Course: European Business Environment

Professor: Dr. Sziebig Orsolya Johanna

& Dr. Tabajdi Gabriella

Name: Siekleng SAM

Username: U2XGQA

Homework 7: Based on the lectures and the EU in the World study, please answer the
following questions:

1. What does the term 'trade intensity' refer to? What can be said about the trade
intensity of the EU as a whole? What is the specificity of EU27(28) trade data?

➢ "Trade intensity" refers to the level or extent of trade between countries or regions. It
measures the magnitude of trade flows, such as imports and exports, relative to the size
of the economy or the total economic activity of a country or region.
➢ The European Union (EU) as a whole has a substantial trading intensity. With a highly
linked internal market, the European Union stands as one of the biggest commercial
blocs globally. It trades extensively with nations outside the EU as well as inside its
member states (intra-EU commerce). Based on statistics provided by the EU, the EU
holds a substantial share of worldwide imports and exports, making it a prominent
participant in international trade. It trades in a variety of areas and with a wide range
of trading partners. The EU-28 accounts for around 15 % of the world’s trade in goods.
➢ EU trade data, including import and export statistics, cover both intra-EU trade and
trade with non-EU countries. These data provide insights into the EU's trade
relationships, the most widely traded goods, and the EU's main trading partners.

2. Which two countries are the EU's largest trade partners both in terms of export and
import of goods? How has the relevance of these partners changed between the latest
examined period?

➢ The two countries that are the European Union's largest trade partners in terms of both
exports and imports of goods are China and the United States.
 ➢ Both China and the EU account for approximately 18% of global gross domestic
product (GDP).1 The EU has significant trade relations with China, exporting a wide
range of goods and importing various products from China. Similarly, the EU has
substantial trade ties with the United States, with exports and imports of goods flowing
between the two regions.
➢ These partners can change over the time due to some factors including economic
condition, political development and trade policies.

3. Which country is the EU's by far the most important partner regarding the trade
(both export and import) of services?

➢ the United States is the European Union's most important partner regarding the trade
of services.

4. Please describe the international trade in both goods and services in relation to the
GDP of the EU compared to each other!

➢ International trade in goods and services represents a significant portion of the

European Union's (EU) Gross Domestic Product (GDP). In 2022, trade in goods and
services accounted for approximately 25.0% of the EU's GDP. 2

1
European Parliament, “The European Union and its trade partners”. Available from
https://www.europarl.europa.eu/factsheets/en/sheet/160/the-european-union-and-its-trade-partners
2
Eurostat, “World trade in goods and services - an overview”. 2022. https://ec.europa.eu/eurostat/statistics-
explained/index.php?title=World_trade_in_goods_and_services_-_an_overview&oldid=573734
5. How do the top 3 players’ positions change if we compare intra-EU services
trade and extra-EU services trade?

❖ Intra-EU Services Trade:

− Intra-EU Dominance: the largest economies within the EU frequently have the upper
hand in intra-EU services trade. the EU's services trade has seen significant
participation from nations like Germany, France, and the United Kingdom (before
Brexit).
− Economic Integration: Businesses and consumers can freely engage in cross-border
services thanks to the member states' close economic integration, which promotes intra-
EU services trade.

❖ Extra-EU service trade

- Economic expansion: countries with strong global economic influence, including
with substantial financial and business services and great global economic clout,
may emerge as top players. For instance, the United Kingdom, even after leaving
the EU, has a strong presence in global services trade.
- Extra-EU services trade positions can be influenced by geopolitical factors, trade
agreements, and global economic trends. Countries with strategic trade agreements
or global economic hubs may have a more prominent role in extra-EU services
trade.
- As their economies expand and their service sectors mature, emerging markets in
the EU or throughout the world may become increasingly significant players in the
trade of services outside the EU, depending on the time period and particular
statistics.