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Consequences of US trade policy on EU-US trade relations and the global trading system

17-10-2018

The Trump Administration’s trade policy is driven by the belief that previous Administrations have let other countries take advantage of the United States for foreign policy reasons, as demonstrated by America’s more open trade regime and its trade deficits. It is determined to end this perceived imbalance by demanding reciprocity instead, and is willing to use tough tactics to achieve this through strict enforcement of its procurement and trade defense law; expansive tax provisions; bringing the ...

The Trump Administration’s trade policy is driven by the belief that previous Administrations have let other countries take advantage of the United States for foreign policy reasons, as demonstrated by America’s more open trade regime and its trade deficits. It is determined to end this perceived imbalance by demanding reciprocity instead, and is willing to use tough tactics to achieve this through strict enforcement of its procurement and trade defense law; expansive tax provisions; bringing the WTO dispute settlement to a halt; withdrawing from and forcing others to renegotiate existing bilateral and multilateral agreements; adopting a novel “national security” argument to justify breaking WTO tariff commitments for steel, aluminum and possibly autos; and enacting punitive tariffs on billions of dollars of imports from China, possibly threatening a trade war. The scenarios for U.S.-EU trade relations as well as the global trading system are anything but rosy. The EU can stand up to the Administration’s “bullying,” or it can take advantage of America’s need for a “re-balancing” to build its own stature by taking simple steps to improve EU-U.S. trade, forging a way forward in the WTO, and providing necessary leadership to address the dangers China’s economic system poses to the global trading order.

Extern avdelning

Peter CHASE, Peter SPARDING, Yuki MUKAI

A new era in EU-China relations: more wide-ranging strategic cooperation?

19-07-2018

China is an important strategic partner for the EU, despite fundamental divergences in some areas, mostly related to state intervention and fundamental human rights. The partnership offers mutually beneficial cooperation and dialogue in areas ranging from investment and transport to human rights and cybersecurity. China is navigating in new directions, guided by Xi Jinping's 'Thought on Socialism with Chinese Characteristics for a New Era’. Despite President Xi’s repeated avowals that 'the market ...

China is an important strategic partner for the EU, despite fundamental divergences in some areas, mostly related to state intervention and fundamental human rights. The partnership offers mutually beneficial cooperation and dialogue in areas ranging from investment and transport to human rights and cybersecurity. China is navigating in new directions, guided by Xi Jinping's 'Thought on Socialism with Chinese Characteristics for a New Era’. Despite President Xi’s repeated avowals that 'the market will have a decisive role', public ownership remains the mainstay of the Chinese economy, whereas profound reforms would be needed to tackle the root causes of overcapacity in various industrial sectors. Xi's ‘Belt and Road Initiative’, now also included in the Constitution, is the flagship international connectivity and infrastructure programme dominated by Chinese state-owned companies. Overall, China’s crucial, but complex transition towards more sustainable growth would eventually benefit both, China and the world as a whole. Global economic interdependence, however, makes certain spill-over effects of China’s rebalancing unavoidable. China plays a pivotal role in global governance and the rules-based international order, and this comes with responsibilities. Beijing has begun to shift away from the narrow pursuit of national aims towards a more assertive foreign and security policy, and increased financial, economic and security cooperation with a global outreach. China is also facing domestic concerns, such as lifting millions of people out of poverty and reducing ever-growing income inequalities, deterioration in the situation of human rights and freedoms as well as endemic corruption.

Protectionism and international diplomacy

25-06-2018

Just three decades after the fall of the Berlin Wall signifying the end of Cold War aggression and the ascendancy of international liberalism, the world faces even greater uncertainty. In every region of the world, geopolitical shifts are taking place that have brought offensive trade agendas to the fore. The US has withdrawn from underwriting the post-World War Two international economic and foreign policy architecture, instead proposing to build a wall between itself and neighbouring Mexico, imposing ...

Just three decades after the fall of the Berlin Wall signifying the end of Cold War aggression and the ascendancy of international liberalism, the world faces even greater uncertainty. In every region of the world, geopolitical shifts are taking place that have brought offensive trade agendas to the fore. The US has withdrawn from underwriting the post-World War Two international economic and foreign policy architecture, instead proposing to build a wall between itself and neighbouring Mexico, imposing unilateral tariff increases while refusing to negotiate new international agreements. In Europe, the project of ever greater integration has been attacked by Brexit, as well as other populist sentiment against the perceived power of EU institutions and the forces of globalisation. The breakdown of the western coalition advocating global governance has left a power vacuum that other key players such as China are forced to respond to. These current tectonic shifts in power and foreign policy positions impact on every country and every individual in the early 21st century. While many governments strive to maintain international cooperation and further integration, it is an unpredictable era. For trade policy has established itself firmly within the arena of high foreign diplomacy and as a result, traditional assumptions and adherence to international norms can no longer be assumed in such a state of political and economic flux. Yet when trade policy becomes a tool of diplomacy and foreign policy, sound economic reasoning can be lost to political decision making. This report shines a spotlight on the rise of protectionism in the 21st century. It examines the diplomatic dynamics behind economic nationalism and its attack on the established liberal international institutions that were created after the second World War to settle disputes without recourse to war. Before focusing on the US, UK, EU and China, the first chapter centers on the threat to economic integration and cooperation in promoting sustainable development through the multilateral rules-based system established under the World Trade Organization.

Extern avdelning

Ms Kamala DAWAR

Human rights in EU trade policy: Unilateral measures applied by the EU

30-05-2018

Protection of human rights is one of the EU's overarching objectives in its external action, in line with the Treaty on European Union. One of the EU's main tools to promote human rights in third countries is the generalised system of preferences (GSP), granting certain developing countries preferential trade access to the EU market. Covering 90 third countries, the scheme includes explicit human rights conditionality, providing that preferences can be withdrawn in case of massive and systematic ...

Protection of human rights is one of the EU's overarching objectives in its external action, in line with the Treaty on European Union. One of the EU's main tools to promote human rights in third countries is the generalised system of preferences (GSP), granting certain developing countries preferential trade access to the EU market. Covering 90 third countries, the scheme includes explicit human rights conditionality, providing that preferences can be withdrawn in case of massive and systematic violations of core human rights or labour rights norms. A special incentive arrangement under the GSP grants further tariff concessions to countries that ratify and implement a series of international conventions. Based on systematic monitoring by the European Commission, this special scheme is the most comprehensive and detailed human rights mechanism established in the framework of the common commercial policy. While the scheme has been particularly effective in encouraging beneficiary countries to make the necessary legislative and institutional changes, such progress has not been matched at the level of implementation. Suspension of preferences under GSP has been applied in only a few cases and, when it was, did not have an immediate and clear impact on the human rights situation. In practice, the EU has privileged a strategy of incentivising gradual progress through dialogue and monitoring, rather than withdrawing preferences. The EU's unilateral trade measures to protect human rights are not limited to the GSP. The EU has taken steps to prohibit or limit trade in items that could cause human rights violations, such as torture and execution equipment, and dual use goods. New legislation has recently been adopted on conflict minerals, and the European Parliament has called for a proposal for legislation to ban the import of goods produced using child labour. This is an updated edition of a briefing published in January 2017: PE 595.878.

Competition in Air Transport

16-04-2018

Competition in the aviation sector pertains to different sets of rules, competition law on the one hand and, given the cross-border interdependencies of transport markets, international rules on the other hand. The workshop aimed to examine the current situation of competition in air transport using the proposed regulation on Safeguarding competition in air transport, repealing Regulation (EC) No 868/2004 as a practical example and starting point for the discussion. The Committee on Economic and ...

Competition in the aviation sector pertains to different sets of rules, competition law on the one hand and, given the cross-border interdependencies of transport markets, international rules on the other hand. The workshop aimed to examine the current situation of competition in air transport using the proposed regulation on Safeguarding competition in air transport, repealing Regulation (EC) No 868/2004 as a practical example and starting point for the discussion. The Committee on Economic and Monetary Affairs (ECON) has prepared a legislative opinion to this dossier. This Workshop was prepared by Policy Department A at the request of the Committee on Economic and Monetary Affairs (ECON).

Extern avdelning

Kay MITUSCH, Universit Karlsruhe, Pablo MENDES DE LEON, University Leiden and Internationa Civil Aviation Organization (ICAO)

The Juncker Commission's ten priorities: State of play in early 2018

26-01-2018

This publication provides an up-to-date overview and analysis of the state of play in the delivery by the European Commission of the various legislative and other political initiatives flowing from the ten priorities asserted by its President, Jean-Claude Juncker, at the time of his election by the European Parliament in July 2014. This in-depth analysis draws on a wide range of EPRS publications, and it updates a previous edition, The Europe Commission at mid-term – State of play of President Juncker's ...

This publication provides an up-to-date overview and analysis of the state of play in the delivery by the European Commission of the various legislative and other political initiatives flowing from the ten priorities asserted by its President, Jean-Claude Juncker, at the time of his election by the European Parliament in July 2014. This in-depth analysis draws on a wide range of EPRS publications, and it updates a previous edition, The Europe Commission at mid-term – State of play of President Juncker's ten priorities, published in July 2017. It has been compiled and edited by Isabelle Gaudeul-Ehrhart, with contributions and support from across the Members' Research Service and the Directorate for Impact Assessment and European Added Value of EPRS, in particular from the following policy analysts: Piotr Bakowski, Angelos Delivorias, Gregor Erbach, Roderick Harte, Elena Lazarou, Tambiama Madiega, Nora Milotay, Shara Monteleone, Anita Orav, Christian Scheinert, Andrej Stuchlik, Marcin Szczepanski, Laura Tilindyte and Sofija Voronova. The graphics have been prepared by Giulio Sabbati, and are derived from the on line 'Legislative Train Schedule' application, launched by Parliament to track progress on the Commission's legislative proposals.

What next after the US withdrawal from the TPP? What are the options for trade relations in the Pacific and what will be the impact on the EU?

27-11-2017

The Trans-Pacific Partnership was a landmark trade agreement signed by 12 Pacific Rim countries including the US on 4 February 2016. TPP had commercial as well as geopolitical significance for the Obama administration and was a key component of the former president´s so-called “pivot” to Asia. On his first full day in office, on 24 January 2017, President Trump pulled the US out of TPP leaving the other 11 signatories to grapple with the consequences. They have since vowed to move forward even without ...

The Trans-Pacific Partnership was a landmark trade agreement signed by 12 Pacific Rim countries including the US on 4 February 2016. TPP had commercial as well as geopolitical significance for the Obama administration and was a key component of the former president´s so-called “pivot” to Asia. On his first full day in office, on 24 January 2017, President Trump pulled the US out of TPP leaving the other 11 signatories to grapple with the consequences. They have since vowed to move forward even without US participation, reviewing the existing clauses and rebranding the regional agreement under the name of Comprehensive and Progressive Agreement for the Trans-Pacific Partnership (CPTPP). Negotiations on the CPTPP will continue in 2018. The European Parliament has requested three experts from the EU, US and Asia to consider the implications of the US withdrawal from the TPP and draw conclusions on how the EU should position itself in this high-growth and geopolitically-strategic area. The findings were presented during a Workshop organised by the Policy Department for the International Trade Committee on 8 November 2017 in Brussels.

Extern avdelning

Peter CHASE, Pasha L. HSIEH, Bart KERREMANS

Serbia’s cooperation with China, the European Union, Russia and the United States of America

21-11-2017

Since 2000, Serbia has undergone a halting yet persistent reintegration into the global economy. However, Serbian foreign policy currently faces a dilemma, as (at least) four separate powers are vying for influence within the country. This study examines Serbia’s foreign policies towards the European Union (EU), the United States (US), Russia, and China, in particular examining the influence of each power with regard to foreign aid, trade, investment and security. Our analysis shows that each partner ...

Since 2000, Serbia has undergone a halting yet persistent reintegration into the global economy. However, Serbian foreign policy currently faces a dilemma, as (at least) four separate powers are vying for influence within the country. This study examines Serbia’s foreign policies towards the European Union (EU), the United States (US), Russia, and China, in particular examining the influence of each power with regard to foreign aid, trade, investment and security. Our analysis shows that each partner of Serbia has their own specific interest and comparative advantage in the country, with the EU focusing primarily on rule of law, aid, and increasing investment, the US on security, Russia on energy and foreign policy support, and China on infrastructure and markets. The scale of cooperation is divergent, however, and the EU accession process has pushed the EU to primus inter pares for the Serbian government. The demarcation across activities, however, means that Serbia may be able to keep its non-aligned status in the short-term. Unfortunately, the country is in an unstable equilibrium, as continued progress towards EU accession means that it will eventually have to sacrifice some independence in foreign affairs. The role of the EU in the coming years will be to emphasise the economic and security benefits that come with EU accession, while acknowledging that Serbia has its own cultural and historical links that need tending to.

Extern avdelning

Christopher HARTWELL, President, CASE – Center for Social and Economic Research, Poland; Katarzyna SIDLO, Political Economist, CASE

Saudi Arabia in the Western Balkans

17-11-2017

The Gulf States, along with other external players, have raised their profile in the Western Balkans in recent years. While most have set out on an economic quest, Saudi Arabia is considered to have a more ideological approach, seeking a strong role among the region's Muslims. In the 1990s Bosnian war, it provided significant aid for the Muslim cause and has stayed in the region to expand its influence, introducing stricter interpretations of Islam that are gradually taking root there.

The Gulf States, along with other external players, have raised their profile in the Western Balkans in recent years. While most have set out on an economic quest, Saudi Arabia is considered to have a more ideological approach, seeking a strong role among the region's Muslims. In the 1990s Bosnian war, it provided significant aid for the Muslim cause and has stayed in the region to expand its influence, introducing stricter interpretations of Islam that are gradually taking root there.

EU-Russia trade continuing despite sanctions

14-11-2017

Since 2014, trade between the EU and Russia has slumped due to the difficult context (an economic downturn in Russia, EU sanctions over Ukraine and Russian counter-sanctions, and long-standing trade barriers), but remains substantial. Trade started to recover in early 2017. This publication updates an 'At a glance' note of January 2016, PE 573.931.

Since 2014, trade between the EU and Russia has slumped due to the difficult context (an economic downturn in Russia, EU sanctions over Ukraine and Russian counter-sanctions, and long-standing trade barriers), but remains substantial. Trade started to recover in early 2017. This publication updates an 'At a glance' note of January 2016, PE 573.931.

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