WORLD  TRADE  
ORGANIZATION  RESTRICTED 
WT/TPR/S/248 
1 June 2011  
 
(11-2657) 
Trade Policy Review Body  
   
 
  
 
TRADE POLICY REVIEW 
 
Report by the Secretariat 
 
EUROPEAN UNION 
 
  
 
This report, prepared for the tenth Trad e Policy Review of the European Union, 
has been drawn up by the WTO Secretariat on its own responsibility.  The 
Secretariat has, as required by the Agreement establishing the Trade Policy 
Review Mechanism (Annex 3 of the Ma rrakesh Agreement Establishing the 
World Trade Organization), sought clarification from the European Union on its 
trade policies and practices. 
 
Any technical questions arising from this report may be addressed to 
Mr. Karsten Steinfatt (tel:  022 739 6759) , Mr. John Finn (tel:  022 739 5081), 
Mr. Cato Adrien (tel:  022 739 5469), an d Ms. Zheng Wang (tel:  022 739 5288). 
 
Document WT/TPR/G/248 contains the policy statement submitted by the 
European Union. 
 
 
 
Note: This report is subject to restricted circ ulation and press embargo until the end of the first 
session of the meeting of the Trade Policy Review Body on the European Union. European Union WT/TPR/S/248 
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CONTENTS 
 
    Page 
SUMMARY   vii 
I.  ECONOMIC ENVIRONMENT 1 
 (1) T RADE AND COMPETITIVENESS  1 
 (2) R ECENT DEVELOPMENTS  3 
  (i) Crisis and policy response 3 
  (ii) Trade and investment flows 6 
II.  TRADE POLICY REGIME 13  
 (1)   LEGAL AND INSTITUTIONAL FRAMEWORK  13  
 (2)   OBJECTIVES AND CONSULTATIONS  17  
 (3)   PARTICIPATION IN THE WORLD TRADE ORGANIZATION  18  
 (4)   PREFERENTIAL TRADE AGREEMENTS AND ARRANGEMENTS  20  
 (i)   Unilateral preferences 20  
 (ii)   Reciprocal preferences 22  
 (5)   INVESTMENT AGREEMENTS AND ARRANGEMENTS  25  
 (6)   AID FOR TRADE  26  
III.  TRADE POLICIES AND PRACTICES BY MEASURE 28  
 (1)   MEASURES DIRECTLY AFFECTING IMPORTS  28  
 (i)   Customs procedures 28  
 (ii)   Customs valuation 31  
 (iii)   Rules of origin 32  
 (iv)   Tariffs 34  
 (v)   Other charges 37  
 (vi)   Contingency measures 39  
 (vii)  Restrictions and controls 43  
 (viii)  Technical regulations and standards 45  
 (ix)   Sanitary and phytosanitary standards (SPS) 55  
 (2)   MEASURES DIRECTLY AFFECTING EXPORTS  61  
 (i)   Registration and documentation 61  
 (ii)   Export taxes and fees 61  
 (iii)   Restrictions and controls 61  
 (iv)   Official support and rela ted fiscal measures 62  
 (v)   Finance, insurance, guarantees, and promotion 63  
 (3)   MEASURES AFFECTING PRODUCTION AND TRADE  64  
 (i)   Business framework and foreign investment regime 64  
 (ii)   State trading and state owned enterprises 67  
 (iii)   Subsidies and other government assistance 70  
 (iv)   Government procurement 77  
 (v)   Competition policy 84  
 (vi)   Intellectual property rights 88  
 
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IV.  DEVELOPMENTS IN SELECTED SECTORS 101  
 (1)   A
GRICULTURE  101  
 (i)   Agriculture in the European Union 101  
 (ii)   Agriculture policies 104  
 (iii)   Domestic support levels 111  
 (2)   TRADE  IN SERVICES 116  
 (i)   Introduction 116  
 (ii)   Financial services 117  
 (iii)   Transport 125  
 (iv)   Telecommunications and postal services 131  
REFERENCES   135 
APPENDIX TABLES  139  European Union WT/TPR/S/248 
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CHARTS 
    P a g e  
I. ECONOMIC ENVIRONMENT 
I.1 Export volumes of goods and services 1999-08   1 
I.2 Export growth and foreign demand, 1999-08    2 
I.3 Real GDP growth, 2008-09   4 
I.4 Public debt, 2008-09   4 I.5 Structure of merchandise trade, 2005 and 2009   8 
I.6 Direction of merchandise trade, 2005 and 2009   9 
II TRADE POLICY REGIME II.1 New comitology rules, (Article 291) 15 
III. TRADE POLICIES AND PRACTICES BY MEASURE 
III.1 Overall level of aid provided by member States, 1992-2009 72 
III.2 Non-crisis aid provided by member States, 2004-09 73 
IV. DEVELOPMENTS IN SELECTED SECTORS 
IV.1 Export subsidies in the European Union, 2003/04 and 2007/08 111 
IV.2 Domestic support in the European Union, 2000/01 and 2007/08 112 
IV.3 Amber Box, Blue Box and Green Box Support in the European Union, 2000/01-2007/08 114 
IV.4 Schematic representation of policy initiatives 122 
TABLES 
I. ECONOMIC ENVIRONMENT  
I.1 Trade in services, 2007-09   10 
I.2 Distribution of FDI stocks 2006-09   11 
II. TRADE POLICY REGIME  II.1 Selected notifications to the WTO, June 2008-January 2011 19 
II.2 Overview of recent EU trade agreements, December 2010 23 
III. TRADE POLICIES AND PRACTICES BY MEASURE III.1 Time limits for the entry summary declaration, January 2011 30 
III.2 Structure of MFN tariffs 35 
III.3 Summary analysis of MFN tariff, 2011 36 III.4 Anti-dumping investigations and measures imposed, 2006-10 40 
III.5 Anti-dumping measures by country, 2006-10 41 
III.6 Countervailing duty investigations and measures imposed, 2006-10 42 III.7 Specific trade concerns over EU TBTs, October 2008-January 2011 46 
III.8 Selected aspects of regulation in four member States, early 2010 49 
III.9 Specific trade concerns over EU SPS measures, October 2008 to January 2011 55 III.10 Minimum public procurement thresholds, 2010-11 79 
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III.11 Selected procuremen t indicators, 2006-08 79 
III.12 Copyright-dependent industries’ contribution to GDP and employment, various years 89 
III.13 Enforcement of intellectual property rights, 2007-09 97 
IV. DEVELOPMENTS IN SELECTED SECTORS  
IV.1 Agriculture goods output at basic prices  for selected agricultural products, 2008-10 101 
IV.2 Production of selected agricultural products, 2006-09 102 IV.3 Exports of selected agricultural products, 2006-09 102 
IV.4 Imports of selected agricultural products, 2006-09 103 
IV.5 Structure of farming in individual member States, 2007 and 2009 103 IV.6 Total producer support estimate and single  commodity transfer values for selected  
 Commodities, 2000-09 115 
IV.7 EU(27) exports of commercial services, 2008-10 117 IV.8 EU(27) imports of commercial services, 2008-10 117 
 
APPENDIX TABLES 
I. ECONOMIC ENVIRONMENT  
AI.1 Destination of exports, 2000 and 2005-09 141 
AI.2 Structure of exports, 2000 and 2005-09 142 
AI.3 Origin of imports, 2000 and 2005-09 143 
AI.4 Structure of imports, 2000 and 2005-09 144 
II. TRADE AND INVESTMENT REGIMES  AII.1 Status of dispute-related WTO matters involving the EU, September 2008-January 2011 145 
III. TRADE POLICIES AND PRACTICES BY MEASURE 
AIII.1 Applied preferential tariffs by HS sector, 2011 147 
AIII.2 Summary of the main legislation of intellectual property rights, 2011 148 
AIII.3 Term of protection of major intellectual property rights, 2011 150 
 
 
 European Union WT/TPR/S/248 
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SUMMARY 
1. At the time of its last Trade Policy 
Review, in April 2009, the European Union (EU) was in deep economic recession.  In spite 
of intensified protectionist pressures, the EU 
maintained the overall openness and transparency of its trade and investment regime.  Given the EU's  leadership position as 
the world's largest trader, its decision to refrain 
from tightening restrictions on imports in 
response to the crisis had a stabilizing effect on the multilateral trading system.  Nonetheless, some long-standing barriers to market access and other measures that distort international competition remain in place.  The 
EU has a significant interest in undertaking 
further trade and investment liberalization, in line with its recognition that an open trade regime is vital to enhance external competitiveness and economic growth. 
2. The period since the last Review of 
the EU has been marked by the sharp contraction and subseque nt recovery of global 
and EU trade.  From a long-term perspective, 
trade performance has varied widely across individual member States, largely reflecting 
uneven gains in productivity and 
competitiveness, especially within the euro area.  The EU considers that structural reforms are needed to correct this situation and to achieve the economic growth objectives 
defined in its Europe 2020 strategy.  
Strengthening the internal market for goods and services is a key priority for structural reform. 
3. Since the Lisbon Treaty entered into 
force in December 2009, the EU's external 
trade and investment policy has been conducted within a transformed legal and institutional framework.  The European Parliament has rights equal with the Council in adopting EU trade legislation, and must give 
its consent before the Council can ratify 
international trade agreements.  In addition, the Lisbon Treaty broadened the exclusive competence of the EU to encompass foreign direct investment.  Several trade policy 
regulations, including on contingency measures, are being adapted to the new 
standard "comitology" rules defining procedures for the control by member States of the Commission's exercise of its implementing 
powers.  The Commission considers that the 
new comitology rules increase transparency and give it greater political responsibility. 
4. While the EU's external trade policy 
attaches top negotiating priority to concluding 
the Doha Round, it is pursuing an agenda of 
"competitiveness-driven" free-trade agreements (FTAs).  The EU has recently signed such an agreement with Korea, and has concluded negotiations on an FTA with Colombia and Peru, and another FTA with 
Costa Rica, El Salvador, Guatemala, 
Honduras, Nicaragua, and Panama.  During the period under review, separate FTAs entered into force with Albania, Bosnia and Herzegovina, Montenegro, and Serbia;  a 
comprehensive Economic Partnership 
Agreement (EPA) with the CARIFORUM region has been applied provisionally since December 2008.  Despite the continued growth of the EU's extensive network of preferential trade agreements, some 85% of 
total EU imports entered under the MFN 
regime in 2008 (latest year for which data are available), highlighting the fundamental importance of the multilateral trading system for EU trade. 
5. In late 2009, the EU eliminated tariff 
quotas on imports of rice and sugar under Everything But Arms, an arrangement under the EU's Generalized System of Preferences (GSP) that grants duty- and quota-free access 
to the EU market for least developed 
countries.  Moreover, the EU has introduced new, more flexible rules of origin for products imported under GSP.  The new rules, which have been applied since 2011, are simpler and allow additional goods, in particular those 
processed in the least developed countries, to 
qualify for preferential treatment.  In March 2011, the EU was preparing a proposal to amend its GSP regime.  The EU grants duty- and quota-free access (except for sugar, which 
is subject to a transitional safeguard 
mechanism) to all African, Caribbean, and WT/TPR/S/248 Trade Policy Review 
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Pacific countries that have initialled an EPA, 
while negotiations for comprehensive EPAs continue. 
6. The EU's main trade policy 
instruments remained largely unchanged 
during the period under review.  The simple average applied MFN tariff rate was 6.4% in 2011, slightly less than in 2008.  The applied MFN rate for agriculture (WTO definition) 
decreased to 15.2% in 2011 from 17.9% in 
2008, reflecting the rise in global commodity prices and the resulting decline in the ad 
valorem  equivalent rates.  At 4.1%, the 
average applied MFN rate for non-agricultural goods remained unchanged.  However, the 
structure of the EU's MFN tariff remains 
complex, and around 9% of tariff lines have peak rates of more than 15%. 
7. Both the number of anti-dumping 
measures in force and the rate at which these 
are adopted have decreased since 2008.  
Nonetheless, with 125 measures in force in early 2011, the EU remains an important user of anti-dumping measures.  Almost 45% of these measures are applied to a single WTO Member (China).  Although there has been a 
slight increase in the total number of 
countervailing measures in force, the EU continues to make relatively limited use of this trade policy instrument.  The EU has not applied safeguards since 2005. 
8. Security considerations have 
continued to drive changes relating to customs procedures.  During the period under review, the EU introduced advance cargo information requirements as part of the so-called "safety 
and security amendment" to the Customs 
Code.  In addition, the EU is pursuing trade facilitation measures, including preparations for the establishment of single window services, and the introduction of a customs registration number recognized throughout the 
EU.  These and other ongoing trade facilitation 
initiatives are essential to help minimize transaction costs, especially those resulting from measures to ensure physical security at national borders. 9. The extraordinary intervention by 
many EU member States in support of domestic firms affected by the economic crisis was directed primarily at the financial sector 
and sought to avert the systemic consequences 
of a full-blown financial crisis.  Nonetheless, other sectors, notably automobiles, construction, and tourism, received considerable support too.  Member States 
granted part of this support under schemes 
approved by the Commission, thus increasing transparency and helping to minimize distortions within the EU market.  It is important to persevere with ongoing initiatives at EU level to phase out crisis support once the 
economic recovery has taken hold.  This 
would ensure that support measures do not hinder long-term adjustment and restructuring in the targeted sectors. 
10. The EU did not modify its government 
procurement regime during the period under 
review;  the bulk of government procurement (around 85%) remains under national legislation of EU member States.  According to the Commission, member States did not introduce "buy local" procurement 
requirements at national or sub-national levels 
in response to the economic crisis.  The EU's competition policy has been progressively refined towards a "more economic approach";  arguably, this has moved the EU closer to the 
antitrust enforcement of some of its major 
trading partners, thus reducing the scope for inter-jurisdictional conflicts in this area. 
11. During the period under review, the 
EU lowered the registration cost for 
Community trade marks and strengthened 
enforcement of intellectual property rights (IPRs).  Major copyright and patent reforms are ongoing, but efforts to create a unitary EU patent and a unified patent court have not been successful.  The Commission is seeking 
alternatives to unified patent protection in the 
EU.  The Lisbon Treaty contains a specific provision on intellectual property, which is an important step towards an EU-wide IPR regime. European Union WT/TPR/S/248 
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12. The "Health Check" of the Common 
Agricultural Policy (CAP), agreed by EU agriculture ministers in November 2008, further reduced the role of the CAP in the 
market, and extended the systems of support 
that are decoupled from agricultural prices or production.  However, total support remains considerable in both absolute and relative terms and market price support continues to 
represent a large, though declining, portion of 
transfers to producers.  Furthermore, the reforms of the CAP have focussed on reducing export subsidies and trade-distorting domestic support while MFN tariffs remain relatively high. 
13. As part of current efforts to address 
competitiveness concerns, the EU attaches high priority to the reinforcement of the internal market for goods and services.  During the period under review the EU 
adopted a package of measures that aims to 
remove regulatory obstacles to intra-EU trade in goods.  The package includes EU-wide principles and reference provisions on conformity assessment procedures and a common framework on accreditation.  In 
addition, the EU adopted legislation to 
minimize the possibility that member States restrict the marketing of goods that are not in compliance with their national technical regulations, but that have been lawfully placed 
on the market of another member State.  At the 
last Review of the EU, several Members indicated that the EU's regulatory practices have become increasingly burdensome in gaining access to the EU market.  It is 
important that the EU consider carefully the possible trade impact of its regulatory 
environment, including its high regulatory standards as regards food and product safety, to ensure that its technical regulations and 
conformity assessment procedures do not 
create unnecessary obstacles to trade with third countries. 
14. Work to implement the Services 
Directive, a pillar of the internal market for 
services, continued throughout the period 
under review.  Under the Services Directive, member States must ensure that their authorization schemes for service providers are non-discriminatory, proportionate, and justified by an overriding reason relating to the 
public interest.  Several member States missed 
the end-2009 deadline to transpose the Directive into national legislation.  The publication in early 2011 of the results of a "mutual evaluation process" of the Services 
Directive found that, despite significant 
progress, burdensome requirements remain in place and continue to restrict intra-EU services trade.  The EU has been at the forefront of deregulation and liberalization in some specific services sectors.   For example, under 
the Third Postal Directive, 16 member States, 
representing 95% of EU postal markets, abolished all remaining postal services monopolies at the end of 2010.  The remaining member States must do so by end-2012.