FOREIGN TRADE POLICY OF THE EUROPEAN UNION

EU Agreements on free trade

Apstrakt

Basic conclusion that can be drawn based on the previous analysis of EU foreign trade agreements is that this is a constantly evolving field, dependant on many internal (internal market, EU competencies) and external factors (negotiations within WTO, geostrategic objectives of the Union, influence of the foreign trade policy of USA etc). With the creation of the Common Market (since 1992) and the trend of expanding the competency of a joint trade policy of the EU to new sectors (such as services, intellectual property etc), the Union is generally striving to provide the best possible business conditions on the foreign markets for its enterprises, using basic multilateral and bilateral mechanisms: agreements of the WTO on one hand and bilateral trade agreements, on the other. The number of these agreements is ever increasing, increasing the complexity of the EU foreign trade system, i.e. the diversity of treatment for imported products on the Union market, dependant on the country of their origin. In general, conditions of international and internal business activities should become comparable and similar through constant liberalisation of foreign trade, which is one of the objectives of eliminating various obstacles to trade, to achieve the »free trade« regime. However, this objective is not so easily achieved in practice. On the contrary, business conditions for foreign enterprises on a certain market will depend on ten or more factors, of which some are »discriminatory« in their nature, discriminating between domestic and foreign businesses71. The Union has created a complex, dense network of agreements on »free trade« with the neighbouring countries (European Economic Area, customs union agreements, Agreements on Stabilisation and Association, Euro- Mediterranean agreements). In addition, the Union gradually expands the network of »new« free trade agreements with other regions in the world. These agreements prescribe a »deeper/wider free trade«, in other words, they encompass new sectors of liberalisation (services, public procurements, investments, and capital flow). They also provide a more detailed definition of certain issues that directly affect trade (standards, sanitary regulations, competition, intellectual property and the like). With the countries in Africa, Caribbean and the Pacific, the Union has concluded new »agreements on economic partnership« that, for the first time, prescribe reciprocity (mutual abolishment of customs) between the EU and the countries of these regions. With the countries in Asia and South America, as well as with Arabian countries (countries in the Gulf), the EU strives to provide adequate access to their markets, with conditions that would not be any less favourable than the concessions granted to USA (e.g. agreement on free trade with Mexico), or which would provide the Union with a »comparative advantage« (negotiations on FTAs with countries of the ASEAN, Gulf, Mercosur, as well as with India, South Korea etc). When concluding FTAs, the Union must always evaluate positive and negative impacts of such policies, as well as the geo-economic balance in its economic relations with its biggest partners (USA, Japan). The degree of benefits that the Union may gain from the new FTAs72 will depend on the »depth and width« of the free trade achieved. Failure of global trade regulation and further liberalisation within the Doha Round will certainly additionally promote bilateralism in the foreign trade of the EU. However, a complete »failure« of the WTO multilateral system is not in the best interest of the EU and its economic partners, as it would, without a doubt, encourage a general reinforcement of protectionism, thus rendering international trade and world development more difficult.