Dear pasof,
Thanks for your question. First, let me request that if any of the
following is unclear or if you require any further research – please
don’t hesitate to ask me for a clarification.
You requested short overviews of the following –
1) Overview about E.U
2) The US and the EU
3) E.U in the International Trade
4) E.U & Globalization
Here are my responses in order –
1) Overview of the European Union
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In many respects, the European Union is a direct outcome of the Second
World War, perhaps the worst tragedy in the history of humanity and
one that brought about the destruction of a continent and tens of
millions of deaths. The historic birth of the EU can be traced back
to a French proposal from May 9, 1950 – a proposal that called for the
creation of a European Federation. The EU proper was created by the
Treaty of Rome in 1957. The first six countries to join – first, the
idea, and later the organization – were France, Belgium, Germany,
Italy, Luxembourg and the Netherlands. Denmark, Ireland and England
were admitted in 1973, followed by Greece in 1981, Spain and Portugal
in 1986 and Austria, Finland and Sweden in 1995. This brings the
total number of members in the European Union to 15; however, 13
additional eastern and southern European countries have expressed
interest in joining the Union including Bulgaria, the Czech Republic,
Estonia, Cyprus, Latvia, Lithuania, Hungary, Malta, Poland, Romania,
Slovenia, Slovakia and Turkey.
The EU is a unique organization – it creates a European Federation
“based on the rule of law and democracy,” but does not replace
existing countries or their constitutions. Rather, member countries
“delegate sovereignty to common institutions representing the
interests of the Union as a whole on questions of joint interest.”
The EU is run by five institutions. The European Parliament is the
main governing body and its members are elected by the Union country’s
peoples. The Council of the Union is a virtual organization comprised
of the governments of member states. The European Commission is the
driving force behind the Union and its executive body. The Court of
Justice is the judiciary arm of the Union, and the Court of Auditors
acts as a controller of sorts, overseeing the Union’s budget.
There are five additional organizations which round out the
institutional system of the EU – the European Economic and Social
Committee is responsible for representing the peoples’ voice on social
and economic issues; the Committee of the Regions represents regional
and local authorities in member states and deals with regional policy,
environmental and educational issues; the European Ombudsman fields
complaint from member states’ peoples in issues relating to improper
conduct and administration; the European Investment Bank acts as sort
of a government sponsored venture capital arm, financing private and
public initiatives that are in the long-term best interests of the
Union; and the European Central Bank, which parallels “the Fed” in the
U.S. and is responsible for Union monetary policy as well as for
foreign exchange operations and administration of the common European
currency (the Euro).
Four central objectives provide a European constitution of sorts and
guide the governmental organizations in their actions – the first
objective is to establish an institution (or concept) of European
Citizenship, to include fundamental rights (e.g. a constitution),
freedom of movement throughout the Union, and civil and political
rights (but not necessarily civil and political freedom in the
American sense). The second objective is to ensure freedom, security
and justice to all citizens of the Union’s member countries through
system wide cooperation in justice and internal affairs (home affairs
of the member countries). The third objective is to promote economic
and social progress – there are several major components to this
objective: creation of a single European market, a single common
currency – the Euro, jobs across the entire region through regional
social and economic development, and environmental protection. The
fourth objective is to assert Europe’s role in the world, politically,
economically and socially.
2) U.S. and the EU
----------------------
The United States and the European Union have been allies for most of
the twentieth century. This strong transatlantic partnership was
solidified with the signing of the Transatlantic Declaration, a treaty
signed on November 20 1990 between the US, the EU and all of the
then-members of the Union. Up until the middle of the last century,
Europe has been the source for most of the world’s turmoil, something
that has become quite difficult to comprehend in this day and age –
and the US placed a great degree of effort on the development of a
stable and democratic Europe. In tandem, however, a competitor to the
US is now emerging.
Following the events of September 11th, 2001, the EU as a whole showed
extreme empathy and support for the US and its citizens –
“As US Secretary of State Colin Powell noted in 2001, "The European
Union's principled response to the September 11th attacks and to our
call for a worldwide effort against terrorism is just the latest
demonstration of the fact that a strong united Europe is good, indeed
essential, for the United States, for Europe, and for the world. Our
common objective is security for our peoples. Let no one doubt the
will and the power of our free societies to defend the security of our
citizens, even as we safeguard our democratic values."”
http://www.eurunion.org/profile/brief.htm
However, traditionally – and most of the time – the EU and the US do
not fully agree about global political affairs. The US is typically
interventional, while the EU, though not an isolationist by any means,
is generally not interested in military and aggressive action –
“Euro-American cooperation must set itself new objectives and
coordinate efforts to face up to the new risks associated with nuclear
proliferation, minority protests, the development of international
crime and drug trafficking, and the pressures of migration” (The Union
and the World).
On the economic front, the EU constitutes the US’s largest trade
partner and the only one with which trade is mostly balanced (vis a
vis trade with Japan or China…) – “The United States and the European
Union enjoy the world’s largest commercial relationship and are each
other’s largest trade and investment partner. In 2001, two-way trade
in goods and services between the EU and the US amounted to $537.7
billion.” (source: EU-US Economic Relationship – An Introduction)
On the other hand, trade disputes concerning mostly steel, agriculture
and civil aircraft (Airbus vs. Boeing) are heated and frequent, but
the two giants continue to seek reasonable compromises on all fronts.
It is interesting to note that on the financial end, and especially
recently, the Euro is emerging as a viable competitor to the US Dollar
on world markets; as the Euro gains a place as a reserve currency
among the world’s central banks, demand for the US currency may
subside, weakening the Dollar.
It is interesting to compare the EU and the US – the US is
approximately triple the size (in area) of the 15 current EU members,
yet 285 million people reside in the US, while 378 million reside in
the EU; it is therefore far more dense –in fact, population density in
the EU is 302.6 people per square mile vs. 76.6 people per square mile
in the US (about four times as dense). The EU’s gross domestic
product is $7.9 trillion vs. $10.2 trillion for the US, which is
therefore obviously far more productive. The US also continues to
grow faster, with GDP increasing 1.7% from 2000 to 2001 vs. 0.5%
growth in the EU during the same time period. It is interesting to
note that 2001 inflation was identical, coming in at 2.4% (source:
Facts and Figures on the European Union and the United States).
Relationships between the EU and each of the 50 states are detailed
here –
http://www.eurunion.org/partner/usstates/eustates.htm
Some “top ten lists” relating to EU – US relations –
http://www.eurunion.org/partner/usstates/top10.htm
3) EU and International Trade
------------------------------------
Trade was the mainstay and basis of the original idea for a European
Union; while the EU has evolved into a political giant and is now
involved in every other facet of human and global interaction, trade
remains a major component of the Union’s actions and policies.
“The 15 member states of the European Union have a common commercial
policy towards non-member countries. The main basis of the common
commercial policy is article 133 of the Treaty of Amsterdam (1997).
Trade has been important for the European Union since its earliest
days four decades ago.”
http://europa.eu.int/comm/trade/misc/whatwedo.htm
The earliest concept for trade was that of a common market – but this
has now evolved into a single market, one with a single currency and
one set of tariffs, rules and regulations for trade with partners
outside of the Union. As the Union has grown, so has its economic
importance in relation to the world. The EU now accounts for fully
one fifth of world trade and has become a key player in the process of
globalization (see next section). The EU’s common commercial policy
not only provides for a framework for the commercial interests of its
member countries – it also sets the stage for a globalization process
that will hopefully be accepted by all member countries as well as by
the rest of the world.
In order to gain some sense of the role the EU plays in international
trade, let us consider some recent statistics. The 15 current members
of the EU account for 6% of the world’s population. Nevertheless, the
EU is the world’s largest exporter – accounting for 19% of global
exports in 1999. As benchmarks, the US accounted for 16% of global
exports, while Japan accounted for “only” 10% of same. The EU is the
world’s second largest importer – accounting for 17% of world imports
during 1999. While that’s about 30% less than the US’s 23% share, it
is nearly thrice Japan’s share at 6.7%.
If one were to consider just services, the EU’s role is even greater –
EU exports of services accounted for 25% of the global total during
1998, while US service exports accounted for 20% and Japan’s for 9% of
the world total. Services also represent more of the EU’s total trade
picture when compared to both the US and Japan – accounting for 25% of
total EU external trade vs. 21% for the United States and 20% for
Japan. One may therefore infer that the role of services is greater
in the EU economy than in other major global economies.
The EU is also the largest foreign direct investor worldwide,
accounting for 44.7% of FDI (Foreign Direct Investment) flows during
1999, compared to 27.8% for the US and only 5.2% for Japan.
Investments *in* Europe accounted for 19.4% of the global total and
were far higher in the US, which has traditionally been a more
attractive investment target for foreigners (many of which hail from
the EU…!) – the US’ share in 1999 was 37.8%. Investment in Japan has
of course declined with the more-than-decade long recession there,
with FDI inflows to Japan accounting for only 0.7% of the global total
during that same year.
A positive sign is the EU’s increasing economic openness – measured as
imports as a percentage of GDP, from 1992 to 1999 the EU’s openness
increased from 10% to 12%, almost reaching that of the US at 13.5%.
Japan, of course, is far less open as an economy, with its index
coming in at 9%.
4) EU and Globalization
---------------------------
To the casual observer, there is no doubt that the EU is becoming a
major player on the front of globalization. But as Gonzalez and
Hoffman write,
“Paradoxically, at a time when the reasonable alternative would be to
accelerate European integration in order to face new global
challenges, the fear inspired by globalization is strengthening narrow
nationalism.”
http://web.nps.navy.mil/~relooney/3040_389.pdf
Global trends have been quite interesting to watch unfold – on the one
hand super-countries such as the EU and the Latin American economic
union, MERCASUR, are growing in influence and power, while on the
other hand there is massive fragmentation of former countries into an
abundance of newly formed nation-states. The old Soviet Union has
become a couple of dozen new countries, Yugoslavia is now a handful,
Czechoslovakia has split in two, etc.
Within Europe, the EU has (mostly) agreed on a policy of “enlargement”
– i.e. expanding the EU beyond its original charter to accommodate the
new geopolitics. But this policy is extremely controversial – just as
the EU is beginning to gain power as a political entity, it may be
weakened as its historic charter is made irrelevant.
What about the rest of the world? As early as 1968, the EU put in
place a common customs tariff; it had abolished customs duties among
its members several years earlier. The character of EU economics is
such that it imports raw materials from ROW (the Rest Of the World)
and then proceeds to process them into finished goods with a high
added value. It has been in the best interests of the EU members,
therefore, to promote a global open trading system, and this is
exactly what the community had been working for over the past three
decades or so (if not as aggressively as one would hope for, given the
protectionist nature of many of the member countries).
The EU has played a major role in GATT – the General Agreement on the
Tariffs and Trade and the primary global treatise on commerce. The EU
has consistently emphasized liberalization during major trade
negotiations. The Union has managed to receive responsibility for all
important world-facing commerce rules and regulations, from the
negotiation of customs duties through the implementation of safeguard
and anti-dumping measures.
The EU has been a strong proponent of the creation of the WTO – the
World Trade Organization. The WTO provides a widely accepted
framework for the settlement of multilateral trade conflicts.
Global trade in and out of the EU is now far easier and efficient than
it has been in the past given the common currency and the
standardization of trade and commerce practices. The EU presents an
extremely attractive market to the rest of the world, second in
consumerism only to the US, and is a favorite export target for
companies worldwide. The EU, on its part, has been leveraging its
size and position to persuade trading partners to play by the rules
the member countries hope will preserve both healthy competition as
well as reciprocal market access.
From a political perspective, while the EU fronts a cohesive global
policy individual countries continue to act as sovereign entities –
this had been most recently demonstrated surrounding the US’ invasion
and occupation of Iraq.
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I hope this response adequately addresses your request. Please let me
know if you are in need of additional information concerning this
query.
Thanks,
ragingacademic-ga
References:
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Part I
European Union at a Glance
http://europa.eu.int/abc-en.htm
Europe in Ten Points
http://europa.eu.int/comm/publications/booklets/eu_glance/12/txt_en.htm
An Overview of the European Union
http://www.lawsoc.org.uk/dcs/fourth_tier.asp?section_id=1436&Caller_ID=
Part II
The Union and The World
http://europa.eu.int/comm/publications/booklets/eu_glance/12/txt_en.htm#9
Facts and Figures on the European Union and the United States
http://www.eurunion.org/profile/facts.htm
EU-US Economic Relationship – An Introduction
http://www.eurunion.org/partner/usstates/usstates.htm
Part III
EU Trade
http://europa.eu.int/comm/trade/index_en.htm
Part IV
European Union and Globalization
http://web.nps.navy.mil/~relooney/3040_389.pdf
Towards a New Trade Round
http://trade-info.cec.eu.int/europa/2001newround/nr.pdf
The European Union in the World
http://europa.eu.int/comm/world/
Additional Links:
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A History of the EU, by Year, 1946-2003
http://europa.eu.int/abc/history/index_en.htm
Europe Direct – a “Live” European FAQ
http://europa.eu.int/europedirect/en/index_en.html
Directory of sources of information on the EU
http://www.gksoft.com/govt/en/eu.html
EU Related Web Resources for Instructors
http://www.eurunion.org/infores/teaching/webteach.htm
Excellent directory of articles on globalization
http://web.nps.navy.mil/~relooney/3040_cex.htm
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