Analysis of Global Trade Operations in the European Union Trade Zone

This report provides a comprehensive analysis of global trade operations within the European Union (EU) trade zone. It begins with a brief history of EU trade, followed by an examination of freight flow statistics, including import and export data. The report then delves into EU trade policies, including foreign direct investment (FDI), and critically reviews current trade policies, highlighting barriers and challenges such as Brexit. Recommendations are provided to address these challenges, focusing on monetary union and policy adjustments. The analysis covers various aspects like trade agreements, freight composition, export markets, and import markets. The report concludes by summarizing the key findings and emphasizing the EU's significance in international trade. The report utilizes sources such as Eurostat, the European Commission, and the United States Trade Representative to support its findings and recommendations.

Global trade operation
9/1/2019

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Executive Summary
In research work, analysis and understanding of European Union economic trade zone which
contain details related to the opportunity and to discuss trade as well as logistics practice
present in the trade zone from the international perspective of trade. The findings shows that
import and export of the country is growing which is providing the benefit to company. In
addition, the trade policies are discussed which shows the commission who manages the
operations. EU different challenges are witnessed with this the recommendations are
provided to rectify the same.

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Contents
Introduction................................................................................................................................2
Brief trade history of the trade zone...........................................................................................2
Freight flow statistics – import/export and freight composition................................................2
Freight composition...............................................................................................................2
Exports...................................................................................................................................3
Imports...................................................................................................................................4
Trade policies.............................................................................................................................5
EU trade policy......................................................................................................................5
FDI.........................................................................................................................................5
Issues and challenges of European Union..................................................................................6
Recommendations......................................................................................................................6
Conclusion..................................................................................................................................7
References..................................................................................................................................8

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Introduction
The purpose of the assignment is to form the better consider nature, patterns, features of the
global trade and rules as well as practices related to the employment to eliminate the different
trade obstacles in context of economic trade zone. The report will focus on European Union
economic trade zone and present the comprehensive information related to the global trade
procedures and policies.

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Brief trade history of the trade zone
EU has free trade agreements that vary at different levels with most of the other countries
available in European nation. EU shares its single market with three EFTA memberships via
European Economic Area agreement with the residual EFTA member that is Switzerland
which is connected through the bilateral agreements. In the research this has been found that
EEA Agreement took place in 1991 in international agreement that permitted extension of
EU’s single marketplace to non-EU member events (Unwin, 2017). It has been found that the
original convention committed the members to form a tariff reductions as well as quota
liberalization majorly for the industrial goods but it also consists of the provisions for escape
if in case the burden is imposed on the domestic economies that proved to be great. By the
year 1967, the import duties in most of the industrial goods remained abolished. Along with
this, in 1977 the EFTA entered into the agreement with EEC that form the industrial free
trade among the two member countries. In the month of October 1991, the members of EFTA
and EEC get agreed to form free-trade zone among EEA which actual came into existence in
1994.
Freight flow statistics – import/export and freight composition
Freight composition
The freight composition includes travel statistics related to Union nation which is explained
with the help of diagram below: -

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(Source: Eurostat, 2019)
In the research, it has been found that freight carriage in European Union (EU) covering
different modes of transport which include road, maritime, rail, air and many others. The
economic trade zone of EU has allowed capability to move the products safely, quickly and
in effective manner to marketplaces which is essential for the international trade, national
distributive trade with the economic development. The quick improvement in the global trade
as well as deepening integration of enlarged EU, alongside a wide range of practices related
to economic shows the freight transport across EU.
Exports
EU economic trade zone has allowed the United States to enhance their export and import
within the nation. U.S. goods export to EU in the year 2018 which was $318.6 billion that is
up to 12.5% ($35.4 billion) from the year 2017 which is higher than 17.0% from 2008. In the
year 2018, U.S. exports are equal to 19.1% of the total exports. The below given diagram
shows the US top 5 exports markets with data. As per the data, UK is leading in export with
66.2 and Germany is lacking behind 57.7 (United States Trade Representative, 2019).

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United
Kingdom;
66.2
Germany ;
57.7
Nertherlan
ds ; 49.4
France ;
36.3
Belgium ;
31.4
Imports
EU countries collectively would rank as second largest provider of imports to US in year
2018. The imports are easily possible due to the economic trade zone of US which allows the
trade in easy manner. The imports in the year 2018 were approx. $487.9 billion which is up
12.3% and 32.6% from the year 2017 and 2008 respectively. US imports majorly from the
European union countries that account for approx. 19.2% of the total US imports in the year
2018. The below given diagram shows the US top 5 import markets with data. In this data,
the Germany is on top in terms of the imports and UK is on second position.
Germany ;
125.9
United
Kingdom ; 60.8
Italy ; 54.7
France ; 52.5
Nertherlands ; 24.6

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European Union has become deeply linked with the global markets which show that
directness of trade region has predestined that EU is considered as one of the biggest player
on the global transaction division as well as remains a good area to perform the commercial.
(Source: European Commission, 2019)
The above graph shows the imports, exports, balance with this it also reflects the imports
growth percentage as well as export growth percentage.
Trade policies
EU trade policy
The trade policy for the EU is designed to be completely apparent as well as comprehensive
which is founded on EU’s Job for all strategy. In this, the Directorate-General for Trade (DG
Trade) of European commission supports to form as well as to apply policy which promote
the global system majorly for the fair trade that offers the benefit to the society as the whole
with this they open up marketplaces with their key partner nations as well as the trading blocs
(Parliament Business, 2018).

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FDI
European Union include the European commission as they also may carry out its own review
of the foreign investment that are likely to information the programs or projects of EU
interest. The member states retain final decision-making power related to foreign investments
in their own respective territories (Nugent, 2017). In the foreign direct investment it is
essential to consider the FDI of different area in economic trade. Presently, the uncertainty
related to Brexit majorly after the U.K. parliament who rejected the draft withdrawal
agreement majorly in the month of January 15, 2019 which shows that it is not clear how the
proposed EU legal framework will apply to UK (Aichele and Felbermayr, 2017). This is the
reason due to which EY member state screening regimes treat the European Economic Area
investors in the different manner than they do non-EEA investment which are generally not
reviewable expect in the particular sectors which are defence and IT for the government
(Adebiyi, et, al 2019). Brexit might leads to changes in the FDI system in relevant EU
jurisdictions beginning in March 2019.
Issues and challenges of European Union
 In the research, this has been found that the major issues are related to dealing with
the brexit, state of UK that has concerned more consideration than normal. EU needs
to make the changes in their economic trade zone after Brexit (Elliott, 2019).
 Along with this, another biggest problem which is faced by the union for the purpose
of trading is linked with the economic model alongside with the population. However,
there is no as such company with the more than 25 years customers. Europe is
consists of world-class companies that is considered as source of revenue.

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 The issues that exist as it would be expected given the depth as well as breadth of the
commercial relationship among EU as well as US. The challenge has come in form of
agreement obligation that has been recognized by EU legislations (Export.gov, 2019).
Recommendations
It has been found that European Economic area is dealing with the real problems which are
required to be adhered by EU commission.
 One of the real solutions that have been recommended to deal with the growing
problem includes fixing the design flaws in terms of monetary union. This will help
them to deals with the issues related to the economy.
 The issues that the company face are linked with the brexit which is required to
adhere. The policies as well as regulations related to brexit need changes in terms of
policies related to imports, exports, FDI and many others.
 The communication among EU and US for the making the relationship strong can
leads to the benefit for countries. To deal with issue of compliance requirement it
becomes essential for EU legislations to consider the needs of US and accordingly
there is need to prepare new legislations.

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Conclusion
In the end of report, this can be concluded that European Union economic trade zone is
associated with the different international trade as well as policies which allow the other
international business to enter the country for business with the low tariffs. The discussion
related to the history, the freight flow statistics as well as trade policies are focused which
shows that EEA has made the country on the leading position. Further, the different issues are
identified and their resolutions have been provided.

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References
Adebiyi, J., Bine, P., Horbach, M., Kovalenko, D. V., Hewitt, J., Koulikov, M. (2019)
Foreign Investment Control Reforms in Europe [Online]. Available from:
https://www.skadden.com/insights/publications/2019/01/2019-insights/foreign-investment-
control-reforms-in-europe [Accessed on 1st September 2019]
Aichele, R., and Felbermayr, G. (2017) Costs and benefits of a United Kingdom exit from the
European Union.
Elliott, L. (2019) The European Union has bigger problems to deal with than Brexit [Online].
Available from: https://www.theguardian.com/business/2019/mar/24/the-europe-union-has-
bigger-problems-to-deal-with-than-brexit [Accessed on 1st September 2019]
European Commission (2019) Statistics [Online]. Available from:
https://ec.europa.eu/trade/policy/eu-position-in-world-trade/statistics/ [Accessed on 1st
September 2019]
Eurostat (2019) Freight transport statistics [Online]. Available from:
https://ec.europa.eu/eurostat/statistics-explained/index.php/Freight_transport_statistics
[Accessed on 1st September 2019]
Export.gov. (2019) European Union - Market Challenges [Online]. Available from:
https://www.export.gov/article?id=European-union-Market-Challenges [Accessed on 1st
September 2019]
Nugent, N. (2017). The government and politics of the European Union. Palgrave.