Trade and the EU

Introduction: The EU as a Trading Bloc

The EU's Role in Global Trade:

• Largest trading bloc globally, comprising 27 member states.

• Accounts for over 15% of world trade in goods.

• Unified trade policy strengthens negotiation power in global trade agreements. The Single Market:

• Established to remove barriers to trade within the EU.

• Features free movement of goods, services, people, and capital.

• Benefits businesses through harmonised regulations and reduced costs.

EU Internal Trade Patterns (Within the Single Market)

• Key Characteristics:
  • No tariffs or quotas on goods traded between member states.
  • Standardised product regulations ensure smooth trade.
• Key Internal Trading Partners:
  • Ireland's top trading partners within the EU include Germany, France, and the Netherlands.
• Products Traded:
  • Exports: Ireland exports pharmaceuticals, dairy, beef, and ICT products.
  • Imports: Machinery, chemicals, and vehicles are imported into Ireland.

EU External Trade Patterns (Outside the Single Market)

• Unified External Trade Policy:
  • The EU negotiates trade deals with countries outside the bloc.
  • Examples:
  • Comprehensive Economic and Trade Agreement (CETA) with Canada.
  • Trade agreements with Japan and South Korea.
• Key Features:
  • The EU is both a major exporter (cars, pharmaceuticals) and importer (oil, raw materials).
  • Harmonised trade rules protect member states from unfair practices.

Common Agricultural Policy (CAP)

Objectives of the CAP:

• Ensure a fair standard of living for farmers.
• Stabilise agricultural markets and ensure food security.
• Provide affordable food for consumers.

Impact of the CAP:

• Positive Impacts:
  • Farmers receive direct payments to support income.
  • Rural development programs promote sustainable farming practices.
  • Modernisation of agriculture improved productivity and food quality.
• Negative Impacts:
  • Overproduction led to surpluses, causing environmental damage.
  • Accusations of "dumping" subsidised products in developing countries (e.g., milk powder in Jamaica).
  • High costs: €42 billion spent annually on CAP, with significant contributions from taxpayers.

Reforms of the CAP:

• Agenda 2000 and Fischler Reforms:
  • Shift from production-linked subsidies (Amber Box) to environmental payments (Green Box).
  • Introduction of rural development funding (Pillar 2).
  • Reduction of intervention buying and export subsidies.

Common Fisheries Policy (CFP)

Objectives of the CFP:

• Manage fish stocks sustainably.
• Ensure equal access to EU fishing waters.
• Support coastal communities dependent on fishing.

Key Features:

• Quota System: Total Allowable Catches (TACs) limit the amount of fish caught.
• Access Rules: Shared access to EU waters, with some exceptions for coastal zones.
• Modernisation Funding: Supports investment in sustainable fishing practices and aquaculture.

Impact of the CFP on Ireland:

• Positive Impacts:
  • Funding helped modernise fishing fleets.
  • Coastal areas benefit from aquaculture projects.
• Negative Impacts:
  • Quotas restrict the amount of fish Irish fleets can catch.
  • Ireland has less control over its marine resources.

Challenges in the CFP:

• Overcapacity of fishing fleets.
• Difficulty enforcing quotas and conservation measures.
• Decline in fish stocks due to overfishing.

European Regional Policy and Structural Funds

Objectives of EU Regional Policy:

• Reduce disparities between regions.
• Support industrial restructuring and economic development.
• Promote social cohesion and environmental protection.

Key Structural Funds:

1. European Regional Development Fund (ERDF):

• Funds infrastructure projects (e.g., roads, telecommunications, research facilities).
• Supports business innovation and technology transfer.

2. European Social Fund (ESF):

• Provides funding for job creation and workforce training.
• Focuses on improving employment opportunities.

3. European Agricultural Guidance and Guarantee Fund (EAGGF):

• Assists in modernising agricultural holdings and improving rural living standards.

Impact on Ireland:

• Funded key infrastructure projects (e.g., motorways, railways).
• Supported job training and skills development programs.
• Improved competitiveness in rural and underdeveloped areas.

Ireland's Role in EU Trade

• Internal Trade Benefits:
  • Access to a single market of over 400 million people.
  • Increased exports of Irish goods, particularly agricultural and pharmaceutical products.
• External Trade Benefits:
  • Ireland benefits from EU-negotiated trade agreements with global partners.
• Key Challenges:
  • Dependence on EU trade makes Ireland vulnerable to EU policy changes.
  • Loss of control over natural resources, particularly fisheries.

Environmental and Ethical Aspects of EU Trade

• Sustainability in Policies: CAP and CFP reforms aim to balance economic growth with environmental conservation.
• Ethical Trade Practices: EU trade agreements promote human rights, labour standards, and sustainable development.