This paper focuses on the impact of the European Union on world trade, with a concentration on its effect on the U.S. and Japan.
This research paper includes an overview of the European Union, its history, principles and policies on trade. It analyzes the European Union?s Impact on international trade and briefs the reader on the impact of the trade block on trade positions of the U.S. and Japan. The author discusses current issues and disputes between the US and the EU and includes statistics to illustrate the effects of the EU on world trade.
The European market is big, much as the United States. The European Union and the USA represent 30.1% and 24.5% of global GDP respectively. Together, the two economic giants represent half of the world GDP. (See Diagram 1). As such, any actions that these two economies do will affect the rest of the world. In fact, the establishment of the European Union has effected ripples of economic growth or depression on its member states and other countries as well. And as the influence of the EU grows, so does its relationship with the rest of the world become more important. The EU currently holds agreements with almost every region in the world. Just as much of the EU’s policies involve reduction of barriers and increased trade among its members, its external policies have involved increased trade globally and deepening relationships with other countries. The logic behind this double-edged mission is the realization that a barrier-free global economy is key to optimum progress.