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European Commission : Trade : EU and WTO

The EU is a member and membership implies a balance of rights and obligations.

The European Commission negotiates trade agreements and represents the European interests on behalf of all of its twenty five EU member states. This position and the legal justification for it have been accepted by the WTO (Trade Issues: The EU and the WTO, 2004).

2. Introduction: Foreign Direct Investment can be defined as an activity in which an investor resident in one country obtains a lasting interest in, and a significant influence on the management of a business entity resident in another country. This may involve either creating an entirely new enterprise or changing the ownership of an existing company. FDI is considered to be an important driver of economic growth in Hungary. FDI will help the Hungarian economy to exploit its comparative advantages, increase exports, stimulate technology transfer, encourage privatization, increase GDP per capita, and encourage innovative activity. In consequence, there is a wide consensus that policy should aim at reducing or eliminating hindrances to FDI as long as this does not conflict with other legitimate policy objectives.

Based on the slowdown in FDI described in Kristen Schweiser's article Losing Its Edge, one recommendation to the Competitiveness Council is that Hungary needs to join the EU as quickly as possible. The openness of a nation's economy has an impact on the amount of FDI it attracts. As an extreme example, North Korea's economy is closed to the world and it attracts essentially no FDI. In contrast, a significant percent of FDI occur between countries bound by regional trade agreements such as those that exist within the European Union. EU member countries tend to have more FDI originating from other EU countries than from other nations because of the ease with which investments can be made and profits repatriated.

Another recommendation to the Competitiveness Council is to acceler...

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European Commission : Trade : EU and WTO. (1969, December 31). In LotsofEssays.com. Retrieved 21:49, November 21, 2014, from http://www.collegetermpapers.com/viewpaper/1304215780.html
 
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