EU trade in the time of financial crisis

• Author: Lenka Fojtíková
• Position: Faculty of Economics, Technical University of Ostrava.
• Pages: 33-42

Bulletin of the Transilvania University of Braşov • Vol. 3 (52) - 2010

Series V: Economic Sciences

EU TRADE IN THE TIME

OF FINANCIAL CRISIS

Lenka FOJTÍKOVÁ1

Abstract: The pa per is focused on the Eur opean Union (EU) tra de a nd

trade policy in the time of globa l financial and economic crisis. The ana lysis

of the EU exports and imports points out that the financial crisis ha s had a

negative impact on the intra as well as on the extra-EU trade in the period

2007-2009, but differences among the EU member states have existed.

Although the EU tries to support trade development in the world a nd remove

barr iers to tr ade, some protectionist tendencies were recor ded in the time of

the economic crisis. The last par t of the paper gives emphasis to the EU trade

policy a nd some trade measures which have been taken in the EU and its

member state s to sup port tra de development or vice versa, to pr otect

domestic industries. The r esults of the analysis show that, although some

protectionist tendencies have been recor ded both in extra and intr a-EU

trade, trad e relations which a re provided a mong member states are of

significant importance a ll the time.

Key words: Extra a nd intra-EU trade, Common Commercial Policy, financial

crisis, protectionism.

1 Faculty of Economics, Technical University of Ostrava.

1. Introduction

External trade influences the general

functioning of economy in an important

way. Having a short term effect on prices,

incomes and level of consumption, trade

creates a long term press on relocation

sources and growth. But the rate of country

engagement to trade and investment

relations with the other countries is

different in the individual states. There are

real factors such as the economic

proportion and the economic maturity of

the country, and also system factors,

presented by the type of economic

mechanism which influenced the rate of

economic openness. Generally, the smaller

the economy and the higher the economic

development is, the higher the openness

rate that the economy achieves.

There is also a theoretical presumption

that countries generally exhibit a bigger

closeness of their economies in time of war

and economic crisis. Protectionist

measures such are growing tariffs, anti-

dumping or countervailing duties, quota

restrictions and other non-tariff barriers,

are motivated by the infant-industry

argument, national defence and so called

optimum tariff. [8] In reality, governments

want to reduce domestic unemployment

and cure deficit in the nation‟s balance of

payments.

The European Union (EU) includes

small, as well as big economies, with

different economic levels and rate of