European Union

Submitted To: Submitted By:

Prof. Alka Akash Aggarwal
Maurya Ankit Gupta
Ankur Talwar
 ABOUT EUROPEAN UNION
• The European Union (EU) is an economic and political union of 27 member states,
located primarily in Europe.
• The EU was established by the Treaty of Maastricht on 1 November 1993.
• The EU combined generates an estimated 28% share (€ 11.955 trillion in 2010) of
the nominal gross world product and about 21% of the PPP gross world product.
• The EU has developed a single market through a standardized system of laws which
apply in all member states, ensuring the free movement of people, goods, services,
and capital.
• It maintains common policies on trade and the member states have adopted a
common currency, the EURO, constituting the Eurozone.
• Largest economic body in the world.
• World’s most successful model for advancing peace and democracy.
 GROSS DOMESTIC PRODUCT
• The gross domestic product (GDP) or gross domestic income (GDI) is a basic measure of a country's overall
economic performance. It is the market value of all final goods and services made within the borders of a country
in a year.

GDP (purchasing power parity):

GDP - real growth rate:
€ 11.052 trillion (2010)
1.7% (2010 )
€ 10.851 trillion (2009)
€ 11.3344 trillion (2008)

GDP - composition by sector

GDP - per capita (PPP)
Agriculture : 1.8%
€24420 (2010)
Industries : 25.2%
€ 24050 (2009)
Services : 72.9%
€ 25162 (2008)

GDP (1 EUR = .74227 USD)

€ 15.9 trillion

Source : https://www.cia.gov/library/publications/the-world-factbook/geos/ee.html
 Evolution
• EU began shortly after World War II
• France, West Germany, Belgium, Luxembourg, the Netherlands and Italy were the
founding countries of EU forming ECSC in 1952.
• In 1973 Denmark, Ireland and UK joined followed by Greece in 1981, Spain with
Portugal in 1986, East Germany as part of newly united Germany in 1990.
• In 1986 EU flag began to be used after the creation of open borders without
passport in 1985.
• In 1995 Austria, Sweden, and Finland joined
• In 2002, euro notes and coins replaced national currencies in member states.
• 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.
• On 1 January 2007, Romania and Bulgaria became the EU's newest members.

Source:- Europa (http://europa.eu/abc/history/1980-1989/index_en.htm)

 Important Institution
• European Council
• The European Commission
• The European Parliament
• The Council of European Union
• The Court Of Justice of European Union
• European Court of Justice
• European Central Bank
 Eurozone
• The euro zone currently consists of Austria, Belgium,
Cyprus, Estonia, Finland, France, Germany, Greece,
Ireland, Italy, Luxemburg, Malta, The Netherland,
Portugal, Slovakia, Slovenia and Spain.
• Seven State will Join when they fulfill the strict
entrance requirement. The countries are Bulgaria,
The Czech Republic, Hungary, Latvia, Lithuania,
Poland, Romania,
• Three Member i.e. Sweden, Denmark and UK have an
opt out provision
 European Union – India FTA

1. In 2004 India became one of the EU's "strategic partners". Since 2005, the EU-India
Joint Action Plan, revised in 2008, aims at realizing the full potential of this
partnership in key areas of interest to India and the EU.

2. The parameters for an ambitious FTA were set out in the report of the EU-India High
Level Trade Group.

3. Negotiations for such FTA were launched in June 2007 and the next round will be in
Brussels on 7-8 April

4. To assist India in continuing its efforts to better integrate into the world economy with
a view to further enhancing bilateral trade and investment ties, the EU is providing
trade related technical assistance to India.

Source : http://trade.ec.europa.eu/doclib/docs/2007/june/tradoc_135101.pdf
 European Union – India FTA
Benefits
1. Relatively easy to negotiate

2. Potential for 30% increase in each way flows of bilateral FDI as a direct
result of signing an FTA

3. Potential for economic gains for both sides from deep integration

4. Potential for Regulatory Convergence

Source : http://trade.ec.europa.eu/doclib/docs/2007/june/tradoc_135101.pdf
 European Union – India FTA
Costs
1. Trade diversion

2. Structural and policy impediments in the Indian economy which may limit the
gains from deep integration

3. Anti-dumping policy could undermine the benefits of a FTA

Source : http://trade.ec.europa.eu/doclib/docs/2007/june/tradoc_135101.pdf
 Leading Client and Supplier Countries of the EU27 in Merchandise Trade (value %)

(2010, excluding intra-EU trade)

The Major EU Import Partners The Major EU Export Partners The Major EU Trader Partners

EU Imports
Rank. Mio euro % world Rank. EU Exports to Mio euro % world Rank. Imports+Exports Mio euro % world
from

                       

  Extra EU27: 1,492,175 100.0   Extra EU27: 1,348,509 100.0   Extra EU27: 2,840,684 100.0

                       

1 China 281,996 18.9 1 USA 242,353 18.0 1 USA 411,649 14.5

2 USA 169,297 11.3 2 China 113,111 8.4 2 China 395,106 13.9

3 Russia 154,909 10.4 3 Switzerland 105,432 7.8 3 Russia 241,424 8.5

4 Switzerland 84,123 5.6 4 Russia 86,515 6.4 4 Switzerland 189,556 6.7

5 Norway 79,084 5.3 5 Turkey 61,171 4.5 5 Norway 120,906 4.3

6 Japan 64,845 4.3 6 Japan 43,709 3.2 6 Japan 108,554 3.8

7 Turkey 42,014 2.8 7 Norway 41,822 3.1 7 Turkey 103,185 3.6

8 South Korea 38,602 2.6 8 India 34,793 2.6 8 India 67,784 2.4

9 India 32,991 2.2 9 Brazil 31,277 2.3 9 South Korea 66,584 2.3

10 Brazil 32,290 2.2 10 South Korea 27,981 2.1 10 Brazil 63,566 2.2
 Leading Exporters and Importers of Merchandise Trade in the World (2009)
including EU27 Member States and intra-EU Trade

The Major Importers The Major Exporters The Major Trader Partners

Rank. Imports billion € % World Rank. Exports billion € % World Rank. Imp.+Exp. billion € % World

                       
  World 9,067 100.0   World 8,934 100.0   World 18,001 100.0
         
  EU27 3,299 36.4   EU27 3,267 36.6   EU27 6,567 36.5
                       
1 USA 1,128.6 12.45 1 China 885.4 9.91 1 USA 1,873.0 10.40

2 China 682.1 7.52 2 Germany 799.1 8.94 2 China 1,567.5 8.71

3 Germany 663.3 7.31 3 USA 744.4 8.33 3 Germany 1,462.4 8.12

4 France 400.0 4.41 4 Japan 390.2 4.37 4 Japan 772.7 4.29

5 Japan 382.5 4.22 5 Netherlands 356.1 3.99 5 France 745.9 4.14

6 Utd. Kingdom 342.9 3.78 6 France 345.9 3.87 6 Netherlands 672.9 3.74

7 Netherlands 316.8 3.49 7 Italy 288.2 3.23 7 Utd. Kingdom 594.8 3.30

8 Italy 292.1 3.22 8 Belgium 264.6 2.96 8 Italy 580.3 3.22

9 Belgium 251.7 2.78 9 Utd. Kingdom 251.9 2.82 9 Belgium 516.3 2.87

10 Canada 250.7 2.76 10 South Korea 235.2 2.63 10 South Korea 481.4 2.67
Developing Countries Market
Share in EU Imports
EU imports from developing
Countries
Import :: Region-wise all countries
Values in US$ Million
Export: Region-wise all countries
Values in US$ Million
Eurostat - http://epp.eurostat.ec.europa.eu/cache/ITY_PUBLIC/6-08122010-AP/EN/6-08122010-AP-EN.PDF
Eurostat - http://epp.eurostat.ec.europa.eu/cache/ITY_PUBLIC/6-08122010-AP/EN/6-08122010-AP-EN.PDF
 Trade with India

Indian imports from

EU constitute 2.6%
and export constitute
1.8% of its total import
and export.

India currently accounts

for 1.2% of world’s
trade.

Source: European Commission (http://trade.ec.europa.eu/doclib/docs/2006/september/tradoc_113390.pdf)

 Trade with India
Merchandise

The Expected trade between India and European Union in Merchandise is expected to
reach $251 Billion by 2015

Source: European Commission (http://trade.ec.europa.eu/doclib/docs/2006/september/tradoc_113390.pdf)

 Trade with India
Services

The Expected trade between India and European Union in Services is expected to reach
$321 Billion by 2015.

Source: European Commission (http://trade.ec.europa.eu/doclib/docs/2006/september/tradoc_113390.pdf)

 International Trade

Agriculture:
Total trade in agriculture amounted to €153 Billion

Fisheries:
EU imported €16 billion worth of fish and fishery
products and exported €2.7 billion worth of fisheries
goods

Services:
In 2007, services contributed 71.7 % of the gross value
added within the EU, although the share of services in
total trade (goods and services) has remained fairly
stable at around 25 % to 27 % since 2001
 International Trade
Industrial Goods
Automotive:
EU automotives exports in 2009: €88 billion
EU automotive imports in 2009: €42 billion
Biggest markets: USA, China, Switzerland, Russia, Turkey

Chemicals:
EU chemicals exports in 2009: €118 billion
EU chemicals imports in 2009: €75 billion
Biggest markets : US, Canada, Switzerland, Asia
(China, India, Japan and ASEAN countries)

Aviation:
EU civil aviation exports in 2009 (est): €45.7billion
EU civil aviation imports in 2009 (est): €32,2 billion
Biggest markets : USA, China, India, Brazil.
 International Trade
Industrial Goods
Pharmaceuticals:
EU pharmaceutical exports in 2009: €77.5 billion
EU pharmaceutical imports in 2009: €42.5 billion
Biggest markets: US, Switzerland, Russia, Canada, Japan

Steel:
EU steel exports in 2009: €28 billion
EU steel imports in 2009: €13 billion
Biggest markets : Turkey, Algeria, USA, Switzerland,
India.

Textile and Footwear:

EU textile exports in 2009: €35.1 billion
EU textile imports in 2009: €122.4 billion
Biggest markets : Switzerland, Russia, USA, Turkey and
Tunisia, Japan
 International Trade Partners
USA
EU-US economic cooperation Trade in goods
1. EU good exports to the US in
2009: €204.4 billion.
The EU and the US enjoy the most
integrated economic relationship in the 2. EU goods imports from the US in
world, illustrated by unrivalled levels of 2009: €159.8 billion
mutual investment stocks, reaching
over €2.1 trillion. Total US investment
in the EU is three times higher than in
all of Asia and EU investment in the
US is around eight times the amount Trade in services
1.EU services exports to the US
of EU investment in India and China
2009: €119.4 billion
together. Investments are thus the real
driver of the transatlantic relationship, 2. EU services imports from the US
contributing to growth and jobs on both in 2009: €127.0 billion
sides of the Atlantic.
 International Trade Partners
China
High Level Economic and
Trade Dialogue
The EU-China High Level Economic
and Trade Dialogue was launched in
Beijing in April 2008. The HED
strengthens the dialogue between the
European Commission and the State
Council of China. It deals with issues
of strategic importance to EU-China
trade and economic relations and
provides impetus to progress
concretely in sectoral dialogues.
Trade in goods
1. EU goods exports to China
2010: €113.1 billion which includes
machinery & transport equipment.
2. EU goods imports from China
2010: €281.9 billion which includes
machinery & transport equipment
Trade in services
1.EU services exports to China
2009: €18 billion
2. EU services imports from China
2009: €13 billion
 International Trade Partners
Russia
The Partnership and
Cooperation Agreement
The PCA has been the framework of the
EU-Russia relationship for more than a
decade. It was signed in 1994 and entered
into force on 1 December 1997. The
agreement regulates the political and
economic relations between the EU and
Russia and is the legal basis for the EU's
bilateral trade and investment relations with
Russia. One of its main objectives is the
promotion of trade and investment as well
as the development of harmonious
economic relations between the parties.
Trade in goods
1. EU good exports to Russia 2009:
€65.6 billion which includes
manufactured goodsand live
animals
2. EU goods imports from Russia
2009: €115 billion which includes
energy and mineral fuels products
Trade in services
1.EU services exports to Russia
2009: €18.2 billion
2. EU services imports from Russia
2009: €10.8 billion
 European Union and WTO

Through the WTO, the EU seeks to:

• Ensure new markets for European companies.

• Observe the rules and make sure others also play by the rules
• Promote sustainable development in trade

1.The Everything But Arms initiative – where all imports to the EU from the world's
poorest countries are duty- and quota-free, with the exception of armaments.

2. The special incentive arrangement for sustainable development and good

governance, known as GSP+. This offers additional tariff reductions to support
vulnerable developing countries in their ratification and implementation of specified
international conventions in the fields of human rights, core labour standards,
sustainable development and good governance.

3. The work of the Trade and Environment Committee 

 European Union and WTO

WTO does :

1.Multilateral negotiations

2.Resolving differences between States

3.Setting the legal ground-rules for trade in the form of Agreements

4.Monitoring Member's trade policy

 Regulations for Trade

1. Trade Barriers - In the last decade dozens of companies or industries have

used the TBR to tackle problems in export markets, as well as unfair foreign
trade practices that cause injury within the EU internal market.

2. IPR - Because European competitiveness builds on the innovation and

value added to products by high levels of creativity, the protection and
enforcement of intellectual property go to the heart of the EU's ability to
compete in the global economy.

3. Anti-dumping - The European Commission is responsible for investigating

allegations of dumping by exporting producers in non-EU countries. It
usually opens an investigation after receiving a complaint from the
Community producers of the product concerned, but it can also do so on its
own initiative.
 Recent News Articles
1. The European Union and India have reached an agreement on generic
drug shipments, EU Trade Commissioner Karel De Gucht said Wednesday,
days after India faced off with one of its leading trade partners

2. Honey industry is facing ban on honey export imposed by European

Union...as a result of it, the honey prices in the country are likely to crash
and vulnerable beekeepers will lose their sustainable livelihood, as they will
be forced to abandon beekeeping which will be a major setback to the
beekeeping industry in India.

3. Leaders of India and the European Union (EU) on Friday welcomed the
agreement on reform in the International Monetary Fund (IMF) reached at
Seoul, which they hoped would strengthen the legitimacy of the IMF and
increase the involvement of emerging economies in global economic
governance.
THANK
YOU