European Union Trade Essay Example | Topics and Well Written Essays - 2000 words

European Union Trade - Essay Example Established by Article 113 [133] of the Treaty of Rome, Common Commercial Policies therefore took shape in 1961 to safeguard the common interests of the EU nations (Bretherton & Vogler, 1999). This effectively meant that the EU region will act as one country while dealing with any other country/ organisation for trade and commercial interests. But the commonness envisaged within the policy kept eluding the European community for many years, because of the changes that the world went through during the period and the conflicts of economic interests within the EU nations. The delay in settling for a common European Monetary unit (EMU) is one such example. Euro, the common currency came into being in 1999, but Bordo and Jonung (1999) reported about some observer's apprehensions about EMU itself citing the lack of a central authority supervising the financial systems of EMU. The Common Commercial Policy expected a degree of autonomy and competitiveness from the member states, which has b een achieved with limited success so far, as is evident from OECD (2007) 'EU country note', which states that competition in network industries remains patchy while implementation of the liberalization policies by individual countries are not in sync with the EU level as a whole. Bretherton & Vogler (1999) further suggest that the common commercial policy calls for common policies on tariff rates, international negotiations, liberalization, exports and trade protection measures; all based on uniform principles. Despite the differences in policy implementations, perception and other interests, today with a share of 18.10% in Goods and 26.4% in services, EU is a major trading partner with the world community, as is evident from the charts below. Fig-1: Share of EU in world trade1 Roarty (1996) states that in order to minimize the differences on trade barriers, efforts were also made in 1993 by creating a Single European Market (SEM). SEM's stated objective was to eliminate the non-tariff barriers restricting competition and resulting in fragmented European market. OECD (2007) points out that the income gap between EU and USA has kept widening since 1990 on account of decelerating growth in productivity and improper labor utilization by some of the larger countries in the EU. Wallace & Wallace (2000) point out towards a fundamental shortcoming in the framework of EU policy making. According to them, "Most studies of the EU concentrate on describing what happens in and through the special institutions of the EU, located in Brussels, Luxembourg, and Strasbourg: the European Commission; the Council of the EU; the European Council; the EP; and the ECJ. However, we should be careful not to regard these EU institutions as existing in a vacuum. Most of the policy-makers who devise and operate EU rules and legislation are from the member states themselves. They are people who spend the majority of their time as national policy-makers, for whom the European dimension is an extended policy arena, not a separate activity." Bretherton & Vogler (1999) also state that though the Common Commercial Policy has evolved through a complex interaction between the shifting composition of international trade, the external demands of various GATT rounds and adjudicative decisions of the European Court of