European Union WT/TPR/S/248 
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I. ECONOMIC ENVIRONMENT 
(1) TRADE AND COMPETITIVENESS  
1. The EU is the world's largest economy and trader, with almost 29% of global output, 17% of 
global merchandise trade, and 26% of global commercial services trade in 2009.1  In the context of the 
economic crisis, extra-EU trade of goods and service s decreased from almost 31% in 2008 to 28% of 
EU-27 GDP in 2009, reversing a previous upward tr end.  Including intra-EU trade, several member 
States are among the top ten goods and services traders in the world.  Germany, by far the largest 
trader among EU member States, was the world's thir d largest trader of goods, and the second largest 
trader of services in 2009. 
2. During the decade leading up to the economic cris is that started in 2008, the performance of 
exports across member States varied greatly (Chart I.1).  Several member States that acceded to the 
EU in 2004 or later recorded rapid growth in export volumes of goods and services (including intra-
EU exports).  This strong performance was partly  driven by an increase in new member States' 
exports of intermediate manufactur ing goods to Germany, and to a lesser extent, Austria and the 
Netherlands, as firms from these three countries invest ed in production facilities in the new member 
States to reduce costs.2 
0.02.04.06.08.010.012.014.0
Malta
Italy
Cyprus
France
United Kingdom
Belgium
Spain
Portugal
Greece
Denmark
Netherlands
Sweden
Bulgaria
Ireland
Austria
Finland
Germany
Luxembourg
Estonia
Latvia
Slovenia
Slovakia
Poland
Hungary
Lithuania
Czech Republic
Romania
Including intra-EU exports.
European Commission, Economic and Financial Affairs,  Economic databases and indicators.  Viewed at:  
http://ec.europa.eu/economy_finance/db_indicators/index_en.htm.a
Source:Chart I.1
Export volumes of goods and services, 1999-08
Average annual change, %
EU(27) average
5.5%a
 
                                                      
1 The EU's share of global output is based on no minal GDP, and the share in global merchandise and 
commercial services trade excludes intra-EU trade. 
2 European Central Bank (2005). WT/TPR/S/248 Trade Policy Review 
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3. Export volume growth in several other member States lagged markedly during the decade 
preceding the economic crisis (Chart I.1).  Although this can be attributed partly to relatively low 
demand in key trading partners, many of these count ries have also recorded losses in market shares 
(Chart I.2).  The factors underlying these losses va ry across member States, but are linked largely to 
the product composition of exports, and to poor price and non-price competitiveness.  For example, 
the persistent loss of market share of Italian exports  reflects Italy's particular export basked, and to a 
lesser extent, a slowdown in the growth of pr oductivity and an increase in unit labour costs.3 
4.04.55.05.56.06.57.0
0 2 4 6 8 1 01 21 4Chart I.2
Export growth and foreign demand, 1999-08
Average annual change, %
Export volume growthExport market growth
Export volume growth refers to the average annual percentage change of export volumes of goods and services 
(including intra-EU trade). Export market growth refers to  the potential export growth for a country assuming that 
its market share remains unchanged;  it is calculated as  the weighted average of import volume growth for goods 
and services at constant prices in 35 markets, with the weighting pattern derived from the share of each member 
State's exports going to these market in a chosen base year.
European Commission, Economic and Financial Affairs, Economic databases and indicators.  Viewed at:  
http://ec.europa.eu/economy_finance/db_indicators/index_en.htm.Note:
Source:ITALVASVK
EST
LTU
GRC
BGRAUT
SVNPOLCZEHUN
ROUFINDEU
DNKPRT
GBRCYP
FRA
MLTESPNLD
IRLBEL SWE
 
 
4. German export performance during the decade pr ior to the onset of the economic crisis 
excelled relative to other large EU  exporters (Chart I.2).  Empirical evidence suggests that the sharp 
increase in Germany's exports resulted largely from improvements in price and cost competitiveness, 
as from 2002 unit labour costs fell due to wage modera tion.  In addition, German companies benefited 
from cost reductions by offshoring and outsourci ng parts of their supply chains to lower-cost 
countries, particularly newer member States.4  Apart from price and cost competitiveness, product 
specialization has contributed to Germany's e xport performance.  Around half of German goods 
exports have a relatively high unit value.5  Germany accounts for one third of EU exports of high unit 
value goods, roughly the same share as Italy, France,  and the United Kingdom combined.  Its share in 
global exports of these goods remained rela tively stable at 10% between 1995 and 2004. 
                                                      
3 Larch (2005). 
4 See OECD (2010c). 
5 Based on unit value data for 2004, contained in Curran and Zignago (2009). European Union WT/TPR/S/248 
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(2) RECENT DEVELOPMENTS  
(i) Crisis and policy response 
5. At the time of its previous Review in Ap ril 2009, the EU was in the midst of a severe 
economic recession;  this has been followed by a s overeign debt crisis in some euro-area countries.  
Like most other WTO Members, the EU largely resisted pressures to respond to the recession by tightening restrictions on imports or exports. 
6. An economic recovery, supported by considerab le fiscal and financial policy stimulus, is 
under way, but it is likely to be moderate and uneven.
6  Although output for the EU as a whole is 
forecast to regain its pre-crisis level in the sec ond quarter of 2012, growth in 11 member States 
growth is expected to remain below pr e-crisis levels until at least end-2012.7 
7. The recession was widespread (Chart I.3).  EU- 27 real GDP decreased at an average of 1.1% 
per quarter for five consecutive quarters beginning in  the second quarter of 2008.  This reflects the 
collapse of external demand follo wing the intensification of the financial crisis, and a sharp 
contraction in private demand due to rising unc ertainty, tighter financial conditions, higher 
unemployment, and lower asset prices.  On a yearly basis, EU-27 real GDP increased by 0.5% in 2008 
and contracted by 4.2% in 2009;  it is expected to rise by 1.8% in both 2010 and 2011.8 
8. Unemployment in the EU rose from 6.7% in the first quarter of 2008 to 9.6% in the fourth 
quarter of 2010, undoing previous gains.  Changes in the unemployment rates of individual member 
States during this period ranged from an increase of 14 percentage points in Lithuania to a decrease of 
almost 1 percentage point in Germany.  At the end of 2010, the unemployment rate was above the EU 
average in Bulgaria, Estonia, Greec e, France, Hungary, Ireland, Latvia, Lithuania, Portugal, Slovakia, 
and Spain.  In the fourth quarter of 2010, th e long-term unemployment was 41% of EU total 
unemployment. 
9. Following the onset of the financial crisis, member States intervened on a large scale to 
stabilize their economies.  The European Central Ba nk (ECB) and other central banks in the EU eased 
monetary policy substantially.  In addition, G overnments provided significant fiscal support through 
the operation of automatic stabilizers and, so metimes, discretionary stimulus measures 
(Chapter III(3)(iii)). 
10. A majority of member States provided support for the financial sector.  In 16 of them, support 
ranged between 5% and 35% of GDP, while in Ireland it reached approximately 170% of GDP.9  This 
support was subject to EU state aid rules, thus helping to minimize the potential for cross-border 
market distortions.  However, as noted by the OE CD, "many financial inte rventions were designed 
primarily with domestic banking groups in mind, and while non-domestic institutions could join, few 
took up this offer in practice, given support schemes at home".10 
                                                      
6 IMF (2010b). 
7 European Commission document COM(2011) 11 final, 12 January 2011.  Viewed at:  
http://ec.europa. eu/economy_finance/articles/eu_economic_situation/pdf/2011/com2011_11_annex2_en.pdf. 
8 The figures for 2010 and 2011 are from European Commission (2011). 
9 European Commission document COM(2011)11 final, 12 January 2011.  Viewed at:  
http://ec.europa.eu/economy_finance/articles/eu_economic_situation/pdf/2011/com2011_11_annex2_en.pdf. 
10 OECD (2010b). WT/TPR/S/248 Trade Policy Review 
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-20-15-10-505
LVA
LTU
EST
FIN
SVN
IRL
ROUHUN
SWE
DNK
ITA
BGRGBR
SVK
DEU
CZE
AUTNLD
ESP
LUX
BEL
FRA
PRT
GRC
MLT
CYPPOLChart I.3
Real GDP growth, 2008-09
Annual change, %
EUROSTAT. Viewed at: http://epp.eurostat.ec.europa .eu/portal/page/portal/statistics/search_database. Source:EU(27) average
-4.2%
 
 
020406080100120140
EU(27)
GRC
ITA
BEL
HUN
FRA
PRT
DEU
MLT
GBR
AUT
IRL
NLD
CYP
ESP
POL
FIN
SWE
DNK
LVA
SVK
SVN
CZE
LTU
ROU
BGR
LUX
ESTChart I.4
Public debt, 2008-09
% of GDP
EUROSTAT. Viewed at: http://epp.eurostat.ec.europa.eu/portal/page/portal/statistics/search_database. Source:2008
2009
 
 European Union WT/TPR/S/248 
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11. Public finances in the EU deteriorated sharply during the period under review.  In 2009, all 
EU member States recorded budget deficits, which ranged from less than 1% of GDP in Luxembourg 
to 14% of GDP in Ireland;  11 member States reco rded negative primary balances.  Government debt 
as a share of GDP increased in almost all member States, undoing moderate progress during the pre-
crisis period (Chart I.4).  The sharp deterioration in public finances reflects the decline of revenues 
following the contraction of economic activity, an d significant pressures on expenditure due to the 
operation of automatic stabilizers and the introduction of discretionary fiscal stimulus measures. 
12. The economic crisis reduced somewhat the larg e current account surpluses and deficits that 
prevailed in many member States prior to its out break.  Nonetheless, current account deficits and 
surpluses remain significant, especially  within the euro area.  Severa l member States that recorded a 
large deficit in their current account balance at the onset of the crisis, for example Greece, Portugal, 
and Spain, were generally in deficit as EU econom ic activity recovered, while member States with 
large current account surpluses prior to the crisis (e.g., Germany and the Netherlands) continue to 
maintain these surpluses.  Accord ing to the Commission, this partly reflects structural weaknesses, 
including weaknesses in domestic demand in surplus countries, and weak price and cost 
competitiveness, often combined with hi gh debt levels in deficit countries.11 
13. The revelation in October 2009 of large fiscal im balances in Greece prompted a debt crisis, 
which has spread to other euro area countries.12  In response, the ECB provided liquidity and credit 
support, and the Council agreed to set up crisis financing instruments.13  Among them, the European 
Financial Stability Facility will be replaced by the European Stability Mechanism on a permanent 
basis from mid-2013.  This will require an amendm ent to the Treaty on the Functioning of the EU.14  
In addition, several member States affected by the cr isis have embarked on fisc al consolidation paths;  
Greece and Ireland have done so as part of  joint EU-IMF financial assistance packages. 
14. In early 2011, the European Parliament and the Council were discussing a package of draft 
legislative measures that seeks to broaden, deepen, and integrat e the surveillance of member States' 
macroeconomic policies a nd structural reforms.15  The package includes a proposal to reform the 
Stability and Growth Pact, which is the existing framework for coordinating national fiscal policies 
among euro area countries, and to broaden surve illance to correct and prevent macroeconomic 
imbalances related to external positions, competitiveness, and intern al developments.  Integrated 
surveillance is based on the so-called "European Semester", a framework for synchronizing national 
budget procedures and reform with EU surveillance.  The European  Council endorsed the introduction 
of a European Semester from 2011. 
                                                      
11 European Commission document COM(2011)11 final, 12 January 2011.  Viewed at:  
http://ec.europa.eu/economy_finance/articles/eu_economic_situation/pdf/2011/com2011_11_annex2_en.pdf. 
12 For a detailed description of the Greek debt crisis, see IMF (2010a). 
13 Council of the European Union press release 9596/10 (Presse 108) , Extraordinary Council meeting, 
Economic and Financial Affairs, Brussels, 9/10 Ma y 2010.  Viewed at:  http://www.consilium.europa.eu/ 
uedocs/cms_data/docs/pressdata/en/ecofin/114324.pdf. 
14 European Commission press release MEMO/10/ 636, "European Stability Mechanism (ESA) - 
Q&A", 1 December 2010.  Vi ewed at:  http://europa.eu /rapid/pressReleasesAction. 
do?reference=MEMO/10/636;  and European Council document EUCO 30/1/10 REV 1, European Council 16-17 December 2010 Conclusi ons, 25 Ja nuary 2011. 
15 European Commission online information, "A new EU economic governance – a comprehensive 
Commission package of proposals".  Vi ewed at:  http://ec.europa.eu/eco nomy_finance/article s/eu_economic_ 
situation/2010-09-eu_economic_governance_proposals_en.htm. WT/TPR/S/248 Trade Policy Review 
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15. The Commission considers that member States  with large current account deficits, weak 
competitiveness, and weak adjustment capacity need  large price and cost adjustment to restore 
competitiveness.16  Among the recommended policy measures are product market reforms and the full 
implementation of the Services Directive (see also Chapter IV(2)(i)).  For member States with large 
current account surpluses, the Commission considers that policy measures must address the sources of 
persistently weak domestic demand, and could includ e further liberalization of the services sector and 
improving investment conditions. 
16. According to the Commission, increased compe tition resulting from the removal of internal 
barriers to trade in services should have a pos itive impact on demand through lower prices and a 
positive income effect.  In addition, the Commission notes that the removal of barriers to investment 
should increase foreign direct investment in services , and have a positive effect on productivity and 
income. 
17. Furthermore, the EU sees trade policy as a ke y tool to buttress member States' efforts to 
achieve the objective of "smart, inclusive, and sustainable growth" under the Europe 2020 strategy 
(see Chapter II(2)).  In this context, the Commi ssion recognizes that trade opening leads to higher 
productivity and thereby contributes to increased external competitiveness.17 
(ii) Trade and investment flows 
(a) Merchandise trade 
18. The steady increase in extra-EU27 imports a nd exports between 2003 a nd 2008 was reversed 
in 2009, as EU total trade fell by approximately €500 billion to €2,361 billio n.  Exports decreased 
13% to €1,138 billion, and imports fell 21% to  €1,223 billion (Tables AI.2 and AI.4).   
19. The fall in exports between 2008 and 2009 mainly reflects a large decrease in exports of 
machinery and transport equipment, the EU's princi pal export category with almost 40% of total EU 
exports (Chart I.5).  Exports of chemicals, the sec ond largest category, increased slightly, in terms of 
both value and participation in total exports.  Germa ny recorded the largest fall in extra-EU exports of 
machinery and transport equipment.  German car ex ports were particularly affected, accounting for 
almost half of the total decrease in EU car e xports;  France and Italy also recorded significant 
decreases in exports of machinery and vehicles. 
20. The United States remains by far the largest destination for EU exports, despite an 18% 
decrease in value terms between 2008 and 2009.  Since 2005, the participation of the United States in total EU exports has fallen by six percentage point s (Chart I.6 and Table AI.1)  Russia, which had 
been the second largest export destination in 2008,  dropped to fourth place in 2009, behind 
Switzerland and China.  Around half of EU exports to China are machinery and transport equipment. 
21. Between 2008 and 2009, imports of iron and steel fell almost 60% to approximately 
€18 billion, the largest decline in relative terms for any product group.  Imports of mining products, 
including fuels, decreased 38% to €307 billion.  These products comprise the second-largest import 
category, with around one quarter of total EU im ports in 2009 (Chart I.5).  The largest import 
category is machinery and transport equipment, with 28%. 
                                                      
16 European Commission document COM(2011)11 final, 12 January 2011.  Viewed at:  
http://ec.europa.eu/economy_finance/articles/eu_economic_situation/pdf/2011/com2011_11_annex2_en.pdf. 
17 Commission staff working document SEC(2010) 1269.   Viewed at:  http://trade.ec.europa.eu/doclib/ 
press/index.cfm?id=636&serie=382&langId=en. European Union WT/TPR/S/248 
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22. China is the largest source of EU imports, followed by the United States and Russia (Chart I.6 
and Table AI.3).  The United States was the main import source for chemicals, raw materials, and 
food and drink, which together re present about one-fifth of total EU imports.  The main EU suppliers 
of chemical products are the United States and Switz erland, while energy products come mainly from 
Russia and Norway.  China is the main source for EU imports of machinery and other manufactured 
goods.  The share of Africa in total EU imports has lingered around 10% since 2005. 
23. All member States recorded falls in both extra- EU exports and imports in 2009.  Lithuania, 
Finland, Bulgaria, Romania, Poland, and Slovenia r ecorded the largest fall in exports in relative 
terms;  they all had Russia as one of their top thr ee trading partners.  The United States was the main 
trading partner for Belgium, France, Ireland, Italy, and the United Kingdom in 2009.  These five 
countries recorded below average declines in trade between 2008 and 2009. 
24. Close to two thirds of the EU’s total trade wa s carried out within the EU in 2009.  The share 
of intra-EU trade in total trade of individual member States ranged between 82% for the Czech 
Republic and 54% for the United Kingdom.  Intra-EU exports decreased 19% in 2009, compared with 
a 16% decline for extra-EU exports.  For new me mber States except Cyprus, Poland, and Slovakia, 
the fall in intra-EU trade was above the EU average,  with Latvia and Lithuania recording the largest 
falls.  The bulk of intra-EU trade consists of  machinery and vehicles, other manufactures goods, and 
chemicals. 
25. The preceding analysis of merchandise trade flows is based on United Nations Comtrade data.  
At end-March 2011, Comtrade had no data on EU tr ade flows for 2010.  EU trade data for 2010 were 
available from the COMEXT database maintained  by the Commission.  Based on these data, EU 
exports grew 23% in 2010, and imports almost 24%, re flecting the strong recovery of global trade.  
The two major export categories recorded growth ra tes of 26% (machinery and transport equipment) 
and 15% (chemicals) in 2010.  Imports of all major import categories showed increases in 2010 
ranging from 20% for food and drink to 100% for oils and fats.  Exports to China, Turkey, and Russia, 
increased between 30% and 40% in 2010, the largest increases among the EU's major trading partners.  
Imports from large developing countries, notably China, Russia, India, and Brazil recorded vigorous 
growth in 2010. 
 
 WT/TPR/S/248 Trade Policy Review 
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Chart I.5
Structure of merchandise trade, 2005 and 2009
2005 2009
(a)  Exports (f.o.b.)
Total:   €1,055.0 billion Total:  €1,137.8 billion
(b)  Imports (c.i.f.)
Total:   €1,179.9 billion Total:   €1,223.0 billionPer cent
Source :  WTO Secretariat estimates, based on UNSD, Comtrade database (SITC Rev.3).Manufactures
62.5Manufactures
59.3Agriculture
6.3Mining
6.3
Iron and 
steel  2.9
Chemicals
14.9
Non-electrical 
machinery
15.3
Agriculture
7.7
Crude oils
14.6
Other 
mining
11.5Textiles and 
clothing  5.9
Other semi-
manufactures
5.4Electrical 
machines
17.6Transport 
equipment
8.3Other consumer 
goods
9.2
Iron and 
steel  1.9Other 
3.8Other
4.9
Electrical 
machines
13.5Textiles and 
clothing
3.0
Chemicals
8.1
Non-electrical 
machinery
6.1Other semi-
manufactures
8.1Other consumer 
goods
9.5
Mining
26.0Mining
25.1Manufactures
82.5Manufactures
77.9
Agriculture
8.3
Crude oils
13.2
Other 
mining
11.9Textiles and 
clothing  6.3
Other semi-
manufactures
4.9Electrical 
machines
15.4Transport 
equipment
6.7Other consumer 
goods
9.7
Iron and 
steel  1.5Other 
7.3
Chemicals
9.1
Non-electrical 
machinery
5.8Transport 
equipment
15.3Agriculture
7.0Mining
7.0
Iron and steel  
2.6
Chemicals
17.0
Non-electrical 
machinery
16.4Other
8.1
Electrical 
machines
10.6Textiles and 
clothing
2.6
Other semi-
manufactures
7.2Other consumer 
goods
8.9
Transport 
equipment
12.7
 European Union WT/TPR/S/248 
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Chart I.6
Direction of merchandise trade, 2005 and 2009
2005 2009
a) Exports (f.o.b.)
(b) Imports (c.i.f.)Per cent
Source:  WTO Secretariat estimates, based on U NSD, Comtrade database (SITC Rev.3).Total: €1,179.9 billionAmerica
21.6Total: €1,055.0 billionSwitzerland
7.9Middle 
East
8.4
Africa
8.3Other Asia
14.5Other
4.1
Asia
23.6
Europe
18.1
Total:€1,137.8 billion
Total: €1,223.0 billionAsia
35.5
Europe
15.5United States
24.0
Other Europe
2.7Norway
3.2Russian 
Federation
5.4Other 
America
8.2
Turkey
4.2
America
20.7
Asia
36.5Europe
17.6America
32.1Asia
24.5
Europe
20.8America
25.9
China
4.9Japan
4.1
Switzerland
7.9
Middle 
East
8.2
Africa
9.5Other Asia
14.2Other
5.3 United States
18.0
Other 
Europe
5.8Norway
3.3
Russian 
Federation
5.8Other 
America
7.9
Turkey
3.9China
7.2Japan
3.2
Switzerland
5.7
Middle 
East
5.7Africa
9.4Other Asia
15.6Other
2.9United States
13.9
Other Europe
1.0Norway
5.7
Russian 
Federation
9.5Other 
America
7.7
Turkey  3.1China
13.6Japan
6.3Switzerland
6.1
Middle 
East
3.9Africa
8.7Other Asia
14.4Other
3.2United States
13.1
Other 
Europe
2.9Norway
5.6
Russian 
Federation
9.4Other 
America
7.6
Turkey
3.0China
17.6Japan
4.6
 WT/TPR/S/248 Trade Policy Review 
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(b) Services trade 
26. Between 2008 and 2009 extra-EU services exports and imports decreased almost 10%.  The 
balance surplus totalled approximately €63 billi on in 2009, down from almost €76 billion a year 
earlier.  The surplus fell due to deteriorating ba lances in transportation, construction services, 
financial services, other business services, computer and information services, and government services (Table I.1).  The balances in travel, insurance services, royalties and licence fees, and personal, cultural, and recreational services improve d in 2009.  Transportation, travel, and other 
business services, including trade-related services, operational leasing services, and miscellaneous 
business, professional and technical services, represen t roughly two thirds of total EU exports and 
imports. 
Table I.1 
Trade in services, 2007-09 
(€ billion and %) 
 EU-27 exports  EU-27 imports 
 2007 2008 2009  2007 2008 2009 
Total (€ billion) 506.1 529.0 477.9  419. 1 453.4 414.6 
 % of total services exports            % of total services imports 
   Transportation  24.4 25.7 22.6  24.5 24.8 21.3 
   Travel  14.8 13.9 14.2  22.6 20.7 20.8 
   Other services 60.4 60.3 63.1  51.1 51.9 55.0 
     Communications services  2.0 2.3 2.7  2.6 2.8 3.1 
     Construction services  3.2 3.3 3.5  1.9 1.8 2.1 
     Insurance services  2.9 2.9 3.2  1.9 1.9 1.8 
     Financial services  10.7 9.4 8.6  4.9 4.2 4.0 
     Computer and information services  5.1 5.7 6.2  2.7 2.8 3.0 
     Royalties and licence fees  5.4 5.1 5.6  8.3 9.2 9.8 
     Other business services 28.5 29.1 30.8  25.7 26.2 27.9 
     Personal, cultural and recreational services  1.0 0.9 1.0  1.4 1.5 1.4 
     Government services, n.i.e.  1.7 1.4 1.5  1.7 1.6 1.8 
   Services not allocated  0.6 0.1 0.1  1.8 2.6 2.9 
Selected trading partners         
   European Free Trade Association 16.3 16.9 17.6  14.3 14.1 14.5 
     Switzerland 12.3 13.2 13.9  11.3 11.3 11.8 
   Russia 3.7 4.1 3.9  2.8 3.1 2.7 
   Turkey 1.4 1.3 1.3  2.9 2.9 2.8 
   Canada 2.4 2.3 2.3  2.3 2.1 2.0 
   United States 27.6 25.5 24.8  31.1 29.5 30.5 
   South America 3.6 4.4 4.3  2.7 3.1 3.1 
     Brazil 1.4 1.9 1.9  1.2 1.4 1.6 
   Asia 24.8 24.4 24.4  21.7 21.6 20.8 
     China 3.3 3.8 3.9  3.4 3.4 3.2 
     Hong Kong, China 1.8 1.7 1.6  1.8 1.8 1.6 
     India 1.7 1.7 1.9  1.7 1.8 1.8 
     Japan 4.0 3.7 3.6  3.4 3.4 3.1 
     Korea 1.5 1.5 1.3  1.0 1.1 0.9 
     Singapore 2.4 2.3 2.3  1.8 1.9 1.9 
     Thailand 0.5 0.5 0.5  1.2 1.1 1.1 
   Australia 2.2 2.3 2.5  1.6 1.4 1.5 
   Africa 6.6 7.0 7.1  7.8 7.4 7.6 
     South Africa 1.3 1.2 1.1  1.1 1.0 0.9 
Source: WTO Secretariat, based on Eurostat online information, "International Trade in Services".  Viewed at:  
http://epp.eurostat.ec.europa.eu/portal/page/portal/eurostat/home.  European Union WT/TPR/S/248 
 Page 11 
 
 
27. The United States has traditionally been the EU 's largest trading partner, accounting for 
around 25% of exports and 30% of imports in 2009 (Table I.1).  Nonetheless, the U.S. share has 
declined considerably since 2000, when imports  from, and exports to the United States each 
represented 38% of total EU imports and exports of services.  Switzerland is the second largest 
trading partner, with almost 14% of exports and 12 % of imports.  Services exports to Brazil, China, 
India, and Russia have roughly doubled since 2004;  together they account for almost 12% of EU 
services exports. 
28. The United Kingdom continues to be the EU’s largest exporter of services, representing 21% 
of total EU exports in 2009, followed by German y and France.  Germany was the biggest importer, 
accounting for around 18% of total imports, follo wed by the United Kingdom and France.  The 
United Kingdom recorded the largest balance surp lus, followed by Sweden, France, and Greece.  
Ireland recorded the highest balance deficit,  followed by the Netherlands and Italy. 
29. About 58% of total EU trade in services in 2009 was between member States.  This share has 
remained relatively stable during the past decade. 
(c) Foreign direct investment (FDI) 
30. The EU is the world's largest recipient and supp lier of FDI.  As a result of the economic and 
financial crisis, EU outward FDI flows decreased by half between 2007 and 2009, to €274 billion.  
Inward FDI flows fell sligh tly less, to €219 billion. 
31. The EU is a net investor in the rest of the world.  Outward FDI stock totalled €3,666 billion at 
end 2009, up 10% from a year earlier (Table I.2).  The stock of inward FDI increased 7%, to €2,707 
billion.  The services sector accounts for approximately  three quarters of inward and outward FDI 
stocks, and manufacturing for about one fifth.  The United States is the largest FDI partner, with 31% 
of total outward stock, and almost 40% of inwa rd stock.  The United Kingdom is the main EU 
investor in the United States.  Switzerland is the EU's second largest FDI partner, with 13% of total 
outward and inward stock.  Almost 60% of fore ign affiliates of EU-based parent companies are 
resident in another member State.18 
Table I.2 
Distribution of FDI stocks 2006-09 
(€ billion and %) 
 Outward stock  Inward stock 
 
2006 2007 2008 2009 Share 
2009 
(%)  
2006 2007 2008 2009 Share 
2009
(%) 
Extra-EU-27 2,746.0 3,231.6 3,319.8 3,665.6 100.0  2,022.7 2,447.9 2,522.3 2,707.2  
EFTA 416.5 516.9 522.6 573.6 15.6  350.6 419.2 384.4 420.1 15.5 
Switzerland 364.6 458.0 462.9 503.3 13.7  282.5 323.6 315.7 347.9 12.9 
Norway 50.2 57.1 54.8 67.4 1.8  55.6 80.9 56.0 61.5 2.3 
Russia 50.5 71.5 83.2 88.8 2.4  14.6 24.7 26.4 27.5 1.0 
Turkey 33.9 49.0 45.1 51.3 1.4  5.0 5.7 6.6 7.6 0.3 
Canada 114.1 142.6 142.7 157.5 4.3  105.2 103.0 108.1 119.5 4.4 
United States 949.3 1,027.1 1,076.4 1,134.0 30.9  926.1 1,027.2 1,014.6 1,044.1 38.6 
Mexico 45.1 49.1 50.6 58.3 1.6  9.7 10.7 10.9 14.4 0.5 
Table I.2 (cont'd) 
                                                      
18 Data for 2007, latest year av ailable, (Eurostat, 2011).   WT/TPR/S/248 Trade Policy Review 
Page 12 
  
 Outward stock  Inward stock 
 
2006 2007 2008 2009 Share 
2009 
(%)  
2006 2007 2008 2009 Share 
2009
(%) 
South America  171.5 191.9 216.5 235.2 6.4  21.4 54.4 69.3 70.3 2.6 
Argentina 40.0 35.2 40.3 44.3 1.2  1.8 2.0 2.4 2.5 0.1 
Brazil 92.4 107.7 108.5 132.2 3.6  14.6 41.2 52.5 56.3 2.1 
Asia 380.1 423.1 485.4 553.8 15.1  196.0 241.2 266.6 304.6 11.3 
China 32.6 40.9 52.4 58.3 1.6  3.6 4.6 5.6 5.7 0.2 
Hong Kong, China 86.1 89.3 89.3 92.9 2.5  17.4 17.2 25.5 26.8 1.0 
India 12.4 16.2 17.4 27.2 0.7  2.3 4.6 6.2 5.5 0.2 
Indonesia 10.6 12.6 14.3 17.5 0.5  -3.5 -2.7 -3.0 -2.6 -0.1 
Japan 75.7 74.8 78.4 84.0 2.3  97.9 122.3 122.6 135.3 5.0 
Korea 28.4 32.8 27.8 28.9 0.8  7.4 9.2 8.6 9.9 0.4 
Malaysia 9.4 12.5 13.6 24.7 0.7  2.6 3.0 3.6 3.0 0.1 
Singapore 52.5 66.7 89.2 95.8 2.6  26.8 45.0 39.3 50.2 1.9 
Thailand 9.2 10.5 11.5 13.3 0.4  0.3 0.6 0.5 1.0 0.0 
Chinese Taipei 13.5 7.7 7.5 9.3 0.3  0.6 0.8 0.4 0.5 0.0 
Australia 53.6 69.9 70.3 82.8 2.3  18.8 25.7 21.2 30.2 1.1 
Africa 128.4 149.5 162.2 208.8 5.7  19.9 23.0 29.5 31.2 1.2 
South Africa 42.5 55.1 55.1 77.0 2.1  3.1 6.0 6.8 6.2 0.2 
Source :   WTO Secretariat, based on Eurostat online information,  "EU direct investment outward stocks detailed by extra 
EU destination country" and "EU direct investment inward stocks by extra EU  investing country".  Viewed at:  
http://epp.eurostat.ec.europa.eu/portal/page/portal/eurostat/home.