RESTRICTED  
  
WT/TPR/G/284  
28 May 2013  
(13-2725)  Page: 1/18  
Trade Policy Review Body  Original: English  
 
TRADE POLICY REVIEW 
REPORT BY 
THE EUROPEAN UNION 
Pursuant to the Agreement Establishing the Trade Policy Review Mechanism (Annex 3 of the 
Marrakesh Agreement Establishing the World Trad e Organization), the policy statement by the 
European Union is attached. 
 
 
Note: This report is subject to restricted circulation and press embargo until the end of the first 
session of the meeting of the Trade Polic y Review Body on the European Union. WT/TPR/G/284 • European Union 
 
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  Contents 
1   INTROD UCTION  .......................................................................................................... 3  
2   THE EUROPEAN UNIO N IN A CHANGING WORLD ......................................................... 3  
2.1   Economic Performance and Challenges Ahead ................................................................ 3  
2.2   The EU response to the financial turmoil and the economic slowdown ................................ 5  
2.2.1   Strengthening economic  and budgetary coordination.................................................... 5  
2.2.2   Towards a banking union ......................................................................................... 6  
2.2.3   Effective crisis resolution mechanisms ........................................................................ 6  
2.3   Developments in the Internal Market and Central Policy areas .......................................... 6  
3   KEY DEVELOPMENTS IN EU TRADE POLICY (2 011-2012) .......................................... 10  
3.1   Introduction ............................................................................................................. 10 
3.2   WTO and the Mu ltilateral Agenda ................................................................................ 11 
3.3   The Bilateral Trade Agenda ........................................................................................ 12 
3.3.1   Comprehensive and modulate d bilateral/region al agreements ...................................... 12 
3.3.2   New regulation on existing BITs between EU Member States and third countries ............. 14 
3.3.3   External public procurement initiative ....................................................................... 14 
3.4   Trade and Sustainable Development ............................................................................ 14 
3.4.1   Trade and development .......................................................................................... 15 
3.4.2   Generalised System of Preferences (GSP) .................................................................. 16 
4   LOOKING FORWARD .................................................................................................. 17  
 
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  1  INTRODUCTION 
1.1.  The years under review have been characterised by the continuing sovereign debt crisis 
accompanied by some remaining uncertainties in the euro and in the possibility of a swift recovery.  
1.2.  Trade has never been more important for the European Union's economy; it has become an 
important means of achieving much needed growth  and creating jobs without drawing on public 
finances because it is the conveyor belt that links Europe to the new global growth centres and is a unique source of productivity gains. 
1.3.  In the face of the crisis, the European Union adopted important decisions to strengthen its 
capacity to overcome the economic slowdown and to move beyond it. The new crisis resolution mechanisms are effectively addressing the short-term issues while economic and budgetary surveillance have been strengthened to put public  finances and growth on a sustainable footing. 
Furthermore, the first steps have been made towards a banking union like the single supervisory 
mechanism and further legislative measures were put forward to better protect investors and to strengthen the single market. 
1.4.  Now in place for 20 years, the single market has played a key role in delivering growth and 
employment and promoting competitiveness. The European Union has pursued policies for developing the right domestic policy framework to support competitiveness, to open up trade in 
services, to strengthen the industrial basis in Europe and to enhance Europe's place in global value 
chains. 
1.5.  Trade has played an important role as growth driver so far and it is expected to remain the 
main contributor to growth of the EU econom y in 2013. The European Union has put a lot of 
emphasis on its trade agenda and the Communica tion 'Trade, Growth and World Affairs, Trade 
policy as a core component of the EU's 2020 strategy'
1 – an integral part of the Europe 20202 
strategy – continued to be the mainstay of the European Union's trade and investment policy. The 
European Council held on 7 and 8 February 2013 reiterated the EU's determination to promote 
free, fair and open trade whilst asserting its interest s, in a spirit of reciprocity and mutual benefit. 
1.6.  In promoting free, fair and open trade, th e European Union has always been fully committed 
to a strong, rules-based multilateral trading system  recognising the utmost importance of fighting 
all forms of protectionism, including as regards non-tariff trade barriers, ensuring better market access, promoting appropriate investment conditions (see paragraph 1.3 above), enforce and promote intellectual property rights – and opening up public procurement markets.  
2  THE EUROPEAN UNION IN A CHANGING WORLD 
2.1.  The world's economy is changing at an unprecedented pace, with sustained growth in 
emerging markets surpassing that of the old indu strial economies several times over. The global 
economic and financial crisis has accelerated the shift in economic power away from developed 
countries towards emerging economies. 
2.2.  In this new situation, Europe faces the rise of new challenges, but also new opportunities 
linked to the reorganisation of global production.  
2.1  Economic Performance and Challenges Ahead  2.3.  The weakening global environment and the a ggravation of the sovereign-debt crisis in the 
first half of 2012, reflecting high deleveraging needs in the public and private sector in the EU, 
have shackled economic activity throughout 2012 and pushed the euro area back into a recession. 
At the beginning of 2013, the EU economy is characterised by a double disparity. Firstly, the improvement in financial market conditions contrasts visibly with the weakness of the real 
economy. Secondly, growth differentials ac ross Member States remain very large. 
                                               
1 http://trade.ec.europa.eu/doclib/docs/2010/november/tradoc_146955.pdf . 
2 http://ec.europa.eu/europe2020/index_en.htm . WT/TPR/G/284 • European Union 
 
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  2.4.  First, despite the substantial easing of fina ncial market tensions and the recent tentative rise 
in confidence the economic situation has furthe r deteriorated at the end of 2012 and the outlook 
for the near future remains subdued. With the larg e internal and external rebalancing needs that 
typically characterise the aftermath of deep debt  crises and often entail balance-sheet recessions, 
a strong rebound of domestic demand was unlikely. In particular, the improvement of the financial 
market situation has not yet impacted on credit growth which is still marked by low demand and tight bank lending conditions to households and non-financial corporations. Moreover, uncertainty 
has had a strong and lasting impact on domestic demand, given that high levels of uncertainty are 
generally associated with households and corporations cutting back on spending, investment and employment. 
2.5.  The second disparity concerns the macroeconomic situation across EU Member States, which 
is likely to remain diverse according to different external and internal rebalancing needs, labour 
market situations, and export capacities in terms of regions and products. In particular, economic activity in Member States where domestic demand is less constrained by structural challenges or 
adverse financing conditions is expected to recover relatively fast, while growth in those Member 
States that are still mired in a balance-sheet recession is set to take longer to return. But disparities are also observable at the sector level within countries, and in particular in some 
vulnerable Member States, where a relatively good export performance is predicted to contrast 
sharply with subdued domestic demand. 
2.6.  The latest readings of survey indicators su ggest that both the EU economy and the euro area 
should start improving at the beginning of 2013. Based on the assumption that the consistent 
implementation of policy decisions both at the EU  and at Member States level will continue to 
reduce uncertainty and increase confidence, output is forecasted to stabilise in the EU and the euro area in the first half of 2013 according to the Commission services' Winter 2013 Forecast.
3 The EU 
and the euro-area economy have contracted by 0.3% and 0.6% in 2012 respectively. Given the 
substantial structural challenges in some euro-area Member States the currency area is still likely to contract by 0.25% in 2013, while GDP in the EU is forecasted to remain broadly unchanged. In 
2014, both areas are forecasted to grow by around 1.5%. 
2.7.  Although the European Union grew only very  slowly in the years under review, it remains the 
largest economy in the world with a per capita  GDP of over €25,000 for its 500 million citizens. 
2.8.  The European Union belongs to the most open economies in the world and is the top trading 
partner for 80 countries. 
2.9.  The European Union's industrial base remain s strong: it has a manufacturing trade surplus of 
almost €300 billion, a figure that has increased fivefold since 2000. Its surplus in services has 
multiplied by more than 20 times in ten ye ars to over €100 billion. The European Union 
agricultural trade balance has shifted from a deficit to a surplus since 2010. While the European Union's overall trade balance for goods and services is slightly negative (€74 billion), this is due to 
import of energy related products and the size of th is deficit is small when compared to total trade. 
2.10.  The European Union retains close to 28% of  global income generated by the production of 
manufactured goods, against 18% for the US and a bit less than 16% for China. The European 
Union's share of this income has remained fairly stable since 2000, while the share of other large 
industrialised countries has significantly declined.  
2.11.  The Single Market has been vital in creating globally competitive companies in Europe and 
has been a cornerstone of the European Union's ability to compete in a globalised world. It has 
fostered the development of high quality rules and standards that help shape global norms. The 
enlargement of the European Union and integration within it, combined with third countries adopting European Union norms, means European Union firms operate in the world's largest single 
market. This has facilitated the emergence of efficient European value chains. European firms 
export not only thanks to the value that is cr eated in the EU Member State where exports are 
registered, but also thanks to contributions from across the whole Single Market. The distribution of jobs created by exports reflects this. For ever y two jobs created in an EU Member State where 
exports are statistically counted, one job is created elsewhere in the European Union.  
                                               
3 http://ec.europa.eu/economy_finance/eu/forecasts/2013_winter_forecast_en.htm . WT/TPR/G/284 • European Union 
 
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  2.12.  Europe is the world's largest importer of both manufactured goods and services. In the 
current crisis context, the European Union has not fallen prey to protectionist tendencies as demonstrated by the fact that our imports continue to rise: the European Union imported €1 trillion worth of manufactured goods in the first seven months of 2012, up 4.5% on the same 
period last year. Europe has the largest stocks of foreign direct investment abroad and is the 
world's largest host of foreign direct investment. 
2.13.  European companies are world leaders in pr oviding the infrastructure that many emerging 
countries need to take them to the next stage of  development – whether in transport, sanitation, 
environmental services, logistics, telecoms or o il and gas exploration. Importing such products 
from Europe is a short-cut to a more advanced economy. 
2.2  The EU Response to the Financial Turmoil and the Economic Slowdown  
2.14.  The continuing financial and economic cris is has been addressed by intense and sustained 
action by the European Union's institutions and national governments and this work continued apace over the course of 2012. All have been working closely together to support financial 
stability, to put in place a stronger governance system for the future and to strengthen the 
necessary conditions to boost growth and employment. In the face of the crisis, important decisions were taken in the course of the year that considerably enhanced the Union's capacity to 
address the crisis and to move beyond it. 
2.15.  Across the European Union, reform and consolidation measures have been implemented. 
Effective crisis resolution mechanisms have been put in place, while further steps have been taken 
to strengthen economic and budgetary surveillan ce. In particular, one must keep in mind the 
decision to set up a genuine banking union whose role is to break the negative interconnections 
between banks and public debt management. 
2.2.1  Strengthening economic and budgetary coordination 
2.16.  The lessons learnt in the context of the economic, financial, and sovereign debt crises have 
been drivers of a major overhaul of the EU's and Economic and Monetary Union's economic governance. Economic, budgetary and structural surveillance is undertaken in a coherent fashion 
over the first six months of each calendar year, allowing the EU Member States to take 
country-specific guidance into account in their national budgetary processes over the next six months.  
2.17.   On 13 December 2011, the European Council and the European Parliament adopted a set or 
legislative measures to reform the Stability and Growth Pact. This set of measures is known as the 
'Six-Pack' and it aims at strengthening the proc edures to reduce public deficits and address 
macroeconomic imbalances. In 2012, the first im plementation of these measures significantly 
strengthened budgetary surveillance and introduced the Macroeconomic Imbalances Procedure to 
prevent and correct macroeconomic imbalances, both of which are backed up by the possibility of financial sanctions for euro area Member States. The 'Six-Pack' also included a proposal for a 
Directive defining minimum requirements for national budgetary frameworks to ensure that 
Member States' fiscal frameworks are fit to respect the EU rules.  
2.18.  The so-called 'Two-Pack' of additional legislation proposed in November 2011 and approved 
in March 2013 aims to further strengthen budgetary surveillance of euro area Member States 
particularly through the introduction of ex ante discussions on national budgetary plans and 
introduces a framework for enhanced surveillanc e of vulnerable euro area Member States.  
2.19.  The European Council in June 2012 invited the President of the European Council, in close 
collaboration with the President of the Commiss ion, the President of the Euro Group and the 
President of the European Central Bank (ECB), to present a specific and time-bound roadmap for the achievement of a genuine European Monetary Union (EMU). Further work is on-going, notably 
in setting up additional measures for ex ante coordination of major economic reforms, contractual 
arrangements for competitiveness and growth li nked to solidarity mechanisms and the social 
dimension of EMU.  WT/TPR/G/284 • European Union 
 
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  2.2.2  Towards a banking union 
2.20.  In spring 2012, the European Commission called for a Banking Union, to restore confidence 
in banks and the euro as part of a longer term  vision for economic and fiscal integration.  
2.21.  The Banking Union would take the form of a Single Supervisory Mechanism (SSM) and a 
Single Resolution Mechanism (SRM), building on the single rule book that will be applicable to all 
banks in the European Union. 
2.22.  On 13 December 2012 the Council of the European Union unanimously agreed on a position 
regarding the two Commission proposals for a Single Supervisory Mechanism, comprising a 
regulation conferring specific tasks on the ECB concerning policies relating to the prudential supervision of credit institutions, and a regulation aligning the existing regulation on the European Banking Authority (EBA) to the new set-up for banking supervision. 
2.23.  The Council compromise is currently subj ect to discussions with the European Parliament. 
Pursuant to the Council compromise, the SSM is envisaged to be fully in place by 1 March 2014 or 12 months after the entry into force of the SSM-Regulation, whichever is the later. To allow for a 
smooth transition to the new mechanism, the ECB may postpone the date.  
2.24.  Once agreement on these proposals is reached, the Commission envisages proposing the 
next critical step in Banking Union before the summer: a Single Resolution Mechanism to resolve 
banks in Member States participating in the Banking Union. 
2.2.3  Effective crisis resolution mechanisms 2.25.  A key part of the crisis resolution approach was the development of a crisis resolution 
mechanism to address financial market fragility and to mitigate the risk of contagion across EU 
Member States.  
2.26.  On the European Commission's initiative, in May 2010 two temporary crisis resolution 
mechanisms were established: the European Financial Stabilisation Mechanism (EFSM) and the 
European Financial Stability Facility (EFSF). The euro area's permanent financial backstop, the 
European Stability Mechanism (ESM) was finally inaugurated on 8 October 2012, and is now fully operational following completion of ratification of  the ESM Treaty by all euro area Member States. 
The ESM is the world's most capitalised international financial institution and the world's biggest 
regional firewall (€500 bn). 
2.27.  The ECB has played a crucial role in the eu ro area response to the economic and financial 
crisis. First, the official refinancing rate has been lowered almost to zero, as the economy has 
slowed. In addition, the ECB has taken a range of me asures to address the effects of the crisis on 
the functioning of financial markets when interbank market activity nearly stalled. Most recently, in September 2012 the ECB has adopted a decision as a basis to undertake Outright Monetary 
Transactions (OMT) in the secondary sovereign bond markets subject to strict and effective 
conditionality. 
2.3  Developments in the Internal Market and Central Policy Areas  
Single Market 
2.28.  The Single Market remains the European Union's most important vehicle for growth and job 
creation. Modernising and deepening the Single Market is a continuous exercise as the Single Market must respond to a constantly changing world where social and demographic challenges, 
new technology and imperatives, such as climate change must be incorporated in policy thinking. 
The European Commission launched an ambitious process to give new momentum to the Single Market. Following the Communicati on on the Single Market Act
4 adopted in April 2011, as a 
                                               
4 COM (2011) 206 of 13.04.2011, viewed at: 
http://ec.europa.eu/internal_market/smact/docs/20110413-communication_en.pdf . WT/TPR/G/284 • European Union 
 
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  response to the crisis and the need to foster growth, the European Commission adopted a second 
Communication, Single Market Act-II5, on 3 October 2012. 
2.29.  This new policy document proposes a seco nd set of priority actions for a renewed growth 
designed to generate real effects on the ground and to make citizens and businesses confident to 
use the Single Market to their advantage. In part icular, this Communication proposes twelve levers 
and corresponding key actions, concentrated on four main drivers for growth, employment and confidence: (i) integrated networks; (ii) cross border mobility of citizens and businesses; (iii) the 
digital economy; and (iv) social entrepreneurship, cohesion and consumer confidence. They 
constitute the next steps towards the objective of  a highly competitive social market economy. 
Once implemented, the Single Market Act II, together with the Single Market Act I, will open new paths towards growth, jobs and social cohesion for 500 million Europeans.  
Intellectual property rights (IPR) 
2.30.  For the European Union, given its stakes  and objectives to grow as a knowledge-based 
economy, IPRs are considered as a vital backbone of the economy and a key driver for its growth. 
With this in mind, the European Commission ad opted a Strategy for IPR in May 2011 to boost 
creativity and innovation.
6 The objective is to establish a coherent and holistic framework that 
contributes to enhanced economic growth, job creation and competitiveness in the European 
Union's Single Market while ensuring a high le vel of protection of IPR. The European Union 
recognises the need to opt for a balanced approach that provides the right incentives to promote creative and innovative activity and ensure cultural diversity, but also ensures the widest possible 
access to IPR-protected creations and innovations.  
2.31.  In December 2012, the European Parliament and the Council reached a political agreement 
on the unitary "patent package" composed of tw o Regulations and an international Agreement and 
laying the ground for the creation of unitary pate nt protection in the European Union. Following 
the adoption of the two Regulations (Regul ation (EU) No 1257/2012 and Regulation (EU) 
No 1260/2012 both of 17 December 2012)
7, 25 Member States signed the Agreement on a Unified 
Patent Court, which, after ratification, will set up a single and specialised patent jurisdiction of the 
participating Member States.  
IPR enforcement 2.32.  In May 2011, companies, trade associations and internet platforms signed a Memorandum 
of Understanding (MoU)
8 on the sale of counterfeit goods over the internet, which aims at 
developing good practices in order to tackle online counterfeiting. An evaluation report was 
adopted by the European Commission in April 2013. Furthermore, signatories agreed in the last quarter of 2012 to extend the MoU to companies from other sectors of industry as well as to 
broaden the scope of application of the agreement. 
2.33.  The European Commission set up in 2009 the European Observatory on Counterfeiting and 
Piracy, which was moved to the Office for Harmonisation in the Internal Market (OHIM)
9 in 2012 
and renamed the 'European Observatory on Infrin gements of Intellectual Property Rights'. It 
covers all IP rights and functions as a central resource for gathering, monitoring and reporting 
                                               
5 COM (2012) 573 of 03.10.2012, viewed at: http://ec.europa.eu/internal_market/smact/docs/single-
market-act2_en.pdf . 
6 Communication from the European Commission on a "S ingle Market for IPRs, Boosting Creativity and 
Innovation to Provide Economic Growth, High Quality Jo bs and First Class Products and Services in Europe", 
COM(2011) 287 final of 24.05.2011, viewed at: http://ec.europa.eu/internal_market/copyright/docs/ipr_strategy/COM_2011_287_en.pdf . See also 
Communication from the Commission on "A Stronger European Industry fo r Growth and Economic Recovery", 
COM(2012) 582 final of 10.10.2012, viewed at: http://eur-
lex.europa.eu/LexUriServ/LexUriServ.do?uri=COM:2012:0582:FIN:EN:PDF . 
7 OJ L 361, 31.12.2012. 
8 http://ec.europa.eu/internal_market/iprenforcement/docs/memorandum_04052011_en.pdf . 
9 Regulation (EU) No 386/2012 of the European Parliament and of the Council of 19 April 2012 on 
entrusting the Office for Ha rmonization in the Internal Market (Trade Marks and Designs) with tasks related to 
the enforcement of intellectual property rights, including the assembling of public and private-sector 
representatives as a European Observ atory on Infringements of Intellectu al Property Rights Text with EEA 
relevance. WT/TPR/G/284 • European Union 
 
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  crucial information that will improve the knowledge about the phenomenon of counterfeiting and 
piracy, and allow the European Union to target en forcement resources. It also encourages greater 
collaboration between the public and private se ctor in IPR enforcement. In July 2012, the 
European Parliament voted against ACTA, the Anti Counterfeiting Trade Agreement, and hence the 
EU will not be a party to it. 
Customs legislation 2.34.  Customs contributes significantly to achiev ing the objectives of the European Union's trade 
policy because it is instrumental in facilitating and securing trade and in countering unfair trade. 
On 20 February 2012 the European Commission proposed to the European Parliament and the Council a Regulation laying down the Union Customs Code, a recast of Regulation (EC) No 450/2008 (the Modernised Customs Code). That proposal mainly aims at rescheduling the 
application of the new Code to take into account the challenge of the implementation of new, 
electronic-based processes and aligning it with  the requirements of the Treaty of Lisbon.  
2.35.  On 21 December 2012 the European Commission adopted a Communication on the State of 
Customs Union
10. The Communication takes stock of the current state of the EU Customs Union, 
and identifies the challenges that lie ahead and sets out priority actions for ensuring future evolution of the Customs Union. The aim is to ensure the European Union Customs Union is as 
modern, effective and efficient as possible, ensuring a safe and competitive Europe. 
Public procurement 2.36.  The European Union keeps its public procurement market largely open to international 
competition, despite growing pressure on its domestic market, in particular from emerging 
economies on certain key sectors (railways, construction, IT services). In the European Union, 
public expenditures represent nearly 19% of GDP and it is an essential lever for kick-starting growth. 
2.37.  On 20 December 2011, the European Commission adopted a proposal aimed at a 
modernization of public procurement in the European Union. This programme includes the revision of Directives No 2004/17/EC
11 (procurement in the water, energy, transport and postal services 
sectors) and No 2004/18/EC12 (public works, supply and service contracts), as well as the adoption 
of a directive on concessions, which were until now only partially regulated at European level. The legislative procedure for the adoption of these proposals progressed well in 2012. 
2.38.  On 20 April 2012, the European Commission also adopted a Communication on 'A strategy 
for e-procurement'
13 which sets out a path to achieve the transition to mandatory e-procurement. 
This builds on the proposal on the modernization of the EU public procurement directives and also 
includes non-legislative flanking measures intended to support the transition towards 
e-procurement in the European Union.  
Standardisation  2.39.  Standards and standardisation are an impo rtant policy tool for the European Union. In 
October 2012 the European Council and the Europe an Parliament adopted the Regulation (EU) 
No 1025/2012
14 on European standardisation, applicable  from 1 January 2013. This Regulation 
sets basic rules for co-operation between standardisation organisations, the European Commission and EU Member States. The Regulation aims at modernising and improving the European 
standardisation system and at making the standardisation process faster and more inclusive. 
                                               
10 COM(2012) 791 final of 21.12.2012, viewed at: 
http://ec.europa.eu/taxation_customs/resources/documents/common/publications/com_reports/customs/com(
2012)791_en.pdf . 
11 COM(2011) 895 final of 20.12.2011; viewed at: http://eur-
lex.europa.eu/LexUriServ/LexUriServ.do?uri=COM:2011:0895:FIN:EN:PDF . 
12 COM(2011)896 final of 20.12.2011; viewed at: http://eur-
lex.europa.eu/LexUriServ/LexUriServ.do?uri=COM:2011:0896:FIN:EN:PDF . 
13 COM(2012) 179 of 20.04.2012; viewed at:  
http://ec.europa.eu/internal_market/publicproc urement/docs/eprocurement/strategy/COM_2012_en.pdf . 
14 OJ L 316 of 14.11.2012. WT/TPR/G/284 • European Union 
 
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  State aid modernisation 
2.40.  The European Union's state aid control is an essential component of competition policy and 
a necessary safeguard for effective competition and free trade. By creating a common framework, state aid rules, first and utmost, ensure a level playing field for European companies and avoid EU 
Member States engaging in wasteful subsidy races, which are unsustainable for individual Member 
States and detrimental to the European Union as a whole. 
2.41.  In 2012 the European Commission launched a far-reaching reform designed to modernise 
the rules on the control of state aid — the State Aid Modernisation (SAM) initiative
15. This initiative 
has three main objectives: to ensure that state aid rules support sustainable, smart and inclusive growth and the Europe 2020 objectives; to prioritise  enforcement in cases that have a significant 
impact on the Single Market; and to streamline the European Commission's decision-making 
process in relation to state aid. In order to achieve these objectives, the European Commission will 
focus on 'good aid' — efficient and well-designed aid which addresses real market failures and has 
a real incentive effect. It will be even more vigilant with regard to 'bad aid', amounting to harmful 
subsidies crowding out private investment or keeping inefficient and non-viable companies on the 
market. At the same time, state aid modernisation has to contribute to EU Member States' efforts towards a more efficient use of public finances in the context of fiscal consolidation. The main 
elements of the reform package should be in place by the end of 2013.  
Common Agricultural Policy (CAP) reform 2.42.  On 12 October 2011 the European Commission presented a set of legal proposals for the 
reform of the Common Agricultural Policy (CAP) for the period 2014-2020. The set includes 
legislative proposals for several regulations, and in particular proposals for the four main 
regulations: 
 a proposal for a regulation establishing rules for direct payments for farmers,  
 a proposal for a regulation establishing a common organisation of the markets in agricultural 
products, 
 a proposal for a regulation on support for rural development, 
 a proposal on the financing, management and monitoring of the common agricultural policy. 
2.43.  The European Commission's proposals aim to strengthen the competitiveness and the 
sustainability of European agriculture and mainta in its presence in all regions of the European 
Union, in order to guarantee European citizens healthy and quality food production, to preserve 
the environment and to help develop the European Union's rural areas. The future policy will continue the shift towards market orientation, building on the progress achieved through previous CAP reforms over the past twenty years. The deco upled direct payments will remain the core of 
CAP spending and the role of market measures will not go beyond providing safety-net for farmers 
in crisis situations.  
2.44.  The inter-institutional dialogue is currently on-going between the European Parliament, the 
C o u n c i l  o f  t h e  E u r o p e a n  U n i o n  a n d  t h e  E u r o p e a n  C o m m i s s i o n .  I t  i s  e x p e c t e d  t o  l e a d  t o  t h e  
adoption of the different regulations and implemen ting acts by the end of 2013, in the hope of 
having the CAP reform in place from 1 January 2014.  
Towards a green economy and better governance  
2.45.  On 25 October 2012, the European Union adopted Directive No 2012/27/EU
16 on energy 
efficiency. This Directive establishes a common framework of measures for the promotion of energy efficiency within the European Union in order to ensure the achievement of the Union's 
2020 20% headline target on energy efficiency and to pave the way for further energy efficiency 
improvements beyond that date. It lays down rules designed to remove barriers in the energy market and overcome market failures that impede  efficiency in the supply and use of energy, and 
provides for the establishment of indicative national energy efficiency targets for 2020. 
                                               
15 COM(2012) 209 of 08.05.2012; viewed at: http://eur-
lex.europa.eu/LexUriServ/LexUriServ.do?uri=COM:2012:0209:FIN:EN:PDF . 
16 O.J. L 315, 14.11.2012. WT/TPR/G/284 • European Union 
 
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  Digital agenda for Europe and e-commerce 
2.46.  On 11 January 2012 the European Commission presented a coherent framework to build 
trust in the digital single market for e-commerce and online services, as also announced in the Digital Agenda for Europe and Single Market Act. Numerous initiatives announced aimed at 
doubling the share of e-commerce in retail sales (cur rently 3.4%) and that of the internet sector in 
European GDP (currently less than 3%) by 2015.  
2.47.  Online trade and services already account for more than 20% of growth and net job creation 
in some Member States and the actions announced seek to boost that potential even further, 
especially through establishing the trust in online services. Moreover, the development of 
electronic commerce and online services offers enormous potential for beneficial economic, social and societal change. For example, recent study sh ows that the internet economy creates 2.6 jobs 
for every 'offline' job lost, and often offers a bette r choice to consumers, including those in rural 
and isolated areas. 
Promoting and supporting SMEs' economic activities outside the EU 
2.48.  On 9 November 2011, the European Commission adopted the Communication on 'Small 
Business, Big World — a new partnership to help SMEs seize global opportunities'.
17 This 
Communication aims to establish a more coherent and effective European Union strategy for 
supporting SMEs in international markets and to make better use of existing resources. To reach 
these objectives, the new strategy sets out 6 fields of action: strengthening and mapping the existing supply of support services; creating a single virtual gateway to information for SMEs; making support schemes at EU level more consistent; promoting clusters and networks for SME 
internationalisation; rationalising new activities in priority markets; leveraging existing EU external 
policies.  
A renewed Industrial Policy 
2.49.  On 10 October 2012, the European Commission adopted the Communication on 'A Stronger 
European Industry for Growth and Economic Recovery'.
18 This Communication proposes a 
partnership between the European Union, its Member  States and industry to step up investment 
into new technologies and give Europe a competitive lead in the new industrial revolution. The 
Communication stresses the need for more investments in innovation (focusing on six priority areas with great potential: advances manufacturing technologies for clean production; key enabling technologies; bio-based products; sustainable industrial and construction policy and raw 
materials; clean vehicles and vessels; smart grids) and better market conditions, both in the 
Internal Market, with special reference to goods, entrepreneurship and Intellectual Property Rights 
protection, and in international markets. The economic crisis and difficulties in the banking sector 
have had a negative impact on lending to the real economy and this Communication proposes a 
series of measures to remedy this situation. In addition, new technologies cannot be developed and brought to the market if the European work -force does not possess the necessary skills. The 
Commission therefore also reinforces its strategy through a series of measures as regards human 
capital and skills, to promote job creation and be tter anticipation of, and investments in, the skills 
needed to promote industry's competitiveness.  
3  KEY DEVELOPMENTS IN EU TRADE POLICY (2011-2012) 
3.1  Introduction 
3.1.  Europe 2020 is the European Union's ten- year growth strategy guiding the European Union 
and the Member States in promoting the delivery of growth-enhancing structural reforms. On this 
basis, the European Union has adopted powerful tools to enhance its economic governance and to 
ensure that the required measures are taken to pull Europe out of the crisis. 
                                               
17 COM(2011)702 final of 09.11.2011; viewed at: http://eur-
lex.europa.eu/LexUriServ/LexUriServ.do?uri=COM:2011:0702:FIN:EN:PDF .  
18 See footnote 6. WT/TPR/G/284 • European Union 
 
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  3.2.  As integral part of Europe 2020, the European Commission adopted in 2010 the 
communication 'Trade, Growth and World Affairs, Trade policy as a core component of the European Union's 2020 strategy'.
19 It represents the basis for the European Union trade and 
investment policy for 2010-2015 and proposes a strate gy to reduce trade barriers, to open global 
markets and to get a fair deal for European businesses. The overall aim of this Communication is 
to ensure the benefits of trade reach European ci tizens in the form of stronger economic growth, 
more jobs and increased consumer choice at lower prices.  
3.3.  The conclusions20 of the European Council held on 7 and 8 February 2013 emphasised the 
need to better use trade as an engine for grow th and job creation and reiterates the European 
Union's determination to promote free, fair and open trade whilst asserting its interests, in a spirit of reciprocity and mutual benefit.  
3.2  WTO and the Multilateral Agenda  
Promoting an inclusive Organisation 3.4.  The WTO represents the multilateral bedrock of the European Union trade policy as it 
provides a forum for enforcing rights under WTO rules and ensures that Members benefit of WTO 
membership. The European Union is firmly convinced that the multilateral system as set up by WTO would take advantage of the participation of new countries that would commit to adhere to 
the WTO rules. In that regard, the European Union is actively participating in all accession 
negotiations. It considers that the recent completion of several accessions is a very positive signal that the Organisation remains attractive and provides a robust framework to ensure the integration of the acceding countries in a solid rules-based system. 
3.5.  The European Union has been continuously making the case for preserving the integrity of 
that framework while providing the necessary flexibilities. This is particularly true as regards the accession of LDCs whose specific constraints and challenges must be taken into account. The 
European Union has approached the recent update of the guidelines on LDCs accession in such a 
spirit and actively contributed to and welcomed the completion of the work within the ambitious 
timeframe of six months set at the 8
th WTO Ministerial Conference. 
The Doha Round and the 9th WTO Ministerial Conference 
3.6.  The European Union's top priority is to preserve and strengthen the multilateral trading 
system. The European Union firmly believes that  a successful outcome is needed during the 9th 
WTO Ministerial Conference (MC9) in December 2013 and that MC9 must deliver tangible results in 
particular in the form of an agreement on a set of issues that would constitute the first step on the 
road toward the conclusion of the Doha round. Such a set of issues would revolve around a Trade Facilitation Agreement and would also include a de velopment component as well as certain limited 
agriculture issues.  
3.7.  In order to help advance negotiations on Trad e Facilitation as well as to assist LDCs to reap 
their benefits the European Union has pledged that it will respond positively to the demands of 
developing countries and in particular LDCs for technical assistance and capacity building. In a 
joint statement published in March 2013, the Development Commissioner Andris Piebalgs and Trade Commissioner Karel De Gucht gave their commitment to this support, stating that the European Union's support will come from its overall Aid for Trade commitments.  
3.8.  Looking forward and beyond the successf ul MC9, the European Union remains fully 
committed to furthering negotiations on the remaining elements of the DDA with a view to concluding the entire round. 
The Government Procurement Agreement (GPA)  
3.9.  The EU is a member of the plurilateral WTO Government Procurement Agreement, to date the 
only legally binding agreement on procurement wi thin the WTO. The EU played a very important 
                                               
19 http://trade.ec.europa.eu/doclib/docs/2010/november/tradoc_146955.pdf . 
20 http://www.consilium.europa.eu/uedocs/cms_data/docs/pressdata/en/ec/135324.pdf . WT/TPR/G/284 • European Union 
 
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  role in the re-negotiation of the Agreement, formally concluded on 30 March 2012. The new set of 
tender rules that form the GPA text provide for a higher level of clarity and transparency and guarantee equal footing to suppliers, supplies and services originating in GPA Parties in procurement procedures. The revised GPA extends significantly business opportunities for the 
suppliers from GPA parties and contains provisions that facilitate expansion of the GPA 
membership.  
Negotiations for a Plurilateral Agreement on Trade in services 
3.10.  Following the political guidance of the 8th WTO Ministerial Conference, the European Union 
has been in discussions with other WTO members with a view to making progress on services liberalisation. In participating in plurilateral negotiations on trade in services, the European Union is ready to contribute to an ambitious agreement that would attract broad participation and which 
could be multilateralised in the future. 
3.11.  In this context, the European Union advocates that a plurilateral agreement should be 
perfectly compatible with the GATS so that it could be multilateralised and thereby support the 
multilateral trading system. 
The review of the Information Technology Agreement (ITA)  3.12.  In May 2012, ITA's participants re-launched the process to review the Agreement. The 
European Union has taken an active and leading role in both of the two parallel processes of 
expanding the product coverage and establishing me chanisms for addressing non-tariff barriers in 
the ICT–sector. The EU believes that the review of the ITA is long due. If successfully concluded, 
potentially already in 2013 and with an expanded membership, it would provide a valuable 
contribution to growth in the ICT-sector.  
Monitoring protectionism 3.13.  The European Union has fully recognised and supported the role of the WTO in monitoring 
protectionism and attaches great importance to the transparency pillar of the WTO. For this 
reason, the European Union has supported the WTO in its quest to ensure transparency by providing unequalled amount and level of information on its trade related measures. Furthermore, 
the European Union does not loose occasions, at the level of the WTO committees, to stress the 
importance of the compliance obligations of Members' with the formal notification of measures.  
3.14.  The progress made by WTO Members in respecting notification obligations is still slow, as 
some significant gaps remain in all areas of the WTO's work. The record of compliance is not fully 
satisfactory, although initiatives have been carried forward in each WTO Committee to improve the 
situation. The European Union has actively and consistently supported all initiatives conducive to strengthening the system of monitoring trade related developments and to enhancing 
transparency of trade policies and practices in the WTO. 
3.3  The Bilateral Trade Agenda 3.3.1  Comprehensive and modulate d bilateral/regional agreements 
3.15.  While the European Union remains committed to the further development of the multilateral 
trading system, it has also developed its bilateral trade relations recognising that they can make a positive contribution to complement the multilateral system in a situation where it does not deliver new market access opportunities. 
3.16.  In recent years, therefore, the European Union has developed a trade policy agenda of an 
unprecedented scale. The European Union is now ev en deepening this agenda with the opening of 
negotiations for an agreement with Japan and the possibility of going down the same road in the 
near future with the US as declared in a joint statement on 13 February 2013 by President of the 
United States of America Barack Obama, European Commission President José Manuel Barroso and WT/TPR/G/284 • European Union 
 
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  European Council President Herman Van Rompuy as a follow up of the final report of the High 
Level Working Group on Jobs and Growth.21 
3.17.  This focus on an ambitious bilateral trade agenda has already produced results with the 
successful completion of a new-generation of 'D eep and Comprehensive' FTA with Korea and with 
Colombia, Peru and Central America. The conclusion of technical negotiations leading to 
agreements with a similar level of ambition with Ukraine and Singapore were finalised in the course of 2012. Negotiations with Canada are also on-going and are now in their final phase. This 
shows that even in difficult times, the European Un ion is able to deliver ambitious trade deals that 
provide concrete benefits for the European economy. 
3.18.  The European Union -Korea FTA is a pr ime example of the European Union policy of 
achieving ambitious and reciprocal agreements. It has led to an unprecedented level of tariff 
dismantling (starting with almost 99% of duties within five years) and some ground-breaking 
provisions on non-tariff barriers. Cumbersome and expensive testing and certification requirements will be reduced. Transparency and predictability in regulatory issues will be 
increased, including the protection of intellectual property rights, while sectoral annexes on 
electronics, motor vehicles and parts, pharmaceuticals, medical devices and chemicals provide additional tools to tackle any emerging issue. The agreement covers trade in services with a 
positive list approach. Market access and national treatment are granted to the services and 
services providers/establishments and investor s in the sectors inscribed in the lists of 
commitments subject to any conditions and qualif ications set out therein. It is the first FTA 
concluded by the European Union to include a comprehensive chapter on trade and sustainable 
development, which puts a particular emphasis on  the commitments of both sides to adhere to 
internationally recognised standards in the area of labour and environment. The agreement also 
provides the first example of implementation of su ch provisions in practice and for the involvement 
of civil society. Finally, there will be better access to government procurement markets. 
3.19.  The European Union is also strengthening its ties in its neighbourhood, where reciprocal 
economic gains can be expected from deep integration and regulatory convergence. Deep and 
comprehensive FTA negotiations are on-going with Georgia, Moldova and Armenia or soon to be 
launched with Egypt, Jordan, Morocco and Tunisi a. The European Union's neighbourhood policy 
builds on the strong relation and synergy between trade policy and foreign policy, thereby contributing to an area of peace and prosperity. 
3.20.  The European Union is committed to ensuring that agreements which have been signed or 
negotiated prepare the ground for the next level of multilateral liberalisation and rule making. FTAs, if approached with care, can build on WTO rules by going further and faster in promoting 
openness, by tackling issues which are not ready for multilateral discussion and by preparing the 
ground for the next level of multilateral liberalisation. Many key issues, including investment, public procurement, competition and regulatory issues, which generally remain outside the WTO at 
this time, can be addressed through FTAs. For example, the Agreements concluded during the last 
two years with South Korea, Central America, Peru, Colombia, Ukraine and Singapore contain a chapter on intellectual property tailored to the level of development of the countries concerned. The Agreements concluded with CARIFORUM, Central America, Chile, Colombia, Mexico, Peru, 
South Korea, Ukraine, Singapore and Switzerland include chapters on government procurement. 
3.21.  Ambitious agreements, especially with large developed countries, can have a systemic 
reach. They provide a laboratory for filling the gaps in the multilateral rulebook and develop 
regulatory solutions that can be a basis for subsequent work at multilateral level. The more 
regulatory convergence – and not just equivalence – can be reached, the better for the multilateral system. Succeeding in bringing closer together  regulatory models that are dominant but 
sometimes conflicting would create a global public good. It would send a powerful signal that it is 
possible to converge, even from very different starting points and would offer concrete regulatory solutions to do so, thereby facilitating further negotiations at WTO. 
3.22.  The European Union is championing international approaches in its bilateral agreements. 
The European Union refers as much as possible to internationally agreed standards (or at least 
plurilateral processes) and thereby uses bilateral agreements as a lever to pull its partners towards these international set-ups. The scoping exercise for FTA negotiations with Japan explicitly refers 
                                               
21 http://trade.ec.europa.eu/doclib/docs/2013/february/tradoc_150519.pdf .  WT/TPR/G/284 • European Union 
 
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  to the objective of seeking greater convergence of Japan's national requirements with relevant 
international standards. 
3.3.2  New regulation on existing BITs be tween EU Member States and third countries 
3.23.  On 12 December 2012, the European Parliament and Council adopted the Regulation (EU) 
No 1219/201222 on bilateral investment treaties (BITs). This Regulation sets the conditions under 
which existing BITs between European Union Member States and third countries can be maintained after the European Union Lisbon Treaty.
23 Furthermore, the Regulation establishes a mechanism 
for empowering Member States – under certain conditions – to negotiate and conclude bilateral 
investment agreements with countries not immediately scheduled for European Union wide investment negotiations. This is designed to expand the scope of investment protection currently available to European investors. All appropriate safeguards are in place to ensure that Member 
States' investment agreements do not create any serious obstacles to the smooth implementation 
of the European Union investment policy. 
3.3.3  External public procurement initiative 
3.24.  In its recent efforts to boost growth thro ugh the proposed 'twelve levers to boost growth 
and strengthen confidence' included in the Single Market Act I and in the 2010 'Trade, Growth and 
World Affairs'
24 the European Commission highlighted fair competition and access to public 
procurement markets as one of the key tools for economic growth and job creation, in particular in 
the context of the recent economic crisis. Furthermore, in March 2012 the European Commission proposed a new regulation (i.e. the International Procurement Initiative) in the area of the European Union's international procurement policy.
25 The key objective of this initiative is, through 
our trade negotiations, to improve the conditions under which European Union businesses can 
compete for public contracts in third countries. Furthermore, it confirms the legal status of bidders, goods and services from countries that have an international agreement with the European Union 
in the area of public procurement and clarifies the rules applicable to bidders, goods and services 
not covered by these agreements. The proposed legisl ation is yet to be approved by the legislators 
(the European Parliament and Council).  
3.4  Trade and Sustainable Development 
3.25.  For the European Union, mainstreaming sustainability with its economic, social and 
environmental dimension in all relevant policies is a basic requirement set out in the Treaty on the European Union, both as regards internal policies and external action. The European Union 
Sustainable Development Strategy has guided the European Union activities in that regard since 
2006. The European Union is concerned with ensuring that its trade policy and agreements supports sustainable development within the European Union, in our partner countries, and at 
global level.  
3.26.  At bilateral level, all trade agreements recently concluded by the European Union, both with 
developed and developing countries, include provisions on sustainable development. Such 
provisions address adherence to and effective implementation of core international instruments 
(ILO fundamental Conventions, Multilateral Environmental Agreements), upholding levels of labour and environmental protection, the effective enforcement of domestic environmental and labour laws, the prudent use of natural resources, the promotion of practices favouring sustainable 
development (e.g. Corporate Social Responsibili ty and the use of sustainability schemes) and 
provide for the involvement of civil society, in  monitoring implementation of the agreement. 
                                               
22 O.J. L 351 of 20.12.2012. 
23 With the entry into force of the Union Lisbon Treaty, exclusive competence for foreign direct 
investment has been transferred from the EU  Member States to the European Union. 
24 See paragraph 2.49 and footnote 18. 
25 COM(2012)124 of 21.03.2012; viewed at: 
http://trade.ec.europa.eu/doclib/docs/2012/march/tradoc_149243.pdf .  WT/TPR/G/284 • European Union 
 
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  3.27.  On 25 October 2011, the European Commission adopted the Communication 'A renewed EU 
strategy 2011-14 for Corporate Social Responsibility'26 to further promote responsible business 
conduct, including the respect for internationally recognised principles and guidelines in this area. 
3.28.  Over the last years, climate change has emerged as a crucial sustainable development 
challenge facing policy makers, requiring also a careful consideration of the interaction between 
climate and trade policies with a view to ensuring that they reinforce each other. The European Union has been in the frontline in the fight against climate change both at the domestic level and 
on the international stage, and pursues complementary trade policies that can directly contribute 
to climate policy goals, such as the liberalisation of trade in environmental goods and services. 
3.29.  One additional tool to reinforce supportiveness between trade liberalisation and sustainable 
development are the assessments of the potential effects of trade agreements on the pursuit of 
economic, social and environmental goals. In th e European Union, such assessments are carried 
out throughout the policy-making cycle: ex ante, in the form of Impact Assessments, when a new policy is developed; during the course of the negotiations, as Trade Sustainability Impact 
Assessments (SIAs); or as ex-post analyses when an agreement is implemented. The assessments 
address significant and relevant economic, social , human rights and environmental impacts, and 
aim at providing information to policy-makers on  how to maximise the positive effects and/or 
mitigate possible negative consequences of th e trade agreements. All of them include broad 
consultations with relevant stakeholders, including civil society. 
3.4.1  Trade and development  Overall policy framework 
3.30.  The European Union seeks to respond to the needs of developing countries, to support their 
sustainable development and their integration into the global trading system. Efforts to assist developing countries in achieving growth, reducing  poverty and improving social equality within a 
framework of sustainable development have to be undertaken through a range of policy tracks, 
including trade policy. In this context, the Euro pean Union continues to be fully committed to put 
trade at the service of development.  
3.31.  In the area of European Union development policy, in October 2011 the European 
Commission issued a Communication on 'Increasing the Impact of European Union Development Policy: an Agenda for Change'.
27 The primary aim of this policy is, as the title suggests, to 
significantly increasing the impact and effectiveness of the European Union development policy in 
a changing global landscape. European Union aid w ill be directed to countries where it is most 
needed and can have the most impact. Inclusive and sustainable growth, particularly where associated to good governance, can be a catalyst for long-term poverty reduction. 
3.32.  On 27 January 2012, the Commission adopted a Communication on 'Trade, growth and 
development: Tailoring trade and investment policy for those countries most in need'
28 that was 
endorsed by the European Council in March 2012. This Communication sets out a clear picture on 
how the European Union can best support developing countries in greatest need in order to better 
harness the opportunities in favour of inclusive growth and poverty reduction, in a global scenario which has considerably changed.  
3.33.  This concerns in particular the shift of the relative trading power of developing countries, 
notably with respect to the growing weight of emerging economies and the struggle that Least 
Developed Countries (LDCs) have in reaping the benefits of world markets. This would allow to trade and development instruments to work hand-in-hand and to reinforce the trade capacities of 
developing countries by making trade part of their development strategy. In setting out the 
European Union's development priorities for the next decade, the Communication proposes, among others, to differentiate more among developing countries to focus on the poorest, to intensify 
                                               
26 COM(2011) 681 final of 25.10.2011; viewed at: http://eur-
lex.europa.eu/LexUriServ/LexUriServ.do?uri=COM:2011:0681:FIN:EN:PDF .  
27 COM(2011) 637 final of 13.10.2011, viewed at: http://eur-
lex.europa.eu/LexUriServ/LexUriServ.do?uri=COM:2011:0637:FIN:EN:PDF .  
28 COM(2012) 22 final of 27.01.2012, viewed at: 
http://trade.ec.europa.eu/doclib/docs/2012/january/tradoc_148992.EN.pdf . WT/TPR/G/284 • European Union 
 
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  efforts to look beyond tariffs and reduce the remaining barriers to trade and to improve the way 
European Union trade and development instruments deliver and to enhance their complementarity. 
Aid for trade 3.34.  Aid for Trade is an integral part of European Union development assistance. The European 
Union with its Member States continues to be the leading player within the Aid for Trade agenda 
and moves decisively to put Aid for Trade into practice.  
3.35.  In 2010 (the year of the last monito ring exercise) the collective European Union 
performance accounted for around 32% of tota l aid for trade flows, reaching more than 
€10.7 billion, an increase of 4.2% compared to the previous exercise. This increase, delivered 
through existing channels of development cooper ation, did not come at the expense of other 
sectors but rather in the context of a growing ov erall Official Development Assistance (ODA) from 
the European Union.  
3.36.  In the narrower category of Trade Relate d Assistance (TRA) the European Union and its 
Member States account for 60% of total commitments. This includes core trade activities such as 
trade policy and planning, trade facilitation, trade negotiations and trade development. By 2008 
and 2009 the European Union collectively had already exceeded its pledge given at the 2005 Ministerial Conference in Hong Kong, to provide €2 billion in TRA assistance by 2010 
(€1 billion each by the European Commission and Member States).  
3.37.  Beyond increasing volumes, the implem entation of the European Union Aid for Trade 
Strategy continues through a constant effort to increase the impact of Aid for Trade delivery. In terms of activities financed in the trade area, the European Union assisted developing countries 
across the whole spectrum of trade policy and re gulation and trade development categories, while 
making sure that the distribution of available funds corresponded as close as possible to the developing countries' own priorities and demands. For instance, a substantial part of Trade Related 
Assistance was allocated for technical assistance to help beneficiaries meet European technical and 
phytosanitary standards. 
3.38.  The Economic Partnership Agreements are the cornerstone of the EU's trade and 
development partnership with ACP countries. Curr ently, three EPAs are being implemented and 
negotiations with a number of regions are on-g oing. The European Union external assistance 
supports reforms of the trading regime by providing the funding to strengthen institutional and productive capacities required to exploit the opportunities created by the agreements. 
3.39.  On the multilateral side of Aid for Trade, the European Union and its Member States are 
closely engaged in work on enhancing the Integrated Framework on Trade Related Technical Assistance for the LDCs. The Enhanced Integrated Framework (EIF) is now fully operational and 
since December 2010, 48 LDCs have benefitted from the programme. The European Union and its 
Member States are involved as important donors, in some cases as donor facilitators on the ground and by participating in the EIF. Furthermore, there is a commitment to using the EIF as a 
guiding tool for bilateral assistance, in accordance with the joint European Union Aid for Trade 
Strategy. 
3.4.2  Generalised System of Preferences (GSP) 3.40.  Under Regulation (EU) No 978/2012
29 of 25 October 2012, the European Union adopted a 
revised generalised scheme of preferences that w ill be applicable from 1 January 2014. The time 
gap between the adoption of the Regulation and it s actual application is necessary to allow more 
than one year for businesses and countries to adapt to changes entailed by the new scheme.  
3.41.  The revised GSP scheme maintains the salient  features of the current one, and adapts the 
instrument to the changes in the global landscape . Preferences have been focused on 89 countries 
in greatest need. These are LDCs and other lower income economies (as classified by the World 
Bank) which do not enjoy, via other arrangements, preferential access to the European Union with 
the same or better tariff preferences as the GSP scheme. Developing countries whose preferences 
                                               
29 O.J. L 303 of 31.10.2012. WT/TPR/G/284 • European Union 
 
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  have been deferred remain eligible, and will enjoy GSP benefits should they be classified again as 
LDCs (by the UN) or as low-income countries (by the World Bank). The situation of eligible countries will be reviewed every year. 
3.42.  A number of products will enjoy larger preferences than under the current scheme: 15 new 
tariff lines are added to GSP as "non-sensitive" (i.e., they enjoy duty-free access); 4 tariff lines 
under GSP which were "sensitive" (i.e., they benefitted from a duty reduction) turn to 
"non-sensitive" (duty-free access); 4 new tariff lines are added to GSP+ (duty-free access). These 
categories have been carefully selected so as to create opportunities for GSP beneficiaries, without 
jeopardising the competitiveness of LDCs, which already benefit from duty-free access under the 
EBA scheme and would suffer from strengthened competition if zero-duty treatment were granted to a wider number of products. 
3.43.  The revised GSP scheme makes a number of  modifications regarding sectoral graduation. 
First, product sections are expanded from 21 to 32, in order to ensure that graduation is more objective, as the products in the categories are more homogeneous. Second, graduation 
thresholds are increased from 15% to 17.5% (from 12.5% to 14.5% in case of textiles) calculated 
as the share of the beneficiary's exports to the EU  over the total exports to the European Union of 
all beneficiaries. Third, with a view to reflecti ng the development needs also of GSP+ beneficiary 
countries there will be no graduation of any sector for GSP+ beneficiaries, thus increasing the 
export opportunities of these vulnerable countries. 
3.44.  GSP+ is improved under the new regulation. The economic criteria for eligibility are relaxed, 
allowing for more countries to benefit from the scheme. Entry, monitoring and withdrawal rules 
are clarified, making the system more transparent and predictable. As in the current system, there 
are provisions for temporary withdrawal of preferences and safeguards. In an effort to enhance transparency and predictability, substantive rules have been clarified, and a separate regulation 
will be published in 2013 to set out in detail procedural rules. Special safeguards for clothing are 
extended to plain textiles as well as to ethanol.  
3.45.  The modified GSP will last ten years, compared to the three years of the current scheme. 
This will make the scheme more stable and thereby benefitting businesses and eligible countries. 
4  LOOKING FORWARD 4.1.  At the European Union level, the current legislative cycle will come to an end in mid-2014. 
The European Parliament elections will take place in May-June 2014 and the current Commission's 
mandate will end later the same year. 
4.2.  The main objective for 2013 to mid-2014 will be to further strengthen the European Union's 
capacity to respond to the current economic, financial and social challenges. Tools and 
mechanisms have been developed over the last ye ars to create the conditions for recovery and 
re-launch growth, investment and job creation. Efforts will be concentrated on the implementation of the new legislative acts on economic governan ce agreed at the end of 2012 that will allow a 
much higher degree of surveillance and coordi nation, necessary to ensure sustainable public 
finances and avoid the accumulation of excessive imbalances. In particular, ensuring the financial stability of the euro area and of the European Union as a whole remains a central concern in order to foster economic growth and create jobs while  deepening the single market and strengthening 
the European Union's competitiveness in the global economy. 
4.3.  Reform of the CAP will continue, to promot e greater competitiveness of European agriculture, 
efficient use of resources and policy returns in line with European citizens' expectations, with 
regard to food security, the environment, climate change as well as social and territorial balance. 
The objective will continue to be building more su stainable, smarter and mo re inclusive growth for 
rural Europe. 
4.4.  An effective protection of IPR will occupy a prominent position in Europe's future external 
policy. In a knowledge society, intangible assets are a crucial component of many goods and services. EU investments in creativity, research, design and quality are a positive feature of the European economy that needs to be preserve d through an effective protection of IPR. 
Furthermore, for the European Union it is important to show that adequate IPR enforcement can WT/TPR/G/284 • European Union 
 
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  contribute enhance investment opportunities, transfer of technology and improvement of health 
and safety standards. 
4.5.  Trade policy will continue to be put at the service of development and the European Union 
and its Member States will continue to make efforts to assist developing countries in achieving 
growth and reducing poverty within the framework of sustainable development. 
4.6.  At the multilateral level, the WTO represents one of the world's most important institutions 
dealing with globalisation. For this reason, the European Union considers the multilateral trading 
system, centred on WTO rules, as a vital backbone for the development of international trade. 
4.7.  Particularly in times of crisis, the temptation to resort to protectionism can indeed be high 
and there is currently a difficult balance to strike between the current impasse in the Doha round and the need to maintain the WTO's central role for long term trade liberalisation.  
4.8.  Despite the economic crisis that was ongoing during the years under review, the European 
Union did not seek to undo the comparative advantages of its partners. The use of trade defence instruments was limited to cope with unfair practices such as anticompetitive pricing behaviours or 
subsidies or other State-induced distortions. Subsid ies were granted to the banking sector only on 
a temporarily basis and limited to the amount necessary to face the related market failures. 
4.9.  The European Union remains unwaveringly committed to the successful conclusion of 
negotiations within the Doha Development Agenda (DDA). This endeavour will require efforts from 
all the participants in the negotiations.  
4.10.  As a first step, it is important to move forward in those areas where multilateral progress 
could be achieved by the 9
th WTO Ministerial Conference: the multilateral agreement on trade 
facilitation, a development component and certain limited agricultural issues.  
4.11.  The benefits to the global economy of an agreement on trade facilitation would be 
comparable to the total gains expected from goods and services liberalisation under the original 
DDA mandate. Making it easier and cheaper to trade will help developing countries to better 
integrate in regional and global trade system. This will contribute to facilitate trade development and diversification, enhance job-creation and the wider sharing of the benefits of international 
trade. Getting agreement in the WTO on trade facilitation would also send a powerful signal about 
the strength of the multilateral trade system and its ability to produce tangible results for the international community. 
4.12.  The European Union is committed as well to engaging constructively after the 9
th WTO 
Ministerial Conference on the rest of the Doha ag enda and potentially other important issues, such 
as climate change, while including a broader differentiation within the commitments of the members. The fact that the European Union is participating in preferential and plurilateral 
negotiations with a number of countries in no way weakens the European Union commitment to 
the WTO or the DDA. The European Union is committe d to ensuring that the future agreements will 
prepare the ground for the next level of multilateral liberalisation and rulemaking. The conclusion 
of ambitious plurilateral or preferential agreem ents would be a clear signal of the parties' 
willingness to open markets on goods and services and tackle complex regulatory issues. It could notably help re-energise multilateral negotiations in the WTO. The negotiation of plurilateral agreement on trade in services and on information technology products, as well as the EU's FTA 
negotiations with the US and Japan are certainly among the most important processes in this 
regard.  
4.13.  To conclude, the European Union is convin ced that ambitious preferential or plurilateral 
agreements can have a systemic reach. They provid e a basis for the development of global rules in 
areas where WTO Members have not been able to agree so far at the multilateral level. This is potentially a unique laboratory for filling the gaps  in the multilateral rulebook and developing 
regulatory solutions that can be a basis for subsequent work at multilateral level.  
__________