COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE AND THE COMMITTEE OF THE REGIONS Trade, Growth and World Affairs   Trade Policy as a core component of the EU's 2020 strategy
Date: 2010-11-09
Institutions: European Commission
Subjects: extra-EU trade, international agreement, third country, trade agreement

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EUROPEAN COMMISSION 

Brussels, 9.11.2010 
COM(2010) 612 final 

COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN 
PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL 
COMMITTEE AND THE COMMITTEE OF THE REGIONS 

Trade, Growth and World Affairs 

Trade Policy as a core component of the EU's 2020 strategy 

{SEC(2010 1268} 
{SEC(2010) 1269} 

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COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, 
THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE AND THE 
COMMITTEE OF THE REGIONS 

Trade, Growth and World Affairs 

Trade Policy as a core component of the EU's 2020 strategy 

1. 

Context and basic orientations 

The  over-riding  aim  of  European  economic  policy  is  faster  growth.  Only  sustained  economic 
growth can create more jobs and safeguard our welfare state. But lifting the growth potential of our 
economies will be a major challenge – a challenge taken up by the Europe 20201 triple objectives of 
smart,  inclusive  and  sustainable  growth.  This  Communication  is  a  crucial  element  of  the  external 
dimension  of  the  Europe  2020  strategy  and  sets  out  how  trade  and  investment  policy  must 
contribute to this objective, and to our external policies as a whole. It should be read together with 
two  supporting  papers:  a  report  on  the  progress  achieved  to  date  on  the  2006  Global  Europe 
Strategy and an analytical paper making the case for 'trade as a driver of prosperity'. 

Open economies tend to grow faster than closed economies. Trade raises EU growth by fostering 
our efficiency and innovation. It boosts foreign demand for our goods and services. Open trade also 
gives  EU  consumers  access  to  a  wider  variety  of  goods  at  lower  prices.  Europe's  openness  to 
foreign direct investment (FDI) increases our competitiveness. Equally, the ability of our firms to 
invest  abroad  enables  them  to  grow  globally  and  create  jobs  both  at  home  and  abroad.  In  short, 
whilst remaining vigilant to adjustment costs, Europe must seize the triple benefit from more open 
trade and investment: more growth and jobs and lower consumer prices.  

The triple benefits from trade opening 

Economic growth: Finalizing all the ongoing negotiations (Doha Round and bilateral agreements) 
and making significant further progress in our relations with strategic partners would lead, by 2020, 
to a level of EU GDP more than 1% higher than it would otherwise be2.  

Consumer benefits: the gains from a wider variety of goods and services for the average European 
consumer are in the range of €600 a year, in  addition to the gains from lower prices. 

Labour  effects:  It  is  generally  agreed  that  the  EU's  integration  in  the  global  economy  through 
increased trade generates more and better paid jobs. More than 36 million jobs in Europe depend, 
directly or indirectly, on our ability to trade with the rest of the world. More than 4.6 million people 
in the EU work for Japan and US-majority owned companies alone3.  

Source: European Commission estimates. For further details see "Trade as Driver of Prosperity", section II.1. 

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3 

European Commission "Europe 2020: A strategy for smart, sustainable and inclusive growth", see 
http://ec.europa.eu/eu2020/index_en.htm. 
1% of EU GDP in 2010 was equivalent to € 120 billion according to Commission forecasts. 
"The  transatlantic  economy  2010"  by  D.  Hamilton  and J.  Quinlan,  Center  for  Transatlantic  Relations,  Johns 
Hopkins University , and 'Basic Survey of Overseas Business Activities, 2010', METI, Japan. 

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But for an open trade policy in Europe to succeed politically, others – including both our developed 
and emerging partners - must match our efforts, in a spirit of reciprocity and mutual benefit4. Trade 
policy will not gain public support in Europe if we do not have fair access to raw materials, or if 
access to public procurement abroad is blocked, for example. The EU will remain an open economy 
but we will not be naïve. In particular, the Commission will remain vigilant in defence of European 
interests and European jobs. It will fight unfair trading practices with all appropriate means. 

Our  economy  is  the  largest  in  the  world.  It  is  also  the  biggest  exporter.  Our  firms  exported  € 1.6 
trillion of goods and services in 2009, which is about 13% of our GDP. The EU is also the most 
important provider and host of FDI. As shown by Figure 1 in the annex, our share in global trade 
remains  stable  for  now,  despite  the  steep  rise  of  the  emerging  economies.  Europe's  strengths  in 
international trade are reflected in public opinion5. 

By 2015, 90% of world growth will be generated outside Europe, with a third from China alone (see 
Figure  1).  So  in  the  years  to  come,  we  need  to  seize  the  opportunity  of  higher  levels  of  growth 
abroad, especially in East and South Asia. Developing and emerging countries are likely to account 
for nearly 60% of world GDP by 2030. This is compared to less than 50% today6.  

The  world  economy  and  world  trade  have  undergone  profound  changes  in  the  recent  past.  The 
supply chain of many goods and services now encompasses factories and offices in various parts of 
the  globe.  Two  thirds  of  our  imports  concern  intermediate  inputs  which  boost  our  productive 
capacity.  For  our  companies  to  stay  ahead,  they  need  to  be  able  to  rely  on  inputs,  services  and 
highly  qualified  people  from  around  the  world,  and  their  investments  and  intellectual  property 
require robust protection.  

Our agenda must evolve accordingly, as Europe 2020 makes clear. Cutting tariffs on industrial and 
agricultural goods is still important, but the brunt of the challenge lies elsewhere. What will make a 
bigger difference is market access for services and investment, opening public procurement, better 
agreements  on  and  enforcement  of  protection  of  IPR,  unrestricted  supply  of  raw  materials  and 
energy,  and,  not  in  the  least,  overcoming  regulatory  barriers  including  via  the  promotion  of 
international standards. Through trade, we should also promote the greening of the world economy 
and decent work. 

This agenda will confront us increasingly with the interface between our internal rules and external 
liberalization and – as the European Council flagged in September – we need to "further enhance 
the coherence and complementarity between the EU's internal and external policies as a whole"7. 
As  an  illustration,  a  more  complete  internal  market  for  services  and  more  systematic  regulatory 
cooperation  with  major  third  countries  will  facilitate  international  trade  in  services  and  the 
dismantling of behind-the-border barriers. 

We  shall  act  at  the  multilateral  level  through  the  WTO,  and  bilaterally.  Doha  remains  our  top 
priority. However, the bilateral is not the enemy of the multilateral. The opposite may hold truer: 
liberalisation fuels liberalisation. 

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European Council Conclusions, 16 September 2010. 
According to Special Eurobarometer Survey 357 on international trade conducted in September 2010, 65% of 
respondents  think  that  the  EU  has  benefited  a  lot  from  international  trade  and  64%  think  that  European 
products can compete well with those from outside.  
Compared to 49% in 2010, see OECD (2010) “Perspectives on Global Development: Shifting Wealth”. 
§ a) Annex I, European Council Conclusions, 16 September 2010. 

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That is why a large part of our energy will be spent on delivering balanced free-trade agreements 
put forward as priorities by the Commission in its Global Europe strategy. A first major harvest is 
near,  with  the  approval  of  the  South  Korea  agreement.  This  was  a  difficult  negotiation,  and  we 
should  have  no  illusions:  the  concessions  requested  of  the  EU  and  the  trade-offs  that  will  be 
necessary in forthcoming agreements will be even more challenging.  

At the same time we shall be working towards the conclusion of the Doha Round and the further 
strengthening of the WTO. Doha is much overdue. This is still very precious to achieve, not only 
for the economic gains it will bring but also to confirm the central role of the WTO in the world 
trade system.  

Nevertheless,  the  Doha  agreement  will  not  give  answers  to  the  newer  questions  that  global  trade 
rules  ought  to  take  care  of.  It  is  time  to  start  reflecting  on  the  next  steps  after  Doha,  and  the 
Commission will set up a group of eminent people to that effect.  

Once all the FTAs have been approved that are under negotiation  or under consideration, the EU 
will  have  preferential  trade  agreements  with  the  large  majority  of  WTO  members.  Together  they 
account for only half our trade, however. It is equally important to deepen our trade and investment 
links with the other big economies in the world: the US, China, Japan, and Russia.  

We shall step up cooperation with these countries through the fora that have been created for that 
purpose.  We  will  evaluate  if  these  fora  are  up  to  the  task  or  whether  we  need  to  explore  other 
avenues with these countries. The prime focus with the US and Japan should be on tackling non-
tariff barriers to trade and investment, primarily through regulatory cooperation. 

China, now our second biggest trade partner, is a source of both major opportunities and challenges. 
Given its tremendous growth potential, China is a major attraction for exports and investment. But 
there is no denying that some of China's industrial and macro-economic policies imply an approach 
based on state capitalism. There are similar issues in relation to Russia, our biggest near neighbour.  

Trade  should  also  drive  improvements  in  social  inclusion  both  around  the  world  and  in  the  EU. 
Developing countries that have entered global trade and production chains have seen incomes and 
employment  grow  rapidly  as well as  significant reductions in poverty. EU trade  policy is helping 
the poorest economies by also providing generous unilateral trade preferences. More generally we 
are  employing  a  carefully  differentiated  approach  depending  on  the  level  of  development  of  our 
partners.  We  are  paying  systematic  attention  to  coherence  with  development  policies,  such  as 
poverty eradication.  

At the same time, trade openness continues to enhance welfare levels and boosts employment and 
wages in developed economies, including in the EU. Openness creates jobs. But we also recognise 
that the costs of adjustment in  particular areas or sectors can  sometimes be  high, and so we need 
appropriate national and European social and labour market policies to help workers and businesses 
adjust.  This  concern  should  be  reflected  in  our  budgetary  priorities,  in  keeping  with  the 
Commission's  budget  review  of  October  20108.  We  have  consulted  widely  throughout  the  EU  in 
preparing  this  Communication.  Based  on  this  and  our  internal  reflections,  these  are  the  chief 
ingredients of the trade policy agenda that the Commission proposes to pursue in this mandate. It 
will do this within the new institutional framework of the Lisbon Treaty, which should be seen as a 
major opportunity in that it lends greater transparency and legitimacy to EU trade policy, gives a 

8 

European Commission Communication on budget review, 19.10.2010, page 15 

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new voice to the European Parliament in trade matters, and which also sets the stage for a mutual 
reinforcement of our trade and external action both here in Brussels and in the EU's delegations in 
136 countries around the world.  

This Communication should be seen both as a key element in the external dimension to the Europe 
2020 strategy but also a clear statement of Europe's intentions to play an active and assertive role in 
promoting  the  trade  policy  agenda  in  the  G20  and  all  relevant  global  trade  fora.  Indeed  open 
markets will play a pivotal role in establishing the strong, sustainable and balanced growth to which 
G20 leaders committed at their Summit in Toronto.  

2. 

A trade and investment policy ready for tomorrow's challenges  

2.1. 

Smart growth: fast forwarding to the future 

Our  economic  future  lies  in  keeping  a  competitive  edge  in  innovative,  high-value  products, 
generating  long  term  and  well  paid  jobs9.  Our  trade  policy  must  capture  this  by  broadening  the 
scope of our work to take the following issues on board: 

–  An  effective  global  manufacturing  supply  chain  cannot  exist  without  the  vital  support  of 
transport,  telecom,  financial,  business  and  professional  services.  Services  represent  70%  of 
world output but only about one fifth of world trade. The low proportion of services in total trade 
is  partly  a  result  of  natural  barriers  (some  services  are  by  definition  non-tradable),  but  trade 
barriers also play a major role. Remaining trade barriers in services are generally by an order of 
magnitude  higher  than  barriers  in  manufacturing  sectors.  Estimated  tariff  equivalents  are 
generally  well  above  20%  and  often  much  higher  (See  Table  2).  We  will  seek  from  our  main 
developed and emerging trade partners, by all means available, greater openness for our services 
providers,  in  line  with  what  the  EU  internal  market  offers  to  services  providers  from  third 
countries;  whilst  maintaining  our  objectives  in  line  with  the  2005  UNESCO  Convention  on 
cultural  diversity.  We  shall  continue  to  offer  integration  with  the  internal  market  to  some 
neighbouring  countries  (such  as  Ukraine,  Moldova,  the  Caucasus  countries,  Egypt,  Jordan, 
Morocco and Tunisia) in sectors such as financial, postal and telecom services. 

As  suggested  during  the  public  consultation  process,  we  should  also  seek  to  ensure  that 
regulation  of  services  in  all  third  countries  is  open,  non-discriminatory,  transparent  and  in  the 
public interest, so that also our providers can better do business there. Finally, as technological 
changes  create  new  services  and  enhance  the  tradability  of  cross-border  services,  our  trade 
agreements should find ways to prevent the erection of new barriers to trade for those services. 

–  There has been an enormous increase in capital movements and FDI. Around half of world trade 
now  takes  place  between  the  affiliates  of  multinational  enterprises  trading  intermediate  goods 
and services. The Commission has proposed a comprehensive European investment policy10 to 
better address the needs of investors from all Member States. It will seek to integrate investment 
protection together with investment liberalisation into on-going trade negotiations. To do this, it 
will  soon  propose  updates  of  relevant  negotiating  directives,  starting  with  Canada,  Singapore, 
and India. The Commission is also considering whether stand-alone investment agreements with 
other countries, such as China, would be worthwhile. 

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10 

European  Commission  Communication  "Europe  2020  Flagship  Initiative  -  Innovation  Union"  -  COM(2010) 
546, 6.10.2010. 
COM(2010) 343, 7.7.2010. 

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–  Public procurement is an area where foreign markets are particularly closed for EU companies. 
With a share of over 10% of GDP in large industrialised countries, and a growing share in the 
emerging  economies,  public  procurement  contracts  constitute  business  opportunities  in  sectors 
where  EU  industry  is  highly  competitive.  This  includes  sectors  such  as,  for  example,  public 
transport,  medical  devices,  pharmaceuticals  and  green  technologies.  We  will  continue  to  press 
for more opening of procurement abroad, and we will in particular fight against discriminatory 
practices. We have been actively negotiating further access for our companies both in bilateral 
negotiations  and  in  the  context  of  the  WTO  Agreement  on  Government  Procurement.  We  are 
pushing for early Chinese accession to the GPA on the basis of an ambitious offer, in line with 
Chinese  WTO  accession  commitments.  But  while  our  market  is  already  largely  open,  those  of 
our major trading partners are much less so, especially at regional and local level (see Table 4 in 
Annex).  The  Commission  will  therefore  present  in  2011  a  legislative  proposal  for  an  EU 
instrument  to  increase  our  leverage  to  secure  improved  symmetry  in  access  to  public 
procurement  markets 
the 
implementation of our international commitments. Likewise, there should be more symmetry in 
access to research and development programmes in third countries to match our own high level 
of openness, as discussed in the recent Communication on Innovation Union11.  

large  emerging  economies,  building  on 

in  developed  and 

–  Trade and investment flows are key to the diffusion of innovation and new technologies across 
the  EU  and  in  the  rest  of  the  world.  This  is  true  both  for  "new"  sectors  such  as  telecoms  and 
more  "traditional"  sectors  -  for  instance  high-tech  textile  production.  We  are  advocating  the 
extension  of  the  moratorium  on  tariffs  for  electronic  commerce  and  will  pursue  our  efforts  to 
update the 1996 WTO Information Technology Agreement to extend its scope, remove non-
tariff  barriers  to  trade  in  these  products,  such  as  duplicate  conformity  testing  and  increase  its 
geographical membership12.  

–  Regulatory  barriers  to  trade  in  goods,  services  and  investment  are  especially  harmful, 
particularly  in  our  major  trade  partners,  given  the  intensity  of  our  trade  and  investment 
relationship  with  them.  Particular  concerns  relate  to  lack  of  acceptance  and/or  use  of 
international standards, and often burdensome certification or inspection requirements, including 
for  industrial  products  and  our  agriculture  or  fisheries  exports.  Countries  have  the  right  to 
establish  their  own  levels  of  public  policy  protection  and  to  regulate  accordingly,  such  as 
maintaining a high level of human health and safety and environmental protection; and of course 
regulation must also be enforced. Knowledge that such regulation is in place and enforced also 
provides reassurance to consumers as they make purchases, whether of imported or domestically 
produced goods and services.  

–  But  while  differences  in  laws  and  regulations,  or  the  absence  of  common  standards  or  mutual 
recognition,  may  be  legitimate  in  some  cases,  they  too  often  constitute  an  important  source  of 
business costs for our companies abroad. While difficult to quantify, non-tariff barriers are often 
the  source  of  trade  disputes  while  lowering  the  associated  trade  costs  can  generate  significant 
savings13.  So  enhanced  regulatory  cooperation  –  both  in  order  to  promote  equivalence  or 
convergence  (of  rules,  standards,  testing  and  certification  practices)  internationally  and  to 
minimize  unnecessary  costs  in  regulation  worldwide  –  is  an  important  aspect  of  our  trade 
relationships  particularly  with  our  key  partners,  or  as  part  of  FTA  or  similar  negotiations,  but 
much remains to be done. We will urge our major trading partners to join and promote the use of 

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See footnote 9. 
Cf. EU proposal contained in WTO paper G/IT/W/28 dated 15 September 2008. 
Staff Working Paper "Trade as a driver of prosperity", chapter III.2 "Non-tariff regulatory barriers on goods". 

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existing  sectoral  regulatory  convergence  initiatives  such  as  the  UN-Economic  Commission  for 
Europe  (ECE)  regulations  on  automobiles,  and  to  participate  actively  in  the  development  of 
international  standards  or  common  regulatory  approaches  in  a  broad  range  of  sectors.  Indeed 
experience  shows  that  it  is  much  easier  to  tackle  potential  barriers  before  regulatory  practices 
become entrenched, both in well established EU industry sectors such as automotives, machine 
tools  and  chemicals,  but  particularly  in  rapidly  emerging  sectors  such  as  online  services  or 
biotech.  

–  Of course, quite a few third countries recognize the advantages of the EU's system of regulation 
for  the  Single  Market  and  have  adapted  their  own  rules  accordingly.  In  an  ever  more  global 
economy,  however,  our  own  rulemaking  must  be  increasingly  sensitive  to  the  international 
context  and  of  the  need  to  help  our  businesses  remain  competitive.  Indeed,  the  link  between 
external trade opening and internal market reforms is often a two-way street, given that in both 
cases we are aiming to reduce the cost of unnecessary regulatory barriers that hamper the flow of 
goods, services and investment. We need to do more to leverage the effectiveness of internal and 
external policies and thereby enhance Europe's competitiveness in the global market place14. The 
Commission  will  examine  how  to  strengthen  the  mutual  links  between  internal  and  external 
regulatory  actions  and  to  explore  how  to  improve  coordination  between  the  two  in  areas  like 
government regulation and international standards, with a particular focus on future legislation. 
These issues are also discussed in the Commission Communication "Towards a  Single Market 
Act".15 

–  We  should  also  ensure  that  the  temporary  movement  of  people  to  provide  services16 
contributes to making our service providers and investors more competitive, both in the EU and 
abroad. Bringing in the most highly qualified people from around the world is essential to enable 
our  companies  and  our  research  centres  to  remain  at  the  cutting  edge  of  innovation.  Likewise, 
our companies need to be able to move European managers and experts to their establishments 
abroad.  We  must  offer  the  same  treatment  to  our  partners'  firms,  if  we  want  to  continue 
benefitting  from  their  investment  in  the  EU  –  and  the  jobs  that  go  with  it.  In  this  respect,  the 
proposed Directive on conditions of admission of third country nationals in the framework of an 
intra-corporate transfer should help create a stable and open environment for third country intra 
corporate transferees in the EU.  

2.2. 

Inclusive growth in the EU and abroad  

While  we  benefit  from  globalisation,  people  in  Europe  are  clearly  concerned  by  some  of  the 
potential  consequences,  notably  on  employment17,  while  also  demanding  policies  offering  more 
opportunities for developing countries.  

–  Trade  openness  creates  more  jobs  overall,  but  because  stronger  growth  requires  a  shift  of 
resources towards the best performing sectors, it may cause job losses in some sectors. So market 
opening has to be accompanied by policies that equip people to adapt to these changes. Whilst it 

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See Competitiveness Council Conclusions: "Priorities for the Internal Market in the next decade", 4.12.09, §§ 
6 and 14.  
COM(2010) 608, 27.10.2010. 
This is called "Mode 4 services liberalisation" in the WTO jargon. 
According  to  Special  Eurobarometer  survey  357,  30%  of  those  who  considered  they  were  not  currently 
benefiting from international trade, attributed this to unemployment effects. Respondents thought that creating 
jobs in the EU should be the first priority for EU trade policy. 

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is the responsibility of Member States to put in place the right flanking social, educational and 
labour market policies, the EU contributes additional support through a number of instruments 
(including structural funds). One of the instruments is the European Globalisation Adjustment 
Fund (EGF). By extending and simplifying the EGF, the EU could do more to help those losing 
their jobs in different sectors to adjust and re-train, so as to cushion the impact of certain major 
disruptions in Member States.  

–  Inclusiveness  is  just  as  important  outside  the  EU's  borders.  We  are  committed  to  promoting 
sustainable development, international labour standards and decent work also outside the EU. Of 
course, integrating developing countries into the global economy helps poverty eradication and 
fosters  better  working  conditions.  This  is  the  EU's  approach  with  Economic  Partnership 
Agreements with African, Caribbean and Pacific countries: fostering development by promoting 
regional  integration,  creating  opportunities  for  trade  and  investment,  and  improving  economic 
governance.  

–  In  early  2011,  we  will  propose  a  reform  of  the  EU's  "General  System  of  Preferences".  This 
will,  inter  alia,  aim  to  focus  the  benefits  on  those  countries  most  in  need  and  on  those  which 
effectively implement international labour standards and principles of human rights, environment 
protection and good governance. 

–  In 2011, the Commission will adopt a  Communication on trade and development. This will 
reflect in a broad sense on how our trade policy can best serve development, such as for example 
the special and differential treatment granted to developing countries, the support to trade-related 
reforms,  and  the  removal  of  structural  impediments  to  their  integration  into  global  trade.  In 
addition, this Communication will include suggestions on how trade can help third countries hit 
by natural disasters, such as the earthquake in Haiti or the recent floods in Pakistan.  

2.3. 

Sustainable growth in the EU and abroad 

Trade policy should continue to support green growth and climate change objectives, in particular 
reduced carbon emissions. We need to ensure that our industry is able to compete in the sustainable 
economy  of  the  future,  including  in  the  fisheries  and  agriculture  sectors  which  will  see  further 
reform. 

–  On climate change, our priority remains a global agreement, where reduction goals are set for 
all countries. Trade policy's support for action against climate change should be pursued through 
the  elimination  of  barriers  to  trade  in  environmental  goods  and  services18.  The  Commission 
remains of the opinion that the option of border adjustment measures raises a number of issues, 
as set out in the recent Commission Communication19. 

–  More broadly, trade policy should continue to support and promote green growth around the 
globe in other areas, such as energy, resource efficiency and biodiversity protection. We will also 
continue  to  give  particular  attention  to  the  implementation  of  sustainable  development 
chapters in our trade agreements, and to close cooperation with civil society.  

18 
19 

See footnote 13. 
Commission  Communication  COM(2010)  265  of  26  May  2010:  “Analysis  of  options  to  move  beyond  20% 
greenhouse gas emission reductions and assessing the risk of carbon leakage”. 

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–  The  sustainable  and  undistorted  supply  of  raw  materials  and  energy  is  of  strategic 
importance  for  the  competitiveness  of  the  EU  economy.  This  is  clearly  emphasized  by  a  large 
number  of  business  and  civil  society  contributors  during  the  public  consultation.  A  number  of 
governments outside the EU are developing industrial policies that create supply bottlenecks and 
other  distortions.  In  its  2008  raw  materials  strategy  paper20,  the  Commission  set  out  a 
comprehensive approach to secure supply of raw materials for EU companies in various policy 
fields, including trade policy. The Commission is preparing a new Communication by the end of 
2010 on the implementation of the strategy and the way forward. We will use current trade rules 
to  the  maximum,  pursue  the  establishment  of  a  monitoring  mechanism  of  export  restrictions, 
negotiate  rules  in  ongoing  bilateral  negotiations  and  further  explore  multi-  and  plurilateral 
disciplines, e.g. an OECD agreement based on "best practices". This approach and our dialogue 
with third countries on this matter must continue to be fully in line with development objectives 
of poverty eradication and good governance – but it is worth pointing out that restrictions placed 
on the supply of raw materials often cause serious damage to other developing countries. So we 
must address this.  

–  On  energy,  we  will  use  both  our  bilateral  and  multilateral  negotiations  to  include  trade 
provisions that will help us to diversify energy supplies (also in the interests of energy security), 
free transit, and promote trade in sustainable energy where barriers in third countries impede the 
rapid development of the EU's renewable energy industry.  

3. 

Updating the negotiating agenda to boost growth  

The  first  part  of  this  Communication  and  the  supporting  papers  explain  how  trade  policy  can 
contribute to growth. It constitutes the external dimension of the Europe 2020 strategy. Our priority 
in trade policy must now be to gain better access to the largest and fastest-growing economies in the 
world, and in particular, through ambitious trade agreements.  

3.1.  Concluding Doha, and building on the multilateral rules-based system 

Despite  the  slow  progress,  completing  the  Doha  Round  remains  our  top  priority.  The  potential 
benefits are simply too important to ignore. 2011 represents the next best opportunity to conclude 
an ambitious, balanced 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.  World  trade  could  increase  by  over  €300  billion  a  year  and 
world income by more than €135 billion 21.  

The successful conclusion of the Doha negotiations would confirm the central role of multilateral 
trade liberalisation and rule-making. It would also confirm the WTO as a powerful shield against 
protectionist  backsliding  –  one  of  the  crucial  differences  between  today's  crisis  and  that  of  the 
1930s.  We  will  make  better  use  of,  and  advocate  strengthening,  the  surveillance  and  monitoring 
capacity  of  the  WTO.  This  could  involve  enhanced  peer  review,  transparency  and  multilateral 
scrutiny of trade policies in order to stem possible protectionist tendencies, enforce existing trade 
agreements and disciplines and improve trade practices in third countries. We will also continue to 

20 

21 

COM(2008) 699, 4.11.2008 "The raw materials initiative – meeting our critical needs for growth and jobs in 
Europe", and COM(2010) 614, 27.10.2010 " An Integrated Industrial Policy for the Globalisation Era - Putting 
Competitiveness and Sustainability at Centre Stage". 
CEPII,  "Economic  Impact  of  potential  outcome  of  the  DDA",  Final  Report  commissioned  by  the  European 
Commission, February 2009. 

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9 

   EN 

                                                 
give priority to further accessions. Finally, we will aim to strengthen the unique dispute settlement 
system of the WTO. This requires beefing up the judicial nature of the process and endowing the 
WTO secretariat with more resources for that purpose. 

There is a long-term systemic benefit in strengthening the WTO as a central institution to address 
the challenges of global economic governance alongside other actors such as the G20. So we will 
set up a group of eminent persons from developed and developing countries to obtain independent 
recommendations  to  help  shape  our  European  view  on  the  future  agenda  and  functioning  of  the 
WTO post-Doha.  

3.2.  Completing the on-going Free Trade Agreements (FTA) negotiating agenda  

The  Global  Europe  agenda  of  an  ambitious  new  generation  of  bilateral  trade  agreements  with 
important  trading  partners  is  a  tough  undertaking.  Some  emerging  economies  already  represent  a 
significant and increasing share of world trade. In framing our level of ambition, we will continue 
to take account of the differing levels of development of our trading partners. But this agenda is the 
right course for Europe to follow, and it has started to bring results.  

This is a significant and highly challenging agenda, not least because these new trade agreements go 
beyond  import  tariffs,  whose  importance  has  diminished,  addressing  regulatory  barriers  in  goods, 
services  and  investment,  intellectual  property  rights,  government  procurement,  the  protection  of 
innovation,  sustainable  development  (i.e.  decent  work,  labour  standards  and  environmental 
protection) and other important issues.  

But  the  benefits  should  be  substantial.  On  the  assumption  that  all  these  ongoing  negotiations  are 
successfully concluded:  

–  about half of the EU's external trade will be covered by free-trade agreements;  

–  the  average  tariff  faced  by  EU  exports  would  fall  by  around  one  half  (to  about  1.7%)  and  the 

average EU import tariff by nearly a fifth (to 1.3%)22; and 

–  taken together, these various FTAs should, as part of future trade policy's contribution to growth, 

add up to 0.5 % to EU GDP in the longer run23. 

We have successfully concluded FTA negotiations with Korea, as well as with Peru, Colombia and 
Central America. Talks with the Gulf countries, India, Canada, and Singapore are at an advanced 
stage. We reopened important negotiations with the MERCOSUR region. Completing our current 
agenda  of  competitiveness-driven  FTAs  remains  a  priority.  We  should  make  good  use  of  fast-
growing regional trade in East Asia and pursue our strategic economic interests in that region, inter 
alia by linking into the rapidly growing network of free-trade areas in that region. We will therefore 
seek to expand and conclude bilateral negotiations with ASEAN countries, beginning with Malaysia 
and Vietnam, and to deepen our trade and investment relations with the Far East.  

In parallel, and to help establish an area of shared prosperity with Europe's neighbourhood, we will 
continue  to  pursue  Deep  and  Comprehensive  Free  Trade  Agreements  (DCFTAs)  within  the 

22 

23 

Staff Working  Paper  "Trade as  a driver  for  prosperity", Section III.1,  it refers  mainly  to  tariffs  on  industrial 
products.  
See Staff Working Paper "Trade as a driver for prosperity", Section II. 

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10 

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respective frameworks of the Eastern Partnership and the Euro-Mediterranean Partnership, offering 
the prospect to countries in the region of participating in the internal market once the conditions are 
met. This remains a powerful agent of change via regulatory convergence and the removal of tariff 
and other barriers, carried out in parallel with the negotiation of Association Agreements, to provide 
economic integration in a context of political association.  

Concluding this agenda, in short, would greatly improve the way in which we do business with the 
rest of the world.  

3.3.  Engaging our strategic economic partners on trade, investment and regulatory convergence  

In September, the European Council identified enhancing trade with the EU's strategic partners as a 
crucial  objective,  calling  for  concrete  steps  to  "secure  ambitious  Free  Trade  Agreements,  secure 
greater market access for European business and deepen regulatory cooperation with major trade 
partners". However, it recalled as well that these partnerships must be "two way streets based on 
mutual interests and benefits and on the recognition that all actors have rights as well as duties"24.  

Because of their economic size and potential, as well as their influence on the global economy, our 
trade policy needs to pay particular attention to the US, China, Russia, Japan, India and Brazil. For 
different  reasons,  our  economic  relations  with  these  countries  have  a  strategic  dimension  for  the 
EU. We must now make them even more of a major priority. We are in the middle of ongoing and 
intense negotiations with India for an FTA. We will transform our relationship with Brazil when we 
conclude the recently re-launched negotiations for an EU-Mercosur Association Agreement.  

The state of and prospects for our relationship with the other four strategic economic partners is set 
out below. 

The US is by far the EU's largest trade and investment partner. In spite of occasional disputes, trans-
Atlantic trade and investment proceeds with more freedom than almost anywhere else in the world. 
The  biggest  remaining  obstacles  lie  in  the  divergence  of  standards  and  regulations  across  the 
Atlantic,  even  though  we  have  very  similar  regulatory  aims.  The  stakes  involved  are  high,  as 
illustrated  by  a  recent  study  suggesting  that  removing  only  half  the  non-tariff  barriers  from  trade 
with  the  US  would  result  in  a  0.5%  increase  in  EU  GDP25.  The  Transatlantic  Economic  Council 
gives us a good forum for political  guidance  to a  complex array  of  different regulatory dialogues 
etc. In this way it can help bring about regulatory convergence. Our priority should be squarely on 
the avoidance of future barriers, and in particular in the innovation, energy efficiency and hi-tech 
sectors, a point which comes out clearly in our public consultation exercise. 

China  is  the  EU’s  second  largest  trading  partner.  It  is  a  source  not  only  of  low  price  consumer 
goods but also of key inputs for our manufacturing industries. It is also a fast growing market for 
our exports. However, our trade with China remains well below potential. Important market access 
barriers persist - in standards and regulations, services, investment and public procurement, as well 
as  insufficient  enforcement  of  IPRs,  an  opaque  standardisation  system,  burdensome  certification 
procedures  and  industrial  policy  measures  aimed  at  import  substitution,  forced  transfers  of 
technology  and  granting  local  producers  preferential  access  to  raw  materials.  The  EU  has 
challenged a number of these measures in the WTO and bilaterally, and will continue to do so.  

24 
25 

EN 

European Council Conclusions, 16 September 2010, §4. 
See  Ecorys 
"Non 
http://trade.ec.europa.eu/doclib/docs/2009/december/tradoc_145613.pdf 

tariff  measures 

in  EU-US 

(2009) 

trade  and 

investment"  available  at 

11 

   EN 

                                                 
In the more comprehensive framework provided by the High Level Economic and Trade Dialogue, 
we will advocate policies that are more in line with market economy rules and seek to address the 
sources of the current major imbalances. 

Japan  is  eagerly  seeking  economic  integration  with  its  main  trading  partners,  including  with  the 
EU. Yet, while tariffs in Japan are generally low, regulatory obstacles to trade in goods, services, 
investment and public procurement remain high26 and are perceived as being as insurmountable as 
ever.  Japan’s  capacity  to  demonstrate  that  these  barriers  can  be  removed  is  the  key  condition  for 
closer economic integration between the EU and Japan. The issue is currently being examined by 
the High Level Group (HLG) set up at the last EU-Japan summit. 

Russia  is  our  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  remains  a  crucial  short-term  objective  for  EU 
trade policy, also a point clearly made by many respondents 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  economy.  In  the  meantime,  the  bilateral 
agreement  under  negotiation  between  the  EU  and  Russia  to  replace  the  current  Partnership  and 
Cooperation  Agreement  would  help  to  achieve  a  more  effective,  stable  and  predictable  trading 
environment, and should provide better balance in our respective rights and obligations. As we are 
leaving  the  crisis  behind  us,  Russia  should  for  instance  remove  the  unilateral  tariff  increases 
imposed since 2007.  

We will step up our cooperation with these countries especially through the different fora that have 
been created for that purpose. We will evaluate later if these fora are up to the sizeable challenge we 
face  in  developing  our  trade  and  investment  links  with  these  countries,  noting  in  particular  the 
importance that the European Council has attached to this issue. 

4. 

The enforcement and implementation agenda 

The EU must step up our efforts to enforce our rights under bilateral and multilateral agreements to 
prise open markets that are illegally closed. Proper  enforcement of trade rules is an indispensable 
pillar  of  trade  policy.  It  ensures  that  trade  agreements  on  paper  can  be  translated  into  concrete 
results for people and companies on the ground. This is particularly relevant for Small and Medium 
Sized  Enterprises  (SMEs).  This  concern  with  even-handed  enforcement  is  reflected  in  public 
opinion27.  

At  the  global  level  the  Commission  will  continue  to  pay  particular  attention  to  trading  partners' 
actions in the recovery from the economic crisis, an initiative that was welcomed by participants in 
our  public  consultation.  The  G20  commitment  in  2008  (renewed  and  extended  in  scope  in  2010 
until  the  end  of  2013)  not  to  introduce  protectionist  measures  plays  an  important  political  role  in 
this respect, and has been largely, though not universally, respected, by partners. We will continue 
to monitor compliance carefully and report regularly. We call upon our G20 partners to take action 
to reverse and roll back the trade restrictive measures introduced during the global financial crisis. 
In addition, we will act vigorously against any protectionist tendencies that may harm our interests. 

26 

27 

Copenhagen Economics (2010) "Assessment of barriers to trade and investment between the EU and Japan" 
available at http://ec.europa.eu/trade/analysis/chief-economist/. 
According to Special Eurobarometer Survey 357, EU citizens thought that one of the key trade policy priorities 
for the EU should be to ensure that the same rules are applied everywhere in the world. 

EN 

12 

   EN 

                                                 
We have already targeted especially harmful measures (e.g., the Buy National policies which have 
sprung up since the economic crisis in several countries) and sought their withdrawal. Beyond that, 
we  must  push  hard  for  systematic  implementation  of  all  trade  agreements,  monitoring 
implementation  by  our  partners  closely  and  enforcing  our  rights  including  through  dispute 
settlement and use of the EU's Trade Barriers Regulation where appropriate.  

As  regards  bilateral  agreements,  we  will  prioritise  the  implementation  of  free-trade  agreements, 
particularly in respect of the regulatory component and non-trade barriers. This will start with the 
EU-Korea  free-trade  agreement,  which  includes  ambitious  commitments  notably  on  regulatory 
issues, which can be enforced through expeditious dispute settlement or mediation.  

The  Market  Access  Strategy  (MAS)  will  remain  a  key  element  of  our  enforcement  activities.  28 
Our partnership with Member States and business has allowed us to create market access teams in 
third countries and in Brussels. The contributors to our public consultation confirmed that MAS has 
brought very good concrete results in removing third country trade barriers and improving market 
access conditions for EU companies on the ground. Concerted action by the Commission, Member 
States  and  business  contributed  to  lifting  barriers  for  a  wide  range  of  sectors  and  third  countries 
with  a  very  significant  export  potential.  Recent  examples  include  strict  labelling  requirements  for 
textiles in Egypt, inspection requirements for animal products in Ukraine, import licensing for tyres 
in  India  (where  barriers  due  to  strict  certification  requirements  remain  to  be  lifted  however), 
certification  procedures  for  toys  in  Brazil  or  market  access  conditions  for  mail  delivery  from 
Canada.29 In line with our aim of stronger enforcement activities, we will look to set up additional 
market  access  teams  in  half  a  dozen  third  countries  and  reinforce  the  existing  33  teams  with  a 
particular focus on monitoring the implementation of free trade agreements. We will also cooperate 
with third countries with which we share common market access concerns on a case by case basis. 
Finally, and as announced in the Europe 2020 Communication, we will produce an annual trade and 
investment  barriers  report  which  will  monitor  trade  barriers  and  protectionist  measures  in  third 
countries.  It  will  trigger  appropriate  enforcement  action,  with  the  possibility  of  "naming  and 
shaming" third countries.  

We  will  also  work  with  major  partners  in  order  to  strengthen  and  better  co-ordinate  consumer 
safety actions by market surveillance authorities. 

In 2005, the Commission proposed legislation on origin marking for imported end products to 
provide more information for consumers. Early adoption by the Parliament and Council would level 
the playing field vis a vis third countries in this domain.  

Particular  attention  will  be  paid  to  international  customs  cooperation  in  the  framework  of 
bilateral agreements and in the World Customs Organisation. Efficient customs procedures reduce 
compliance costs for traders, facilitate legitimate trade, and help us to address rising security, safety 
and IPR risks. 

It is vital that intellectual property linked to EU goods, services and FDI be adequately protected. In 
order  to  strengthen  IPR  enforcement  and  streamlining  procedures,  we  are  reviewing  the  rules  for 
customs taking action at the EU border. We will also review our 2004 strategy on the enforcement 

28 

29 

EN 

See report "Implementing the Commission Communication: Global Europe - A Stronger Partnership to Deliver 
Market Access for European Exporters", of 18 April 2007. 
See  "Implementing 
http://trade.ec.europa.eu/doclib/docs/2010/march/tradoc_145851.pdf 

-  Annual  Report  2009",  available  online  at 

the  Market  Access  Strategy 

13 

   EN 

                                                 
of intellectual property rights in third countries to respond to new challenges. To safeguard and 
enhance  their  competitiveness  in  the  knowledge  economy,  our  companies  and  right  holders  need 
more  effective  protection  and  enforcement  of  intellectual  property  (IP),  including  geographical 
indications,  across  foreign  markets,  especially  in  emerging  economies.  In  this  context,  further 
harmonising  IP  rules  within  the  EU  would  enhance  the  Commission's  capacity  to  negotiate  on 
behalf of the EU stronger IP commitments with our key trading partners. In negotiating FTAs, the 
IPR clauses should as far as possible offer identical levels of IPR protection to that existing in the 
EU  while  taking  into  account  the  level  of  development  of  the  countries  concerned.  The  Anti-
Counterfeiting  Trade  Agreement  (ACTA)  aims  to  establish  a  comprehensive  international 
framework – a catalogue of "best practices" – that will assist its members to effectively combat the 
infringement  of  IPRs.  When  agreed  and  implemented,  ACTA  will  effectively  introduce  a  new 
international standard, building on the WTO TRIPS agreement. 

Our  commitment  to  open  trade  depends  on  fair  competition  between  domestic  and  foreign 
producers based on genuine comparative advantages. We protect EU production from international 
trade distortions or disruptions, by applying trade defence instruments in compliance with WTO 
rules. We will apply these instruments to new forms of distortions such as subsidisation of strategic 
sectors,  including  where  third  countries  use  export  restrictions  to  confer  indirect  benefits  to 
downstream  industries. We will continue to apply our rigorous legal and economic standards and 
expect  our  trading  partners  to  do  likewise.  We  will  support  EU  businesses  if  third  countries  use 
trade defence instruments in an unfair way, including, where appropriate, by raising these issues in 
the WTO. In the light of the changes brought about by the Lisbon Treaty and/or the future results 
achieved in the Doha Round under the 'Rules' chapter, we will explore whether and how to further 
update and modernize our trade defence instruments. 

Absent or ineffective competition and state aid rules in third countries limit market access for EU 
exporters. The EU therefore has a strategic interest in developing international rules to ensure that 
European firms do not suffer in third countries from unfair subsidisation of local companies or anti-
competitive practices. A multilateral set of rules adopted in the WTO framework would be the best 
outcome. However, many key issues can also be addressed through bilateral agreements. 

We will do  more to address the concerns of SMEs recognising  for example in  trade  defence that 
they  often  face  real  problems  with  cost-intensive  trade  defence  investigations  either  as  importers, 
users,  complainants  or  exporters.  In  addition,  the  Commission  will  present  in  2011  a 
Communication on possible support measures to help SMEs that want to develop their international 
activities.  

We will also enhance the role of EU Delegations as contact points for EU business abroad and, 
where appropriate, create specific business support structures in third countries.  

5. 

Public consultations and impact assessment  

Consultations with civil society and key stakeholders, as well as with the European Parliament and 
our Member States, have provided useful inputs to the preparation of this paper30. For example, we 
have received 302 contributions from 37 countries, including 23 Member States, which have been 
summarised in a separate document. 

30 

See report and individual replies at http://trade.ec.europa.eu/consultations/?consul_id=144 

EN 

14 

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We  remain  committed  to  consulting  interested  parties  when  drafting  policy  and  proposing  action. 
Consultation with civil society is a fundamental part of our policy-making and we provide feedback 
to  those  who  have  responded  to  our  public  consultation  processes,  where  this  is  feasible.  This  is 
already partly achieved by regular Civil Society Dialogues on trade: regular, structured meetings on 
trade  policy  issues  of  interest  to  a  wider  audience  which  promote  an  active  and  inclusive 
participation of civil society in our trade policy-making process.  

We will step up a gear in embedding impact assessments and evaluations in trade policy making. 
This  includes  carrying  out  impact  assessments  on  all  new  trade  initiatives  with  a  potentially 
significant economic, social or environmental impact on the EU and its trading partners, including 
developing countries. We will pay particular attention to wide consultation and involvement of civil 
society in the  sustainability  impact assessments that we carry  out  during trade  negotiations. Once 
negotiations are concluded and before signature, we will prepare for the Parliament and Council an 
analysis of consequences of the proposed deal for the EU. Finally, to help monitor the impacts of 
existing  EU  trade  agreements,  we  will  be  carrying  out  ex  post  evaluation  on  a  more  systematic 
basis.  

6. 

Trade and external relations 

Our aim is for the EU to play a role in foreign affairs and global management commensurate with 
our economic weight. 

Trade policy has its own distinct economic logic and contribution to make to the external action of 
the Union. Trade and trade policy reinforce the EU's international influence and concerted action at 
EU level should pursue and support EU economic interests in third countries. So the Union's trade 
and  foreign  policies  can  and  should  be  mutually  reinforcing.  This  applies  to  areas  such  as 
development  policy  and  the  application  of  UN  sanctions,  but  also  to  creating  the  right  incentives 
within,  inter  alia,  our  trade  and  political  relations  with  third  countries  or  through  specific  trade 
instruments  such  as  the  General  System  of  Preferences  or  FTAs,  to  encourage  our  partners  to 
promote  the  respect  of  human  rights,  labour  standards  the  environment,  and  good  governance, 
including in tax matters. Other tools of external action, such as EU Delegations abroad, should help 
accomplish our trade agenda and support our companies abroad. Another example of the interaction 
between  trade  policy  and  external  action  is  our  export  control  system  for  dual-use  goods  which 
serves a foreign security policy goal. Although strong progress has been made over the last 20 years 
toward  the  creation  of  a  fully  fledged  EU  export  control  system,  differences  between  national 
implementing  measures  in  the  EU  risk  undermining  the  benefits  of  the  Single  Market  and  the 
common commercial policy. Reforms being undertaken in this area by the EU's partners, including 
by the US, clearly demonstrate the economic significance of the export control area and the need for 
a  renewed  effort  to  strengthen  the  competitiveness  of  EU  exports  while  ensuring  the  highest 
possible  levels  of  security.  We  will  continue  to  develop  export  control  measures  aimed  at 
simplifying and making more transparent the business environment for EU exporters, which at the 
same time contribute to strengthening international security efforts. We will bring forward a Green 
Paper to consult on the functioning of the current system and possible areas of reform.  

7. 

Conclusions 

This Communication  sets  out how we intend our trade and investment  policy  to  contribute to the 
objective of sustained economic growth which should create more jobs and safeguard our welfare 
state.  This  will  require  a  strong  commitment  from  all  stakeholders,  EU  institutions  and  Member 
States. 

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In summary, we will:  

1. Pursue our negotiating agenda:  

•  aim to conclude the Doha round of negotiations as a matter of urgency, and at the latest by end 

2011; 

•  set  up  a  group  of  eminent  persons  from  developed  and  developing  countries  to  obtain 
independent  recommendations  to  help  shape  our  European  view  on  the  future  agenda  and 
functioning of the WTO post-Doha; 

•  aim  to  make  significant  progress  with  ongoing  bilateral  trade  negotiations,  launch  new  trade 
negotiations with ASEAN countries and propose self-standing investment negotiations with key 
partners; 

•  pursue negotiations with the EU’s neighbours towards the ultimate aim of concluding Deep and 

Comprehensive FTAs bringing all neighbours gradually closer to the Single Market.  

2. Deepen our strategic partnerships 

•  set out in more detail how we plan to upgrade our relationship with strategic partners to address 
the issues that are an obstacle to better functioning markets in the 21st century and review how 
far we have come by the end of 2012;  

3. Take trade policy forward 

In 2011 we will:  

•  make a legislative proposal for an EU instrument to help secure and increase symmetry in access 
to public procurement markets in developed countries and large emerging market economies; 

•  conclude  the  debate  with  Member  States  and  the  European  Parliament  on  a  new  investment 

policy for the EU;  

•  present our views on how to develop the mutual supportiveness of internal and external market 

opening, in particular in goods and services regulations; 

•  adopt  a  Commission  Communication  on  trade  and  development  and  a  legislative  proposal  to 

reform the Generalised System of Preferences for developing countries; 

•  adopt a Green Paper seeking to improve our export control system; 

•  present a Communication on possible support measures to help SMEs that want to develop their 

international activities;  

4. Enforce our rights  

•  review our strategy on the enforcement of intellectual property rights in third countries as well as 

our customs regulation on IPR enforcement at the EU border; 

EN 

16 

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•  produce  from  2011  onwards  an  annual  trade  and  investment  barriers  report  for  the  Spring 
European Council as our key instrument to monitor trade barriers and protectionist measures and 
trigger appropriate enforcement action. 

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ANNEX  

Figure 1 

Contributions to global GDP growth, PPP basis
(percent, three-year moving averages)

Rest of the World
China
Japan
United States
European Union

6

5

4

3

2

1

0

-1

2
8
9
1

4
8
9
1

6
8
9
1

8
8
9
1

0
9
9
1

2
9
9
1

4
9
9
1

6
9
9
1

8
9
9
1

0
0
0
2

2
0
0
2

4
0
0
2

6
0
0
2

8
0
0
2

0
1
0
2

2
1
0
2

4
1
0
2

Source: IMF World Economic Outlook October 2010 

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Figure 2 

Share of EU27*, USA, Japan and China in World Trade in Goods (% )

EU27
USA
Japan
China

25%

20%

15%

10%

5%

0%

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

* excluding Intra EU Trade

Source: WTO, Eurostat (Comext)

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Table 1: 

Status of EU FTAs and their share of EU trade (%) 

Regions and FTA status 

Imports (%) 

Exports (%) 

Imports (%) 

Exports (%) 

Industrial products* 

Agricultural products** 

Operational FTAs  

Chile, Mexico, South Africa 

Developing country FTAs 

Andorra, San Marino, Turkey, Iceland, Liechtenstein, Norway, Switzerland  EFTA and customs Unions 

Caribbean ACP 

EPAs 

Algeria,  Egypt,  Israel,  Jordan,  Lebanon,  Morocco,  Occupied  Palestinian 
Territory, Tunisia 

Mediterranean countries, FTAs 

Albania,  Bosnia  and  Herzegovina,  Croatia,  Former  Yugoslav  Republic  of 
Macedonia, Montenegro, Serbia 

Western  Balkans,  Stabilisation
and Association Agreements 

FTA negotiations concluded but not yet applied, on-going and planned 
FTA negotiations 

Bolivia, Ecuador, Peru, Colombia, 

Andean Community 

Brunei Darussalam, , Indonesia, Malaysia, Philippines, Singapore, Thailand, 
Vietnam 

ASEAN 

Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua, Panama 

Central America 

Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, United Arab Emirates 

Gulf Cooperation Council (GCC)

Argentina, Brazil, Paraguay, Uruguay 

MERCOSUR 

Armenia,  Azerbaijan,  Canada,  Georgia,  India,  Korea, Libya,  Moldova, 
Syria, Ukraine 

Other FTAs 

ACPs less Caribbean 

No FTAs 

EPAs 

Australia, China, Japan, New Zealand, Russia, United States  

Major trading partners 

Rest of the world (~ 70 countries) 

22.3 

2.5 

14.6 

0.3 

4.0 

0.9 

21.8 

0.4 

5.4 

0.2 

2.0 

1.5 

10.0 

2.3 

55.8 

50.3 

5.5 

Source: European Commission. Note: * HS25-99. ** HS01-24. Note: concluded FTA negotiations but not yet applied FTAs in italics. 

27.7 

3.4 

15.9 

0.3 

5.9 

2.2 

25.6 

0.6 

4.6 

0.4 

5.3 

2.5 

9.1 

3.2 

46.7 

38.6 

8.1 

24.3 

5.7 

11.6 

1.0 

4.5 

1.5 

56.2 

5.3 

9.8 

2.8 

0.3 

20.9 

7.2 

10.5 

19.5 

16.6 

2.9 

29.1 

2.2 

14.6 

0.6 

7.9 

3.7 

26.2 

0.4 

4.2 

0.4 

5.1 

1.5 

8.0 

6.6 

44.7 

35.8 

8.9 

EN 

20 

EN 

 
  
 
 
 
 
 
Table 2: 

Estimated tariff equivalents of services barriers (in %) 

Telecom  Constr  Trade 

Transport  Finance 

Business 
services 

Other  

Developed Countries 

Asia  

Eu25 

USA  

Developing countries 

Total mean 

Max 

24 

33 

22 

29 

50 

35 

42

25

35

73

80

58

119 

119

31

17

30

48

47

38

95

17

8

18

14

27

21

53

34 

32 

32 

41 

57 

44 

24 

15 

22 

34 

50 

35 

103 

101 

26

17

27

7

34

29

54

Source: DG TRADE/ CEPII. Based on gravity modelling of services trade flow data. 

Table 3: 

Trade costs of NTMs in the US and the EU (in % tariff equivalent) 

Sector 

NTM costs  

NTM costs  

in the EU 

in the US 

Chemicals 

Pharmaceuticals 

Cosmetics 

Electronics 

Office & communications equipment 

Automotive 

Aerospace 

Food & Beverages 

Metals 

Textiles & clothing 

Wood & paper products 

23.9

15.3

34.6

6.5

19.1

25.5

18.8

56.8

11.9

19.2

11.3

21.0 

9.5 

32.4 

6.5 

22.9 

26.8 

19.1 

73.3 

17.0 

16.7 

7.7 

Source: Ecorys (2009) "Non-Tariff Measures in EU-US Trade and Investment – An Economic Analysis" 
Note:  These  tariff  equivalents  of  non-tariff  regulatory  measures  have  been  derived  from  a  dedicated  industry 
survey by means of econometric methods. 

EN 

21 

   EN 

 
  
 
Table 4: 

Public procurement market in key trading partnersϕ 

EU 

US 

Japan  Canada Korea  Brazil*  Argentina* 

India* 

Total Public 
Procurement 
market 

(in bln €)  

2088 

1077 

565 

225  

106 

133 

15 

64 

(% of GDP) 

16% 

11% 

18% 

22% 

14% 

13% 

8% 

8% 

Total Public 
Procurement 
above GPA 
threshold  

(in bln €) 

370 

279 

96 

59 

25 

42* 

3.7* 

20* 

(% of GDP) 

3% 

3% 

3% 

6% 

3% 

4%* 

2%* 

2.5%* 

PP offered 
to GPA (in 
bln €) 

(% of above 
threshold PP 
market ) 

312 

34 

22 

2 

15 

na 

84% 

12% 

23% 

3% 

60% 

na 

na 

na 

na 

na 

Source: European Commission estimates.  

Comparable data for China is not available. 
Not  GPA  members.  European  Commission  estimates  of  potential  public  procurement  market 

ϕ 
* 
subject to commitments if the countries were to join the GPA. 

EN 

22 

   EN