Transcript Economic integration

Economic Integration
a state of affairs or a process which involves the
amalgamation of separate economies into larger free
trading regions.
Three levels of economic integration
Global: trade liberalization by GATT or WTO
Regional: preferential treatment of member countries in the group
Bilateral: preferential treatment between two countries
Regional and bilateral agreements are against the MFN clause (normal trading
relations), but allowed under WTO.
Stages of Economic Integration
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Free trade areas
Customs unions
Common markets
Complete economic unions
Complete political unions
Stages of Economic Integration
• FTA (free trade area):
– no internal tariffs among members, but each country
imposes its own external tariffs to the third country.
– NAFTA (North America Free Trade Agreement
– AFTA (ASEAN Free Trade Area)
– EFTA (European Free Trade Area)
• Customs union:
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no internal tariffs and common external tariffs
Mercosur (Southern Common Market),
CACM (Central American Common Market)
CARICOM (Caribbean Community and Common Market)
Stages of Economic Integration
• Common market:
– free movement of products and factors
(resources), which is customs union plus factor
mobility
– EU (European Union – previously EEC)
• Economic union:
– common market plus common currency
– coordination of fiscal and monetary policy
– EMU (Economic and Monetary Union)
Effects of Economic Integration
• Static effects: Short-term effects (shift of production)
– Trade creation: production shifts to more efficient member
countries from inefficient domestic or outside countries.
– Trade diversion: production shift to inefficient member
countries from more efficient outsiders.
• Dynamic effects: Long-term effects
– Cost reduction due to economies of scale
– Cost reduction due to increased competition.
EUROPEAN UNION
Over 500 million citizens
Largest economy in the world:
€12.0 trillion ($16.6 trillion)
GDP in 2012
GDP per capita: $33,000 (nominal), $32,021 (PPP)
GDP by sector: 70.5% services, 27.3% industry,
2.1% agriculture
World Trade in Goods
World Trade in Commercial Services
Member State
GDP
GDP
Annual
GDP
Public Debt
Deficit (-)/
Inflation
Unemp.
in billions
% of EU
change
per capita
% of GDP
Surplus (+)
% Annual
%
of USD
2012
% of GDP
in PPP US$
(2013 Q1)
% of GDP
2012
2013 M7
2012
2012
2012
2012
European Union
16,584.00
100
−0.3
32,021
85.9
−4.0
2.6
10.9
Germany
3,400.60
20.50%
0.7
39,028
81.2
0.2
2.1
5.3
France
2,608.70
15.70%
0
35,548
91.9
−4.8
2.2
11
United Kingdom
2,440.50
14.70%
0.3
36,941
88.2
−6.3
2.8
7.7
Italy
2,014.10
12.10%
−2.4
30,136
130.3
−3.0
3.3
12
Spain
1,352.10
8.20%
−1.4
30,557
88.2
−10.6
2.4
26.3
Netherlands
773.1
4.70%
−1.0
42,194
72
−4.1
2.8
7
Sweden
526.2
3.20%
0.8
41,191
39.4
−0.5
1
8
Poland
487.7
2.90%
1.9
20,592
57.3
−3.9
3.7
10.4
Belgium
484.7
2.90%
−0.2
37,883
104.5
−3.9
2.6
8.9
Austria
398.6
2.40%
0.8
42,409
74.2
−2.5
2.6
4.8
Denmark
313.6
1.90%
−0.5
37,657
44.7
−4.0
2.4
6.7
Greece
256.3
1.60%
−6.4
24,505
160.5
−10.0
1
27.9
Finland
250.1
1.50%
−0.2
36,395
54.8
−1.9
3.2
7.9
Member State
GDP
GDP
Annual
GDP
Public Debt
Deficit (-)/
Inflation
Unemp.
in billions
% of EU
change
per capita
% of GDP
Surplus (+)
% Annual
%
of USD
2012
% of GDP
in PPP US$
(2013 Q1)
% of GDP
2012
2013 M7
2012
2012
2012
2012
Portugal
212.7
1.30%
−3.2
23,385
127.2
−6.4
2.8
16.5
Ireland
210.4
1.30%
0.9
41,921
125.1
−7.6
1.9
13.8
Czech Republic
196.1
1.20%
−1.3
27,191
47.8
−4.4
3.5
6.8
Romania
169.4
1.00%
0.7
12,808
38.6
−2.5
3.4
7.5
Hungary
126.9
0.80%
−1.7
19,638
82.4
−1.9
5.7
10.4
Slovakia
91.9
0.60%
2
24,249
54.9
−4.3
3.7
14.3
Luxembourg
56.7
0.30%
0.3
79,785
22.4
−0.8
2.9
5.7
Bulgaria
51
0.30%
0.8
14,312
18
−0.8
2.4
12.7
Slovenia
45.6
0.30%
−2.3
28,195
54.5
−4.0
2.8
11.2
Lithuania
42.2
0.30%
3.7
21,615
40.8
−3.2
3.2
12.1
Latvia
28.4
0.20%
5.6
18,255
39.1
−1.2
2.3
11.5
Cyprus
23
0.10%
−2.4
27,086
86.9
−6.3
3.1
17.3
Estonia
21.9
0.10%
3.2
21,713
10
−0.3
4.2
7.9
Malta
8.7
0.10%
0.8
27,022
75.4
−3.3
3.2
6
Short History
• Pre-1945: Pan-Europa Movement (1923) Pan-Europa manifesto
by Richard Nikolaus von Coudenhove-Kalergi
• After 1945: Winston Churchill’s 1946 call for a "United States of
Europe“
• Robert Schuman: Schuman Declaration in May 1950 (proposal
of a community to integrate the coal and steel industries of
Europe)
• The Six: France, Italy, Belgium, Netherlands and Luxembourg,
West Germany
• Treaty of Paris (1951): European Coal and Steel Community
(ECSC)
• Treaty of Rome (1957)
– European Economic Community (EEC)
– European Atomic Energy Community
(Euratom)
• Merger Treaty (1967)
– European Communities
• Maastricht Treaty (1 November 1993)
– European Union
Enlargement
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1973: Ireland, UK, Denmark
1981: Greece
1986: Spain and Portugal
1995: Austria, Sweden, Finland
2004: CEEC-10 (Malta, Cyprus, Estonia, Latvia,
Lithuania, Poland, Czech Republic, Slovakia,
Slovenia, Hungary)
• 2007: Bulgaria, Romania
• 2013: Croatia
Institutions of the EU
The member states of the EU remain independent
sovereign nations but they pool their sovereignty in
order to gain strength and world influence.
The member states delegate some of their decisionmaking powers to shared institutions they have
created, so that decisions on specific matters of joint
interest can be made democratically at European
level.
The EU is governed by 7 institutions
Institutions of the EU
Political Institutions
• European Parliament
• European Council
• Council of the European Union
• European Commission
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Non-political Institutions
Court of Justice of the European Union
 European Court of Auditors
 European Central Bank
Institutions of the EU
Non-political institutions
–European Court of Justice
• upholds the rule of European law
–European Court of Auditors
• checks the financing of the EU’s activities.
European Commission
• the executive arm of the EU
– develop medium-term strategies
– draft legislation and arbitrate in the
legislative process
– represent the EU in trade negotiations
– make rules and regulations
– draw up the budget
– with the ECJ, it acts as the guardian of the
EU treaties by enforcing EU law
European Commission
• The Commission consists of 28 people
(Commissioners) — one from each EU country.
• Each member is appointed by a national
government, but they do not represent their
state in the Commission.
• The President of the Commission is first
nominated by the European Council; that
nominee is then officially elected by the
European Parliament
• A new Commission is
appointed every five
years, within six
months of the
elections to the EP.
• José Manuel Barroso
president since
November 2004 (reelected in 2009)
• President of EC is
Jean-Claude Juncker
after November 2014
Directorates-General (DG)
The Commission is divided into several
departments and services.
The departments are known as DirectoratesGeneral (DGs)
Directorates-General
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Agriculture and Rural Development (AGRI)
Budget (BUDG)
Climate Action (CLIMA)
Communication (COMM)
Communications Networks, Content and
Technology (CNECT)
Competition (COMP)
Economic and Financial Affairs (ECFIN)
Education and Culture (EAC)
Employment, Social Affairs and Inclusion (EMPL)
Energy (ENER)
Enlargement (ELARG)
Enterprise and Industry (ENTR)
Environment (ENV)
EuropeAid Development & Cooperation (DEVCO)
Eurostat (ESTAT)
Health and Consumers (SANCO)
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Home Affairs (HOME)
Humanitarian Aid (ECHO)
Human Resources and Security (HR)
Informatics (DIGIT)
Internal Market and Services (MARKT)
Interpretation (SCIC)
Joint Research Centre (JRC)
Justice (JUST)
Maritime Affairs and Fisheries (MARE)
Mobility and Transport (MOVE)
Regional Policy (REGIO)
Research and Innovation (RTD)
Secretariat-General (SG)
Service for Foreign Policy Instruments (FPI)
Taxation and Customs Union (TAXUD)
Trade (TRADE)
Translation (DGT)
President of the Council
• The President of the European
Council is the person
responsible for chairing and
driving forward the work of the
European Council.
• The current president is
Herman Van Rompuy from
Belgium.
• Donald Tusk from Poland taking
office on 1st December 2014
European Parliament
• shares the legislative and
budgetary authority of the
Union with the Council
• elected every 5 years by
universal adult suffrage and
sit according to political
allegiance
• Located in Strasbourg and
Brussels
European Parliament
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accession by new member nations;
association agreements with non-members;
the conclusion of international agreements;
decisions affecting the right of residence for
EU citizens;
• its own electoral procedures;
• the task and powers of the ECB
•The President of the European Parliament
presides over the debates and activities of the
European Parliament. He or she also
represents the Parliament within the EU and
internationally. The President's signature is
required for enacting most EU laws and the EU
budget.
•Presidents serve two-and-a-half-year terms
•The current President is Martin Schultz
European Parliament: Committees
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Foreign Affairs
Development
International Trade
Budgets
Budgetary Control
Economic and Monetary Affairs
Employment and Social Affairs
Environment, Public Health and Food
Safety
Industry, Research and Energy
Internal Market and Consumer
Protection
Transport and Tourism
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Regional Development
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Agriculture and Rural Development
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Fisheries
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Culture and Education
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Legal Affairs
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Civil Liberties, Justice and Home
Affairs
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Constitutional Affairs
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Women's Rights and Gender Equality
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Petitions
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Human Rights (Subcommittee)
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Security and Defence (Subcommittee)
European Parliament: Groups
• European People's Party (EPP)
• Progressive Alliance of Socialists and Democrats (S&D)
• Alliance of Liberals and Democrats for Europe (ALDE)
• The Greens–European Free Alliance (Greens–EFA)
• European Conservatives and Reformists (ECR)
• European United Left–Nordic Green Left (GUE-NGL)
• Europe of Freedom and Democracy (EFD)
• Non-Inscrits (NI)
European Parliament: Groups
Institutional Reform
European Constitution
• replace the existing Treaties of the EU
• give limited legal force to the Charter of
Fundamental Rights
• Expand Qualified Majority Voting into policy
areas which had previously been decided by
unanimity among member states
European Constitution
• signed in October 2004 by
representatives of the 25 member states
• 13 member states completed the
ratification procedure
• French and Dutch voters rejected in 2005
• the future of the Constitution?
Lisbon Treaty
• 13 December 2007: Lisbon Treaty
• must be ratified by all Member States
• Ireland: the only member state to hold a
referendum
–rejected on 12 June 2008
–approved on 2 October 2009
• Entered into force on 1 December 2009
Policies of the EU
• Agriculture, fisheries and food
• Business
• Climate action
• Cross-cutting policies
• Culture, education and youth
• Economy, finance and tax
• Employment and social rights
• Energy and natural resources
• Environment, consumers and health
• External relations and foreign affairs
• Justice, home affairs and citizens' rights
• Regions and local development
• Science and technology
• Transport and travel
Agriculture, fisheries and food
• Agriculture and Rural Development
– Agricultural markets
– CAP (Common Agricultural Policy)
– Rural development
• Fisheries
– Aquaculture
– CFP (Common Fisheries Policy)
• Food safety
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Animal diseases
Animal welfare
Food labelling
Food quality
GMOs
Plant health
Business
• Enterprise
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Enterprise policies
Free movement of goods
Industry sectors
Small and Medium-sized enterprises
Your Europe - Business
• Internal market
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Competition
Competitiveness and Innovation Framework Programme
Free movement of services
Market access
Climate Action
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2030 Framework on climate and energy
Citizens' information
EU Climate Action
Policy
Cross-cutting policies
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Better Regulation
Europe 2020 - strategy for growth and jobs
Impact assessment of new initiatives
Multilingualism
Culture, education and youth
• Audiovisual and media
– Media Coordination (MTF)
• Culture
– Culture
• Education and training
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Education and Training policy
Erasmus+
Languages and multilingualism
Sport
Youth
European Youth Portal
Economy, finance and tax
• A Single Market for Capital
– Better access to finance
– Financial services
– Free movement of capital
• Budget
– EU Budget
– Reforming the Budget, Changing Europe
• Competition
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Anti-trust
Cartels
Information for Consumers
International
Liberalisation
Mergers
State aid
Economy, finance and tax
• Customs
– Tariffs
• Economy
– Economic policies
– Euro
• Fight against fraud
– OLAF (European Anti-Fraud Office)
– Taxation
Employment and social rights
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European Globalisation Adjustment Fund
European Social Fund
Funding for employment and social solidarity
Gender equality
Health and safety at work
Labour law
More and better jobs
Pensions
Social and demographic trends
Social dialogue
Social inclusion
Social protection
Working abroad
Energy and natural resources
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Energy policies
Energy strategies
Sustainable and responsible business
Trans-European networks
Environment, consumers and health
• Consumers
– Chemicals
– Consumer protection and rights
• Environment
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Air
Chemicals
Civil protection
Nature and Biodiversity
Noise
Soil
Waste
Water
• Health
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Drugs
Human diseases
Medicines
Tobacco
External relations and foreign affairs
• Common Foreign Security Policy (CFSP)
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Civilian Crisis Management
Conflict Prevention
Development and Developing countries
Enlargement
European Neighbourhood policy
European Union in the World
External Cooperation Programmes
Peacekeeping operations
• Foreign policies
– Humanitarian aid (Humanitarian Aid department - Echo)
– International trade and trade agreements (External trade)
Justice, home affairs and citizens' rights
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Citizens' rights
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Childrens' rights
Data protection
Disability issues
EU citizens' rights
Fundamental rights
Tackling discrimination
Home affairs
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Asylum
Borders & border control
Fight against crime
Fight against Terrorism
Immigration
Police matters
Schengen
Visa
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Justice
• Criminal justice
• Drug trafficking
• Judicial cooperation
Regional policy
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Cohesion Fund
European Regional Development Fund
European Social Fund
The European Union Solidarity Fund
Science and technology
• European Institute of
Innovation and Technology
• Information Society
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Audiovisual and Media Policies
Communications
Digital Agenda for Europe
ICT Research
Internet
Media Coordination (MTF)
Media Literacy
MEDIA Programme
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Life sciences and
biotechnology
Nanotechnology
Research
• EURAXESS - Researcher's Mobility
Portal
• Horizon 2020
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Space
Transport and travel
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EU citizens rights when travelling in Europe
EU driving licence
Passenger rights
Passenger safety
Services sector
Tourism
Trans-European networks
Transport policies