The European Union and world trade

Trade was one of the first areas in which EU countries agreed to pool their sovereignty, transferring to the European Commission the responsibility for handling trade matters, including negotiating international trade agreements on their behalf.
This means that the EU’s 15 Member States negotiate as one, both with their trading partners and at the WTO, thus maximising their influence on the international scene.
But a wide range of players are involved in drawing up the EU’s trade policy. Representatives of the governments of the EU countries are regularly and closely consulted, and ministers themselves take the key decisions. The European Parliament is closely involved in all developments. The Commission is continually organising a wide consultation of civil society, such as non-governmental organisations (NGOs), trade unions, and business.
This enables the EU to be sensitive to all interests as it works to expand trade and to create a win–win situation for all players.

The European Union is:
• the world’s leading exporter of goods: over 973 billion euro in 2001, almost a fifth of the world total;
• the world’s leading exporter of services: 291 billion in euro 2000, 23.9 % of the world total;
• the world’s leading source of foreign direct investment (362 billion euro in 2000) and the second largest home for foreign investment (176.2 billion euro in 2000) after the United States (304.9 billion euro)
• the main export market for some 130 countries around the globe;
• a relatively open economy: international trade accounted for over 14 % of its gross domestic product in 2000, compared with 12 % for the United States and 11 % for Japan.

There are four main categories of things that are traded internationally or flow across borders. Trade rules vary by category, and different countries are strong in different categories.
• Goods: This covers all types of physical goods, such as food, clothing, raw materials and machinery.
• Services: This covers things like tourism, banking and telecommunications.
• Intellectual property: This covers trade and investment in ideas and creativity: copyright, industrial design, artists’ rights, etc.
• Foreign direct investment (FDI): This is when a company from one country buys or establishes a company in another country. This is an alternative to trade and an important part of ‘globalisation’. The concept does not include financial investments, where the owner of the money has no direct influence on the running of a company in which he or she owns shares.