Transition and Integration Economics at Universität Giessen

1. Liberalism: reduction of governmental and private trade distortions
2. Non-discrimination: Most favoured Nation (MFN) treatment --> most favourable tariff rate, which is granted to any third party, is also granted to each member (National Treatment: after foreign goods have entered the market, imported and locally produced goods should be trated equally) 
3. Reciprocity (Gegenseitigkeit): if a country is granted a trade advantage, this country will also grant this advantage in return
4. Multilateralism: alliance of multiple countries pursuing a common good

1. goods

2. services

3. persons, including free movement of workers, and freedom of establishment

4. capital

WTO: 

• International organization to supervise and liberalize international trade 
• deals with rules of trade btw. nations

= Legally indeppendent institution

GATT:

• general agreement on tariffs and track (step by step reduction of barriers to trade)
• reduction of tariff/non-tariff trade barriers in multilateral contracts

= multilateral agreement

• GATT = multilateral agreement, states are only contractual parties 
• WTO = leagally independent institution, states are members 
• WTO also includes: service transactions and rights to intellectual property
• WTO as an organisation: Faster settlement of conflicts, higher assertiveness, less susceptible to blockades

Tasks of WTO

• supervision of multilateral trade agreements

• forum for multilateral negotiations

• help with the solution of trade conflicts

• supervision of national trade policy

• cooperation with other international institutions

1. European Community 

2. Common Foreign and Security Policy (CFSP)

3. Justice and Home Affairs / Police and Judicial cooperation in criminal matters

Treaty of Lisbon 

Eu now as 1 legal person (Three Pillar System scrapped). EU now competence to sign treaties. 

1. Capital movements completely liberalized in EC (European Communities)
2. Strenghthening monetary cooperation: ECB (European Central Bank) created 
3. Adoption of the euro

1. Inflation rate (no more than 1.5% higher than the 3 lowest inflation EU states) 
2. Government finance: gov. deficit below 3% of GDP; gov. debt must not exceed 60% of GDP)
3. Exchange rate: two consecutive years w/o devlauation
4. Long-term interest rates: no more than 2% higher than in 3 lowest inlation EU states

• Political criteria: Stability of institutions guaranteeing democracy, the rule of law, human rights, minority protection
• Economic criteria: Existence of a functioning market economy, capacity to cope with competitive pressure within the EU
• Legislative alignment: 

- Bring laws into line w the body of European law (acquis communautaire)

- Implement legislation effectively through appropriate administrative and judicial structures => ability to take on the obligations of membership, including adherence (Einhaltung) to the aims of political, economic and monetary union

• aditionally: EU itself has enough "absorption capacity" for new member(s)

1. Exclusive competence of the Union:

e.g. for customs union; for competition rules for

the internal market, for common trade policy, etc.)

2. Shared competence:

(Member states cannot exercise competence

in areas where the Union has done so)

e.g. in the internal market and in agriculture and

fisheries; consumer protection, etc.

3. Supporting competence

to support, coordinate or supplement member states'

e.g. in culture, tourism, education, administrative

cooperation, etc

• scrapping the Three Pillar system
• Creation of more continuity in EU policy by a long-term(2½ year) President of the European Council
• more qualified majority voting (reduces chances of stalemate in the EU Council)
• Charter of FUndamental Rights (CHFR): list of political, social, and economic rights for EU citizens
• Legislative meetings of the Council of Ministers held in public
• More powerful Europe. Parliament by extending codecision w the Council of Ministers
• Secession clause: introduces an exit clause for members wanting to withdraw from the Union
• (Competences btw. members and Union)

• European Council

• Council of Ministers

• European Commission

• European Parliament

• Court of Justice

• function: "political guidance & leadership"
• consists of leaders (prime minister or president) of each EU member + President of the commission + President of the European Council 
• provides guidelines for EU Policy
• negotiates compromises on sensitive issues (reforms, treaty changes...)

= most influential EU institution