Foreign trade policy|politics| of the EU

The European Union is the world’s biggest trader, accounting for 20% of global imports and exports. Free trade among its members underpinned the launch of the EU 50 years ago. The Union is therefore keen to liberalize world trade for the benefit of rich and poor countries alike.

Foreign (external) trade policy of the EU is a set of institutional measures|step| in the field of foreign|outward| trade, which|what| is used by institutions of the EU as an entire political and economic formation for regulation of mutual relations between economic agents of the European Union|conjunction| and other countries or their groups. In the wide understanding the foreign trade policy of the EU is policy|politics| on goods, |primageservices, productive forces (labour, capital, intellectual property) trade. In narrow sense foreign trade policy covers just goods and services trade.

The common commercial policy is a pillar for the external relations of the European Union. It is based on a set of uniform rules under the Customs Union and the Common Customs Tariff (1968) and governs the commercial relations of the Member States with Non-EU Member Countries. The purpose of the instruments of trade defense and market access is mainly to protect European businesses from obstacles to trade. The EU has evolved during the process of globalisation by aiming for the harmonious development of world trade and fostering fairness and sustainability. It actively encourages the opening of the markets and the development of trade in the multilateral framework of the World Trade Organisation (WTO). At the same time, it supports developing countries and regions through bilateral relations with a view to involving them in world trade using preferential measures.

At the same time the EEC was engaged in the row|file| of multilateral trade negotiations (Kennedy-round|, Tokyo-round, Uruguayan round) the result of which|what| was considerable reduction|abbreviation| of tariffs|rate|, especially|in particular case| in relation to|concerning| the manufactured goods. However, neither EEC nor the USA, Australia, Canada and other developed countries, did not aspire to similar|like| reduction|abbreviation| tariffs|rate| in agricultural products, textile and clothes trading, which|what| made|fold| the substantial part of goods import|imp.| from developing countries. In these industries|branch| the EEC left the system of tariffs|rate| and subsidies which|what| protected|non-load-bearing| the European producers |production| from external|outward| competition.

According to|according to| the Treaty of Rome|contract|, the European Commission has powers on representation of EU countries-members|limb| interests in the field of foreign trade. Article 131 of the Treaty|contract| of Rome sets the purpose of common foreign policy|politics| of European communities, which|what| consists in aspiration to assist harmonious development of world trade, gradual abolition of foreign trade limitations|limination| and decline|lowering| of custom barriers|barri|definite|. Though, common foreign trade policy forming is complicated because of necessity of taking into attention interests of all countries-members|limb| of the EU, which|what| differ on level|Y-level| of economic|economical| and social development, structure of economy, traditional trade partners etc. The key|clue| purpose of adjusting|adjustment| of the EU foreign trade relations is achievement of the permanent|withstand| economy|economical| growing through|from| trade liberalization and such its consequences as welfare|well-being| growth|height| and unemployment reduction|abbreviation|. It’s also important to take into attention public opinion on introduction|introducting| or abolition of regulative measures..

The range and sophistication of the EU's external trade agreements has multiplied. Whilst several of the original product specific quota/tariff setting agreements are still in force, most agreements now cover all industrial goods. In addition to the WTO, multilateral arrangements are long established with groupings such as ASEAN and MERCOSUR. The most integrated of all these agreements is the European Economic Area, which extends the entire single market acquis to Iceland, Liechtenstein and Norway. Trade agreements are now pushing liberalisation into new areas, like the mutual recognition of conformity assessment for product standards. Safeguard measures operating at EU level include a well-developed anti-dumping mechanism.

The EU is firmly committed to the promotion of open and fair trade with all its trading partners. The EU has specific trade policies in place for all its partners and observes the global rules on international trade set out by the World Trade Organisation. In addition to global-level negotiations within WTO known as the "Doha Development Agenda", the EU conducts a number of negotiations with countries and regions around the world.

The Doha Round of world trade negotiations was launched in Doha (Qatar) in November 2001. Named the Doha Development Agenda, this round of trade negotiations is much broader than past global trade negotiations and is specifically targeted at addressing the needs of developing countries. The focus of negotiations has been on

· reforming agricultural subsidies

· improving the access to global markets and

· ensuring that new liberalisation in the global economy respects the need for sustainable economic growth in developing countries.

The successful conclusion of the Doha negotiations would confirm the central role of multilateral liberalisation and rule-making. It would confirm the WTO as a powerful shield against protectionist backsliding.

The EU's objectives are as follows:

• In market access for the industrial goods sector, the EU wants to create significant new trade flows by cutting tariffs in both developed countries and the growing emerging economies such as China, Brazil and India. The goal is to create new trade between developed countries, but also between developing countries. This means lowering tariffs on industrial goods but also negotiating common rules on how to address obstacles to trade generated by a too complex and non-transparent regulatory system.
• The EU also wants to improve and clarify the WTO rulebook on subsides that distort the production of industrial goods. These include longstanding financial support made available to exporters on non-commercial terms as well as governments' provision of inputs to domestic producers at prices substantially more favourable than those available to foreign producers (so-called dual or discriminatory pricing).
• For the agriculture sector the EU is committed to an agreement that reforms farm subsidy programs throughout the rich world in line with the EU's wide-ranging 2003 reform of the Common Agricultural Policy. As part of the Doha Round, the EU has offered to cut farm tariffs by 60%, reduce trade distorting farm subsidies by 80% and eliminate farm export subsidies altogether. The EU also wants to see new market access opportunities for its own processed agricultural exports.
• In market access negotiations for the services trade, Doha should bring considerable and real market opportunities for business as well as benefits to consumers world-wide. However, the EU does not seek general deregulation or privatisation of sectors where principles of public interest are at stake, and the EU is also committed to defending the right of WTO members to promote cultural diversity.
• The EU wants the Doha Round to agree a package of development measures including: a special agreement to address trade distortions caused by subsidies to cotton farmers in developed countries; the extension of unlimited markets access to all Least Developed Countries by as many countries as possible; a new global package of 'aid for trade' assistance to help the poorest build the capacity to trade; special measures to help the poorest countries implement any Doha Agreement effectively and without long-term harm to their economies.
• The EU wants the Doha Round to agree a new set of rules to govern the use of trade defence instruments so that they are not abused, and a complete update of the WTO's rulebook for trade facilitation, the standard practice for customs and other border related procedures world wide – a potential source of huge savings for traders, especially in developing countries. The EU also wants to use the Doha Round to improve the protection of geographical indications – the special legal identity given to products like Parma Ham and Roquefort cheese that are closely linked to a particular place and tradition of production.

Presently|now| the foreign trade policy of the EU is based on principle of balancing between tendencies to|by| liberalization of trade and necessity of defence|protection| of the European producers. The tendencies of liberalization are caused both global|worldwide| tendencies on trade liberalization and expected positive|staid| consequences from trade liberalization between the EU and other countries of the world|peace|. In particular|including|, on European Commission experts estimations|estimation|, complete liberalization of world trade will cause growth|height| of GDP of the European Union|conjunction| on 2%. In addition, liberalization of the trade mode|regime| will improve|bootstrap| the life-standard of the poorest groups of population of the European Union, making chipper imported goods|primage|, first of all food. Trade liberalization of the EU must be positive|staid| for developing countries, which|what| hereupon must get|receive| access to|by| the European market. However, application of protective trade measures|step| is|appear| a necessary condition|COND| for development and providing|ADM| of sufficient|suffite| competitiveness at an international level for such industries|branch| of the European economy, as agriculture, new and perspective|long-range| industries|branch| as nano-technologies|, bioengineering and others.

For self preparation: 1) main clauses of “Millenium round”; 2) European Commission Communication to the Council and European Parliament over EU's stance in view of «Millenium round» of World Trade Organization; 3) Economic Partnership Agreements, (EPAs) (European commission web-site).

8.3. Development aid policy|politics|

The European development aid policy is a complex of methods, measures and instruments on providing aid to developing countries and collaboration for assistance of their economic and social development.

More than half the money spent to help poor countries comes from the European Union and its member states, making it the world's biggest aid donor. But development policy is about more than providing clean water and surfaced roads, important though these are. The Union also uses trade to drive development by opening its markets to exports from poor countries and by encouraging them to trade more with each other.

The European Union and its member countries paid out more than €49 billion in 2008 in public aid to developing countries. This was the equivalent of 0.40% of their GNP, and was higher than the per capita aid levels of the United States or Japan. The target for 2010 is 0.56% of GNP, rising to 0.7% in 2015.

Most of the EU’s aid is made in the form of non-repayable grants. A limited amount of soft loans and investment capital is made available by the European Investment Bank (EIB), the EU’s long-term funding body. In 2006 the EIB made loans worth €5.9 billion to partners outside Europe, mainly developing countries.

Development aid policy|politics| is|appear| a complementary one (Article 177 of Treaty on the European Union |conjunction|), though it must complement policies of the countries-members|limb|.

Development aid policy|politics| is called to promote|assist| (Article 177, Article 181a |of Treaty on the European Union |conjunction|):

· the sustainable economic and social development of the developing countries, and more particularly the most disadvantaged among them,

· the smooth and gradual integration of the developing countries into the world economy

· the campaign against poverty in the developing countries

· general objective of developing and consolidating democracy and the rule of law, and to that of respecting human rights and fundamental freedoms.

Within their respective spheres of competence, the Community and the Member States shall cooperate with third countries and with the competent international organisations (Article 180 Treaty|contract| on The European Union |conjunction|).

According to the 181а of Treaty on The European Union, the Community shall carry out, within its spheres of competence, economic, financial and technical cooperation measures with third countries. Such measures shall be complementary to those carried out by the Member States and consistent with the development policy of the Community.

The EU uses the followings|downstream| instruments|tool| of development aid:

· signing of Conventions with African, Caribbean and Pacific countries (ACP);

· special relations with former|quondam| colonies and overseas territories on aid granting for the countries which|what| do not have Treaties on association with the EU;

· introduction|enters| of Generalized System of Preferences|;

· participating in world trade treaties in some|certain| kinds|appearance| of goods and granting help through|from| non-state organizations;

· participating in initiatives realization of IMF and the World Bank on grant aid for the ACP countries with great national debt.

An Community has a right to take the necessary urgent measures (Article 301 Treaty|contract| on The European Union |conjunction|).

The EU can use a wide range of resources on development aid policy|politics|:

· cooperation in industrial and technological sectors before introduction|enters| of trade assistance|contributory| mode|regime|;

· substantial gender inequalities liquidation|unevenness|;

· ecological|ecofriendly| measures bringing into|by| the processes|Carbro| of development;

· food aid;

· financial|cost| help granting (loans|lend| and risk capital from the European investment bank (EIB) resources, subsidies of the European Development Fund (EFD), Financing instrument for development cooperation (DCI) and other kinds of subsidies.

The European Development Fund (EDF) is the main instrument for Community aid for development cooperation in the ACP countries and the Overseas Countries and Territories (OCT). Articles 131 and 136 of the 1957 Treaty of Rome provided for its creation with a view to granting technical and financial assistance to African countries that were still colonised at that time and with which certain countries had historical links.

Although, following a request by the European Parliament, a heading has been reserved for the Fund in the Community budget since 1993, the EDF does not come under the general Community budget. It is funded by the Member States, covered by its own financial rules and managed by a specific committee. The Member States set the EDF budget in the Council via agreements that are subsequently ratified by the national parliament of each MemberState. The European Commission and other institutions established under the partnership play a key role in the day-to-day management of the Fund. However, the aid allocated to OCTs will be integrated into the Community general budget from 1st January 2008 on, while the aid granted to the ACP countries will continue to be financed under the EDF (10th) at least for the period 2008-2013.

Each EDF is concluded for a period of around five years. Since the conclusion of the first partnership convention in 1964, the EDF cycles have generally followed that of the partnership agreements/conventions.

· First EDF: 1959-1964

· Second EDF: 1964-1970 (Yaoundé I Convention)

· Third EDF: 1970-1975 (Yaoundé II Convention)

· Fourth EDF: 1975-1980 (Lomé I Convention)

· Fifth EDF: 1980-1985 (Lomé II Convention)

· Sixth EDF: 1985-1990 (Lomé III Convention)

· Seventh EDF: 1990-1995 (Lomé IV Convention)

· Eighth EDF: 1995-2000 (Lomé IV Convention and the revised Lomé IV)

· Ninth EDF: 2000-2007 (Cotonou Agreement)

· Tenth EDF: 2008-2013 (Cotonou Agreement)

The previous EDFs (up to the Eighth) consisted of several instruments, including grants, risk capital and loans to the private sector. The STABEX and SYSMIN instruments designed to help the agricultural and mining industries respectively were abolished by the new Partnership Agreement signed in Cotonou in June 2000.

The instruments of the 9th EDF, concluded at the same time as the Cotonou Agreement, have been regrouped and rationalised in only two instruments: the EDF for support to long-term development and the Investment Facility for support to the private sector. The 9th EDF has been allocated € 13.5 billion over a period of five years. In addition, the unexpended balances from previous EDFs total € 9.9 billion.

Another change brought by the New Agreement is related to the resources allocation which is no longer automatic but based on an evaluation of needs and performance through a system of rolling programming. All allocations are therefore indicative and may be reduced or increased during the course of implementation of the programmes. This system will provide for greater flexibility and give the ACP countries greater responsibility.

The development aid provided by the EDF forms a part of a broader European framework. Within the European Union, the funds of the Community's general budget may be used for certain types of aid. Moreover, whilst managing part of the EDF's resources (loans and risk capital), the own resources contribution of the European Investment Bank comes to € 1.7 billion for the five-year period of the ninth EDF.

Added to this, the Member States have their own bilateral agreements and implement their own initiatives with developing countries that are not financed by the European Development Fund or other Community funds.

The future of EDF after 2007 was the subject of a long and complex debate, whether to keep the EDF separated from the EU’s general budget or to integrate it then we will talk about the budgetisation of the EDF. In December 2005, EU Member States finally decided to continue funding the ACP-EU cooperation through the 10th EDF which will cover the period 2008-2013 and represent a total amount of € 22.682 billion.

In line with the new Cotonou Agreement, the system for programming of resources has been fundamentally reformed. The programming process is more continuous and result-oriented than has been the case in the past. At the outset of the programming process, one single Country Strategy Paper (CSP) is established for each ACP country for a period of five years. At regional level, we talk about Regional Strategy Paper (RSP). The CSP/RSP covers the implementation of all operations financed from the entire resources available including unexpended resources from previous EDFs. The CSP/RSP identifies a limited number of sectors where the Community is deemed to have a comparative advantage. It is complemented by a National Indicative Programme (NIP)/Regional Indicative Programme (RIP) which sets out the concrete operations to be financed in the focal sector(s) and a timetable for their implementation.

The financing instrument for development cooperation DCI (2007-2013) approved by the Regulation (EC) No 1905/2006 of the European Parliament and of the Council of 18 December 2006 establishing a financing instrument for development cooperation improves the Community's previous development cooperation framework by merging the different geographic and thematic instruments into a single instrument.

Under this instrument, the European Communities finance measures aimed at supporting geographic cooperation with the developing countries included in the list of aid recipients of the Development Assistance Committee of the Organisation for Economic Cooperation and Development (OECD/DAC). These countries are listed in Annex 1 to the Regulation.

The Regulation (EC) No 1905/2006emphasises that the Community's development cooperation policy is guided by the Millennium Development Goals (MDGs) and that the “European Consensus” provides the general framework for action by the Community on development matters. It also reaffirms that the objectives of this policy are poverty reduction, sustainable economic and social development and the smooth and gradual integration of developing countries into the world economy.

The Regulation provides that Community aid is implemented through geographic and thematic programmes and through the programme of accompanying measures for the African, Caribbean and Pacific (ACP) Sugar Protocol countries.

Geographic programmes encompass cooperation with partner countries and regions determined on a geographical basis. They cover five regions, namely Latin America, Asia, Central Asia, the Middle East and South Africa. Community assistance to these countries is aimed at supporting actions within the following areas of cooperation:

· supporting the implementation of policies aimed at poverty eradication and at the achievement of the MDGs;

· addressing the essential needs of the population, in particular primary education and health;

· promoting social cohesion and employment;

· promoting governance, democracy, human rights and support for institutional reforms;

· assisting partner countries and regions in the areas of trade and regional integration;

· promoting sustainable development through environmental protection and sustainable management of natural resources;

· supporting sustainable integrated water resource management and fostering greater use of sustainable energy technologies;

· assistance in post-crisis situations and fragile States.

The measures taken vary according to the specific needs of each country, taking into account the specific situation in Latin America, Asia, the Middle East or South Africa.

Thematic programmes complement geographic programmes. They cover a specific area of activity of interest to a group of partner countries not determined by geography, or cooperation activities focusing on various regions or groups of partner countries, or an international operation that is not geographically specific. In other words, their scope of application is wider than that of geographic cooperation programmes because they encompass not only the countries eligible for geographic cooperation under the DCI but also the countries and regions eligible under the European Development Fund (EDF) and under Regulation (EC) No 1638/2006.

The Regulation provides for five thematic programmes concerning:

· investing in people;

· the environment and the sustainable management of natural resources;

· non-state actors and Local Authorities;

· the improvement of food security;

· cooperation in the area of migration and asylum.

For self preparation: Yaoundé Conventions, Lomé Conventions, Cotonou Agreement, Millennium Development Goals (MDGs)