Eu: Trade and Aid

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Trade and aid policies of the EU

CONTENT
1TRADE AND AID POLICIES WITH THIRD PARTIES1
1.1THE WTO1
1.1.1FREE TRADE AGREEMENTS2
2MAIN TRADING PARTNERS OF THE EU3
2.1USA3
2.1.1DEVELOPMENT OF TRANSATLANTIC CO-OPERATION3
2.1.2DISPUTES BETWEEN THE EU AND THE USA4
2.2CHINA AND ASIA4
2.3RUSSIA5
3TRADE POLICIES WITH CERTAIN GROUPS7
3.1WIDER EUROPE: THE EUROPEAN NEIGHBOURHOOD POLICY7
3.2THE MEDITERRANEAN REGION8
3.3EU-LATIN AMERICAN RELATIONS9
4AID FOR TRADE – EU AND THE DEVELOPING COUNTRIES11
4.1THE GENERALISED SYSTEM OF PREFERENCES11
4.2EU AND THE ACP COUNTRIES12
4.2.1ECONOMIC PARTNERSHIP AGREEMENTS13

1TRADE AND AID POLICIES WITH THIRD PARTIES

The EU has created a trade area of its own, but it has also been forced to develop a trade policy towards the rest of the world. Usually this entails agreement s with countries or groups of countries, and there are a lot of exceptions in these agreements. They don’t concentrate traditionally just on trade, and this has made critics question EUs responsibil-ity on other issues. Other issues might deal with for instance security.

Trade policies are linked to other areas such as Common Agricultural Policy and the Single Market. The EU can legislate on trade matters and conclude international trade agreements, not the member states. This is based on the Common Commercial Policy.

1.1The WTO

As the largest trade partner in the world, the role of the EU in the World Trade Organiza-tion is a subject of interest. WTO and its predecessor GATT were major factors to the start of the integration process of Europe and also in shaping the trade policies of the EU. EU is a main actor in trade negotiations and trade disputes in WTO because of mere size of the organization. The union negotiates on behalf of all of its member countries.

WTO is mainly focused on negotiations, resolving differences, setting legal basis for trade and monitoring trade policies in member countries. The EU in involved in the WTO for three reasons: 1.Ensuring new markets for European companies

2.Observing the rules and making sure others also play by them 3.Promoting sustainable development
The last one is brought to practice with for example the Everything but Arms initiative, which allows all imports from the poorest countries to the EU quota- and dutyfree, ex-cluding armaments.

1.1.1Free Trade Agreements

Free Trade Agreements are the most common trade agreement that the EU uses. Rules for these agreements are set out in the WTO. FTAs create following benefits: -Opening new markets for goods and services

-Increasing investment opportunities
-Making trade cheaper - by eliminating approximately all customs duties -Making trade faster - by easing goods' transit through customs and setting com-mon rules on technical and sanitary standards -Making the policy environment more predictable - by taking joint commitments on areas that affect trade such as competition rules and the framework for public purchasing decisions The EU has currently almost 30 FTAs in force.

2MAIN TRADING PARTNERS OF THE EU

In this chapter we discuss the main trading partners of the EU; the United States of Amer-ica, China and Russia.

2.1USA

United States of America is the biggest trade partner of the European Union. The total investment of the US in the EU is three times bigger than in all of Asia, and the number of EU’s investment to the US eight times the amount of investments to India and China to-gether. The relations between these two regions have been problematic at times and the co-operation policies are still uncompleted.

2.1.1Development of transatlantic co-operation

Historically USA has been advocating for the development of the Europe and the coalition of the region. The country was in crucial role after the Second World War by providing Marshall Aid and thus stimulating the co-operation between European...
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