EU Presentation
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Transcript of EU Presentation
International Experience:
The European Union
Presented by:
Pre-1945: Pre-WWII Europe Concept of an unified European State developed
1923: Pan-Europa Movement
1951: Treaty of Paris Created the European Coal and Steel Community
1957: Treaty of Rome Established the EEC and Euratom
History of the EU
History of the EU
July 1967: Merger Treaty Created the European Communities
Jan 1973: Enlargement of the European Union
Jan 1981: Greece becomes a Member State
Jan 1986: Spain and Portugal join
History of the EU
1987: Turkey formally applies for accession
1992: Maastricht Treaty Established the European Union
May 1992: Switzerland accession halted
Mar 1994: Accession negotiations Adds Austria, Sweden, Finland and Norway
History of the EU
1994: European elections
1990s: The Euro Further development of currency
2000: Treaty of Lisbon
May 2004: 25 total Member StatesCzech Republic, Hungary, Poland, Slovakia, Estonia,Latvia, Lithuania, Slovenia, Cyprus and Malta
Jan 2007: Bulgaria and Romania join EU
EU Entry Requirements• Treaty of Maastricht
– Set geographic criteria
• Copenhagen Criteria– Political– Economic– Legislative
• Framework for candidate negotiations– Specific conditions– EU “absorption capacity”
The EU Mission• Not in the Constitution• Outlines where European level
action is needed• 9 Points
Mission Statement1. Guarantees peace, freedom & security in
and around Europe 2. Promotes & protects democracy and
universal rights in Europe and around the world
3. Strengthens Europe's economy, promoting solidarity by working with national, regional and local government
Mission Statement (cont’d)
4. Makes it easy for Europe's citizens to live and work throughout the Union
5. Promotes equality and tolerance of diversity
6. Promotes and facilitates cooperation between Europeans
Mission Statement (cont’d)
7. Protects Europe's environment 8. Ensures that Europe's voice is heard in
the world 9. Listen to citizens, becoming
accountable and working for them in a transparent and decentralized way
EU Political System• The EU decision making process and co-decision
procedure involves:– European Parliament– Council of the European Union– European Commission
EU Political System (cont’d)
• EU President• EU Commission• EU Parliament• European Court of
Justice• EU Directives
Advantages of the EU
• Vary country to country• Prevent war• Trade growth and reduced
transaction costs• Greater employment
opportunities• Structural funds
– Regional ERDF– Single National Program
Disadvantages of The EU• Expansion threatens internal
strength• Farming subsidies• Language Barriers
Economy of the European Union
• General Background– GDP: 14.96 trillion*– Labor Force: 224.6 million*– Largest exporter of goods– Second largest importer of goods
• Main goals:– Strengthen trade position– Bolster political and economic power
• Operates under a competition policy
*2008 statistics
Currency: Euro• Goals of single currency:
– Build a single financial market– Represent a political symbol of integration– Bring more jobs and prosperity to Europeans
• The euro area– Member States using the euro– Criteria for adoption– Who is already in the euro area?– European Central Bank
• All cash transactions in euros by January 2002
Economic and Monetary Union (EMU)
• Founded in 1957 • Purposes
– Better functioning economy– Improving prosperity and job market
• Framework for cooperation on monetary and economic policy
• All EU countries are members of the EMU– Responsibilities divided between Member States and
Institutions
Economic and Monetary Union (cont’d)
• 3 stages coordinating economic policy– Stage 1: Abolished capital movement restrictions
between Member States (1990-1994)– Stage 2: EMI and ECB established (1994-1999)– Stage 3: Exchange rates fixed (1999- )
Benefits of the Euro• Business
– Increased competition for consumers, no exchange rate transaction costs
• Citizens– Price transparency, low interest rates encouraging investment
• Macroeconomy– Price stability, low inflation
• Political– Prominent position in the global economy, milestone step in
European integration• Global
– Greater ease of international trade, enhanced stability
EU Budget 2009
Source: European Commission Online
Current State of EU Economy
Source: Bloomberg News, Feb 2009
International Relations: Globalization
• New members coming from less developed economies – Healthy State finances– Expected to provide above average growth
• Reduced transportation and communication costs – Facilitating global trade
• Population growth and opening of economies– Supply of cheap labor
International Relations: Service Centers
• Growing importance of shared service centers– Especially for US firms
• Tend to be located in EU member states with particularly favorable taxation
Relationship with the United States
• Mature economic relationship – Massive two-way trade – Extensive investment relationship
• Beneficial developments in EU: – Increase in the Euro Zone in January 2008
• Addition of Cyprus and Malta • 15 countries currently using the Euro
– Framework for Advancing Transatlantic Economic Integration
• Signed at 2007 US-EU Summit
Selling Products in the EU• Franchising
– Franchise market is quite robust
– Friendly to franchise systems in general
– Laws governing the operation of franchises
• Fairly broad • Generally do not constrain non-
member businesses
Export presentation by country
Selling Products in the EU (cont’d)
• Direct Marketing– Affected by wide range of EU legislation– Focus on clarity and completeness of consumer
information and customer data• Direct Marketing Over the Internet
– The E-commerce Directive imposes requirements• E-commerce Directive
– Promotional offers must not mislead customers in easily accessible and clear terms
– Marketing e-mails must be identified as such to the recipient
– Companies targeting customers online must regularly consult national opt-out registers list
Selling Products in the EU (cont’d)
• Distance Selling– EU’s Directive on distance selling – Number of obligations for companies doing business at a
distance• Direct marketers
– Must provide clear information before a contract is concluded
• Their identity• Identity of suppliers• Prices including delivery costs• Period for which an offer remains
Leading Sectors for US Exports• Agricultural Sector
– Fourth largest US export market– Trade balance favors EU– Main US products imported
• Tree nuts• Soybeans• Seafood• Tobacco
– High value consumer-oriented food product
Leading Sectors for US Exports (cont’d)
• FY2007 agriculture stats– US/EU bilateral trade: $27.1 billion– Agricultural trade balance
• EU: $16.7 billion• US: $10.4 billion
– US exports: Up 11%• US soybean exports: up 87%
Leading Sectors for US Export (cont’d)
• Trends in EU Agriculture– Demand for greater convenience– More openness to non traditional foods– Growing interest in health foods
• Organics• Water• Niche markets
Leading Sectors for US Export (cont’d)
• Commercial Sector– US high end technology
• Demand for quality & performance• Less focus on price
– EU market is differentiated by Member States
• Supply• Distribution• Demand• Culture• Legal characteristics
Differentiated EU Market• Each Member State merits individual attention• US Embassy Country Commercial Guide
– Provides “Best Practices” by Country
• Showcase Europe– Gives perspective on European market– Organized around leading commercial sectors
EU Openness to Foreign Investment
• One of the most hospitable climates for US business• EU Treaty Article 43
– Member States must provide “national treatment” to other Member States
– Creates “four freedoms” for movement• Capital• Labor• Goods• persons
Conclusions• Unification promoted global business
– Common currency facilitates trade– Market environment aids US foreign investment
• Current economic situation harder to manage