European Union

Introduction

In many facets, the European Union (EU) is thought to be an extraordinary accomplishment. Since its inception in the 1950's, the EU has raised the standard of living for its citizens, it has created a single market and a single currency, the euro. Collectively, the EU has enormous economic power and is arguably the world leader in development aid. Although not all European countries are EU members, its membership has grown from six to 25 nations, with two more nations positioned to join in 2007. While the union embodies a diverse representation of European cultures, the nations come together with similar dedications to peace, respect for human rights and democracy.

The European Union and Global Trade

The European Union is the world's biggest trader, accounting for 20% of global imports and exports (European Commission, 2004, p. 3). The EU has a fundamental policy to open its market to imports from the outside world as long as its trading partners will do the same in return. The EU has a deep-seated belief that globalization should mean inviting more and more countries, both rich and poor, to take part in the world economy. As the world's leading trade power, the EU certainly has a strong interest in creating conditions in which trade can prosper (Monnet, 2004). Increased trade boosts world growth. It brings consumers a wider range of products to choose from and this competition lowers prices and raises quality.

The EU is also keenly aware it must maintain free but fair world trade. This means the union must consider the economic standings of each of its participating countries. The EU wants its trade policies to be apparent and open to examination.

Economies of the European Union

The EU's trade policy is closely linked to its development policy. The union has granted duty-free or cut-rate preferential access to its market for most of the imports from developing countries and economies in transition under its general system of preferences (GSP) (Europa, 2005). These developing countries are mandated to mirror their national trade legislation to EU's laws before they can become members of the union. In the Balkan countries trade will be used as a means of rejuvenation. The EU has removed custom duties on 95% of exports from these countries (Eurostat, 2004) in an effort to boost their economy and strengthen their trade relations with Western Europe.

The EU has made the commitment not to shut out poorer countries. In fact, the EU is finding ways to help these countries catch up with the rest of the world. The EU believes a major point of contention for these countries is their inability to access global markets for agricultural and industrial goods and services.

Everything but Arms

The EU displayed its support for the 49 least developed countries by launching the 'Everything but Arms' initiative in March 2001 (Fontaine, 2005). This initiative characterized EU's commitment to opening its markets to unlimited quantities of all products except weapons from those countries without charging any duties. As Trade Commissioner Pascal Lamy stated, "This sends a signal to the rest of the world that we are serious about getting the most disadvantaged to share in the fruits of trade liberalization," (European Commission, 2004).

Regional Integration

Regional integration has become more and more active with countries searching to strengthen their alliances with other countries. The expansion of the EU took place in 1995 with the attainment of Austria, Sweden and Finland. All three of these countries formerly belonged to the European Free Trade Association (EFTA) (Kennes,