Trade Policy Review: European Union
1. This was the eleventh Trade Policy Review of the European Union and it attracted a lot of interest from WTO Members with well over one thousand questions were asked and responded by the EU. More than forty different delegations took the floor on both days. Our discussion was greatly helped by the comments of the discussant, Ambassador Tim Yeend of Australia, and the statements by the head of the EU delegation, Peter Balas.
2. As many delegations noted, the economic crisis in the EU has dominated developments over the past two years. Although other international organizations have greater roles in developing and analysing financial and macroeconomic measures, the Trade Policy Review cannot ignore these developments as they have had a considerable impact on trade. The general state of EU’s economy was focused in the reports prepared by the EU, the Secretariat, the discussant and many delegations in their questions and interventions. For a number of reasons, though domestic demand remains subdued, trade was the main engine of growth.
3. Although a considerable number of measures to address the crises have been taken at the levels of the EU and its Member states and there are several positive signs, the economic recovery is still fragile and unemployment in some Member states remains high. However, the reforms that are being undertaken, including fiscal reform and banking union, should help lead the way to a sustainable recovery that will benefit not only the EU but also its trading partners.
4. It was also widely noted by delegations that, despite the crises, the EU has not resorted to introducing new protectionist measures which is a positive indication of both the strength of, and the EU's commitment to, the multilateral trading system. Furthermore, although a wide range of issues were raised by delegations during the meeting, on the whole, the EU has low barriers to trade and investment and its laws and procedures are transparent and, to a large extent, uniformly applied throughout the 28 Member states. Furthermore, as Peter Balas noted in his opening remarks, the recent accession of Croatia is "another sign that the EU, the current economic difficulties notwithstanding, remains a successful and attractive entity."
5. The EU's commitment to the multilateral trading system, the Doha round, and the preparations for the next Ministerial Conference in Bali in December were appreciated by Members including EU’s statement that the WTO represents the multilateral bedrock of its trade policy. Members consider that as the EU is the largest trading entity in the world and one of the main trading partners for many countries, its support for the WTO and active engagement in its work are essential for the multilateral trading system. However, while appreciating the EU's right to negotiate free trade agreements with other countries, several delegations urged the EU to take care that these agreements do not dilute its commitment to the multilateral trading system, particularly given the start of negotiations last week with the United States on the Transatlantic Trade and Investment Partnership (TTIP) and on-going negotiations with other major economies.
6. Several delegations commended the EU for its support for aid for trade and noted that the EU was the largest provider in the world for such aid.
7. Despite the focus of developments in the EU over the past two years being on measures related to the on-going economic crises, several trade-related measures have been agreed, although in some cases they have not yet been fully implemented. The changes to the GSP scheme, which are to be implemented from the start of 2014, was one area which drew comments by some Members. Other reforms awaiting full implementation relate to customs procedures and the introduction of the single electronic window, which could help reduce differences in implementation of customs laws among Member states, and the application of the single unitary patent which should make registration of patents in the EU less difficult.
8. Given the size and importance of the EU to world trade and the diversity of its economy, it is difficult to cover each and every issue that was raised on Tuesday and today. However, I noted that some of the points made by delegations in their interventions were also raised in earlier trade policy reviews of the EU, although it is reassuring to see that there are not many new issues.
- Tariffs: The EU was commended for the high number of duty free tariff lines and its relatively low average tariff. However, many delegations noted that some sectors continue to be protected by high tariffs which are often specific duties or complex forms of duties while some agricultural products are also subject to seasonal tariffs.
- Agriculture: Although the EU has reached a political agreement on further reforms of the Common Agricultural Policy to apply from 2014, and the general trend is towards greater market orientation of agriculture in the EU, delegations noted that market access was not being directly addressed in these, or previous, reforms. There were also some concerns about the levels of support to producers as well as the continued, albeit declining, use of export subsidies. In this respect, successful completion of the Doha Round is essential to address these issues globally.
- Fisheries: The reform of the Common Fisheries Policy also attracted a lot of interest, particularly concerns about overfishing, subsidies that could increase fishing capacity, and the possible application of unilateral trade sanctions against third countries for over-exploiting fisheries stocks shared with the EU.
- Government procurement: While government procurement above certain thresholds has been harmonised and must comply with EU laws, there were concerns about procurement below these thresholds by Member states, sub-federal agencies, and state-owned enterprises.
- SPS and TBT measures: SPS and TBT measures also remain a concern for other WTO Members who called for better opportunities to participate in the formulation of these measures which should be based on science and should be no more trade restrictive than necessary to meet their objectives.
9. Despite the great diversity among the Member states of the EU, it is, in many ways a single economic unit with common rules governing trade and most trade-related areas. However, some differences remain in the application of rules and procedures and member States have different legal and administrative systems while retaining competence or have considerable flexibility in some areas such as corporation tax, excise duties, and VAT. Nevertheless, there is a considerable degree of harmonization in areas where the EU has competence, which now also includes investment.
10. I would like to thank the EU for choosing to use the alternative timeline for this Trade Policy Review which gave all delegations time to consider its replies and has helped our discussion. From the statements from delegations, it is clear that, on the whole, the EU has managed to provide satisfactory answers to practically all the questions put to it although I appreciate the fact that in some areas the questions referred to proposals for future legislation where it was not possible to provide definitive answers. Nevertheless, the EU is to be commended for answering so many questions and we look forward to getting the last replies over the next four weeks. Finally, I would like to thank the EU, our discussant Ambassador Tim Yeend, and the delegations for contributing to a successful review of EU trade policy.