The EU in the World by Wav0pVC3

VIEWS: 10 PAGES: 68

									The European Union
Trade Policy




March 2011


             A renewed trade strategy for Europe: Trade, Growth and World Affairs   Page | ‹#›
Content

 1. The EU in world trade
 2. EU trade policy – Basic features
 3. EU trade policy – How it works
 4. EU trade policy – Competing in the
    world
 5. A renewed strategy for Europe
 6. Agenda for 2011: Next steps

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EU IN WORLD TRADE



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1. A few facts about world trade


                         GLOBALISATION
                     TECHNOLOGICAL                           TRADE
                     DEVELOPMENTS                           OPENING




   IMPLICATIONS
  • Opportunities for growth, but sometimes adjustment costs
  • Need for global governance -> multilateral rules and institutions to
    ensure level playing field and better distribution of benefits
  • Need to reinforce the competitive position of the EU economy




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        1. A few facts about world trade
        Evolution of Word* Trade: 1999-2009

                                                                                            Exports (billions of euro)
                                                                                8 000
                                                                                                   1999       2004         2009


                                                                                7 000                              6 758



                                                                                6 000
         Imports (billions of euro)
8 000
                 1999       2004      2009
                                                                                5 000

                            6 965
7 000
                                                                                4 000

                                                                                                                                               3 259
6 000
                                                                                3 000

5 000
                                                                                2 000

4 000                                                                                                                                                                       1 097
                                                                                1 000
                                                                    3 138
3 000
                                                                                   0
                                                                                             World (excl. Intra-EU27 trade)       Developing Countries   EU27 (excl. Intra-EU27 trade)
2 000

                                                                                                           1 205
1 000



   0
         World (excl. Intra-EU27 trade)                Developing Countries             EU27 (excl. Intra-EU27 trade)

                                          Source: Eurostat (Comext, Statistical regime 4), IMF, WTO; * World exports (imports) except Intra-EU27 Trade




                                                  A renewed trade strategy for Europe: Trade, Growth and World Affairs                                                   Page | ‹#›
1. The EU in world trade
 A major trading power…

                                                                          World Trade                    EU27
                                                     EU27                                                                     Position
                                                                       (excl. Intra-EU27,          share / World
                                              (billions of euro)                                                           (in the World)
                                                                        billions of euro)       (excl. Intra-EU27, %)

                                                         A                       B                    C=A/B                         D
                                              2008           2009      2008          2009        2008         2009        2008            2009


1. Trade in Goods
             Exports                          1 309,9        1 097,1   8 241,3        6 757,9    15,9%        16,2%       First           First
               Imports                        1 565,0        1 205,3   8 584,4        6 964,9    18,2%        17,3%       First           First
               Balance                         -255,1         -108,1          -             -           -            -      -               -
Sources: Eurostat (Comext, Statistical Regime 4), WTO                                                                           updated: 22.02.2011




2. Trade in Commercial Services (Total Services excluding Government services n.i.e.)
               Exports                          521,4         470,6    1 899,7        1 771,7    27,4%        26,6%       First           First
               Imports                          446,2         407,0    1 782,6        1 668,2    25,0%        24,4%       First           First
               Balance                            75,2         63,5           -             -           -            -      -               -
Sources: Eurostat (NewCronos), WTO                                                                                              updated: 22.02.2011




3. Foreign Direct Investment - Flows
               Outflows                         378,3         273,8    1 067,0         784,6     35,5%        34,9%       First           First
               Inflows                          165,7         218,7    1 004,7         758,0     16,5%        28,8%      Second           First
Sources: Eurostat (NewCronos), UNCTAD                                                                                           updated: 22.02.2011




4. Foreign Direct Investment - Stocks
               Outwards                       3 319,8        3 665,6   9 167,8       10 590,2    36,2%        34,6%       First           First
               Inwards                        2 522,3        2 707,2   8 860,7        9 853,8    28,5%        27,5%       First           First
Sources: Eurostat (NewCronos), UNCTAD                                                                                           updated: 22.02.2011




                                     A renewed trade strategy for Europe: Trade, Growth and World Affairs                                             Page | ‹#›
            1. The EU in world trade
              A major trading power (2009)


                                                                       16,2%              11,2%         6,2%           12,7%                                   53,7%
                                   Exports in Goods (2009)



                                                                       17,3%                    16,5%            5,7%          10,4%                             50,1%
                                   Imports in Goods (2009)



                                                                               26,6%                            19,2%              5,1% 5,2%                          44,0%
                     Exports in Commercial Services (2009)



                                                                            24,4%                       14,2%            6,3%      6,8%                          48,3%
                      Imports in Commercial Services (2009)



                                                                                    34,9%                                       22,7%             6,8% 4,4%                    31,2%
                                      FDI - Outflow s (2009)



                                       FDI - Inflow s (2009)                     28,8%                         12,3%     1,1% 9,0%                               48,8%




                              FDI - Outw ards Stocks (2009)                         34,6%                                         28,2%                4,9%                    30,8%




                                                                                 27,5%                            22,0%                   3,3%                        45,8%
                               FDI - Inw ards Stocks (2009)



                                                               0%          10%           20%         30%           40%                 50%       60%      70%            80%           90%        100%



Source: Eurostat (Comext, Statistical regime 4)                     EU27                       United States                            Japan                 China                      Others
                                              A renewed trade strategy for Europe: Trade, Growth and World Affairs                                                                           Page | ‹#›
            1. The EU in world trade
            EU27 Trade in goods: Exports by region (2010)



                                                                         2. EFTA
                                                                      € 150.0 billion
                                                                                                                         5. CIS
                                                                                                                     € 123.7 billion




                                 1. NAFTA                                                                                                  6. Japan & Korea
                               € 290.1 billion                                                                                                € 71.7billion
                                                                                                                       4. China & Hong Kong
                                                                                                                           € 140.0 billion
                                                                         3. MED (10)                       10. SAARC
                                                                                            8. GCC (6)
                                                                        € 141.9 billion                   € 42.0 billion
                                                                                           € 64.7 billion                      9. ASEAN
                                                                                                                             € 60.6 billion
                                    13. Andean
                                    Community
                                    € 7.9 billion                                  7. ACP
                                                                                € 68.7 billion
                                                    11. MERCOSUR
                                                     € 40.1 billion                                                            12. Australia & New
                                                                                                                                      Zealand
                                                                                                                                   € 29.5 billion




Source: Eurostat (Comext, Statistical regime 4)
                                              A renewed trade strategy for Europe: Trade, Growth and World Affairs                                       Page | ‹#›
            1. The EU in world trade
             EU27 Trade in goods: Imports by region                                                                         (2010)



                                                                        4. EFTA
                                                                     € 166.9 billion
                                                                                                                          3. CIS
                                                                                                                      € 195.9 billion




                                2. NAFTA                                                                                                    5. Japan & Korea
                              € 202.5 billion                                                                                                 € 103.4 billion
                                                                                                                        1. China & Hong Kong
                                                                                                                            € 292.9 billion
                                                                        6. MED (10)                          9. SAARC
                                                                                             11. GCC (6)
                                                                       € 102.4 billion                     € 45.7 billion
                                                                                            € 33.5 billion                      7. ASEAN
                                                                                                                              € 86.2 billion
                         13. Andean Community
                              € 12.2 billion
                                                                                       8. ACP
                                                                                       € 64.7
                                                   10. MERCOSUR                        billion
                                                    € 43.9 billion                                                           12. Australia & New Zealand
                                                                                                                                    € 12.6 billion




Source: Eurostat (NewCronos) – provisional value
                                            A renewed trade strategy for Europe: Trade, Growth and World Affairs                                           Page | ‹#›
            1. The EU in world trade
    EU27 Foreign Direct Investment: Outflows by main partners(2009)




                                                                                                                    Russia
                                                                                                                  € 0.0 billion
                                    Canada                                           Switzerland
                                 € -0.8 billion                                      € 39.6 billion
                                                                                                                                      Japan
                                 United-States
                                                                                                                                  € -0.0 billion
                                 € 75.1 billion
                                                                                                      China & Hong Kong
                                                                                                          € 8.2 billion

                                                                                                      India
                                                                                                  € 3.1 billion




                                                       Brazil
                                                    € 7.6 billion




Source: Eurostat (NewCronos) - provisional value
                                             A renewed trade strategy for Europe: Trade, Growth and World Affairs                              Page | ‹#›
            1. The EU in world trade
   EU27 Foreign Direct Investment: Inflows by main partners (2009)




                                                                                                                    Russia
                                                                                                                  € 3.3 billion
                                     Canada                                          Switzerland
                                  € 11.5 billion                                     € 26.2 billion
                                                                                                                                      Japan
                                   United-States
                                                                                                                                  € -1.2 billion
                                   € 97.8 billion
                                                                                                      China & Hong Kong
                                                                                                          € 1.7 billion

                                                                                                      India
                                                                                                  € 0.8 billion




                                                       Brazil
                                                    € 0.3 billion




Source: Eurostat (NewCronos) - provisional value
                                            A renewed trade strategy for Europe: Trade, Growth and World Affairs                             Page | ‹#›
           1. The EU in world trade
          Share of (current) GDP in World GDP (2009)


                                                                                                                          %
                                        China                                  8,6%




                                       Japan                                   8,7%




                           United States                                                                  24,3%




                                         EU27                                                                     28,2%



                                                  0%              5%           10%    15%    20%        25%       30%     35%

Source: UN (National Accounts Main Aggregates Database); Share = GDPi / GDPw
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            1. The EU in world trade
            Trade dependence (2009)


                                               China                                                                                     41,4%




                                               Japan                                                  19,1%




                                  United States                                                 16,5%




                                       Intra EU27                                                                              34,5%




                                      Extra EU27                                                16,5%
                                                                                                                                                 %

                                                          0%                  10%                   20%                  30%       40%           50%


Sources: Eurostat (Comext, Statistical regime 4), WTO, UN nama Database; Ratio = (Imports+Exports, excluding Energy) / GDP
                                            A renewed trade strategy for Europe: Trade, Growth and World Affairs                                 Page | ‹#›
          1. The EU in world trade
           EU27 Imports from Developing Countries…

                                             1 000
                         Billions of euro




                                                           800
                                                           600
                                                           400
                                                           200
                                                               0
                                                                    2001      2002       2003      2004       2005      2006      2007         2008       2009         2010

                                                                     Agricultural products       Fuels and mining products      Manufactures          Other products


              … and Least Developed Countries
                                                               30
                                                               25
                                            Billions of euro




                                                               20
                                                               15
                                                               10
                                                                5
                                                                0
                                                                    2001      2002        2003      2004      2005       2006      2007        2008        2009         2010
                                                                      Agricultural products      Fuels and mining products      Manufactures          Other products




Source: Eurostat (Comext, Statistical regime 4)
                                                                      A renewed trade strategy for Europe: Trade, Growth and World Affairs                                     Page | ‹#›
          1. The EU in world trade
        EU27 Exports to Developing Countries…

                                              700
                                              600
                           Billions of euro




                                              500
                                              400
                                              300
                                              200
                                              100
                                                0
                                                     2001        2002       2003      2004       2005      2006     2007         2008        2009        2010
                                                             Agricultural products    Fuels and mining products   Manufactures          Other products



             … and Least Developed Countries
                                              25
                         Billions of euro




                                              20
                                              15
                                              10
                                               5
                                               0
                                                    2001       2002        2003      2004       2005       2006     2007         2008        2009        2010

                                                           Agricultural products     Fuels and mining products    Manufactures          Other products



Source: Eurostat (Comext, Statistical regime 4)
                                                            A renewed trade strategy for Europe: Trade, Growth and World Affairs                                Page | ‹#›
1. EU exports - crisis and recovery

                                 Extra EU Exports (millions of euro)
  130 000


  120 000                                                                                        2010

            2011
  110 000                                                                                 2008


  100 000                                                                         2009

                                                                                                 2005
   90 000


   80 000


   70 000


   60 000
            Jan.     Feb.    Mar.   Apr.    May    Jun.    Jul.   Aug.    Sep.   Oct.     Nov.     Dec.

                                                     Source: Eurostat (Comext, Statistical regime 4)
                   A renewed trade strategy for Europe: Trade, Growth and World Affairs                   Page | ‹#›
EU TRADE POLICY
BASIC FEATURES


 A renewed trade strategy for Europe: Trade, Growth and World Affairs   Page | ‹#›
2. EU trade policy - basic features

         Being the leading trade region

Strong interest in:                                     Responsibility to:

 Open markets                                           EU citizens
 Clear regulatory frameworks                            Rest of the World


                       Need to reinforce EU
                       competitiveness on world
                       markets

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  2. EU trade policy - basic features
                          Policy concept
         A competitive European economy in an open world
            trade system organised by multilateral rules


Ensure that the European
economy is open to the world                                      Support a strong multilateral
and competitive in foreign                                        trading system
markets                                                           Most effective means of
Secure real market access in                                      managing trade and enforcing
foreign countries                                                 rules

                             Promote European values
                             on democracy, rule of law,
                             environment, social rights...
                             Enforce sustainable
                             development
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2. EU trade policy - basic features
                       Historic development

   From tariffs and
      quotas...

                                                                       … to “behind the
 The new shape of trade                                                border” issues
        policy
    Developed from trade                              Evolution reflected in the EU
  liberalisation in goods…                                      Treaties
 … to services and rules on
   investment, intellectual                             Extended the EU trade
       property, public                              competence to services and
        procurement                                commercial aspects of intellectual
                                                     property rights with qualified
                                                            majority voting


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2. EU trade policy - basic features



 Multilateral                                                            Bilateral/
                                3                                        Regional
                           DIMENSIONS



                                Unilateral


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2. EU trade policy - basic features

                                Multilateral

 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
        • … and how to promote core labour standards ?


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2. EU trade policy - basic features

                                                    The core of the multilateral rule-based
                                                                   system
                                                     Unique forum for trade negotiations,
                                                   rule setting, resolution of disagreements
 Objectives
 – To boost international        Core principles
   economic growth
                                 – No country may apply quantitative restrictions
 – To ensure business              or similar measures
   confidence
                                 – Non-discrimination - ‘Most Favoured Nation’
                                   principle

 Functioning                     – National Treatment - no country may discriminate
                                   between its own products and imported products
 Consensus = each
 country on an equal             – Transparency - all rules affecting trade must be
 footing                           transparent; publication, notification, discussion,
                                   trade policy reviews

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2. EU trade policy - basic features



  Membership
  – Quasi universal: 153
    member countries
                                                    Enforcement controlled by Dispute
  – Covers 95% of world                                   Settlement Mechanism
    trade
                                                 – All WTO members can seek redress
                                                 – Dispute Settlement Body (DSB) rulings
  Regulatory framework                             are binding
  – Trade pillar of global                       – DSB may authorise retaliation
    governance
  – Rounds and agreements



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2. EU trade policy - basic features
 The Doha Development Agenda

A round of trade negotiations launched in 2001
– To pursue market opening
– To strengthen rules, improve global governance
– To integrate developing countries in world trade


A development round
– Special and Differential Treatment
– Addressing developing countries’ concerns
– Aid for Trade
– Special measures for LDCs
                                                                  Development - a key
                                                                 component of the WTO
                                                                        round


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  2. EU trade policy - basic features
    The 3 legs of the DDA
Opening markets
– Agricultural goods
– Industrial goods
– Services
EU seeks real new MA


              Development
              Sustainable development (to
              respond to concerns of
              developing countries and civil
              society)


                                Regulatory framework
                                  Improving existing rules (e.g. anti-dumping,
                                  geographical indications) and creating new rules (e.g.
                                  “trade facilitation”)
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2. EU trade policy - basic features
The Cancún setback (September 2003)

Meant as a half-way point of the Round, the Ministerial broke up
without decision.

Serious divergences on agriculture and Singapore issues.

New balance of power in the WTO:
•   Emergence of vocal developing country groupings (G20,
    G90)
•   Rise of Brazil and India as key members of the WTO
=> New negotiating dynamics: different G progressively to
   replace “old” Quad

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 2. EU Trade policy - basic features

After the suspension (July 2006): relaunching the Round
 • EU remains committed to a successful and reasonably ambitious
   outcome to:
       Create business opportunities and market access,
       Improve multilateral trade rules,
       Contribute to development
 • All key Members confirmed their commitment to the DDA
 • No real alternative to the WTO
 • Objectives: narrow the gaps between Members on agricultural
   tariffs, agricultural subsidies and industrial tariffs
 • In the short-term: to seek agreement on package of development
   initiatives and resume technical work in Geneva

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2. EU Trade policy - basic features
                            Bilateral/regional
 In addition to the WTO's multilateral negotiations, the EU concludes bilateral
 agreements with third countries and regional areas. Many of the World’s
 countries potentially linked to the EU by regional trade agreements.

                                                Key EU bilateral agreements include:
 EU policy rationale for                        • Economic Partnership Agreement with the
  bilateral agreements                            Caribbean and in negotiation with other ACP
                                                  countries
 • Trade expansion and
   rules-making (WTO+)                          • Free Trade Agreements with some Balkan
                                                  countries, the EFTA countries, the
 • Fostering development                          Mediterranean countries, Korea (not yet
   and...                                         ratified), Chile, Mexico, South Africa...
 • … promoting regional                         • Customs Unions with Turkey, Andorra and
   development                                    San Marino
                                                • On-going negotiations with India, Mercosur,
                                                  Ukraine…

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2. EU Trade policy - basic features
                                     Unilateral
The EU implements unilateral measures as an additional trade policy
instrument in the interests of development and/or political stability in line with
the Union’s key political priorities:
General System of Preferences                          “Everything But Arms” initiative
(GSP): the classic instrument for                      (EBA): a special GSP arrangement
fostering development is by                            for the least developed countries.
granting tariff preferences.                           Grants duty-free access to imports
Products imported from GSP                             of all products from LDCs without
beneficiary countries enter the EU                     any quantitative restrictions (except
either duty-free access or with                        to arms and munitions).
tariff reduction.

                            Asymmetrical preferences e.g. for
                            some Balkan countries and
                            Moldova, with the aim of ensuring
                            peace, stability, freedom and
                            economic prosperity in the region.
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 2. EU Trade policy - basic features
 The EU is the most open market for poor countries


    176 developing                                              In 2008, EU imports benefiting from
    countries and                                               GSP preferences amounted to €68
    territories are                                             billion. Bangladesh leading beneficiary
    beneficiaries of                                            country followed by China, Pakistan,
    the EU’s GSP.                                               Brazil, Malaysia and India.


                                     Key Facts on the General
                                  System of Preferences (GSP)


                                                                              GSP guidelines for 2006-
                                                                              2015 in place providing
The 49 Least Developed Countries (EBA -                                       stability to traders and
"Everything But Arms") benefit from duty-free                                 economic operators. The
and quota–free access for practically all                                     scheme is implemented
exports of originating products to the EU for an                              following cycles of 3 years.
unlimited period of time.

                       A renewed trade strategy for Europe: Trade, Growth and World Affairs           Page | ‹#›
2. EU Trade Policy – basic features
The GSP system 2006-2015 : simplifies graduation mechanism
and reduces the system to 3 schemes



  • General scheme: increase of product coverage from 6900 to 7200
    (mainly agriculture and fishery sector of interest for developing
    countries).
  • Special scheme for Least Developed Countries: Everything But Arms.
  • New special GSP+ for vulnerable countries = duty free on 7200
    products if the country meets criteria :

  • Ratification and implementation of 27 key international conventions
  • “Vulnerable”
  • A poorly diversified economy.



               A renewed trade strategy for Europe: Trade, Growth and World Affairs   Page | ‹#›
2. EU Trade policy - basic features

                               The reduced rate

                          provisions of the GSP



The GSP provides tariff reductions                 Special incentive arrangement
without quantitative limitations.                  (GSP+) honour beneficiary countries’
Reductions are modulated according                 efforts to comply with certain
to the sensitivity of products. While              internationally agreed environmental
non-sensitive products enter the EU                and labour standards. Meant to foster
market duty free, the MFN rate for                 sustainable development by providing
sensitive products, with some                      additional trade preferences. Duty
exceptions, is reduced by 3.5                      free access for the products covered
percentage points.                                 by the scheme.


                A renewed trade strategy for Europe: Trade, Growth and World Affairs   Page | ‹#›
EU TRADE POLICY
 HOW IT WORKS


 A renewed trade strategy for Europe: Trade, Growth and World Affairs   Page | ‹#›
3. EU trade policy - how it works
                How it worked before Lisbon Treaty

                The negotiating process
 The Commission is the negotiator
  • On behalf of the 27 Member States

    The Council is the decision maker
     • Mandate = determined by the Council on the basis of a
       Commission proposal
     • The Commission negotiates on the basis of this mandate
     • The Council approves the result of the negotiation (generally by
       qualified majority)

        The European Parliament
         • Is informed by the Commission of trade policy developments
         • Gives “assent” on major treaty ratifications (covering more than
           trade)
              A renewed trade strategy for Europe: Trade, Growth and World Affairs Page | ‹#›
    3. EU trade policy - how it works
                                            EP plays greater
                                            role in trade
                                            negotiations
How it has changed …

                                                                                          Further extension
  To extend the scope                                                                     of qualified
  of trade policy to all                 PROPOSALS IN                                     majority voting
  foreign direct                            THE EU                                        for trade
                                                                                          agreements
  investment                             CONSTITUTION




                               To increase parliamentary control:
                               co-decision for all autonomous acts
                               of legislative nature, assent for
                               major trade agreements

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3. EU trade policy - how it works
                    The trade defence instruments
“Defensive” instruments to ensure fair trade and defend the interests of
European companies…
     ... have been designed in line with specific WTO agreements recognising the
                                     right of members to counter unfair practices:
Anti-dumping measures created to
counter dumping practices, the most                        Anti-subsidy measures designed to
frequently encountered trade-distorting                    combat subsidies, which are made
practices. Dumping occurs when                             available to manufacturers by public
manufacturers from a non-EU country sell                   authorities and which can also distort
goods in the EU below the sales price in                   trade when they help to reduce
their domestic market, or below the cost                   production costs or cut the prices of
of production.                                             exports to the EU unfairly.

                       Safeguards: A WTO member may restrict
                       imports of a product temporarily if its
                       domestic industry is seriously injured or
                       threatened with injury
                       caused by a surge in imports.
                  A renewed trade strategy for Europe: Trade, Growth and World Affairs        Page | ‹#›
3. EU trade policy - how it works
                   The trade defence instruments
    Since 1995, EC AD/AS                          • For the past 10 years, the EU was the
    activity is stable, with yearly                 n°3 global initiator of new AD/AS
    fluctuations                                    investigations
                                                  • Top of the league is India (over 400
Less than 1% of total                               cases) then the US (over 300) and EU
imports of goods into                               (over 200).
the EU are covered by
AD/AS measures.                  Key Facts on Anti-
                                 Dumping (AD) and                  Most EU AD/AS cases
                                 Anti-subsidy (AS)                 initiated over the last 10 years
In terms of the                       activity                     were in the iron & steel,
                                      (as at 31/12/2005)           chemicals & allied, textiles &
principal users by
AD/AS measures in                                                  electronic products sectors.
force, the EU is a
modest user of TDI          The biggest target of
                            AD/AS measures is
                            China. The EU is
                            ranked in 2nd place.
                  A renewed trade strategy for Europe: Trade, Growth and World Affairs           Page | ‹#›
3. EU trade policy - how it works
                     The offensive trade policy
                            instruments
“Offensive” instruments to open markets and eliminate obstacles to
trade...
                 … across the multilateral, bilateral and unilateral fronts:
 The Trade Barriers Regulation (TBR) gives EU industry the opportunity to lodge a
 complaint with the Commission when encountering trade barriers that restrict their
 access to third country markets. The TBR is then used to investigate whether there
 is evidence of violation of international trade rules, resulting in adverse trade effects
 - this could lead to the initiation of the WTO dispute settlement mechanism.


 Market Access Strategy of which the EU’s Market Access Database provides:
 information about market access conditions in non-EU countries; a systematic way
 for the Commission to follow up complaints from business about barriers to trade in
 non-EU countries; and a means of ensuring that our trading partners abide by their
 international commitments.



                 A renewed trade strategy for Europe: Trade, Growth and World Affairs   Page | ‹#›
3. EU trade policy - how it works
                    The offensive trade policy
                           instruments

Monitoring of third country trade defence measures:
• Ensuring third countries do not misuse the trade defence
  instruments (anti-dumping, anti-subsidy, safeguard) against EU
  exporters.
• Given the overall escalating use of these instruments important
  that there is full compliance with international rules.
• The Commission provides information and advice to all interested
  parties, identifies individual and systemic infringements of WTO
  rules by third countries, addresses these issues in the appropriate
  bilateral or multilateral forum.

              A renewed trade strategy for Europe: Trade, Growth and World Affairs   Page | ‹#›
3. EU trade policy - how it works
        The trade policy instruments




    Towards a new generation of FTAs: “WTO++”
         • Opening markets for trade in goods
         • + investments, services, rule-
           making, standards, non tariff
           measures



       A renewed trade strategy for Europe: Trade, Growth and World Affairs   Page | ‹#›
COMPETING IN WORLD
      TRADE


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           4. EU trade policy - competing the
           world
                                                                      -150            -100              -50               0              50           100             150             200

                                                                                                                                              55,6
                                                        Manufactures
                                                                                                                                                                      140,6

                                                                                                                              5,5
                                                        Iron and steel
                                                                                                                              7,6

                                                                                                                                          48,4
                                                           Chem icals
                                                                                                                                          49,6

                                                                                                                                17,9
                                          Other sem i-m anufactures
                                                                                                                                  26,2

                                     Office and telecom m unication                          -70,5
                                               equipm ent                    -116,0

                                                                                                                                         45,6
                                               Transport equipm ent
                                                                                                                                                         99,9

                                                                                                                                         45,3
                                                    Other m achinery
                                                                                                                                                                     135,9

                                                                                                                   -0,7
                                                              Textiles
                                                                                                                  -4,3

                                                                                                          -29,4
                                                              Clothing
                                                                                                     -47,3

                                                                                                                 -8,2                                                         2000
                                                Other m anufactures
                                                                                                              -14,6                                                           2010

   * Based on SITC Rev. 3 Nomenclature: Manufactures: 5, 6, 7, 8, excl. 68, excl. 891; Iron and steel: 67; Chemicals: 5; Other semi-manufactures: 61, 62, 63, 64, 66, 69; Office and
   telecommunication equipment: 75, 76, 776; Transport equipment: 78, 79, 713, 7783; Other machinery: 71, 72, 73, 74, 77, excl. 713, excl. 776, excl. 7783; Textiles: 65; Clothing: 84;
   Other manufactures: 81, 82, 83, 85, 87, 88, 89, excl. 891


Source: Eurostat (Comext, Statistical regime 4); EU excluding Intra-EU Trade
                                               A renewed trade strategy for Europe: Trade, Growth and World Affairs                                                                Page | ‹#›
4. EU trade policy - competing in
the world

        Good performance in high-quality products
                Ratio quality products / exports (%)
   60
   50
   40
   30
   20
   10
    0
             15


                        A




                                                       a
                                             a




                                                                  l
       n




                                                                             a
                                   s




                                                                   i
                                                       i
                                           di




                                                                az
                      US




                                                                          in
    pa




                                    t




                                                    ss
           EU




                                 ke


                                         In




                                                                       Ch
                                                             Br
   Ja




                                                 Ru
                              ar
                           m
                         gn
                       gi
                    er
                Em




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            4. EU trade policy - competing in
            the world
          Market shares trends in world trade…
                  25%




                  20%




                  15%




                  10%




                   5%




                   0%
                          1993    1994    1995    1996    1997    1998    1999    2000    2001    2002     2003   2004   2005   2006   2007   2008   2009

                                                                 EU27         USA         Japan          China



Source: Eurostat (Comext, Statistical regime 4), IMF, WTO; EU27 (excluding Intra-EU27 Trade)
                                             A renewed trade strategy for Europe: Trade, Growth and World Affairs                                           Page | ‹#›
            4. EU trade policy - competing in
            the world
          Comparative trade balance trends…
                                        400




                                        200




                                          0
                     Billions of euro




                                        -200




                                        -400




                                        -600




                                        -800
                                               1993   1994   1995   1996   1997   1998   1999    2000   2001    2002    2003   2004   2005   2006   2007   2008   2009

                                                                                  EU27          USA     Japan          China



Source: Eurostat (Comext, Statistical regime 4), IMF, WTO; EU27 (excluding Intra-EU27 Trade)
                                                         A renewed trade strategy for Europe: Trade, Growth and World Affairs                                        Page | ‹#›
4. EU trade policy - competing in
the world

            EU trade not focused enough on
              rapidly growing markets

                             % of total exports to more/less                Contribution to growth
                                rapidly growing markets                       in world imports
                              US              Japon            EU25
                                                                                   1995-2002
10 most rapidly              79%               76%              48%                       93%
growing markets
20 least rapidly              8%               12%              13%                       -5%
growing markets
Source: Cepii




                   A renewed trade strategy for Europe: Trade, Growth and World Affairs          Page | ‹#›
4. EU trade policy - competing in
the world
Globalisation has
put trade issues at
   the centre of
citizens’ concerns Opening markets
                     can provide
                    opportunities…
 … if EU economy           … if harnessed by
      sustains               collective rules
 competitiveness

                  Towards fairer trade...

        A renewed trade strategy for Europe: Trade, Growth and World Affairs   Page | ‹#›
 A RENEWED
STRATEGY FOR
   EUROPE

A renewed trade strategy for Europe: Trade, Growth and World Affairs   Page | ‹#›
5. A renewed strategy for Europe

New EU trade strategy adopted 9 November 2010
- Why a new trade policy?

The previous strategy “Global Europe” generally on the right
  track
                            BUT

• Europe 2020 called for Trade and Investment to play crucial
  role in achieving growth objectives
• Changing economic environment
• Impact of economic crisis and public opinion


             A renewed trade strategy for Europe: Trade, Growth and World Affairs   Page | ‹#›
5. A renewed strategy for Europe
Public expectations on trade policy


An opinion survey on international trade found that:
Europeans think trade is good for Europe and Europe is good at trade …
   65% of Europeans think EU has benefited a lot from international trade
   64% of Europeans think that European goods and products are competitive
… but they are less confident about the future
   71% of Europeans think that in the coming years, trade will benefit more and more
   emerging economies like Brazil, China and India
   45% of Europeans think that the EU will be secondary economic power
…and they want trade to deliver jobs and consumer benefits
   61% of Europeans believe that the priority for future EU trade policy should be to
   create employment




                 A renewed trade strategy for Europe: Trade, Growth and World Affairs   Page | ‹#›
5. A renewed strategy for Europe
The triple benefits from trade

• Growth: more than 90% of future growth outside EU
    Finalising all the ongoing negotiations (DDA, FTAs and
     progress on strategic partnerships) would lead by 2020 to a EU
     GDP level more than 1% higher (150bn per year)
• Jobs: high stakes and expectations
    14 million jobs are directly linked to EU ability to export
    But there is much more at stake: 36 million European jobs,
     directly or indirectly, linked to trade
    7% wage premium as a result of trade-induced competitiveness
• Consumer welfare:
    The average EU “variety” consumer gains around €600 per year
     from wider trade induced choice


             A renewed trade strategy for Europe: Trade, Growth and World Affairs   Page | ‹#›
5. A renewed strategy for Europe
What does the strategy propose?


1. Completion of current negotiating agenda
2. Deepen trade relations with other strategic
   partners
3. Help European businesses access global
   markets
4. Create opportunities for investors
5. More assertive approach to enforcement
6. Share the benefits of the global economy


           A renewed trade strategy for Europe: Trade, Growth and World Affairs   Page | ‹#›
  5. A renewed strategy for Europe
  Completion of current negotiating agenda


Deliver new opportunities for trade and investment through:




• Multilateral negotiations: the Doha Round


• Bilateral agreements
    •Concluded: South Korea, Central America, Peru, Colombia
    •Ongoing: India, Canada, Mercosur, Ukraine, Singapore,
    Malaysia, Libya, Euro-Med



                  A renewed trade strategy for Europe: Trade, Growth and World Affairs   Page | ‹#›
    5. A renewed strategy for Europe
    Deepen trade relations with other strategic partners


    US:                                              China:
•   EU’s largest investment and                      • A fast growing market for EU’s
    trading partner                                  exports with big potential
•   Transatlantic Economic                           • Tackling market access barriers
    Council                                          • High Level Economic and Trade
                                                     Dialogue


    Japan:                                         Russia:
    • Regulatory obstacles                         •WTO membership
    • High Level Group                             • Partnership and Cooperation
                                                   Agreement




                   A renewed trade strategy for Europe: Trade, Growth and World Affairs   Page | ‹#›
 5. A renewed strategy for Europe
 Deepen trade relations with other strategic partners


Cutting tariffs is still important but majority of trade barriers now lie

   elsewhere:

• Improved market access for services and investment

• Opening up public procurement

• Better protection of intellectual property

• Unrestricted supply of raw materials and energy

• Overcoming regulatory barriers


                 A renewed trade strategy for Europe: Trade, Growth and World Affairs   Page | ‹#›
5. A renewed strategy for Europe
Help European businesses access global markets




 • Mutual supportiveness of internal and
   external policies for market opening
 • Public procurement in partner markets
 • Market Access Strategy

 • SMEs access to global markets



           A renewed trade strategy for Europe: Trade, Growth and World Affairs   Page | ‹#›
5. A renewed strategy for Europe
Creating opportunities for investors


                                Lisbon Treaty




 EU has powers to negotiate future deals on foreign investment in
 order to improve conditions for investors
           Foreign investment = engine for job creation


 Start on comprehensive investment agreements with:
 India, Canada, Singapore, China, Russia


              A renewed trade strategy for Europe: Trade, Growth and World Affairs   Page | ‹#›
 5. A renewed strategy for Europe
 More assertive approach to enforcement



Trade rules to be fairly applied to all
• Use all appropriate means to stand up for our rights
    Anti-dumping rules
    Dispute settlement mechanisms

• Effective enforcement of trade agreements
• Act against protectionism



              A renewed trade strategy for Europe: Trade, Growth and World Affairs   Page | ‹#›
5. A renewed strategy for Europe
Sharing the benefits of the global economy


Not just about opening markets but helping people
  and countries benefit
• Inclusiveness - European Globalisation
  adjustment Fund
• Trade-development agenda
    Renewal of Generalised System of Preferences
    Communication on trade and Development
    Ongoing Economic Partnership Agreements
• Social and environmental issues


           A renewed trade strategy for Europe: Trade, Growth and World Affairs   Page | ‹#›
AGENDA FOR 2011: THE
    NEXT STEPS


    A renewed trade strategy for Europe: Trade, Growth and World Affairs   Page | ‹#›
 6. Agenda for 2011: The next steps


We have already initiated much of this, and in 2011 will:

    1. work for an early deal in the Doha round

    2. make significant progress with ongoing bilateral trade negotiations

    3. initiate legislation for an EU instrument to increase symmetry in access
       to public procurement markets

    4. conclude the debate on a new investment policy for the EU

    5. present our views on how to develop mutual supportiveness of internal
       and external market opening




                  A renewed trade strategy for Europe: Trade, Growth and World Affairs   Page | ‹#›
6. Agenda for 2011: The next steps

6.   adopt a Communication on trade and development and initiate
     legislation to reform the Generalised System of Preferences

7.   adopt a Green Paper seeking to improve our export control system

8.   present a Communication on support measures to help SMEs

9.   review our strategy on the enforcement of IPR

10. produce a report on trade and investment barriers




              A renewed trade strategy for Europe: Trade, Growth and World Affairs   Page | ‹#›
6. Agenda for 2011: The next steps
Crisis-led protectionism: European views


•   The EC actively monitoring protectionism as part of a coordinated international
    response through regular reports

      E.g. more than 200 trade restrictive measures in 32 partners were reported
         • classical border measures (such as tariff increases or licensing
           requirements)
         • behind the border measures (such as certification schemes or buy
           national policies)

•   The bulk of new protectionist measures have been imposed by a limited number
    of EU trading partners and were concentrated in a few types of measures

•   Latest effort: TIBR (Trade and Investment Barrier Report) 2011,
    published 10 March
      Was presented to the European Council on 24-25 March



                 A renewed trade strategy for Europe: Trade, Growth and World Affairs   Page | ‹#›
6. Agenda for 2011: The next steps
Impact of border protectionism on overall EU exports: the
easy part…

 • the impact on the EU exports is greater than that
   estimated for world trade:
     “classical” border measures alone (mostly tariffs)
      target around 1.7% of EU merchandise exports

 • Russia was by far the country whose tariff measures
   could hurt EU export interests the most:
     Russian measures alone could affect around 1.25%
      of the total value of EU exports



             A renewed trade strategy for Europe: Trade, Growth and World Affairs   Page | ‹#›
6. Agenda for 2011: The next steps
TIBR 2011 - estimating « murky protectionism »: the
difficult part…

 •   New Trade Strategy key message: more assertiveness, enforcement,
     reciprocity and mutual benefits

 •   Significant non-tariff barriers in strategic partners
       China, India, Japan, Mercosur, Russia, US
 •   Main issues:
         Government procurement
         IPR enforcement
         Access to raw materials
         Services
         Investment
         TBT/SPS




                A renewed trade strategy for Europe: Trade, Growth and World Affairs   Page | ‹#›
6. Agenda for 2011: The next steps
TIBR 2011: Key messages


• EU exports potentially affected in the range of 100bn euros

• Raw materials (excluding energy) – some 6bn of EU imports

• « Lost trade » not possible to quantify but magnitude important

• Strategic partners barriers require closer interplay between
  political and operational levels
     China: HED, US:TEC, Russia

• Beyond numbers and EU negative economic impact, efforts to
  reduce/remove barriers abroad provide « public goods » and
  have systemic value


             A renewed trade strategy for Europe: Trade, Growth and World Affairs   Page | ‹#›
Thank you for your attention !



                  Find the Communication and accompanying analysis:
                        http://ec.europa.eu/trade/trade-growth-and-jobs/




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