Current portal location

Website content

Policy making

What is trade policy?

The European Union manages its trade and investment relations with non-EU countries through its trade and investment policy.
Trade outside the EU is an exclusive responsibility of the EU, rather than the national governments of member countries. This means the EU institutions make laws on trade matters, negotiate and conclude international trade agreements.
The EU's responsibilities cover:

Article 207 of the Treaty on the Functioning of the European Union  sets out the rules on EU trade policy. 

Why the EU negotiates trade deals

By acting together as one, EU countries benefit from increased negotiating power when making trade deals with other countries.

The EU negotiates trade agreements to strengthen our economy and create jobs.

EU trade agreements help to do that in two ways. Trade agreements enable European businesses to compete more effectively abroad and export more to countries and regions outside the EU.

This increase in trade then grows the economy, meaning that more jobs are created. It also gives consumers a wider choice of products at lower prices.

In addition, projecting our rules and values in trade agreements helps the EU shape globalisation, especially on issues like human rights, working conditions and environmental protection.

How the EU negotiates trade deals

Videos also available in fr and de

  1. First, the European Commission requests authorisation from the Council of the EU ('the Council') to negotiate a trade agreement with a trade partner. The Council's authorisation can include 'directives' (objectives of the agreement that the Commission should achieve).
  2. Then the Commission negotiates with the trading partner on behalf of the EU. It does this while working closely with the Council's trade policy committee and keeping the European Parliament fully informed throughout the negotiations.
  3. Areas of negotiations might include:

    • removing or cutting customs duties (taxes) on goods that European companies export
    • scrapping any limits (quotas) on the amounts EU firms can export
    • allowing EU businesses to provide services and bid for public contracts
    • cutting bureaucracy to make it easier for EU firms to export (but maintaining things like health and safety standards or environmental protection).

  4. Once the Commission completes the negotiations, it then presents the deal to the Council and the European Parliament.
  5. The Council and the European Parliament receive the final deal and decide if it should get their approval.
  6. If they both approve, the EU can sign the agreement. The partner can then ratify this signed agreement, and the Council can then declare the agreement concluded.
  7. If the trade agreement covers areas where EU countries have responsibility, it can only be fully concluded after EU countries also ratify and sign the agreement.

Between signing and ratifying the deal, parts of the agreement can be 'provisionally applied' - put into effect before ratification - if the Council decides to do so. Provisional application usually only takes effect once the European Parliament has given its consent.

More information on bilateral deals

Putting EU trade policy into effect

The European Commission helps put EU trade policy into effect. Two of the ways it does so involve so-called 'delegated acts' and 'implementing acts'.

Delegated acts

Sometimes trade legislation needs to be updated or adjusted, for example in light of new scientific or technical procedures.

To avoid the Council and European Parliament having to repeatedly pass updated versions of laws, they can delegate the power to adjust these rules to the Commission. These are called 'delegated acts.'

The Commission can only change areas that do not affect the main areas of the legislation.

Implementing acts

Some trade legislation requires the Commission to administrate aspects of EU law. This is done so that laws are implemented consistently throughout the EU. These are called 'implementing acts.'

For both delegated and implementing acts, the Council and European Parliament strictly control the powers they give to the Commission.