1

World Trade Blocs

Apart from the global trading agreements, there are many regional trading blocs
designed for reducing protectionism and fostering world trade. Some of the trade blocs
in the world are as follows:

1. European Free Trade Association (EFTA)

Countries such as United Kingdom, Austria, Denmark, Norway, Sweden, Portugal and
Switzerland joined for a better trade in the region in the year 1960. Under this EFTA
group they abolished all types of protectionism. In the year 1972 both UK and Denmark
abandoned their membership.

2. North American Free Trade Agreement (NAFTA)

NAFTA was started in the year 1988 with US-Canada free trade agreement. This was
further extended to include Mexico in 1994. NAFTA presently has extended to the Latin
American Countries.

3. Organization of Petroleum Exporting Countries (OPEC)

This was made by the petroleum producing countries in the year 1960.The member
countries of this group are Algeria, Ecuador, Gabon, Indonesia, Iran, Kuwait, Libya,
Nigeria, Qatar, Saudi Arabia, United Arab Emirates and Venezuela.

4. Association of South East Asian Nations (ASEAN)

The member countries of ASEAN are Indonesia, Malaysia, Thailand, Philippines and
Singapore. This was formed in the year 1967. India is an associate member in the
group.

5. South Asian Association For Regional Cooperation (SAARC)

Countries such as India, Bangladesh, Pakistan, Nepal, Bhutan, Maldives and Sri Lanka
have formed SAARC with an objective of making better trade in the region.

Free Trade Blocs

In addition to the European Union there a number of other multi-national free trade blocs. NAFTA (North
American Free Trade Agreement), MERCOSUR and AFTA (ASEAN Free Trade Area) are the three largest
after the EU. Below is a brief description of these blocs.

NAFTA
NAFTA is a free trade agreement involving Canada, Mexico and the United States. Of the free trade unions
NAFTA is the most limited. It is restricted to eliminating tariffs, quotas and other trade impediments amongst
the three countries involved. It has no governing structure, although there are boards set up to settle agreements.
There is no common customs or tariff agreement for imported goods and services. No monetary union is in the
works and there is no movement to making education or training of professions similar as in the EU. Most
importantly, there is no free movement of citizens allowed. It is a very powerful trade bloc, nonetheless,
because of the economic and political power of the United States. It involves about the same number of citizens
as the EU, about 400 million, but it has a slightly higher total GNP, about 9 trillion dollars. It should be noted
that NAFTA is in the process of becoming a free trade zone. It has not reached this goal entirely yet, as there
are a number of industries that still receive protection such as citrus, lumber, and Mexican petroleum. For a look
at the key provisions of NAFTA please look at a site maintained by the U.S. Embassy in Mexico.

MERCOSUR
 2
MERCOSUR is the trade agreement started by the two largest economies in South America, Argentina and
Brazil, along with Uruguay, and Paraguay. Chile, the most advanced South American economy, and Bolivia are
in the process of becoming members. There have been intensified discussions the past few years about bringing
in Peru, Columbia and Venezuela. It is very possible that in ten years MERCOSUR will represent almost all of
the South American countries.

MERCOSUR is presently a customs union in addition to a free trade zone. This means that there is a common
tariff on all imports from outside. (The United States has been unhappy with the raising of tariffs on U.S.
agricultural goods. This raises a potential problem with trade blocs. They favor the countries within them, but
they also often raise tariffs or create obstacles to goods and services coming into them.)

There have been discussions of creating a common currency and of coordinating domestic and foreign policies
within MERCOSUR, but at this point these things are only in the talking stage. You can find some important
facts about MERCOSUR here

AFTA
ASEAN started out primarily as a political organization and only lately has created AFTA. Indonesia, Malaysia,
the Philippines, Singapore and Thailand were the original creators of ASEAN. Brunei and Vietnam, Laos,
Myanmar and Cambodia have since been admitted as members. In effect, ASEAN, and AFTA, now represent
Southeast Asia.

AFTA is essentially a free-trade zone in the making. It still is working out agreements amongst all ten countries
to eliminate tariffs, quotas and other restrictions on trade. By 2001, 90 percent of a list of 9,000 manufactured
and agricultural products are set to be under a 0-5 percent tariff. All products will fall under tariff range by
2002. It has concentrated lately on removing restrictions on capital and services, but it is behind the other trade
blocs in these areas. ASEAN is a political organization of countries that are trying to protect themselves from
their powerful neighbors—China, Japan and India. The countries of Southeast Asia are finding that economic
integration is helping their political goals. For a brief look at AFTA, ASEAN and their relationships to the
United States business community please look here.

Possible Advantages to Free Trade Zones

Most agree that free trade agreements provide higher quality goods and services to consumers in all countries at
lower prices.

This tends to be true for several reasons. First, competition increases. The elimination of tariffs, quotas, and
other restrictions allow companies who were once prevented from doing business to compete on equal footing
with national companies. Competition usually lowers prices and improves quality by itself. In the United States,
for example, NAFTA, seems to be helping keep the prices of textiles, shoes, lumber and some agricultural
goods low. While this is generally true, it is not true in all cases because some free trade blocs erect higher
tariffs and other restrictions to goods and services from outside the countries in the bloc. For example, both the
EU and MERCOSUR have created higher tariffs for agricultural goods coming in from outside. This has kept
food prices artificially high.

Secondly, the cost of production for goods and services tend to decline as companies take advantage of the
lower costs of labor, cheaper natural resources and easier access to quality services and specialized knowledge.
Dell Computer Corporation based in Texas, for example, uses low-cost Mexican labor to assemble many of its
monitors. U.S. software and computer companies are helping to make many more Mexican companies efficient.

The free movement of knowledge is especially important. Free trade allows companies to set up subsidiaries in
other countries where they can simply use their existing technology. It also allows businesses to create
arrangements where their company can sell its knowledge easily to other businesses. A U.S. pharmaceutical
company can now sell and produce medicines in Mexico and Canada, allowing consumers in those countries to
take advantage of the medical discoveries made by a U.S. company. This same pharmaceutical company may
well negotiate deals with Mexican or Canadian companies to market, package or distribute their products. A
Canadian company that discovers a better engine for trucks can sell the engine or the knowledge to make the
engine to companies in all three countries, thereby allowing a much larger number of people to take advantage
of the discoveries and providing a greater incentive to creating discoveries in all countries.

Specialization is also increased in free trade zones. A larger market allows countries to spend their resources
producing things that they do well, rather than inefficiently producing goods or services that other countries can
provide at lower prices. (In economics this is called comparative advantage.) In the NAFTA for example, it
 3
seems clear that in the foreseeable future Mexico will be home to many assembly industries that use low-cost
labor. Automotive and computer parts are two that come to mind as well as textiles (clothing). Citrus and
produce might also be more likely to be grown in Mexico where the land is cheaper and winter freezes don’t
interfere with growing seasons. Canadian and U.S. financial services and high-tech industries meanwhile are
beginning to dominate some markets in Mexico. A country that specializes is much the same as a person who
specializes. It becomes extremely good at what it does and therefore very productive. Productivity increases
income.

Free trade zones also allow for economies of scale to take place. Canada might not have a large enough market
to justify the creation of company that puts communications satellites into orbit around the earth to provide
better Internet access. It might be able to do so if it can offer these services to consumers in Mexico and the
United States. Similarly it may make sense to create a company that provides Internet access at $15 a month
unlimited use if the company can make a one dollar a month profit off each account--- if the customer base is
over a million. Companies can get discounts if they buy in large quantities. These factors allow the costs of
providing services or producing goods to come down, thus allowing for reductions in prices to consumers.

This leads to the next two advantages to free trade. It tends to increase income and employment in all of the
countries involved. It’s easy to see how many jobs have been created in Mexico by NAFTA. Now and in the
future Mexicans will be receiving better employment opportunities by the factories that have been created by
U.S. and Canadian firms seeking low-cost labor. As the income of Mexican workers has increased their
consumption of goods and services produced in the U.S. and Canada has increased as well. U.S. banks,
insurance companies, stockbrokerage firms and others have seen increases in purchases from Mexican
consumers. More computers with processors and software made in the USA and Canada are being sold to
Mexico. This has increased employment in high-paying jobs in Canada and Mexico. Those who have received
these new jobs buy new homes, use more dry cleaning and home cleaning services. They frequent more
restaurants and buy more services from local businesses. All of these activities create other jobs. In short, all
countries tend to see an increase in income and employment over time.

These increases are not equal, however, some countries will benefit more than others in free trade agreements

Another advantage for consumers is that there is often a greater variety of goods and services available in free
trade blocs. Products like beer, detergent, clothing, and machine tools are often produced in all the countries
after the free trade agreement they are often stocked in many stores. Products like satellite hook ups for
televisions, computers and telephones are usually made more available to developing countries. Internet service
providers are now able to sell to larger markets and more consumers have opportunities to purchase or use these
services.

A big advantage to poor countries in trade blocs is that they are usually recipients of large amounts of capital
investments made by the wealthier countries. New buildings, technology, and sophisticated equipment are
created by foreign investors or by businesses from the more developed countries in the trade blocs. The flip side
to this is the opportunity for investment that the wealthier countries now have.

There are other long-term political and social benefits to trade blocs. As economies become more intertwined
the political reasons for close cooperation within the bloc increase. Countries understand that they have a stake
in each other and make greater efforts to get along. In that same vein, increased business contacts usually mean
that people must learn the culture of their trading partners. Many must learn new languages and different
business practices. In short, more people will come into contact with each other and will need to learn more
about each other. This breeds increased understanding amongst people

Possible Disadvantages to Free Trade Blocs

Possibly the greatest drawback to free-trade blocs is job and economic sector displacement. For many reasons,
some industries will be shut down or forced to downsize because of increased competition from trading
partners. These business sectors often employ large numbers of workers who find that their jobs no longer exist.
This is an inevitable process in free-trade agreements. If some industries were not closed it would mean that
there was little need for the agreement in the first place. The workers who lose their jobs are often without work
for an extended period and when they do find work it may well be at a lower wage.

The closing of factories that were their lifeblood has devastated some communities. In the United States, for
example, some automobile parts plants have moved to Mexico as have many textile factories in the southern
states. Soon the citrus industry in Florida will face increased competition from Mexico and eventually from
Central America. It may well have to sell many groves and shut down citrus processing plants. Many Mexican
banks and insurance companies are now under pressure from northern financial institutions. Mexicans fear that
 4
large retail chains based in the USA will push many small family businesses out as they have done in the
United States and Canada.

As stated above, this is an inevitable result of restructuring that occurs in free-trade pacts. This knowledge does
not make it any easier for those who have lost their jobs or businesses, however.

The other major possible drawback to free-trade agreements is increased dependency. As countries become
more specialized they become more dependent on their trading partners. This means that each country loses
some control over its economy or sovereignty. Decisions by foreign businesses can greatly affect domestic
economies. Many are made uncomfortable knowing that most of their food is now grown in other countries. A
strike in automobile parts in Canada or Mexico can throw many thousands of U.S. workers out of work. If U.S.
firms eventually supply most of the electrical power in northern Mexico what happens if there is a political rift
between the two countries?

MERCOSUR countries were frightened by the near collapse of the Brazilian currency at the end of 1998. If the
Brazilian economy went into a depression it would surely drag its trading partners along with it. The USA went
out of its way to bail out the Mexican peso in 1994-5. It also pushed the IMF to help. With NAFTA, the United
States and Canada did not want to see Mexico sink economically.

Imagine what will happen to Mexico the next time the United States and Canada go into recessions?

Weaker economies in trade blocs clearly have the most to gain…and to lose. They fear being swallowed by the
more advanced countries. This is exactly what the Mexicans and Canadians fear about NAFTA. They fear that
they will all eventually be working for Uncle Sam’s businesses. They may well be richer, but they will lose
control of their economic lives.

There are also environmental concerns raised by these agreements. NAFTA, in particular, has little in it to
prevent Mexican businesses from pouring their effluents into the water or air. Thus, as more manufacturing
industries shift to production in Mexico, pollution in North America might well increase. This has also put U.S.
and Canadian firms at a disadvantage when competing with Mexican firms since companies will have to pay for
pollution control in the former countries and perhaps not in Mexico.

G8
"Group of Eight" redirects here. For the Australian league of universities, see Group of
Eight (Australian universities). For the Pontiac vehicle, see Pontiac G8. For other uses,
see G8 (disambiguation).

Group of Eight
 5
Canada United
Prime Kingdom
Minister
Prime
Stephen
Minister
Harper
Gordon
Presiden
Brown
t of the
G8 for United States
2010
Presiden
France t Barack
Obama
Presiden
t Nicolas
Also represented
Sarkozy
European
Germany
Union
Chancell
President
or
José Manuel
Angela
Barroso
Merkel

Italy

Prime
Minister
Silvio
Berlusco
ni

Japan

Prime
Minister
Yukio
Hatoya
ma

Russia

Presiden
t Dmitry
Medved
ev
 6

The Group of Eight (G8, and formerly the G6 or Group of Six and also the G7 or Group of Seven) is a
forum, created by France in 1975, for governments of six countries in the world: France, Germany, Italy, Japan,
the United Kingdom, and the United States. In 1976, Canada joined the group (thus creating the G7). In
becoming the G8, the group added Russia in 1997. In addition, the European Union is represented within the
G8, but cannot host or chair.[1] "G8" can refer to the member states or to the annual summit meeting of the G8
heads of government. The former term, G6, is now frequently applied to the six most populous countries within
the European Union. G8 ministers also meet throughout the year, such as the G7/8 finance ministers (who meet
four times a year), G8 foreign ministers, or G8 environment ministers.

Each calendar year, the responsibility of hosting the G8 rotates through the member states in the following
order: France, United States, United Kingdom, Russia, Germany, Japan, Italy, and Canada. The holder of the
presidency sets the agenda, hosts the summit for that year, and determines which ministerial meetings will take
place. Lately, both France and the United Kingdom have expressed a desire to expand the group to include five
developing countries, referred to as the Outreach Five (O5) or the Plus Five: Brazil, China, India, Mexico, and
South Africa. These countries have participated as guests in previous meetings, which are sometimes called
G8+5.

With the G-20 major economies growing in stature since the 2008 Washington summit, world leaders from the
group announced at their Pittsburgh summit on September 25, 2009, that the group will replace the G8 as the
main economic council of wealthy nations.[2][3]

Contents
[hide]

• 1 History
• 2 Structure and activities
o 2.1 Global energy
o 2.2 The Annual Summit
• 3 G8 member facts
• 4 Cumulative influence of member nations
• 5 Criticism and demonstrations
• 6 See also
• 7 Footnotes
• 8 External links

History
At the 34th G8 Summit at Toyako, Hokkaido, formal photo during Tanabata matsuri
event for world leaders – Silvio Berlusconi (Italy), Dmitry Medvedev (Russia), Angela
Merkel (Germany), Gordon Brown (UK), Yasuo Fukuda (Japan), George W. Bush (U.S.),
Stephen Harper (Canada), Nicolas Sarkozy (France), José Barroso (EU) – July 7, 2008.

The concept of a forum for the world's major industrialized democracies emerged following the 1973 oil crisis
and subsequent global recession. In 1974 the United States created the Library Group, an informal gathering of
senior financial officials from the United States, the United Kingdom, West Germany, Japan and France. In
1975, French President Valéry Giscard d'Estaing invited the heads of government from West Germany, Italy,
Japan, the United Kingdom and the United States to a summit in Château de Rambouillet. The six leaders
agreed to an annual meeting organized under a rotating presidency, forming the Group of Six (G6). The
following year, Canada joined the group at the behest of Germany's Chancellor Helmut Schmidt and U.S.
President Gerald Ford[4] and the group became the 'Group of Seven' -or G7. The European Union is represented
by the President of the European Commission and the leader of the country that holds the Presidency of the
Council of the European Union. The President of the European Commission has attended all meetings since it
was first invited by the United Kingdom in 1977[5] and the Council President now also regularly attends.

Following 1994's G7 summit in Naples, Russian officials held separate meetings with leaders of the G7 after the
group's summits. This informal arrangement was dubbed the Political 8 (P8) – or, colloquially, the G7+1. At the
invitation of United Kingdom Prime Minister Tony Blair and U.S. President Bill Clinton,[6] Russia formally
joined the group in 1997, resulting in the Group of Eight, or G8.

Structure and activities

The G8 is intended to be an informal forum, and it therefore lacks an administrative structure like those for
international organizations, such as the United Nations or the World Bank. The group does not have a
 7
permanent secretariat, or offices for its members. In 2008, the president of the European Union Commission
participated as an equal in all summit events.

The presidency of the group rotates annually among the member countries, with each new term beginning on 1
January of the year. The country holding the presidency is responsible for planning and hosting a series of
ministerial-level meetings, leading up to a mid-year summit attended by the heads of government.

The ministerial meetings bring together ministers responsible for various portfolios to discuss issues of mutual
or global concern. The range of topics include health, law enforcement, labor, economic and social
development, energy, environment, foreign affairs, justice and interior, terrorism, and trade. There are also a
separate set of meetings known as the G8+5, created during the 2005 Gleneagles, Scotland summit, that is
attended by finance and energy ministers from all eight member countries in addition to the five "Outreach
Countries": Brazil, China, India, Mexico, and South Africa.

In June 2005, justice ministers and interior ministers from the G8 countries agreed to launch an international
database on pedophiles.[7] The G8 officials also agreed to pool data on terrorism, subject to restrictions by
privacy and security laws in individual countries.[8]

Global energy
Main articles: International Partnership for Energy Efficiency Cooperation and Climate Investment
Funds

G8 leaders confer together during the 2009 summit in L'Aquila (Abruzzo, Italy).

At the Heiligendamm Summit in 2007, the G8 acknowledged a proposal from the EU for a worldwide initiative
on energy efficiency. They agreed to explore, along with the International Energy Agency, the most effective
means to promote energy efficiency internationally. A year later, on 8 June 2008, the G8 along with China,
India, South Korea and the European Community established the International Partnership for Energy
Efficiency Cooperation, at the Energy Ministerial meeting hosted by Japan holding 2008 G8 Presidency, in
Aomori.[9]

G8 Finance Ministers, whilst in preparation for the 34th Summit of the G8 Heads of State and Government in
Toyako, Hokkaido, met on the 13 and 14 June 2008, in Osaka, Japan. They agreed to the “G8 Action Plan for
Climate Change to Enhance the Engagement of Private and Public Financial Institutions.” In closing, Ministers
supported the launch of new Climate Investment Funds (CIFs) by the World Bank, which will help existing
efforts until a new framework under the UNFCCC is implemented after 2012.[10]

The Annual Summit

The annual G8 leaders summit is attended by eight of the world's most powerful heads of government.
However, as noted by commentators the G-8 summit is not the place to flesh out the details of any difficult or
controversial policy issue in the context of a three-day event. Rather, the meeting is to bring a range of complex
and sometimes inter-related issues. The G8 summit brings leaders together not so they can dream up quick
fixes, but to talk and think about them together.[11]

The G8 summit is an international event which is observed and reported by news media, but the G8's relevance
is unclear.[12] The member country holding the G8 presidency is responsible for organising and hosting the
year's summit, held for three days in mid-year; and for this reason, Tony Blair and the United Kingdom
accumulated the lion's share of the credit for what went right (and wrong) at Gleneagles in 2005. Similarly,
Yasuo Fukuda and Japan hope to garner the greater part of the credit for what went well (and what did not) at
the Hokkaido Summit in 2008.

Each of the 35 G8 summit meetings could have been called a success if the events had been re-framed as venues
to generate additional momentum for solving problems at the other multilateral conferences that meet
throughout the year. The G8 summit sets the stage for what needs to be done and establishes an idea of how to
do it, even if that idea is, at best, rough and patchy.[11]

The summits have also been the site of numerous, large-scale anti-globalization protests.

Date Host country Host leader Location held Website Notes

1st November 15–17, 1975 France Valéry Giscard d'Estaing Rambouillet

G6 Summit

2nd June 27–28, 1976 United States Gerald R. Ford Dorado, Puerto Rico
Canada joins the group, forming the G7
 8
3rd May 7–8, 1977 United Kingdom James Callaghan London
President of the European Commission is invited to join the annual G-7 summits

4th July 16–17, 1978 West Germany Helmut Schmidt Bonn, North Rhine-
Westphalia

5th June 28–29, 1979 Japan Masayoshi Ōhira Tokyo

6th June 22–23, 1980 Italy Francesco Cossiga Venice

7th July 20–21, 1981 Canada Pierre E. Trudeau Montebello, Quebec

8th June 4–6, 1982 France François Mitterrand Versailles

9th May 28–30, 1983 United States Ronald Reagan Williamsburg, Virginia

10th June 7–9, 1984 United Kingdom Margaret Thatcher London

11th May 2–4, 1985 West Germany Helmut Kohl Bonn, North Rhine-
Westphalia

12th May 4–6, 1986 Japan Yasuhiro Nakasone Tokyo

13th June 8–10, 1987 Italy Amintore Fanfani Venice

14th June 19–21, 1988 Canada Brian Mulroney Toronto

15th July 14–16, 1989 France François Mitterrand Paris

16th July 9–11, 1990 United States George H. W. Bush Houston, Texas

17th July 15–17, 1991 United Kingdom John Major London

18th July 6–8, 1992 Germany Helmut Kohl Munich, Bavaria

19th July 7–9, 1993 Japan Kiichi Miyazawa Tokyo

20th July 8–10, 1994 Italy Silvio Berlusconi Naples

21st June 15–17, 1995 Canada Jean Chrétien Halifax, Nova Scotia [1]

22ndJune 27–29, 1996 France Jacques ChiracLyon International organizations'

debut to G8 Summits periodically. The invited ones here were: United Nations, World
Bank, International Monetary Fund and the World Trade Organization.[13]

23rd June 20–22, 1997 United States Bill Clinton Denver, Colorado [14]
Russia joins the group, forming G8

24th May 15–17, 1998 United Kingdom Tony Blair Birmingham, England
[15]

25th June 18–20, 1999 Germany Gerhard Schröder Cologne, North Rhine-
Westphalia [16]
First Summit of the G-20 major economies at Berlin

26th July 21–23, 2000 Japan Yoshiro Mori Nago, Okinawa[17] Formation of the
G8+5 starts, when South Africa was invited. Since then, it has been invited to the
Summit annually without interruption. Also, with permission from a G8 leader, other
nations were invited to the Summit on a periodical basis for the first time. Nigeria,
Algeria and Senegal accepted their invitations here. The World Health Organization was
also invited for the first time, too.[13]
 9
27th July 20–22, 2001 Italy Silvio Berlusconi Genoa Leaders[18]
from
Bangladesh, Mali and El Salvador accepted their invitations here. [13]
Demonstrator Carlo
Giuliani is shot and killed by police during a violent demonstration.

28th June 26–27, 2002 Canada Jean Chrétien Kananaskis, Alberta [19]
Russia
gains permission to officially host a G8 Summit.

29th June 2–3, 2003 France Jacques ChiracÉvian-les-Bains [2] The G8+5
was unofficially made, when China, India, Brazil, and Mexico were invited to this Summit
for the first time. South Africa has joined the G8 Summit since 2000. Other first-time
nations that were invited by the French president included: Egypt, Morocco, Saudi
Arabia, Malaysia and Switzerland.[13]

30th June 8–10, 2004 United States George W. Bush Sea Island,
Georgia [20]
A record number of leaders from 12 different nations accepted
their invitations here. Amongst a couple of veteran nations, the others were: Ghana,
Afghanistan, Bahrain, Iraq, Jordan, Turkey, Yemen and Uganda.[13]

31st July 6–8, 2005 United Kingdom Tony Blair Gleneagles, Scotland
[21]
The G8+5 was officially formed. On the second day of the meeting,
suicide bombers killed over 50 people on the London Underground and a bus. Nations
that were invited for the first time were Ethiopia and Tanzania. The African Union and the
International Energy Agency made their debut here.[13]

32nd July 15–17, 2006 Russia Vladimir Putin Strelna, St. Petersburg [3] First G8
Summit on Russian soil. Also, the International Atomic Energy Agency and UNESCO made their
debut here.[13]

33rd June 6–8, 2007 Germany Angela Merkel Heiligendamm, Mecklenburg-Vorpommern

[4] Seven different international organizations accepted their invitations to this
Summit. The Organisation for Economic Co-operation and Development and the Commonwealth
of Independent States made their debut here.[13]

34th July 7–9, 2008 Japan Yasuo Fukuda Toyako (Lake Toya), Hokkaido [22]

Nations that accepted their G8 Summit invitations for the first time are: Australia, Indonesia
and South Korea.[13]

35th July 8–10, 2009 Italy Silvio Berlusconi L'Aquila, Abruzzo [5] This
G8 Summit was originally planned to be in La Maddalena (Sardinia), but was moved to L'Aquila
as a way of showing Prime Minister Berlusconi's desire to help the region in and around L'Aquila
after the earthquake that hit the area on the April 6th, 2009. Nations that accepted their
invitations for the first time were: Angola, Denmark, Netherlands and Spain.[23] A record of TEN
(10) international organizations were represented in this G8 Summit. For the first time, the Food
and Agriculture Organization, the International Fund for Agricultural Development, the World
Food Programme, and the International Labour Organization accepted their invitations.[24]

36th June 25–27, 2010[25] Canada Stephen Harper Huntsville, Ontario[26] [6] Possible final
G8 Summit to be held.

37th 2011 France TBD

G8 member facts

All eight of the G8 countries are amongst the ten (10) top-ranked leading export countries. [27] The UK, the USA,
Canada, France, Germany, Italy have nominal per capita GDP over US$35,000.[28] Some of the world's twenty
(20) largest stock exchanges by market value are in G8 countries [29] (U.S., Japan, UK, France, Canada,
Germany). The G8 countries represent 7 of the 9 largest economies by nominal GDP [30] (Russia isn't one of the
9 largest economies by nominal GDP but has the 7th largest real GDP; Canada was 8th in 2006 but in 2007 it
lost 8th place to Spain, as it did in 2003,[30] prompting the previous government headed by José María Aznar to
request Spain's entrance in the G8). Spain is neither a member by itself of the G-20 major economies, too.
 10
The 2nd and 3rd largest oil producers (USA and Russia) and the country with the 2nd largest reserves
(Canada) are in the G8.[31] Seven of the nine largest nuclear energy producers are in the G8[32] (USA, France,
Japan, Russia, Germany, Canada, UK). The 7 largest donors to the UN budget for the 2009 annual fiscal year
are in the G8[33] (U.S., Japan, Germany, UK, France, Italy, Canada). The G8 and the G8+5 (minus Mexico)
make up almost all of the 12-nation "trillion dollar club of nations". Spain is the only non-G8 and non-G20
major economy nation that has a nominal GDP of over USD $1 trillion.

Cumulative influence of member nations

Stephen Harper and Nicolas Sarkozy, the 36th and 37th chairs of the G8 Summit

Together the eight countries making up the G8 represent about 14% of the world population, but they represent
about 60% of the Gross World Product[34] as measured by gross domestic product, all 8 nations being within the
top 12 countries according to the CIA World Factbook. (see the CIA World Factbook column in List of
countries by GDP (nominal)), the majority of global military power (seven are in the top 8 nations for military
expenditure[35]), and almost all of the world's active nuclear weapons.[36] In 2007, the combined G8 military
spending was US$850 billion. This is 72% of the world's total military expenditures. (see List of countries and
federations by military expenditures) Four of the G8 members, the United Kingdom, United States of America,
France and Russia, together account for 96–99% of the world's nuclear weapons.[37](see List of states with
nuclear weapons)

Criticism and demonstrations

20 July 2001, 27th G8 summit in Genoa, Italy: Protestors burn a police vehicle which was
abandoned by police during a clash with protestors.

As the annual summits are extremely high profile, they are subject to extensive lobbying by advocacy groups
and street demonstrations by activists.

The most widespread criticisms centre on the assertion that members of G8 are responsible for global problems
such as poverty in Africa and developing countries - through debt and trade policy; global warming - due to
carbon dioxide emissions; and the AIDS problem - due to strict medicine patent policy and other issues related
to globalization. During the 31st G8 summit in Scotland, 225,000 people took to the streets of Edinburgh as part
of the Make Poverty History campaign calling for Trade Justice, Debt Relief and Better Aid. Numerous other
demonstrations also took place challenging the legitimacy of the G8.[38]

One of the largest and most violent anti-globalization movement protests occurred for the 27th G8 summit.[39]
Following those events and the September 11, 2001 attacks two months later, the G8 have met at more remote
locations. The 7 July 2005 London bombings were timed to coincide with the 31st G8 summit in Scotland.

The group has also been criticized for its membership, which critics argue has now become unrepresentative of
the world's most powerful economies. In particular, China has recently surpassed every economy except the
United States and Japan. Canada has been in recent years overtaken by Brazil and Spain by nominal GDP.
Russia now has a nominal GDP in the top eight (8) in the world by the International Monetary Fund and the
CIA World Factbook for 2008 [Ninth (9th), according to the World Bank].

Timothy Geithner, the US Treasury Secretary, has said: "We are committed to reforming the international
system and our interests are best served by giving China a stake in the process. We would like to build with
China the kind of relationship we had with the G-7

Asean+6 to create world's biggest economic bloc

Asean and its six major trading partners yesterday reaffirmed their resolve to create
the world's largest economic bloc through the "East Asia Free Trade Agreement"
and "Comprehen-sive Economic Partnership in East Asia" within 15 years.

The consensus to move forward with economic integration was a successful climax to the four-day
Asean Economic Ministers (AEM) meeting under Asean+3 (China, Japan and South Korea) and
Asean+6 (Asean+3 and India, Australia and New Zealand).

The 16 member countries will lead the region to pass the US and European Union in becoming
independent economic zones. The achievement in the future will not only strengthen their regional
trade relations but also wean them from imports from outside the region.
 11
A senior trade negotiator said Asean's integration with East Asian countries will force the European
Union to rush to clinch bilateral pacts with individual Asean members for fear of losing benefits after
the world's largest free trade agreement in East Asia was established.

During the AEM meeting, three other milestones were achieved - the Asean-India Free Trade
Agreement, Asean-China Investment Agreement, and the completion of the Asean-South Korea Free
Trade Agreement after both sides reached an understanding on rules of origin for trade in goods.

As chairwoman of the AEM meeting, Commerce Minister Porntiva Nakasai said it was a significant
step for Asean to move forward with "economic integration in the East Asia region".

The outcome of this meeting will be forwarded to the October summit of Asean leaders in Prachuap
Khiri Khan's beach resort town of Cha-Am, she said.

The CEPEA will form the largest economic region with 3 billion people, accounting for 49.6 per cent
of the world's population, and sharing 26 per cent of the world's GDP.

According to a study by the Economic Research Institute for Asean and East Asia, liberalising trade
in the 16 countries will increase their GDP by 1.3 percentage points. For Asean alone, GDP will soar
by 3.83 percentage points, while Thailand will welcome a boost of 4.78 percentage points.

For EAFTA, the GDP of members would increase by 1.2 percentage points. Asean would benefit more
than Asean+3 with even higher GDP growth of 3.6 percentage points while China, South Korea and
Japan will rise by 0.9 percentage point on the average. Thailand's GDP would get a lift of 4.5
percentage points.

Commerce Ministry spokesman Krisda Piampon-gsant said Asean has been taking a step-by-step
approach to opening trade with those major partners. So far, it has completed the priority task of free
trade agreements, called Asean+1, namely Asean-Japan, Asean-China, Asean-South Korea, Asean-
Australia-New Zealand, and Asean-India.

The second priority is to aggressively move toward Asean's goal of stitching together an Asean
Economic Community by 2015. Then it will cement economic cooperation with China, South Korea
and Japan before moving toward becoming the largest world's free trade area through CEPEA.

"What we are doing, the economic integration and free trade agreement with those major trading
partners will boost the economy of the members and we expect their economies will recover by next
year," he said.

New Zealand Trade Minister Tim Groser told the joint press conference on Saturday that this AEM
meeting had provided for a very constructive dialogue.

"All members should work toward the goal. We're now moving forward in the right direction," Groser

What is OPEC?
The Organization of the Petroleum Exporting Countries(OPEC) was created in 1960 to unify and
protect the interests of oil-producing countries. OPEC allows oil-producing countries to guarantee
their income by coordinating policies and prices among them. This unified front was created primarily
in response to the efforts of Western oil companies to drive oil prices down. The original members of
OPEC included Iran, Iraq, Kuwait, Saudi Arabia, and Venezuela. OPEC has since expanded to
include seven more countries (Algeria, Angola, Indonesia, Libya, Nigeria, Qatar, and United Arab
Emerates) making a total membership of 12.

OPEC represents a considerable political and economical force. Two-thirds of the oil reserves in the
world belong to OPEC members; likewise, OPEC members are responsible for half of the world's oil
exports. The fact that OPEC controls the availability of a substance so universally sought after by
modern society renders the organization a force to be reckoned with.

The first display of the effect OPEC power could have on the world's politics was in the 1970s. When
the Yom Kippur War exploded in the Middle East, the United States assisted Israel in defending itself
against the Egyptian and Syrian armies. In what may have been a response to this interference in the
war, OPEC instituted an oil embargo that targeted the United States and its European allies. The
embargo lasted from October 19, 1973 to March 17, 1974.
 12
The effects of the OPEC oil embargo were widespread. Immediate effects included inflation and
economic recession in the United States and other countries targeted by the embargo. Car owners in
the United States were restricted to specific days on which they could purchase gasoline: even dates
for cars with even-numbered license plates, and odd dates for cars with odd-numbered license plates.

A national law introducing more restrictive speed limits was instituted, as well as a year-round
Daylight Savings Time. The OPEC oil embargo also drove auto manufacturers to produce smaller
and more fuel-efficient vehicles. Even after the embargo ended, oil prices continued to rise, and the
United States economy continued to suffer.

Although OPEC is often seen as a villain in the political arena, the organization serves an important
purpose. OPEC prevents its members from being taken advantage of by industrialized countries, by
ensuring that oil-exporting countries are paid a fair price for crude oil. Because oil-exporting countries
are dependent on industrialized countries for oil products, OPEC standards prevent industrialized
countries from buying crude oil at rock-bottom prices, then turning around and selling oil products
back at vastly inflated prices.

Organization of Petroleum Exporting Countries OPEC

What Does Organization of Petroleum Exporting Countries - OPEC Mean?
An organization consisting of the world's major oil-exporting nations, OPEC was founded in 1960 to coordinate the
petroleum policies of its members and to provide member states with technical and economic aid. OPEC is a cartel
that aims to manage the supply of oil in an effort to set the price of oil on the world market, in order to avoid fluctuations
that might affect the economies of both producing and purchasing countries.

Investopedia explains Organization of Petroleum Exporting Countries - OPEC

OPEC membership is open to any country that is a substantial exporter of oil and that shares the ideals of the
organization. OPEC has 11 member countries, including founder members Iran, Iraq, Kuwait and Venezuela.

OPEC member nations currently supply about 40% of the world's crude oil and 16% of its natural gas. At the end of 2003,
OPEC nations possessed about 78% of the world's total proven crude oil reserves.

Background

In 1988 Canada and the United States signed the Canada-United States Free Trade Agreement after the US
Congress approved implementing legislation. The American government then entered into negotiations with the
Mexican government for a similar treaty, and Canada asked to join the negotiations in order to preserve its
perceived gains under the 1988 deal.[1] The international climate at the time favoured expanding trade blocs, and
the Maastricht Treaty which created the European Union was signed in 1992.

Negotiation and ratification

Seen here are Carlos Salinas, President of Mexico (back left), George H.W. Bush, President of the
United States (back centre), and Brian Mulroney, Prime Minister of Canada (back right).

Following diplomatic negotiations dating back to 1991 between the three nations, the leaders met in San
Antonio, Texas, on December 17, 1992, to sign NAFTA. U.S. President George H.W. Bush, Canadian Prime
Minister Brian Mulroney and Mexican President Carlos Salinas, each responsible for spearheading and
promoting the agreement, ceremonially signed it. The agreement then needed to be ratified by each nation's
legislative or parliamentary branch.

Before the negotiations were finalized, Bill Clinton came into office in the U.S. and Kim Campbell in Canada,
and before the agreement became law, Jean Chrétien had taken office in Canada.

Bill Clinton had become president of the U.S. before the agreement came into force, and is seen
here signing the U.S. implementation legislation.

The proposed Canada-U.S.trade agreement had been extremely controversial and divisive in Canada, and the
1988 Canadian election was fought almost exclusively on that issue. In that election more Canadians voted for
anti-free trade parties (the Liberals and the New Democrats) but more seats in parliament were won by the pro-
free trade Progressive Conservatives (PCs). Mulroney and the PCs had a parliamentary majority and were able
to easily pass the Canada-U.S. FTA and NAFTA bills. However Mulroney himself had become deeply
unpopular and resigned on June 25, 1993. He was replaced as Conservative leader and prime minister by Kim
Campbell, who then led the PC party into the 1993 election where they were decimated by the Liberal party
under Jean Chrétien. Chrétien had campaigned on a promise to renegotiate or abrogate NAFTA, but instead
negotiated the two supplemental agreements with the new U.S. president.
 13
In the U.S., Bush, who had worked to "fast track" the signing prior to the end of his term, ran out of time and
had to pass the required ratification and signing into law to incoming president Bill Clinton. Prior to sending it
to the House of Representatives, Clinton introduced clauses to protect American workers and allay the concerns
of many House members. It also required U.S. partners to adhere to environmental practices and regulations
similar to its own. The ability to enforce these clauses, especially with Mexico, and with much consideration
and emotional discussion the House of Representatives approved NAFTA on November 17, 1993, by a vote of
234 to 200. The agreement's supporters included 132 Republicans and 102 Democrats. NAFTA passed the
Senate 61-38. Clinton signed it into law on December 8, 1993; it went into effect on January 1, 1994.[2][3]

This section requires expansion.

Provisions

The goal of NAFTA was to eliminate barriers of trade and investment between the USA, Canada and Mexico.
The implementation of NAFTA on January 1, 1994, brought the immediate elimination of tariffs on more than
one half of US imports from Mexico and more than one third of US exports to Mexico. Within 10 years of the
implementation of the agreement all US-Mexico tariffs would be eliminated except for some US agricultural
exports to Mexico that were to be phased out in 15 years. Most US-Canada trade was already duty free. NAFTA
also seeks to eliminate non-tariff trade barriers and publisher.

Mechanisms

Chapter 20 provides a procedure for the interstate resolution of disputes over the application and interpretation
of the NAFTA. It was modeled after Chapter 18 of the Canada-United States Free Trade Agreement.[4]

NAFTA's effects, both positive and negative, have been quantified by several economists, whose findings have
been reported in publications such as the World Bank's Lessons from NAFTA for Latin America and the
Caribbean,[5] NAFTA's Impact on North America,[6] and NAFTA Revisited by the Institute for International
Economics.[7] Some argue that NAFTA has been positive for Mexico, which has seen its poverty rates fall and
real income rise (in the form of lower prices, especially food), even after accounting for the 1994–1995
economic crisis.[8] Others argue that NAFTA has been beneficial to business owners and elites in all three
countries, but has had negative impacts on farmers in Mexico who saw food prices fall based on cheap imports
from U.S. agribusiness, and negative impacts on U.S. workers in manufacturing and assembly industries who
lost jobs. Critics also argue that NAFTA has contributed to the rising levels of inequality in both the U.S. and
Mexico. Some economists believe that NAFTA has not been enough (or worked fast enough) to produce an
economic convergence,[9] nor to substantially reduce poverty rates. Some have suggested that in order to fully
benefit from the agreement, Mexico must invest more in education and promote innovation in infrastructure and
agriculture.

Trade

According to Issac (2005), overall, NAFTA has not caused trade diversion, aside from a few industries such as
textiles and apparel, in which rules of origin negotiated in the agreement were specifically designed to make
U.S. firms prefer Mexican manufacturers. The World Bank also showed that the combined percentage growth
of NAFTA imports was accompanied by an almost similar increase of non-NAFTA exports.

Industry

Maquiladoras (Mexican factories which take in imported raw materials and produce goods for export) have
become the landmark of trade in Mexico. These are plants that moved to this region from the United States,
hence the debate over the loss of American jobs. Hufbauer's (2005) book shows that income in the maquiladora
sector has increased 15.5% since the implementation of NAFTA in 1994. Other sectors now benefit from the
free trade agreement, and the share of exports from non-border states has increased in the last five years while
the share of exports from maquiladora-border states has decreased. This has allowed for the rapid growth of
non-border metropolitan areas, such as Toluca, León and Puebla; all three larger in population than Tijuana,
Ciudad Juárez, and Reynosa.

Environment
For more details on this topic, see NAFTA's Impact on the Environment.

Securing U.S. congressional approval for NAFTA would have been impossible without addressing public
concerns about NAFTA’s environmental impact. The Clinton administration negotiated a side agreement on the
environment with Canada and Mexico, the North American Agreement on Environmental Cooperation
(NAAEC), which led to the creation of the Commission for Environmental Cooperation (CEC) in 1994. To
alleviate concerns that NAFTA, the first regional trade agreement between a developing country and two
 14
developed countries, would have negative environmental impacts, the CEC was given a mandate to conduct
ongoing ex post environmental assessment of NAFTA.[10]

In response to this mandate, the CEC created a framework for conducting environmental analysis of NAFTA,
one of the first ex post frameworks for the environmental assessment of trade liberalization. The framework was
designed to produce a focused and systematic body of evidence with respect to the initial hypotheses about
NAFTA and the environment, such as the concern that NAFTA would create a “race to the bottom” in
environmental regulation among the three countries, or the hope that NAFTA would pressure governments to
increase their environmental protection mechanisms.[11] The CEC has held four symposia using this framework
to evaluate the environmental impacts of NAFTA and has commissioned 47 papers on this subject. In keeping
with the CEC’s overall strategy of transparency and public involvement, the CEC commissioned these papers
from leading independent experts.[12]

Overall, none of the initial hypotheses was confirmed. NAFTA did not inherently present a systemic threat to
the North American environment, as was originally feared, but NAFTA-related environmental threats instead
occurred in specific areas where government environmental policy, infrastructure, or mechanisms, were
unprepared for the increasing scale of production under trade liberalization. In some cases, environmental
policy was neglected in the wake of trade liberalization; in other cases, NAFTA's measures for investment
protection, such as Chapter 11, and measures against non-tariff trade barriers, threatened to discourage more
vigorous environmental policy.[13] The most serious overall increases in pollution due to NAFTA were found in
the base metals sector, the Mexican petroleum sector, and the transportation equipment sector in the United
States and Mexico, but not in Canada.[14]

Agriculture

From the earliest negotiation, agriculture was (and still remains) a controversial topic within NAFTA, as it has
been with almost all free trade agreements that have been signed within the WTO framework. Agriculture is the
only section that was not negotiated trilaterally; instead, three separate agreements were signed between each
pair of parties. The Canada–U.S. agreement contains significant restrictions and tariff quotas on agricultural
products (mainly sugar, dairy, and poultry products), whereas the Mexico–U.S. pact allows for a wider
liberalization within a framework of phase-out periods (it was the first North–South FTA on agriculture to be
signed).

The overall effect of the Mexico–U.S. agricultural agreement is a matter of dispute. Mexico did not invest in the
infrastructure necessary for competition, such as efficient railroads and highways, creating more difficult living
conditions for the country's poor. Still, the causes of rural poverty cannot be directly attributed to NAFTA[citation
needed]
; in fact, Mexico's agricultural exports increased 9.4 percent annually between 1994 and 2001, while
imports increased by only 6.9 percent a year during the same period.[15]

One of the most affected agricultural sectors is the meat industry. Mexico has gone from a small-key player in
the pre-1994 U.S. export market to the 2nd largest importer of U.S. agricultural products in 2004, and NAFTA
may be credited as a major catalyst for this change. The allowance of free trade removed the hurdles that
impeded business between the two countries. As a result, Mexico has provided a growing meat market for the
U.S., leading to an increase in sales and profits for the U.S. meat industry. This coincides with a noticeable
increase in Mexican per capita GDP that has created large changes in meat consumption patterns, implying that
Mexicans can now afford to buy more meat and thus per capita meat consumption has grown[16].

Production of corn in Mexico has increased since NAFTA's implementation. However, internal corn demand
has increased beyond Mexico's sufficiency, and imports have become necessary, far beyond the quotas Mexico
had originally negotiated.[17] Zahniser & Coyle have also pointed out that corn prices in Mexico, adjusted for
international prices, have drastically decreased, yet through a program of subsidies expanded by former
president Vicente Fox, production has remained stable since 2000.[18]

The logical result of a lower commodity price is that more use of it is made downstream. Unfortunately, many
of the same rural people who would have been likely to produce higher-margin value-added products in Mexico
have instead emigrated. The rise in corn prices due to increased ethanol demand may improve the situation of
corn farmers in Mexico.

In a study published in the August 2008 issue of the American Journal of Agricultural Economics, NAFTA has
increased U.S. agricultural exports to Mexico and Canada even though most of this increase occurred a decade
after its ratification. The study focused on the effects that gradual "phase-in" periods in regional trade
agreements, including NAFTA, have on trade flows. Most of the increase in members’ agricultural trade, which
was only recently brought under the purview of the World Trade Organization, was due to very high trade
barriers before NAFTA or other regional trade agreements.[19]
 15
Mobility of persons

According to the Department of Homeland Security Yearbook of Immigration Statistics, during fiscal year 2006
(i.e., October 2005 through September 2006), 73,880 foreign professionals (64,633 Canadians and 9,247
Mexicans) were admitted into the United States for temporary employment under NAFTA (i.e., in the TN
status). Additionally, 17,321 of their family members (13,136 Canadians, 2,904 Mexicans, as well as a number
of third-country nationals married to Canadians and Mexicans) entered the U.S. in the treaty national's
dependent (TD) status.[20] Because DHS counts the number of the new I-94 arrival records filled at the border,
and the TN-1 admission is valid for three years, the number of non-immigrants in TN status present in the U.S.
at the end of the fiscal year is approximately equal to the number of admissions during the year. (A discrepancy
may be caused by some TN entrants leaving the country or changing status before their three-year admission
period has expired, while other immigrants admitted earlier may change their status to TN or TD, or extend TN
status granted earlier).

Canadian authorities estimated that, as of December 1, 2006, a total of 24,830 U.S. citizens and 15,219 Mexican
citizens were present in Canada as "foreign workers". These numbers include both entrants under the NAFTA
agreement and those who have entered under other provisions of the Canadian immigration law. [21] New entries
of foreign workers in 2006 were 16,841 (U.S. citizens) and 13,933 (Mexicans).[22]

Criticism and controversies

Canadian disputes
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Garment workers assemble suits in a Toronto factory in 1901

There is much concern in Canada over the provision that if something is sold even once as a commodity, the
government cannot stop its sale in the future.[23] This applies to the water from Canada's lakes and rivers, fueling
fears over the possible destruction of Canadian ecosystems and water supply.

In 1999, Sun Belt Water Inc., a company out of Santa Barbara, California, filed an Arbitration Claim under
Chapter 11 of the NAFTA claiming $105 million as a result of Canada's prohibition on the export of bulk water
by marine tanker, a move that destroyed the Sun Belt business venture. Sun Belt maintains a website where
many documents concerning the Arbitration are posted www.sunbeltwater.com. The claim sent shock waves
through Canadian governments that scrambled to update water legislation and remains unresolved.

Other fears come from the effects NAFTA has had on Canadian lawmaking. In 1996, the gasoline additive
MMT was brought into Canada by an American company. At the time, the Canadian federal government
banned the importation of the additive. The American company brought a claim under NAFTA Chapter 11
seeking US$201 million,[24] and by Canadian provinces under the Agreement on Internal Trade ("AIT"). The
American company argued that their additive had not been conclusively linked to any health dangers, and that
the prohibition was damaging to their company. Following a finding that the ban was a violation of the AIT, [25]
the Canadian federal government repealed the ban and settled with the American company for US$13 million.
[26]
Studies by Health and Welfare Canada (now Health Canada) on the health effects of MMT in fuel found no
significant health effects associated with exposure to these exhaust emissions. Other Canadian researchers and
the U.S. Environmental Protection Agency disagree with Health Canada, and cite studies that include possible
nerve damage.[27]

Ponderosa Pine logs taken from Malheur National Forest, Grant County, Oregon.

The United States and Canada had been arguing for years over the United States' decision to impose a 27
percent duty on Canadian softwood lumber imports, until new Canadian Prime Minister Stephen Harper
compromised with the United States and reached a settlement on July 1, 2006. [28] The settlement has not yet
been ratified by either country, in part due to domestic opposition in Canada.

Canada had filed numerous motions to have the duty eliminated and the collected duties returned to Canada.[29]
After the United States lost an appeal from a NAFTA panel, it responded by saying "We are, of course,
disappointed with the [NAFTA panel's] decision, but it will have no impact on the anti-dumping and
countervailing duty orders." (Nick Lifton, spokesman for U.S. Trade Representative Rob Portman)[30] On July
21, 2006, the U.S. Court of International Trade found that imposition of the duties was contrary to U.S. law. [31]
[32]
 16
Change in income trust taxation

On October 30, 2007, American citizens Marvin and Elaine Gottlieb filed a Notice of Intent to Submit a Claim
to Arbitration under NAFTA. The couple claims thousands of U.S. investors lost a total of $5 billion dollars in
the fall-out from the Conservative Government's decision the previous year to change the tax rate on income
trusts in the energy sector. On 29 April 2009, a determination was made that this change in tax law was not
expropriation.[33].

Further criticism in Canada

A book written by Mel Hurtig published in 2002 called The Vanishing Country charged that since NAFTA's
ratification more than 10,000 Canadian companies had been taken over by foreigners, and that 98% of all
foreign direct investments in Canada were for foreign takeovers.[34]

U.S. deindustrialization
For more details on this topic, see NAFTA's Impact on US Employment.

An increase in domestic manufacturing output and a proportionally greater domestic investment in

manufacturing does not necessarily mean an increase in domestic manufacturing jobs; this increase may simply
reflect greater automation and higher productivity. Although the U.S. total civilian employment may have
grown by almost 15 million in between 1993 and 2001, manufacturing jobs only increased by 476,000 in the
same time period.[35] Furthermore from 1994 to 2007, net manufacturing employment has declined by
3,654,000, and during this period several other free trade agreements have been concluded or expanded.[35]

Impact on Mexican farmers

In 2000, U.S. government subsidies to the corn sector totaled $10.1 billion, a figure ten times greater than the
total Mexican agricultural budget that year.[36] These subsidies have led to charges of de facto dumping which
jeopardizes Mexican farms and the country's food self-sufficiency.

Other studies reject NAFTA as the force responsible for depressing the incomes of poor corn farmers, citing the
trend's existence more than a decade before NAFTA's existence, an increase in maize production after NAFTA
went into effect in 1994, and the lack of a measurable impact on the price of Mexican corn due to subsidized
corn coming into Mexico from the United States, though they agree that the abolition of U.S. agricultural
subsidies would benefit Mexican farmers.[37] According to Graham Purchase in Anarchism and Environmental
Survival, NAFTA could cause "the destruction of the ejidos (peasant cooperative village holdings) by corporate
interests, and threatens to completely reverse the gains made by rural peoples in the Mexican Revolution." [38]

Impact of NAFTA on Canada

Canada gained the most from NAFTA with Canada's GDP rate at 3.6%, growing faster than the United States at
3.3% and Mexico at 2.7%. Canadian employment levels have also shown steady gains in recent years, with
overall employment rising from 14.9 million to 15.7 million in the early 2000s. Even Canadian manufacturing
employment held steady. One of NAFTA's biggest economic effects on U.S.-Canada trade has been to boost
bilateral agricultural flows.[39] In the year 2008 alone, Canada exports to the United States and Mexico was at
CAN$381.3 Billion Dollars and imports from NAFTA was at CAN$245.1 Billion Dollars. [40] The Canadian
mainstream has been so unanimous in its recognition of NAFTA's advantages despite a few odd detractors that
even former NDP Gary Doer of Manitoba openly praises the benefits of NAFTA. [41]

Chapter 11

Another contentious issue is the impact of the investment obligations contained in Chapter 11 of the NAFTA. [42]
Chapter 11 allows corporations or individuals to sue Mexico, Canada or the United States for compensation
when actions taken by those governments (or by those for whom they are responsible at international law, such
as provincial, state, or municipal governments) have adversely affected their investments.

This chapter has been invoked in cases where governments have passed laws or regulations with intent to
protect their constituents and their resident businesses' profits. Language in the chapter defining its scope states
that it cannot be used to "prevent a Party from providing a service or performing a function such as law
enforcement, correctional services, income security or insurance, social security or insurance, social welfare,
public education, public training, health, and child care, in a manner that is not inconsistent with this
Chapter."[43]

This chapter has been criticized by groups in the U.S.,[44] Mexico,[45] and Canada[46] for a variety of reasons,
including not taking into account important social and environmental[47] considerations. In Canada, several
 17
groups, including the Council of Canadians, challenged the constitutionality of Chapter 11. They lost at the
trial level,[48] and have subsequently appealed.

Methanex Corporation, a Canadian corporation, filed a US$970 million suit against the United States, claiming
that a California ban on MTBE, a substance that had found its way into many wells in the state, was hurtful to
the corporation's sales of methanol. However, the claim was rejected, and the company was ordered to pay
US$3 million to the U.S. government in costs.[49]

In another case, Metalclad, an American corporation, was awarded US$15.6 million from Mexico after a
Mexican municipality refused a construction permit for the hazardous waste landfill it intended to construct in
Guadalcázar, San Luis Potosí. The construction had already been approved by the federal government with
various environmental requirements imposed (see paragraph 48 of the tribunal decision). The NAFTA panel
found that the municipality did not have the authority to ban construction on the basis of the alleged
environmental concerns.[50]

Chapter 19

Also contentious is NAFTA's Chapter 19, which subjects antidumping and countervailing duty (AD/CVD)
determinations with binational panel review instead of, or in addition to, conventional judicial review. For
example, in the United States, review of agency decisions imposing antidumping and countervailing duties are
normally heard before the U.S. Court of International Trade, an Article III court. NAFTA parties, however,
have the option of appealing the decisions to binational panels composed of five citizens from the two relevant
NAFTA countries. The panelists are generally lawyers experienced in international trade law. Since the NAFTA
does not include substantive provisions concerning AD/CVD, the panel is charged with determining whether
final agency determinations involving AD/CVD conform with the country's domestic law. Chapter 19 can be
considered as somewhat of an anomaly in international dispute settlement since it does not apply international
law, but requires a panel composed of individuals from many countries to reexamine the application of one
country's domestic law.

A Chapter 19 panel is expected to examine whether the agency's determination is supported by "substantial
evidence." This standard assumes significant deference to the domestic agency.

Some of the most controversial trade disputes in recent years, such as the U.S.-Canada softwood lumber
dispute, have been litigated before Chapter 19 panels.

Decisions by Chapter 19 panels can be challenged before a NAFTA extraordinary challenge committee.
However, an extraordinary challenge committee does not function as an ordinary appeal. Under the NAFTA, it
will only vacate or remand a decision if the decision involves a significant and material error that threatens the
integrity of the NAFTA dispute settlement system. As of January 2006, no NAFTA party has successfully
challenged a Chapter 19 panel's decision before an extraordinary challenge committee.

Chapter 14
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"This chapter dealing with Financial Services provides for the same procedure as Chapter 20, except that the
members of the panel shall be selected from a roster of fifteen persons who "have expertise in financial services
law or practice..." The roster has never been made public and no dispute has yet occurred under this chapter."[51]

The proviining a roster of 15 available people to form a committee for dispute resolution is shown, quite clearly,
in Article 1414.[52]

History
Robert Schuman proposing the Coal and Steel Community in 1950

The 1957 Rome Treaty created the European Economic Community.

After World War II, moves towards European integration were seen by many as an escape from the extreme
forms of nationalism which had devastated the continent.[21] One such attempt to unite Europeans was the
European Coal and Steel Community which, while having the modest aim of centralised control of the
previously national coal and steel industries of its member states, was declared to be "a first step in the
federation of Europe".[22] The originators and supporters of the Community include Jean Monnet, Robert
Schuman, Paul Henri Spaak, and Alcide de Gasperi. The founding members of the Community were Belgium,
France, Italy, Luxembourg, the Netherlands, and West Germany.[23]
 18
In 1957, these six countries signed the Treaties of Rome which extended the earlier cooperation within the
European Coal and Steel Community and created the European Economic Community, (EEC) establishing a
customs union and the European Atomic Energy Community (Euratom) for cooperation in developing nuclear
energy.[23] In 1967 the Merger Treaty created a single set of institutions for the three communities, which were
collectively referred to as the European Communities (EC), although commonly just as the European
Community.[24]

In 1973, the Communities enlarged to include Denmark, Ireland, and the United Kingdom.[25] Norway had
negotiated to join at the same time but Norwegian voters rejected membership in a referendum and so Norway
remained outside. In 1979, the first direct, democratic elections to the European Parliament were held.[26]

Greece joined in 1981, and Spain and Portugal in 1986.[27] In 1985, the Schengen Agreement led the way toward
the creation of open borders without passport controls between most member states and some non-member
states.[28] In 1986, the European flag began to be used by the Community [29] and the Single European Act was
signed.

The Iron Curtain's fall enabled eastward enlargement. (Berlin Wall)

In 1990, after the fall of the Iron Curtain, the former East Germany became part of the Community as part of a
newly united Germany.[30] With enlargement towards Eastern and Central Europe on the agenda, the
Copenhagen criteria for candidate members to join the European Union were agreed.

The European Union was formally established when the Maastricht Treaty came into force on 1 November
1993,[10] and in 1995 Austria, Sweden, and Finland joined the newly established EU. In 2002, euro notes and
coins replaced national currencies in 12 of the member states. Since then, the eurozone has increased to
encompass sixteen countries. In 2004, the EU saw its biggest enlargement to date when Malta, Cyprus,
Slovenia, Estonia, Latvia, Lithuania, Poland, the Czech Republic, Slovakia, and Hungary joined the Union.[31]

On 1 January 2007, Romania and Bulgaria became the EU's newest members and Slovenia adopted the euro.[31]
In June 2009, the 2009 Parliament elections were held leading to a renewal of Barroso's Commission
Presidency, and in July 2009 Iceland formally applied for EU membership. On 1 December 2009, the Lisbon
Treaty came into force after a protracted and controversial birth. This reformed many aspects of the EU but in
particular created a permanent President of the European Council, the first of which is Herman van Rompuy,
and a strengthened High Representative, Catherine Ashton.

[edit] Treaties timeline

Signed
In force
Treaty 1948
1948
Brussels 1951
1952
Paris 1954
1955
Paris Agr. 1957
1958
Rome 1965
1967
Merger 1986
1987
Single Act 1992
1993
Maastricht 1997
1999
Amsterdam 2001
2003
Nice 2007
2009
Lisbon
 19
European Communities
Three pillars of the European Union

European Atomic Energy Community (EURATOM)

→ ←

European Coal and Steel Community (ECSC) Treaty expired in 2002

European Union (EU)

European Economic Community (EEC) European Community (EC)→Justice and Home Affairs (JHA)

Police and Judicial Co-operation in Criminal Matters (PJCC) ←

European Political
Cooperation (EPC) → Common Foreign and Security Policy (CFSP) ←Unconsolidated
bodiesWestern European Union (WEU)

Member states
Main article: Member State of the European Union

See also: Special Member State territories and the European Union, Enlargement of the
European Union, Future enlargement of the European Union, and Withdrawal from the European
Union

The continental territories of the member states of the European Union (European Communities
pre-1993), animated in order of accession.

Albania Estonia Luxembourg Serbia

Austria Finland Mac. Slovakia

Belarus France Malta→ Slovenia

Belgium Germany Moldova Spain

Bos. Greece Mont. Sweden

& Herz.
Hungary Netherlands Switz-
Bulgaria erland
Iceland Norway
Croatia Turkey
Ireland Poland
Cyprus Ukraine
Italy Portugal
Czech United
Rep. Latvia Romania Kingdom

Denmark Lithuania Russia

The European Union is composed of 27 sovereign Member States: Austria, Belgium, Bulgaria, Cyprus, the
Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia,
Lithuania, Luxembourg, Malta, the Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain,
Sweden, and the United Kingdom.[32]

The Union's membership has grown from the original six founding states–Belgium, France, (then-West)
Germany, Italy, Luxembourg and the Netherlands–to the present day 27 by successive enlargements as
countries acceded to the treaties and by doing so, pooled their sovereignty in exchange for representation in the
institutions.[33]

To join the EU a country must meet the Copenhagen criteria, defined at the 1993 Copenhagen European
Council. These require a stable democracy that respects human rights and the rule of law; a functioning market
economy capable of competition within the EU; and the acceptance of the obligations of membership, including
EU law. Evaluation of a country's fulfilment of the criteria is the responsibility of the European Council.[34]
 20
No member state has ever left the Union, although Greenland (an autonomous province of Denmark)
withdrew in 1985. The Lisbon Treaty now provides a clause dealing with how a member leaves the EU.

There are three official candidate countries, Croatia, Macedonia and Turkey. Albania, Bosnia and Herzegovina,
Montenegro, Serbia and Iceland are officially recognised as potential candidates.[35] Kosovo is also listed as a
potential candidate but the European Commission does not list it as an independent country because not all
member states recognise it as an independent country separate from Serbia.[36]

Four Western European countries that have chosen not to join the EU have partly committed to the EU's
economy and regulations: Iceland, which has now applied for membership, Liechtenstein and Norway, which
are a part of the single market through the European Economic Area, and Switzerland, which has similar ties
through bilateral treaties.[37][38] The relationships of the European microstates, Andorra, Monaco, San Marino
and the Vatican include the use of the euro and other areas of co-operation.[39]

Geography
Main article: Geography of the European Union

Mont Blanc in the Alps is the highest peak in the EU.

The territory of the EU consists of the combined territories of its 27 member states with some exceptions,
outlined below. The territory of the EU is not the same as that of Europe, as parts of the continent are outside
the EU, such as Switzerland, Norway, European Russia, and Iceland. Some parts of member states are not part
of the EU, despite forming part of the European continent (for example the Isle of Man and Channel Islands
(two Crown Dependencies), and the Faroe Islands (a territory of Denmark)). The island country of Cyprus, a
member of the EU, is closer to Turkey than to continental Europe and is often considered part of Asia.[40][41]

The EU's climate is influenced by its 65,993 km (41,006 mi) coastline. (Crete)

Several territories associated with member states that are outside geographic Europe are also not part of the EU
(such as Greenland, Aruba, the Netherlands Antilles, and all the non-European British overseas territories).
Some overseas territories are part of the EU even though geographically not part of Europe, such as the Azores,
the Canary Islands, Madeira, Lampedusa, French Guiana, Guadeloupe, Saint Barthélemy, Martinique and
Réunion, Ceuta and Melilla. As well, although being technically part of the EU,[42] EU law is suspended in
Northern Cyprus as it is under the de facto control of the Turkish Republic of North Cyprus, a self-proclaimed
state that is recognised only by Turkey.

The EU's member states cover an area of 4,422,773 square kilometres (1,707,642 sq mi).[43] The EU is larger in
area than all but six countries, and its highest peak is Mont Blanc in the Graian Alps, 4,807 metres (15,771 ft)
above sea level. The landscape, climate, and economy of the EU are influenced by its coastline, which is
65,993 kilometres (41,006 mi) long. The EU has the world's second-longest coastline, after Canada. The
combined member states share land borders with 19 non-member states for a total of 12,441 kilometres
(7,730 mi), the fifth-longest border in the world.[19][44][45]

Including the overseas territories of member states, the EU experiences most types of climate from Arctic to
tropical, rendering meteorological averages for the EU as a whole meaningless. The majority of the population
lives in areas with a Mediterranean climate (Southern Europe), a temperate maritime climate (Western Europe),
or a warm summer continental or hemiboreal climate (Eastern Europe).[46]

The EU's population is also incredibly urbanised, with some 75% of people (and growing, projected to be 90%
in 7 states by 2020) living in urban areas. Cities are largely spread out across the EU, although with a large
grouping in and around the Benelux and a large amount of urbanisation in Spain since it joined the EU. An
increasing percentage of this is due to low density urban sprawl which is extending into natural areas. In some
cases this urban growth has been due to the influx of EU funds into a region.[47]

Governance
Main articles: Politics of the European Union and Institutions of the European Union

European Union

Politics and government of

the European Union

Parliament

Council of Ministers
 21
European Council

Commission

Court of Justice

Other institutions

Policies and issues

Foreign relations

Elections

Law

The institutions of the EU operate solely within those competencies conferred on it upon the treaties and
according to the principle of subsidiarity (which dictates that action by the EU should only be taken where an
objective cannot be sufficiently achieved by the member states alone). Law made by the EU institutions is
passed in a variety of forms, primarily that which comes into direct force and that which must be passed in a
refined form by national parliaments.

Legislative competencies are divided equally, with some exceptions, between the European Parliament and the
Council of the European Union while executive tasks are carried out by the European Commission and in a
limited capacity by the European Council (not to be confused with the aforementioned Council of the European
Union). The interpretation and the application of EU law and the treaties are ensured by the Court of Justice of
the European Union. There are also a number of ancillary bodies which advise the EU or operate in a specific
area.

European Council
The President of the European Council, Herman Van Rompuy

The EU receives its political leadership from the European Council, which usually meets four times a year. It
comprises one representative per member state—either its head of state or head of government—plus its
President as well as the President of the Commission. The member states' representatives are assisted by their
Foreign Ministers. The European Council uses its leadership role to sort out disputes between member states
and the institutions, and to resolve political crises and disagreements over controversial issues and policies. The
European Council should not be mistaken for the Council of Europe, an international organisation independent
from the EU.

On 19 November 2009, Herman Van Rompuy was chosen as the first President of the European Council and
Catherine Ashton was chosen as the High Representative of the Union for Foreign Affairs and Security Policy.
They both assumed office on 1 December 2009.

Council

The Council (also called "Council of the European Union"[48] and sometimes referred to as the "Council of
Ministers"[49]) forms one half of the EU's legislature. It consists of a government minister from each member
state and meets in different compositions depending on the policy area being addressed. Notwithstanding its
different compositions, it is considered to be one single body.[50] In addition to its legislative functions, the
Council also exercises executive functions in relations to the Common Foreign and Security Policy.

Commission
Commission President José Manuel Barroso

The European Commission acts as the EU's executive arm and is responsible for initiating legislation and the
day-to-day running of the EU. It is intended to act solely in the interest of the EU as a whole, as opposed to the
Council which consists of leaders of member states who reflect national interests. The commission is also seen
as the motor of European integration. It is currently composed of 27 commissioners for different areas of policy,
one from each member state. The President of the Commission and all the other commissioners are nominated
by the Council. Appointment of the Commission President, and also the Commission in its entirety, have to be
confirmed by Parliament.[51]

Parliament
The seat of the European Parliament in Strasbourg.
 22
The European Parliament forms the other half of the EU's legislature. The 736 (soon to be 750) Members of
the European Parliament (MEPs) are directly elected by EU citizens every five years. Although MEPs are
elected on a national basis, they sit according to political groups rather than their nationality. Each country has a
set number of seats and in some cases is divided into sub-national constituencies. The Parliament and the
Council of Ministers pass legislation jointly in nearly all areas under the ordinary legislative procedure. This
also applies to the EU budget. Finally, the Commission is accountable to Parliament, requiring its approval to
take office, having to report back to it and subject to motions of censure from it. The President of the European
Parliament carries out the role of speaker in parliament and represents it externally. The president and vice
presidents are elected by MEPs every two and a half years.[52]

Courts

The judicial branch of the EU—formally called the Court of Justice of the European Union—consists of three
courts: the Court of Justice, the General Court, and the European Union Civil Service Tribunal. Together they
interpret and apply the treaties and the law of the EU.[53]

The Court of Justice primarily deals with cases taken by member states, the institutions, and cases referred to it
by the courts of member states.[54] The General Court mainly deals with cases taken by individuals and
companies directly before the EU's courts,[55] and the European Union Civil Service Tribunal adjudicates in
disputes between the European Union and its civil service.[56] Decisions from the General Court can be appealed
to the Court of Justice but only on a point of law.[57]

Legal system
Further information: Law of the European Union, Treaties of the European Union, and European
Union legislative procedure

The EU is based on a series of treaties. These first established the European Community and the EU, and then
made amendments to those founding treaties.[58] These are power-giving treaties which set broad policy goals
and establish institutions with the necessary legal powers to implement those goals. These legal powers include
the ability to enact legislation[59] which can directly affect all member states and their inhabitants.[60] Under the
principle of supremacy, national courts are required to enforce the treaties that their member states have ratified,
and thus the laws enacted under them, even if doing so requires them to ignore conflicting national law, and
(within limits) even constitutional provisions.[61]

The Court of Justice in Luxembourg can judge member states over EU law.

The main legal acts of the EU come in three forms: regulations, directives, and decisions. Regulations become
law in all member states the moment they come into force, without the requirement for any implementing
measures,[62] and automatically override conflicting domestic provisions.[59] Directives require member states to
achieve a certain result while leaving them discretion as to how to achieve the result. The details of how they
are to be implemented are left to member states.[63]

When the time limit for implementing directives passes, they may, under certain conditions, have direct effect
in national law against member states. Decisions offer an alternative to the two above modes of legislation.
They are legal acts which only apply to specified individuals, companies or a particular member state. They are
most often used in Competition Law, or on rulings on State Aid, but are also frequently used for procedural or
administrative matters within the institutions. Regulations, directives, and decisions are of equal legal value and
apply without any formal hierarchy.

One of the complicating features of the EU's legal system is the multiplicity of legislative procedures used to
enact legislation. The treaties micro-manage the EU's powers, indicating different ways of adopting legislation
for different policy areas and for different areas within the same policy areas.[64] A common feature of the EU's
legislative procedures, however, is that almost all legislation must be initiated by the Commission, rather than
member states or European parliamentarians.[65] The two most common procedures are co-decision, under which
the European Parliament can veto proposed legislation, and consultation, under which Parliament is only
permitted to give an opinion which can be ignored by European leaders. In most cases legislation must be
agreed by the council.[66]

National courts within the member states play a key role in the EU as enforcers of EU law, and a "spirit of
cooperation" between EU and national courts is laid down in the Treaties. National courts can apply EU law in
domestic cases, and if they require clarification on the interpretation or validity of any EU legislation related to
the case it may make a reference for a preliminary ruling to the Court of Justice. The right to declare EU
legislation invalid however is reserved to the EU courts.
 23
Fundamental rights

As a product of efforts to establish a written fundamental rights code, the EU drew up the Charter of
Fundamental Rights in 2000. The Charter is legally binding since the Lisbon Treaty has come into force.[67]
Also, the Court of Justice gives judgements on fundamental rights derived from the "constitutional traditions
common to the member states,"[68] and may even invalidate EU legislation based on its failure to adhere to these
fundamental rights.[69]

Although signing the European Convention on Human Rights (ECHR) is a condition for EU membership,[70] the
EU itself is not covered by the convention as it is neither a state [71] nor has the competence to accede.[72]
Nonetheless the Court of Justice and European Court of Human Rights co-operate to ensure their case-law does
not conflict.[73] Since the entry into force of the Lisbon Treaty, the EU has been required to accede to the ECHR.
[74]
The EU opposes the death penalty and promotes its world wide abolition.[75] Abolition of the death penalty is
a condition for EU membership.[76]

Foreign relations
Main articles: Foreign relations of the European Union and Common Foreign and Security Policy

EU member states have a standardised passport design, burgundy coloured with the name of the
member state, Coat of Arms and with the words "European Union" given in their official
language(s) at the top; in this case those of Ireland.

Foreign policy cooperation between member states dates from the establishment of the Community in 1957,
when member states negotiated as a bloc in international trade negotiations under the Common Commercial
Policy.[77] Steps for a more wide ranging coordination in foreign relations began in 1970 with the establishment
of European Political Cooperation which created an informal consultation process between member states with
the aim of forming common foreign policies. It was not, however, until 1987 when European Political
Cooperation was introduced on a formal basis by the Single European Act. EPC was renamed as the Common
Foreign and Security Policy (CFSP) by the Maastricht Treaty.[78]

The Maastricht Treaty gives the CFSP the aims of promoting both the EU's own interests and those of the
international community as a whole. This includes promoting international co-operation, respect for human
rights, democracy, and the rule of law.[79]

Catherine Ashton is the EU's High Representative in foreign policy.

The Amsterdam Treaty created the office of the High Representative for the Common Foreign and Security
Policy (currently held by Catherine Ashton) to co-ordinate the EU's foreign policy.[80] The High Representative,
in conjunction with the current Presidency, speaks on behalf of the EU in foreign policy matters and can have
the task of articulating ambiguous policy positions created by disagreements among member states. The
Common Foreign and Security Policy requires unanimity among the now 27 member states on the appropriate
policy to follow on any particular issue. The unanimity and difficult issues treated under the CFSP makes
disagreements, such as those which occurred over the war in Iraq,[81] not uncommon.

Besides the emerging international policy of the European Union, the international influence of the EU is also
felt through enlargement. The perceived benefits of becoming a member of the EU act as an incentive for both
political and economic reform in states wishing to fulfil the EU's accession criteria, and are considered an
important factor contributing to the reform of former Communist countries in Central and Eastern Europe.[82]
This influence on the internal affairs of other countries is generally referred to as "soft power", as opposed to
military "hard power"

The EU participates in all G8 summits. (Heiligendamm, Germany)

In the UN, as an observer and working together, the EU has gained influence in areas such as aid due to its large
contributions in that field (see below).[84] In the G8, the EU has rights of membership besides chairing/hosting
summit meetings and is represented at meetings by the presidents of the Commission and the Council.[85] In the
World Trade Organisation (WTO), where all 27 member states are represented, the EU as a body is represented
by Trade Commissioner Karel De Gucht.[86]

Military and defence

Main articles: Common Security and Defence Policy and Military of the European Union

The Eurofighter is built by a consortium of four EU countries.

 24
The predecessors of the European Union were not devised as a strong military alliance because NATO was
largely seen as appropriate and sufficient for defence purposes.[87] Twenty-one EU members are members of
NATO[88] while the remaining member states follow policies of neutrality.[89] The Western European Union
(WEU) is a European security organisation related to the EU. In 1992, the WEU's relationship with the EU was
defined, when the EU assigned it the "Petersberg tasks" (humanitarian missions such as peacekeeping and crisis
management). These tasks were later transferred from the WEU to the EU by the Amsterdam Treaty and now
form part of the Common Foreign and Security Policy and the Common Security and Defence Policy. Elements
of the WEU are currently being merged into the Common Foreign and Security Policy, and the President of the
WEU is currently the EU's foreign policy chief.[90][91]

CFSP forces are peacekeeping in parts of the Balkans and Africa.

Following the Kosovo War in 1999, the European Council agreed that "the Union must have the capacity for
autonomous action, backed by credible military forces, the means to decide to use them, and the readiness to do
so, in order to respond to international crises without prejudice to actions by NATO". To that end, a number of
efforts were made to increase the EU's military capability, notably the Helsinki Headline Goal process. After
much discussion, the most concrete result was the EU Battlegroups initiative, each of which is planned to be
able to deploy quickly about 1500 personnel.[92]

EU forces have been deployed on peacekeeping missions from Africa to the former Yugoslavia and the Middle
East.[93] EU military operations are supported by a number of bodies, including the European Defence Agency,
satellite centre and the military staff.[94] In an EU consisting of 27 members, substantial security and defence
cooperation is increasingly relying on great power cooperation.[95]

Humanitarian aid
Further information: ECHO (European Commission)

Collectively, the EU is the largest contributor of foreign aid in the world.

The European Commissions Humanitarian Aid Office, or "ECHO", provides humanitarian aid from the EU to
developing countries. In 2006 its budget amounted to €671 million, 48% of which went to the African,
Caribbean and Pacific countries.[96] Counting the EU's own contributions and those of its member states
together, the EU is the largest aid donor in the world.[97]

The EU's aid has previously been criticised by the eurosceptic think-tank Open Europe for being inefficient,
mis-targeted and linked to economic objectives.[98] Furthermore, some charities have claimed European
governments have inflated the amount they have spent on aid by incorrectly including money spent on debt
relief, foreign students, and refugees. Under the de-inflated figures, the EU as a whole did not reach its internal
aid target in 2006[99] and is expected not to reach the international target of 0.7% of gross national income until
2015.[100]

However, four countries have reached that target, most notably Sweden, Luxembourg, the Netherlands and
Denmark.[97] In 2005 EU aid was 0.34% of the GNP which was higher than that of either the United States or
Japan.[101] The previous commissioner for aid, Louis Michel, has called for aid to be delivered more rapidly, to
greater effect, and on humanitarian principles.[102]

Justice and home affairs

Further information: Area of freedom, security and justice

The Schengen Area comprises most member states ensuring open borders.

Since the creating of the EU in 1993, it has developed its competencies in the area of justice and home affairs,
initially at an intergovernmental level and later by supranationalism. To this end, agencies have been
established that co-ordinate associated actions: Europol for co-operation of police forces,[103] Eurojust for co-
operation between prosecutors,[104] and Frontex for co-operation between border control authorities.[105] The EU
also operates the Schengen Information System[17] which provides a common database for police and
immigration authorities. This cooperation had to particularly be developed with the advent of open borders
through the Schengen Agreement and the associated cross border crime.

Furthermore, the Union has legislated in areas such as extradition, [106] family law,[107] asylum law,[108] and
criminal justice.[109] Prohibitions against sexual and nationality discrimination have a long standing in the
treaties.[110] In more recent years, these have been supplemented by powers to legislate against discrimination
based on race, religion, disability, age, and sexual orientation.[111] By virtue of these powers, the EU has enacted
legislation on sexual discrimination in the work-place, age discrimination, and racial discrimination.[112] By
 25
virtue of the Treaty of Lisbon, the EU is now bound by its Charter of Fundamental Rights which consolidates
a large array of citizens rights.[113]

Economy
Main article: Economy of the European Union

The EU and the next ten largest economies in the world by nominal GDP (IMF, 2008)

Since its origin, the EU has established a single economic market across the territory of all its members.
Currently, a single currency is in use between the 16 members of the eurozone.[114][115] If considered as a single
economy, the EU generated an estimated nominal gross domestic product (GDP) of US$18.39 trillion
(15.247 trillion international dollars based on purchasing power parity) in 2008, amounting to over 22% of the
world's total economic output in terms of purchasing power parity,[12] which makes it the largest economy in the
world by nominal GDP and the second largest trade bloc economy in the world by PPP valuation of GDP. It is
also the largest exporter ,[116] and largest importer[117] of goods and services, and the biggest trading partner to
several large countries such as China and India.[118][119][120]

178 of the top 500 largest corporations measured by revenue (Fortune Global 500) have their headquarters in
the EU.[121]

In May 2007 unemployment in the EU stood at 7%[122] while investment was at 21.4% of GDP, inflation at 2.2%
and public deficit at −0.9% of GDP.[123] There is a great deal of variance for annual per capita income within
individual EU states, these range from US$7,000 to US$69,000.[124]

Single market
Further information: Four Freedoms (European Union)

Two of the original core objectives of the European Economic Community were the development of a common
market, subsequently renamed the single market, and a customs union between its member states. The single
market involves the free circulation of goods, capital, people and services within the EU,[115] and the customs
union involves the application of a common external tariff on all goods entering the market. Once goods have
been admitted into the market they can not be subjected to customs duties, discriminatory taxes or import
quotas, as they travel internally. The non-EU member states of Iceland, Norway, Liechtenstein and Switzerland
participate in the single market but not in the customs union.[37] Half the trade in the EU is covered by
legislation harmonised by the EU.[125]

Free movement of capital is intended to permit movement of investments such as property purchases and
buying of shares between countries.[126] Until the drive towards Economic and Monetary Union the development
of the capital provisions had been slow. Post-Maastricht there has been a rapidly developing corpus of ECJ
judgements regarding this initially neglected freedom. The free movement of capital is unique insofar as that it
is granted equally to non-member states.

The European Central Bank in Frankfurt governs the eurozone's monetary

policy.

The free movement of persons means citizens can move freely between member states to live, work, study or
retire in another country. This required the lowering of administrative formalities and recognition of
professional qualifications of other states.[127]

The free movement of services and of establishment allows self-employed persons to move between member
states in order to provide services on a temporary or permanent basis. While services account for between sixty
and seventy percent of GDP, legislation in the area is not as developed as in other areas. This lacuna has been
addressed by the recently passed Directive on services in the internal market which aims to liberalise the cross
border provision of services.[128] According to the Treaty the provision of services is a residual freedom that only
applies if no other freedom is being exercised.

Monetary union

The creation of a European single currency became an official objective of the EU in 1969. However, it was
only with the advent of the Maastricht Treaty in 1993 that member states were legally bound to start the
monetary union no later than 1 January 1999. On this date the euro was duly launched by eleven of the then
fifteen member states of the EU. It remained an accounting currency until 1 January 2002, when euro notes and
coins were issued and national currencies began to phase out in the eurozone, which by then consisted of twelve
member states. The eurozone has since grown to sixteen countries, the most recent being Slovakia which joined
on 1 January 2009.
 26
16 EU countries have introduced the euro as their sole currency.

All other EU member states, except Denmark and the United Kingdom, are legally bound to join the euro[129]
when the convergence criteria are met, however only a few countries have set target dates for accession.
Sweden has circumvented the requirement to join the euro by not meeting the membership criteria.[130]

The euro is designed to help build a single market by, for example: easing travel of citizens and goods,
eliminating exchange rate problems, providing price transparency, creating a single financial market, price
stability and low interest rates, and providing a currency used internationally and protected against shocks by
the large amount of internal trade within the eurozone. It is also intended as a political symbol of integration and
stimulus for more.[114] Since its launch the euro has become the second reserve currency in the world with a
quarter of foreign exchanges reserves being in euro.[131]

The euro, and the monetary policies of those who have adopted it in agreement with the EU, are under the
control of the European Central Bank (ECB).[132] There are eleven other currencies used in the EU[114] with all
but two legally obliged to be switched to the euro. A number of other countries outside the EU, such as
Montenegro, use the euro without formal agreement with the ECB.[39]

Competition
Further information: European Community competition law and European Commissioner for Competition

The EU operates a competition policy intended to ensure undistorted competition within the single market.[133]
The Commission as the competition regulator for the single market is responsible for antitrust issues, approving
mergers, breaking up cartels, working for economic liberalisation and preventing state aid.[134]

The Competition Commissioner, currently Joaquín Almunia, is one of the most powerful positions in the
Commission, notable for the ability to affect the commercial interests of trans-national corporations.[135] For
example, in 2001 the Commission for the first time prevented a merger between two companies based in the
United States (GE and Honeywell) which had already been approved by their national authority. [136] Another
high profile case against Microsoft, resulted in the Commission fining Microsoft over €777 million following
nine years of legal action.[137]

2006 EU total expenditure. Agriculture: 46.7% Structural Actions: 30.4% Internal Policies: 8.5%
Administration: 6.3% External Actions: 4.9% Pre-Accession Strategy: 2.1% Compensations: 1.0%
Reserves: 0.1%

In negotiations on the Treaty of Lisbon, French President Nicolas Sarkozy succeeded in removing the words
"free and undistorted competition" from the treaties. However, the requirement is maintained in an annex and it
is unclear whether this will have any practical effect on EU policy.[138]

Budget
Main article: Budget of the European Union

The twenty-seven member state EU had an agreed budget of €120.7 billion for the year 2007 and €864.3 billion
for the period 2007–2013,[139] representing 1.10% and 1.05% of the EU-27's GNI forecast for the respective
periods. By comparison, the United Kingdom's expenditure for 2004 was estimated to be €759 billion, and
France was estimated to have spent €801 billion. In 1960, the budget of the then European Economic
Community was 0.03% of GDP.[140]

In the 2006 budget, the largest single expenditure item was agriculture with around 46.7% of the total budget.
[141]
Next came structural and cohesion funds with approximately 30.4% of the total. [141] Internal policies took up
around 8.5%. Administration accounted for around 6.3%. External actions, the pre-accession strategy,
compensations and reserves brought up the rear with approximately 4.9%, 2.1%, 1% and 0.1% respectively.[141]

Development
Agriculture
Main article: Common Agricultural Policy

The Common Agricultural Policy (CAP) is one of the oldest policies of the European Community, and was one
of its core aims.[142] The policy has the objectives of increasing agricultural production, providing certainty in
food supplies, ensuring a high quality of life for farmers, stabilising markets, and ensuring reasonable prices for
consumers.[143] It was, until recently, operated by a system of subsidies and market intervention. Until the 1990s,
 27
the policy accounted for over 60% of the then European Community's annual budget, and still accounts for
around 35%.

EU farms are supported by the CAP, the largest budgetary expenditure. (Vineyard in Spain)

The policy's price controls and market interventions led to considerable overproduction, resulting in so-called
butter mountains and wine lakes. These were intervention stores of produce bought up by the Community to
maintain minimum price levels. In order to dispose of surplus stores, they were often sold on the world market
at prices considerably below Community guaranteed prices, or farmers were offered subsidies (amounting to the
difference between the Community and world prices) to export their produce outside the Community. This
system has been criticised for under-cutting farmers in the developing world.[144]

The overproduction has also been criticised for encouraging environmentally unfriendly intensive farming
methods.[144] Supporters of CAP say that the economic support which it gives to farmers provides them with a
reasonable standard of living, in what would otherwise be an economically unviable way of life. However, the
EU's small farmers receive only 8% of CAP's available subsidies.[144]

Since the beginning of the 1990s, the CAP has been subject to a series of reforms. Initially these reforms
included the introduction of set-aside in 1988, where a proportion of farm land was deliberately withdrawn from
production, milk quotas (by the McSharry reforms in 1992) and, more recently, the 'de-coupling' (or
disassociation) of the money farmers receive from the EU and the amount they produce (by the Fischler reforms
in 2004). Agriculture expenditure will move away from subsidy payments linked to specific produce, toward
direct payments based on farm size. This is intended to allow the market to dictate production levels, while
maintaining agricultural income levels.[142] One of these reforms entailed the abolition of the EU's sugar regime,
which previously divided the sugar market between member states and certain African-Caribbean nations with a
privileged relationship with the EU.

Energy
Main article: Energy policy of the European Union

EU energy production

46% of total EU primary energy use

Nuclear energy 29.3%

Coal & lignite 21.9%

Gas 19.4%

Renewable energy 14.6%

Oil 13.4%

Other 1.4%

Net imports of energy

54% of total primary EU energy use

Oil & petroleum products 60.2%

Gas 26.4%

Other 13.4%

In 2006, the 27 member states of the EU had a gross inland energy consumption of 1,825 million tonnes of oil
equivalent (toe).[147] Around 46% of the energy consumed was produced within the member states while 54%
was imported.[147] In these statistics, nuclear energy is treated as primary energy produced in the EU, regardless
of the source of the uranium, of which less than 3% is produced in the EU.[148]

The EU has had legislative power in the area of energy policy for most of its existence; this has its roots in the
original European Coal and Steel Community. The introduction of a mandatory and comprehensive European
energy policy was approved at the meeting of the European Council in October 2005, and the first draft policy
was published in January 2007.[149]
 28
The Commission has five key points in its energy policy: increase competition in the internal market,
encourage investment and boost interconnections between electricity grids; diversify energy resources with
better systems to respond to a crisis; establish a new treaty framework for energy co-operation with Russia
while improving relations with energy-rich states in Central Asia[150] and North Africa; use existing energy
supplies more efficiently while increasing use of renewable energy; and finally increase funding for new energy
technologies.[149]

The EU currently imports 82% of its oil, 57% of its gas[151] and 97.48% of its uranium[148] demands. There are
concerns that Europe's dependence on Russian energy is endangering the Union and its member countries. The
EU is attempting to diversify its energy supply.[152]

Infrastructure
Further information: European Commissioner for Transport and European Commissioner for
Enterprise and Industry

The Öresund Bridge between Denmark and Sweden is part of the Trans-European Networks.

The EU is working to improve cross-border infrastructure within the EU, for example through the Trans-
European Networks (TEN). Projects under TEN include the Channel Tunnel, LGV Est, the Fréjus Rail Tunnel,
the Öresund Bridge and the Brenner Base Tunnel. In 2001 it was estimated that by 2010 the network would
cover: 75,200 kilometres (46,700 mi) of roads; 78,000 kilometres (48,000 mi) of railways; 330 airports; 270
maritime harbours; and 210 internal harbours.[153][154]

The developing European transport policies will increase the pressure on the environment in many regions by
the increased transport network. In the pre-2004 EU members, the major problem in transport deals with
congestion and pollution. After the recent enlargement, the new states that joined since 2004 added the problem
of solving accessibility to the transport agenda.[155] The Polish road network in particular was in poor condition:
at Poland's accession to the EU, 4,600 roads needed to be upgraded to EU standards, demanding approximately
€17 billion.[156]

Another infrastructure project is the Galileo positioning system. Galileo is a proposed Global Navigation
Satellite System, to be built by the EU and launched by the European Space Agency (ESA), and is to be
operational by 2010. The Galileo project was launched partly to reduce the EU's dependency on the US-
operated Global Positioning System, but also to give more complete global coverage and allow for far greater
accuracy, given the aged nature of the GPS system.[157] It has been criticised by some due to costs, delays, and
their perception of redundancy given the existence of the GPS system.[158]

Regional development
Further information: Regional policy of the European Union

EU funds finance infrastructure such as the motorway Prague–Berlin (D8/A17) pictured near Lovosice, Czech
Republic

There are substantial economical disparities across the EU. Even corrected for purchasing power, the difference
between the richest and poorest regions (271 NUTS-2 regions of the Nomenclature of Territorial Units for
Statistics) ranged, in 2007, from 26% of the EU27 average in the region of Severozapaden in Bulgaria, to 334%
of the average in Inner London in the United Kingdom. On the high end, Inner London has €83,200 PPP per
capita, Luxembourg €68,500, and Bruxelles-Cap €55,000, while the poorest regions, are Severozapaden with
€6,400 PPP per capita, Nord-Est and Severen tsentralen with €6,600 and Yuzhen tsentralen with €6,800.[159]
Compared to the EU average, the United States GDP per capita is 35% higher and the Japanese GDP per capita
is approximately 15% higher.[160]

There are a number of Structural Funds and Cohesion Funds to support development of underdeveloped regions
of the EU. Such regions are primarily located in the new member states of East-Central Europe.[161] Several
funds provide emergency aid, support for candidate members to transform their country to conform to the EU's
standard (Phare, ISPA, and SAPARD), and support to the former USSR Commonwealth of Independent States
(TACIS). TACIS has now become part of the worldwide EuropeAid programme. The EU Seventh Framework
Programme (FP7) sponsors research conducted by consortia from all EU members to work towards a single
European Research Area.[162]

Environment
Further information: European Commissioner for the Environment and European Climate Change
Programme
 29
The first environmental policy of the European Community was launched in 1972. Since then it has
addressed issues such as acid rain, the thinning of the ozone layer, air quality, noise pollution, waste and water
pollution. The Water Framework Directive is an example of a water policy, aiming for rivers, lakes, ground and
coastal waters to be of "good quality" by 2015. Wildlife is protected through the Natura 2000 programme and
covers 30,000 sites throughout Europe.[163] In 2007, the Polish government sought to build a motorway through
the Rospuda valley, but the Commission has been blocking construction as the valley is a wildlife area covered
by the programme.

The Commission have managed to protect the Rospuda valley in Poland.

The REACH regulation was a piece of EU legislation designed to ensure that 30,000 chemicals in daily use are
tested for their safety.[165] In 2006, toxic waste spill off the coast of Côte d'Ivoire, from a European ship,
prompted the Commission to look into legislation regarding toxic waste. With members such as Spain now
having criminal laws against shipping toxic waste, the Commission proposed to create criminal sentences for
"ecological crimes". Although the Commission's right to propose criminal law was contested, it was confirmed
in this case by the Court of Justice.[166]

In 2007, member states agreed that the EU is to use 20% renewable energy in the future and that is has to
reduce carbon dioxide emissions in 2020 by at least 20% compared to 1990 levels. [167] This includes measures
that in 2020, one-tenth of all cars and trucks in EU 27 should be running on biofuels. This is considered to be
one of the most ambitious moves of an important industrialised region to fight global warming.[168]

At the 2007 United Nations Climate Change Conference, dealing with the successor to the Kyoto Protocol, the
EU has proposed at 50% cut in greenhouse gases by 2050.[169] The EU's attempts to cut its carbon footprint
appear to have also been aided by an expansion of Europe's forests which, between 1990 and 2005, grew 10%
in western Europe and 15% in Eastern Europe. During this period they soaked up 126 million metric tons of
carbon dioxide, equivalent to 11% of EU emissions from human activities.

Education and research

Further information: Educational policies and initiatives of the European Union and Framework Programmes
for Research and Technological Development

Renewable energy is one priority in transnational research activities such as the FP7.

Education and science are areas where the EU's role is limited to supporting national governments. In education,
the policy was mainly developed in the 1980s in programmes supporting exchanges and mobility. The most
visible of these has been the ERASMUS programme, a university exchange programme which began in 1987.
In its first 20 years it has supported international exchange opportunities for well over 1.5 million university and
college students and has become a symbol of European student life.[171]

There are now similar programmes for school pupils and teachers, for trainees in vocational education and
training, and for adult learners in the Lifelong Learning Programme 2007–2013. These programmes are
designed to encourage a wider knowledge of other countries and to spread good practices in the education and
training fields across the EU.[172] Through its support of the Bologna process the EU is supporting comparable
standards and compatible degrees across Europe.

16 EU countries are members of the European Space Agency. (Launch of an Ariane rocket in Guiana)

Scientific development is facilitated through the EU's Framework Programmes, the first of which started in
1984. The aims of EU policy in this area are to co-ordinate and stimulate research. The independent European
Research Council allocates EU funds to European or national research projects.[173] The Seventh Framework
Programme (FP7) deals in a number of areas, for example energy where it aims to develop a diverse mix of
renewable energy for the environment and to reduce dependence on imported fuels.[174]

Since January 2000 the European Commission has set its sights on a more ambitious objective, known as the
European Research Area, and has extensively funded research in a few key areas. This has the support of all
member states, and extends the existing financing structure of the frameworks. It aims to focus on co-
ordination, sharing knowledge, ensuring mobility of researchers around Europe, improving conditions for
researchers and encouraging links with business and industry as well as removing any legal and administrative
barriers.[175]

The EU is involved with six other countries to develop ITER, a fusion reactor which will be built in the EU at
Cadarache. ITER builds on the previous project, Joint European Torus, which is currently the largest nuclear
fusion reactor in the world.[176] The Commission foresees this technology to be generating energy in the EU by
2050.[149] It has observer status within CERN, there are various agreements with ESA and there is collaboration
 30
[177]
with ESO. These organisations are not under the framework of the EU, but membership heavily overlaps
between them.

Demographics
Main article: Demographics of the European Union

Population of the 5 largest cities in the EU

City City limits

(2006)
Density

/km²

(city limits)
Density

/sq mi

(city limits)
Urban area
(2005) LUZ
(2004)

Berlin 3,410,000 3,815 9,880 3,761,000 4,971,331

London 7,512,400 4,761 12,330 9,332,000 11,917,000

Madrid 3,228,359 5,198 13,460 4,990,000 5,804,829

Paris 2,153,600 24,672 63,900 9,928,000 11,089,124

Rome 2,708,395 2,105 5,450 2,867,000 3,457,690

The combined population of all 27 member states has been estimated at 501,259,840 as of January 2010. The
EU's population is 7.3% of the world total, yet the EU covers just 3% of the Earth's land, amounting to a
population density of 113 km2 (44 sq mi) making the EU one of the most densely populated regions of the
world. One third of EU citizens live in cities of over a million people, rising to 80% living in urban areas
generally.[179] The EU is home to more global cities than any other region in the world.[180] It contains 16 cities
with populations of over one million.

Besides many large cities, the EU also includes several densely populated regions that have no single core but
have emerged from the connection of several cites and now encompass large metropolitan areas. The largest are
Rhine-Ruhr having approximately 11.5 million inhabitants (Cologne, Dortmund, Düsseldorf et al.), Randstad
approx. 7 million (Amsterdam, Rotterdam, The Hague, Utrecht et al.), Frankfurt/Rhine-Main approx.
5.8 million (Frankfurt, Wiesbaden et al.), the Flemish diamond approx. 5.5 million (urban area in between
Antwerp, Brussels, Leuven and Ghent), the Upper Silesian Industrial Region approx. 3.5 million (Katowice,
Sosnowiec et al.), and the Öresund Region approx. 2.5 million (Copenhagen, Denmark and Malmö, Sweden).

Languages
Main article: Languages of the European Union

European official languages report (EU-251)

Language Native Speakers Total

English 13% 51% Polish 9% 10%

German 18% 32% Dutch 5% 6%

French 12% 26% Greek 3% 3%

Italian 13% 16% Czech 2% 3%

Spanish 9% 15% Swedish 2% 3%

 31
Hungarian 2% 2% Finnish 1% 1%

Portuguese 2% 2% Lithuanian 1% 1%

Catalan 1% 2% Bulgarian 1% 1%

Slovak 1% 2% Romanian 1% 1%

Danish 1% 1% Slovene 1% 1%

Among the many languages and dialects used in the EU, it has 23 official and working languages: Bulgarian,
Czech, Danish, Dutch, English, Estonian, Finnish, French, German, Greek, Hungarian, Italian, Irish, Latvian,
Lithuanian, Maltese, Polish, Portuguese, Romanian, Slovak, Slovene, Spanish, and Swedish.[184][185] Important
documents, such as legislation, are translated into every official language. The European Parliament provides
translation into all languages for documents and its plenary sessions.[186] Some institutions use only a handful of
languages as internal working languages.[187] Language policy is the responsibility of member states, but EU
institutions promote the learning of other languages.[188][189]

German is the most widely spoken mother tongue (about 88.7 million people as of 2006), followed by English,
Italian and French. English is by far the most spoken foreign language at over half (51%) of the population,
with German and French following. 56% of European citizens are able to engage in a conversation in a
language other than their mother tongue.[190] Most official languages of the EU belong to the Indo-European
language family, except Estonian, Finnish, and Hungarian, which belong to the Uralic language family, and
Maltese, which is an Afroasiatic language. Most EU official languages are written in the Latin alphabet except
Bulgarian, written in Cyrillic, and Greek, written in the Greek alphabet.[191]

Besides the 23 official languages, there are about 150 regional and minority languages, spoken by up to
50 million people.[191] Of these, only the Spanish regional languages (Catalan/Valencian, Galician, and the non-
Indo-European Basque), Scottish Gaelic and Welsh [192] can be used by citizens in communication with the main
European institutions.[193] Although EU programmes can support regional and minority languages, the protection
of linguistic rights is a matter for the individual member states. Though the population of Romani speakers is
triple[194] that of Welsh speakers (despite the Porajmos) and the history of Romani people in Europe is seven
centuries long, their language is not official in any EU state.

Besides the many regional languages, a broad variety of languages from other parts of the world are spoken by
immigrant communities in the member states: Turkish, Maghrebi Arabic, Russian, Urdu, Bengali, Hindi, Tamil,
Ukrainian, Punjabi and Balkan languages are spoken in many parts of the EU. Many older immigrant
communities are bilingual, being fluent in both the local (EU) language and in that of their ancestral
community. Migrant languages have no formal status or recognition in the EU or in the EU countries, although
from 2007 they are eligible for support from the language teaching section of the EU's Lifelong Learning
Programme 2007–2013.[191]

Religion
Main article: Religion in the European Union

Percentage of Europeans in each member state who believe in "a God"[195]

The EU is a secular body with no formal connection with any religion, but Article 17 of the Treaty on the
Functioning of the European Union recognises the "status under national law of churches and religious
associations" as well as that of "philosophical and non-confessional organisations". [196] The preamble to the
Treaty on European Union mentions the "cultural, religious and humanist inheritance of Europe".[196] Discussion
over the draft texts of the European Constitution and later the Treaty of Lisbon included proposals to mention
Christianity or God, or both, in the preamble of the text, but the idea faced opposition and was dropped. [197] This
emphasis on Christianity stems from it being by far the largest religion in Europe as well as a cultural marker
for, and vastly influential on, Europe and Western/European civilization. Other significant religions present in
the EU are Islam and Judaism.[citation needed]

Christians in the EU are divided among followers of Roman Catholicism, numerous Protestant denominations
(especially in northern Europe), and Eastern Orthodox and Eastern Catholic (in south eastern Europe). Other
religions, such as Islam and Judaism, are also represented in the EU population. As of 2009, the EU had an
estimated Muslim population of 13 million,[198] and an estimated Jewish population of over a million.[199]

Eurostat's Eurobarometer opinion polls show that in 2005 the majority of EU citizens (52%) believed in a god,
and that a majority had some form of belief system, with 21% seeing it as important. Many countries have
experienced falling church attendance and membership in recent years.[200] The 2005 Eurobarometer showed
that of the European citizens (of the 25 members at that time), 52% believed in a god, 27% in "some sort of
 32
spirit or life force", and 18% had no form of belief. The countries where the fewest people reported a
religious belief were the Czech Republic (19%) and Estonia (16%).[201]

The most religious countries are Malta (95%; predominantly Roman Catholic), and Cyprus and Romania both
with about 90% of the citizens believing in God (both predominantly Eastern Orthodox). Across the EU, belief
was higher among women, increased with age, those with religious upbringing, those who left school at 15 with
a basic education, and those "positioning themselves on the right of the political scale (57%)."[201]

Culture and sport

Further information: Cultural policies of the European Union and Sport policies of the European Union

Pécs, the Hungarian city is one of the three European Capitals of Culture in 2010.

Policies affecting cultural matters are mainly set by individual member states. Cultural co-operation between
member states has been a concern of the EU since its inclusion as a community competency in the Maastricht
Treaty.[202] Actions taken in the cultural area by the EU include the Culture 2000 7-year programme,[202] the
European Cultural Month event,[203] the Media Plus programme,[204] orchestras such as the European Union
Youth Orchestra[205] and the European Capital of Culture programme – where one or more cities in the EU are
selected for one year to assist the cultural development of that city.[206]

In addition, the EU gives grants to cultural projects (totalling 233 in 2004) and has launched a Web portal
dedicated to Europe and culture, responding to the European Council's expressed desire to see the Commission
and the member states "promote the networking of cultural information to enable all citizens to access European
cultural content by the most advanced technological means".[207]

Sport is mainly the responsibility of individual member states or other international organisations rather than
that of the EU. However, some EU policies have had an impact on sport, such as the free movement of workers
which was at the core of the Bosman ruling, which prohibited national football leagues from imposing quotas
on foreign players with European citizenship. [208] Under the Treaty of Lisbon sports were given a special status
which exempted this sector from many of the EU's economic rules. This followed lobbying by governing
organisations such as the International Olympic Committee and FIFA, due to objections over the applications of
free market principles to sport which led to an increasing gap between rich and poor clubs.[

The South Asian Association for Regional Cooperation (SAARC) is an economic and political organization
of eight countries in Southern Asia. In terms of population, its sphere of influence is the largest of any regional
organization: almost 1.5 billion people, the combined population of its member states. [citation needed] It was
established on December 8, 1985 by Bangladesh, Bhutan, Maldives, Nepal, Pakistan, India and Sri Lanka. In
April 2007, at the Association's 14th summit, Afghanistan became its eighth member.

Contents
[hide]

• 1 History
o 1.1 Secretariat
o 1.2 Criticism
o 1.3 Political issues
o 1.4 Free trade agreement
o 1.5 Dhaka 2005 Summit
• 2 Membership
o 2.1 Current members (alphabetically)
o 2.2 Observers
o 2.3 Future membership
• 3 Secretaries General
• 4 List of SAARC summits
• 5 SAARC Preferential Trading Arrangement
• 6 South Asian Free Trade Area
• 7 See also
• 8 References
• 9 External links

History

In the late 1970s, Bangladeshi President Ziaur Rahman proposed the creation of a trade bloc consisting of South
Asian countries. The idea of regional cooperation in South Asia was again mooted in May 1980. The foreign
secretaries of the seven countries met for the first time in Colombo in April 1981. The Committee of the Whole,
 33
which met in Colombo in August 1981, identified five broad areas for regional cooperation. New areas of
cooperation were added in the following years.

The objectives of the Association as defined in the Charter are to promote the welfare of the people of South
Asia and to improve their quality of life;

• to accelerate economic growth, social progress and cultural development in the region and to provide all
individuals the opportunity to live in dignity and to realize their full potential;
• to promote and strengthen collective self-reliance among the countries of South Asia;
• to contribute to mutual trust, understanding and appreciation of one another's problems;
• to promote active collaboration and mutual assistance in the economic, social, cultural, technical and
scientific fields;
• to strengthen cooperation with other developing countries;
• to strengthen cooperation among themselves in international forums on matters of common interest; and
• to cooperate with international and regional organisations with similar aims and purposes.

The Declaration on South Asian Regional Cooperation was adopted by the Foreign Ministers in 1983 in New
Delhi. During the meeting, the Ministers also launched the Integrated Programme of Action (IPA) in nine
agreed areas, namely, Agriculture; Rural Development; Telecommunications; Meteorology; Health and
Population Activities; Transport; Postal Services; Science and Technology; and Sports, Arts and Culture. The
South Asian Association for Regional Cooperation (SAARC) was established when its Charter was formally
adopted on 8 December 1985 by the Heads of State or Government of Bangladesh, Bhutan, India, Maldives,
Nepal, Pakistan and Sri Lanka.[2]

Afghanistan was added to the regional grouping at the behest of India on 13 November 2005,[3] and became a
member on 3 April 2007.[4] With the addition of Afghanistan, the total number of member states were raised to
eight (8). In April 2006, the United States of America and South Korea made formal requests to be granted
observer status. The European Union has also indicated interest in being given observer status, and made a
formal request for the same to the SAARC Council of Ministers meeting in July 2006. [5][6] On 2 August 2006 the
foreign ministers of the SAARC countries agreed in principle to grant observer status to the US, South Korea
and the European Union.[6] On 4 March 2007, Iran requested observer status.[7] Followed shortly by the entrance
of Mauritius.

Secretariat

The SAARC Secretariat was established in Kathmandu on 16 January 1987 and was inaugurated by Late King
Birendra Bir Bikram Shah of Nepal.

It is headed by a Secretary General appointed by the Council of Ministers from Member Countries in
alphabetical order for a three-year term. He is assisted by the Professional and the General Services Staff, and
also an appropriate number of functional units called Divisions assigned to Directors on deputation from
Member States.[8] The Secretariat coordinates and monitors implementation of activities, prepares for and
services meetings, and serves as a channel of communication between the Association and its Member States as
well as other regional organizations.[8]

The Memorandum of Understanding on the establishment of the Secretariat[8] which was signed by Foreign
Ministers of member countries on 17 November 1986 at Bangalore, India contains various clauses concerning
the role, structure and administration of the SAARC Secretariat as well as the powers of the Secretary-General.

In several recent meetings the heads of state or government of member states of SAARC have taken some
important decisions and bold initiatives to strengthen the organisation and to widen and deepen regional co-
operation.

The SAARC Secretariat and Member States observe 8 December as the SAARC Charter Day1.

Criticism

Not enough is being done to for rapid economic integration of the region. Apart from the fact that the recently
approved south asian university and the creation of new rail lines linking the region, people to people contacts
and connectivity of region needs to be strengthened.

Political issues

SAARC has intentionally laid more stress on "core issues" mentioned above rather than more decisive political
issues like the Kashmir dispute and the Sri Lankan civil war. However, political dialogue is often conducted on
 34
the margins of SAARC meetings. SAARC has also refrained itself from interfering in the internal matters of
its member states. During the 12th and 13th SAARC summits, extreme emphasis was laid upon greater
cooperation between the SAARC members to fight terrorism.

Free trade agreement

Over the years, the SAARC members have expressed their unwillingness on signing a free trade agreement.
Though India has several trade pacts with Maldives, Nepal, Bhutan and Sri Lanka, similar trade agreements
with Pakistan and Bangladesh have been stalled due to political and economic concerns on both sides. India has
been constructing a barrier across its borders with Bangladesh and Pakistan. In 1993, SAARC countries signed
an agreement to gradually lower tariffs within the region, in Dhaka. Eleven years later, at the 12th SAARC
Summit at Islamabad, SAARC countries devised the South Asia Free Trade Agreement which created a
framework for the establishment of a free trade area covering 1.4 billion people. This agreement went into force
on January 1, 2006. Under this agreement, SAARC members will bring their duties down to 20 per cent by
2007.

Dhaka 2005 Summit

The summit accorded observer status to People's Republic of China, Japan, South Korea and United States of
America. The nations also agreed to organize development funds under a single financial institution with a
permanent secretariat, that would cover all SAARC programs and also ranging from social, to infrastructure, to
economic ones.

Membership
Current members (alphabetically) Observers

• Afghanistan • Australia[9]
• Bangladesh • China
• Bhutan • European Union[10]
• India • Iran[11]
• Maldives • Japan[10]
• Nepal • Mauritius [12]
• Pakistan • Myanmar (Burma) [9]
• Sri Lanka • South Korea
• United States

Future membership

• The People's Republic of China has shown its interest in joining SAARC.[13] While Pakistan and
Bangladesh support China's candidature, India is more reluctant about the prospect of Chinese
membership, while Bhutan does not even have diplomatic relations with China.[14] However, during the
2005 Dhaka summit, India agreed on granting observer status to the PRC along with Japan. During the
14th summit, Nepal along with Pakistan and Bangladesh, announced their support for the membership of
China.[15][16][17] China seeks greater involvement in SAARC, however, finds it too early to apply for full
membership. [18]
• Indonesia intends to become an observer as well, and is supported by Sri Lanka.[19]
• Iran, a state with borders to two SAARC members, has traditionally enjoyed strong cultural, economic
and political relationships with Afghanistan, Pakistan, India and Bangladesh and has expressed its desire
to become a member of the South Asian organization. On 22 February 2005, the Foreign Minister of
Iran, Kamal Kharrazi, indicated Iran's interest in joining SAARC by saying that his country could
provide the region with "East-West connectivity".[20] On 3 March 2007, Iran asked to join the SAARC as
an observer. SAARC Secretary-General Lyonpo Chenkyab Dorji responded by saying that Iran's request
for observer status would be taken up during a meeting of ministers of foreign affairs of SAARC
member countries in the 3 April summit in New Delhi.[21][17]
• Russia intends to become an observer as well, and is supported by India.[22][23]
• Myanmar has expressed an interest in joining as a full member. If done so, Myanmar will become the
ninth member in the group. India is currently backing Myanmar.[24][25] Myanmar’s military regime
officially applied for full SAARC membership in May 2008. However, the application is still being
considered and the government is currently restricted to observer status.[26]
• South Africa has participated in meetings.[27]

Secretaries General
Abul Ahsan January 16, 1987 Kant Kishore Bhargava October 17, 1989
to 15 October 1989 to December 31, 1991
 35
Ibrahim Hussain Zaki January 1, 1992 4th Islamabad December 29-31
to December 31, 1993 1988

Yadav Kant Silwal January 1, 1994 5th Malé November 21-23 1990
to December 31, 1995
6th Colombo December 21, 1991
Naeem U. Hasan January 1, 1996
to December 31, 1998 7th Dhaka April 10-11 1993

Nihal Rodrigo January 1, 1999 8th New Delhi May 2-4 1995
to January 10, 2002
9th Malé May 12-14
Q.A.M.A. Rahim January 11, 2002 1997
to February 28, 2005
10th Colombo July 29-31 1998
Lyonpo Chenkyab Dorji March 1, 2005 to
11th Kathmandu January 4-6 2002
February 29, 2008
12th Islamabad January 2-6 2004
Sheel Kant Sharma March 1, 2008 to
present 13th Dhaka November 12-13 2005

[edit] List of SAARC summits 14th New Delhi April 3-4 2007
1st Dhaka December 7-8 1985
15th Colombo August 1-3 2008
2nd Bangalore November 16-17 1986
16th Bhutan Scheduled to held in
3rd Kathmandu November 2-4 1987 2010

SAARC Preferential Trading Arrangement

The Agreement on SAARC Preferential Trading Arrangement (SAPTA)[28] was signed on 11 April 1993 and
entered into force on 7 December 1995, with the desire of the Member States of SAARC (India, Pakistan,
Nepal, Sri Lanka, Bangladesh, Bhutan and the Maldives) to promote and sustain mutual trade and economic
cooperation within the SAARC region through the exchange of concessions.

The establishment of an Inter-Governmental Group (IGG) to formulate an agreement to establish a SAPTA by

1997 was approved in the Sixth Summit of SAARC held in Colombo in December 1991.

The basic principles underlying SAPTA are:

1. overall reciprocity and mutuality of advantages so as to benefit equitably all Contracting States, taking
into account their respective level of economic and industrial development, the pattern of their external
trade, and trade and tariff policies and systems;
2. negotiation of tariff reform step by step, improved and extended in successive stages through periodic
reviews;
3. recognition of the special needs of the Least Developed Contracting States and agreement on concrete
preferential measures in their favour;
4. inclusion of all products, manufactures and commodities in their raw, semi-processed and processed
forms.

So far, four rounds of trade negotiations have been concluded under SAPTA covering over 5000 commodities.

South Asian Free Trade Area

The Agreement on the South Asian Free Trade Area is an agreement reached at the 12th SAARC summit at
Islamabad, capital of Pakistan on 6 January 2004. It creates a framework for the creation of a free trade area
covering 1.4 billion people in India, Pakistan, Nepal, Sri Lanka, Bangladesh, Bhutan and the Maldives.The
seven foreign ministers of the region signed a framework agreement on SAFTA with zero customs duty on the
trade of practically all products in the region by end 2016. The new agreement i.e. SAFTA, came into being on
1 January 2006 and will be operational following the ratification of the agreement by the seven governments.
SAFTA requires the developing countries in South Asia, that is, India, Pakistan and Sri Lanka, to bring their
duties down to 20 percent in the first phase of the two year period ending in 2007. In the final five year phase
ending 2012, the 20 percent duty will be reduced to zero in a series of annual cuts. The least developed nations
in South Asia consisting of Nepal, Bhutan, Bangladesh and Maldives have an additional three years to reduce
tariffs to zero. India and Pakistan have signed but not ratified the treaty.[29].
 36
[1]
ASEAN Free Trade Area (AFTA) is a trade bloc agreement by the Association of Southeast Asian
Nations supporting local manufacturing in all ASEAN countries.

The AFTA agreement was signed on 28 January 1992 in Singapore. When the AFTA agreement was originally
signed, ASEAN had six members, namely, Brunei, Indonesia, Malaysia, Philippines, Singapore and Thailand.
Vietnam joined in 1995, Laos and Myanmar in 1997 and Cambodia in 1999. AFTA now comprises ten
countries of ASEAN. All the four latecomers were required to sign the AFTA agreement in order to join
ASEAN, but were given longer time frames in which to meet AFTA's tariff reduction obligations.

The primary goals of AFTA seek to:

• Increase ASEAN's competitive edge as a production base in the world market through the elimination,
within ASEAN, of tariffs and non-tariff barriers; and
• Attract more foreign direct investment to ASEAN.

The primary mechanism for achieving the goals given above is the Common Effective Preferential Tariff
(CEPT) scheme, which established a schedule for phased initiated in 1992 with the self-described goal to
increase the "region’s competitive advantage as a production base geared for the world market".

Contents
[hide]

• 1 History
• 2 The Common Effective Preferential Tariff (CEPT) scheme
• 3 Rule of Origin
• 4 Administration
• 5 Dispute resolution
• 6 Further trade facilitation efforts
• 7 Membership
• 8 ASEAN Plus Three
• 9 Related free trade areas
• 10 References

History

A proposal to set up a Free Trade Area in Asean was first mooted by the Thai Prime Minister Anand
Panyarachun, which was agreed upon with amendments during the ASEAN Seniors Economic Official Meeting
(AEM) in Kuala Lumpur. In January 1992, the ASEAN members signed the Singapore Declaration at the heart
of which was the creation of AFTA in 15 years. This is a comprehensive program of tariff reduction in the
region, which is to be carried out in phases through the year 2008. This deadline was subsequently moved
forward and AFTA became fully operational on 1 January 2003.

Over the course of several years, the initial program of tariff reductions was broadened and accelerated and
other "AFTA Plus" activities were initiated. This includes efforts to eliminate non-tariff barriers, harmonisation
of customs nomenclature, valuation, and procedures and development of common product certification
standards.

The Common Effective Preferential Tariff (CEPT) scheme

Unlike the EU, AFTA does not apply a common external tariff on imported goods. Each ASEAN member may
impose tariffs on goods entering from outside ASEAN based on its national schedules. However, for goods
originating within ASEAN, ASEAN members are to apply a tariff rate of 0 to 5 percent (the more recent
members of Cambodia, Laos, Myanmar and Vietnam, aka CMLV countries, were given additional time to
implement the reduced tariff rates). This is known as the Common Effective Preferential Tariff (CEPT) scheme.

ASEAN members have the option of excluding products from the CEPT in three cases: 1.) Temporary
exclusions; 2.) Sensitive agricultural products; 3.) General exceptions. Temporary exclusions refer to products
for which tariffs will ultimately be lowered to 0-5%, but which are being protected temporarily by a delay in
tariff reductions.

Sensitive agricultural products include commodities such as rice. ASEAN members have until 2010 to reduce
the tariff levels to 0-5%.

General exceptions refer to products which an ASEAN member deems necessary for the protection of national
security, public morals, the protection of human, animal or plant life and health, and protection of articles of
 37
artistic, historic, or archaeological value. ASEAN members have agreed to enact zero tariff rates on virtually
all imports by 2010 for the original signatories, and 2015 for the CMLV countries.

Rule of Origin

The CEPT only applies to goods originating within ASEAN. The general rule is that local ASEAN content must
be at least 40% of the FOB value of the good. The local ASEAN content can be cumulative, that is, the value of
inputs from various ASEAN members can be combined to meet the 40% requirement. The following formula is
applied:

Raw material cost + Direct labor cost + Direct overhead cost + Profit + Inland transport cost x 100% FOB value

However, for certain products, special rules apply:

• Change in Chapter Rule for Wheat Flour;

• Change of Tariff Sub-Heading for Wood-Based Products;
• Change in Tariff Classification for Certain Aluminum and Articles thereof.

The exporter must obtain a “Form D” certification from its national government attesting that the good has met
the 40% requirement. The Form D must presented to the customs authority of the importing government to
qualify for the CEPT rate. Difficulties have sometimes arisen regarding the evidentiary proof to support the
claim, as well how ASEAN national customs authorities can verify Form D submissions. These difficulties arise
because each ASEAN national customs authority interprets and implements the Form D requirements without
much coordination.

Administration

Administration of AFTA is handled by the national customs and trade authorities in each ASEAN member. The
ASEAN Secretariat has authority to monitor and ensure compliance with AFTA measures, but has no legal
authority to enforce compliance. This has led to inconsistent rulings by ASEAN national authorities. The
ASEAN Charter is intended to bolster the ASEAN Secretariat’s ability to ensure consistent application of
AFTA measures.

ASEAN national authorities have also been traditionally reluctant to share or cede sovereignty to authorities
from other ASEAN members (although ASEAN trade ministries routinely make cross-border visits to conduct
on-site inspections in anti-dumping investigations). Unlike the EU or NAFTA, joint teams to ensure compliance
and investigate non-compliance have not been widely used. Instead, ASEAN national authorities must rely on
the review and analysis of other ASEAN national authorities to determine if AFTA measures such as rule of
origin are being followed. Disagreements may result between the national authorities. Again, the ASEAN
Secretariat may help mediate a dispute but has no legal authority to resolve it.

ASEAN has attempted to improve customs coordination through the implementation of the ASEAN Single
Window project. The ASEAN Single Window would allow importers to submit all information related to the
transaction to be entered electronically once. This information would then be shared with all other ASEAN
national customs authorities.

Dispute resolution

Although these ASEAN national customs and trade authorities coordinate among themselves, disputes can
arise. The ASEAN Secretariat has no legal authority to resolve such disputes, so disputes are resolved
bilaterally through informal means or through dispute resolution.

An ASEAN Protocol on Enhanced Dispute Settlement Mechanism governs formal dispute resolution in AFTA
and other aspects of ASEAN. ASEAN members may seek mediation and good offices consultations. If these
efforts are ineffective, they may ask SEOM to establish panel of independent arbitrators to review the dispute.
Panel decisions can be appealed to an appellate body formed by the ASEAN Economic Community Council.

The Protocol has almost never been invoked because of the role of SEOM in the dispute resolution process.
SEOM decisions require consensus among all ASEAN members, and since both the aggrieved party and the
alleged transgressor are both participating in SEOM, such consensus cannot be achieved. This discourages
ASEAN members from invoking the Protocol, and often they seek dispute resolution in other fora such as the
WTO or even the International Court of Justice. This can also be frustrating for companies affected by an
AFTA dispute, as they have no rights to invoke dispute resolution yet their home ASEAN government may not
be willing to invoke the Protocol. The ASEAN Secretary General has listed dispute resolution as requiring
necessary reform for proper administration of AFTA and the AEC.
 38
Further trade facilitation efforts

Efforts to close the development gap and expand trade among members of ASEAN are key points of policy
discussion. According to a 2008 research brief published by the World Bank as part of its Trade Costs and
Facilitation Project,[2] ASEAN members have the potential to reap significant benefits from investments in
further trade facilitation reform, due to the comprehensive tariff reform already realised through the ASEAN
Free Trade Agreement.

This new analysis suggests examining two key areas, among others: port facilities and competitiveness in the
Internet services sector. Reform in these areas, the report states, could expand ASEAN trade by up to 7.5
percent ($22 billion) and 5.7 percent ($17 billion), respectively. By contrast, cutting applied tariffs in all
ASEAN members to the regional average in Southeast Asia would increase intra-regional trade by about 2
percent ($6.3 billion).[3]

Membership

Countries that agree to eliminate tariffs among themselves:

• Brunei • Thailand
• Indonesia • Myanmar
• Malaysia • Cambodia
• Philippines • Laos
• Singapore • Vietnam

Regular Observers

• Papua New Guinea

• East Timor

The most recent ASEAN meeting was observed also by :

• People's Republic of China • India

• Japan • Australia
• South Korea • New Zealand

ASEAN Plus Three

See also: Asian Monetary Unit

Members of the ASEAN Plus Three

ASEAN Plus Three is a forum that functions as a coordinator of cooperation between Association of Southeast
Asian Nations and the three East Asian nations of China, Japan, and South Korea.

The first leaders' meeting was held in 1997 and the group's significance and importance was strengthened by the
Asian Financial Crisis. The grouping was institutionalised by 1999 [4].

ASEAN Plus Three, in establishing the Chiang Mai Initiative, has been credited as forming the basis for
financial stability in Asia [5], the lack of such stability being a contributing factor to the Asian Financial Crisis.
The Asian Currency Unit (ACU) is a proposed weighted index of currencies for ASEAN+3. The ACU was
inspired by the now defunct European Currency Unit, replaced by the Euro. The Asian Currency Unit's purpose
is to help stabilize the region's financial markets. The ACU as it is proposed is a currency basket and not a real
currency, i.e., a weighted index of East Asian currencies that will function as a benchmark for regional currency
movements.[6][7]

The Asian Development Bank is currently reviewing different options concerning the technical aspects related
to the ACU calculation, including the nature of the basket, the choice of fixed weights vs. fixed units, the
selection of currencies to be included in the basket, the choice of weights, the criteria for their periodical
revision, and other aspects as well. The Asian Development Bank was to announce the details of the ACU in
March 2006 or later.[8] However external pressures delayed this announcement although the concept was still
being studied in detail[9]. A panel discussion in February 2007 cited technical and political obstacles as having
prevented the project from advancing[10]. The unit, limited to ASEAN+3, was still said to be moving forward by
mid-July 2007
 39
Related free trade areas

• ASEAN – Australia – New Zealand Free Trade Area (AANZFTA) is a free trade area between ASEAN
and ANZCERTA, signed on 27 February 2009[12] and coming into effect on 1 January 2010[13]. Details of
the AANZFTA agreement are available online.[14].
• ASEAN–China Free Trade Area (ACFTA), in effect as of 1 January 2010[15]
• ASEAN–India Free Trade Area (AIFTA), in effect as of 1 January 2010[15]
• ASEAN–Japan Comprehensive Economic Partnership (AJCEP)
• ASEAN–Korea Free Trade Area (AKFTA), in effect as of 1 January 2010[15]