The EU has too many restrictions on Imports
The common market is supposed to make imports and exports to and from Europe as well as within Europe easier and simpler, yet the EU places many restrictions on what can be imported. A common tariff is imposed on goods entering anywhere in the EU, and similarly regulations are the same throughout the European Union, this means that Britain has the same regulations as very different markets such as Estonia.
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Preferential treatment for some
The EU has the most extensive network of preferential trade access agreements with of any world trade organisation (WTO) member.
First the EU has a Generalised System of Preferences. This includes all manufactured exports and some agricultural and food exports from developing countries (excluding goods covered by the Common Agricultural Policy). Countries on the UN’s list of least developed countries have since February 2001 had full duty-free access without quotas to the EU market.
The Lomé Convention, followed by the Cotonou Agreement in 2000, were agreements with the African, Caribbean and Pacific countries were to give preferential treatment to these countries and to encourage their integration into the world economy. This was originally because these nations were Europe’s former colonies so seen as requiring some form of preferential treatment to mirror the access they would have had to the ‘home’ markets of their colonial masters.
The EU as a whole (negotiated by the trade commissioner for the whole of the EU) has some bilateral trade agreements. Agreements are now in place with Mexico, Chile and South Africa, and negotiations are continuing with Mercosur (the South American Common Market comprising Brazil, Argentina, Paraguay and Uruguay). Under the Barcelona process, the EU is signing free trade agreements with Mediterreanean countries. However once again these exclude CAP subsidised products.[[http://www.tcd.ie/iiis/policycoherence/index.php/iiis/eu_agricultural_trade_policy/preferential_access_agreements]]
While all these sets of preferential treatments for differing developed nations may be confusing they are not a bad thing. Preferential agreements with the poorest nations allow these nations to sell goods at cheaper rates than countries that are already rich enough to get by. This way the EU helps the least developed countries to improve themselves through trade, potentially lifting as many out of poverty as aid does. Free trade agreements with other regional blocks also encourage trade making both sides more prosperous as a result.
The most famous trade war is the ‘Banana War’. Latin American countries and US Multinationals complained to the WTO against the preferential treatment that the EU gave to the ACP countries in relation to the selling of bananas in the EU. In 1999 the USA responded by applying a set of sanctions on a variety of EU goods, many of which had nothing to do with bananas, due to the preferential banana trade agreement. Washington claimed that they were protecting their interests and wanted to show that free trade can work, while the EU battled over questions regarding the right to decide, claiming that the US was manipulating WTO rules to implement sanctions against countries trading with regimes it does not like. The WTO allowed a very large package of sanctions by the USA on the EU, effectively voting in favour of Free trade. This was obviously ignoring the rights of small scale producers in favour of big US multinationals.[[Anup Shah, The Banana Trade War, Global Issues, 21st May 2002, http://www.globalissues.org/article/63/the-banana-trade-war%5D%5D However for us the key thing is that it was EU import regulations that caused the dispute in the first place, a dispute that would not have happened had Britain not been part of the EU. This means that our relations with other states are partially tied to what EU import regulations are and what frictions they are causing.
Trade wars would however not be possible without the EU, a small national set of regulations by say the UK, or even more so the smaller member countries like Slovenia would just be ignored by the big trading nations; the USA, China and Japan. It is because we are together in a trading bloc that we are able to force these nations to not simply favour their own producers and give our exporters equal opportunities.
Customs Union: Single external tariff
Since the 1957 treaty establishing the European Economic Community the EU has been based on a customs union. This meant eliminating customs duties and restrictions on imports and exports between member states. In turn there is a need for a single external tariff to avoid external exporters being able to import into one country to avoid restrictions in another.[[William Nicol and Trevor Salmon, Understanding the European Union, (Harlow, 2001), p.225.]]One of the main things the EU has been about has been slowly reducing restrictions to, and regulations on trade. This means that import restrictions are less under the EU than they would be otherwise
This has not completely stopped restrictions between member states as they simply imposed restrictions on safety, health, industrial standards etc instead. This has lead to attempts by the commission to get rid of such non-tariff barriers to internal trade. There is also not uniformity in VAT between states, since 1989 there has been an approximation of rates to bring VAT closer together however the transitional period is still ongoing.[[Nicol, Understanding, p.243.]]
Better than each member having different import restrictions
How much more chaotic would it be if every member had their own import restrictions? Each member having differing import restrictions would make 27 differing systems of import regulations and all members would have to know the regulations of each member for if a good is imported into one state and then re-exported internally. Anything that was being re-exported, or moved within Europe would need to go through differing systems meeting each set of regulations as it went... this would not fit very well with a common market.
Although this would not fit very well with the common market perhaps different import restrictions are necessary to protect individual national market interests. The recession has hit different nations to a different extent and some rely upon imports and exports more than others. Retaining the flexibility to determine restrictions would provide better security for national economies.
Some restrictions are necessary
The EU implements trade defensive measures recognising the right of its members to counter unfair trade practices, such as dumping goods on the European market. These are surveillance measures - import licensing system for monitoring purposes; quotas on imports of some products originating from outside to protect harmful massive imports; and safeguard measures to restrict some specific imports; anti-dumping measures. An example of this is on textile and clothing imports, particularly from China which were subject to quantitative restrictions under the WTO Agreement on Textiles and Clothing. And although these are being eliminated since 2005 the EU has continued to impose safeguard quotas on some categories of Chinese textiles products.[[Trade regulations of the EU, 1st December 2007, http://sme.hktdc.com/sme_content.aspx?contentid=174174&src=List_ir&w_sid=194&w_pid=898&w_nid=11552&w_cid=3&w_idt=1900-01-01%5D%5D This was necessary both for protectionist reasons; to give Italian textile makers time to adjust, and also to help other smaller textile producers such as Cambodia.
There are also restrictions from health or environmental reasons. For example to combat the spread of the Asian longhorn beetle, the EU introduced in July 1999 emergency controls on wooden packaging materials originating in the Chinese mainland. Actions like this would only be effective if taken by a common set of import restrictions. If the Netherlands had restrictions on the beetle but Belgium did not and the beetle arrived in Europe through Antwerp then it would soon spread into the Netherlands.
What do you think?