Preferential Trade Agreement European Union

The Preferential Trade Agreement European Union: What You Need to Know

The European Union (EU) is a trading powerhouse, with a population of over 500 million and a GDP of over $16 trillion. As part of its trade strategy, the EU has entered into a number of preferential trade agreements (PTAs) with countries around the world, including with developing countries in Africa, Asia, and Latin America. These agreements are designed to promote trade and economic development, while also supporting EU foreign policy objectives.

What is a Preferential Trade Agreement?

A PTA is a trade agreement between two or more countries that reduces or eliminates tariffs and other trade barriers on certain goods or services. The goal of a PTA is to increase trade between the countries involved, and to promote economic growth and development. PTAs can be bilateral, involving two countries, or multilateral, involving more than two countries.

The EU`s Preferential Trade Agreements

The EU has a number of PTAs in place with countries around the world. These agreements cover a wide range of goods and services, including agricultural products, industrial goods, and services such as financial and telecommunications services.

Some of the EU`s most important PTAs include:

– The European Free Trade Association (EFTA): This agreement, which came into force in 1960, covers trade between the EU and four EFTA countries: Iceland, Liechtenstein, Norway, and Switzerland. The agreement allows for the free movement of goods between the EU and EFTA countries, as well as for the free movement of people and capital.

– The EU-Canada Comprehensive Economic and Trade Agreement (CETA): This agreement, which came into force in 2017, covers trade between the EU and Canada. It eliminates tariffs on 98% of goods traded between the two regions, and includes provisions on intellectual property, public procurement, and regulatory cooperation.

– The EU-South Korea Free Trade Agreement (FTA): This agreement, which came into force in 2011, covers trade between the EU and South Korea. It eliminates tariffs on 99% of goods traded between the two regions, and includes provisions on services, investment, and intellectual property.

The Benefits of PTAs

PTAs have a number of benefits for countries involved. By reducing or eliminating trade barriers, PTAs can help to increase trade between countries, promoting economic growth and development. They can also help to promote foreign policy objectives, such as by promoting political stability or reducing poverty in developing countries.

For the EU specifically, PTAs can help to promote its economic and political interests around the world. By increasing trade with other regions, the EU can help to diversify its economy and reduce its reliance on any one market. PTAs can also help to promote EU values such as democracy, human rights, and environmental protection.

Conclusion

The EU`s preferential trade agreements are an important part of its trade strategy. These agreements help to promote trade and economic development, while also supporting EU foreign policy objectives. By reducing or eliminating trade barriers, PTAs can help to increase trade between countries, promoting economic growth and development. The EU`s most important PTAs include the European Free Trade Association, the EU-Canada Comprehensive Economic and Trade Agreement, and the EU-South Korea Free Trade Agreement.