Europe and the World

Topics

External Trade Relations Foreign Policy Preferential Relations Special Matters

External Trade Relations The concept of “civilian power” The record of external trade Focal points

Common external tariff (CET) Other measures for liberalization of

commerce Negotiations in international trade

organizations (GATT, WTO since 1995)

External Trade Relations (cont’d-1)

The special issue of agriculture Institutional aspects

External Trade – RecordEU Trade by Trading Partners

1970% Imports

1970% Exports

1994% Imports

1994% Exports

Non-EU Western Industrialized 54.6 59.3 58.1 53.3Central-Eastern Eur and former USSR

8.4 7.3 9.1 8.1Developing Countries 38.0 31.0 29.7 34.2

ACP 8.9 7.6 3.4 2.8

Mediterr

9.4 10.3 7.9 10.2

Asian nic’s

1.5 2.1 5.5 5.2

China 0.5 0.9 4.2 2.3

External Trade – Record (1)

As % of GDP, EC/EU external trade has not changed much (about 10%)

Strong regional concentration EFTA trade largest component before

accession of former EFTA members ¾ of total trade of average EU member

consists of intra-European trade

External Trade – Record (2) Trade with Developing Countries

Big decline since early 1970’s oil crisis Biggest decline for ACP countries Noteworthy increase for Asian NIC’s and

China Import penetration into EC/EU

Machinery and transport equipment Dynamic high technology sectors

(telecommunications, data processing, etc.)

External Trade – Record (3) Strong EU export presence in:

Chemicals and steel High-end textiles and clothing

Self-sufficiency in food – role of CAP Growth areas

Services Financial markets Internationalized production (intra-industry

and intra-firm trade)

External Trade – CET and Other Measures Foundation for EC/EU commercial

policy and “international actor” role The central role of the Commission

as the “one voice” in external commercial activity

Limited to trade in goods Other measures: quotas, export

policy, anti-dumping, anti-subsidies

External Trade – International Organizations and Forums (1) GATT and its “Rounds” (eg

Kennedy, Tokyo, Uruguay- 1986-94) The Commission as single voice for

EC/EU countries Items of GATT trade liberalization

% reduction in tariffs: 6% CET for manufactured goods in Tokyo Round

Elimination of quantitative restrictions (QR)

External Trade – International Organizations and Forums (2)

Growing attention to NTB’s (Tokyo, Uruguay)

The thorny problem of agriculture Left outside of original GATT

framework at USA insistence Bone of contention between USA and

EU in the 1990’s

External Trade – International Organizations and Forums (3) World Trade Organization (WTO)

Successor to GATT, founded in 1995 as a result of the Uruguay Round

Strong EU commitment to WTO agenda and methods

Strong multilateral emphasis Ongoing negotiating forum Code of conduct Strengthened dispute-settlement and surveillance

mechanisms

External Trade - Agriculture CAP as centerpiece of both internal

market integration and external trade policy

The technical components of CAP 3 core elements: levy, price, financing “Guarantee” (price support) and “Guidance”

(structural funds) Politically expedient high price (for wheat

especially) caused huge surpluses and very expensive price support

External Trade–Agriculture (2) External implications of CAP

Heavily subsidized agricultural exports from EC/EU countries

1975-1984 exports grow 256%, imports only 14%

Developing countries plus: USA, Canada, Australia, New Zealand hit hardest

Need for reform of CAP – both internal and external imperative

External Trade–Agriculture (3)

“The 1992 reform of the CAP, leading to a substantial reduction in intervention prices, opened the way for an EU-US agreement which in turn eliminated one of the main stumbling blocks of the Uruguay Round.” (Tsoukalis, p. 235)

External Trade - Institutions

DG’s

European Foreign Policy (1) Historical Precedents

The failed initiative of the European Defense Community (EDC) 1952-54

A French initiative (Pleven Plan) motivated by the issue of West German re-armament

Military integration: common army, budget, and institutions

Idealized as a rapid move towards political union (European Political Community)

Dramatic rejection by French National Assembly

European Foreign Policy (2)

West European Union (WEU) 1955 Weak (loose intergovernmental) structure Includes Britain Redundant with NATO, which overshadows it Nonetheless serves to coordinate or

synchronize European cooperation within NATO

A way for France to “stay connected” after withdrawing from NATO military command

Over time, especially in the 1990’s, emerges as a new possibility for coordinated defense

European Foreign Policy (3)

European Political Cooperation (EPC) Cooperation among Member States on

foreign policy through increasing mutual consultation and selective identification of common positions

Operates outside of EC structure Intergovernmental and voluntary A “club” of foreign policy experts in EC

governments who readily achieve a union of views and perspectives where crucial national interests do not clash

European Foreign Policy (4)

Highlights of common positions Soviet invasion of Afghanistan 1979 Polish Solidarity movement in 1981 Falklands War and Argentina 1982 South Africa in 1986 “Clout” in two major global contexts

Middle East Conference on Security and Cooperation in

Europe (CSCE) – Helsinki 1975 (includes USSR)

Assessment: not insignificant, but uneven and with limited results

European Foreign Policy (5)

The Big Innovation: Common Foreign and Security Policy (CFSP) An outgrowth of concern for “consistency”

in external policy actions of EC and EPC First steps towards institutional

congruence taken in SEA CFSP as “within the framework” - an

outgrowth of IGC on Political Union in 1990

European Foreign Policy (6) CFSP (cont’d)

CFSP as a “late addition” to Political Union (focus of latter is institutional reform, especially the role of Parliament)

CFSP as an outcome of Mitterrand-Kohl collaboration: global vision of European foreign policy, without clear details

CFSP as shaped by the Gulf War, with a priority on security and defense

European Foreign Policy (7) Maastricht creates CFSP, as CFSP

shapes the EU The “pillar idea” as a result of CFSP CFSP becomes “part of” (integral to,

within the framework of) EU CFSP structure

European Council as the key body – determines foreign and security policy and general guidelines

European Foreign Policy (8) CFSP structure (cont’d)

Council of European Union (Council of Ministers) takes necessary decisions to implement common policy and guidelines

Political Committee, Political and Security Committee, Military Committee

Secretary General of the Council = High Representative for the CFSP assists Council and acts on its behalf

European Union Military Staff (military experts) attached to High Representative

Presidency of the EU: represents EU in CFSP externally

European Foreign Policy (9)

CFSP Procedure Initiative belongs to: Presidency, Member State,

High Representative Policy instruments: common position, joint

action, decision, conclusion of international agreements, declaration

Example: joint action on Union Monitoring Mission in the Federal Republic of Yugoslavia (adopted 2000)

Decision-making Unanimity as norm, and obligatory for military or

defense matters “Constructive abstention” allowed Qualified majority voting (with a higher majority

threshold than in EC decisions) for implementation by Council of Ministers

European Foreign Policy (10) Relationship to EC (“economic” pillar of

EU) Commission participates as integral member

of CFSP bodies, but without special powers as in the EC. However, like any Member State, it can submit initiatives to CFSP

Directorate-General for External Relations of the Commission has specialized role in preparing work of the Council, in follow-up to its actions, and especially in coordinating relationship to international organizations

European Foreign Policy

CFSP