Fabian Demicoli

Lesson 9 B: The EU on the world stage

A trade Policy that is open to the
world – Its importance as a trading power gives the European
Union considerable international influence. The EU supports the rules-based
system of the World Trade Organisation (WTO), which has 153 member countries.
This system provides a degree of legal certainty and transparency in the
conduct of international trade.

The WTO sets conditions under which its members
can defend themselves against unfair practices like dumping (selling below
cost) through which exporters compete against their rivals. It also provides a
procedure for settling disputes that arise between two or more trading

Since 2001, through the ‘Doha round' of trade talks,
the EU has been seeking to open up world trade. These are difficult
negotiations but the EU remains convinced that, in the wake of the financial
and economic crisis, a contraction in world trade would turn the recession into
a full-blown depression.

The EU's trade policy is closely linked to its
development policy. Under its ‘general system of preferences' (GSP), the EU has
granted duty-free or cut-rate preferential access to its market for most of the
imports from developing countries and economies in transition. It goes even
further for the world's 49 poorest countries. All of their exports, with the
sole exception of arms, enjoy duty-free entry to the EU market.

The EU does not, however, have specific trade
agreements with its major trading partners among the developed countries like
the United States and Japan. Here, trade relations are handled through the WTO
mechanisms. The United States and the European Union are seeking to develop
relations founded on equality and partnership. Following the election of Barack
Obama as US President, EU leaders have been calling for closer trans-Atlantic
ties. At the G-20 meeting in London in April 2009, the EU and US agreed on the
need for better regulation of the global financial system. The European Union
is increasing its trade with the emerging powers in other parts of the world,
from China and India to Central and South America. Trade agreements with these
countries also involve technical and cultural cooperation. China has become the
EU's second most important trading partner (after the United States) and its
biggest supplier of imports. (In 2009, more than 17% of the EU's imports came
from China). The European Union is Russia's main trading partner and its
biggest source of foreign investment. Apart from trade, the main issues in
EU-Russia relations concern cross-border matters such as the security of energy
supplies, in particular gas.



Relations between Europe and sub-Saharan Africa go
back a long way. Under the Treaty of Rome in 1957, the then colonies and
overseas territories of member states became associates of the Community.
Decolonisation, which began in the early 1960s, turned this link into a
different kind of association, one between sovereign countries.

The Cotonou Agreement, signed in 2000 in Cotonou, the
capital of Benin, marked a new stage in the EU's development policy. This
agreement between the European Union and the African, Caribbean and Pacific
(ACP) countries is the most ambitious and far-reaching trade and aid agreement
ever concluded between developed and developing countries. It followed on from
the Lomé Convention, which was signed in 1975 in Lomé, the capital of Togo, and
subsequently updated at regular intervals. This agreement goes significantly
further than earlier ones, since it has moved from trade relations based on
market access to trade relations in a wider sense. It also introduces new
procedures for dealing with human rights abuses.

The European Union has granted special trading
concessions to the least developed countries, 39 of which are signatories to
the Cotonou Agreement. Since 2005, they have been able to export practically
any type of product to the EU, duty free. In 2009, the EU agreed to provide the
77 ACP countries with €2.7 billion of aid in the fields of health, water,
climate change and peacekeeping.



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