Freedom to Trade Internationally: 10 Years Freedom Barometer
Even though the threat of protectionism remains on the global stage, with populist rhetoric and trade wars between the USA and China, Europe mostly seems committed to the values of free trade. All European countries are small economies on the global scale, making benefits from free trade clearly visible.
EUROPE REMAINS COMMITTED TO THE VALUES OF FREE TRADE.
There are regional differences, however, with EU countries being more free trade oriented than those outside this regional community. The closer a country is to the EU, the more open its free trade.
When regional scores are examined, they show little change over the last decade. First of all, the almost identical results of the EU15 and the EU11 countries show that in practice, there is no deviation from the supranational EU trade policy by EU member states. The only exception noted is Greece, which scores 8.10 (instead of 8.60), due to higher non-trade barriers. The whole EU average score has slightly decreased during the previous decade (from 8.75 to 8.60) which echoes the non-proliferation of trade agreements. While the EU signed new FTAs with Japan, Korea and Canada, the trade agreement with its most important trade partner (the United States) was put on hold, not only due to the new protectionist trade policies advocated by the USA, but also because of strong opposition at home.
THE PROLIFERATION OF FREE TRADE AGREEMENTS BETWEEN EU AND COUNTRIES OUTSIDE OF THE REGION HAS BEEN RESTRICTED.
When non-EU countries are considered, we see that their scores are much lower compared to the EU, indicating that they pursue significantly more protectionist trade policies. Although the scores are mostly stable across the WB+ and CIS regions, there are cases which indicate significant policy changes during this period. Tajikistan, Ukraine and Turkey are countries with the biggest drop in scores, while Russia is the single country that significantly increased its score. Although Russia continues to employ its trade policy to create political pressure (the ban on foodstuff imports from the EU since 2014), its accession to the WTO in 2012 had a strong liberalisation effect. On the other hand, the effects of the EAEU on participating countries are rather small.
THE EFFECTS OF EAEU ON PARTICIPATING COUNTRIES ARE RATHER LIMITED.
Serbia, Belarus, Bosnia and Herzegovina, and Azerbaijan remain among the several countries in the world that are still not members of the WTO.
The prospect of EU accession for WB countries should promote free trade in this region since WTO accession and implementation of the EU common trade policy is a prerequisite for the accession. While Serbia and Montenegro have already opened accession negotiations, Albania and North Macedonia are waiting for the green call, while Bosnia and Kosovo are further behind since they haven’t obtained candidate country status. New ideas for a stronger regional economic integration are also voiced, but its actual implementation remains to be seen.
THE PROSPECT OF EU ACCESSION WOULD PROMOTE FREE TRADE AMONG WB COUNTRIES.
The Brexit deal might have a significant impact on trade relations between the UK and the EU. It is still unknown whether the UK will pursue a more open trade policy towards the world, opening up its market not only to products and services coming from the European continent but also from across the seas, or it will close its borders and build walls that prevent trade. Any of these policies would have a reciprocal response from Brussels. The future UK – EU relationship might prove to be a complicated one.