The European Union is one of the most outward-oriented economies in the world. It is also the world’s largest single market area. Free trade among its members was one of the EU's founding principles, and it is committed to opening up world trade as well.
From 1999 to 2010, EU foreign trade doubled and now accounts for over 30% of the EU’s gross domestic product (GDP). The EU is responsible for the trade policy of the member countries and negotiates agreements for them. Speaking as one voice, the EU carries more weight in international trade negotiations than each individual member would.
The EU actively engages with countries or regional groupings to negotiate trade agreements. These agreements grant mutually-beneficial access to the markets of both the EU and the countries concerned. EU companies can grow their business, and can also more easily import the raw materials they use to make their products.
Each agreement is unique and can include tariff reductions, rules on matters such as intellectual property or sustainable development, or clauses on human rights. The EU also gets input from the public, businesses, and non-government bodies when negotiating trade agreements or rules.
The EU supports and defends EU industry and business by working to remove trade barriers so that European exporters gain fair conditions and access to other markets. At the same time, the EU supports foreign companies with practical information on how to access the EU market.
The EU also works with the World Trade Organization (WTO) to help set global trade rules and remove obstacles to trade between WTO members.
FAQs
The EU negotiates trade agreements on behalf of the member states – including Ireland. These agreements deal with preferential duty rates on the shipment of goods between the EU and countries around the world. They have also evolved to cover a wider range of areas to facilitate trade.
What is the common trade policy of the European Union? ›
The EU has a common trade policy. This means that the EU and its 28 EU Member States act as one single jurisdiction in all trade‑related matters. International agreements concluded by the EU are binding on the EU Institutions and on its Member States.
What is the EU trade policy strategy? ›
On 18 February 2021, the European Commission set out its new trade strategy for the coming years. Reflecting the concept of 'Open Strategic Autonomy', it builds on the EU's openness to contribute to the economic recovery by supporting the green and digital transformations.
What is the EU competence trade policy? ›
What is the EU's trade policy? Trade policy is an exclusive EU competence. This means it is the EU that legislates on trade matters and concludes international trade agreements and not the member states.
What is the most recent EU trade agreement? ›
The EU and Vietnam signed trade and investment protection agreements in June 2019. The FTA entered into force in August 2020, while the investment protection agreement will enter into force once it has been ratified by all EU member states.
What are the benefits of the EU trade agreements? ›
EU imports from developing countries are worth €860 billion a year. Moreover, EU trade policy is designed to promote European principles and values in the world. These include good governance, environmental protection, human and labour rights, health and consumer protection, and protection of cultural diversity.
How many trade agreements does the EU have? ›
At present, the EU has in place the largest trade network in the world, with over 40 individual agreements with countries and regions. These agreements facilitate the trade of products and services between the EU and its outside partners.
Does the EU have a common economic policy? ›
In the European Union (EU), although economic policy is the responsibility of each EU country, there is considerable multilateral coordination of economic policies between the individual countries, particularly those which belong to the euro area, to ensure that European monetary union operates in the best way possible ...
What is the EU export control policy? ›
EU export controls for dual-use items1 are a key tool for international peace and security as well as the protection of human rights. They ensure that items such as advanced electronics, toxins, missile technology or nuclear components, which have civil but also military uses, do not get into the wrong hands.
What is an example of a trade policy? ›
National Trade Policies
The United States, for example, imposes import quotas on sugar, because of a fear that such imports would drive down the price of sugar and thus injure domestic sugar producers. Why is sugar favored, while other products are not? Sometimes a product is protected because of historical practice.
Bilateral and multilateral trade agreements strip away trade barriers, reduce or eliminate tariffs, and promote investment and economic growth.
What is a trading policy? ›
Trade policy defines the laws related to the exchange of goods or services involved in trade between different countries, including taxes, subsidies, and import/export regulations.
What is the international trade policy? ›
International trade is the buying and selling goods between various countries. International trade policy can be defined as the government's rules and regulations guiding and controlling how trade is done with foreign countries.
What is the European Union EU and what is its purpose? ›
The European Union (EU) is a political and economic alliance of 27 countries. It promotes democratic values in its member nations and is one of the world's most powerful trade blocs. Nineteen of the countries share the euro as their official currency.
What is the European Union EU and what does it do? ›
The modern European Union, founded in 1992, has its origins in post–World War II attempts to integrate European economies and prevent future conflicts. It consists of seven major institutions and dozens of smaller bodies that make law, coordinate foreign affairs and trade, and manage a common budget.
What countries are in the EU agreement? ›
The EU countries are: Austria, Belgium, Bulgaria, Croatia, Republic of Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain and Sweden.
