THE EU'S TRADE POLICY AND GATT/WTO

The EU's trade policy and GATT/WTO

The EU's trade policy and GATT/WTO

Introduction

From the beginning, the EC had a presence in the world by virtue of its involvement in trade matters. The EC participated in the Dillon and Kennedy Rounds, respectively, in 1962 and 1967, of the General Agreement on Tariffs and Trade (GATT) that aimed at tariff reductions, and it also signed a number of trade agreements with Iran (1963), Israel (1964), and Lebanon (1965).

As the capacity of the EC in the trade field enlarged, so did its global presence. By the 1970s, the EC was having trade disputes with the United States. The long-lasting GATT ''Uruguay Round'' negotiations from 1986 to 1994 ended with a deal between the United States and the EU that covered the growing trade in services as well as in goods. Importantly, an average cut in agricultural tariffs of 36 percent was agreed, as was a 20 percent decrease in trade-distorting farm subsidies. 2 These were averages, and farm subsidies remained both in the EU and the United States. The Union appeared to be just as much of a trade bloc as the EC, protecting the interests of powerful groups such as the EU farmers.

However, the EU, like the EC, has had to deal with trade partners across the world, and its relations with the most important will now be examined.

Discussion and analysis

From the beginning, the EC had a presence in the world by virtue of its involvement in trade matters. The EC participated in the Dillon and Kennedy Rounds, respectively, in 1962 and 1967, of the General Agreement on Tariffs and Trade (GATT) that aimed at tariff reductions, and it also signed a number of trade agreements with Iran (1963), Israel (1964), and Lebanon (1965).

As the capacity of the EC in the trade field enlarged, so did its global presence. By the 1970s, the EC was having trade disputes with the United States. The long-lasting GATT ''Uruguay Round'' negotiations from 1986 to 1994 ended with a deal between the United States and the EU that covered the growing trade in services as well as in goods. Importantly, an average cut in agricultural tariffs of 36 percent was agreed, as was a 20 percent decrease in trade-distorting farm subsidies. These were averages, and farm subsidies remained both in the EU and the United States. The Union appeared to be just as much of a trade bloc as the EC, protecting the interests of powerful groups such as the EU farmers.

However, the EU, like the EC, has had to deal with trade partners across the world, and its relations with the most important (apart from the United States which is covered at the end of this chapter) will now be examined.

The rise of RTAs and the new protectionism have many possible causes, but what have their effects been? An important and perhaps growing portion of international trade is being conducted in violation of WTO ...