The Building Blocks of the EU Common Commercial Policy

The EU has a common external trade policy that allows EU members to conduct trade negotiations and implement agreements as a single bloc. This gives the EU greater negotiating power internationally compared to individual member states dealing alone. The EU’s common commercial policy is governed by European law and overseen by EU institutions like the European Commission.

A central part of EU trade law is the common customs tariff, which sets common import duties on goods entering the EU from outside. This common external tariff eliminates customs duties on goods moving between EU members, creating a large unified customs union. The EU can also establish common trade defense instruments to investigate and counter unfair trade practices like dumping or subsidies from other countries.

When negotiating trade agreements, the EU works to reduce trade barriers and open foreign markets for EU exporters. It has signed numerous free trade agreements with countries around the world to achieve these goals. Within the EU internal market, the four freedoms of movement guarantee the free circulation of goods, capital, services, and people between member states. This facilitates trade integration across the EU. The European Court of Justice plays an important judicial role in interpreting and enforcing EU trade law to ensure its consistent application.

In general, EU trade law aims to establish a common framework and level playing field for international trade conducted by EU members. It provides the legal basis for the EU to function as a single trade bloc and negotiate trade deals and regulations on behalf of member states. This approach strengthens the EU’s global economic influence.

Some key numbers regarding the EU Common Commercial Policy:

  • €3.5 trillion – The estimated annual value of EU trade covered by trade agreements negotiated by the European Commission;
  • 500 million – The approximate population of the EU common market, making it one of the largest economies in the world by GDP;
  • 15% – The proportion of world trade covered by EU trade agreements, demonstrating the bloc’s significant global trade influence;
  • 60+ – The number of trade agreements the EU has concluded with countries/regions around the world, both bilateral and regional deals. Major partners include Canada, South Korea, Japan, and Singapore;
  • €2.4 billion – The estimated annual EU customs duties collected at the bloc’s external border under the common customs tariff;
  • €2 billion – Approximate annual EU budget for trade defense instruments to investigate unfair trade practices of other exporters to Europe;
  • 26 million – The number of EU-based jobs supported by exports to markets opened via EU trade agreements;
  • 90% – The estimated share of EU external trade covered by EU-level trade agreements rather than individually negotiated country deals.

The EU has without a doubt one of the most developed and integrated common commercial policies in the world. It covers virtually all aspects of international trade for its 27 member states. The European Commission does all the negotiating on behalf of members, giving the EU huge clout in trade talks.

This level of centralization is much higher than we typically see in Asia. Groups like ASEAN and the Regional Comprehensive Economic Partnership involve more discussion between the different countries in the negotiations. The members also vary widely in terms of economic size and influence.

The EU common commercial policy is also legally binding. It’s fully integrated into each member state’s legal system through their obligations under European law and with the European Court of Justice there to adjudicate any disputes. Asian common policies tend to rely more on cooperation and consensus between governments.

Of course, the EU also has the huge advantage of acting as a single giant market in negotiations. Its population and economic might give European negotiators a lot of leverage at the table. While groups like ASEAN and RCEP represent nations with enormous populations together, their fragmented markets undermine their bargaining power compared to unified EU.

Additionally, the whole goal of the EU system is to liberalize trade and investment between members and speak with one voice globally. Asian common policies focus more on facilitating trade deals among existing national frameworks that still maintain their independence and sovereignty.

While groups like ASEAN and RCEP have made progress toward common policies in Asia, none have nearly achieved the advanced integration and legal uniformity of the European Union’s bloc-wide approach to international commercial relations.

The highly centralized and legally binding EU Common Commercial Policy gives the European Commission sole negotiating power on trade matters for 27 member states, acting as one giant economic bloc unified by market access and liberalization goals, greatly strengthening its influence and deal-making capabilities compared to less integrated common approaches elsewhere.

You might be interested in: The European single market legislation or (in Italian) an insight on the EU legislation