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EU AND THE WORLD TRADING SYSTEM

EU AND THE WORLD TRADING SYSTEM. Razeen Sally European Centre for International Political Economy/ London School of Economics www.ecipe.org. EU AND THE WORLD TRADING SYSTEM. How EU trade policy works -- Highly centralised: at heart of EU economic and foreign policy

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EU AND THE WORLD TRADING SYSTEM

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  1. EU AND THE WORLD TRADING SYSTEM Razeen Sally European Centre for International Political Economy/ London School of Economics www.ecipe.org

  2. EU AND THE WORLD TRADING SYSTEM • How EU trade policy works -- Highly centralised: at heart of EU economic and foreign policy -- Customs union; old issues; new issues -- Commission; Council of Ministers; member-states; Article 133 Committee

  3. EU AND THE WORLD TRADING SYSTEM • EU in global trade and investment • EU and WTO • EU and FTAs • EU internal market and external trade • The new members in EU trade policy

  4. EU AND THE WORLD TRADING SYSTEM • EU in global trade and investment -- Market size; shares of trade and FDI -- EU trade and FDI relations with key partners -- Comparative trade barriers -- Pockets of EU protection: agriculture; industrial goods; services; trade remedies; standards

  5. Figure 9: Share of Exports of World Trade in Goods & Services (excl. Intra-EU(25) trade, 2005

  6. Figure 10: Share of Imports of World Trade in Goods & Services (excl. Intra-EU(25) trade, 2005

  7. Figure 5: Share of Exports of World Merchandise Trade (excl. Intra-EU(25) trade, 2005

  8. Figure 6: Share of Imports of World Merchandise Trade (excl. Intra-EU(25) trade, 2005

  9. Figure 7: Share of Exports of World Services Trade (excl. Intra-EU(25) trade, 2005

  10. Figure 8: Share of Imports of World Services Trade (excl. Intra-EU(25) trade, 2005

  11. Figure 1: OFDI Stock Accumulated 1980-2005 (percentage of Global OFDI Stock)

  12. Figure 2: IFDI Stock Accumulated 1980-2005 (percentage of Global IFDI Stock)

  13. Figure 3: OFDI Flows Accumulated 2003-2005 (percentage of Global OFDI Flows)

  14. Figure 4: IFDI Flows Accumulated 2003-2005 (percentage of Global IFDI Flows)

  15. Figure 16: EU 25 OFDI and IFDI Stocks with Partners (2005)

  16. Figure 13: EU 25 OFDI and IFDI Flows with Partners (2005)

  17. EU AND THE WORLD TRADING SYSTEM • The WTO -- Structural shifts from GATT to WTO -- Doha round: evolution; state of play; prospects -- What future for the WTO?

  18. EU AND THE WORLD TRADING SYSTEM • EU and the WTO -- Challenges of co-leadership in a multipolar system -- EU negotiating positions: too defensive on agriculture; too offensive on other issues -- EU needs to have more pragmatic positions; be more effective in coalition building -- But constraints of internal EU politics

  19. EU AND THE WORLD TRADING SYSTEM • FTAs -- Huge proliferation of FTAs -- Building blocs or stumbling blocs? -- Strong FTAs the exception; most are “trade light” -- Consequences: rampant discrimination; the spaghetti bowl

  20. EU AND THE WORLD TRADING SYSTEM • The new EU FTA policy -- Global Europe: economic/commercial rationale; WTO plus; but also non-trade motives; differences with EPAs/MENA -- Benchmarks for (relatively) strong, clean FTAs -- How serious is the economic/commercial logic? -- Exporting EU regulation and non-trade motives: labour/environmental standards; “sustainable development”; climate change etc. -- Comparisons with US FTAs on WTO plus issues -- Arguments from the sceptics: Why no FTAs with Japan and China? Narrow mercantilism; trade diversion; spaghetti/noodle bowls -- Very difficult to do serious FTAs with Asian and other partners

  21. The map shows FTAs signed or under negotiation in January 2006. East Asia is defined here as the 10 ASEANs, China, Japan and Korea. Source Richard Baldwin 2006

  22. Noodle bowl syndrome in Africa Source: World Bank

  23. Noodle bowl syndrome in America Source: Inter-American Development Bank.

  24. EU AND THE WORLD TRADING SYSTEM • Unilateral liberalisation -- Diminishing returns to trade negotiations; importance of unilateral measures; Asia and China -- EU trade policy as foreign policy and internal-market policy; link between internal and external liberalisation -- Internal-market reforms key; trade-policy reinforcement

  25. EU AND THE WORLD TRADING SYSTEM • New members: trade-policy reforms pre-accession -- Post-socialist transition: radical reformers (new EU members); gradual reformers (China/Vietnam); erratic reformers (CIS) -- New EU members: general liberalising trend in ’90s, but variation among them -- Convergence of EU-10/12 with EU-15 trade policy, esp. from late 1990s -- Net liberalisation in trade in industrial goods and services, but not agriculture; the Estonian exception -- Major reorientation of trade; FDI effects; trade creation/diversion

  26. EU AND THE WORLD TRADING SYSTEM • New members in EU trade policy: state of play and prospects -- Expectations: somewhere between more liberal orientation and no change -- Reality: virtually no change so far; EU 10/12 passive, reactive; mixed positions; danger of “Our Market is Big Enough”, “restaurant bill” syndromes -- EU-Russia; Russian accession to WTO -- Variable internal implementation of common commercial policy

  27. EU AND THE WORLD TRADING SYSTEM • Conclusion -- EU: challenge of constructive engagement while containing domestic protectionism -- Multi-track trade policy and internal-market reforms -- What role for the new members?

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