EU and Foreign Trade

How does globalisation affect the EU?

IMPLICATIONS• Opportunities for growth, but disruptive effects

• Need for global governance -> multilateral rules and institutions to ensure level playing field and better distribution of benefits

• Need to reinforce the competitive position of the EU economy

GLOBALISATIONGLOBALISATIONTECHNOLOGICAL TRADE

DEVELOPMENTS OPENING

A few facts about world trade

0

2.000

4.000

6.000

8.000

10.000

12.000

14.000

2000 2005

Evolution of world trade : 2000-2005(world trade = exports + imports, except intra- EU trade)

Sources: Eurostat, OMC

Bn €

World PVD EU

The EU in world trade19% of world trade, 17.5% world trade in goods, 26% world trade in services

First exporterSecond largest

importer

Foreign direct investment: EU-25

a major source of the world’s FDI

(€152.5 billion) and host of the

world’s FDI (€ 69.8 billion) in 2005

A MAJORA MAJOR

TRADING POWERTRADING POWER

The EU in world trade

A A MAJORMAJOR

TRADING TRADING POWERPOWER

Others49,4%

China8,9%

Japan7,0%

United States17,2%

EU2517,5%

SHARE IN WORLD TRADE IN GOODS (2005)

EU2526,0%

United States18,4%

Japan6,9%

China3,8%

Others44,9%

SHARE IN WORLD TRADE IN SERVICES (2005)

Source: Eurostat

NAFTA 292

The EU in world tradeEU-25 Trade in goods: Exports by region (2005, billion euro)

Andean4.5

MERCOSUR23.4

EFTA119

ACP 30.8

CIS 80.7

China & Hong Kong

72.2

Japan &

Korea63.7

ASEAN45

Australia & New Zealand 23.8

GCC6 50.4

MED10

101.7

SAARC27.1

EU Foreign Direct Investments by region in 20042. The EU in world trade

77

.1

18

4.3

USA

38

.1

5.1

Canada

54

.1

12

6.3

EU25

23

.9

5.6

EFTA

2.8 1

6.4

EU10

9.4

7.7

Russia

6.2

3.9

Korea

1.8 1

3.3

Mexico

9.2

0.8

Candidates

5.9

2.8

Medit. Countries*

48

.7

1.5

China

6.3

24

.9

Japan

-9.7

-31

.7

Other L. America

4.3

1.8

India

20

.6

10

.9

Asean

18

.4

7.9

Mercosur

11

.5

1.9

Sub-Saharan Africa

36

.2

13

.8

Australia & New-Zealand

Outflows Inflows

(Billions of Euros)

World FDI Flows in 2004

The EU in world trade

30,028,1

10,2

5,0

0,0

5,0

10,0

15,0

20,0

25,0

30,0

35,0

EU25 United States Japan China

Share of GDP in world GDP (2005)share = GDPi / GDPw%

Source: World Bank

The EU in world trade

18,2

20,3

56,4

18,2

EU25

Japan

China

USA

Degree of insertion in world economy (2005)RATIO Total Trade = (Imports+Exports, excl. Energy)/GDP

Sources: Eurostat, World Bank

The EU in world tradeEU Imports from

Developing

Countries

(Billion euro)

0

100

200

300

400

500

600

1999 2000 2001 2002 2003 2004 2005

Manuf. Products Agr. Prod. Energy Other

Source: Eurostat

EU Imports from Least Developed Countries(Billion euro)

0

5

10

15

20

1999 2000 2001 2002 2003 2004 2005

Manuf. Products Agr. Prod. Energy Other

EU Trade policy - basic features

Being the leading trade region

Strong interest in:

Open markets

Clear regulatory frameworks

Responsibility to:

EU citizens

Rest of the World

Need to reinforce EU

competitiveness on world

markets