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European Union: Foreign trade policy

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These slides where created as part of the European Union Course taught by Franziska Lindhout at Indian Institute of Technology Madras.

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European Union: Foreign trade policy

  1. 1. FOREIGN AND FOREIGN TRADE A C Ramana Reddy M Siddhardha
  2. 2. FOREIGN POLICY-CFSP • Organised and agreed foreign policy of EU • EU’s defence agreed as responsibility of NATO according to CFSP • CFSP deals with international issues of political or diplomatic nature, including issues with a security or military orientation
  3. 3. CFSP-GENERAL STRUCTURE Common Foreign And Security Policy • Institutions involved and acting bodies • Common Security and Defence Policy(CSDP) • Common Commercial Policy • Humanitarian aid and Development assistance • Neighbourhood policy • Relations with US, NATO etc.
  4. 4. DEVELOPMENT THROUGH TREATIES • 1970 European Political Cooperation • 1992 Maastricht Treaty • Common Foreign and Security Policy • 1997 Amsterdam Treaty • High Representative for CFSP • 2000 Nice Treaty • 2009 Lisbon Treaty
  5. 5. EUROPEAN POLITICAL CO-OPERATION(EPC) • Established in 1970 through Luxembourg Report • Intergovernmental forum, outside European community • Copenhagen Summit in 1973, London report in 1981 strengthened the EPC • The Single European Act (SEA) of February 1986 institutionalised the EPC and established a small permanent secretariat in Brussels to assist the Presidency
  6. 6. MAASTRICHT TREATY • Maastricht Treaty replaced EPC with the Common Foreign and Security Policy. • The Treaty introduced the ‘three-pillar system’, with the CFSP as the second pillar which involves an intergovernmental decision-making process which largely relies on unanimity. • The Council of foreign ministers will decide Common Positions and Joint Actions, and QMV can be used to implement the latter. • The Commission can initiate proposals and the Court of Justice has no say in this area.
  7. 7. AMSTERDAM TREATY • A security and defence policy dimension was added to the “second pillar”. • A new foreign policy instrument namely common strategies was added to the existing ones. • “Petersburg tasks” of the WEU were integrated into the Treaty on European Union . • The position of a High Representative for CFSP and Secretary General of the Council was established; to contribute to the formulation, preparation, and implementation of foreign policy decisions as well as to act on behalf of the Council in the international affairs. • The High Representative also heads a new Policy Planning and Early Warning Unit.
  8. 8. TREATY OF NICE • security and defence policy provisions were transformed into an independent policy, the so- called “European Security and Defence Policy” (ESDP). • The EU thus fulfilled the institutional prerequisites to execute the “Petersburg tasks” on its own and conduct both civil and military crisis management. • Political and Security Committee (PSC), the Military Committee (EUMC) and the Military Staff (EUMS), and the Politico-Military Group (PMG), the Committee for Civilian Aspects of Crisis Management (CIVCOM). • introduced the possibility of establishing enhanced cooperation
  9. 9. LISBON TREATY • Two major innovations: • the creation of the High Representative of the Union for Foreign Affairs and Security Policy and the European External Action Service; • the development of the Common Security and Defence Policy. • Abolition of the 2nd pillar of the old EU Structure • Instruments of the CFSP replaced • Role of the court of justice • Financing the CFSP
  11. 11. CFSP CURRENT OBJECTIVES • Safeguard the common values, fundamental interests, independence and integrity of the EU in conformity with the principles of the Charter of UN • Strengthen the security of the Union in all ways • Preserve peace and strengthen international security, in accordance with the principles of the Charter of UN, as well as the principles of the Helsinki Final Act and the objectives of the Paris Charter including those on external borders • Promote international co-operation • Develop and consolidate Democracy and Nomocracy and respect for human rights and fundamental freedoms
  12. 12. CFSP-MAIN ELEMENTS • High Representative • European External Affairs Service(EEAS) • Common Security and Defence policy(CSDP) • Policies like ENP, EuropeAid etc. • Other entities like FAC,PSC,EUMC etc.
  13. 13. CFSP-POLICY TYPES • Principles, general guidelines and common strategies of CFSP defined by the European Council • Joint actions and Common positions taken by Council of Ministers • Joint actions are situation specific and address circumstances where EU actions are obligatory • Common positions define the approach of EU in matters of thematic nature and define general guidelines to which national policies ought to comply with in the abstract of CFSP
  14. 14. HIGH REPRESENTATIVE • Authority additional to the President of European Council • Made distinct from the Secretary General of COM from Lisbon Treaty • Addresses on behalf of EU in agreed foreign policy matters of EU with other countries
  15. 15. HIGH REPRESENTATIVE • Holds various responsibilities within EU - Head of EEAS and delegations - President of FAC and EDA - Responsible for European Union Special Representatives - Chairperson of board of EUISS • Reporting authority of bodies related to CFSP and also articulates ambiguous policy positions created by disagreements among member states
  16. 16. EUROPEAN EXTERNAL ACTION SERVICE(EEAS) • Also established following the Lisbon Treaty and formally launched after one year(2010) • Serves as foreign ministry and ‘corps diplomatique’ for EU aiding to implement CFSP and EU’s external representation • Under the authority of HR for assistance
  17. 17. EEAS-STRUCTURE • Functionally autonomous from other EU bodies but is responsible for consistency of its policies with those of other EU bodies in merging areas • Staff include members from Council and Commission and diplomatic services of member states taken directly by the HR
  19. 19. COMMON SECURITY AND DEFENCE POLICY(CSDP) • Major element of CFSP • Domain of EU’s policies covering defence and military aspects and civilian crisis management • Formed and developed by the European Council formally • Currently handled by the High Representative and EEAS with inputs from others
  20. 20. CSDP-ACTIONS • Operations carried out by organisations such as EDA, PSC,EUMS and CMPD etc. • Several ongoing civilian missions and military operations in various parts of world curbing threat to EU and its interests.
  22. 22. EUROPEAN SECURITY STRATERGY • Provides conceptual framework for enaction of CSDP • Titled ‘A secure Europe in a better world’, ESS was adopted to enunciate five key challenges faced by EU viz. Terrorism, Proliferation of Weapons of Mass Destruction, Regional conflicts, State failure and organised crime • Several strategies formed and adopted for taking measures against the challenges
  23. 23. OTHER BODIES INVOLVED • The Foreign Affairs Council(FAC) Advisive body for policy proposal for enaction by the HR and EEAS • The Political and Security Committee(PSC) Monitory of international situation in the areas covered by the CFSP and implementation of agreed policies Also contributes in delivering opinions to the COM, either at its request or its own initiative • European Defence Agency(EDA) Takes care of military research, international market for military and weapons technology and encourages the defence capabilities
  24. 24. OTHER BODIES INVOLVED • European Union Military Service(EUMC) Highest military body within the council comprising of Chiefs of Defence of each member state acting as advisory on all military matters within the EU • Crisis Management & Planning Directorate(CMPD) Political-strategic planner of CSDP civilian missions and military operations
  25. 25. OTHER BODIES INVOLVED • European Union Institute of Security Studies(EUISS) and European Union Satellite Centre(EUSC) are institutions of research and development with a mission to find common security culture of EU • The former researches security issues of relevance to EU and provides a form of debate and the latter provides input in the form of satellite imagery and collateral data
  26. 26. ADDITIONAL POLICIES AND INTERNATIONAL ACTIONS • European Neighbourhood Policy(ENP) • Development and Co-operation-EuropeAid • Human Rights and Humanitarian Aid • Conflict Prevention, Peace building and Mediation • Non-proliferation, disarmament and export control • Global Challenges
  27. 27. EuropeAid • Directorate-General in the Commission, unified in 2011, aimed for extending development and co- operation to countries in need • Thematic classification of areas to offer support using several financial and assistive instruments
  28. 28. INTERNATIONAL ACTIONS • Human rights are treated universal and indivisible. Efforts are made to promote and defend them both internally as well as while engaging in treaties • Conflict prevention and mediation by the efforts of EEAS and following the ideology of promoting peace
  29. 29. INVOLVEMENT IN GLOBAL CHALLENGES • Increasing efforts are made in tackling the global challenges such as Sustainable energy, Global warming, Environment conservation etc.
  32. 32. EU in World Trade • EU constitutes the largest trading bloc in the world accounting for more than a fifth of global imports and exports. • World largest exporter and the second largest importer of goods. • The EU is the largest economy in the world with a GDP per head of €25 000 for its 500 million consumers. • The EU ranks first in both inbound and outbound international investments. • The EU is the top trading partner for 80 countries.
  33. 33. 10 major EU export partners (2012)
  34. 34. 10 major EU import partners (2012)
  35. 35. EU's investments in the world Sources: Eurostat, converted from US$ / 2011
  36. 36. EU Trade Policy • The EU manages trade and investment relations with non-EU countries through the EU's trade and investment policy. • Trade policy is an exclusive power of the EU • Trade policy is set down in Article 207 of the Treaty on the Functioning of the European Union
  37. 37. The Common commercial policy Part V (Title II) TFEU • Art.206 TFEU: • ”By establishing a customs union in accordance with Articles 28 to 32, the Union shall contribute, in the common interest, to the harmonious development of world trade, the progressive abolition of restrictions on international trade and on foreign direct investment, and the lowering of customs and other barriers.” • Art.207 TFEU: • “The common commercial policy shall be based on uniform principles, particularly with regard to changes in tariff rates, the conclusion of tariff and trade agreements relating to trade in goods and services, and the commercial aspects of intellectual property, foreign direct investment, the achievement of uniformity in measures of liberalisation, export policy and measures to protect trade such as those to be taken in the event of dumping or subsidies. The common commercial policy shall be conducted in the context of the principles and objectives of the Union's external action.
  38. 38. EU Trade Policy - Objectives • Create a global system for fair and open trade • Open up markets with key partner countries • Make sure others play by the rules • Ensure trade is a force for sustainable development
  39. 39. Instruments • Autonomous EU measures: e.g. Regulation 2603/69/EEC laying down common rules for exports (import quotas), anti-dumping duties and other protective measures… • International agreements: art. 207(3) TFEU attributes to the EU the competence to conclude treaties in CCP field with third counties and IOs (art. 218).
  40. 40. EU Trade Policy Dimensions • The multilateral dimension of EU trade policy centres on the WTO and takes the form of multilateral rounds of negotiation such as the Doha Development Agenda. • Bilateral dimension • Globally more than 200 FTAs • Unilateral dimension • GSP, GSP + and Everything But Arms • Trade Defense instruments
  41. 41. How EU trade policy is made • The European Parliament decides jointly with the Council on the framework of EU trade policy – through the ordinary legislative procedure. • While the Commission maintains the right of initiative, for its proposals to be formally adopted, agreement has to be reached between the co- legislators. • International agreements are adopted by the Council, after the Parliament has given its consent.
  42. 42. How trade agreements are negotiated • The Commission negotiates with the trading partner on behalf of the EU, working closely with the Member States in the Council and keeping the European Parliament fully informed.
  43. 43. Trade defence • A way of protecting European production against international trade distortions (Unfair trade practices) • Anti-dumping Policy • A company is dumping if it is exporting a product to the EU at prices lower than the normal value of the product (the domestic prices of the product or the cost of production) on its own domestic market. • The European Commission is responsible for investigating allegations of dumping by exporting producers in non-EU countries. • It usually opens an investigation after receiving a complaint from the Community producers of the product concerned, but it can also do so on its own initiative. • If the investigation finds that the conditions have been met, then anti dumping measures are imposed on imports of the product concerned • The anti dumping duties are paid by the importer in the EU and collected by the national customs authorities of the EU countries concerned.
  44. 44. Anti-subsidy Policy • A subsidy is a financial contribution from a government or public body which, in the case of trade, affects the pricing of goods imported into the EU. • The EU may impose duties to neutralise the benefit of such a subsidy on imported goods when the subsidy is limited to a specific industry or group of industries.
  45. 45. Safeguard measures • Safeguards are intended for situations in which an EU industry is affected by an unforeseen, sharp and sudden increase of imports. • Unlike anti dumping and anti subsidy measures, safeguards do not focus on whether trade is fair or not, so the conditions for imposing them are more stringent.
  46. 46. European Neighbourhood Policy • In 2004, the EU launched the European Neighbourhood Policy (ENP) to develop deeper political and economic ties with neighbouring countries. • This ENP framework is proposed to the 16 of EU's closest neighbours – Algeria, Armenia, Azerbaijan, Belarus, Egypt, Georgia, Israel, Jordan, Lebanon, Libya, Moldova, Morocco, Palestine, Syria, Tunisia and Ukraine. The ENP is not yet ‘activated’ for Algeria, Belarus, Libya and Syria. An Action Plan with Algeria is currently under negotiation. Remaining 12 are currently are already fully participating as partners in the ENP.
  47. 47. How ENP works ? • The program allows the EU to advocate for the adoption of common political and economic values. • In return, ENP participants may receive enhanced trade and economic ties with the EU, as well as aid and technical assistance. • ENP also encompasses three regional initiatives—the Eastern Partnership, the Union for the Mediterranean, and the Black Sea Synergy— designed to complement the bilateral action plans.
  48. 48. • Central to the ENP are the bilateral Action Plans or Association Agendas between the EU and each ENP partner. • The ENP action plans (or Association Agendas for Eastern partner countries) • set out the partner country's agenda for political and economic reforms, with short and medium-term priorities of 3 to 5 years • reflect the country's needs and capacities, as well as its and the EU’s interests.
  49. 49. Implementation & monitoring • The ENP builds upon the legal agreements in place between the EU and the partner in question: Partnership and Cooperation Agreements (PCA) or Association Agreements (AA). • Implementation of the ENP is jointly promoted and monitored through the Committees and sub-Committees established in the frame of these agreements. • The European External Action Service and the European Commission publish each year the ENP Progress Reports. The assessments and recommendations contained in the Progress Reports form the basis for EU policy towards each ENP partner under the "more for more" principle.
  50. 50. The Benefits of ENP • Under the ENP, the EU works together with its partners to develop democratic, socially equitable and inclusive societies, and offers its neighbours economic integration, improved circulation of people across borders, financial assistance and technical cooperation toward approximation with EU standards. • The EU supports the achievement of these objectives. • financial support – grants worth €12 bn were given to ENP- related projects from 2007 to 2013 • economic integration and access to EU markets – in 2011 trade between the EU and its ENP partners totalled €230bn • easier travel to the EU – 3.2 m Schengen visas were issued to citizens, and in particular to students from ENP countries in 2012 • technical and policy support