The EU has exclusive power in the area of trade in goods. When it comes to services and intellectual property, power is shared between the Commission and the Member States. Case law from the EU Court of Justice dictates that the European Commission and the European Member States work closely together in order to ensure that Europe speaks with one voice, particularly at the WTO. So the European Commission organises trade policy in close coordination with the Member States. This coordination takes place on a weekly basis, at the meeting of the European Council’s trade policy committee.
The Federal Ministry for Economic Affairs and Climate Action is responsible for setting out Germany’s position on a number of trade policy issues and for representing the German government at European and international level.
“Trade for all” – the European Commission’s new strategy on trade
On 25 October 2015, the European Commission presented its new strategy on trade entitled “Trade for all”. With this strategy, the Commission revises and updates its “Global Europe” trade strategy from 2006 (which implemented the EU’s Market Access Strategy) and the trade policy elements included in its general economic policy strategy entitled “Europe 2020” from 2010.
The strategy focuses on 5 points:
- Trade and investment as driving forces for growth and employment:
The Commission notes that in the next 10 to 15 years, 90% of global growth will take place outside Europe. In order to benefit from this growth, the EU needs open markets.
- New trade policy issues: A stronger focus on services, digital trade, raw materials, innovation and small and medium-sized enterprises (SMEs).
- Greater transparency in trade and investment policy:
This includes making TTIP negotiations more transparent to the public and working more closely with other EU institutions, the Member States and civil society. The European Commission also proposes regularly publishing the Council’s negotiating mandates.
- A trade and investment policy that is based on values:
The European Commission has presented its plans for reforming and redesigning the investment protection chapters in free trade agreements. A particular focus will be placed on whether trade policy upholds high sustainability, human rights and democracy standards.
- Trade policy as a tool to shape globalisation:
The European Commission stresses the importance it attaches to the WTO and to taking a multilateral approach to trade policy. At the same time, it develops proposals for reviving multilateral negotiations.
Germany welcomes the fact that the European trade strategy is being revised. The latest communication identifies the opportunities and challenges that currently exist in trade policy, including growth, employment, transparency, investment protection reform and sustainability. The objectives set out in the strategy – particularly those of opening up markets and implementing a set of dependable, global rules on trade – must now be consistently pursued. This is the only way in which German and European businesses can improve their competitive edge on growth markets outside the EU.
Market Access Strategy
The European Commission aims to open up global markets even further and thus strengthen the competitiveness of European companies. It wants to eliminate barriers to market access, particularly non-tariff barriers, and assist European companies as they enter certain markets and industries around the world.
To this end, the European Commission released a new communication on its Market Access Strategy on 18 April 2007 entitled "Global Europe: A stronger Partnership to deliver Market Access for European Exporters". The main focus is on better dovetailing the work undertaken by the European Commission, the European Member States and the European business community.
Modernising trade-defence instruments
The EU is currently working on a modernisation of its trade-defence instruments in order to afford more effective protection to Europe’s companies and industrial centres against distortions of competition in international trade and against unfair trading practices and subsidies in other countries. A trilogue agreement was reached in December 2017 between the European Commission, the European Council and the European Parliament.
Further to this, the EU’s Council of Ministers approved a new methodology to calculate dumping in EU anti-dumping procedures, sending out an important signal in particular for the manufacturing sectors in Germany and the EU, such as the steel industry. The new rules ensure that the EU will continue to be able to deploy an effective set of trade-defence instruments to counter unfair trading practices in future – particularly in the case of dumping by non-market economies.
The Trade Barriers Regulation
The Trade Barriers Regulation gives companies the right to submit a request to the Commission to ask for the investigation of a barrier to trade, and to do so without asking for permission from their association or a ministry. It the request is accepted, an investigation is started. During this investigation the Commission tries to find out whether the barrier that the company complained about actually exists and whether it negatively affects or impairs a particular industry in the EU. If the complaint is confirmed and no amicable settlement can be reached, the EU can decide to start a formal procedure for settling the dispute as part of an international agreement that exists with the trading partner.