The European Union: Brief Insights and Agreements

The European Union: Brief insights and agreements An informative paper by the Thai-Italian Chamber of Commerce

November 2020

EU MEMBER STATES AUSTRIA

ESTONIA

ITALY

PORTUGAL

BELGIUM

FINLAND

LATVIA

ROMANIA

BULGARIA

FRANCE

LITHUANIA

SLOVAKIA

LUXEMBOURG

SLOVENIA

CROATIA

GERMANY

CYPRUS

GREECE

MALTA

SPAIN

CZECH REP.

HUNGARY

NETHERLANDS

SWEDEN

DENMARK

IRELAND

POLAND

Thai-Italian Chamber of Commerce Vanit Building II, 16 Flr. Suite 1601 B, 1126/2 New Petchburi Road,Bangkok 10400, Thailand Office: +66 2 255 8691 / +66 2 255 8681 - Fax: +66 (0) 2 253 9896 www.thaitch.org

INTRODUCTION The European Union (EU) is a political and economic union comprised of 27 European countries. This supranational organization was founded after the Second World War to foster economic cooperation and increase interdependency and reduce conflict. Initially, the European Economic Community (EEC) was established in 1958 with six countries: Belgium, Germany, France, Italy, Luxembourg, and the Netherlands. In 1993, the name changed to European Union with 22 more countries joining the cooperation. The initial goal of economic development expanded to social, migration, environmental, security, climate, and justice. The European Union has reflected stability and peace among these countries and help speed the economy. Nineteen member states use one currency (the EURO) and all the citizens in the EU have the freedom to travel among these countries. All EU citizens hold the right to travel, work, and study or retire in any country within the EU.

EUROPEAN UNION AT A GLANCE: POPULATION

446 M (2019)

LAND AREA

4.476 M KM2

GDP

15.5 TRILLION USD

MEDIAN AGE

43.1 YEARS OLD

LIFE EXPECTANCY

80 YEARS

OVERVIEW OF THE REGION EU GOALS The goals of the European Union are: ▪ ▪ ▪

Promote peace, its values, and the well-being of its citizens offer freedom, security, and justice without internal borders sustainable development based on balanced economic growth and price stability, a highly competitive market economy with full employment and social progress, and environmental protection

▪

combat social exclusion and discrimination

▪

promote scientific and technological progress

▪

enhance economic, social and territorial cohesion and solidarity among EU countries

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respect its rich cultural and linguistic diversity

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Establish an economic and monetary union whose currency is the euro.

TRANSPARENT AND DEMOCRATIC INSTITUTIONS i. National Parliaments work alongside of the directly elected European Parliament. ii. EU is governed by the principle of representative democracy. iii. Citizens from the member states are asked for their views while making new policies or improvements iv. Free trade among EU nations

EU MAIN INSTITUTIONS • European Commission • Council of the E.U. • European Parliament

• European Court of Justice • European General Court • European Central Bank

BREXIT: UNITED KINGDOM’S WITHDRAWAL FROM THE EUROPEAN UNION Britain joined the European Union in 1973 along with Denmark and the Republic of Ireland. The United Kingdom decided to withdraw from EU in 2016 as 52% of the population voted in favor to leaving the organization. The official withdrawal is dated on the 31 January 2020.

During this transition, the UK continues to participate in the European Union Customs Union and European Single Market until the 31 December 2020. The new policies and regulations will be into effect from 1 January 2021.

EU POSITION IN WORLD TRADE The European Union (EU) remains the biggest trading player in the world and has achieved this position by acting as one voice in the global stage. The development of transportation and communication has eased export and import of goods from and to Europe. • • • •

Europe exports and imports hundreds of millions of Euros worth goods every day. Europe is the world’s largest exporter of manufactured goods and services Europe is the largest consumer market for more than 80 countries for manufactured goods and services European Union values for around 15% world’s trade in goods

European Parliament in Strasbourg – Needpix.com

EU’S OVERALL EXPORTS AND IMPORTS At HS6 digit level – 4,555 products exported to 209 countries – 4,555 products are imported from 208 countries.

DEVELOPMENT OF INTERNATIONAL TRADE IN GOODS IMPORT

1,935 billion EUR

EXPORT

2,132 billion EUR

BALANCE

197 billion EUR

Note: External trade flow with extra EU-27 /Source: Eurostat, 2020

ABOUT THAILAND Thailand is one of the 10 members of the Association of South East Asian Nations (ASEAN), the second largest economy in the region in terms of GDP (17%) and the EU’s fourth largest trading partner in ASEAN. Thailand holds the chairmanship of ASEAN for 2019, making Thailand a significant partner for the EU.

EU-THAILAND TRADE The negotiation for an EU-Thailand Free Trade Agreement was launched in March 2013 and put on hold in 2014 after the military take-over of the country. The negotiations aimed to conclude a comprehensive Free Trade Agreement. Spotlight - Thailand Trade Balance and Milestones • • • • •

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In 2018, total bilateral trade between the EU and Thailand amounted to €38 billion. The EU is Thailand’s third largest trade partner (after China and Japan), accounting for 9.1% of the country’s total trade. Thailand is the EU’s 25th largest trading partner worldwide. Thailand exported goods worth €22.9 billion to the EU in 2018. Key exports from Thailand are machinery and electronics and transport equipment, miscellaneous manufactured articles, as well as food products. The EU exported goods worth €15.1 billion to Thailand in 2018. Key EU exports to Thailand are machinery and transport equipment, chemicals and related products, and manufactured goods. Thailand is one of the most important destinations of European investments within ASEAN with €21.2 billion of outward stocks. The EU is the second-largest investor in Thailand after Japan.

EU-VIETNAM TRADE AGREEMENT The European Union and Vietnam signed a Trade Agreement and an Investment Protection Agreement on 30 June 2019. The agreement aims to provide opportunities to increase trade and support jobs and growth on both sides, through eliminating 99% of all tariffs • • • •

Reducing regulatory barriers and overlapping red tape Ensuring protection of geographical indications Opening services and public procurement markets Making sure the agreed rules are enforceable

EU-SINGAPORE TRADE AGREEMENT The European Union and Singapore signed a Free Trade Agreement and an Investment Protection Agreement on 19 October 2019. The agreements aim to: • • • •

remove nearly all customs duties and get rid of overlapping bureaucracy. Improve trade for goods like electronics, food products and pharmaceuticals. Stimulate green growth, remove trade obstacles for green technology and create opportunities for environmental services, Encourage EU companies to invest more in Singapore, and Singaporean companies to invest more in the EU.

EU-JAPAN TRADE AGREEMENT EU firms already export nearly €70bn in goods and €28bn in services to Japan every year. In the past European firms faced trade barriers when exporting to Japan, which sometimes made it hard for them to compete. The trade agreement with Japan (signed on 1 February 2019): • • •

removes tariffs and other trade barriers and creates a platform to cooperate in order to prevent obstacles to trade; and helps us shape global trade rules in line with our high standards and shared values, and; Sends a powerful signal that two of the world's biggest economies reject protectionism.

EU AUSTRALIA TRADE AGREEMENT Australia and the European Union undertake bilateral trade under the agreement EU-Australia Partnership Framework of 2008. European Union is Australia’s third largest trading partner and the third largest source of foreign investment. • •

• •

•

The trade in goods and services amongst these regions reached 48bn euro and 27bn euro respectively in 2017. The trade negotiations aim to remove trade barriers and help SME export, protect distinctive regional EU food and drink products from imitations in Australia and allow EU companies to participate in government procurement in Australia. EU and Australia began the free trade agreement on 18th June 2018. 2.2 million people are working in trade-related jobs out of 1.57 million and 671,000 work regarding exports and imports respectively in Australia. In 2018, EU was Australia’s largest source of foreign investment of over 1.2 trillion AUD.

EU-NEW ZEALAND TRADE AGREEMENT Bilateral trade among EU and New Zealand has risen in the recent years and reached almost 8.7 bn euro in 2017, making New Zealand EU’s third largest trading partner. Per the impact assessment, trade between New Zealand and the EU could increase by 36%; trade in goods could increase by 47%, whereas the services trade could increase by 14% as of 2018. The trade negotiations aim to: • •

•

reduce existing barriers to trade in goods and services make sure that European companies compete on a level playing field with businesses from countries that already have a trade agreement with New Zealand promote smart, sustainable and inclusive growth

EU-CANADA TRADE AGREEMENT EU and Canada signed the Comprehensive Economic and Trade Agreement (CETA) in 2017 by virtually removing all custom duties. This increased 7% exports from the EU within a year of the agreement, below are the figures as per 2018. • •

Export of machinery and mechanical appliances increased over 8% Pharmaceuticals exports from EU to Canada went up by 10%

• • • • •

Furniture exports increased by 10% Perfume and cosmetics exports increased by 11% Footwear and clothing increased by 8% and 11% respectively Italian agricultural products export to Canada were up by 7.4% Export of chocolate to Canada are up by 34% overall

EU-MEXICO TRADE AGREE MENT There was an ‘agreement in principle’ on a modernized EU-Mexico Global agreement in 2018. • • • •

European Union is the second largest foreign direct investor in Mexico followed by the United States. Mexico accounted for their largest imports from US and China followed by the EU in 2019. EU exports to Mexico include machinery and appliances, transport equipment, chemical products and base metals. Mexico exports equipment, machinery and appliances, mineral products, optical/photographic instruments to EU making EU the second largest export market after the United States.

EU-MERCOSUR TRADE A GREE MENT Mecosur is a group of 4 sovereign member countries: Argentina, Brazil, Paraguay and Uruguay. Mecosur stands for Common market for South American Regional Economic Organization. • • • •

EU-Mercosur agreement aims to remove most tariffs that is estimated to save 4 bn euro worth duties per year for companies. Mercosur’s biggest investor is the EU with a stock of 365 bn euro EU exports accounted to 41bn euro in 2019 The export from EU to Mercosur market in 2018 accounted for 21 bn euros.

EUROPEAN UNION: AN ATTRACTIVE MARKET FOR BUSINESS • • • • • •

Population of 448 million consumers seeking quality goods Transparent rules and regulations Secure legal investment framework Most open market for developing countries. Largest trading block in the world More than 70% of imports enter EU at zero tariffs or reduced tariffs

SUMMARY

DISCOVER MORE ABOUT EU FTAs

The European Union plays an important role in maintaining peaceful diplomacy within the organization and the international community. This single market sharing common culture and history has continued to create prosperity, freedom and security that are conducted under international law. The economic growth in Europe has been steady and records a stable growth since 2013. However, the covid-19 pandemic has created uncertainty in the economic growth in the region. The magnitude of the pandemic has added pressure in the financial market, commodity price, domestic healthcare system etc. and the economic impact is expected to be severe globally.

USEFUL WEBSITES: European Union www.europa.eu European Parliament www.europarl.europa.eu Council of the European Union www.consilium.europa.eu European Commission www.ec.europa.eu Court of Justice of the European Union www.curia.europa.eu European Court of Auditors www.eca.europa.eu European Economic and Social Committee www.eesc.europa.eu Committee of the Regions of the European Union www.cor.europa.eu European Investment Bank www.eib.org European Ombudsman www.ombudsman.europa.eu European Systemic Risk Board www.esrb.europa.eu European Stability Mechanism www.esm.europa.eu

THE THAI-ITALIAN CHAMBER OF COMMERCE The Thai-Italian Chamber of Commerce (TICC) is a private, non-profit organization which has a network of companies from all around the world but mostly focusing on Italian and Thai companies with its headquarters in Bangkok, Thailand.

The main goal of the Chamber is to enhance cooperation between Italy and Thailand, by developing programs of common interest in order to increase the awareness between organizations and public administrations in the two countries. Hence, TICC constantly organizes activities, seminars, commercial missions, networking events and meetings to promote the development of commercial activities as well as industrial and cultural collaboration between organizations and entrepreneurs both Thai and Italian. Thanks to a strong collaboration with both Italian and foreign organizations, the Chamber is constantly involved in European Projects occurring in Thailand, which leads to a steady improvement of the business flow between Europe and Thailand. TICC is a member of Assocamerestero (the Association of Italian Chamber of Commerce abroad), the Joint Foreign Chambers of Commerce in Thailand (JFCCT) and is one of the founding partners of the European ASEAN Business Center (EABC).

DISCOVER MORE ABOUT TICC

W: www.thaitch.org

E: Trade@thaitch.org

DISCLAIMER: This paper has been prepared to provide informative support to the reader. It does not cover exhaustively the subject it treats, but it is intended to answer some of the important broad questions that may arise. Hence, the TICC does not guarantee the accuracy of the data included and accepts no responsibility for any consequence of their use.

CONTACTS THAI-ITALIAN CHAMBER OF COMMERCE Vanit Place Building II, 16 Floor, Suite 1601 B 1126/2 New Petchburi Road, Bangkok, 10400, Thailand Telephone numbers Main: +66 02 253 9909 Line 1: +66 02 255 8691 Line 2: +66 02 255 8695 Line 3: +66 02 253 9896

Email addresses Info@thaitch.org Trade@thaitch.org

Website www.thaitch.org

ASSOCAMERESTERO The Thai-Italian Chamber of Commerce is a member of Assocamerestero, the association of the Italian Chambers of Commerce Abroad, a global network with 81 Italian Chambers of Commerce in 58 Countries, 160 assistance points, 20.000 company members and over 300.000 business contacts.

Published on November 17, 2020 All rights reserved ÂŽ TICC 2020 Thai-Italian Chamber of Commerce Vanit Building II, 16 Flr. Suite 1601 B, 1126/2 New Petchburi Road,Bangkok 10400, Thailand Office: +66 2 255 8691 / +66 2 255 8681 - Fax: +66 (0) 2 253 9896 www.thaitch.org