Creating the Right Environment for Trade

76. The Market Access Strategy is an essential element of the enforcement agenda of the EU's renewed trade strategy. It was initially launched in 1996 with the purpose to provide a framework for removing tariff and non tariff barriers to trade in goods, services, intellectual property and investment as well as to supply the EU exporters with information on market access conditions in third countries. Since the onset of the economic crisis, the structures of the Market Access Strategy have been used to monitor compliance with the G20 anti-protectionism commitment resulting in several public reports[23]. As a visible sign of the EU's commitment to tackle trade barriers, the Commission announced in the Europe 2020 strategy that it would henceforth submit an annual "Trade and Investment Barriers Report" to the European Council with the objective of triggering appropriate enforcement action including at political level. The first such report was submitted to the European Council of 24/25 March[24].

77. The EU actively promotes the implementation of effective standards for IP protection and enforcement world-wide. The EU continues its pursuit of the full implementation of the standards set out by the WTO TRIPs Agreement. In parallel, the EU negotiates and implements bilateral agreements with partner countries, which include substantial IP provisions, also on customs border measures. The EU also provides technical cooperation to a significant number of developing countries in this field.

78. A deal was concluded on an anti-counterfeiting trade agreement (ACTA), which helps to ensure a high level of enforcement by participating countries, limiting the market for counterfeit goods and strengthening protection for copyright and trademarked EU goods and products with EU geographical indications.

79. The codification exercise of all Trade Defence Instrument basic regulations took place in 2009[25].

80. The EU continued to address competition distortions in international trade via the use of its trade defence instruments (anti-dumping, anti-subsidies and safeguards), in full compliance with WTO rules. While an increase in trade defence actions could have been expected following the global economic downturn, it is notable that in 2009 these measures affected only around 0.5 % of trade.

81. The fair and sustainable supply of raw materials and energy is of strategic importance for the competitiveness of the EU economy. This is clearly emphasized by a large number of business and civil society contributors during the public consultation. A number of governments outside the EU are developing industrial policies that create supply bottlenecks and other distortions affecting not only their domestic market, but also global markets on downstream products. In its 2008 Communication "Raw Materials Initiative", the Commission defined an integrated approach for raw materials encompassing all relevant policy fields. In February 2011, the Commission adopted a new Communication on "Tackling the challenges in commodity markets and on raw materials", updating and reinforcing the trade strategy in this field.

Sectoral Policies

Agriculture

82. The Common Agricultural Policy (CAP) has successfully undergone substantial reforms in the recent years which achieved market orientation of the policy. Most aid to farmers is now granted in the form of decoupled income support whereby no obligation to produce exists and farmers are therefore free to follow market incentives, while for certain sectors a limited safety net is provided. In parallel, the role of the rural development policy has been further strengthened

83. On the basis of this reformed policy, a debate on the future CAP post 2013 has been initiated. As outlined in the Communication from the Commission entitled "The CAP towards 2020: Meeting the food, natural resources and territorial challenges of the future"the main focus of the debate is set on the following aspects:

- 'Greening' of the first pillar direct payments by supporting environmental measures and thus contributing to the overall environmental performance of the CAP;

- A more equitable distribution of payments among Member States in order to increase effectiveness and efficiency of the income support;

- An increased focus on competitiveness, innovation and environment in the rural development policy in line with the Europe 2020 objectives.

84. The legislative proposals for the CAP post 2013 will, for the first time in the history of the policy, follow the ordinary legislative procedure as mandated by the Lisbon Treaty with increased participation of the European Parliament alongside the Council and the Commission. The presentation of legal proposals is foreseen for later this year. The reformed CAP is expected to enter into force on 1 January 2014.

Manufacturing

85. The manufacturing sector is an integral part of the EU economy and an engine for its growth. In 2006, it generated?6,816 billion in turnover, producing?1,711 in added value, generated a trade surplus (outside the EU) of?107 billion, and employed 34 million people. Specific policies in this sector focus on creating better framework conditions for manufacturing industries in the EU so that they attract investment and job creation, and ensure that business can compete openly and fairly. In respect of the EU strict competition policy, measures involving state-aid would only be approved if consistent with the requirements of a level-playing field where competitive companies succeed.

86. In parallel with efforts on the external front to open up international markets, the current priority areas of the EU enterprise and industrial policy on the internal front include: promoting entrepreneurship, for example through better access to funding and support networks; flexible regulatory framework that facilitates access to the single market, with an additional focus on the contribution of voluntary standards to the regulatory framework; simplification of the regulatory and administrative environment; promoting competitive performance by encouraging businesses to adapt to structural change and maintaining a high and consistent level of productivity growth; ensuring availability of essential inputs for industry; promoting innovation; and improving skills. Increasing attention also goes into fostering consistency with energy and environmental policies.

87. The EU tariffs for industrial products are among the lowest in the world. The EU average level of customs duty protection amounts to around 3.9% on industrial goods, 2.4% in trade-weighted terms (taking into account MFN rates)[26]. However, the effective average industrial tariff is much lower because imports from many of the EU's suppliers of industrial products enter the EU preferential rates under the terms of bilateral agreements, the Generalised System of Preference (GSP) or tariff suspension regimes. Furthermore, low non-tariff barriers also contribute significantly to making the EU economy one of the most open to trade.

Services

88. Services are the largest economic sector in the EU, accounting overall for close to 70% of its GDP and for a similar – and rising – proportion of employment. The Treaty on the Functioning of the EU (TFEU) establishes the central principles governing the internal market for services: the freedom for EU companies to establish themselves in other Member States, and the freedom to provide services on the territory of another Member State other than the one in which they are established. In so far as the market integration for services is still not complete within the EU, significant efforts have been underway to remove the remaining regulatory and administrative obstacles to trade in services between Member States within the framework provided by the Directive on Services in the Internal Market (the "Services Directive" No. 2006/123/EC) adopted in December 2006 and other sector-specific legislation and initiatives. The deadline for the implementation of the Services Directive by Member States has expired: very significant results have been achieved and next steps for further deepening the internal market for services are being examined. Since the last TPR of the EU, notable progress has been achieved particularly in the financial services, telecommunications and postal services.

89. Despite the effects of the financial and economic crisis, the EU holds firmly the position of the world's leading exporter and importer of commercial services with a share of 25.5% in 2009 (extra EU trade). In 2009, it accounted for over a quarter of global services exports as well as imports. The latter reflects the degree of openness of its trade regime in services. The EU and its Member States have undertaken major scheduled commitments under the GATS in practically all major service categories. The EU and its Member States have also entered into commitments on the protocols for the telecommunication and financial services sectors. MFN exemptions are maintained in compliance with Article II.

90. In recent years, further trade openness in services beyond the multilateral commitments made in the WTO has been provided through bilateral negotiations with different countries and regions. These have been based on a platform that combines trade in services and establishment in both services and non-services sectors under one set of provisions and often some provisions on further liberalisation in the telecommunications, financial services, international maritime transport services or postal and courier services, which enable trade liberalisation while preserving each partner's right to regulate its market.