EUROPEAN UNION

Level of Integration

The European Union (EU) is a unique economic and political union between 27 European
countries.

As an Economic Union:
The first steps were to foster economic cooperation: the idea being that countries that
trade with one another become economically interdependent and so more likely to avoid conflict.
What began as a purely economic union has evolved into an organization spanning many
different policy areas, from climate, environment and health to external relations and security,
justice and migration.

Every action taken by the EU is founded on treaties that have been approved voluntarily
and democratically by all EU countries. The treaties lay down the objectives of the European
Union and set out the rules for how the EU institutions operate on how decisions are made and
on the relationship between the EU and its Member States.

Thanks to the abolition of border controls between EU countries, people can travel freely
throughout most of the continent. And it has become much easier to live and work in another
country in Europe. All EU citizens have the right and freedom to choose in which EU country
they want to study, work or retire. Every EU country must treat EU citizens in exactly the same
way as its own citizens when it comes to matters of employment, social security and tax.

The EU’s main economic engine is the single market. It enables most goods, services,
money and people to move freely. The EU aims to develop this huge resource to other areas like
energy, knowledge and capital markets to ensure that Europeans can draw the maximum benefit
from it.
In certain specific cases, not all Member States participate in all areas of EU policy.

For example, while the euro is the single currency of the EU as a whole, the euro area
currently comprises only 19 Member States, while Denmark has an opt-out and the remaining
countries do not yet meet the criteria for joining. 22 Member States are members of the
Schengen area, which enables passport-free movement, with five maintaining their own border
controls.

As a Political Union:
 The EU is governed by the principle of representative democracy, with citizens directly
represented at EU level in the European Parliament and Member States represented in the
European Council and the Council of the EU.
The EU remains focused on making its governing institutions more transparent and democratic.
Decisions are taken as openly as possible and as closely as possible to the citizen. More powers
have been given to the directly elected European Parliament, while national parliaments play a
greater role, working alongside the European institutions.

European citizens are encouraged to contribute to the democratic life of the EU by giving
their views on EU policies during their development or by suggesting improvements to existing
laws and policies. The European Citizens’ Initiative empowers citizens to have a greater say on
EU policies that affect their lives. Citizens can also submit complaints and enquiries concerning
the application of EU law.

The EU is based on the rule of law. Everything the EU does is founded on treaties, which
are voluntarily and democratically agreed by its member countries. Law and justice are upheld
by an independent judiciary. The EU countries have given final jurisdiction in matters of EU law
to the European Court of Justice, whose judgments must be respected by all.

Imports

In 2021, the top 6 EU import products were computer, electronic & optical products (14
% of total imports), crude petroleum & natural gas (12 %), chemicals & chemical products (8
%), machinery & equipment, electrical equipment and basic metals (all three 6 %).

Exports

In 2021, the top 5 EU export products were machinery and equipment (12.9 % of total
exports), pharmaceutical products (10.7 %), motor vehicles (10.3 %), chemical products (9.1 %)
and computer, electronic and optical products (7.9 %).

European Countries
Austria, Belgium, Bulgaria, Croatia, Republic of Cyprus, Czech Republic, Denmark,
Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania,
Luxembourg, Malta, Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain and
Sweden.
Brief background/Short History

The EU traces its roots to the European Coal and Steel Community, which was founded in
1950 and had just six members: Belgium, France, Germany, Italy, Luxembourg, and the
Netherlands. It became the European Economic Community in 1957 under the Treaty of Rome
and subsequently was renamed the European Community (EC). This agreement served to deepen
the integration of the members nations' foreign, security, and international affairs policies. EC
was initially focused on a common agricultural policy and elimination of custom barriers. The
EU was created by the Maastricht Treaty on November 1, 1993, replacing the EC with the
European Union. The treaty was designed to enhance European political and economic
integration by creating a single currency (the euro), a unified foreign and security policy, and
common citizenship rights and by advancing cooperation in the areas of immigration, asylum,
and judicial affairs.

Reasons in forming the Trading Bloc

1. The treaty was designed to enhance European political and economic integration by
creating a single currency (the euro), a unified foreign and security policy, and common
citizenship rights and by advancing cooperation in the areas of immigration, asylum, and
judicial affairs. The EU was awarded the Nobel Prize for Peace in 2012, in recognition of
the organization’s efforts to promote peace and democracy in Europe.

2. The treaty establishing the EEC required members to eliminate or revise important
national laws and regulations. In particular, it fundamentally reformed tariff and trade
policy by abolishing all internal tariffs by July 1968. It also required that governments
eliminate national regulations favoring domestic industries and cooperate in areas in
which they traditionally had acted independently, such as international trade (i.e., trade
with countries outside the EEC).

3. The EEC was designed to help break down trade barriers between countries in Europe,
protect from private trade agreements that could diminish competition, and establish
common agricultural and trade agreements and standards. The countries that comprised
the EEC included Ireland, the United Kingdom, Denmark, the Netherlands, Belgium,
Luxembourg, France, West Germany (and later East), Italy, Portugal, Spain and Greece.

Trade of Agreement
1. EU-Australia Trade Agreement
 - The EU is Australia's second-biggest trade partner. Bilateral trade in goods
between the two partners has risen steadily in recent years, reaching almost €48bn
in 2017. Bilateral trade in services added an additional €27bn.
- Some objectives/purpose of this agreement are as follows:

a. Removing barriers and helping EU firms – especially smaller ones – to

export more
b. Putting European companies exporting to or doing business in Australia
on an equal footing with those from countries that have signed up to the
Trans-Pacific Partnership or other trade agreements with Australia
c. Ambitious provisions on trade and sustainable development, showing a
shared commitment to labor rights and environmental protection
(including climate change) in trade
d. Protecting distinctive regional EU food and drink products from imitations
in Australia
2. EU-Canada Comprehensive Economic and Trade Agreement (CETA)
- The EU-Canada Comprehensive Economic and Trade Agreement (CETA) is a
progressive trade agreement between the EU and Canada. It entered into force
provisionally in 2017, meaning that most of the agreement now applies.
- Following are some benefits of CETA :

a. It eliminates duties on 99% of all tariff lines, of which 98% were scrapped
when it provisionally entered into force;
b. it defends the EU’s Geographical Indications, and;
c. it improves and secures EU companies’ access to the Canadian services
market
3. EU-New Zealand Trade Agreement
- The European Union has launched negotiations for a comprehensive and
ambitious trade agreement with New Zealand.
- The trade negotiations aim to:

a. reduce existing barriers to trade in goods and services

b. make sure that European companies compete on a level playing field with
businesses from countries that already have a trade agreement with New
Zealand
c. promote smart, sustainable and inclusive growth
References:

Sraders, Anne. “What Is the European Union? Its Purpose, History and How It Looks in 2018.”
TheStreet, TheStreet, 23 Aug. 2018, https://www.thestreet.com/politics/what-is-european-union-
14690672.

Main goods in extra-EU exports - Statistics Explainedhttps://ec.europa.eu › statistics-explained ›

index.php › M…

Main goods in extra-EU imports - Statistics Explainedhttps://ec.europa.eu › statistics-explained ›

index.php › M…

https://op.europa.eu/webpub/com/eu-what-it-
is/en/#:~:text=1%20The%20European%20Union%20in,union%20between%2027%20European
%20countries.
https://policy.trade.ec.europa.eu/eu-trade-relationships-country-and-region/negotiations-and-
agreements_en