page_title: Economy of the European Union
section_title: Trade
hierarchical_section_title: Economy of the European Union / Trade
caption_attribution_description: English: Mercosur and European Union leaders gathered during a press conference in Osaka, Japan on June 29, 2019.
context_page_description: The economy of the European Union is the joint economy of the member states of the European Union. It is the second largest economy in the world in nominal terms, after the United States, and the third one in purchasing power parity terms, after China and the United States. The European Union's GDP was estimated to be $18.8 trillion in 2018, representing about 22% of the global economy.
  The euro, used by 19 of its 27 members, is the second largest reserve currency as well as the second most traded currency in the world after the United States dollar. The euro is the official currency in 25 countries, in the eurozone and in six other European countries, officially or de facto.
  The European Union economy consists of an internal market of mixed economies based on free market and advanced social models. For instance, it includes an internal single market with free movement of goods, services, capital, and labor. The GDP per capita was $43,188 in 2018, compared to $62,869 in the United States, $44,246 Japan and $18,116 in China. There are significant disparities in GDP per capita between member states ranging from $106,372 in Luxembourg to $23,169 in Bulgaria.
context_section_description: The European Union is the largest exporter in the world and as of 2008 the largest importer of goods and services. Internal trade between the member states is aided by the removal of barriers to trade such as tariffs and border controls. In the eurozone, trade is helped by not having any currency differences to deal with amongst most members.
  The European Union Association Agreement does something similar for a much larger range of countries, partly as a so-called soft approach ('a carrot instead of a stick') to influence the politics in those countries.
  The European Union represents all its members at the World Trade Organization (WTO), and acts on behalf of member states in any disputes. When the EU negotiates trade related agreement outside the WTO framework, the subsequent agreement must be approved by each individual EU member state government.
caption: The European Union–Mercosur Free Trade Agreement would form one of the world's largest free trade areas
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