Eu-Russia Relations

External trade

The European Union is today the leading player in international trade, ahead of the United States and Japan. At a time of strong growth in international trade it accounts for

a fifth of the world trade.

The Treaty of Rome objective was to create customs union between EU’s Member States with no trade barriers and common external tariffs on imports from third countries. Nowadays, after fifty years, almost all of those objectives are fulfilled. Trade among all Member States has no barriers, there are no tariffs and goods move freely inside European Union. Also the external trade policy of the European Union is common for all Member States. That means single jurisdiction in all trade-related matters of European Union and its 25 member states. According to the Article 133 of the European Community Treaty which is the legal basis for the EU’s trade policy, European Commission in consultation with a special committee negotiates on behalf of all member states. All trade agreements signed by EU are binding on all EU institutions and all member states.

Common Commercial Policy

The objective of the EU's Common Commercial Policy is to contribute, in the common interest, to the harmonious development of world trade, the progressive abolition of restrictions on international trade, and the lowering of customs barriers. The EU's Common Commercial Policy covers all the main measures affecting trade in goods and services and almost all trade-related issues.

EU’s Common commercial policy allows to uniform trade relations with third countries, by using such tools as common customs tariffs and common regimes on export and import. To defend its market, European Union uses antidumping and anti-subsidy measures as well as Trade Barriers Regulations.

The Common External Tariff

One of the main features of the European Customs Union is the Common External Tariff (CET). Its main advantage is that regardless of the Member State of destination, all products imported from third countries are burdened with uniformed customs duties. Originally, the CET was the arithmetic mean of the tariffs applied in 1957 by the Member States. However, since then, CET has been amended by the Council several times. The creation of the common external tariff has resulted in Member States' protection in relation with third countries and in creation of a inside community trade preference, as imports from another Member State are not loaded with customs duties.

Trade defense instruments

As it was mentioned before, European Union in its trade relations with third countries may use the following instruments in order to protect its market against unfair trade.

• Anti-dumping policy is intended to counter the practice of exporting goods at lower prices than those applied to similar products on the domestic market.

• Anti-subsidy policy is designed to prevent imports of products for which prices are kept artificially low by public subsidies in the third country of origin.

These two policies result in temporal recall of some customs duties on questionable imports. The European Union can also undertake protective procedures in order to limit the imports. This however can be applied only if imports occur to be jeopardy to national producers. In addition, these measures must be non-discriminatory, what means that they must be applied to all imports of the product in matter, irrespective of country of origin.

Instruments for access to third country markets

Currently, when trade tariffs are being abolished, European Union has set up mechanisms allowing it to identify the trade barriers encountered by Community businesses in exporting to third countries. Those mechanisms are:

• preferential arrangements

• multilateral negotiations

Undertakings to eliminate obstacles to trade on international markets include "special relations" with given countries or groups of countries. In practice, this means concluding preferential trade agreements which allow certain partner countries to be given special treatment.

The most important of these agreements are:

• the European Economic Area (with Norway, Iceland and Liechtenstein);

• the Association Agreements with the countries of central and eastern Europe;

• the agreements with the Mediterranean countries;

• the Lomй Conventions with the ACP (African, Caribbean and Pacific) countries.

Big part of trade agreements negotiated by European Union were negotiated within the World Trade Organization.

THE EUROPEAN UNION AND THE WTO

World Trade Organization has been established in 1995. It is a multinational organization that sets a trading rules between the nations. The WTO is also called

a multilateral trading system, which core decisions and agreements are taken as a result of negotiations conducted by its members. At the end of October 2004 WTO had 149 members composed of countries and political entities such as European Union. EU is the largest and most comprehensive member within the WTO members. Because EU’s common trade policy, EU negotiates on a behalf of all 25 member states. That gives the EU a key position in WTO.

EU-RUSSIA BILATERAL RELATIONS

The EU and Russia can do a lot together. I look forward to building a strong relationship, both to tackle shared problems, and to seize the opportunities of deeper cooperation. Our relationship with Russia is one of the EU’s key strategic partnerships. To promote our shared economic, political and security interests, we need a balanced and comprehensive agenda to guide us in the coming years. I am looking forward to working with my Russian colleagues to achieve this”.

President of European Commission Josй Manuel Durão Barroso, November 2004

Russia is the EU’s largest neighbor, brought even closer to the EU by the 2004 enlargement. It is an important partner with which there is significant interest to engage and build a strategic partnership. The 2003 European Security Strategy correctly situates