European Economic Integration V Core Policy 1 Common

European Economic Integration V Core Policy 1 Common Trade Policy The 14 th EU-China summit in Beijing enabled the two to deepen their partnership. EU and India advance negotiations on economic cooperation and future free-trade pact, and agree on further energy and research collaboration. Prof. Dr. Günter S. Heiduk 1

Common trade policy = "Common Commercial Policy": § Trade policy was always a core competence of the EU Ø Where trade, including WTO matters, are concerned, the EU acts as one single actor, where the European Commission negotiates trade agreements and represents the European interests on behalf of the Union's 27 Member States. § Formal procedure: “Article 133 Committee” (representatives of the 27 MS + EC) coordinates EU trade policy. The major formal decisions (for example agreement to launch or conclude trade negotiations) are then confirmed by the Council of Ministers. § The Lisbon Treaty (To. L) gives a stronger role to the European Parliament in EU trade policy. The ordinary legislative procedure requires parliamentary consent for all trade agreements (joint power with the Council). The Commission shall also keep the Parliament informed of trade negotiations. Furthermore, the scope of EU trade power has been broadened to services and IPR. The To. L has also established an exclusive competence on FDI as part of the common commercial policy. This is complemented by an implied competence on portfolio investments derived from the internal market chapter on free movement of capital. Karel de Grucht, European Commissioner for Trade 2

European Integration V Core Policy 1 Common Trade Policy The To. L will help toward a more consistent EU external action by connecting more effectively the various strands of EU external policy, such as diplomacy, security, trade, development, humanitarian aid, and international negotiations. The attributes of the EU as an actor in the international trading system: Ø MARKET POWER Ø RECOGNITION Ø CAPABILITY Ø NORMATIVE POWER Ø LEGITIMACY/PARLIAMENTARY ACCOUNTABILITY R. Leal-Arcas, 2010. The European Union’s Trade and Investment Policy after the Lisbon Treaty. Legal Studies Research Paper 64/2010. Queen Mary Univeristy of London. 3

European Integration V Core Policy 1 Common Trade Policy Market Power: Central topic in WTO’s trade policy has been the negotiation of reciprocal concessions on market access. The larger the domestic market, the greater the negotiator’s power. EU’s deepening and widening policy is boosting its absolute market power. In terms of relative market power, EU’s slow growth in the last decades as well as the emergence of the BRIC countries reduced EU’s relative market power. The tariff reductions of the Uruguay Round reduced the market power of all industrialized countries. The main leverage that remained was in terms of access to the EC agricultural market. EU interest in trade has increasingly become one of persuading its trading partners to adopt rules and standards that address nontariff and regulatory barriers. The EU largely failed in its attempt to shape the multilateral trade agenda during the late 1990 s and early 2000 s, as either the emerging markets (in investment and government procurement) or the U. S. (in competition) opposed or failed to support the EU’s proposals. After 2006 the EU shifted back to a more active use of bilateral free-trade negotiations. 4

European Integration V Core Policy 1 Common Trade Policy Recognition: The EC has been a member of the WTO since its creation in 1995, and thus has legal personality in the field of trade. Whereas in the OECD, the EC has the status of an observer in groups that discuss trade. Besides EC’s exclusive competence for common commercial policy (de jure recognition), Member States are authorizing the EC to negotiate trade-related issues such as services, IPR, investment (de facto recognition). Capability: Even when the EC is recognized as being a major actor in trade negotiations, there is still the question of how the EC uses its power and influence. Capability can be assessed by autonomy, cohesion, and effectiveness. As EU Member States are involved in decisions concerning negotiating strategies as well as the adoption of what has been negotiated by the EC, one can conclude that it has less autonomy than its counterpart in the U. S. On the other the progress in replacing national laws by EU law leads to widen the scope of the EC in trade and trade-related policies. In over 50 years of decision-making in trade policy the EC has established a set of rules and procedures that facilitate to define common interest. This can be seen as a measure of cohesion. It is widely accepted that the EC has been able to defend effectively its interests, e. g in agriculture. 5

European Integration V Core Policy 1 Common Trade Policy Normative power: It has been argued that the EU is a normative power in that it promotes certain common values and norms or provides a model for other regions on how to regulate integrating markets. Especially with the Single Market program the acquis communautaire has codified more and more shared norms and standards. The acquis provided a broad basis for common EU external policies in trade and trade-related topics. Furthermore, the EU has provided a model for regional integration. Thus integration efforts in Latin America, Africa, and Asia were to some extent modeled on the EU. Legitimacy and Accountability: For decades the European Parliament as well as the parliaments of the Member States had been kept out of EC’s trade policy. In recent times globalization has resulted in more interest groups/NGOs becoming, or aware of shaping trade and investment policies. The EC responded with organizing a Consultation Forum with NGOs. But the basically technocratic character of EU trade policy making has not changed. The attribute of legitimacy — or perhaps more accurately, parliamentary control of policy—was not very well established in the EU before the To. L. 6

European Integration V Core Policy 1 Common Trade Policy Post-To. L Common Commercial Policy: EC’s exclusive power in trade policy means that the Member States will no longer participate in the WTO forum, at least theoretically. But most likely Member States will not disappear from the international trade scene, since the EC is not fully aware of the Member States’ needs when acting on their behalf. Anyhow, EC’s exlusive competence in investment may require Member States to amend or modify bilateral investment agreements. It will need some time for the EC to develop a common investment policy. 7

EU’s priorities in Common Commercial Policy based on the Lisbon Treaty The EU shall have exclusive competence in the area of the common commercial policy. The EU may conclude international agreements ”where the conclusion of an agreement is necessary in order to achieve, within the framework of the Union's policies, one of the objectives referred to in the Treaties (Article 216(1) TFEU). This external competence is complemented by the internal competence of implementing these agreements. Council should decide by qualified majority voting regarding the negotiation and conclusion of international agreements. Unanimity is required in fields such as agreements in the field of trade in cultural and audiovisual services and trade in social, education and health services. The CTP shall be conducted ‘in the context of the principles and objectives of the Union’s external actions (”politisation” of trade policy). EU should contribute to the gradual trade liberalization (”free and fair trade”) Harmonious development of world trade, the progressive abolition of restrictions on international trade and lowering of customs and other barriers (on goods and services) The scope of the CTP concerning intellectual property rights remains restricted to the ‘commercial aspects’ of these rights. Abolition of restrictions on foreign direct investment (but the Member States remain competent concerning portfolio investments). The function of the European Parliament is extended to a co-legislator with regard to the implementation of agreements and the adoption of internal autonomous trade policy measures. Markus Krajewski (2010). The Reform of the Common Commercial Policy. In: A. Biondi and P. Eeckhout (eds), European Union Law after the Treaty of Lisbon 8

EU’s Credo in Trade Policy: “Creating Opportunities“ European competitiveness Export credits Intellectual property Trade and competitiveness Regulating Trade policy for European Competitiveness Principles and regulations governing export credits in the EU. Trade policy on Intellectual property Market access Investment trade finance Public procurement Trade Policy on Investment Opening doors foreign direct investment Protection and enforcement of intellectual property are crucial for the EU’s ability to compete in the global economy Raw materials Dual use Promoting market access Creating new opportunities for EU exporters in markets abroad and in the EU markets for developing countries' exporters is a key part of the European Commission's work. Trade Policy on Public Procurement authorities buying goods and services Sustainable, secure and affordable access to raw materials is vital for industrial competitiveness in the EU. Open markets for the Open international rules for public building blocks of industry Maintaining export controls for dual use goods Dual use goods are products and technologies normally used for civilian purposes but which may have military applications. Source: http: //ec. europa. eu/trade/creating-opportunities/trade-topics/index_en. htm

Duty-free Imports by Selected Product Groups, China, EU-27, Japan, U. S. A. (in %)

The EU and the WTO The EU is the world's largest trading block, which makes it one of the key players in the WTO. The EU supports the work of the WTO on multilateral rule-making, trade liberalisation and, sustainable development. Through the WTO, the EU seeks to: Ensure new markets for European companies Observe the rules and make sure others also play by the rules Promote sustainable development in trade. Respecting the rules: The main benefit of the WTO system is that it is rule-based. Rule-making is the only way to guarantee that all members will adopt the same basic standards for global trade. The rules defined by WTO build on the general acknowledgement that certain types of action are unfair (such as dumping, for example). In case a Member of the WTO infringes these regulations, the injured country can seek justice by taking the case to the WTO dispute settlement system: the dispute settlement mechanism ensures respect of the rules for all - big and small. The EU trade policy instruments and legislation are in line with WTO and other international agreements on unfair trading practices. The EU takes care that European business and industries are not disadvantaged by unfair and injurious practices from other trading partners. 11

The EU and the WTO Dispute settlement The Agreement on Dispute Settlement Understanding sets up procedures for solving disputes which may arise among WTO members in the implementation of the different WTO Agreements. Trade Barriers Regulation The TBR gives industry the opportunity to lodge a complaint with the Commission when there is reason to believe that companies are encountering trade barriers that restrict their access to third country markets. Anti-dumping measures were created to counter dumping practices, the most frequently encountered trade-distorting practices. Dumping occurs when manufacturers from a non-EU country sell goods in the EU below the sales price in their domestic market, or below the cost of production. Anti-subsidy measures were designed to combat subsidies, which are made available to manufacturers by public authorities and which can also distort trade when they help to reduce production costs or cut the prices of exports to the EU unfairly. Safeguards A WTO member may restrict imports of a product temporarily if its domestic industry is seriously injured or threatened with injury caused by a surge in imports. 12

WTO Dispute Settlement cases involving the EU - Selection Ref. Number and title Complaints against EC Complainant WT/DS 349 - EC - Measures affecting the tariff quota for fresh or chilled garlic Argentina WT/DS 293 - Measures affecting the approval and marketing of biotech products Argentina (GMOs) WT/DS 263 - Measures affecting imports of wine Argentina WT/DS 290 - Protection of trademarks and geographical indications for agricultural Australia products and foodstuffs WT/DS 265 - Export subsidies on sugar Australia WT/DS 219 - Anti-dumping duties on malleable cast iron tube or pipe fittings from Brazil WT/DS 269 - Customs classification of frozen boneless chicken cuts Brazil WT/DS 266 - Export subsidies on sugar Brazil WT/DS 135 - Measures affecting the prohibition of asbestos and asbestos products Canada WT/DS 292 - Measures affecting the approval and marketing of biotech products Canada (GMOs) WT/DS 369 - EC - Certain Measures Prohibiting the Importation and Marketing of Seal Canada Products WT/DS 375 - Tariff Treatment of Certain Information Technology Products United States WT/DS 315 - European Communities - Selected Customs Matters United States WT/DS 223 - Tariff-rate quota on corn gluten feed from the United States WT/DS 27 - Import regime for bananas United States WT/DS 316 - Measures Affecting Trade in Large Civil Aircraft United States WT/DS 260 - Provisional safeguards measures on imports of certain steel products United States WT/DS 174 - Protection of trademarks and geographical indications for United States agriculturalproducts and foodstuffs WT/DS 26 - Measures affecting meat and meat products (Hormones) United States WT/DS 291 - Measures affecting the approval and marketing of biotech product ( United States GMOs) 13

Ref. Number and title WT/DS 330 WT/DS 121 WT/DS 189 WT/DS 155 WT/DS 332 WT/DS 354 WT/DS 142 WT/DS 114 WT/DS 321 WT/DS 339 WT/DS 166 - Cases launched by the EC Countervailing Duties on Olive Oil, Wheat Gluten and Peaches Safeguard measures on footwear Definitive anti-dumping measures on imports of ceramic floor tiles from Italy Measures on the export of bovine hides and the import of finished leather Measures affecting imports of retreaded tyres Canada - Tax exemptions and reductions for wine and beer Certain measures affecting the automotive industry Patent protection of pharmaceutical product Continued Suspension of Obligations in the EC-Hormones Dispute. Measures affecting imports of automobile parts Definitive safeguard measures on imports of wheat gluten from EC Defendant Argentina Brazil Canada China United States WT/DS 165 - Import measures on certain products from the EC United States WT/DS 152 - Sections 301 -310 of the Trade Act of 1974 United States WT/DS 138 - Imposition of countervailing duties on certain hot-rolled lead and bismuth United States carbon steel products originating in the UK WT/DS 294 - Laws, regulations and methodology for calculating dumping margins ('zeroing') United States WT/DS 262 - Anti-dumping and countervailing measures on certain steel products United States WT/DS 248 - Definitive safeguard measures on imports of certain steel products United States WT/DS 217 - Continued dumping and subsidy offset Act of 2000 United States WT/DS 213 - Countervailing duties on certain corrosion-resistant carbon steel flat products from Germany WT/DS 212 - Countervailing measures concerning certain products from the EC United States WT/DS 200 - Section 306 of the Trade Act of 1974 and amendments thereto ("carousel" United States WT/DS 186 - Section 337 of the Tariff Act of 1930 and amendments thereto United States WT/DS 176 - Section 211 Omnibus Appropriations Act United States WT/DS 160 - Section 110(5) of US Copyright Act WT/DS 136 - Anti-dumping Act of 1916 WT/DS 108 - Tax treatment for "Foreign Sales Corporations" United States WT/DS 320 - Continued Suspension of Obligations in the EC-Hormones Disput United States WT/DS 319 - Section 776 of the Tariff Act of 1930 WT/DS 317 - Measures Affecting Trade in Large Civil Aircraft United States WT/DS 353 - Measures Affecting Trade in Large Civil Aircraft (second complaint) United States WT/DS 350 - Continued Existence and Application of zeroing methodology United States 14

EU’s commitment for global trade Trade and development The European Union is committed to supporting developing countries' efforts to integrate into the trading system to help them reap the benefits of market opening. Access to essential medicines The EU is deeply committed to insure access to cheap medicines in poor countries. Trade and environment The respect of the environment is a vital condition for a sustainable trade growth and long-term development. Sustainability Impact Assessment (SIA) The European Commission has commissioned an independent assessment of the impact that trade negotiations may have on sustainable development. Trade and social welfare In an integrated global economy, the impact of trade on social welfare and rights has to be carefully managed. 15

EU’s hottest trade issues The DOHA –Round, the EU, trade preferences for development, and strategic partnerships EU-USA disputes create a climate where ”even the procedural framework of the WTO dispute settlement process seems incapable of ensuring wholly amicable US-EU trade relations. ” (N. Kuehler, European Policy Centre) Each new Regional Trade Agreement is reducing preferential market access for less developed countries. EU’s CAP is a major obstacle for progress in the DOHA Round. EU-China strategic partnership (e. g. in climate change) Continuing with preparatory discussions on launching formal free trade negotiations between EU and Japan EU’s leadership role in a multipolar world economy 16

EU’s Trade Negotiations Trade agreements are designed to create better trading opportunities by: • Opening new markets for goods and services • Increasing investment opportunities and protection of investments • Making trade cheaper - by eliminating substantially all customs duties and cutting red tape • Making trade faster - by facilitating transit through customs and setting common rules on technical and sanitary standards • Making the policy environment more predictable - by taking joint commitments on areas that affect trade such as intellectual property rights, competition rules and the framework for public purchasing decisions • Supporting sustainable development – by fostering cooperation, transparency and dialogue with our partners on social and environmental issues. Source: European Commission, Factsheet, Trade Negotiations Step by Step

Procedure of Trade Negotiations Source: European Commission, Factsheet, Trade Negotiations Step by Step

The EU has successfully concluded a number of important trade agreements with trading partners Latest developments USA – TTIP, first round of negotiations, 8 -12 July 2013 China – Agreement in Investment, negotiations launched on 21 Nov. 2013 Canada – Comprehensive Economic and Trade Agreement, key elements agreed on 18 Oct. 2013 Japan – Free Trade Agreement, negotiations launched in April 2013 Singapore – Free Trade Agreement, in force on 20 Sept. 2013, expected to become effective by lagte 2014. Malaysia, Thailand, Vietnam – Bilateral Free Trade Agreements, ongoing negotiations Morocco – Deep and Comprehensive Free Trade Agreement, ongoing negotiations

Free Trade Agreements finsihed but not yet applied Eastern Neighbourhood – The EU has recently concluded negotiations for a Deep and Comprehensive Free Trade Area (DCFTA) with Moldova, Armenia and Georgia. The DCFTAs are part of the Association Agreements with these three countries. The official initialing of the Association Agreements with Moldova and Georgia took place during the Eastern Partnership Summit on 29 November 2013 in Vilnius. Ukraine – The EU and Ukraine concluded the negotiations for a deep and comprehensive Free Trade Agreement (DCFTA) in December 2011. On 15 May 2013, the Commission adopted the proposals for Council decisions on the signing and provisional application of the EU-Ukraine Association Agreement, including its trade part (IP/13/436). Ukraine decided to suspend temporarily the preparations for signing but the EU offer is still on the table (Presidents’ statement). There also five interim Economic Partnership Agreements with African, Caribbean and Pacific States that have been negotiated but have not yet entered into force. These are with Cote d'Ivoire, Central Africa (Cameroon), the Southern African Development Community, Ghana and the East African Community. In total, the EU has finished negotiating ten trade agreements that have yet to enter into force. Source: European Commission, Memo, 3 Dec 2013, The EU‘S Bilateral Trade and Investment Agreements

EU‘s Regional Trade Agreements (1) The EU has already in place bilateral trade agreements with some 50 partners. Europe • Norway - 01 July 1973 • Iceland - 01 April 1973 • Switzerland - 01 January 1973 • Faroe Islands - 01 January 1997 • The former Yugoslav Republic of Macedonia - Stabilisation and Association Agreement, 01 May 2004 • Albania - Stabilisation and Association Agreement, 01 April 2009 • Montenegro - Stabilisation and Association Agreement, 01 May 2010 • Bosnia and Herzegovina - Interim Agreement on trade and trade related matters, 01 July 2008 • Serbia - Interim Agreement on trade and trade related matters, 01 February 2010 Mediterranean • Palestinian Authority - Association Agreement, 01 July 1997 • Syria - Co-operation Agreement, 01 July 1977 • Tunisia - Association Agreement, 01 March 1998 • Morocco - Association Agreement, 01 March 2000 • Israel - Association Agreement, 01 June 2000 • Jordan - Association Agreement, 01 May 2002 • Lebanon - Interim Agreement, 01 March 2003 • Egypt - Association Agreement, 01 June 2004 • Algeria - Association Agreement, 01 September 2005 21

EU‘s Regional Trade Agreements (2) Other countries • Mexico - Economic Partnership, Political Coordination and Cooperation Agreement, 01 July 2000 • South Africa - Trade, Development and Co-operation Agreement, 01 January 2000 • CARIFORUM States - Economic Partnership Agreement, Provisionally applied • Chile - Association Agreement and Additional Protocol, 01 February 2003 (trade) / 01 March 2005 (full agreement) • Madagascar, Mauritius, the Seychelles, and Zimbabwe Interim Partnership Agreement signed in August 2009 • Korea - New Generation Free Trade Agreement, signed 06 October 2010 • Papua New Guinea and Fiji - Interim Partnership Agreement ratified by Papua New Guinea in May 2011 • EU-Iraq - Partnership and Cooperation Agreement, signed on 11 May 2012 • Colombia and Peru - Trade Agreement, signed 26 July 2012 • Central America - Association Agreement with a strong trade component, signed 29 June 2012 Customs unions • Andorra - 01 July 1991 • San Marino - 01 December 1992 • Turkey - 31 December 1995 Updated information available at: http: //trade. ec. europa. eu/doclib/docs/2006/december/tradoc_118238. pdf 22

EU‘s Regional Trade Agreements (3) Transatlantic Trade and Investment Partnership – TTIP -Interaction between the US and EU account for $4 trillion in trade, investment, and commercial sales. -Trade between the 2 regions already accounts for between 40% and 50% of Global GDP. -Currently secures 15 million job -US investments in France and Belgium alone in 2010 were as high as in India and China combined. -A study by Sweden’s National Board of Trade said trade between the two sides could jump 20% - upwards of $200 billion annually- if an aggressive trade deal were enacted. -Eliminating existing tariffs would boost two-way trade by $120 billion within five years and $180 billion the U. S. and E. U combined GDP. -Would add 1. 5 percent to 2 percent combined to U. S. and European output. 23

EU‘s Regional Trade Agreements (4) Transatlantic Trade and Investment Partnership – TTIP Overall economic gains q An ambitious and comprehensive trans-Atlantic trade and investment partnership could bring significant economic gains as a whole for the EU (€ 119 billion a year) and the US (€ 95 billion a year) once the agreement is fully implemented. This translates on average to an extra € 545 in disposable income each year for a family of four in the EU. q The benefits for the EU and the US would not be at the expense of the rest of the world. On the contrary, liberalising trade between the EU and the US would have a positive impact on worldwide trade and income, increasing GDP in the rest of the world by almost € 100 billion. To the extent that the EU and the US can work together towards better trade rules and less regulatory divergence in the future, some of the reductions achieved in the cost of doing trade will also benefit other partners. The economic importance of the EU and the US will mean that their partners will also have an incentive to move towards the new transatlantic standards. This has the potential to spread gains across the global economy, which is increasingly interdependent especially given the ever greater complexity of global value chains. q Income gains are a result of increased trade. EU exports to the US would go up by 28%, equivalent to an additional € 187 billion worth of exports of EU goods and services. EU and US trade with the rest of the world would also increase by over € 33 billion. Overall, the extra bilateral trade between the two blocs, together with their increased trade with other partners, would represent a rise in total EU exports of 6% and of 8% in US exports. This would mean an additional € 220 billion and € 240 billion worth of sales of goods and services for EU and US based producers, respectively. 24 Source: Francois, J (2013), Reducing Transatlantic Barriers to Trade and Investment: An Economic Assessment, Centre for Economic Policy Research, London http: //europa. eu/rapid/press-release_MEMO-13 -211_en. htm; http: //trade. ec. europa. eu/doclib/docs/2013/march/tradoc_150737. pdf

EU‘s Regional Trade Agreements (5) Sectoral benefits q EU exports would increase in almost all sectors, but the boost in sales to the rest of the world would be particularly significant in metal products (+12%), processed foods (+9%), chemicals (+9%), other manufactured goods (+6 %), and other transport equipment (+6%). But, by far the biggest relative increase in trade would take place in the motor vehicles sector. In this sector, EU exports to the rest of the world are expected to go up by nearly 42% and imports to expand by 43%. The growth in bilateral trade is even more impressive: EU exports of motor vehicles to the US are expected to increase by 149%. This partly reflects the importance of two-way trade in parts and components and the further integration of the two industries across the Atlantic. This increase in trade in motor vehicles is also accompanied by an expansion in the sector's output (+1. 5%) in the EU. q The increase in exports and output that would be found (in different degrees) in almost all sectors reflects the big liberalisation effort that the agreement would imply. Unsurprisingly, the car sector, being characterised by an initial combination of high tariffs and high non-tariff barriers, such as different safety standards, is one that would benefit the most. Reducing non-tariff barriers q Reducing non-tariff barriers, so-called "behind-the-border" barriers, will have to be the key part of trans-Atlantic trade liberalisation. As much as 80% of the total potential gains come from cutting costs imposed by bureaucracy and regulations, as well as from liberalising trade in services and public procurement. Labour market q The increased level of economic activity and productivity gains created by the agreement will benefit the EU and US labour markets, both in terms of overall wages and new job opportunities for high- and low-skilled workers. Sustainable development q The agreement would have negligible effects on CO 2 emissions and on the sustainable use of natural resources. 25

Countries with which the EU has concluded or is negotiating FTAs 26

EU-Korea Free Trade Agreement “On 1 July 2011, the EU-Korea Free Trade Agreement (FTA) entered into force, marking the beginning of a new era in EU-Korea trade relations. This brought to an end a process that began five years ago with the Commission’s Communication on ‘Global Europe in a Competing World’ which called for the EU to renew its engagement in Asia. The EU-Korea FTA is only the first agreement in a series we are negotiating with Asian partner countries, but it is an example of how two partners can work together to achieve a deal that brings significant benefits to the economies of both sides. The EU-Korea FTA is the most ambitious trade agreement ever negotiated by the EU; it is also the EU’s first trade deal with an Asian country. The Agreement is expected not only to boost bilateral trade and economic growth in both the EU and Korea, but also to have a wider impact in Asia and elsewhere by signalling the EU’s openness to doing business with third countries and its commitment to free trade. The Agreement is unprecedented both in its scope and in the speed at which trade barriers are to be removed. By the end of the transitional periods, virtually all import duties between the two economies will have been removed. Exporters and importers of all industrial products and almost all agricultural products will be able to trade without having to pay duties. Additionally, the FTA breaks new ground in tackling significant non-tariff barriers to trade, with a specific focus on the automotive, pharmaceuticals, medical devices and electronics sectors. The Agreement will also create new opportunities for market access in services and investments, and lead to major advances in areas such as intellectual property, government procurement and competition policy. ” Karel De Gucht, European Commissioner for Trade, http: //trade. ec. europa. eu/doclib/docs/2011/october/tradoc_148303. pdf 27

EU-Korea Free Trade Agreement Tariff elemination for industrial and agricultural goods http: //trade. ec. europa. eu/doclib/docs/2011/october/tradoc_148303. pdf 28

EU-Korea Free Trade Agreement Rules of Origin 29 http: //trade. ec. europa. eu/doclib/docs/2011/october/tradoc_148303. pdf

EU-Korea Free Trade Agreement Tackling Barriers to Trade http: //trade. ec. europa. eu/doclib/docs/2011/october/tradoc_148303. pdf 30

EU-Korea Free Trade Agreement Further Example: Protection for Geographical Indications http: //trade. ec. europa. eu/doclib/docs/2011/october/tradoc_148303. pdf 31

EU-Japan Free Trade Agreement Negotiations 29 November 2012: Council decided to give the Commission 'the green light' to start trade negotiations with Japan. The mandate sets out a strict and clear parallelism between the elimination of our duties and non-Tariff Barriers in Japan. 'Like for like' if you will. There's a safeguard clause to protect sensitive European sectors. We explicitly reserve ourselves the right 'to pull the plug' on the negotiations after one year if Japan does not live up to its commitments on removing non-tariff barriers. Potential benefits of EU-Japan Free Trade Agreement (FTA) § A free trade deal with Japan would boost Europe's economy by 0. 8% of its GDP § EU exports to Japan could increase by 32. 7%, while Japanese exports to the EU would increase by 23. 5% § 420, 000 additional jobs in the EU are expected as a result of this agreement http: //trade. ec. europa. eu/doclib/press/index. cfm? id=847 32

The Controversy on ACTA – Anti-counterfeiting Trade Agreement ACTA is an international trade agreement aimed at ensuring that the EU's already high standard of protection for intellectual property rights can be enforced globally. • The EU's national customs authorities have registered that counterfeit goods entering the EU have tripled between 2005 and 2010. • Statistics published by the EC in July 2011 show a tremendous upward trend in the number of shipments suspected of violating IPR. Customs in 2010 registered around 80, 000 cases, a figure that has almost doubled since 2009. More than 103 million fake products were detained at the EU external border. • As Europe is losing billions of Euros annually through counterfeit goods flooding our markets, protecting Intellectual Property Rights means protecting jobs in the EU. It also means consumer safety and secure products. • ACTA does not contain any provision that provide for the cutting of internet access or for monitoring of the internet. ACTA is not about checking private laptops or smart phones at borders. • ACTA is fighting against piracy; piracy should not be confused with sharing content. Sharing content is only illegal when the content is illegal. ACTA does not define what is legal or illegal content. Source: http: //ec. europa. eu/trade/tackling-unfair-trade/acta/

EU Trade Data (1) Exports and Imports, EU-27, USA, Japan, China, 2001 -2011 (% of World Ex, Im) Source: Own calculation based on EUROSTAT.

EU Trade Data (2) Exports Share of EU-27 external trade by products, 2011 Imports SITC 0 -1 Food, drings and tobacco SITC 2, 4 Raw materials SITC 3 Mineral fuels, lubricants + related materials SITC 5 Chemicals and related materials SITC 6, 8 Other manufactured goods SITC 7 Machinery and transportation equipment SITC 9 Commodities and transactions not classified elsewhere in the SITC Source: Own calculation based on EUROSTAT.

EU Trade Data (3) Share of top 5 EU-27 Member States on EU-27 external exports, 2011 Source: Own calculation based on EUROSTAT.

EU Trade Data (4) Source: EUROSTAT

EU – China Trade and Investment Relations (1) Extra EU-27 Merchandise Trade with China 2000 -2011 (EUR billion) Source: Own calculation based on EUROSTAT 38

EU – China Trade and Investment Relations (2) EU-27 Bilateral Trade with China in Selected SITC Products Groups, 2000 - 2011 (EUR billion) EU-27 Export to China EU-27 Import from China SITC 5 = Chemicals and related articles; SITC 6 = Manufactured goods chiefly classified by materials; SITC 7= Machinery and transport equipment; SITC 8 = Miscellaneous manufactured articles Source: Own calculation based on EUROSTAT. 39

EU – China Trade and Investment Relations (3) Intra-Industry Trade Index Germany-China, Selected Products (HS 1999, 2 -Digit, 4 -Digit), 2000, 2011 6205 Men’s shirt 7318 Iron and Steel crews 7326 Articles of iron and steel 8471 Automatic data processing machines, optical reader 9018 Electrical apparatus 84 Machinery 85 Electrical, electronic equipment 90 Optical, photo, technical, medical apparatus 40 Source: Own calculation based on International Trade Center – Trade Map, International Trade Statistics

EU – China Trade and Investment Relations (4) Poland‘s Exports to China by End-Use Category, 2000 -2010 (% of total exports to China) Poland‘s Imports from China by End. Use Category, 2000 -2010 (% of total imports from China) 41 Own calculation based on OECD, STAN Bilateral Trade Database by Industry and End-Use Category .

EU – China Trade and Investment Relations (5) Intra-Industry Trade Index Germany-China and Poland-China, Selected Product Groups, HS 2006, 2 Digit, 2007, 2011 42

EU – China Trade and Investment Relations (6) Poland’s Imports from China Classified by Technological Level, 2000 -2009 (USD billion) 43 . Source: OECD, Structural Analysis Statistics, S TAN Bilateral Trade 2010

EU – China Trade and Investment Relations (7) FDI inflows to China from the EU, Japan, the U. S. A. , 2000 -2010 (USD billion) 44 Source: Own calculation based on MOFCOM, Invest in China.

EU – China Trade and Investment Relations (8) Motives of German Companies to Invest in EU-15, CEEC, China Source: DIHT, 2011 45

EU – China Trade and Investment Relations (9) China’s OFDI Stock in EU-27, Top 4 EU-15, Top CEEC, 2007 -2010 (USD million) 46 Source: Own calculation based on MOFCOM, 2010.

EU – China Trade and Investment Relations (10) China’s OFDI Flows by Selected Countries/Regions, 2010 (in %) Source: Own calculation based on European Commission, DG Trade. 47

EU – China Trade and Investment Relations (11) Chinese Outward Direct Investment Stock, 2003 -2011 (USD billion, %) Source: Own calculation based on UNCTAD, World Investment Reports.

EU – China Trade and Investment Relations (12) Greater China Outbound M&A Activity into Germany, 2005 -Q 2 2013 (Volume and Value)

EU – China Trade and Investment Relations (13) Greater China Outbound M&A Activity into Germany, Sector Deals, 2005 -Q 2 2013 Greater China Outbound M&A Activity into Germany, Deal Size Volumes, 2005 -Q 2 2013

Recent Chinese M&As in Germany 2012 Chinese Company German Company Industry Sollbro Hanergy Holding Solar Schwing XCMG Machinery Wumang Texroll Fudi Machinery Preh Joyson Electronic Automobile Supplier Drossbach Dalian Sunlight Machinery Kiekert Hebel Automobile Supplier Putzmeister Sany Machinery Saunalux Anhui Saunaking Sauna Equipment Sunways LDK Solar Sellner Ningbo Huaxiang Automobile Supplier Fluitronics XCMG Hydraulic Systems KSM Casting CITIC Dicastal Medion Lenovo Computer Saargummi Chongging Light Industry Automobile Supplier Source: Frankfurter Allgemeine Zeitung, 25 August, 2012, p. 13.

Recent Chinese M&As in Germany 2012 – H 1 2013, ranked by deal value Target Company Target Industry Bidder Company Seller Company Deal Value (USD mio) Linde Hydraulics; Kion Group Manufacturing Weicha Power Oerlikon Sauer; Oerlikon Schlafhorst; Oerlikon Textile Components Manufacturing The Jiangsu Jingsheng Group OC Oerlikon Corporation 702 Putzmeister Holding Manufacturing Sany Heavy Industry; CITIC Karl Schlecht Stiftung 661 Preh Manufacturing Liaoyuan Joyson Electronic Deutsche Beteiligungs AG; Joyson Holding 364 Thyssen. Krupp Tailored Blanks Manufacturing Wuhan Iron and Steel Company Thyssen. Krupp AG 334 Grohe AG (undisclosed stake) Manufacturing Jianshe Cai; Jilin Cai A. Monforts Textilmaschinen Manufacturing Fong‘s Industries (Hong. Kong) L. Possehl & Co. Mb. H 63 HIB-Trim Part Solutions Bruchsal Manufacturing Ningbo Huaxiang Electronic Mutares AG 45 AWECO Appliance Systems Consumer Business Sanhua Appliances Systems 28 Golden Tulip Hotel Frankfurt Consumer Business New Century Tourism Group 14 928 119 Source: Deloitte (2013): Graduating Up the Value Chain – Chiina‘s Overseas Revivals – 2013 Greater China Outbound M&A Spotlight.