DÜNYA İLİŞKİLERİNDE AVRUPA BİRLİĞİ - Deneme Sınavı - 4

Intra-regional foreign trade between “the original six” amounted to about 25 percent of their total foreign trade turnover in the mid-1950s. The original six were West Germany, France, Italy, the Netherlands, Belgium and Luxembourg.

Foreign trade in goods and services is one of the few policy areas within the EU that is regulated by “exclusive competence” at the supranational level.

The General Agreement on Tariffs and Trade (GATT) had also created an opportunity for two or more individual countries to speed up tariff elimination by reducing tariff rates among themselves as long as third countries were not put at a disadvantage.

In advanced economies, the proportion of the economically active population involved in services is
usually around 75–80 percent.

The four EFTA members  were Norway, Switzerland, Liechtenstein and Iceland which together account for 11 percent of the EU’s external foreign trade in goods.

In February 2018, US President Donald Trump launched “a new era in American trade policy” (USTR 2018). The novel feature of this policy was the realization of substantial tariff increases. At the same time, the president launched an aggressive nationalist agenda in many other areas directed at long-term allied trade partners, including its North American Free Trade Agreement (NAFTA) neighbours and the EU, as well as China and the rest of the world.

The EU28 is the world’s largest economic-political bloc. Its total foreign trade in goods represents one-third of world trade. If we exclude intra-EU trade, the EU’s external
foreign trade still accounts for around 15 percent of world trade, which puts the EU ahead of both China and the US.

The EU’s most important relationships (in terms of value) are with “Greater China” (i.e., People’s Republic of China, Hong Kong, Taiwan and Macao) and the US, with about 19 and 17 percent, respectively, of the union’s extraregional foreign trade.

In line with the “Global Europe” strategy, negotiations were launched for an ambitious interregional agreement with ASEAN in 2007. This is Asia’s largest regional trading bloc with 10 member countries and 650 million inhabitants.

Foreign trade has undergone profound changes in content, geographical orientation and mode of operation in recent decades, including changes resulting from the emergence and proliferation of global and regional value chains. In addition, free trade agreements (FTAs) have become more ambitious and wider in scope, and now cover many new issues. At the same time, they have become more profound in terms of deeper commitments. However, the essential role of these agreements still relates to the management and regulation of economic transactions between states.

A common commercial policy towards third countries (in the form of a customs union) was included in the 1957 Treaty of Rome, which established the European Economic Community (EEC).

After Brexit, the UK’s external tariffs would be lower than the EU’s. Such a policy would be in line with the UK’s self-image of being more liberal in foreign trade issues than the rest of the EU.

Intra-regional foreign trade between “the original six” (West Germany, France, Italy, the Netherlands, Belgium and Luxembourg) amounted to about 25 per cent of their total foreign trade turnover in the mid-1950s.

One important reason why the EU’s proportion of internal trade relative to total foreign trade has stagnated and declined in recent decades is that a large part of the growth in world trade has taken place outside of Europe, which implies that there has been an incentive for the EU to look beyond the union’s borders. In particular, foreign trade with Asia in general and China in particular has expanded.

Services have traditionally been subject to multilateral regulations to a lesser extent than the manufacturing sector. This might be because the production and trade of services are, by nature, more “invisible” and “elusive”, making them more complicated to measure, describe and regulate. A significant part of service production is built into commodity production in the shape of research, product development, design, distribution and marketing.

In advanced economies, the proportion of the economically active population involved in services is usually around 75–80 per cent.

One example of success at the multilateral level was the 2015 renewal of the “Information Technology Agreement” (ITA) in which a holistic approach is taken to hardware and software in the IT area. In other words, the ITA combines trade in goods with trade in services.

Some countries are typical “home countries” for FDI (i.e. the bulk of the FDI flows have been directed outward through companies’ own internationalization processes). Other countries are typical “host countries” (i.e. a large part of the FDI flows has been directed inward owing to the launch of production by foreign companies in these markets).

The broader, more open and more “inclusive” trade agreements become, the more they seem to be criticized for opacity and for their lack of consideration of climate issues, food safety, responsible entrepreneurship and protection against foreign companies’ profit interests. Likewise, the more transparent the EU Commission has become by, for instance, publishing negotiation mandates and revealing proposals and reports from negotiation rounds, the louder the criticism has been over the lack of transparency.

The four EFTA members (Norway, Switzerland, Liechtenstein and Iceland), which together account for 11 per cent of the EU’s external foreign trade in goods, are already deeply integrated in the EU, although through different arrangements.