AMITY LAW SCHOOL KOLKATA

B.Com LL.B (Hons)

SEMESTER 3

SCANNING OF BUSINESS ENVIRONMENT FOR

LAWYERS (MGMT102)

TOPIC: CONTRIBUTION OF THE EUROPEAN

UNION IN THE WORLD TRADE: BELGIUM AND
GERMANY

SUBMITTED TO: Ms MADHUMITA DAS GUPTA

SUBMITTED BY:
AMALU IYER
SHREYASI BOSE
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CONTENT
 WHAT IS EUROPEAN UNION?
 LITRETURE REVEIW
 ORIGIN OF EUROPEAN UNION
 CONTRIBUTION OF EUROPEAN UNION
i. BELGIUM’S CONTRIBUTION
ii. GERMANY’S CONTRIBUTION
 ANALYSIS
 CONCLUSION
 REFERENCE

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 WHAT IS EUROPEAN UNION
The European Union (EU) is a political and economic union of 27 European
countries that are located primarily in Europe. It was established to promote
economic cooperation and prevent the kind of devastating conflicts that had
plagued the continent in the first half of the 20th century, particularly World War
I and World War II. The EU has its roots in earlier efforts at European integration,
such as the European Coal and Steel Community (ECSC) and the European
Economic Community (EEC), established in the 1950s (Hayes, 2022).

LITEREATURE REVIEW
The literature on the European Union's (EU) role in global trade and investment
underscores its significant impact and complex dynamics in the international
economic arena. Scholars have highlighted the EU's evolution from a regional
economic community to a global trade powerhouse. They emphasize its role as a
major driver of the liberal international trading system, promoting economic
cooperation, preventing conflicts, and fostering peace through interdependence.
The EU's economic policies, trade agreements, and regulatory framework have
been subject to extensive analysis, with particular attention to the challenges
posed by the bloc's integration process and the pursuit of common external trade
policies. Researchers also examine the EU's relationship with key trade partners,
including the United States and China, and its role in shaping international trade
norms through collaboration with the World Trade Organization (WTO).
Furthermore, the EU's role in addressing contemporary global challenges, such
as sustainability, fair trade, and digitalization, has drawn scholarly attention. The
literature reveals ongoing debates on the EU's ability to maintain its influence in

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a shifting global economic landscape, particularly in the context of changing
transatlantic relations and the emergence of new economic powers. Overall, the
literature reflects the intricate and multifaceted nature of the EU's global trade
and investment policy, underlining the need for coherent strategies, cooperation,
and adaptability to navigate the complex challenges and opportunities of the
contemporary global trade landscape.

HISTORY OF EUROPEAN UNION

The European Union (EU) has a complex and fascinating history that spans
several decades. Here is a concise overview of its historical development:

1. Post-World War II Origins: The roots of the EU can be traced back to the
aftermath of World War II when European leaders sought ways to prevent another
devastating war on the continent. The Schuman Declaration in 1950, made by
French Foreign Minister Robert Schuman, proposed the creation of a European
Coal and Steel Community (ECSC) to oversee the coal and steel industries of
several European nations. This initiative aimed to unite these key economic
sectors and make war between these countries "not only unthinkable but
materially impossible."

2. Treaty of Paris (1951): The Treaty of Paris was signed in 1951, establishing
the European Coal and Steel Community, including six founding members:
France, West Germany, Italy, Belgium, the Netherlands, and Luxembourg. The
ECSC represented the first supranational organization in Europe.

3. Treaties of Rome (1957): The Treaty of Rome was signed in 1957, creating
two new organizations: the European Economic Community (EEC) and the
European Atomic Energy Community (Euratom). The EEC aimed to create a

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common market, customs union, and policies for agriculture and transport. These
treaties laid the foundation for the EU as it is known today.

4. Single European Act (1986): The Single European Act aimed to complete the
single European market by 1992. It introduced a series of important changes to
European integration, including the implementation of qualified majority voting
in certain policy areas, which increased the decision-making capacity of the
European Community.

5. Maastricht Treaty (1992): The Maastricht Treaty, officially known as the

Treaty on European Union, was a significant milestone. It established the EU as
a legal entity separate from the European Communities (EC). It also introduced
the three pillars of the EU: the European Communities, Common Foreign and
Security Policy (CFSP), and Cooperation in Justice and Home Affairs (JHA).

6. Amsterdam Treaty (1997) and Nice Treaty (2001): These treaties focused on
institutional reforms and preparing the EU for enlargement by addressing issues
like the number of seats in the European Parliament, the size of the European
Commission, and the weighting of votes in the Council.

7. Lisbon Treaty (2007): The Treaty of Lisbon further reformed the EU's
institutions to make them more efficient and introduced new positions such as the
President of the European Council. It also expanded the use of qualified majority
voting in the Council and increased the power of the European Parliament.

8. Enlargement: The EU has undergone several waves of enlargement, with

countries from Central and Eastern Europe joining in 2004 and 2007. Further
expansions took place in subsequent years, welcoming new member states.

9. Economic and Monetary Union (EMU): The introduction of the Euro (€) as a
common currency for many EU member states in 1999 marked a significant step
towards economic integration. The euro is now used by 19 of the 27 EU member
countries.

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10. Challenges and Developments: The EU has faced various challenges,
including the global financial crisis, the refugee crisis, and the UK's decision to
leave the EU (Brexit). It has also expanded its cooperation in areas such as
security and defense.

The European Union continues to evolve, with ongoing debates about its future
direction, including further integration, enlargement, and addressing various
economic, social, and political issues. It plays a vital role in promoting peace,
stability, and economic prosperity in Europe (Hayes, 2022).

CONTRIBUTION OF EUROPEAN UNION

A global economy that is highly focused on exports is the European Union's. The
largest single market area in the world is also found there. As one of its core
tenets, free trade between its members is crucial to the EU's mission to expand
global trade.
The EU is responsible for the trade policy of the member countries and negotiates
agreements for them. Speaking as one voice, the EU carries more weight in
international trade negotiations than each individual member would. The EU
actively negotiates trade agreements with nations or regional organisations. In
order to give European exporters fair conditions and access to international
markets, the EU works to remove trade obstacles in support of and defence of EU
industry and enterprise. In addition, the EU provides useful guidance to
international businesses on how to enter the EU market.

Additionally, the EU collaborates with the World Trade Organisation (WTO) to

assist establish international trade regulations and eliminate trade barriers among
WTO members. Since World War II, the EU has been instrumental in the
development of the global commercial system. At the moment, the EU is looking
into modernising the WTO. The EU's original goal was to lower tariffs and

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encourage trade among its member states. Effective international trade founded
on the rule of law has long been actively supported by the Union, among other
organisations. A framework like this ensures that its companies have equitable
access to international markets, and therefore encourages economic expansion
both at home and in other nations, especially less sophisticated ones

Information on international trade in products and services, income from

investments and employment, and current transfers are all provided by the
balance of payments' current account. The balance of payments records the
amount of credits and debits for each of these transactions. Similar to an export,
a credit is an inflow related to the provision of products, services, income, and
current transfers. Similar to an import, a debit is an outflow that is made for the
purchase of products, services, income, and current transfers. In 2016, the EU
constituted almost one-sixth of the global goods trade, with 15.7 percent of
imports and 16.3 percent of exports (European Union, n.d.).

TOTAL CONTRIBUTION
WORLD EU BELGIUM GERMANY
68618348
60404706

58852569

58272959
54839785

54672318
49326055

42393280
38693819

37658047
35320644

35319317
32150968

28989569
5351583
5195727

4936107
4845439

4537734
4465763

1747663

1657577
1472351

1426577

1354645
1339463
1243917

635245

2016 2017 2018 2019 2020 2021 2022

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 BELGIUM’S CONTRIBUTION
1. Merchandise exports by product group- annual

This depicts the total merchandise exports by product group of Belgium in a

period of 7 years from 2016-22. In 2021, Belgium ranked 10th in the world trade
excluding intra- EU ,trade share of world exports of Belgium being 2.44.
Breakdown in economy’s total exports by main commodity group mainly are
agricultural products, fuels and mining products, manufactures etc.

Belgium, with its strategic location in the heart of Europe and a highly developed
infrastructure, has made significant contributions to the world trade in various
product groups. The country is renowned for its strong presence in the global
export market, particularly in categories like machinery, chemicals, and
automobiles. Belgium's robust manufacturing sector, technological expertise, and
a skilled workforce have allowed it to excel in the production and export of

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machinery and equipment, including specialized machinery for various
industries. Additionally, the nation is a major exporter of chemicals and
pharmaceutical products, owing to its well-established pharmaceutical companies
and chemical producers. Belgium's contribution to world trade is further
enhanced by its involvement in the automobile sector, where it manufactures and
exports a wide range of vehicles and automotive components. These factors
highlight Belgium's significant role in global merchandise exports across various
product groups.

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 2. Merchandise export value chain indices- annual

Belgium's unique location as a gateway to Europe accounts for much of its weight
in the global merchandise export value chain rankings. The nation is an important
centre for distribution and transit, particularly for commodities coming into or
going out of the European Union. Its sophisticated transportation network, which
includes ports, highways, and rail lines, makes it easier for goods to move freely
throughout the continent. Belgium is also well-known for its competitive and
varied export industries, which include machinery, processed foods, and
chemicals. The nation's dedication to global trade, first-rate logistics, and highly
qualified labour force have all helped it maintain a steady position in the export
value chain, making it a crucial component of the global trading system.

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 3. Merchandise export value fixed base- annual

The Merchandise Export Value Fixed Base index, which measures a nation's
contribution to international trade, heavily weights Belgium. Belgium is
renowned for its advantageous location in the centre of Europe and for having
Antwerp, one of the busiest and most productive ports on the planet. Belgium is
an important hub for international trade because of this port, which acts as a
significant gateway for the import and export of goods. The nation leads in a
number of industries, including chemicals, machinery, pharmaceuticals, and
autos, which add significantly to the value of worldwide product exports.
Belgium is a key factor in the global merchandise export value fixed base because
to its participation in the European Union and its well-developed infrastructure,
which further improve its capacity to facilitate and engage in the international
trade network.

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 4. Commercial services export by sector and partner-
annual

Belgium is an important hub for trade within Europe, which contributes

significantly to its position in the global merchandise export value chain rankings.
Because of its advantageous location at the intersection of Western Europe,
sophisticated infrastructure, and effective logistics, it has become a major role in
easing the flow of commodities throughout the continent. Belgium is well-known
for its robust exports of vehicles, chemicals, machinery, and pharmaceuticals.
The nation's top-notch ports, such Zeebrugge and Antwerp, make it possible for
goods to be distributed effectively throughout Europe and beyond. Belgium's
significance as a gateway to the European market is further increased by its
membership in the EU. Its continuous ranking among the world's top merchandise
exporter’s highlights its contribution to the global commerce network. Belgium
is a major player in the commercial services export market, with a concentration

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on industries such as business services, insurance, and finance. The financial
industry of the nation, based in Brussels, is known for offering top-notch services,
drawing in a large number of foreign organisations and enterprises. Furthermore,
a major portion of Belgium's exports of commercial services come from its
expertise in business services, which includes ICT, consultancy, and research and
development. Belgium works with both European and foreign partners,
demonstrating its importance as a player in the worldwide trade of these services.
Belgium plays a significant role in the global services trade landscape by utilising
its membership in the European Union to further expand its commercial services
export relations with the rest of the globe (World Trade Organization, n.d.).

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 GERMANY’S CONTRIBUTION
1. Merchandise exports by product group – annual

SI3_AGG - TO - Total merchandise

18,00,000 16,57,577
16,36,742
15,60,539
16,00,000 14,89,412
14,48,191
13,34,355 13,82,533
14,00,000

12,00,000

10,00,000

8,00,000

6,00,000

4,00,000

2,00,000

0
2,016 2017 2018 2019 2020 2021 2022

SI3_AGG - TO - Total merchandise

Germany’s merchandise exports play a pivotal role in global trade,

showcasing the country’s economic prowess and industrial strength. As
one of the world’s leading exporting nations, Germany contributes
significantly to the international marketplace. Its exports cover a wide
range of product groups, reflecting the diversity of tis manufacturing
sector. These exports include high-quality automobiles and automotive
parts, precision machinery and equipment, chemicals and pharmaceuticals,
industrial machinery and electrical and electronic goods. With a reputation
for engineering excellence and product reliability, Germany’s exports have
a substantial impact on global trade and the country consistently ranks
among the top exporting nations its products synonymous with quality and
innovation in market worldwide.

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2. Merchandise export value chain indices – annual

SI3_AGG - TO - Total merchandise

140
118.4
120 108.5 107.8
100.6 101.3
100 95.4 92.8

80

60

40

20

0
2016 2017 2018 2019 2020 2021 2022

SI3_AGG - TO - Total merchandise

Germany’s merchandise export vale chain indices hold a prominent

position in the global trade landscape. Known for its precision and
efficiency, Germany’s value chain encompasses various sectors, from
manufacturing to distribution, contribution significantly to international
trade. The country’s emphasis on high-quality manufacturing and
innovation has allowed it to excel in producing complex, value-added
products. With well-established network of suppliers and a strong focus on
research and development, Germany has created on sophisticated value
chain that resonates with the world. Its products often seen as benchmarks
of quality and reliability, have a far-reaching impact on global trade,
reinforcing Germany’s status as an export powerhouse and a key player in
the interconnected web of international commerce.

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3. Merchandise export value fixed base- annual

SI3_AGG - TO - TOTAL MERCHANDISE

2016 2017 2018 2019 2020 2021 2022

140

120 125
123.4
117.7
100 109.2 112.3
100.6 104.2

80

60

40

20

0
2016 2017 2018 2019 2020 2021 2022

Germany's merchandise export value, on a fixed-base comparison to world

trade, demonstrates the country's enduring economic significance in the
global marketplace. By maintaining a strong and stable export
performance, Germany consistently reinforces its pivotal role in
international trade. This fixed-base approach underscores Germany's
ability to adapt to changing global economic dynamics while continuing to
export a diverse range of high-quality products, including automobiles,
machinery, chemicals, and electronics. Through its robust and adaptable
export strategy, Germany has firmly established itself as a cornerstone of
the world economy, showcasing resilience and adaptability in the face of
evolving trade dynamics.

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 4. Commercial services export by sector and
partner – annual

BOP6 - SA - MANUFACTURING SERVICES ON PHYSICAL

INPUTS OWNED BY OTHERS
2016 2017 2018 2019 2020 2021 2022

18,000
16,000
14,000 15,282
12,000
12,709
10,000 11,689 11,187
10,400
8,000 9,698

6,000 7,658

4,000
2,000
0
2016 2017 2018 2019 2020 2021 2022

Germany's commercial services exports are a crucial component of its global trade
strategy, contributing significantly to the country's economic strength. The sectorial
composition of these exports is diverse and includes services such as financial and
business services, information technology, and tourism-related services. Germany's
success in exporting these services is driven by its reputation for quality, efficiency, and
innovation. Furthermore, Germany has cultivated strong trade partnerships across the
globe, with key trading partners including countries within the European Union, the
United States, and China. This diverse network of trade relationships underscores
Germany's position as a vital player in the international commercial services arena, with
its services sector continuing to play a vital role in facilitating global economic
connectivity and growth (World Trade Organization, n.d.).

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 ANALYSIS
The analysis of the EU's role in global trade and the contributions of Belgium and
Germany reveals the intricate web of economic interdependence within the
European Union. Both Belgium and Germany play pivotal roles in the
international trade landscape. Belgium's strategic location and top-notch logistics
infrastructure make it a crucial transit point for goods entering and leaving the
EU, while Germany's engineering prowess and manufacturing excellence have
established it as a global export powerhouse. The EU, as a collective entity,
wields considerable influence in shaping global trade policy and removing
barriers to commerce. It leverages its strength to negotiate trade agreements,
promote open markets, and facilitate economic integration within its member
states. However, the EU faces the challenge of defining its trade policy in a world
marked by shifting global dynamics and evolving transatlantic relationships. It
must strike a balance between advancing its economic interests and upholding the
values of an open, rules-based international trading system. Collaboration with
like-minded nations becomes crucial, especially in the absence of traditional
transatlantic leadership. The EU must harmonize its internal trade-policy
framework, fostering consensus among member states and stakeholders to
effectively pursue its broad trade and investment objectives. In this era of global
economic change, adaptability and cooperation will be essential for the EU to
navigate the complex landscape of international trade successfully.

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 CONCLUSION
To secure access to potential growth markets and advance sustainable
development, the EU needs an efficient foreign trade and investment policy.
However, maintaining an open, rules-based global trade and investment order is
equally crucial. For a moment The EU is a vital pillar of significant structural
changes in the global commercial system. An open system with rules.

But in order to accomplish this wide goal, the EU will need to work with other
nations that share its values. The EU has previously shared leadership with the
US, but given the current circumstances, this is no longer a feasible choice. As
with foreign and security policy, trade represents a significant breach for the EU.
Cross-Atlantic collaboration. But with its superior power in trade policy, the EU
is able to must be able to abandon the common transatlantic leadership of the
economic bloc by default. System and cooperate with other nations to keep the
trade and investment order steady. The construction of a successful trade-policy
framework that unites the three EU-level institutions is necessary for the EU to
be able to pursue these broad objectives in a cogent and effective manner. It is
further calls for the (re)establishment of a broad political agreement regarding the
objectives and scope of the EU trade and investment policy, which can only be
accomplished with the complete cooperation of member state governments and
interested parties in a well-informed discussion.

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 REFERENCE
 European Union. (n.d.). Retrieved from European Union: https://european-
union.europa.eu/priorities-and-actions/eu-
priorities/achievements_en#:~:text=Every%20year%20the%20EU%20pr
ovides,conflict%20in%20over%2080%20countries.

 Hayes, A. (2022, June 05). European Union (EU): What It Is, Countries,
History, Purpose. Retrieved from investopedia:
https://www.investopedia.com/terms/e/europeanunion.asp#toc-history-of-
the-european-union-eu

 World Trade Organization. (n.d.). Retrieved from World Trade

Organization: https://stats.wto.org/

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