There has been a huge surge in the amount of regional trading blocks found all over the world, they take many forms, the most well known is the EU, which is now very much known as a customs union. For the purposes of this essay the EU will be looked at as a ‘Regional Trading Block’. The World Trade Organisation has deemed these trading blocks as acceptable. The EU is a member of the WTO, but to what extent does the EU threaten the main aim of the WTO, which is to create a multilateral trading system. The aim of this essay is to compare and contrast the aims of these two international organizations, in order to see if these organisations are a hindrance or a help to each other. Each organisation will be discussed in turn looking at their aims and the extent to which they have achieved their aims, both organisations will then be compared and specific arguments will be highlighted in order to draw a conclusion. These particular organisations have been chosen due to there similar yet conflicting aims which I hope to explore.
There are many different types of trading blocks; preferential trading areas where there are lower trade barriers for countries within that trading block, free trade areas where there are no barriers, and customs unions where there are no trade barriers and they have a common external barrier. The EU is a free trade area and a customs union, however it is unique from all other regional trading blocks, as it goes much further than focusing solely on trade; it requires far more commitment. The member states of the EU are required to give up some of their powers voluntary, this is a very rare thing to see within the world today. It is so unique that there has been a lot of debate over what it should be called, it has been advised that the best course is to “leave it to future historians to find an appropriate label.” In order to understand how the EU developed in this way it is important to examine the history and external factors that influenced its growth.
“The history of the European Union presents a fascinating puzzle: why did European states traditionally jealous of their independence, pool sovereignty in an international organisation that increasingly acquired federal attributes?”
The E.U. was set up at the end of the Second World War with the aim of ending frequent and bloody wars between neighbours. In 1951, the European Colon Steel Community was formed it began to unite European countries economically and politically in order to secure peace. In 1957, the Treaty of Rome was passed; this provided the EU with more structure resulting in the European Energy Community and the European Economic Community or ‘Common Market’. Moving forward to the ‘swinging sixties’ there was a significant increase in economic growth, this was aided by the fact EU countries had stopped charging customs duties when they traded with each other. By the mid 80’s the European Community had grown to twelve members. However, it was proving difficult to move forward with a single market, as there was a problem implementing Regulations and Directive due to lack of consensus. Arthur Cockfield addressed this by producing a report; the result was the Single European Act 1987. This was the first major attempt to amend the treaty of Rome (1957). The report identified three types of barriers that need to be addressed in order to create a common market; physical (borer controls), technical (rules and regulations) and fiscal (different tax rates). The result was an improvement in EC decision-making processes by introducing majority voting on most economic matters rather than unanimity, it also removed regulatory barriers on the ‘four freedoms’ of: movement of goods, services, people and money. The EC laid down the basis for the completion of single European market by the end of 1992. The Conservative Government worked very hard to achieve this and it has undoubtedly given the EU the shape it has today. The EU was strengthened by...
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