Transcript European Union and the Development of Trade Areas

European Union and other
Regional Trade Areas
Chapter 14
© 2005 West Legal Studies in Business/Thomson Learning
1
The Philosophy of Economic
Integration
• Political union
Economic union
• Economic union
Political union
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Models
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Federal
Free trade area
Customs Union
Common Market
Conflict with GATT?
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European Union
• Treaty of Rome (1957) creates European
Community
• Single European Act (1987) set 1992
deadline of achieving single market
• Maastricht Treaty (1993) created
European Union and set path for monetary
union
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European Union
• Treaty of Amsterdam: 1999 (incorporated
the principle of freedom of movement from
the Schengen Agreement)
• Treaty of Nice: 2000, voting rights for new
members; 10 members to join May 2004,
(Poland, Lithuania, Estonia, Latvia,
Hungary, Czech republic, Slovenia,
Slovakia, Malta and Cyprus). Population of
440 million eclipsing NAFTA
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European Union
• Constitution for Europe? What are the
issues? What is its status?
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Monetary Union Criteria
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Budget deficit no greater than 3% of GDP
Public debt no greater than 60% GDP
Price stability (inflation controlled)
Long term interest rates within 2% of the
best 3 countries
• Exchange rate stability
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Timetable
• January 1, 1999- Euro single currency is
born
• 1999-2002 National currencies continue to
exist and work in parallel
• 2002- switched to single currency
• Not all countries have joined? Why?
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EU Members
• Belgium, Germany, France, Luxembourg,
Netherlands, Italy
• (1973) Denmark, Ireland, United Kingdom
• (1981) Greece
• (1986) Portugal, Spain
• (1995) Austria, Finland
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EU Organization
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Council
Commission
Parliament
Court of Justice
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Law-Making Within the EU
• Regulations vs. directives
• Role of Council, Commission and
Parliament
• Court of Justice review
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Privacy in the EU: A Different
Approach from the U.S.
• What is the philosophical difference?
• How is it reflected in the law?
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Common Agricultural Policy (CAP)
• What is it?
• What conflicts have occurred?
• How are the goals described now?
“transparency, quality and safety and a
farm sector in tune with the environment
and animal welfare.. A sustainable farm
and food sector for the future”
• How does the expansion of the EU affect
this?
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National Farmer’s Union (France)
• The Commission adopted emergency
measures to protect against BSE ( Bovine
spongiform encephalopathy) or mad cow
disease. The UK was temporarily
prohibited from exporting beef to the
Continent.
• The Court found that since there was a
procedure in place to protect the public
upon the resumption of exports, France
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National Farmer’s Union (France)
• Could not invoke Article 30 to block
imports.
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Business Implications of the EU
• What are the ramification for business of
the expansion of the EU?
• What impact does the trade friction
between the U.S. and the EU have on
business ventures?
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Cotonou Agreement
• 2000
• EU, African, Caribbean and Pacific
countries
• EU had GSP program since 1971 and in
effect until 2007
• 2007 new “partnerships” will begin
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Other Economically Integrated
Trade Areas
• Mercosur: Argentina, Brazil, Paraguay,
Uruguay
• Andean Common Market: Bolivia,
Venezuela, Colombia, Ecuador, Peru
• ASEAN: Indonesia, Malaysia, Philippines,
Singapore, Thailand, Brunei, Myanmar,
Laos, Cambodia, Vietnam
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Trade Areas
• African trade areas( AEC, COMESA,
SADC)
• Caricom
• Arab League
• Gulf Cooperation Council
• NAFTA
• FTA ( Free Trade in the Americas)
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Trade Areas
• APEC
• Others?
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How are these groups different
from the EU and the US?
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Scope of agreement
Court
Currency
Army
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Free Trade and Protectionism
Debate
• Winners and losers?
• Compatibility with GATT and WTO?
• Role of trade areas
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Current Issues
• EU: adherence to the criteria for monetary
union, price of unification, expansion,
“wider and deeper,” CAP, labor, two tiered
Europe?, subsidiarity (let the decision be
made at the lowest level possible- a hedge
against over-reaching by the EU), foreign
policy
• expansion of NAFTA- connection to US
politics and national elections?
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