EU Trade Policy
Finland and the other Member States promote their trade policy interests through the EU. EU trade policy (the common commercial policy of the EU) covers trade in goods and services, the commercial aspects of intellectual property, public procurement, and foreign direct investments.
- Decision-making process on EU trade policy
- Finland protects its interests in the European Union
- World Trade Organization WTO
Decision-making process on EU trade policy
The direction of EU trade policy is defined in cooperation between the European Commission, the EU Member States (Council), and the European Parliament.
There is a decisive difference between trade policy and, for example, the EU's common security and defence policy in that trade policy falls almost wholly under the exclusive competence of the Union.
Exclusive competence in trade policy means that the European Commission makes initiatives and proposals on the common commercial policy and negotiates trade agreements with third countries.
The European Commission has a strong and visible position in trade policy, but its work is guided by the Member States. The Council of the European Union(Link to another website.) (Council of Ministers), which consists of representatives of the Member States’ governments, decides on negotiation mandates and international agreements as well on various trade policy measures.
After the entry into force of the Treaty of Lisbon(Link to another website.) in 2009, the European Parliament has been more closely involved in trade policy. For example, free trade agreements and legislative measures related to trade policy require approval by not only the Council of Ministers but also by the European Parliament.
Questions concerning trade policy are dealt with in the Trade Policy Committee (TPC)(Link to another website.), in which all Member States are represented.
The TPC meets regularly also in various expert level configurations (e.g. Services and Investments).
The EU’s bilateral relations with such important trading partners as the United States, the Russian Federation, China, India, Brazil and Japan play a significant role in EU trade policy.
Finland protects its interest in the EU
As a Member State of the EU, Finland promotes its trade policy interests through EU trade policy. The Ministry for Foreign Affairs is responsible for preparing and coordinating EU trade policy matters in Finland.
The European Commission is obligated to consult the Member States regularly. This means that when the content of EU trade policy is formulated, Member States, including Finland, play an active role at the different stages of preparation.
Finland’s positions for the Trade Policy Committee are prepared in the EU2 sub-committee under the Committee for EU Affairs(Link to another website.), which consists of representatives from various administrative branches. In addition to this restricted composition, the sub-committee meets in an extended composition, where various interest groups are also represented.
As required, Finland's positions are discussed in the Committee for EU Affairs, which consists of permanent secretaries or their representatives and, ultimately, in the Ministerial Committee on European Union Affairs. The Government is obligated to inform Parliament on significant trade policy issues, as Parliament ultimately confirms Finland's positions. Additionally, when decisions are made in trade negotiations involving sectors that fall under the competence of the Member States, approval by Parliament is required.
Finland’s goals for its trade policy lobbying are presented in the Report on International Economic Relations and Development Cooperation(Link to another website.), which was submitted to Parliament on 11 July 2024. The report is based on the Programme of Prime Minister Petteri Orpo’s Government, which aims to provide a more strategic and comprehensive examination of external relations, giving attention to the rapid changes in the international environment.
World Trade Organization WTO
The World Trade Organization (WTO) is an inter-governmental organisation based in Geneva, Switzerland. It was founded in 1995 and currently has 166 members. Nigerian Ngozi Okonjo-Iweala has served as the WTO’s Director-General since March 2021.
Multilateral trade negotiations conducted within the WTO play a central role in Finland’s trade policy. The European Commission represents the EU Member States in the WTO. In Finland, the Ministry for Foreign Affairs has principal responsibility for WTO negotiations.
The WTO’s three main functions are to serve as a permanent forum for trade negotiations, to administer trade agreements, and to solve trade disputes. WTO members account for around 98 per cent of world trade. The trade between the EU and the United States and between the EU and China, among other countries, is governed by the WTO 'acquis' of rules and agreements, as the EU currently has no free trade agreement with either country.
In recent years, however, the WTO has struggled as an organisation. Major trade negotiations have been stalled, and the Appellate Body of the WTO’s dispute settlement system has been inoperative due to differing views on the principles governing its work. However, numerous WTO committees and the dispute settlement panels are continuing their work. Some WTO members actively participate in plurilateral negotiations, which in recent years have covered rules on e-commerce and the facilitation of investments, among other issues.
Modernising the WTO is a key objective for the EU and Finland, as a multilateral rules-based trading system is in the interest of small open economies such as Finland. Free trade also serves security of supply by facilitating the diversification of supply chains. The next WTO Ministerial Conference (MC14) will be held in Cameroon in 2026. It is important for the credibility of the WTO and the multilateral trading system that the conference will be able to make decisions about modernising the WTO.
Related websites
- An overview of EU trade agreements(Link to another website.) (Opens New Window) on the website of the European Commission
- World Trade Organization WTO(Link to another website.) (Opens New Window)
- Kauppapolitiikka magazine(Link to another website.)
- EU affairs and the Finnish government(Link to another website.)