WORLD TRADE  
ORGANIZATION   
WT/TPR/G/248/Rev.1 
28 July 2011  
 
(11-3871) 
Trade Policy Review Body Original:  English 
   
 
  
 
TRADE POLICY REVIEW 
 
Report by the 
 
EUROPEAN UNION 
 
Revision 
 
 
 
 
Pursuant to the Agreement Establishi ng the Trade Policy Review Mechanism 
(Annex 3 of the Marrakesh Agreement Establishing the World Trade 
Organization), the policy statement by European Union is attached. 
 
    European Union WT/TPR/G/248/Rev.1 
 Page 3 
 
 
  CONTENTS 
 
  Page 
 
1. INTRODUCTION 5 
2. KEY DEVELOPMENTS IN THE EU 6  
 2.1   I NSTITUTIONAL DEVELOPMENTS  6 
 2.2 D EVELOPMENTS IN THE INTERNAL MARKET AND CENTRAL POLICY AREAS  7 
 2.3   D EVELOPMENT AND IMPLEMENTATION OF THE EU INVESTMENT POLICY  10 
 2.4  E CONOMIC PERFORMANCE AND CHALLENGES AHEAD  11 
3. KEY DEVELOPMENTS IN THE EU TRADE POLICY (2009-2010) 14  
 3.1. I NTRODUCTION  14 
 3.2. WTO  15 
 3.3 C REATING THE RIGHT ENVIRONMENT FOR TRADE  17 
 3.4 S ECTORAL POLICIES  18 
 3.5 B ILATERAL AND REGIONAL TRADE RELATIONS  20 
 3.6   S USTAINABILITY AND DEVELOPMENT  23 
 3.6.1 Trade and sustainable development 23 
 3.6.2  Trade and development 24 
4.  LOOKING FORWARD 26  European Union WT/TPR/G/248/Rev.1 
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  1. INTRODUCTION  
1. The European Union (EU) acknowledges the central  role that the WTO plays in safeguarding 
the rules-based international trading system, and ultimately in promoting openness and global 
prosperity. The surveillance of national trade polic ies through the Trade Policy Review Mechanism is 
an important element of this work; transparency is a fundamental component of an effective world 
trading system.  
2. This is the tenth Trade Policy Review of th e EU (though the first under the name "European 
Union"). The aim of this report is to give an outlin e of how the EU trade policy is formulated and to 
highlight the EU's current trade priorities. 
3. Since the last Trade Policy Review  of the EU in 2009, there have been a number of important 
developments that have impacted trade and trade related policies, both globally and within the EU. 
4. The EU vision for a new trade policy is outlined in the Commission's Communication, 
"Trade, Growth and World Affairs"1, which is part of the important 10-year "Europe 2020" 
implementation strategy. Together with the Counc il's conclusions and the European Parliament's 
resolution on the Communication, these strategy pa pers set the framework for the Union's future 
actions on trade. 
5. The EU emerged from the global crisis still as a major trading power, accounting for 16.8% 
of world trade in goods and for over one fourth of  world trade in services in 2009. Being such an 
important player in the world trade brings respons ibility, not only towards the EU citizens to promote 
economic growth and jobs in Europe, but also towards the rest of the world. 
6. Trade has been and continues to be an engine for global growth. Accordingly, the EU showed 
leadership in its response to the global economic and financial crisis by shaping its policies guided by 
the principle that a sustainable recovery needs to  remain rooted in open markets and international 
rules.  
7. Equally, a key feature of the EU trade polic y has been an active participation in the DDA 
negotiations, as well as in the regular work of the WTO councils and committees to monitor and 
ensure the implementation of the covered agreements.  
8. Besides its commitment to work in the WTO, the EU is pursuing its liberalisation agenda 
bilaterally and also unilaterally aiming at fac ilitating trade for the less advanced economies.  
9. The EU aims to achieve these trade policy ob jectives whilst also driving improvements in 
social inclusion, supporting green growth and c limate change objectives, and promoting sustainable 
development, both in the EU and in the rest of the world.  
 
 
                                                      
1 Communication from the Commission to the European Parliament, the Council, the European 
economic and social Committee and the Committee of the regions, 9 November 2010. 
http://trade.ec.europa.eu/doclib/docs/ 2010/november/tradoc_146955.pdf.  
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  2. KEY DEVELOPMENTS IN THE EU  
2.1  I NSTITUTIONAL DEVELOPMENTS  
 
10. This is the first Trade Policy Review after the new Treaty of Lisbon entered into force on 
1 December 2009. The European Communities was then replaced by the European Union which 
succeeds it and takes over all its rights and obligations . In the WTO context, this meant changing from 
"The European Communities" to "The European Un ion" – the European Union remains a Member of 
the WTO alongside 27 EU Member States and the De legation of the European Union continues to 
represent the EU and its Member States in the WTO. 2 
11. The Treaty of Lisbon provides the EU with the legal framework and tools necessary to meet 
future challenges and to respond to citizens' demands : 1) A more democratic and transparent Europe, 
with a strengthened role for the European Parliament  and national parliaments.  New legislation is now 
routinely preceded by assessments of socioeconomic  and fundamental rights impact as well as long-
term viability. 2) A more efficient Europe, with simplified working methods and voting rules. 3) A 
Europe of rights and values, freedom, solidarit y and security, promoting the Union's values, 
introducing the Charter of Fundamental Rights in to European primary law, providing for new 
solidarity mechanisms and ensuring better protection of European citizens. 4) Europe as a stronger 
actor on the global stage as the Treaty brings together Europe's external policy tools.  
12. Overall, the Treaty of Lisbon does not fundament ally change the EU's institutional set-up, 
which is still based on its three main instituti ons: European Parliament, Council and European 
Commission. However, the Treaty of Lisbon has retuned the relations between the European 
Parliament, the Council, and the European Commissi on, so that full benefit can be derived from the 
new arrangements under the treaty. As regards trad e policy, the Lisbon Treaty has significantly 
enhanced the role of the European Parliament, maki ng it a fully fledged decision-maker in this field: 
- The European Parliament, together with th e Council, adopts legislation implementing the 
EU's common commercial policy under the ordinary legislative procedure (previously 
referred to as "co-decision procedure"); and, 
- The Parliament's "consent" is required for the ratification of all trade agreements.  
13. This contrasts with the pre-Lisbon situation where the Council alone was responsible for the 
adoption of trade legislation while the European Pa rliament was only consulted and in a few limited 
circumstances involved in the ratifi cation of major trade agreements.  
14. The Lisbon Treaty also modified the way the EU reaches decisions on many day-to-day 
issues. In light of this, legislation is currently underway to adapt the decision-making procedures of 
existing trade legislation (such as for instance the Ba sic Anti-Dumping regulation) to the new rules of 
TFEU.  
15. The Treaty of Lisbon contains two important ins titutional innovations that impact EU external 
action, as it creates:  a President of the European  Council and a High Representative of the Union for 
Foreign Affairs and Security Policy. In N ovember 2009, the European Council appointed 
Ms. Catherine Ashton as High Representative of the Union for Foreign Affairs and Security Policy. 
She is assisted by the European External Action Service (EEAS). 
                                                      
2 Member States maintain an active role in th e Committee on Budget Finance and Administration. 
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  16. In June 2009, the European Parliament electi ons for 2009-2014 took place, and in July 2009, 
the European Council formally nominated Mr. José Ma nuel Barroso as President of the next European 
Commission until 2014. Mr. Karel De Gucht is the Commissioner responsible for trade.  
17. As of 1 January 2011, Mr. Jean-Luc Demarty h as been appointed Director General of the 
Directorate General of Trade, replacing Mr. David O' Sullivan.  
18. During the period since the last Trade Policy Review, the euro-area expanded by one 
Member: Estonia adopted the euro on 1st January 2011. The euro is now the single currency in 17 
European Union's Member States: Austria, Belgiu m, Cyprus, Estonia, Finland, France, Germany, 
Greece, Ireland, Italy, Luxembourg, Malta, the Netherlands, Portugal, Slovakia, Slovenia, and Spain.  
19. No new Member States acceded the EU since th e last Review. Accession negotiations with 
Croatia and Turkey are ongoing, and new negotiations  were opened with Iceland in July 2010. The 
former Yugoslav Republic of Macedonia is a candidate country since December 2005 and 
Montenegro since December 2010. The EU has also received applications from Albania and Serbia.  
2.2 D EVELOPMENTS IN THE INTERNAL MARKET AND CENTRAL POLICY AREAS  
"Europe 2020" 
 
20. Beyond the immediate action required to tackle  the most pressing challenges posed by the 
economic and financial crisis, the EU has continue d laying solid foundations for a sustainable and 
job-creating growth. This is the purpose of the new economic strategy, th e "Europe 2020 Strategy3" 
for jobs and growth, adopted in June 2010. It is a new 10-year plan for spurring growth and creating 
jobs in the EU. The structural measures under the "E urope 2020" strategy tackle the underlying causes 
of the crisis. The goal is smart, sustainable, incl usive growth. This strategy will maximise the EU's 
assets, in particular the single market, and equip it for success in a rapidly changing world. It 
identifies specific areas of action to turn ambiti on into achievement. Sound public finances, tighter 
financial supervision and open world markets are part of the EU's comprehensive strategy to create a 
more sustainable and dynamic growth path deliver ing high levels of employment, productivity and 
social cohesion.  
21. To counter the risks from strained public fina nces, dented business confidence and the threat 
of unemployment, the EU proposed a series of actions over the course of 2010 to invigorate the 
economy, to unlock the EU's growth potential, stim ulate investment and to upgrade skills. The EU put 
emphasis on low energy use, low carbon emissions, up-skilling its population, making work attractive, 
seizing the potential of a digital single market, rese arch and development and advanced technology.  
22. The strategy is complemented by the EU's c ontinued development of the single market and 
the pursuit of smarter regulation coupled with a stimulating environment for competition. Equally 
important is the goal of creating an ever-more incl usive society, which is why social cohesion and 
social inclusion are at the heart of the "Europe 2020" strategy. 
23. The "Europe 2020"strategy provides a coherent framework for the Union to mobilise all its 
instruments and policies to secure the structural reforms that Europe needs. It sets five specific targets 
on employment, innovation, education, social inclusion and climate/energy4 to be achieved by 2020. 
                                                      
3 http://ec.europa.eu/europe2020/index_en.htm.  
4 http://ec.europa.eu/europe2020/targets/eu-targets/index_en.htm.  WT/TPR/G/248/Rev.1 Trade Policy Review 
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  The specific targets are amplified by  a series of flagship initiatives5, and by integrated guidelines for 
economic and employment policies.  
24. The first flagship initiative is the "Digital agenda for Europe"6 - Europe’s strategy for a 
flourishing digital economy by 2020 - a sector that  can deliver smart growth. This initiative will 
promote a digital single market, extend Internet a ccess, help make devices and applications more 
interoperable, boost trust in the Internet by enha ncing security and protecting privacy for citizens and 
businesses and leveraging investment in  ICT research and innovation.  
25. The second flagship initiative – "Innovation Union" - places innovation at the heart of the 
"Europe 2020" strategy. With over thirty acti on points, the Communication on Innovation Union7 
aims at improving conditions and access to finance fo r research and innovation in Europe, to ensure 
that innovative ideas can be turned into products  and services that create growth and jobs.  
26. The third flagship initiative – "Youth on the move"8 - aims at enhancing young people's 
chances of finding a job by helping students and trainees gain experience in other countries, and 
improving the quality and attractiveness of  education and training in the EU.  
27. The fourth flagship initiative – "A n Agenda for new skills and jobs"9 - aims to give fresh 
momentum to labour market reforms, to help people gain the right skills for future jobs, to create new 
jobs and to overhaul the EU employment legislation.  
28. The fifth flagship initiative – "European pl atform against poverty and social exclusion10" - 
aims to increase the pace toward s the target of lifting at least 20 million people out of poverty and 
exclusion by 2020.  
29. The sixth flagship initiative – "An integrat ed industrial policy for the globalisation era"11 - 
sets out a strategy that aims to boost growth and jobs by maintaining and supporting a strong, 
diversified and competitive industrial base in Eur ope, offering well-paid jobs while becoming less 
carbon intensive.  
30. "A resource-efficient Europe"12 is the seventh flagship initia tive, which establishes resource 
efficiency as the guiding principle for EU polici es on energy, transport, climate change, industry, 
commodities, agriculture, fisheries, biodiversity an d regional development. By using synergies across 
these policy-areas, the strategy will be instrumental  in reaching a variety of EU objectives, from 
reducing European greenhouse gas emissions by 80 to  95% by 2050 to reforming the agricultural and 
fisheries sectors, from reducing food insecurity in developing countries to making the Union more resilient to future rises in global energy and commodity prices. 
 
 
                                                      
5 http://ec.europa.eu/europe2020/tools/flagship-initiatives/index_en.htm.  
6 http://ec.europa.eu/information_society/digital-agenda/index_en.htm.  
7 http://ec.europa.eu/research/innovation-union/pdf/innovation-union-communication_en. pdf#view= 
fit&pagemode=none.  
8 http://ec.europa.eu/social/mai n.jsp?catId=950&langId=en.  
9 http://ec.europa.eu/social/mai n.jsp?catId=958&langId=en.  
10 http://ec.europa.eu/social/mai n.jsp?catId=961&langId=en.  
11 http://ec.europa.eu/enterprise/policies/industrial -competitiveness/industrial-policy/index_en.htm.  
12 http://ec.europa.eu/resource-efficient-europe/index_en.htm.  European Union WT/TPR/G/248/Rev.1 
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  Single Market Act 
 
31. Improving the single market is a pillar of the "E urope 2020" strategy and a prerequisite for its 
success. In October 2010 the Commission set out its plans to strengthen the single market with 
measures to boost growth and enha nce citizens' rights. To boost growth, competitiveness and social 
progress, it made proposals to make the single ma rket work better, and make life easier for 
companies, consumers and workers. The Single Market Act13, issued on 13th April 2011 and based on 
the results of a public consultation from Nove mber 2010 to the end of February 2011 is a 
comprehensive two-year plan for 2011–12 designed to  relaunch growth and create jobs in the EU. Its 
"12 levers to boost growth and strengthen confidence", together with the 12 key actions proposed 
thereunder should be implemente d before the end of 2012. 
Customs legislation 
 
32. The "Safety and Security Amendment" to th e Customs Code was introduced by Regulation 
648/2005 and its implementing Regulation 1875/2006. The Amendment aims to ensure an equivalent 
level of protection through customs controls for a ll goods brought into or out of the EU's customs 
territory and provides Authorized Economic Operat ors (AEO) with facilitation measures. The "Safety 
and Security Amendment" entered into force in an incremental fashion. After the entry into force in 
2007, risk management became immediately applicab le. On 1 January 2008, the EU AEO programme 
became operational and on 1 July 2009 the automa ted advance cargo inform ation requirements were 
introduced. However, a transitional period was provi ded to grant customs authorities and traders the 
opportunity to adapt to these requirements. At the end of this transitional period, on 1 January 2011, 
relevant security data have to be  sent in advance - before goods leav e or enter the EU – to customs. 
The aim of this measure is to increase security in international trade, by enabling customs to carry out 
better risk analyses on the basis of the information received in advance and therefore to better target 
controls without delaying the customs cl earance of consignments at the border. 
Agriculture  
 
33. The implementation of decisions under the Health Check of the Common Agricultural 
Policy14 (CAP) started on 1 January 2009. This reform  package is a continuation of the process of 
reforms which modernise, streamline and simplify th e CAP. Reforms were also introduced in specific 
markets, the most recent one being the wine sector reform in force since 2009.  
34. The EU is currently in the process of designi ng the Common Agricultural Policy after 2013. 
Following a wide-ranging public debate, the Commission presented in November 2010 the Communication entitled "The CAP towards 2020: meeti ng the food, natural resources and territorial 
challenges of the future"
15, which outlines options for the future policy and launches the debate with 
the other institutions and stakeholders. The presenta tion of legal proposals is foreseen for later this 
year.   
 
   
                                                      
13 http://ec.europa.eu/internal_market/smact/index_en.htm.  
14 Council Regulations 72/2009, 73/2009 and 74/2009 of 19 January 2009, published in the  Official 
Journal L30 of 31 January 2009. 
15 http://eur-lex.europa.eu/LexUriServ/LexU riServ.do?uri=COM:2010:0672:FIN:en:PDF. WT/TPR/G/248/Rev.1 Trade Policy Review 
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  Energy 
 
35. On 10 November 2010, the European Commis sion has adopted the Communication "Energy 
2020 - A strategy for competitive, sustainable and secure energy"16 . The Communication defines the 
energy priorities for the next ten years and sets the ac tions to be taken in orde r to tackle the challenges 
of saving energy, achieving a market with competitive prizes and secure supplies, boosting 
technological leadership, and effectively ne gotiate with our international partners. 
36. On 4 February 2011, for the first time a Eur opean Union Summit dedicated to Energy took 
place17. One of the decisions taken at this summit was to complete an internal market for energy by 
2014. Also, the Commission was invited to adopt a Communication on Energy Security and 
International Cooperation, which is  now scheduled for September 2011. 
2.3  D EVELOPMENT AND IMPLEMENTATION OF THE EU INVESTMENT POLICY  
37. Prior to the Lisbon Treaty, investment was an area in which the EU shared competence with 
Member States. The Union negotiated the liberalisat ion of investment, by establishing conditions for 
the access of EU investors to foreign market s (either multilaterally in GATS – for mode 3 
commitments - or bilaterally through FTAs). At the same time, the EU Member States were seeking 
to promote and protect investment. Investment pr omotion and protection was generally pursued by 
Member States through the negotiation of so-called B ilateral Investment Trea ties (BITs) with third 
countries, of which about 1200 have been concl uded as of today by the EU Member States.  
38. The Treaty of Lisbon has established the EU's  exclusive competence on foreign direct 
investment (FDI), as part of the common commercia l policy (Article 207(1) and Article 3(1)e). This 
change implies two immediate needs:  
- for transitional arrangements to enhance legal certainty for existing investment agreements 
concluded by Member States with 3rd countries; and   
- for developing a targeted and gradual policy that would define EU interests in exercising its 
newly gained competence.  
39. In response to these needs on 7 July 2010,  the Commission adopted two initiatives on 
investment.  
40. In a proposal for a Regulation on transitiona l arrangements regarding BITs concluded by 
Member States with third countries, the Commission proposes to authorise Member States to maintain 
in force all investment agreements they concluded prior to entry into force of the Regulation, and – 
under certain conditions – to negotiate new and/ or to renegotiate old agreements. The draft 
Regulation is to be adopted by the Council and the Parliament in the ordinary legislative procedure. 
Discussions are ongoing at the moment. 
41. In the Communication "Towards a comprehensive European international investment policy" 
the Commission lays down its views on the broad or ientations of the future EU comprehensive 
investment policy that in addition to investment liberalization should also seek for best available 
standards of protection for all European investors, to ensure they can operate  in a stable, fair and 
predictable environment. In this Communication, th e Commission takes the view that the principles 
                                                      
16 http://eur-lex.europa.eu/Lex UriServ/LexUriServ.do?uri=C ELEX:52010DC0639:EN:HTML:NOT.  
17 http://www.consilium.europa.eu/uedocs/cms_Data/docs/pressdata/en/ec/119141.pdf. European Union WT/TPR/G/248/Rev.1 
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  and parameters for EU investment protection nego tiations will be inspired by the best practices 
developed by Member States, and include among others  such standards as the guarantee of a fair and 
equitable treatment, full protection and security, n on-discriminatory treatment or protection against 
unlawful expropriation. As enforcement mechanis ms are of crucial importance for ensuring 
effectiveness of any investment ag reement, the Communication calls to include in the EU agreements 
provisions establishing investor-to-state disput e settlement mechanisms. The Communication 
determines criteria for defining priority countries fo r the EU comprehensive investment negotiations. 
These include the magnitude of actual and poten tial investment flows, and the stability and 
predictability of the investment climate in countri es – prospective candidates for the EU investment 
negotiations. The Communication has already been followed by conclusions by the Council and a 
resolution in the Parliament on the Communication is also underway. 
42. The best prospects for comprehensively addressing EU investment interests, both in terms of 
market access and investment protection, arise in the context of broader trade negotiations. 
Nonetheless, the EU will also explore the desira bility and feasibility of negotiating stand-alone 
investment agreements with certain countries whic h receive a high proportion of EU investment, and 
with whom an FTA negotiation is not envisaged.  
43. The EU will develop its investment policy pr ogressively. The Commission has already tabled 
proposals for investment negotiating directives for Canada, India and Singapor e to seize opportunities 
of ongoing wider trade negotiations with these c ountries. These directives are currently under 
consideration by the Council.  
2.4  E CONOMIC PERFORMANCE AND CHALLENGES AHEAD  
 
44. In 2010, the EU economy rebounded, following the earlier financial crisis. Real output 
growth in EU-27 reached 1.8%. After a strong perform ance in the first half of 2010, real GDP growth 
for both the EU and the euro area slowed down in  the second half of 2010. The deceleration was 
expected and in line with a soft patch in global gr owth and trade, which reflected the withdrawal of 
stimulus measures and the fading away of positive impulses from the inventory cycle. The growth 
pattern was not uniform, though, with some of th e Member States still technically in recession.  
45. EU-27 external merchandise trade (excluding intra-EU trade) grew in 2010 around 23%, 
following earlier decline of 20% in 2009. It reached a value of €2,302 trillion in 2009 which represented 16.8% of the total world trade in goods , keeping the EU firmly in the position of the 
largest global merchandise trader. The EU continued to run a trade deficit of about € 108 billion in 
2009.   
46. In 2010, the US remained by far the largest market for the EU merchandise exports, absorbing 
about 18% of the total. In comparison, China, Switzerland and Russia, which came second, third and 
fourth respectively, took much smaller shares of  between 6-8% each. However, on the import side, 
China in 2010 strengthened its position as the main source of goods imports into the EU. It accounted 
for nearly 19% of all goods imported into the EU , while around 11% of imported merchandise came 
from the US. Russia (just over 10%, of which nearly  80% consisted of fuel  and mining products), 
followed by Switzerland and Norway (both approximate ly 5.5%) completed the list of top five EU’s 
import partners in 2010 which together were the source of as much as half of all its goods imports. 
47. Developing countries as a group continued to incr ease their share in the EU imports to well 
over 50% in 2010, entirely dominating imports in the textiles and fuels (more than three quarters of WT/TPR/G/248/Rev.1 Trade Policy Review 
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  the total). The EU has continued to import more agricultural goods from developing countries than all 
other WTO Members combined.  
48. Its 26% share of the global trade in commerc ial services in 2009 illustrates that the EU 
continues to hold a solid lead position in the glob al services market. The EU services trade performed 
relatively well, amounting to €878 billion in 2009, representing only a slightly lower number than 
before the crisis. Exports continued to perform bette r than imports resulting in a surplus of €64 billion 
in 2009.The EU services trade remained more concen trated towards other industrialised economies. 
The US was the main partner on both the supplying and the receiving side. 
49. According to the latest available data, the EU c ontinues to be the world's biggest investor and 
the principal host. FDI flows, both from and into the EU, were subdued in the recession year of 2009, 
amounting to €493 billion. Excluding intra-EU fl ows, the EU accounted for 35% of global FDI 
outflows and was the recipient of 29% of the global inward FDI in 2009. The main destinations of EU 
FDI outflows were the US (€79  billion), EFTA  countries (€46 billion), Switzerland (€44 billion) 
followed by Brazil, South Africa and China. On th e other hand, EU FDI inflows originated from the 
US (€97  billion), EFTA countries (€29 billion), Switzerland (€25 billion), Canada (€11 billion), 
followed by Australia and Latin America. 
50. According to the recent Commission economic fore cast, the pace of the GDP growth is going 
to continue, and the EU-27 GDP is projected to in crease at the current pace of 1.8% in 2011, as the 
recovery has been gaining strengt h and has been more balanced towards domestic demand. On the 
downside there are signs that the upsurge in ener gy and commodity prices is feeding into stronger 
inflationary pressures, which may lead to the tighten ing of monetary policy in the near future. If that 
happens, the expected strengthening of domestic demand may be more difficult to materialize. 
51. The improved outlook for the external environm ent will provide a boost to the EU exports. 
While exports should continue to support the r ecovery going forward, a rebalancing of growth 
towards domestic demand is expected for 2011, driv en by growth in private investment. A better 
export outlook should translate into a stronger im petus for equipment investment, which will 
increasingly contribute to growth. In addition to th is impetus from the export-led industrial rebound, 
equipment investment should benefit from the con tinued improvement in corporate profits, stronger 
order inflows and the low level of stocks, as well as from higher capacity utilisation rates, now close 
to their long-term averages. This view is supporte d by the strong business confidence and the latest 
Commission's investment survey, which suggests robust investment plans for 2011. Construction 
investment is, however, projected to remain relativel y subdued this year due to ongoing adjustment in 
this sector. 
The EU response to tackle the financ ial turmoil and the economic slowdown 
 
52. During 2009, the EU economic recovery plan starte d to come into effect. Its priorities were 
restoring business and consumer confidence, kick-s tarting lending and investments, and supporting 
and creating jobs. Central to the plan was the abilit y of the EU to catalyse cooperation. The EU could 
exert its influence because it was able to harness Me mber States' and Union action, using the strengths 
of each part of Europe to best effect. This allowed the EU to help in shaping the global response to the 
crisis. The recovery plan is a response to the cris is with a clear eye to the future. It called for 
investments to improve the EU's competitiveness, not just to rebound from the crisis but to foster 
economic growth. European Union WT/TPR/G/248/Rev.1 
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  53. To counter the threats to the international trading system, the EU invested heavily and 
successfully in influencing the London G20 pledges, when world leaders agreed  to base their trade 
policy on WTO rules and disciplines and the prospect of further liberalisation offered by the Doha 
Development Agenda.  
54. The EU also took a leading role in promoting international responses to the crisis. It was 
prominent in discussions within the G20 as the prem ier forum for international economic cooperation. 
The EU argued for global efforts to fill in the gaps in financial regulation and supervision at 
international level. It took a leading role in pr omoting new rules on bank capital. It kept up pressure 
for effective action to plug deficits and reduce de bt while stimulating growth prospects. The EU 
proactively supported a commitment at the G20 summit in November 2010 in Seoul to fight 
protectionism in all its forms and to promote join t action to boost global grow th and jobs. A "Seoul 
action plan" commits the G20 further to global acti on for balanced growth, and is a clear recognition 
of joint responsibility under which all major econo mies have agreed to do their part to achieve 
rebalancing to tackle imbalances. The EU also help ed to build a consensus on cooperative solutions to 
tensions on currency issues and trade. Leaders agreed  to move to more market based exchange rates 
and enhance exchange rate flexibility to reflect  underlying economic fundamentals and refrain from 
competitive devaluations — as EU leaders had called for in advance of the summit. By endorsing the 
Basel III reform, the G20 also kept up the moment um for global financial regulatory reform, a key 
priority for the EU. 
55. In September 2010 the Commission delivered a comprehensive package of legislative 
measures to reinforce economic governance in the EU  and the euro area. It aims at broader and 
enhanced surveillance of fiscal policies, as well as of macroeconomic policies and structural reforms. 
It also provides new enforcement mechanisms fo r non-compliant Member States. Four of the six 
proposals deal with fiscal issues, including a wide-ra nging reform of the Stability and Growth Pact, so 
that sanctions will be the normal consequence fo r countries in breach of their commitments. Two 
other regulations aim at detecting and addressing emerging macroeconomic imbalances within the EU 
and the euro area. 
56. In October 2010, the European Council agr eed that Member States should establish a 
permanent mechanism for crisis re solution to safeguard the financial stability of the euro area as a 
whole. At the December 2010 European Council, it was agreed that the treaty will be amended to 
allow for the creation of the European Stability M echanism (ESM). It will be activated by mutual 
agreement of the euro-area Member States in situations where the stab ility of the euro area as a whole 
is at risk. 
57. As regards the measures to tackle social dimens ion of the crisis, changes have been made as 
regards support from the European Social Fund (ESF)18 to help people stay in job or to look for a new 
one and also changes have been introduced into the Regulation (EC) No. 1927/2006 on the European 
Global Adjustment Fund (EGF)19 aiming to help workers recently made redundant get back to work.  
 
  
                                                      
18 http://ec.europa.eu/employment_social/e sf/news/news/article_7362_en.htm.  
19 http://ec.europa.eu/social/m ain.jsp?catId=326&langId=en&n ewsId=432&furtherNews=yes.  WT/TPR/G/248/Rev.1 Trade Policy Review 
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  3. KEY DEVELOPMENTS IN TH E EU TRADE POLICY (2009-2010) 
3.1 I NTRODUCTION   
58. The communication "Trade, Growth and World Affairs"20, an integral part of the "Europe 
2020” strategy, was adopted in November 2010. It set s the direction of the EU  trade and investment 
policy for 2010-2015, based also on the lessons  learned from "The Global Europe 2006-2010"21. It 
proposes a strategy to reduce trade barriers, to open gl obal markets and to get a fair deal for European 
businesses. The overall aim is to ensure the benefits of  trade reach European citizens — in the form of 
stronger economic growth, more jobs and increased consumer choice at lower prices. 
59. The EU plans to draw on its trade policy to help  exit the current crisis and to create the right 
environment for a strong EU economy. Specifically, the communication proposes to complete the 
negotiations on the Doha Development Agenda in the WTO by reaching an ambitious and 
comprehensive agreement before the end of 2011. Moreover, it calls for concluding the negotiations 
of FTAs with major trading partners such as India a nd Mercosur; to deepen trade relations with other 
strategic partners, such as the US, China, Russia and Japan, where the main focus will be on tackling 
non-tariff barriers to trade. To help European businesses access global markets, the Commission will 
present in 2011 a legislative proposal for an EU  instrument to increase the leverage to secure 
improved symmetry in access to public procuremen t markets in developed and large emerging 
economies, building on the implementa tion of international commitments. 
60. The European Commission on 18 November 2010 adopted a regulation22 revising rules of 
origin for products impor ted under the generalised system of preferences (GSP), notified to the WTO 
on 29 March 2011. This regulation relaxes and simplifies rules and procedures for developing 
countries wishing to access the EU's preferential trade arrangements, while  ensuring the necessary 
controls are in place to prevent fraud. In addition,  special provisions are included for Least Developed 
Countries (LDCs) which would allow them to clai m origin for many more goods which are processed 
in their territories, even if the primary materials do not originate there. The new rules of origin are 
applied from 1 January 2011. The proposal also puts forward a new procedure for making out proofs 
of origin, which places more responsibility on the operators. From 2017, the current system of 
certification of origin carried out by the third c ountry authorities will be replaced by statements of 
origin made out directly by exporters register ed via an electronic system. This will allow the 
authorities of the exporting country to re-focus their resources on better controls against fraud and 
abuse, while reducing red-tape for businesses. This future Commission proposal will be subject to 
ordinary legislative procedure by the Council and Parliament. 
61. The EU uses transparency m echanisms in the design and implementation of trade policy 
which significantly contribute in identifying and addressing potential barriers to international trade 
and investment. These instruments include meetings between civil society and the EU officials to discuss aspects of Europe's trade policy, and p ublic consultations with domestic and foreign 
stakeholders.  
                                                      
20 http://trade.ec.europa.eu/doclib/doc s/2010/november/tradoc_146955.pdf.  
21 http://trade.ec.europa.eu/doclib/doc s/2010/november/tradoc_146941.pdf.  
22 http://ec.europa.eu/taxation_customs/customs/cust oms_duties/rules_origin/preferential/article_777_ 
en.htm. European Union WT/TPR/G/248/Rev.1 
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  3.2 WTO  
62. The World Trade Organisation (WTO) and the multilateral trading system are the focus for 
the EU trade policy, as the EU believes that a system  of global rules is the best way to ensure that 
trade between countries remains open and that prosperity can be widely shared.  
63. Despite the slow progress since the last review , completing the Doha Round remains the EU's 
top priority. The potential benefits are simply too important to be lost. 2011 represents the best opportunity to conclude an ambitious, balan ced and comprehensive agreement to which all major 
players make significant contributions and from which all players, big and small, could benefit. Doha 
represents a potentially sizable boost to the world economy. A failure to conclude the Doha Round 
would on the other hand be significantly detrimenta l to the current global economic uncertainty and 
could challenge the credibility of the multilateral trading system.  
64. This commitment to multilateralism was clearly demonstrated in the EU negotiation activity 
since the last report. The EU has re mained flexible to ensure an agre ement is reached and has played a 
constructive and proactive role in all areas of negotiation.  
65. Concerning Non-Agricultural Market Access (NAMA), the EU seeks meaningful 
liberalisation through sectoral arrangements, whic h it sees as a necessary complement to the formula 
approach. Liberalisation in non-agricultural produc ts is key for the development dimension of the 
round since the large majority of exports from developing countries are manufactured products. An ambitious outcome in NAMA is beneficial also for South-South trade, as 70% of the duties paid in this sector by developing countries (DCs) are pa id to other DCs. The EU considers that WTO 
Members should contribute to sectoral initiatives in accordance with their capac ity and share in world 
trade: in addition to developed countries, also the more advanced emerging economies should make a 
meaningful contribution, given both their increasingl y important role in the world trading system and 
the importance of improved access to their markets for the development of South-South trade to the 
benefit of other developing countries. The EU reco gnises that developing countries should be able to 
benefit from appropriate flexibility in response to th eir particular developmen t needs and challenges. 
The EU considers that the sectoral initiatives for ch emicals and machinery are particularly important, 
and sees scope for sectoral arrangements also for gems and jewellery, forestry and possibly some other industrial sectors. Non-tariff barriers are anot her clear priority for the EU, and it considers the 
horizontal mechanism and a series of proposals for th e elimination of non-tariff barriers for electric 
and electronic products, textiles, clothing and footwear  as crucial complements to the tariff side of the 
negotiations. 
66. The EU pursues gradual liberalization of global trade in services, which represents a very 
important contribution to economic  performance, long term investment and development. At the 
multilateral negotiations, the EU seeks the consolid ation of existing liberalisation as well as new 
market access for services providers. The EU's a pproach is respectful of national public policy 
priorities such as public services or cultural dive rsity and takes into acc ount developing and least 
developed members' priorities. Services liberalization is essential to ensure an overall balance with the 
two other core market access pillars (Agriculture  and NAMA). Since the last EU TPR, the EU has 
been heavily involved in the negotiations and has c ontinued to push for meaningful progress in this 
key economic sector.  
67. The EU has played a leading role in the agri cultural negotiations throughout the Doha Round 
with the firm belief that further liberalization of  trade in agricultural products is an important 
contribution to sustainable growth of the global economy. Conditional on meaningful offers by our WT/TPR/G/248/Rev.1 Trade Policy Review 
Page 16 
  
  negotiating partners and a balanced outcome in all areas of the negotiations, and hence of a successful 
conclusion of the round, the EU h as in particular shown its willingness to make substantial cuts in its 
agricultural tariffs based on a tiered formula which will cut highest tariffs the most, to significantly 
reduce trade distorting subsidies, and to elimin ate export refunds, on the condition of a successful 
completion of the Doha Round, containing inter alia  the parallel elimination of all forms of export 
subsidies and disciplines on all export measures with equivalent effect. Furthermore, the EU seeks to 
promote the protection of geographical indicati ons through the establishment of a meaningful 
multilateral register and the extension of additiona l protection of geographical indications for wines 
and spirits to geographical indications for all products. 
68. The EU has also participated actively in nego tiations on Trade Facilitati on and would hope to 
find an agreeable solution that pr ovides enhanced technical assistan ce and capacity-building in this 
area and has been active in suggesting solutions acceptable to developing countries on the rules 
governing the aid. The EU will be working to clar ify and improve GATT Articles V, VIII and X with 
a view to facilitating trade and removing obstacles to the movement of goods across borders, as well 
as unnecessary and cumbersome formalities while pr omoting cooperation across agencies for that 
purpose. This streamlining may offer some of the biggest gains from the Doha Round, as it can 
dramatically reduce the cost of trading across borders. 
69. The EU's approach to the DDA ha s been to complement further market opening with stronger 
rules and disciplines. The EU has been an active participant in the Negotiating Group on Rules. The 
EU favours amendments of the Anti-Dumping Agreemen t so as to clarify existing rules and prevent 
protectionist abuse. Equally, the EU seeks to stre ngthen current rules of the Agreement on Subsidies 
and Countervailing Duties and disciplines on fisheries subsidies. Furthermore, the EU has continued 
to support the further clarification of exis ting rules on regional trade agreements.   
70. The EU maintains its strong commitment to environmental protection and the fight against 
climate change in its trade policy, including through its work in the Committee on Trade and 
Environment and its Special Session; the EU promotes the liberalisation of trade in environmental 
goods and services and seeks a clarification of th e relationship between the WTO and Multilateral 
Environmental Agreements (MEAs). 
71. The EU, together with Brazil, Colombia, Costa Rica, Ecuador, Guatemala, Honduras, 
Mexico, Nicaragua, Panama, Peru, Venezuela initialle d the "Geneva Agreement on Trade in Bananas" 
(GATB) on 15 December 2009  and in parallel, a separate EU-US agreement on bananas was initialled 
by the parties on the same day .  This closed one of the most protracted disputes in the multilateral 
trading system. According to GATB, the EU will gradually reduce its banana tariff from 176 € per 
tonne to 114 € per tonne by 2017 (or by 2019 at the latest should the conclusion of the Doha Development Round be postponed). The GATB includ es a "settlement clause " for the definitive 
settlement of all pending disputes.  The EU-US ag reement reflects the GATB: the EU-US dispute on 
bananas will be considered as se ttled upon settlement of the disputes brought by the Latin-American 
banana exporters. GATB was signed on 31 May 2010, the tariff cu ts being provisionally applied as of 
8 June 2010  (and retroactively as of 15 December 2009, th e date of initialling). The EU internal 
procedure for the ratification of the agreements h as been completed and it has been notified to the 
WTO on 8 March 2011. The GATB will enter into for ce once all parties to the agreement notify the 
WTO on the completion of their internal procedur es while the US agreement will follow suit and will 
enter into force upon entry into force of GATB.  European Union WT/TPR/G/248/Rev.1 
 Page 17 
 
 
  72. On 18 November 2010, the EU has lodged a waiver request in the WTO to be allowed to 
grant exceptional autonomous preferences to imports of  a limited number of Paki stani products as part 
of the EU response to the devastating floods that hit Pakistan in August 2010.  
73. In a rapidly changing environment that poses ev er new challenges, the importance of full 
compliance and effective implementation of all WTO rules and agreements, including the plurilateral 
accords, cannot be overemphasized. In parallel with its committed participation in the DDA 
negotiations, the EU has paid full attention and has been engaging ac tively in all other negotiating and 
non-negotiating work within the various WTO bodies and committees. 
74. In particular, the EU has been very actively engaging in the TPRB tasks of monitoring 
protectionism. The EU has been the most transp arent and cooperative Member by timely reporting 
comprehensive information on its trade practices and measures to the WTO Secretariat. Consequently, the WTO TPRB monitoring reports contain substa ntial information on wi de-ranging EU practices, 
illustrating the high level of transparency exerted by  the EU. In this context, the EU has strongly 
advocated greater transparency, and encouraged other WTO Members to follow the EU example and 
champion in transparency. 
75. The EU will continue to give priority to fu rther accessions, notably of LDCs, and will aim to 
improve and clarify the unique dispute settlement system of the WTO.  
3.3
  C REATING THE RIGHT ENVIRONMENT FOR TRADE  
76. The Market Access Strategy is an essential elem ent of the enforcement agenda of the EU's 
renewed trade strategy. It was initially launched in  1996 with the purpose to provide a framework for 
removing tariff and non tariff barriers to trade in g oods, services, intellectual property and investment 
as well as to supply the EU exporters with informat ion on market access conditions in third countries. 
Since the onset of the economic crisis, the structures of  the Market Access Strate gy have been used to 
monitor compliance with the G20 anti-protectionism  commitment resulting in several public reports23. 
As a visible sign of the EU's commitment to tackle  trade barriers, the Commission announced in the 
Europe 2020 strategy that it would henceforth submit an annual "Trade and Investment Barriers 
Report" to the European Council with the objectiv e of triggering appropriate enforcement action 
including at political level. The first such re port was submitted to the European Council of 24/25 
March24. 
77. The EU actively promotes the implementation of effective standards for IP protection and 
enforcement world-wide. The EU continues its pursu it of the full implementation of the standards set 
out by the WTO TRIPs Agreement. In parallel,  the EU negotiates and implements bilateral 
agreements with partner countries, which include substantial IP provisions, also on customs border 
measures. The EU also provides technical cooperati on to a significant number of developing countries 
in this field.  
78. A deal was concluded on an anti-counterfeiti ng trade agreement (ACTA), which helps to 
ensure a high level of enforcement by participatin g countries, limiting the market for counterfeit 
goods and strengthening protection for copyright an d trademarked EU goods a nd products with EU 
geographical indications.  
                                                      
23 http://trade.ec.europa.eu/doclib/doc s/2010/october/tradoc_146796.pdf. 
24 http://trade.ec.europa.eu/doclib/ docs/2011/march/tradoc_147629.pdf. WT/TPR/G/248/Rev.1 Trade Policy Review 
Page 18 
  
  79. The codification exercise of all Trade Defence Instrument basic regulations took place in 
200925. 
80. The EU continued to address competition distortions in international trade via the use of its 
trade defence instruments (anti-dumping, anti-su bsidies and safeguards), in full compliance with 
WTO rules. While an increase in trade defence acti ons could have been expected following the global 
economic downturn, it is notable that in 2009 these measures affected only arou nd 0.5 % of trade.  
81. The fair and sustainable supply of raw materials and energy is of strategic importance for the 
competitiveness of the EU economy. This is clear ly emphasized by a large number of business and 
civil society contributors during the public consu ltation. A number of governments outside the EU are 
developing industrial policies that create supply bot tlenecks and other distortions affecting not only 
their domestic market, but also global market s on downstream products. In its 2008 Communication 
"Raw Materials Initiative", the Commission defined an integrated approach for raw materials 
encompassing all relevant policy fields. In February 2011, the Commission adopted a new Communication on "Tackling the challenges in commodity markets and on raw materials", updating and reinforcing the trade strategy in this field. 
3.4 S
ECTORAL POLICIES  
Agriculture  
82. The Common Agricultural Policy (CAP) has suc cessfully undergone substantial reforms in 
the recent years which achieved market orientation of  the policy. Most aid to farmers is now granted 
in the form of decoupled income support whereb y no obligation to produce exists and farmers are 
therefore free to follow market in centives, while for certain sectors a limited safety net is provided. In 
parallel, the role of the rural developm ent policy has been further strengthened 
83. On the basis of this reformed policy, a debate  on the future CAP post 2013 has been initiated. 
As outlined in the Communication from the Comm ission entitled "The CAP towards 2020: Meeting 
the food, natural resources and territorial challenges of the future"  the main focus of the debate is set 
on the following aspects: 
- 'Greening' of the first pillar direct payments  by supporting environmental measures and thus 
contributing to the overall environmental performance of the CAP; 
- A more equitable distribution of payments among Member States in order to increase 
effectiveness and efficiency of the income support; 
- An increased focus on competitiveness, innovation and environment in the rural development 
policy in line with the Europe 2020 objectives. 
84. The legislative proposals for the CAP post 2013 will , for the first time in the history of the 
policy, follow the ordinary legislative procedur e as mandated by the Lisbon Treaty with increased 
participation of the European Parliament alongs ide the Council and the Commission. The presentation 
of legal proposals is foreseen for later this year. Th e reformed CAP is expected to enter into force on 
1 January 2014. 
                                                      
25 Safeguards: Council Regulation (EC) No 260/2009 and 625/2009, Anti-dumping: Council 
Regulation (EC) No 1225/2009, Anti-subsidy: Council Regulation (EC) No 597/2009. European Union WT/TPR/G/248/Rev.1 
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  Manufacturing  
85. The manufacturing sector is an integral part of the EU economy and an engine for its growth. 
In 2006, it generated €6,816 billion in turnover, producing €1,711 in added value, generated a trade 
surplus (outside the EU) of €107 billion, and empl oyed 34 million people. Specific policies in this 
sector focus on creating better framework conditions for manufacturing industries in the EU so that 
they attract investment and job creation, and ensu re that business can compete openly and fairly. In 
respect of the EU strict competition policy, measu res involving state-aid w ould only be approved if 
consistent with the requirements of a level-pl aying field where competitive companies succeed. 
86. In parallel with efforts on the external front to open up international markets, the current 
priority areas of the EU enterprise and industrial  policy on the internal front include: promoting 
entrepreneurship, for example through better acc ess to funding and support networks; flexible 
regulatory framework that facilitates access to th e single market, with an additional focus on the 
contribution of voluntary standards to the regulat ory framework; simplification of the regulatory and 
administrative environment; promoting competitiv e performance by encouraging businesses to adapt 
to structural change and maintaining a high and consistent level of produc tivity growth; ensuring 
availability of essential inputs for industry; prom oting innovation; and improving skills. Increasing 
attention also goes into fostering consistenc y with energy and environmental policies. 
87. The EU tariffs for industrial products are among the lowest in the world. The EU average 
level of customs duty protection amounts to around 3. 9% on industrial goods, 2.4% in trade-weighted 
terms (taking into account MFN rates)26. However, the effective aver age industrial tariff is much 
lower because imports from many of the EU's suppliers of industrial products enter the EU 
preferential rates under the terms of  bilateral agreements, the Genera lised System of Preference (GSP) 
or tariff suspension regimes. Furthermore, low n on-tariff barriers also contribute significantly to 
making the EU economy one of the most open to trade. 
Services 
 
88. Services are the largest economic sector in the EU, accounting overall for close to 70% of its 
GDP and for a similar – and rising – proportion of employment. The Treaty on the Functioning of the EU (TFEU) establishes the central principles governi ng the internal market for services: the freedom 
for EU companies to establish themselves in othe r Member States, and the freedom to provide 
services on the territory of another Member State othe r than the one in which they are established. In 
so far as the market integration for services is still not complete within the EU, significant efforts have 
been underway to remove the remaining regulatory and administrative obstacles to trade in services between Member States within the framework provide d by the Directive on Services in the Internal 
Market (the "Services Directive" No. 2006/123/ EC) adopted in December 2006 and other sector-
specific legislation and initiatives. The deadline fo r the implementation of the Services Directive by 
Member States has expired: very significant results have been achieved and next steps for further 
deepening the internal market for services are being examined. Since the last TPR of the EU, notable 
progress has been achieved particularly in the fi nancial services, telecommunications and postal 
services. 
89. Despite the effects of the financial and economic  crisis, the EU holds firmly the position of 
the world's leading exporter and importer of commer cial services with a share of  25.5% in 2009 
(extra EU trade). In 2009, it accounted for over a qu arter of global services exports as well as imports. 
                                                      
26 World Tariff Profiles 2010, WTO (2010). WT/TPR/G/248/Rev.1 Trade Policy Review 
Page 20 
  
  The latter reflects the degree of openness of its trade regime in services. The EU and its Member 
States have undertaken major sch eduled commitments under the GATS in practically all major service 
categories. The EU and its Member States have al so entered into commitments on the protocols for 
the telecommunication and financial services sectors.  MFN exemptions are maintained in compliance 
with Article II. 
90. In recent years, further trade openness in servi ces beyond the multilateral commitments made 
in the WTO has been provided through bilateral negotiations with differe nt countries and regions. 
These have been based on a platform that comb ines trade in services and establishment in both 
services and non-services sectors under one set of provisions and often some provisions on further 
liberalisation in the telecommunications, financial services, international maritime transport services 
or postal and courier services, which enable trade liberalisation while preserving each partner's right 
to regulate its market.  
3.5 B ILATERAL AND REGIONAL TRADE RELATIONS  
 
91. In parallel to its firm commitment to the mu ltilateral system, the EU has pursued ambitious 
complementary trade liberalization at both regiona l and bilateral levels. Th e EU has consistently 
defined its own RTAs in ways that ensure they complement the multilateral trading system, and that 
make them a stepping stone rather than a stumb ling block for further multilateral trade opening. In 
accordance first with its Global Europe strategy, re -emphasised in the new trade communication, the 
EU has decided to aim at a new generation of FTAs that extend beyond present agreements and build 
towards future multilateral negotiations. The EU t hus seeks FTAs which are - in line with the letter 
and the spirit of the WTO Agreements - comprehe nsive in scope and deep in terms of level of 
commitment, in both goods and services. Particular emphasis is placed on tackling regulatory and non-tariff obstacles to trade. FTAs also address areas such as intellectual property rights, investment 
and government procurement. They are, moreover, designed to promote sustainable development, and 
therefore include high environmental and labour standards.  
92. The EU–South Korea Free Trade Agreement w as signed at the EU–South Korea Summit in 
October 2010 and will be provisionally as of 1
st July 2011, pending final ratification of the agreement 
by the Member States. South Korea is already the EU 's eighth largest trade partner, while the EU has 
become the second largest export destination for South Korea. The Agreement provides for the 
progressive liberalisation of trade in goods and ser vices, and for rules on i.a. competition and state 
aid, intellectual property and public procurement. To  tackle non-tariff obstacles  to trade, it includes 
specific provisions on electronics, motor vehicles and vehicle parts, pharmaceuticals, medical devices and chemicals. It will bring major benefits to ec onomic operators and to c onsumers, as well as 
sending a strong message that trade liberalisation is  a key element for the recovery of the world 
economy.  
93. Following the suspension of the EU-ASEAN FT A negotiations in 2009, negotiations for 
bilateral free trade agreements were launched w ith Singapore in March 2010 and with Malaysia in 
October 2010. 
94. Negotiations for comprehensive Economic Partne rship Agreements continued with all the 
African regions as well as with the Pacific. Pr ogress in these regions is uneven. The Commission 
ensures proper implementation of those agreements whic h have already been finalised, in particular in 
the Caribbean and Papua New Guinea.  European Union WT/TPR/G/248/Rev.1 
 Page 21 
 
 
  95. Progress in negotiations on free trade agreements  with Canada and Ukraine held out the 
prospect of significant shifts in the global tr ade landscape and of new trade opportunities for EU 
businesses and investors in these growing markets.  
96. Significant progress was also made in the negotia tions for a free trade agreement with India 
launched in 2007, with both sides confirming their commitment at the EU – India Summit on 10 
December 2010 that both sides would dedicate all effo rts necessary to conclude the negotiations as 
rapidly as possible. 
97. The EU successfully concluded the negotiations for an Association Agreement with Central 
American countries. These were launched in 2007 w ith 5 countries, and were  concluded in 2010 with 
the participation of a sixth Central American part ner, Panama. Similarly, the negotiations with the 
Andean Community were concluded in 2010, resultin g in a Multi-Party Trade Agreement with Peru 
and Colombia. Although Ecuador and Bo livia decided to opt out of the negotiations, the EU is leaving 
the door open for these countries to resume the negotiations and join the Agreement at a later stage. Both of these preferential agreements reflect a high level of ambitions in terms of tariff reductions, 
services coverage, market access fo r investments, and government procurement. They also effectively 
target beyond-the-border trade barriers with a comp rehensive coverage of disciplines on intellectual 
property rights, sanitary and phyto-sanitary requireme nts, and technical requi rements and standards. 
The agreements also promote regional economic integration through rules and via linkages with 
cooperation activities, and take care of broader c oncerns notably in the area of sustainable 
development, the environmen t and of labour rights. 
98. The EU has continued negotiations with Southe rn Mediterranean partners to complement 
Euro-Mediterranean agreements. Nego tiations on agreements on further liberalisation of agricultural, 
processed agricultural and fisheries products were conc luded with Egypt and Israel (entry into force in 
2010), and with Morocco and the Palestinian Author ity (approved by Council but pending consent of 
the European Parliament); they are ongoing with Tu nisia. Negotiations to liberalise trade in services 
and establishment are ongoing with Egypt, Morocco, Tunisia and Israel. A number of protocols 
establishing bilateral dispute settlement mechanisms fo r trade matters were signed with Egypt, Jordan, 
Lebanon, Morocco and Tunisia. Negotiations continue with the Palestinian Authority. Also, the first 
agreement on conformity assessment and acceptance of  industrial products, which developed from the 
earlier mutual recognition agreement, was signed with Israel in 2010, and discussions are ongoing 
with other Southern Mediterranean countries, ai ming at launching some negotiations end of 2011. 
With Libya, the EU suspended negotiations on a deep and comprehensive free trade area on 23 
February 2011. Currently the EU is implemen ting UNSCR 1970 (2011) sanctions against Libya with 
additional EU autonomous sanctions. 
99. In 2010, the EU also agreed with Mercosur to re-launch negotiations for an EU-Mercosur 
Association Agreement which would notably incl ude a comprehensive and ambitious preferential 
trade component. 
100. With Iraq, negotiations on a Partnership and Cooperation Agreement we re concluded in 2010 
and the agreement will be signed later this year. Th e trade part of that agreement is based on WTO 
rules with wide coverage of trade policy sectors. It also provides for some substantial elements, 
namely as regards public procurements and services. 
101. With Mongolia, the EU concluded in 2010 a Part nership and Cooperation Agreement that will 
be signed later this year. The trade part of that  agreement is based on WTO rules and particular 
attention was devoted to the disciplines app licable to the trade of raw materials. WT/TPR/G/248/Rev.1 Trade Policy Review 
Page 22 
  
  Other important bilateral activity 
 
102. The EU places a particular emphasis on devel oping new relationships with key trading 
partners, including the USA, China, Russia and Japan . To make life easier for traders while keeping 
security standards high, the EU improved its cu stoms cooperation with strategic partners.  
103. With the United States, its most important trading partner, the EU enjoys trade relations that 
are unrivalled in scope and breadth. Given the size of the bilateral economic relations, there is wide 
range of issues that both sides are engaging on.  The meeting of the Transatlantic Economic Council 
with the United States on 17 December 2010 underlin ed the intention of both sides to intensify the 
bilateral economic relationship, to tackle barriers and create new opportunities. At the TEC meeting, a 
wide range of issues were discussed and the TEC to ok concrete steps to promote a forward-looking 
business environment that reduces regulatory barriers and encourages innovation, shared standards and high-tech business. Delegates agreed on a comm on approach regarding electronic health record 
systems, and to focus attention on regulatory cooper ation in key sectors, access to raw materials, eco-
friendly products and inno vation and research policy. They agreed to work towards joint principles on 
ICT services trade and launched a joint website agai nst counterfeiting. At the meeting, they also 
announced the understanding on final steps towards mutu al recognition of authorised traders with the 
objective of implementation by October 2011. Furt her, they agreed to deepen transatlantic 
cooperation in supply chain security policies. 
104. China is the EU's second largest trading partne r, the EU's fastest growing export market, and 
the EU's biggest source of imports. Building on so lid and fast developing economic relations, the EU 
is looking forward to turn this relationship into  a truly strategic partnership. The High Level 
Economic and Trade Dialogue (HED) was launched in  April 2008 to give direction to EU-China 
trade, investment and economic cooperation and address issues of mutual concern. The third HED 
meeting was held end December 2010 in Beijing a nd delivered on its aim to enable strategic 
discussions while also allowing for concrete discuss ions to reach progress on specific issues and help 
resolve frictions. Among the issues discussed were: the international economy and ways forward for 
the two economies; competition issues; trade and investment; innovation; and customs cooperation. 
Focal points include the business climate, intelle ctual property rights, discriminatory non-tariff 
barriers, and transparency concerns. 
105. Russia is the EU's most important near neighbour . It is also the second largest destination for 
EU exports, the third largest source  of EU imports globally, and the biggest energy provider for many 
Member States. Russia's integration into the WTO re mains a crucial short-term objective for EU trade 
policy, also a point clearly made by many respon dents in our public consultation. It would be the 
single most significant measure to anchor Russia into the global system and it would give a boost to the modernisation and diversification of its econom y. The EU and Russia concluded their bilateral 
talks on Russia's accession to the WTO in November 2010. 
106. Japan is a strategic partner of the EU. Bila teral meetings are base d on the 2001 Action Plan, 
which comes to an end this year. The renewal and enhancement of the bilateral relations are at the 
centre of work of the High Level Group which is due  to report possible options to this year's EU-
Japan Summit.  European Union WT/TPR/G/248/Rev.1 
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  3.6  S USTAINABILITY AND DEVELOPMENT  
3.6.1  Trade and sustainable development  
107. In the EU, mainstreaming sustainability with its  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 2006 re newed EU Sustainable Development Strategy has 
guided the EU activities in that regard. Given th e wide ranging effects that trade policies and 
agreements can have on the economy, employment , labour standards, social cohesion, and the 
environment, including to policy development and regulatory aspects, the EU is concerned with 
ensuring that all its trade actions are supportive of  sustainable development within the EU, in our 
partner countries, and at global level.  
108. One basic tool to ensure coherence between tr ade liberalisation and sustainable development 
are the ex-ante assessments of th e potential effects of trade agreements on the pursuit of economic, 
social and environmental goals. In the EU, such ex-ante assessments take the form of Impact 
Assessments (carried out when considering a new initiative) and Sustainability Impact Assessments 
(SIAs). SIAs, conducted during the tr ade negotiations, by independent contractors, assess the potential 
economic, social and environmental impacts of trade agreements in the EU as well as its negotiating 
partners. They use a broad set of indicators and in volve wide consultation of stakeholders, such as 
private sector associations, trade unions, NGOs and civil society at large.   The results of the 
assessments guide EU negotiators in determining th e best possible outcome of a trade negotiation. 
They also provide guidelines for the design of  possible policy measures to accompany the trade 
agreement, to help maximise the positive effects and/or mitigate any negative consequences of the 
future agreements. The SIAs are t hus intended to enable trade liberalisation in a sustainable way. The 
EU currently conducts SIAs to all major regional or bilateral trade negotiations.  
109. The EU grants additional autonomous trade preferences under the GSP+ arrangement as an 
incentive to vulnerable developing countries to ratif y and effectively implement internationally agreed 
standards on sustainable development and good governance. Furthermore, the EU has agreed 
provisions and commitments on implementing soci al and environmental standards and creating 
mechanisms for wider stakeholder involvement in its  contractual bilateral ag reements, be they PCAs, 
FTAs or EPAs and irrespective of whether the partners  are developed countries or not. In parallel, the 
EU continues to be devoted to multilateral acti on to ensure that trade rules are supportive of 
sustainable development.  
110. The EU promotes Corporate Soci al Responsibility (CSR) and a reference to CSR is also 
included into the sustainable development chapter of a new FTA generation. 
111. Over the last years, climate change has emerged as a crucial sustainable development 
challenge facing policy makers, re quiring also a careful consideration of the interaction between 
climate and trade policies with a view to ensuring that  they reinforce each othe r. The EU has been in 
the frontline in the fight against climate cha nge both at the domestic level as well as on the 
international stage. Domestically, the EU has de veloped a robust policy with some of the most 
aggressive carbon emissions reduction targets unde rpinned by a strengthened Emissions Trading 
System (EU ETS). In parallel, on an international level, the EU is a leading player in the climate change negotiations under the Un ited Nations Framework Conventi on on Climate Change (UNFCCC) 
to agree on a new post-Kyoto climate regime. WT/TPR/G/248/Rev.1 Trade Policy Review 
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  112. There is a high awareness within the EU on th e need to safeguard and support such direct 
efforts to mitigate and adapt to climate change with  complementary trade policies. At the global level, 
trade policy could directly contribute to climate policy goals through the liberalization of trade in environmental good and services. While prioritizin g the multilateral path, the EU has also been 
pursuing early liberalization of environmental goods  and services in its FTAs. Further trade policy 
tools that may be significant with regard to clim ate change objectives and which the EU is examining 
closely include certification of natural resource based products and voluntary/private labelling. 
3.6.2  Trade and development  
113. The Treaty of Lisbon recognises development as a policy in its own right, on an equal footing 
with other components of the EU's external polic y. It puts a new focus on coordinating the Union's 
and Member States' development policies, and on  coherence between deve lopment policy and the 
other EU policies. This coincides with a shift to  integrate EU development policy into the Europe 
2020 agenda. Moving away from a donor–recipient relati onship, the policy is one of mutual interest: 
working in partnership with developing countries to provide sustainable and inclusive opportunities 
for growth and poverty reduction whils t at the same time benefiting the EU. 
114. The resources provided by the EU remain signi ficant. Together with its Member States, 
preliminary figures for 2010 show the EU provided €53.8 billion of aid a year, a doubling over the 
past 10 years. As the world's biggest donor, the EU reconfirmed its commitment for its aid to reach 
the target of 0.7 % of gross national income by 2015.  
115. The last "Policy coherence for devel opment" communication from 2009 outlined EU 
responses to the global challenges of trade and finance, climate change, global food security, 
migration and security. It proposed mechanisms to ensure that development objectives are taken into 
account and reconciled with other EU objectives.  
116. Trade is a major factor in the EU's relations  with developing countries. Many developing 
countries are linked to the EU on a contractual basi s. In this context, the negotiation of Economic 
Partnership Agreements is the cornerstone of the EU's trade and developmen t partnership with ACP 
countries (see § 94 ). EU external assistance supports these reforms of the trading regime by providing 
the funding to strengthen institutional and produc tive capacities required to exploit the opportunities 
created by the agreements. 
117. In addition to this, or, for those developing c ountries who do not have an agreement with the 
EU, the EU's Generalised System of Preferences (GSP) offers generous access to 176 developing 
countries and territories to the EU's market on an autonomous basis. A public consultation during 2010 on future adaptations of this system was a ccompanied by a proposal to roll over the current 
scheme. The "roll-over" Regulation, which will avoid the system lapsing at the end of 2011, has been 
approved by the European Parliament on 24 Ma rch 2011 and should be published in June.  
118. The Commission will put forward a comprehensive "review" of the GSP system in May 2011; 
once adopted by the European Parliament and Council of Ministers this new regulation will enter into 
force by January 2014 at the latest. According to  the Commission proposal, the new system will be 
open-ended and will strive to: a) take into acc ount the fast-changing economic and trade patterns, 
acknowledging that the crisis and preference erosio n have been hitting hard poorest countries, and 
therefore concentrating preferences on those most in need; b) strengthen the GSP+ incentive scheme 
for human and labour rights, the environment and good governance, by making applications easier but 
at the same time enhancing monitoring and implementation; c) make the system more stable, 
transparent and predictable. European Union WT/TPR/G/248/Rev.1 
 Page 25 
 
 
  119.  The Commission is preparing a "Communicati on on Trade and Development", which will be 
adopted before the end of the year 2011.  The main  aim of this Communication is to set out a clear 
picture on how the EU can best support those developing countries that are presently not benefitting (or only marginally) from international trade in or der to better harness the opportunities in favour of 
inclusive growth and poverty reduction, in a globa l scenario which has considerably changed.  The 
related public consultation w ill be launched in May 2011. 
120. In November 2010, the Commission published a Green paper on its future development 
policy,  launching a reflection on how the EU's developmen t policy should be oriented to best support 
the efforts of developing countries looking to achieve the MDGs, and how it can leverage new 
opportunities to tackle poverty. The public cons ultation was carried out from November 2010 to 
January 2011; and a Communication will be  adopted during the course of 2011. 
121. The EU with its Member States continues to be  a leading player within the Aid for Trade 
agenda and moves decisively to put Aid for Trade into practice. Based on the recommendations of the 
WTO Aid for Trade Task Force, the EU adopted a joint Aid for Trade Strategy in 15 October 2007, 
through which it intends to honour its pledge on increasing Trade Related Assistance (TRA) made at 
the Hong Kong WTO Ministerial, as well as to achie ve broader improvements in both the quality and 
quantity of its Aid for Trade. The EU has put in place a range of specific activities to implement the 
Strategy, including active participation in work in  WTO and OECD to improve monitoring of global 
Aid for Trade flows and effectiveness. 
122. The EU seeks to respond to the needs of devel oping countries, to support their sustainable 
development and their integration into the global trading system. Efforts to assist the developing 
countries in achieving growth, alleviating poverty a nd 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 EU continues to be  fully committed to put trade at the service of 
development.  
123. In the context of the DDA, the EU has conti nued to engage construc tively with developing 
countries to reach suitable solutions to their partic ular realities and needs, and consistent with the 
principle of differentiation. EU proposals across all negotiating areas have consistently considered the 
development aspect and often incl ude explicit provisions for special  and differential treatment. 
Beyond the DDA and the WTO, the EU has par ticipated actively in discussions on trade and 
development in other international fora such as the United Nations and UNCTAD.   
124. In 2009, the EU as a whole continued to increase its TRA commitments substantially. 
Provisional data for this year, available at the time of writing, indicates that TRA reached almost €3 
billion, compared to €2.4 in 2008. This results  mainly from an increase in Members States TRA 
commitments to €2 billion. Although one year to go, the EU therefore exceeded its Hong Kong pledge 
to provide €2 billion in such assistance by 20 10 (€1 billion each by the Commission and Member 
States).  As in the case of TRA, the EU is also th e largest provider world-wide of Aid for Trade. In 
2006 the EU provided €7.3 billion (€2.6 billion by th e Commission, €4.7 billion by Member States).  
Provisional data for 2009, available at the time of writing, indicates that this figure had increased to 
€10.5 billion (€3.35 by the Commission and €7. 15 by Me mber States) It should be stressed that these 
increases, delivered via existing channels of devel opment cooperation, did not come at the expense of 
other sectors but rather in the context of a growing overall Official Development Assistance (ODA). In terms of activities financed in the trade area, th e EU assisted developing countries across the whole 
spectrum of trade policy and regulation and trade development categories, while making sure that the 
distribution of available funds corresponded as clo se as possible to their own priorities and demands. WT/TPR/G/248/Rev.1 Trade Policy Review 
Page 26 
  
  For instance, a substantial and growing part of TRA was allocated for technical assistance to help 
beneficiaries meet European techni cal and phytosanitary standards. 
125. On the multilateral side of Aid for Trade, th e EU 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 as of December 2010, 47 
LDCs benefitted from the programme. The EU an d 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 Aid for Trade Strategy. 
126. Finally, the European Commission has also been regularly improving and updating its Export 
Helpdesk27. This is a free online service to facilitate ma rket access to the EU for economic operators 
in developing countries in particular. The website in cludes relevant informati on required by exporters 
interested in supplying the EU markets, such as,  inter alia, import requirements, import tariffs, 
customs documents, rules of origin and trade stat istics. The statistics on the use of this online 
information service demonstrates its growing importa nce. From 2004 (the year of its launch) to 2010, 
the number of hits increased from 1,500 to more than 12,000 hits a day. In 2010 in order to further address the needs of economic operators in the European Neighbourhood countries, the current 
language versions of the website (E nglish, French, Spanish, Portugu ese) were extended to Arabic and 
Russian.  
4.  LOOKING FORWARD 
127. Notwithstanding the difficulties that the WTO Members encounter in moving forward the 
Round, the EU remains convinced that concluding th e Doha round of negotiations is the priority on 
the WTO agenda. An ambitious, balanced and comp rehensive outcome should be achieved that would 
deliver substantial new trade opportunities for all WT O members. This would be the right response to 
the global economic crisis and in order to achieve this, all major players, including large fast-
emerging economies, will have to make significant contributions so that all players, big and small, 
can benefit. 
128. The EU will continue to play its leadership  role in promoting trade liberalization and 
developing a trading system of benefit to all. In this regard, the EU will continue to participate 
actively in the work of the WTO, while pursuing regional trade agreements which are a catalyst for 
multilateral liberalization, encouraging sustainabl e development and supporting the advancement and 
integration of less advanced economies in the multilateral scene. The EU believes that the 
transparency pillar is of utmost importance fo r the good functioning of the WTO. The surveillance 
and monitoring capacity of the WTO should be enhan ced by pursuing work in peer reviews processes, 
transparency and multilateral scrutiny of trade po licies in order to stem possible protectionist 
tendencies. The dispute settlement pillar remains cen tral for ensuring stability to the global trading 
system and its judicial nature  should be further developed. 
129. The EU will work on the implementation of the communication "Trade, Growth and World 
Affairs", and continues to be committed to an open, fair and rules-based trading system, in order to 
achieve sustainability and gr owth at home and abroad.  
__________  
                                                      
27 http://exporthelp.europa.eu.