito da unidade curricular “Economia Portuguesa e Europeia” do 3º ano do curso de Economia (1º ciclo) da EEG/UMinho]