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EU Policy on Non-Agricultural Trade

The objective is again to favor a domestic industry, in this example encouraging the import of cocoa beans for making chocolate goods while discouraging importation of the finished goods themselves.

Both of these mechanisms act as a complicating and unbalancing factor in world trade. The position of the EU is that "economic efficiency is enhanced by the reduction of widely different and dispersed tariff structures" ("Market Access ... Communication" 2). Compression of tariffs means reducing the range of tariffs across various classes of goods, thus reducing or eliminating tariff peaks and escalation.

Binding: Binding is a process by which WTO members agree to fix tariffs at some maximum level, which cannot then subsequently be increased. The policy of the EU is to attain an eventual objective of 100 percent bound tariffs on non-agricultural goods ("EU Submits" 2). As with compression, the objective of binding is to reduce the variability and complexity of tariff schedules, and thus to reduce the unpredictability of world trade. Where tariffs are bound, manufacturers and other producers can shape their mid-term and long-term export and import policies based on market projections and underlying economic fundamentalies, rather than the vagaries of national tariff policies.

Environmental Goods: The policy of the EU is to allow preferential treatment to goods defined as environmental goods. These are goods produced in an environmentally "friendly" and sustainable way, reducing stress on the environment. The primary objective of this policy is not economic in the narrow sense, but to encourage environmentally responsible methods of production and encourage improvement in the global environment. In the long run this can be expected to yield economic benefits as well, by reducing costs of all sorts related to pollution and environmental damage.

All of these policy objectives are highly defensible on a global level,...

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