The EU’s external relations covers two areas: (1) the common commercial policy – foreign trade relations and (2) foreign policy – common foreign and security policy. Under this chapter we are going to focus on the trade questions.
The common commercial policy, trade carried out with countries outside the EU falls within the competence of the European Communities. The European Union is one of the main players on the world economy. The main trading partners of the EU are the USA, China, Japan, Far-Eastern states, Switzerland, Norway and Russia. The EU is the largest exporter of goods and services in the world. The significance and weight of the EU in the global economy is evidenced by the fact that the majority of developing and emerging countries have signed trade agreements with the EU, which also cover trade preferences and financial subsidies.
The common commercial policy steams from the objective of the customs union. Within customs union Member States have delegated the regulation of trade with third countries to the Community level.
Article 133 speaks of the basic rules of a common commercial policy. The common customs rules, common tariffs and common customs procedures were already described under the customs union chapter. Here we focus on the trade agreements with third countries and measures to protect trade such as those to be taken in the event of dumping and unfair subsidies.
The Community has the right to conclude international agreements in pursuit of the fulfilment of objectives laid down in the EC Treaties. In areas where the Community has competence, it has it both internal powers, for adapting EC legislation, as well as external power for concluding international agreements and acting in international organisations. The main institutions responsible for the implementation of the common commercial policy are the Commission and the Council. The EC has bilateral agreements with third countries: association agreements (for example with Turkey and with Central-Eastern-European countries), preferential trade agreements, stabilisation and association agreements (for example with the Western Balkan countries), partnership and cooperation agreements (Ukraine, Russia, Moldova, Kazakhstan), agreements with Mediterranean countries (for example Algeria, Morocco, Egypt, Jordan, Israel), Lomé Conventions and ACP-EC partnership agreements (46 countries from Africa, the Carribean and the Pacific). The Community has not made special trade agreement with the United States or Japan however the cooperation based on the most favoured nation clause, and the regulation of the WTO and OECD.
There are some rules in the Treaties as to the multilateral external relations of the EC. If the issues of the international organisation fall under Community competence, the Commission acts in the name of the Member States. Therefore the Commission negotiates with the WTO, the OECD and the UN Economic Commission for Europe.
The Commission as the institution responsible for the implementation of the common commercial policy, under the control of the Member States, may decide on the application of antidumping and market protection measures. The Commission may initiate a dumping procedure if a product from a country outside the EU is distributed in a Member State at a price lower than the price in the home country or the cost of production shipping and distribution. The Commission may order the temporary customs duties to redress the balance on goods which receive an unreasonable subsidy in the exporting country.
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