The European Union between Free Trade and Protectionism

Table of Contents

1. Introduction

2. Economic justification of free trade

2.1 Definition and origin of free trade

2.2 Free trade as an institutionalized fundamental value

2.3 Reasons for free trade

2.4 Summary

3. Economic justification of protectionism

3.1 Definition and origin of protectionism

3.2 Forms and instruments of protectionism

3.3 Reasons for protectionism

3.4 Summary

4. The European Union as the engine of free trade – A historic development of free trade using the example of the internal market

4.1. The European Single Market

4.1.1 Definition

4.1.2. The European Economic Area (EEA) and its fundamental freedoms

4.1.3. Economic and Monetary Union (EMU)

4.2. Historical development of the European single market

5. The European Union as an engine of protectionism – A historic development of protectionism using the example of the Common Agricultural Policy (CAP)

5.1. The Common Agricultural Policy (CAP) - Definition and Tasks

5.2. Objectives, financing and development of the Common Agricultural Policy (CAP)

5.3. The external protection of the Common Agricultural Policy

6. Summary

Research Objectives and Core Themes

This thesis investigates the inherent tension within the European Union between its commitment to free trade within its internal market and its adoption of protectionist measures within specific sectors, most notably its Common Agricultural Policy (CAP).

• The theoretical foundations and economic justifications of free trade and protectionism.
• The historical development and current institutional framework of the EU's internal market.
• The structural mechanisms, objectives, and reforms of the Common Agricultural Policy (CAP).
• An analysis of the policy inconsistency between internal liberalization and external protectionism.

Excerpt from the Book

Summary of Chapters

1. Introduction: Presents the global rise of free trade, its economic importance, and introduces the central tension of the thesis regarding the EU's inconsistent policy approach.

2. Economic justification of free trade: Explains the origins and theoretical foundations of free trade, including models by Smith and Ricardo, and discusses the role of global institutions.

3. Economic justification of protectionism: Defines protectionism and its instruments, while exploring the historical and economic reasons why states resort to trade barriers despite the benefits of open markets.

4. The European Union as the engine of free trade – A historic development of free trade using the example of the internal market: Analyzes the EU's internal market, the four fundamental freedoms, and the historical path toward integration since the post-war period.

5. The European Union as an engine of protectionism – A historic development of protectionism using the example of the Common Agricultural Policy (CAP): Details the structure, history, and objectives of the CAP to illustrate the EU's protectionist approach to external markets.

6. Summary: Concludes the work by reflecting on the inconsistent policy stance of the EU and its necessity to balance free trade and protectionism in a complex global environment.

Keywords

Free trade, protectionism, European Union, internal market, Common Agricultural Policy, CAP, globalization, tariff barriers, non-tariff barriers, economic integration, trade policy, structural change, mercantilism, comparative advantage, market intervention

Frequently Asked Questions

What is the central focus of this thesis?

The thesis explores the tension within the European Union between its free trade-oriented internal policy and its protectionist measures in external agricultural policy.

What are the primary thematic areas covered?

The main themes include the theory of free trade vs. protectionism, the historical evolution of the EU's single market, and the mechanics of the Common Agricultural Policy (CAP).

What is the main research question?

The work examines how the EU maintains an inconsistent policy stance, functioning as a champion of free trade internally while simultaneously implementing protectionist instruments externally.

Which scientific methods are utilized?

The author employs a literature-based analysis, drawing upon economic theories, historical policy documentation, and legislative records to assess the development and impact of EU trade policies.

What is discussed in the main sections?

The main sections cover the definition and justification of economic theories, the historical milestones of European integration, and a detailed look at the financial and structural development of the CAP.

What are the key terms associated with this work?

Essential terms include 'internal market', 'fundamental freedoms', 'Common Agricultural Policy', 'trade barriers', and 'economic integration'.

How has the CAP changed over time?

The CAP has moved from a price-support model that created surpluses toward a system of direct payments and decoupled subsidies aimed at modernization and environmental compliance.

What role does the 'infant industry argument' play?

The author discusses this as one of the theoretical reasons for protectionism, explaining why states might protect young domestic industries from established foreign competition.

Why is the EU's position considered 'inconsistent'?

The EU is considered inconsistent because it enforces a restriction-free single market internally, yet applies protectionist barriers, like those in the CAP, to shield its agricultural sector from external competition.