EU's Formal Policies towards the Global South - Term Paper Example

Topic: To what extent do you agree that there is a tension between the focus of the EUs formal policies towards the Global South and the EUs own immediate economic There is no doubt in agreeing on the presence of a crack in the perception of the European union’s focus, which has been gradually shifting from its set economic agenda towards ‘Global South’. Before delving deep into the myriad of interrelation among its own organizations and countries of which it’s a Union, and its relation with other international organisations, it would be better to have a glance on the origin of the European Union. The European Union (EU) came into existence by the Maastricht treaty in 1992. It’s an organisation of 25 democratic member countries, still in developing stage as new members add-on. It has charted its course from a mere economic body to political one, which is mirrored in ever-increasing diameter of policy areas coming under its umbrella – the focus of political power transferring from member countries to the European Union. The European Union – Main policies Let’s have a look into the formal policies of the European Union and level of cooperation among the member states. The European Union has been empowered by the member countries to take decisions in the fields of competition law, state aid control and liberalisation. All law related issues are harmonised by legislative process of the European Union through its other organs like European Commission, European Parliament and Council of the European Union, thus recording its presence in the member country’s system. All member states cooperate and coordinate their internal policies in their Council’s meetings. The nature of tension between EU and a state’s domestic efficiency is permanent feature in the growth of EU. All member states pass laws to be in accordance with prevalent European Union legal framework. EU follows the policy of single market to provide its benefits to the member countries by erasing customs costs, which results in more wealth creation for the member states. It is in the benefit of members to conform to EU standards to save the costs of joining later. The internal policies of the European Union provide for a common currency – Euro – to open the road to free trade among member states. A common EU competition law checks anti-competitive behaviour of companies and states via antitrust law, merger-control and the States Aids regime. There is a centralized environment policy, agriculture policy, fisheries policy, indirect taxes, VAT, and customs and excise on goods. Thus, there are no internal borders and external controls have been unitized. EU member states have a common customs tariff, programme funding, single market energy community, aviation field and a common European defense agency. In other words, the European Union is the single biggest economy of the world.( en.wikipedia.org/wiki/European_Union) The European Union and Global South The ‘Global South’ represents those countries of Africa, Latin America and Asia that are developing. Under the aegis of World Trade Organisation, efforts are made by the developed countries of the world, of which EU is a major partner, to opt for ‘Open market’. The EU initiatives on multi-lateral trading system are not taken in the right spirit. Let’s have a look at the result of Doha talks. Basically, the European Union’s tilt towards South has economic interests. The vast business resources of developing countries are stuck in the lack of capital, which rich countries and regions of the world like EU and USA want to exploit through WTO. But the terms and conditions put up by the rich North are not acceptable to poor South. Doha talks were initiated by EU and the USA to further their economic interests. EU dream of becoming the major economic power of the globe can be realised only if it comes out of the wired fence of its internal and external economic policies by practicing multilateral business policies. Pointing to the fiasco of Doha talks, EU Trade Commissioner Peter Mandelson said Washington "was unwilling to accept or indeed to acknowledge the flexibility shown by others". On the other hand, the US finds the attitude of other G6 member countries as “protectionist”, not ready to lower tariff barriers to permit it continue with subsidies. The US blamed EU and other WTO members and called them "protectionist" as they had not done enough to lower farm tariff barriers to allow it to move further on subsidies. EU Agriculture Commissioner Mariann Fischer Boel said: "It is a big failure. Whether it is going to be definitive, only time will tell." It shows the response of the South Block that eyes the North initiative of which EU is a major partner with doubtful intentions of expanding imperialism in the developing countries towards its offer to remove poverty from the globe. (REUTERS) We have defeated the WTO -- tristan Friday Jul 28th, 2006 9:48 AM Earlier EU had got success in its policy towards South in Hong Kong Ministerial declarations held on December 2005. EU had been asking high price in return to export subsidies. A good chunk of EU subsidies goes into the WTO-legal “Green Box”, which has not been targeted in Hong Kong Ministerial talks.(http://www.focusweb.org/content/view/786/36/) The notion of European Integration European integration is the process of political and economic (and in some cases social and cultural) integration of European (and some peripheral) states into a tighter bloc. The main and most powerful body of European integration is the European Union, though other institutions like the Council of Europe also integrate their member states. The regions of Europe are integrated into larger Euro regions (en.wikipedia.org/wiki/European_integration -) Robert Hosking has written on EU governance – on European Economic Integration in “The Why & How of European Economic Integration: A Brief Guide”. According to Hosking, the regulatory and market orders are two different political beliefs to get inkling on how the European economy works. The regulatory concept offers scope for thorough intervention and active hold by the member countries in the affairs of European Union. The second option of market orders hints the presence of price mechanism, led by profit and accumulation, regulated by its own forces – the best alternatives of distributing resources. These two mechanisms have contributed to the integration of Europe earlier.(http://www.spectrezine.org/europe/hosking3.htm) Jason L Saving, a senior economist in the Research Department of the Federal Reserve Bank of Dallas, has written on the issue of integration as a conflict of visions. European Union, according to him, is the only leading example of such integration. Earlier, it was a confederation of six leading European countries. Its integration became a reality when it survived the attacks on the formation of a constitution, first by French voters using their right to vote, rejecting it by 10-point margin followed by the Dutch. The French and Dutch referendums were significant for the future of not only European integration but US as well but the actual issue remains the range and manner of integration. To economists, integration carries a lot of benefits. If different states choose their own tax and labour policies, labour and businesses will feel inclined to shift places. It will encourage change of location to where subsidies are high. Advanced states will bring changes in their policies accordingly to conform to the prevailing pattern of subsidy and taxes in other less advanced states. The Organization for Economic Cooperation and Development (OECD) has advocated an end to “harmful tax competition” among states. German Chancellor Gerhard Schroder has also expressed the same feelings. French President Jacques Chirac has termed the phenomenon as “social dumping”— of importing workers and businesses from more highly regulated EU members. Textbooks may provide a solution to this economic problem but the issue here is different. The issue OF EU integration resembles with the US example of North American Free Trade Agreement (NAFTA), where the argument was on how to integrate the US and Mexican economies. According to French President Chirac, the contentious issue before EU is how to integrate European economies further. The choice is between the Anglo-Saxon and Atlantic liberal current of low tax rates and flexible labour markets or a humanistic and balanced approach to stop the tilt for economic ultra-liberalism. It is also important to note that economic integration doesn’t imply economic growth. If EU were to follow French or German recommendations, they won’t guarantee economic growth. Germany and France advocate regulated economy while Britain and the Netherlands are against it. Economic integration can’t assimilate the visions of both at the same time. In the words of British Prime Minister it is a choice for globalisation or against it. “Should Europe embrace globalization and try and make it work for us, or should we try and ward it off?” On this question depends the economic future of EU.(http://www.dallasfed.org/research/swe/2005/swe0504b.html) Some of the latest news on EU constitution puts a sign of interrogation on the diminishing importance being given to it by member countries like UK. According to euobserver correspondent Mark Beunderman, an all party British parliamentarians have advocated UK help in putting the EU constitution in the bin -- to throw the curtains down on its “paralysis” by concluding that "although the [Constitutional] Treaty is not dead, it is comatose and on life support.”(http://euobserver.com/9/221) A common constitution for all EU members is the base on which the building of European integration stands. If member countries have different opinions on the treaty for the formation of a European constitution, how far can go the idea and vision of European integration, which is not a guarantee of its growth. Examples of Russia and Singapore are proof that integration and growth are two different phenomena. The Russian integration has not resulted in its growth while on the other hand, Singapore has registered high growth without any integration due to its open market strategy, not following any regulation framework. Judith Crosbie has reported in The Economist about the bilateral trade deals EU is entering with the nations of South block after the failure of Doha talks. If multilateral deals are not possible due to reservations of the member states like US, EU pacts with developing countries won’t stand in the ways of World Trade Organisation (WTO) agreements, according to David OSullivan, the European Commissions director-general for trade. Even if Doha talks succeed in future, present bilateral agreements would be icing on the cake. Some of the countries EU is close to sign free trade agreements with the Gulf Co-operation Council include United Arab Emirate, Bahrain, Saudi Arabia, Oman, Qatar and Kuwait. Already, negotiations are in process for a free trade agreement with Central America and the Andean Community of Bolivia, Colombia, Ecuador and Peru. Another pact, which got obstructed in 2004 with Mercosur -Brazil, Argentina, Uruguay, Paraguay and Venezuela - may reappear again. Future possibilities of doing business with countries of Association of South East Asian Nations (ASEAN) are being envisaged. In near future a EU summit in India will explore the possibility of a trade deal. An update on an earlier political and economic accord with China may take place in September. There has been a marked shift in approach to bilateral deals by the member countries of EU. As remarked by David OSullivan, “There is a sense among the member states that they would like to use future free trade agreements more for the purpose of getting additional market access and additional economic advantages and less for purely developmental, neighbourhood or political motivations”. Although multilateral trade deals are still the priority over bilateral trade deals not only because they are good for developing countries of the world (South) but for the European Union own economic interests as well. (http://www.europeanvoice.com/current/article.asp?id=25960) Thus, we see that EU is not compromising on its own economic priorities while shifting the focus of its formal policies towards South. If present multilateral talks are not getting a threshold, EU is entering into bilateral agreements with developing countries of the world to keep up with its own economic interests. Works cited list en.wikipedia.org/wiki/European_Union en.wikipedia.org/wiki/European_integration - http://euobserver.com/9/221 http://www.europeanvoice.com/current/article.asp?id=25960 http://www.focusweb.org/content/view/786/36/ http://www.spectrezine.org/europe/hosking3.htm http://www.dallasfed.org/research/swe/2005/swe0504b.html REUTERS: Globalization & Capitalism We have defeated the WTO tristan Friday Jul 28th, 2006 9:48 AM Read More