WTO & EU | euwto

Comparing the WTO and EU

Here we are going to analyze the interactions between the EU and the WTO. The following table sums up the main characteristics of each International Organization.

There are sustainable differences between both international organizations. The World Trade Organization is a broad multilateral organization which focuses on the promotion and regulation of trade between States, while the European Union is a geographically limited regional entity whose aims and polices go further than just a trade organization.

Relationship between the WTO and the EU

Among the members of the World Trade Organization we can find the EU. Usually, only States can become a member of an International Organization, but this case is an exception because all the member States of the EU ceded its sovereignty in matters of trade, so the EU is the result of the 28-member decision.

Interaction between the WTO and the EU

The European Commission is in charge of the negotiations on behalf of the European Union within the World Trade Organization rules. The Commission is also represented in the Ministerial Conference at least every 2 years. For meetings on a regular basis, this organ of the European Union assists General Council reunions. The Commission also represents the EU in the Council for Trade in Goods and the Committee for Trade and the Environment, which are subsidiary WTO bodies.

The process of decision-making of the EU to approve a WTO's measure follows this scheme:

There is a World trade partner request.
The commission, to achieve the coordination of the EU member state, consults with the Trade Policy Committee (group of the council in change of discussing the full range of trade policy issues).
Once the Commission has been authorized by the Council and the European Parliament to negotiate on behalf of the European Union, the decision/ concern/ priority can be brought to the WTO.

World Trade Request

European Commission asks:

1º Trade Policy Committee

2º Council and European Parliament to negotiate

The commission informs the European Parliament of key WTO issues thought the International Trade Committee (INTA) on a regular basis.

If there is a complain of the WTO, it is handled and initiated by the Commission, with the Council support.

EU trade policy through WTO

The EU supports the work of the WTO on multilateral rule-making, trade liberalisation and sustainable development. Through the WTO, it also promotes sustainable development in trade. Here, there are some examples:

- Generalised Scheme of Preferences (GSP) :

It allows vulnerable developing countries to pay fewer (or no duties) on exports to the European Union. This gives an opportunity to LDCs to access to the EU market, and also support EU businesses' by reducing the costs of imported components. Depending on the type of country, different types of GSP may be applied:

Standard GSP for low and lower-middle income countries.
GSP+ for vulnerable low and lower-middle income countries.
EBA (Everything But Arms) for least developed countries.

- Everything but arms agreement (EBA)

Since 2001 the exportations of least developed countries (LDC) are free of duty and access to the EU except for arms and armaments. This promotes integration for LDCs into the global economy.

- The EU's trade and development policy

Countries should have ownership to implement domestic policies and make domestic reforms to stimulate trade and investment, and make sure their development is for the long-term.