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European Union

Tatevik Zohrabyan

Agribusiness Teaching Center

International Trade

Fall 2002

European Union (EU)


This paper is about the EU, its major policies, the key objectives,
legislations, instruments for implementing those policies, who the
members are, and the institutions involved in the implementation of the
trade goals.

Key word: European Union; Mission of the EU.


The establishment of the EU intended to work toward common goals of
European countries. This free trade zone or economic community was and
is very successful which seeks special purposes such as political
dialogue, free trade and freedom of movement, economic, financial, and
cultural cooperation. Special attention was focused on the trade laws,
regulations, and other issues (Kotler, 1999, p. 371).

The key objectives are to keep market open, ensure fair trade, enforce
the legislation objectively and transparently, ensure trade partners
respect WTO legislation, and promote improvements to the system
(European Union). The EU provides sovereignty to its Members to act as
independent ones on behalf of the EU or in other words to welfare and
interest of the Union as a whole (European Union).

The integration of the EU after 2nd World War enabled the EU is to raise
standards of living, build an internal market, launch the common
currency - euro, strengthen the Union’s voice in the world. To realize
these goals the EU has been implementing several trade defense

Anti – dumping policy

Anti – subsidy policy

Regulation on trade barriers

Protective measures.

The EU even uses a common currency, the euro monetary system which tend
to make the trade zone more effective and compatible in the
international market (European Union). The EU has such a structure that
there are 5 institutions and each of them is responsible for a
respective objective (European Union).

Today the EU is one of the influential and largest trade blocs or single
markets that includes 15 member countries. Those 15 member countries
totally have more than 370 million consumers and account for 20% of the
world’s exports. The EU is going to enlarge and accept 13 European
countries. The EU also intended to improve the relations with non-member
countries and for this purpose it planed to develop special policies on
trade with nonmember countries (Kotler, 1999, p. 371).

Nowadays, the EU is on the 5th place ahead of the US and Japan. The EU
is the leading player in international market (European Union).

European Union

The European Union (EU) was established after 2nd World War. France
officially undertook the establishment of the EU proposing to create
“the first concrete foundation of a European federation”. On May 9, 1950
the EU was created and initially six European countries joint to the EU:
Belgium, Germany, France, Italy, Luxemburg, and the Netherlands. Then 9
countries joint to the EU and today the number of the member countries
is 15 (later joint Denmark, Ireland, the United Kingdom, Greece, Spain,

d, the United Kingdom, Greece, Spain,
Portugal, Austria, Finland, and Sweden) (European Union).

The EU today is preparing for the accession of 13 European countries –
Bulgaria, Czech Republic, Estonia, Cyprus, Latvia, Lithuania, Hungary,
Malta, Poland, Romania, Slovenia, Slovakia, and Turkey. In order to join
the EU, these countries need to fulfill the economic and political
requirements, which in other terms called “Copenhagen criteria”. Those
requirements are mainly related to the following:

Member countries must be a stable democracy, respecting human rights,
the rule of law, and the protection of minorities;

Member countries must have a functioning market economy;

Member countries adopt the common rules, standards and policies that
make up the body of EU law.

As these countries have not yet fulfilled all the requirements, they
need financial resources or in other words they need money. The EU
assists those countries providing financial resources to those countries
The EU provides sovereignty to its Members to act as independent ones on
behalf of the EU or in other words to welfare and interest of the Union
as a whole (European Union).

All of these countries will integrate in order to realize the principal
objectives of the EU. Those objectives are:

Establish European citizenship

Ensure freedom, security and justice

Promote economic and social progress

Assert Europe’s role in the world.

5 institutions implement all of these objectives:

European Parliament (EP) – This represents the will of 374 million
European citizens’ and assembles pan-European political groups that
operate in Member states. The overall task of the EP is to make and
adopt the laws with Council, to adopt the budget at the end, and
control/supervise all institutions. It is elected every five year.

Council of the European Union – This is the most influential institution
in decision making process. The main functions of this institution is to
exercise the issues related to the legislation, to suggest and monitor
the international agreements, implementing foreign and security policy,
monitor the budget of the EU with the EP and finally to coordinate the
activates of the Member States.

European Commission (EC) – EC play the leading force in the Union’s
institutional system. It is mainly responsible for creating the initial
outline of legislation, implementing the legislation to assure that law
is property applied, and representing the EU in international scope and
signing trade and cooperation agreements.

Court of Justice – This institution is responsible only the issues
related to the justification. It justifies the disputes that arise among
Member States, EU institutions, businesses, and individuals. They check
whether laws are in the accordance with the justice or not.

Court of Auditors – Its major function is to check whether all the
Union’s revenues and expenditures are going in a regular manner,
according to the EU budget.

Today European Union is the leader in the international trade and with

is the leader in the international trade and with
its member countries it makes up the fifth of the world trade. The EU
had 4 trade defense instruments, which enables the EU to achieve its
objective related with economic and social progress. Also this will lead
the assertion of the EU’s role in the world. Those instruments are the

Anti-dumping policy, which had the meaning of taking steps to stop the
process which enables the exporters to bring goods at such a price which
is lower compare with the prices of the goods in the domestic market.

Anti-subsidy policy that intended to restrict or fully eliminate the
imports of those goods that in the third country of origin had low
prices. Those prices are artificially kept low by public subsidies.

Regulations on trade barriers – above mentioned policies resulted
reinstating temporary custom duties on the imports that are in the

Protective measures – if the amount of the imported goods increases very
rapidly which hurt the national producers, there should be undertook
protective measures such as restricting the imports.

The EU to make the integration more efficient uses these trade defense
instruments. Since today they achieved stability, peace and economic
prosperity. These resulted in the raise of living standards, building an
internal market, launch the euro, and the strengthening the Union’s
voice in the world (European Union).

Today the EU has 15 members counting more than 370 million consumers,
which account about 20% of the world exports. Later on the EU’s mission
is to enlarge and include more nations. Today there are 13 candidate
countries that will increase the number of Member countries to 28, which
will have totally 450 million consumers (Kotler, 1999, p. 371).

Anticipated Analyses and Conclusion

Although the EU is the fifth major trade bloc in the world, there are
some weak sides the EU should consider very carefully. At first the EU
has to set special policies concerning the trade with nonmember
countries to avoid or secure from expected outsiders’ barriers. Instead
the EU can enact such policy that will deepen the relationships with
nonmember countries. As soon as 13 countries enter into this free trade
zone or bloc, the EU will become more successful and will increase
exports to support member countries’ consumers. Yet, however much
nations and regions integrate their trading policies and standards, each
nation still has unique features that must be understood. A nation’s
readiness for different products and services and its attractiveness as
a market to foreign firms depend on its economic, political – legal, and
cultural environments. The EU became driving force into the
international market for member countries. Such kind of economic
communities are needed to increase today’s economic growth and make
countries better off.


European Union. “ Trade policy instruments”. Brussels. October 30, 2002.

HYPERLINK "http://europa.eu.int/comm/trade/policy/index_en.htm"


European Union. “The institutions of the union”. Brussels. November 2,

European Union. “Enlargement”. Brussels. November 1, 2002. HYPERLINK

Marketing Management, Regional Free Trade Zone, Chapter 12 Designing
global market offerings, p. 371, USA, 1999).

Kotler Ph. “Marketing Management.” Prentice-hall, Inc. New Jersey, 1999.
November 12, 2002.



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