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Crisis-hit EU has avoided protectionism


The European Union has avoided protectionism in the face of its debt crisis, the World Trade Organization said Tuesday, saluting the 28-nation bloc for its stance.

"The focus of EU policy over the past two years has been on the financial crises and there have been relatively few changes to trade policies, laws, or institutions in other areas," the WTO said.

"However, the fact that there has been no retreat into protectionism is, in itself, a positive sign," it added.

The comments came in a review of EU trade policy by the WTO, which carries out regular assessments of its 159 member economies.

EU officials have been meeting with a review panel this week at the WTO's Geneva headquarters.

The WTO spotlighted a raft of causes of the EU's crisis, including a failure to carry out reforms while credit was easy, resulting in unsustainable debt and over-exposure for banks.

It also pointed to falling competitiveness in some EU member states.

The WTO pointed to varying rates of value-added tax (VAT) and excise duties, plus corporate and personal taxation in the EU, saying the mesh of different rules posed problems for trade.

"The complexity of the taxation system, including collection and payment, for example for VAT, can result in additional compliance costs for economic operators," it said, also flagging up the broad range of reduced VAT rates applied for some products.

"If all reduced rates were removed, the standard rate of VAT could in certain member states theoretically be dropped by up to 7.5 percent without any impact on overall revenue," it added.

The WTO review of the EU is due to wrap up on Thursday.