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Europe on the move

Making globalisation work for everyoneThe European Union and world trade

European Union

Published in all the official languages of the European Union: Danish, Dutch, English, Finnish, French, German, Greek, Italian, Portuguese, Spanish and Swedish.

European Commission Directorate General Press and Communication PublicationsB-1049 Brussel/Bruxelles

Manuscript completed in December 2002.

Cover: EKA

Cataloguing data can be found at the end of this publication.

Luxembourg: Office for Official Publications of the European Communities, 2003

ISBN 92-894-4714-1

© European Communities, 2003Reproduction is authorised.

Printed in Belgium

PRINTED ON WHITE CHLORINE-FREE PAPER

Trade for a better world 3

Role and responsibilities of the European Union 4

The EU and the World Trade Organisation 8

The EU’s bilateral trade agreements 11

The Doha development agenda: 18a new era for world trade

Further reading 22

Contents

3

In daily life, we alltake part in the global economy.

Trade is everybody’s business. Tradepolicy may seem a complex, technicalsubject that only experts can under-stand, but it actually involves us all,every day, whatever we do and wher-ever we live. Think global. Think ofmorning tea or coffee, the cars wedrive, the computers on which weincreasingly depend. Think of afavourite oriental rug or a holiday onanother continent.

Globalisation means that more andmore countries, both rich and poor, aretaking part in the world economy. Thisprocess is changing the pattern ofworld trade and increasingly perme-ating our everyday lives.

The wealth that trade can generatehelps European Union (EU) countriesto give their citizens a better qualityof life — now, and for future genera-tions too. Taking part in world trade— if properly managed — also givesdeveloping countries a much-neededopportunity for economic growth.

As the world’s leading trade power, theEU has a strong interest in creatingconditions in which trade can prosper.The EU’s position also gives it respon-sibilities towards the rest of the world.That is why it plays a leading role ininternational trade negotiations, work-ing towards fair trade and seeking toharness globalisation through theWorld Trade Organisation (WTO).

The EU works to ensure that its trad-ing partners in the developing worldcan join in the system, giving them ahand where needed. This applies par-ticularly to the poorest countries, forwhich the benefits of globalisationremain elusive.

This booklet describes how EU tradepolicy works. It outlines the EU’s traderelationships with the rest of the worldand the role the EU plays in the WorldTrade Organisation. And it explainshow the EU intends to make sure thatthe whole world can benefit from theinternational trade negotiations thatwere launched in Doha in November2001. Known as the ‘Doha develop-ment agenda’, the new round of nego-tiations will be a decisive force inshaping trade in the 21st century.

Trade for a better world

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4

Making globa l i sa t ion work fo r eve r yone

The European Union, with its 15 mem-ber countries, represents just 6 % ofthe world’s population. But it accountsfor more than a fifth of global importsand exports. This makes the Union theworld’s biggest trader.

Trade was one of the first areas inwhich EU countries agreed to pooltheir sovereignty, transferring to theEuropean Commission the respon-sibility for handling trade matters,including negotiating internationaltrade agreements on their behalf.

This means that the EU’s 15 MemberStates negotiate as one, both withtheir trading partners and at the WTO,thus maximising their influence on theinternational scene.

But a wide range of players areinvolved in drawing up the EU’s tradepolicy. Representatives of the govern-ments of the EU countries are regu-larly and closely consulted, and min-isters themselves take the keydecisions. The European Parliament isclosely involved in all developments.The Commission is continually organ-ising a wide consultation of civil soci-ety, such as non-governmental organ-isations (NGOs), trade unions, andbusiness.

This enables the EU to be sensitive toall interests as it works to expandtrade and to create a win–win situa-tion for all players.

Role and responsibilities of the European Union

Europeans trade a lot

The European Union is:

• the world’s leading exporter of goods: over 973 billion euro in 2001, almost a fifth of the world total;

• the world’s leading exporter of services: 291 billion euro in 2000, 23.9 % of the world total;

• the world’s leading source of foreign direct investment (362 billion euro in 2000) and the second largesthome for foreign investment (176.2 billion euro in 2000) after the United States (304.9 billion euro);

• the main export market for some 130 countries around the globe;

• a relatively open economy: international trade accounted for over 14 % of its gross domestic productin 2000, compared with 12 % for the United States and 11 % for Japan.

5

Free and fair

The European Union’s aim is free butfair world trade. In other words, a sys-tem where all countries trade freelywith one another on equal terms andwithout protectionist barriers. The EUwants a ‘level playing field’ for allcountries and clear ‘rules of the game’for everyone to follow. The systemshould be transparent — fully open topublic scrutiny.

To achieve this, the EU’s strategy is toopen up its own market while othersdo likewise. It seeks to remove obsta-cles to trade gradually, at a pace theEU and others can sustain, to settledisputes peacefully and to build up abody of internationally agreed rules.

To ‘open up’ or to ‘liberalise’ trademust be seen in comparison with thesituation created in years gone bywhen almost all governments in theworld restricted imports into theircountry, with the intention of helpingthe economy in their country.

What do we buy and sell?

There are four main categories of things that are traded internationally or flow across borders. Trade rulesvary by category, and different countries are strong in different categories.

• Goods: This covers all types of physical goods, such as food, clothing, raw materials and machinery.

• Services: This covers things like tourism, banking and telecommunications.

• Intellectual property: This covers trade and investment in ideas and creativity: copyright, industrialdesign, artists’ rights, etc.

• Foreign direct investment (FDI): This is when a company from one country buys or establishes a com-pany in another country. This is an alternative to trade and an important part of ‘globalisation’. Theconcept does not include financial investments, where the owner of the money has no direct influenceon the running of a company in which he or she owns shares.

The EU is the biggesttrader in the world.

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6

Opening up markets means removingtrade barriers between countries. Thiswas a basic goal of the Union fromthe earliest days. In the 1960s, it cre-ated a ‘customs union’ between itsmember countries. In other words, anyEU country could trade any quantityof goods with any other EU countrywithout having to pay customs dutiesand tariffs.

A ‘single external tariff’ was also intro-duced. In other words, non-EU coun-tries exporting products to the EU werecharged the same tariff regardless ofwhich EU country was importing thegoods. This made life simpler fortraders and cut down their paperwork.

But although the tariff barriers wereremoved, many ‘non-tariff’ barriers totrade still remained. For example, dif-ferent EU countries had differentadministrative requirements and dif-ferent rules on things like packagingand labelling — all of which hinderedtrade between them.

That is why, in 1992, the EU launchedits ‘single market’, removing non-tar-iff barriers to trade in goods, and alsoopening up trade in services withinthe Union.


Trade in the EU treaty

EU trade policy is enshrined in Article 131 of the EC Treaty. This article sets theobjectives of the common commercial policy as being to ‘contribute, in the commoninterest, to the harmonious development of world trade, the progressive abolitionof restrictions on international trade and the lowering of customs barriers’.

This blends seamlessly with the aims of the Treaty in general (Article 2): ‘to promote[…] harmonious, balanced and sustainable development of economic activities, ahigh level of employment and social protection, […] a high degree of competitive-ness and improvement of the quality of the environment, the raising of the stan-dard of living and quality of life …’.

(Treaty establishing the European Community)

7

Doing what you are good at

Opening up trade stimulates theeconomy as a whole. It boosts therevenues of exporting countries andoffers consumers in the importingcountries a wider choice of goodsand services at lower prices becauseof increased competition. Ultimatelyit allows all countries to produceand export the goods and serviceswith which they are best placed tocompete.

So globalisation can boost economicgrowth. But it can also be disruptive.Larger and more open markets meanincreased competition between busi-nesses and also between countries.By pitting unequally developedeconomies against one another,globalisation may, if unharnessed,widen the gap between rich and poorcountries and further sideline thepoorest economies.

Individual nation States cannot dealwith this problem. When businessgoes global, the rules of fair play mustalso be set globally. Only throughinternational agreement can we har-ness globalisation and make it workfor the good of all.

So EU trade policy now covers abroader canvas, beyond trade liber-alisation. It is about updating andimproving international rules, andgiving them a wider coverage toensure fair trade and harnessedglobalisation. It is about promotingan international agenda that bene-fits the developing world, andaddressing issues of general publicconcern. One of the key challengestoday is to ensure that world traderules take account of non-marketconcerns, particularly the environ-ment, public services, food safety,agriculture and culture.

Open economies without customs dutiesor trade restrictionsgive consumers a wider choice.

Multilateral and bilateral

EU trade policy works on two com-plementary levels:

• the ‘multilateral’ level refersto the system of trading rulesagreed by all WTO membercountries worldwide;

• the ‘bilateral and regional’level means trade betweenthe EU and individual tradingpartners or with groups ofcountries that form a singletrading bloc in a particularregion of the world.

ZEFA

8

The European Union has alwaysbacked the multilateral trading sys-tem. The EU is indeed convinced thatthe best way to encourage and fosterworld trade — and thus to promoteeconomic development and prosper-ity — is to have multilateral tradingrules agreed by consensus.

That is why the EU played a major rolein setting up the World Trade Organi-sation, and it is a very active partici-pant in the WTO.

Forum for the whole world

The World Trade Organisation is thecore of the international rules-basedsystem for world trade. Based inGeneva, it provides a forum for multi-lateral negotiations on trade, togetherwith a rule book and mechanisms forensuring that its members play by therules. These mechanisms include aprocedure for settling disputes.

As the world economy globalises, theWTO is the most legitimate forum forremoving obstacles to trade, creatingand enforcing global rules and mak-ing them compatible with rules drawnup by other multilateral bodies. Theaims of the EU’s work in the WTOeffort are:

• to open up markets in goods, ser-vices and investment in accor-dance with clear rules and follow-ing a timetable that enables allcountries to implement them;

• to make the WTO more open,accountable and effective byengaging in discussion with othergroups and organisations;

• to bring developing countries fullyinto the WTO’s decision-takingprocesses, helping them to inte-grate with the world economy.


The EU and the World TradeOrganisation

When business goesglobal, the rules for

fair play must also beset globally. That is thejob for the World Trade

Organisation.

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9

The WTO was set up in 1995, but themultilateral trading system on whichit is based is far older. Eight separaterounds of international negotiationsunder the General Agreement on Tar-iffs and Trade (GATT) have progres-sively abolished tariffs and other tradebarriers over the past 50 years.

The WTO now has 144 members,including China and Taiwan whichjoined in 2001. It is the only interna-tional body policing trade in goods,services and intellectual propertyrights among its members.

Agreements are negotiated by gov-ernments whose aim is to ensure thereis a comprehensible, reliable frame-work of rules for importers andexporters worldwide, enabling themto operate in the certainty there willbe no sudden, unpredictable changesin policy.

The more members there are, themore effective the WTO’s rules arelikely to be. That is why the EU activelyencouraged China to join, and is nowworking hand in hand with Russia anda number of other countries to helpthem prepare for WTO entry.

World Trade Organisation

Established: 1 January 1995 (but with its predecessor GATT dating back to the 1940s).

Membership: 144 countries at the start of 2002, accounting for over 90 % of all trade in the world.

Rounds: Countries tend to negotiate over several years on new agreements for a group of subjects. Theseseries of negotiations are called ‘rounds’. Examples are the ‘Uruguay Round’ 1986–94 and the round thatstarted in 2001 called ‘The Doha development agenda’.

Functions:• Administering WTO trade agreements• Forum for trade policy discussions and negotiations• Handling and resolving trade disputes• Monitoring national trade policies• Technical assistance and training for developing countries• Cooperation with other international organisations

10

Ensuring countries play by the rules

The dispute settlement system is oneof the cornerstones of the WTO. Itgives all WTO members confidencethat the commitments and obligationsthey have negotiated are honoured.

The dispute settlement mechanism,which was introduced in 1995, is aforum that parties may use to asserttheir rights under multilateral tradeagreements. WTO member countriesare not allowed to take revenge onone another in response to allegedviolations of the agreed rules. Instead,all 144 members have exactly thesame right to seek redress via the WTOif they believe one of their tradingpartners is breaking the rules. Thus,the mechanism protects weaker mem-bers against arbitrary or unilateralaction by the strongest.

The procedures for dispute settlementencourage the parties to settle theirdifferences through consultation. Oth-erwise, panels of experts make rulings,which have to be endorsed or rejectedby the WTO’s full membership.

All WTO members, developing coun-tries as well as the big players, aremaking more use of the mechanism,and it has helped to ensure real mar-ket opening. However, the EU believesthere is still room for improvement,notably in respect of speed and thetypes of sanctions possible.

The EU has put forward proposals formaking the procedures more trans-parent to the outside world, and forhelping developing countries handlethe process.

Mak ing globa l i sa t ion work fo r eve r yone

Share of world trade

(1) ASEM: The nine Asian partners of the ‘Asia–Europe meeting’ (ASEM) other than Japan: Brunei, China, Indonesia, Malaysia, Philippines, Thailand, Singapore, South Korea, Vietnam.

Figures for 2000, imports and exports together. Source: Eurostat.

Services Goods

EU 18.8 %

United States 20.8 %

Candidate countries 4.1 %

Japan 8.8 %

Asia: ASEM excluding Japan (1) 11.2 %

Rest of the world 17.8 %

Latin America excluding

Mexico 4.0 %

Canada and Mexico 9.3 %

EU 23.8 %

United States 21.2 %

Candidate countries 3.8 %

Japan 8.2 %

Asia: ASEM excluding Japan (1) 11.2 %

Rest of the world 23.7 %

Latin America excluding

Mexico 3.2 %

Canada and Mexico 4.9 %

11

The European Union is the world’sbiggest trading power. Though it oper-ates according to trade rules that areset multilaterally, the actual exchangeof goods and services takes placebilaterally — between the EU and indi-vidual trading partners. However,what takes place bilaterally and whathappens at the multilateral level oftenreinforce each other. The EU’s bilateralagreements with individual tradingpartners, or with regional groupingsof countries, are often designed topursue goals that are subsequentlyachieved through multilateral negoti-ations.

EU tariffs on industrial products areamong the lowest in the world andmost of them will disappear in 2004in line with the Union’s commitmentsfrom 1994 under the Uruguay Roundof international trade negotiations.

As it is, most of the EU’s imports arealready duty free or enter the EU atpreferential rates under the terms ofbilateral trade agreements or the EU’sgeneralised system of preferencesregime. For example, more than 50 %of finished steel imports enter the EUduty free from countries in central andeastern Europe with which the EU hasbilateral association agreements.

Doing business with neighbours

Trade has helped the EU establishcloser links with its immediate neigh-bours. In the first place, the Union hasstepped up its trade with the candi-date countries of central and easternEurope that are due to join the EU.The agreements with these countries,known as ‘Europe agreements’, areintended to create a free trade areabetween them and the EU before theyactually join.

Thanks to these agreements, a muchgreater proportion of the exports fromthese countries now goes to the EU.The agreements also relate to the freemovement of services, payments andcapital for trade and investment.

The EU’s bilateral tradeagreements

Taking part in the world economy can create wealth for everyone

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12

In addition, these countries will haveto bring their national trade legisla-tion into line with EU law before theybecome EU members. Associationagreements with the other candidatecountries — Cyprus, Malta and Turkey— contain similar provisions.

For the Balkan countries, which couldeventually join the EU, trade is aninstrument of reconstruction. The EUhas removed customs duties on 95 %of exports from these countries inorder to boost their economic recov-ery and strengthen their trade linkswith western Europe.

At the same time, the EU intends toconclude ‘stabilisation and associa-tion agreements’ with these countries,similar to those signed with the can-didate countries. Agreements havealready been signed with Croatia andwith the Former Yugoslav Republic ofMacedonia.

The EU also has a regional strategyfor relations with its neighbours in theMediterranean region. In 1995, itbegan what is called the ‘Barcelonaprocess’. This seeks, by means of anetwork of bilateral agreements andregional arrangements, to establish aEuro-Mediterranean free trade areaby 2010.

To move this process forward, associ-ation agreements have been signedwith Algeria, Egypt, Israel, Jordan,Lebanon, Morocco, the PalestinianAuthority and Tunisia. Negotiationsare ongoing with Syria.


EU trade: the big players

Trade partner Imports into the EU Exports from the EU Percentage of total trade(billion euro) (billion euro) (imports + exports)

EU global trade 985 990 100

1. United States 174 239 20.9

2. The 10 countries 107 125 11.7due to join theEU in 2004

3. Switzerland 59 71 6.5

4. China 81 34 5.8

5. Japan 68 42 5.6

6. African, Carribean 46 40 4.4 and Pacific countries (ACP)

7. Russia 48 30 3.9

8. Norway 45 26 3.6

Figures for 2002, trade in goods. Source: Eurostat.

13

Opening up trade around the world

The EU is encouraging countries inAfrica, Asia and Latin America andother regions of the world to forgecloser ties with one another, just asthe countries of Europe have done.Europe’s own experience of ‘regionalintegration’ has brought many advan-tages, and the EU believes that inte-gration in other regions of the worldwill put its trading partners in a bet-ter collective position to benefit fromglobalisation.

The EU is committed to ensuring thatits agreements are compatible withWTO obligations. The EU expects thesame of other WTO members andhopes the current international nego-tiations under the auspices of theWTO will be a useful opportunity toclarify and strengthen rules in thisfield for the benefit of all members.

The United States is by far the EU’sbiggest trading partner, accountingfor nearly 22 % of the EU’s total trade(exports plus imports).

Given the volume of their bilateraltrade, it is not surprising that the EUand the United States have trade dis-putes from time to time. While a num-ber of these are handled bilaterally,some end up before the WTO disputesettlement body. Although these dis-putes make the headlines, theamounts of trade involved are verysmall in comparison with total US–EUtrade flows (less than 2 % of trade).

The EU’s relationship with Japan isalso of high importance. The EU’sfocus here is on the need for Japan toopen up its market more to Europeangoods and investments and to get thegovernment to take effective action toreflate the economy.

The EU is also negotiating the estab-lishment of a free trade area with thesix members of the Gulf CooperationCouncil (GCC), which is the regionalorganisation grouping Bahrain,Kuwait, Qatar, Oman, Saudi Arabiaand the United Arab Emirates.

The EU is examining ways of promot-ing bilateral economic relations withIran through a trade and cooperationagreement which is under negotia-tion. In addition, the EU has con-cluded partnership and cooperationagreements with Russia and a num-ber of other countries of the formerSoviet Union — Azerbaijan, Kaza-khstan, Kyrgyzstan, Moldova andUkraine. The agreements withMoldova, Russia and Ukraine are partof a process that could lead to theestablishment of a free trade areabetween them and the EU.

The EU has recently been very active inits trade relations with Latin America.

14

A free trade agreement with Mexicocame into force in July 2000. Thisagreement will give EU exports thesame access to the Mexican market asthose coming from the United Statesand Canada, its partners in the NorthAmerican Free Trade Agreement(NAFTA). The EU is scheduled toremove all duties on imports fromMexico by 2003, while Mexico will liftall duties on EU goods by 2007.

The EU and Chile have recently con-cluded the negotiations for an associ-ation agreement, delivering the mostambitious and innovative results everfor a bilateral agreement by the EU.


Regional economicintegration is an

important response toglobalisation. People

in Africa, for example,should trade more with

each other and notfocus only on Europe

and the USA.

Negotiations are currently under wayto liberalise trade with Mercosur, theSouth American Common Market con-sisting of Argentina, Brazil, Paraguayand Uruguay. The EU is already themost important trading partner of theMercosur countries and the biggestforeign investor in the region. Thenegotiations will cover not only theliberalisation of trade in goods andservices, but also public procurement,intellectual property rights, competi-tion policy and foreign investments.

South Africa concluded a bilateralagreement with the EU on trade,cooperation and development in2000. According to this agreement,within 12 years, South Africa and theEU will grant free trade status to eachother’s exports.

15

Focus on development

The globalisation of trade must notsideline poorer countries. The EUwants to find ways of helping thesecountries catch up with the rest of theworld, instead of facing marginalisa-tion. Improving their access to globalmarkets for agricultural and industrialgoods and services is crucial.

The EU demonstrated its support forthe 49 ‘least developed countries’ bylaunching the ‘Everything but arms’initiative in March 2001. This meansthe EU is opening its markets tounlimited quantities of all products(except weapons) from those countriesand without charging any dutieswhatsoever.

As Trade Commissioner Pascal Lamysaid: ‘This sends a signal to the rest ofthe world that we are serious about get-ting the most disadvantaged to sharein the fruits of trade liberalisation.’

Everything but arms

This initiative is a world first. On 5March 2001, the EU became the firstmajor trading power to open its mar-ket completely to exports from theworld’s least developed countries(LDCs). On that date, remaining tar-iffs and quotas were removed from allproducts (barring arms), though theimport duties on bananas, sugar andrice are being removed in stagesbetween 2002 and 2009. In takingthis initiative, the EU was mindful ofthe interests of its own producers, theinterests of developing countries as awhole and of traditional suppliers ofthese products to the European mar-ket. The EU hopes other industrialisedcountries will follow its example byadopting similar initiatives.

EU openness to exports from developing countries

In 1999, 97 % of the exports from the world’s least developed countries entered the EU free of duties. Since then, the access has been further liberalised under the ‘Everything but arms’ initiative.

Source: United Nations Conference on Trade and Development/European Commission.

LDC exports entering free of duty

LDC exports facing protection

LDC exports liberalisedunder ‘Everything but arms’

100%

80%

60%

40%

20%

0%EU United States Canada Japan

49 %45 %52 %97 %

100

%

3 %

16

Aid and trade together

The EU has a tradition of close rela-tionship with the countries in Africa,the Caribbean and the Pacific. Underthe Cotonou Agreement concludedwith 77 African, Caribbean andPacific (ACP) countries in February2000, the European Union adoptedan integrated trade and developmentstrategy aimed at bringing the ACPcountries smoothly into the worldeconomy.

The Cotonou Agreement will run until2007. It will then be replaced by agree-ments of a new type, called economicpartnership agreements (EPAs).Negotiations between the EU and ACPcountries on these new agreementsstarted in September 2002. The EPAswill deal with political questions, eco-nomic and trade cooperation anddevelopment aid. They are likely totake the form of agreements betweenthe EU and groups of neighbouringACP countries.


The poorest countriesin the world can

export most of theirgoods to the

European Union without any restrictions.

17

This new approach is a response to thedebate on globalisation, from whichit is clear that neither European-funded development projects nortrade rules with increasingly openmarkets have led to acceptable livingconditions in the poorest countries ofthe world.

A key strategy in the new approach isto strengthen the regional economicintegration within different ACP sub-regions. Poor countries should notonly try to sell more to EU countries,they should also trade more with eachother. Free trade agreements betweenneighbouring countries can createlarger, more effective markets whichare attractive to local and foreigninvestors. The EPAs should deal withall factors that constrain businessactivities in ACP countries. The EU willcontinue to give wide-ranging eco-nomic support to these countries.

Least developed countries exports to the EU

The value of exports from developing countries to the EU has been rising steadily, andin 2000 amounted to EUR 432 billion, double the total in 1990. The EU is the world’sbiggest importer of goods from the 49 least developed countries (LDCs). The chartshows the distribution of LDC exports to the four richest trading blocs. Figures for 2000. Source: European Commission.

EU 52 %

United States 42 %

Canada 1 %

Japan 5 %

Pascal Lamy, European Commissioner for trade:

‘People are worried about the impact of globalisation on the environment, animal welfare, health, social standards, cultural diversity. We need solutions to address these concerns – but without protectionism’.

18

On 14 November 2001, the 142 mem-bers of the WTO concluded the fourthministerial conference with a decisionto launch a new round of world tradetalks. Called the ‘Doha developmentagenda’, this round will include bothfurther trade liberalisation and areview of trade rules.

It is underpinned by the commitmentof WTO members to help developingcountries benefit fully from futureWTO decisions. The negotiations willlast three years — until January 2005.

The EU believes that the new WTOround, which it helped to launch, isthe best way to ensure that tradeexpansion strikes a balance betweeneconomic growth, environmental pro-tection and the promotion of socialequity — in other words, sustainabledevelopment.

The EU finds the new round timelybecause:

• globalisation is accelerating. Itspositive effects need to be har-nessed in the interests of bothdeveloping and industrialisedcountries. This should be done byboosting opportunities for tradewhile creating a regulatory frame-work that offers predictability, sta-bility and transparency;

• people are becoming increasinglyaware of global issues such as theenvironment, investment, compe-tition, consumer protection, andpublic health and safety. Theworld trade community needs totake all of these public concernsinto account.


The Doha development agenda:a new era for world trade

Many people take part in the global

economy via tourism.How can it help

improve living conditions around

the world?

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Priorities for the future

The new agenda sets WTO memberson the path towards the following.

Further opening up their markets forgoods and services: This is the tradi-tional task of the WTO. Members needto do more to open their markets onthe basis of predictable and non-dis-criminatory rules. Trade should be lib-eralised as comprehensively as possi-ble, so that countries can negotiateconcessions in one sector againstgains in another.

Helping developing countries getbetter access to the markets ofadvanced countries: As developedcountries open up their markets, busi-nesses and citizens in those countrieswill have better access to importedproducts. This should happen at apace that allows developing countriesto adjust successfully to increasedcompetitive pressures.

Focusing on development: This wasa crucial aspect of the position whichthe EU took in Doha, and the outcomeof the conference reflects it faithfully.The EU is committed to helping devel-oping countries integrate into theworld trading system and reap thebenefits of liberalisation. WTO mem-bers must not only give developingcountries better market access and asay in the rule-making, but must alsoprovide them with the skills and toolsto become effective players in theworld trade arena.

Trade-related assistance

The EU is a clear proponent of trade-related technical assistance (TRTA). From 1996 to 2000, it devotedmore than 700 million euro to TRTA, and is providing an additional 300 million euro for ongoing bilat-eral or regional TRTA initiatives.

Examples of trade-related technical assistance for African, Caribbean and Pacific (ACP) countries include:

• a major 42 million euro programme to improve the health conditions of ACP fishery exports;

• a 29 million euro pesticide initiative programme for horticultural products;

• support for the installation and maintenance of an ACP office in Geneva.

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The EU is committed to providingtrade-related technical assistance andcapacity-building for developing coun-tries. It will make a special effort tohelp developing countries define anddefend their interests in the new nego-tiations. It will also provide assistancefor the medium- to long-term effortsneeded to implement the results andtake advantage of the trading oppor-tunities which will flow from it.

The EU particularly welcomed a sep-arate declaration in Doha on accessto essential medicines at affordableprices. This confirms that the WTOagreements (here the Trade-RelatedAspects of Intellectual PropertyRights Agreement) can be inter-preted in a way that allows membersto take action to protect publichealth if need be.

Updating the world trade rule book:A fair and transparent rules-based sys-tem to govern world trade is just asimportant for developing countries asit is for industrialised ones. But asglobalisation advances, the WTO willinevitably have to update its rules. TheEU pressed successfully for the newround to include issues such as invest-ment, competition, government pro-curement and measures to simplifytrade procedures (known as ‘tradefacilitation’). The EU also supportsplans to improve WTO rules on anti-subsidy measures and anti-dumpingprocedures, so as to reduce the scopefor abusing the system.

Protecting the environment withinsustainable development: Ministers atDoha agreed with the EU that tradeand environmental issues can andshould be dealt with in a multilateralcontext. In an increasingly interdepen-dent world, challenges such as climatechange, the protection of the ozonelayer and the disposal of toxic wastecannot be solved by one country or evenby a group of countries acting alone.

The EU has long argued that multilat-eral environmental agreements haveto mesh smoothly with agreements inthe international trading system, sothey become mutually supportive.

Promoting trade and social develop-ment: There will be more cooperationbetween the WTO and the Interna-tional Labour Organisation (ILO) so asto ensure progress on the socialaspects of globalisation, includinglabour standards.

The EU will encourage the world com-munity to pursue this issue via theILO, and it will work to make sure thatthe WTO contributes constructively tothis process.


Trade rules also concern culture and intellectual property rights.

The EU wants to protect cultural

diversity.

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The EU already includes social andenvironmental incentives in its traderelations with developing countries(the generalised system of prefer-ences). It grants extra tariff reductionsto countries that implement ILO con-ventions.

Taking on board issues of gen-eral public concern

The EU has been keen to promote adebate within the WTO on issues ofgeneral public concern. Among these,consumer protection, and in particu-lar food safety, is a top EU priority.

Quality and safety standards must bemaintained at a high level. The WTOrules already allow countries to taketrade measures to protect the healthand well-being of their citizens, pro-vided the measures taken are scien-tifically justified. When scientific proofis not available, countries may takeaction provisionally on the basis of theprecautionary principle, pending theavailability of scientific evidence thatis being sought.

Training in the sustainable management of tropical forests is one example of an EU-funded activity that tries to make trade and the environment go hand in hand.

Dialogue with civil society

Demonstrations against globalisation have focused public attention as never before on the way trade pol-icy is made. Concerned that globalisation was pushing trade policy in directions hostile to the interests ofmany, representatives of civil society around the world sought to make their views known.

The European Commission started its dialogue with civil society in 1998, recognising that trade policymust reflect the competing interests and values of the broadest cross-section of society and that their viewsneed to be heard before difficult trade-offs are made. Since then, the Commission has held regular meet-ings with representatives of trade unions, academic institutions, employers’ organisations (including smallbusinesses) and non-governmental organisations (Internet: trade-info.cec.eu.int/civil_soc).

22

Further market access negotiations onservices are expected to bring con-siderable market opportunities forbusiness as well as benefits to con-sumers worldwide. In this respect, theEU does not seek general deregula-tion or privatisation of markets in sec-tors where principles of public interestare at stake, such as healthcare andeducation, or where the public author-ities have a historic involvement, likeenergy or postal services.

The EU is also committed to main-taining its right to cultural diversityin negotiations. Audiovisual servicesare essential purveyors of culture andare therefore unlike other commercialservices. Trade negotiations cannot beallowed to create standardised cul-tural products; rather, they shouldhelp them to be traded in a way thatrespects their diversity.

Overall, the Doha developmentagenda takes the World Trade Organ-isation into a new era. Not only will itcontinue improving conditions forworldwide trade and investment, butit will now be able to play a muchfuller role in promoting economicgrowth, job creation and the fightagainst poverty.

Better world governance and the pro-motion of sustainable developmentare the ambitious backdrop to theagenda. The EU will actively pursue itswork on this agenda by tabling pro-posals on all aspects of the negotia-tions and acting as a broker amongdifferent players, particularly betweendeveloped and developing countries.It will maintain close contacts with awide range of ministers and seek toreshape trade policy so that it servesthe interests of the majority of WTOmembers, namely the developingcountries.


Further reading

☛ More details about all the issues in this booklet can be found on the following European Commission trade policy web site:europa.eu.int/comm/trade

For information on other aspects of the European Union’s relations with the rest of the world:europa.eu.int/comm/world

European Commission


Europe on the move series

Luxembourg: Office for Official Publications of the European Communities

2003 — 22 pp. — 16.2 x 22.9 cm

ISBN 92-894-4714-1

Globalisation means that the flows of goods, services, capital, technologies andpeople are spreading worldwide, as countries everywhere open up to wider con-tact with each other. Globalisation can create more wealth for everybody, butit can also be disruptive and needs to be harnessed by international rules. Whenbusiness goes global, the rules for fair play must also be set globally.

The European Union (EU) represents all its Member States on questions of tradepolicy and within the World Trade Organisation. This booklet describes how theEU works for transparent and fair trade rules worldwide, and tries to mitigatethe negative sides of globalisation by making sure that the developing coun-tries benefit from free trade. The European Union involves citizens in trade pol-icy and includes environmental and social rules in trade agreements.

There are European Commission and Parliament representations and offices in all the countries of the European Union. The European Commission also has delegations in other parts of the world.

Other information on the European Union

Information in all the official languages of the European Union is available on the Internet. You can access it through the Europa server: europa.eu.int

All over Europe there are hundreds of local EU information centres. You can find the address of the centre nearest you at this web-site: europa.eu.int/comm/relays/index_en.htm

EUROPE DIRECT is a service which answers your questions about the European Union. You can contact this service by freephone: 00 800 6 7 8 9 10 11 (or by payphone from outside the EU: +32-2 299 96 96), or by electronic mail via europa.eu.int/europedirect

You can also obtain information and booklets in English about the European Union from:

EUROPEAN COMMISSIONREPRESENTATIONSRepresentation in Ireland18 Dawson Street, Dublin 2Tel. (353-1) 634 11 11Fax (353-1) 634 11 12Internet: www.euireland.ieE-mail: [email protected]

Representation in the United KingdomJean Monnet House8 Storey’s Gate, London SW1P 3ATTel. (44-20) 79 73 19 92Fax (44-20) 79 73 19 00/10Internet: www.cec.org.uk

Representation in Wales2 Caspian Point, Caspian WayCardiff CF10 4QQTel. (44-29) 20 89 50 20Fax (44-29) 20 89 50 35Internet: www.cec.org.uk

Representation in Scotland9 Alva Street, Edinburgh EH2 4PHTel. (44-131) 225 20 58Fax (44-131) 226 41 05Internet: www.cec.org.uk

Representation in Northern IrelandWindsor House9/15 Bedford Street, Belfast BT2 7EGTel. (44-28) 90 24 07 08Fax (44-28) 90 24 82 41Internet: www.cec.org.uk

Information services in the United States2300 M Street, NW — 3rd FloorWashington DC 20037Tel. (202) 862 95 00Fax (202) 429 17 66Internet: www.eurunion.org

305 East 47th Street3 Dag Hammarskjöld PlazaNew York, NY 10017Tel. (212) 371 38 04Fax (212) 688 10 13

EUROPEAN PARLIAMENTOFFICESOffice in IrelandEuropean Union House43 Molesworth Street, Dublin 2Tel. (353-1) 605 79 00Fax (353-1) 605 79 99Internet: www.europarl.eu.intE-mail: [email protected]

United Kingdom Office2 Queen Anne’s Gate, London SW1H 9AATel. (44-20) 72 27 43 00Fax (44-20) 72 27 43 02Internet: www.europarl.eu.int/ukE-mail: [email protected]

Office in ScotlandThe Tun, 4 Jackson’s EntryHolyrood Road, Edinburgh EH8 8PJTel. (44-131) 557 78 66Fax (44-131) 557 49 77Internet: www.europarl.eu.int/ukE-mail: [email protected]

The European Union

Member States of the European Union

New Member States due to join in 2004

Candidate countries Situation: spring 2003

Globalisation means that the flowsof goods, services, capital, technolo-gies and people are spreading world-wide, as countries everywhere openup to wider contact with each other.Globalisation can create more wealthfor everybody, but it can also be dis-ruptive and needs to be harnessed by

international rules. When business goes global, the rulesfor fair play must also be set globally.

The European Union (EU) represents all its MemberStates on questions of trade policy and within the WorldTrade Organisation. This booklet describes how the EUworks for transparent and fair trade rules worldwide, andtries to mitigate the negative sides of globalisation bymaking sure that the developing countries benefit fromfree trade. The European Union involves citizens in tradepolicy and includes environmental and social rules intrade agreements.

2 11N

A-40-01-375-EN

-C ISSN

1022-8233

EN

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