A world player - The European Union’s external relations

The European Union is the world’s biggest trader, accounting for 20% of global imports and exports. Open trade among its members underpinned the launch of the EU nearly 50 years ago and has brought growing prosperity to all its member states. The Union therefore takes a lead in efforts to open up world trade for the benefit of rich and poor countries alike.

Increased trade is likely to boost world growth to everybody’s advantage. It brings consumers a wider range of products to choose from. Competition between imports and local products lowers prices and raises quality. The EU believes that globalisation can bring economic benefits to all, including the developing countries, provided appropriate rules are adopted at the multilateral level and efforts are made to integrate developing countries in world trade.

That is why the European Union is negotiating with its partners to open up trade in both goods and services. The EU seeks to help developing countries by giving them better access to its market in the short term, while allowing them more time to open their own markets to European products. At the same time, the EU is reforming its agricultural policy – and this too will benefit developing countries.

A team sport needs a level playing field, rules that all teams accept and a referee to ensure fair play. This is why the EU is a firm supporter of the World Trade Organisation (WTO), which lays down a set of rules to help open up global trade and ensure fair treatment for all participants. Despite a perceived need for improvement, this system offers a degree of legal certainty and transparency in the conduct of international trade. The WTO also provides a dispute settlement procedure when direct disputes arise between two or more trading partners.

The EU has become a key player in the successive rounds of multilateral negotiations aimed at opening up world trade. It attaches particular importance to the current round, known as the ‘Doha development round’, which was launched in 2001. The aim is to remove obstacles to open trade, particularly to benefit developing countries.

Trade rules are multilateral, but trade itself is bilateral – between buyers and sellers, exporters and importers. This is why the European Union has developed a network of bilateral trade agreements with individual countries and regions across the world. The enlargement of the EU from 15 to 25 members in 2004 gives it added weight as a trading partner, particularly with its neighbours in eastern Europe and the Mediterranean basin.

The EU’s trade policy is closely linked to its development policy. The two come together as the Union assumes its share of responsibility to help developing countries fight poverty and integrate into the global economy.

It has long recognised that trade can boost the economic growth and productive capacities of poor nations. As early as 1971, under its ‘generalised system of preferences’ (GSP), the EU began reducing or removing tariffs and quotas on its imports from developing countries. Furthermore, through its ‘Everything but arms’ initiative launched in 2001, the Union grants the 49 least-developed countries free access to the EU market for all their products, except weapons.

The special trade and aid relationship between the Union and its 78 partners in Africa, the Caribbean and the Pacific (the ACP group) dates from 1975 and is considered a model for how rich countries can help poorer ones.