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The European Union

What is the EU ?
A family of 27 European countries

What is the European Union?

27

Member States

Shared values: liberty, democracy, respect for human rights and fundamental freedoms, and the rule of law. Largest economic body in the world. Worlds most successful model for advancing peace and democracy.

Combined population of EU Member States

490
million

Percent of worlds population Percent of global GDP

A unique institution Member States voluntarily cede national sovereignty in many areas to carry out common policies and governance. Not a super-state to replace existing states, nor just an organization for international cooperation.
Worlds most open market for goods and commodities from developing countries.

30

55

Percent of combined worldwide Official Development Assistance

Member States

ORIGIN OF THE EU
First successful regional organization (1957) European Economic Community (EEC) EEC became European Community (EC) (1986) EC became European Union (EU) (1993)

OBJECTIVES OF THE EU
Its principal goal is to promote and expand cooperation among member states in economics, trade, social issue, foreign policy, security, defense, and judicial matter.

EU has sought out to meet its objective in three ways: 1. By defining a common commercial policy. 2. By reducing economic differences between its richer and poorer members. 3. By stabilizing the currencies of its members.

THE SINGAL MARKET AND COMMOM COMMERCIAL POLICY


The signal market refers to the creation of a fully integrated market within the EU, which allows for free movements of goods, services and factors of production.

Some of the important policies are given below: 1. Competition Policy 2. Free Movements Of Goods 3. Free Movements Of Persons 4. Services 5. Capital

EU Trade policy - basic features


Being the leading trade region

Strong interest in: Open markets Clear regulatory frameworks

Responsibility to: EU citizens Rest of the World

Need to reinforce EU competitiveness on world markets

EU Trade policy - basic features


Policy concept
A competitive European economy in an open world trade system organized by multilateral rules

Ensure that the European economy is open to the world and competitive in foreign markets Secure real market access in foreign countries

Support a strong multilateral trading system Most effective means of managing trade and enforcing rules

Promote European values on democracy, rule of law, environment, social rights... Enforce sustainable development

TRADE STRATEGY
The EUs overall objective is progressive liberalization of trade. Its key objectives are:
1. Free access to external market 2. Fair competition 3. Respect of the World Trade Organizations commitments.

SECTORWISE TRADE
Trade in Agriculture:
The EU is the worlds largest importer of Agriculture goods and farm products from the developing and least developed countries. Its total imports in this area from developing countries, equals the combined import of the US, Japan, Canada, Australia. The EU absorbs around 85% of Africas Agriculture export and 45% of Latin Americas.

Trade in Goods

SHARE IN WORLD TRADE IN GOODS (2006)


EU25 17,1%

Others 50,6% Japan 6,6%

United States 16,0%

Source: Eurostat

China 9,6%

Trade in Services
SHARE IN WORLD TRADE IN SERVICES (2005)
EU25 26,0% Others 44,9%

Source: Eurostat

China 3,8%

Japan 6,9%

United States 18,4%

EU MARKET SHARES TRENDS IN WORLD TRADE (%)


20 18 16 14 12 10 8 6 4 2 0 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

EU27 USA Japan China

TRADE BETWEEN THE EUROPEAN UNION AND INDIA


India was one of the first Asian nations to accord recognition to the European Community in 1962. The EU is Indias largest trading partner and biggest source of foreign direct investment. It is a major contributor of developmental aid and an important source of technology. Over the year EU-India trade has grown from 4.4 billion to 28.4 billion.
Top items of trade between India and the EU Indias exports to the EU Textiles and clothing % 35 Indias imports from the EU Gemstones and jewellery % 31

Leather and leather products


Gemstones and jewellery Agriculture Products Chemical products

25
12 10 9

Power generating equipment


Chemical products Official machinery Transport equipment

28
15 10 6

35.00

30.00

Exports (from India to EU)

Imports (from EU to India)

25.00

20.00

15.00

10.00

5.00

0.00 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005

Bilateral agreement between India and the EU


Agreement on sugarcane
Administrative arrangement on trade in

textiles
Co-operation agreement Science and technology agreement

Change in Indian Imports and Exports under Different Trade Agreements


4.00

3.50

3.00

Imports Exports

2.50

2.00

1.50

1.00

0.50

0.00 Doha India-EU FTA India-U.S. FTA India-China FTA