In its assessment of the European Union’s trade policy, the WTO Secretariat pays tribute to the critical role played by the EU in the Organization. It highlights the EU’s remarkable openness at a time of timid economic recovery. WTO Member countries and the WTO Secretariat will discuss the report on Monday 6 July and Wednesday 8 July in Geneva in the framework of the EU’s 12th Trade Policy Review.

The main points highlighted by the report and expected to be discussed include:

• The EU’s role in the multilateral trading system

The report makes clear that the EU trade policy matters not only to the EU, but also to the world. The EU is among the top three trade partners of no less than 107 countries. According to the report, “the EU remains an open and transparent economy and, as one of the biggest economies and trading entities in the world, plays a critical role in the multilateral trading system”.

• Impact of EU’s trade on jobs within and outside the EU

31 million jobs in the EU are supported by its participation in global trade. While exports are important, imports are just a necessary to the EU’s economy. In today’s world of global value chains, in order to export, companies need also imported inputs. The EU sources inputs from the rest of the world, and this also supports jobs elsewhere in the world.

• The EU’s role as a major investor and recipient of foreign direct investment

The EU remains the preferred choice for foreign investors: 45% of total outflows of foreign direct investment in 2013 came from the EU. Equally, the EU is open to foreign investment: it hosted about 48% of world inflows (not including investment flows between the EU Member States).

To remain an attractive destination for foreign direct investment, the EU takes steps towards further consolidation and completion of its internal market. A more integrated European single market of over 500 million consumers will benefit both European and foreign companies. The Digital Single Market initiative launched in May 2015 has been pointed out as an area of interest and opportunity.

• A link between growth of innovation

The EU’s economic growth rests on its capacity to innovate. This makes protection of intellectual property rights – domestically and abroad – essential to the EU.

• Impact of EU trade policies on exports from developing countries

EU imports under its Generalised System of Preferences scheme amounted to €217 billion in 2014. The Least Developed Countries (LDCs) alone exported to the EU goods worth €38 billion, i.e. nearly 5 % more than a year before. The LDCs benefit from the EU’s duty-free quota-free scheme known as “Everything but Arms’ and the reformed, more flexible, rules of origin.

• EU’s role in global trade of agricultural products

The EU imports of agricultural products amounted to €104 billion in 2014. A significant part of these imports came from the developing countries. The EU is the leading importer of agricultural products from developing countries. For about two years now the EU have not granted any refunds to its exporters of agricultural products but the EU’s reformed Common Agriculture Policy (CAP) raises still much attention in the Review.

• EU’s high level of consumer and environment protection

The report underlines that the vast majority of EU sanitary and phytosanitary regulations are based on international standards representing middle-way solutions. The EU’s legislation seeks to ensure the functioning of the internal market and a high level of consumer and environment protection –  frequently higher than in other WTO Members.

• Positive developments in the EU’s fishery regime

The EU’s fishery policies reform is presented in the report as a positive element addressing concerns raised in past reviews.

Background

The Trade Policy Review Mechanism is the most important transparency exercise of the WTO. It systematically and regularly analyses and assesses the trade policies of the WTO member countries and thus shows how well they comply with the rules, disciplines and commitments initially made. It outlines the trade policies and practices of WTO members and, by doing so, promotes a smoother functioning of the multilateral trading system.

The policies of the four WTO Members having the largest trade volume are reviewed every two years. Currently, these Members are the EU (last review in July 2013), the US (last review in December 2014), Japan (last review in March 2015) and China (last review in June 2014). The next 16 Members are reviewed every four years (Canada very recently for example). All other countries are subject to a review every six years. A longer period may be fixed for Least Developed Countries.

The review of the EU’s trade policy is based on a report presented by the WTO Secretariat, a report from the EU and written questions from Members, to which the EU replies in writing. The EU has received about 1400 advance written questions.

» 12th EU Trade Policy Review