European Union

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EUROPEAN UNION

Last updated March 2003

Official Name:
European Union (EU)

Editor's note: The information in this article was compiled and edited from the 1996 and 1998 Background Notes and 2002 Fact Sheets made available through the Bureau of European and Eurasian Affairs of the U.S. Department of State.

BACKGROUND

May 26, 1998

The European Union (formerly the European Community) is comprised of three separate communities: the European Coal and Steel Community (established in 1951) and the European Atomic Energy Community and the European Economic Community (both established in 1957). The EU has 15 members (Austria, Belgium, Denmark, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, Netherlands, Portugal, Spain, Sweden, and the United Kingdom) and four major institutions (the Commission, Council of Ministers, European Parliament, and Court of Justice). Member states agree to relinquish a degree of national sovereignty to EU institutions and to cooperate in the joint administration of the union.

On November 1, 1993, under the Maastricht Treaty the European Community formally became the European Union, and the Commission of the European Communities became the European Commission. Member states began intergovernmental coordination on Common Foreign and Security Policy (the "Second Pillar") and Justice and Home Affairs (the "Third Pillar"). The treaty set a timetable for the introduction of a single currency (euro) and a European Central Bank as well as the development of common economic and monetary policies.

The question of how fast to proceed with enlargement of the Union while strengthening EU institutions (the "widening" versus "deepening" issue) continues to be a major topic for discussion among member states. In the most recent enlargement, Austria, Finland, and Sweden joined the EU in 1995. Bulgaria, Cyprus, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Romania, Slovakia, Slovenia, and Turkey have applied for membership. In March, the EU began formal accession negotiations with Cyprus, the Czech Republic, Estonia, Hungary, Poland, and Slovenia.

The EU's Intergovernmental Conference (IGC), completed in June 1997, reviewed the Maastricht Treaty and made modest institutional changes to prepare for further enlargement. The resultant Amsterdam Treaty is now awaiting ratification by the member states, a process that could take 1-2 years. More far-reaching reforms will be revisited at a later date.

The EU is currently involved in the launch of the European Monetary Union (EMU). On May 2, 1998, an extraordinary EU Summit announced that 11 European countries qualified for and decided to join a single currency area (Denmark, Sweden, and the U.K. have opted out for now and Greece did not meet the criteria to join). Having long supported European integration, the United States applauds the economic convergence that makes the EMU possible. A successful EMU that contributes to a dynamic, strong, and stable Europe with open markets and healthy growth is clearly in the best interest of the U.S. The EU additionally decided upon the first President of the European Central Bank, Wim Duisenberg of the Netherlands, whose term of office will be 8 years. The bank is to be headquartered in Frankfurt, Germany.

The 20-member Commission, appointed by common agreement of the 15 member governments and approved by the European Parliament, has primary responsibility for initiating and implementing EU policy in areas that fall under EU communities (for example, the internal market, external trade, and agricultural policy). The Council of Ministers, representing the member states, occupies the preeminent position in the current institutional power balance and decides on the Commission's proposals. Each member state serves as President of the Council for 6 months in rotation. The presidency country presides at all meetings of the member states and serves as spokesman in dealing with countries on intergovernmental matters, including efforts to coordinate the foreign policies of the member states.

The Parliament, the only EU institution that directly represents European citizens, has significant power over budgetary matters and can amend or reject certain legislation approved by the Council. The Court of Justice is the final authority on the interpretation of EU treaties and laws.

U.S.-EU RELATIONS

The United States and the European Union (EU) enjoy an exceptionally broad and deep commonality of interests and values that form the basis of a close, mutually beneficial relationship. Since the end of the Cold War, the U.S. has worked intensively with its EU partners to strengthen the partnership as part of a broader effort to build a New Atlantic Community and a New Transatlantic Marketplace.

The U.S. and the EU share the goal of promoting a healthy, open commercial relationship and strong multilateral economic institutions. The U.S. supports greater European political and economic integration and ongoing EU efforts to enlarge to include central and east European states. We believe this process of integration and enlargement contributes to a more stable and prosperous Europe, just as NATO enlargement does. It should proceed, however, without creating new trade barriers.

The EU is the United States'largest economic partner, its largest investment partner, and second-largest trading partner. European companies are the number-one investor in 41 U.S. states and rank second in the other nine.

The EU plays an increasingly important role in foreign affairs, especially in the area of humanitarian and development assistance. The EU's current 3-year foreign aid budget exceeds $36 billion. This assistance reinforces many important U.S. interests. For example, the EU is the largest donor of grant assistance to help promote democracy and free market reforms in the countries of central and eastern Europe. EU aid also is supporting U.S. efforts to bring stability and prosperity to troubled areas including the Middle East, the former Yugoslavia, Albania, and central Africa.

Since December 1995, the New Transatlantic Agenda (NTA) has provided the framework for enhanced political and economic cooperation between the U.S. and the EU. The President meets with the EU leadership at semiannual summits. The May 18 Summit in London highlighted recent U.S.-EU accomplishments under the United Kingdom's Presidency of the EU. Notably, the U.S. and EU:

Began discussions on a broad, new trade liberalization initiative.
Registered strengthened cooperation on nonproliferation, counterterrorism, and related issues, including Caspian energy resources.
Launched a joint initiative to promote nuclear safety in northwest Russia.
Implemented an information campaign to combat trafficking in women in Ukraine and Poland.
Announced the first Democracy and Civil Society Awards, recognizing the democracy-promoting efforts of NGOs and individuals from 26 central and east European countries and the New Independent States (NIS).

The New Transatlantic Agenda (NTA)

The New Transatlantic Agenda (NTA), launched in December 1995, provides a framework for managing and enlarging our cooperation with the EU. It reinforces our bilateral relations with the EU member states and offers a framework for engaging the EU as a whole through a regular consultative process involving the EU Presidency country and the European Commission.

The NTA lays out an ambitious agenda for expanding U.S.-EU cooperation on promoting peace, stability, democracy, and development around the world; responding to global challenges; contributing to the expansion of world trade and closer economic relations; and "building bridges" between Americans and Europeans of the post-Cold War generation.

A key element of the U.S.-EU worldwide partnership is intensified diplomatic cooperation. The U.S. and the EU are, for example, working together to support reconstruction and reconciliation in Bosnia, promote needed reform in Ukraine, and improve nuclear safety in northwest Russia. The U.S. also is working with the EU to reinforce political and economic cooperation with Turkey, and we have encouraged dialogue among the parties in the Middle East Peace Process.

The U.S. and the EU have undertaken several new initiatives to expand cooperation on law enforcement, counternarcotics, environmental degradation, and health issues. U.S.-EU consultations have spurred development of a successful joint counternarcotics program in the Caribbean, exchanges of law enforcement officials, and an information campaign to combat trafficking in women in Poland and Ukraine. The U.S. and the EU have recently begun to discuss ways to improve counternarcotics activities in the Andean region.

Joint U.S. and EU trade efforts are helping to reduce transatlantic barriers and support the multilateral trading system. The U.S. and the EU are discussing a new initiative to remove trade barriers and create a New Transatlantic Marketplace. The U.S. and the EU are working diligently to resolve important trade differences in the areas of Specified Risk Materials and Genetically Modified Organisms. Within the next few months, the U.S. and the EU will sign a Positive Comity agreement on enforcement of competition laws. Our governments are cooperating closely with the Transatlantic Business Dialogue (TABD), a U.S.-European business partnership, to address a wide range of trade barriers important to the business community.

A key part of the agenda is a fourth chapter dealing with "building bridges" between the different constituencies in the transatlantic community. At the May 18 summit, the U.S. and the EU presented the first U.S.-EU Democracy and Civil Society Awards to NGOs and individuals from some 26 central and eastern Europe and New Independent States (NIS) countries who have excelled in promoting democratic values and civil society. The U.S. and the EU are also working to launch an ongoing dialogue that will focus on consumer issues in the transatlantic marketplace.

SUMMARY OF THE U.S.-EU SUMMIT

June 26, 2004

Strengthening the Transatlantic Economic Partnership

The United States and the European Union are each other's largest sources of foreign direct investment, with the 2002 stock of U.S. direct investment in the European Union reaching $700 billion and EU investment in the United States reaching $850 billion. In 2003, two-way transatlantic trade exceeded $390 billion. The total output of U.S. foreign affiliates ($333 billion in 2000) in Europe and of EU affiliates in the United States ($301 billion) is greater than the total GDP of most nations. Investment is good for workers: foreign subsidiaries in the United States and the European Union pay higher wages on average than do domestic companies.

At the summit, President Bush and his EU counterparts agreed to call upon all interested U.S. and EU stakeholders to engage in vigorous discussions over the coming months on how to eliminate trade, regulatory, and investment impediments to further economic integration.

To this end, the United States intends to convene a number of public dialogue sessions and participate in conferences and meetings with the business, consumer, labor, environmental, and academic communities, and other elements of civil society in order to outline proposals for possible adoption by governments.

On the basis of stakeholder discussions and proposals, and as called for in the U.S.-EU joint Declaration, the United States will in early 2005 develop its contribution to a forward-looking U.S.-EU strategy to enhance economic growth and eliminate transatlantic barriers. The U.S.-EU Senior Level Group, comprising government officials, will present these ideas to Leaders before the 2005 U.S.EU Summit.

Fighting the Challenge of the HIV/AIDS Epidemic

The United States and the European Union reaffirmed their commitment to combat AIDS, pledging to: Support the U.N. Declaration of Commitment on HIV/AIDS; Ensure resources from the Global Fund for AIDS, Malaria, and Tuberculosis are available to countries most severely affected by the disease; Cooperate on formally amending WTO rules in accordance with our groundbreaking agreement on intellectual property rights and public health; Support and accelerate the development of vaccines and technologies to prevent the spread of HIV/AIDS and other communicable diseases; and Work to promote donor coordination and civil society and private involvement in the fight against AIDS.

President Bush is leading a global effort to combat the HIV/AIDS pandemic through his historic $15 billion Emergency Plan for AIDS Relief and his commitment to the Global Fund to Fight AIDS, Tuberculosis, and Malaria, to which the United States has pledged more than $1.96 billion, or 36 percent of all pledges through 2008.

On June 10, 2004, President Bush and his G-8 counterparts endorsed the establishment of a Global HIV Vaccine Enterprise, a virtual consortium to accelerate HIV vaccine development by enhancing coordination, information sharing, and collaboration globally.

President Bush announced plans to establish a new U.S. Vaccine Research & Development Center, in addition to the one at the United States National Institutes of Health. The new center will become a key component of the Global HIV Vaccine Enterprise. The United States is investing $488 million in HIV vaccine development in FY2004, and has requested $533 million in FY2005.

Declaration on the Nonproliferation of Weapons of Mass Destruction

The United States and the European Union agreed to expand their cooperation to prevent, contain, and reverse the proliferation of weapons of mass destruction (WMD) and their delivery systems. Their commitments build on their agreement at the 2003 U.S.-EU Summit, and further President Bush's February 11 proposals to heighten international action against WMD proliferation, and the G-8 Action Plan on Nonproliferation adopted at the Sea Island Summit.

The United States and the European Union:

Welcomed the G-8 Action Plan on Nonproliferation, agreeing to:

Refrain for one year from initiating new transfers of enrichment and reprocessing equipment and technology to additional states, while seeking permanent controls to keep this capability from terrorists or states seeking it for nuclear weapons;
Subscribe fully to the Proliferation Security Initiative Statement of Interdiction Principles, support efforts to interdict WMD shipments, and enhance cooperation against proliferation networks, including in intelligence and law enforcement.
Seek stronger enforcement of nuclear nonproliferation obligations, including by: making the International Atomic Energy Agency (IAEA) Additional Protocol an essential new standard in the field of nuclear supply; creating a new special committee of the IAEA Board of Governors to focus on safeguards and verification; and declaring that states under investigation should not participate in IAEA compliance decisions;
Continue to support the work of the G-8 Global Partnership Against the Spread of Weapons and Materials of Mass Destruction; and
Take concrete action to expand and improve capability to prevent and respond to bioterrorism.

The United States and the European Union also:

Committed to implement fully United Nations Security Council Resolution 1540, to criminalize proliferation, establish effective export controls and protect dangerous materials, and to assist others to do the same;
Resolved to enhance cooperation to promote the security of radioactive sources and prevent their misuse;
Agreed to continue to promote effective export controls, backed up by criminal sanctions, and to work to identify, control, and interdict WMD- and missilerelated proliferation shipments;
Called for the complete, verifiable, and irreversible dismantlement of North Korea's nuclear program, including uranium enrichment and plutonium reprocessing; and,
Welcomed Libya's decision to abandon, under international verification, its WMD and longer-range missile programs.

On Iran, the United States and the European Union expressed united determination to see the proliferation implications of Iran's nuclear program resolved. In this connection, the U.S. and EU were disturbed by Iran's recent announcement of its intention to resume manufacturing and assembly of centrifuges and called on Iran to rethink its decision.

Cooperation to Combat Terrorists and Other Serious Criminals

The United States and the European Union agreed at the summit to: Work together to deepen the international consensus and enhance international efforts to combat terrorism through support of the United Nations, its General Assembly, and the Security Council; Share data on lost and stolen passports to prevent terrorists from traveling undetected with these documents; Work together to prevent access by terrorists to financial and other economic resources and have a regular dialogue on terrorist financing; Promote cooperation between our law enforcement agencies and institutions for the purpose of the prevention, detection, and investigation and prosecution of terrorist offenses; Identify areas for closer cooperation in dealing with the consequences of terrorist attacks; and Focus assistance programs on the enhancement of counterterrorist capacity and commitment in priority Third Countries.

These steps build on the expanding transatlantic counterterrorism cooperation. Specifically, the United States and the European Union recently have: Reached an agreement giving U.S. border enforcement authorities access to airline passenger reservation data on transatlantic flights that will allow U.S. authorities to screen for potential terrorists in advance of boarding aircraft; Begun cooperation to secure our ports, vessels, cargo, and supply chains through programs such as the Container Security Initiative and the Customs-Trade Partnership Against Terrorism to detect radioactive material; and Inaugurated a high-level dialogue to enhance mutual understanding and complementarity of U.S.-EU security policies and improve security in land, air, and maritime environments.

This extensive and growing collaboration with the EU is part of 'President Bush's broader counterterrorism strategy.

Cooperation on the Development of the Hydrogen Economy

President Bush and his EU counterparts welcomed and encouraged the collaboration between the United States and the European Union on accelerating development of the global hydrogen economy, which will enhance security of energy supply, increase diversity of energy resources, promote economic growth and job creation, and improve local and global environmental quality.

This U.S.-EU collaboration is helping to advance President Bush's goal that the first car driven by a child born today could be powered by hydrogen fuel cells, and is a natural extension of the President's $1.2 billion Hydrogen Fuel Initiative.

This U.S.-EU collaboration was launched at the 2003 U.S.-EU Summit, and has led to a series of meetings on both sides of the Atlantic to advance hydrogen research and technology development and the establishment of harmonized codes, standards, and regulations. Together, the United States and the European Union have:

Increased coordination of our approaches to hydrogen research, helping to guarantee that research efforts are focused and complementary and make the best use of our facilities and the most effective scientific methods;
Identified targeted areas of cooperation including fuel cell development, hydrogen storage, hydrogen production, and the necessary codes and standards to support these applications;
Committed United States' and the European Union's resources to advance research in critical areas such as high-temperature membranes and catalysts for improved fuel cell cost and durability;
Identified model demonstration programs showing the value of public applications of hydrogen;
Shared lessons from municipal hydrogen-powered bus demonstrations in San Diego, California and Brussels, Belgium; and
Explored collaborative applications of new safety techniques for handling hydrogen in transportation applications in America and Europe.

This transatlantic cooperation is intended to support the International Partnership for the Hydrogen Economy (IPHE), which held its inaugural meeting in Washington, D.C., in November 2003. The IPHE has helped launch international cooperation on research for high-temperature membranes used in fuel cells, hydrogen storage materials, and renewable hydrogen production. The IPHE combines financial and intellectual resources in a global effort to overcome the remaining obstacles to the commercial adoption and trade of hydrogen technology worldwide. These include finding means to bring consumer costs to a level competitive with other energy sources and to build the infrastructure needed to produce, transport, and safely handle hydrogen and hydrogen-based fuel cells.

Continuing Our Cooperation to Expand Transatlantic Trade

At the summit, President Bush and EU leaders:

Directed their trade ministers, in cooperation with other WTO members, to finalize framework agreements in the WTO's Doha trade negotiations by the end of July, in order to further enhance the conditions for sustained global economic growth; and
Welcomed the continued progress in reducing impediments to transatlantic commerce and expanded regulatory cooperation.

Doha Negotiations and the Global Economy: President Bush believes that trade liberalization is critical to boosting global prosperity, generating sustained economic growth, and raising living standards. Emphasizing the need to seek an ambitious outcome in the WTO's Doha negotiations, President Bush and his EU counterparts reaffirmed their commitment to cooperate with other WTO members to finalize framework agreements in the Doha trade negotiations by the end of July in order to expeditiously complete these negotiations and further enhance the conditions for sustained global economic growth. President Bush and his EU counterparts also:

Emphasized the need to focus on the core areas of the Doha negotiations; and
Underscored that we are on the verge of an historic opportunity to fundamentally reform trade in agriculture and noted that progress in the agriculture negotiations will be essential to move the other core areas of the negotiations forward.

While the United States and the EU are working to advance WTO negotiations, both the United States and the EU have had laws and other measures challenged under WTO dispute settlement procedures. President Bush intends to comply with final WTO rulings against U.S. measures, such as in the FSC/ETI case where the Bush Administration continues to work closely with the U.S. Congress. The United States is currently awaiting EU action to comply with the WTO ruling in the beef hormone case, as well as awaiting a WTO ruling against the EU moratorium on bio-tech approvals.

The cooperation with the EU on WTO Doha negotiations is part of President Bush's broader effort to open markets globally, regionally, and bilaterally. In addition to the global efforts in the WTO Doha negotiations and the Free Trade Area of the Americas encompassing the Western Hemisphere, the Bush Administration has negotiated or is negotiating comprehensive, high-quality free trade agreements (FTAs) with partners in every region of the globe.

Positive Economic Agenda: President Bush and his EU counterparts welcomed the ongoing cooperation as part of the "Positive Economic Agenda." The United States and the European Union share the largest bilateral trade and investment relationship in the world, accounting for over $1.5 trillion. In order to ensure that this critically important economic relationship continues to thrive, President Bush and his EU counterparts established in 2002 the "Positive Economic Agenda" to advance bilateral cooperation to reduce trade frictions and foster expanded transatlantic commerce.

Regulatory Cooperation: Recognizing that regulatory differences, not tariffs, comprise the most significant remaining transatlantic trade barriers, President Bush and his EU counterparts welcomed the U.S.-EU Regulatory Cooperation Roadmap. This Roadmap builds on the 2002 U.S.-EU Guidelines for Regulatory Cooperation in which the European Commission undertook to make its regulatory process more transparent. The Regulatory Cooperation Road-map provides a framework for U.S. and EU officials to cooperate on a broad range of important areas such as pharmaceuticals, auto safety, information and communications technology, cosmetics, consumer product safety, chemicals, nutritional labeling, and eco-design of electrical/electronic products. Through targeted U.S.-EU regulatory consultations, we aim to promote better quality regulation, minimize regulatory divergences, and facilitate transatlantic commerce.

Financial Markets Regulatory Dialogue: President Bush and his EU counterparts welcomed a joint report from U.S. and EU officials participating in the Financial Markets Regulatory Dialogue. The report describes the ongoing collaboration of U.S. and EU policy and regulatory officials on corporate governance and financial market regulation. The Dialogue, launched in 2002, provides a forum for discussing bilateral financial and regulatory issues, with a view to fostering an efficient and transparent transatlantic capital market. The Dialogue has, in particular, provided a useful vehicle for ensuring that European legislation not impede U.S. participation in European capital markets. More broadly, with recent efforts to improve corporate governance and financial market regulation, the Dialogue has served a valuable function in enabling U.S. and EU regulators to work on potential regulatory issues in a cooperative and timely fashion.

Agreement on GPSGalileo Cooperation

At the summit, the United States and the European Union reached an agreement covering their satellite navigation services, the U.S. Global Positioning System, and Europe's planned Galileo system.

The U.S. Global Positioning System (GPS) is a constellation of 28 satellites and ground support facilities, used for a wide array of economic, scientific, and military applications. The satellites broadcast signals that can be converted into precise positioning and timing information anywhere in the world. In 1998, the European Union decided to pursue its own satellite navigation system, known as Galileo, which currently is still in its development phase.

U.S. Secretary of State Colin Powell, European Commission Vice-President Loyola de Palacio, and Irish Foreign Minister Brian Cowen signed the Agreement on the Promotion, Provision, and Use of Galileo and GPS Satellite-Based Navigation Systems and Related Applications. This historic agreement protects Allied security interests, while paving the way for an eventual doubling of satellites that will broadcast a common civil signal worldwide, thereby promoting better and more comprehensive service for all users.

The agreement ensures that Galileo's signals will not harm the navigation warfare capabilities of the United States and the North Atlantic Treaty Organization military forces, ensures that both the United States and the European Union can address individual and mutual security concerns, and calls for non-discrimination and open markets in terms of trade in civil satellite navigation-related goods and services.

Recognizing the added benefit to civil and commercial users if the two independent systems were compatible and interoperable, the United States and the European Union have shared technical analyses and information, resulting in an agreement to establish a common civil signal. The additional availability, precision, and robustness that will be provided by dual GPS-Galileo receivers lays the foundation for a new generation of satellite-based applications and services, promoting research, development, and investment that will benefit business, science, governments, and recreational users alike.

EUROPEAN INTEGRATION

The process of European integration was strengthened by the implementation, in July 1987, of the Single European Act (SEA), which increased the scope of the Union's legislative and executive authority. The SEA endorsed the objective of economic and monetary union and outlined a series of directives necessary to eliminate all physical, technical, and fiscal barriers to completion of an internal "single" market by January 1, 1993. It also formalized procedures for cooperation in the area of foreign policy.

At the landmark Maastricht summit in December 1991, EU members approved additional proposals to forge even closer economic, monetary, and political ties within the Union. The treaty called for the EU to establish a European Central Bank and a single currency, the euro.

The euro was adopted January 1, 1999 by eleven member-states of the EU. These states were: Austria, Belgium, Germany, Finland, France, Ireland, Italy, Luxembourg, the Netherlands, Portugal, and Spain. Britain, Denmark, and Sweden opted not to adopt the euro at that time. Since then, Greece has also adopted the euro. The creation of a euro zone marks the third phase of the path toward economic union among the countries of the EU. Euro notes and coins began replacing the currency of individual countries in 2002.

In December 2002, the EU announced the acceptance of negotiations for membership with Cyprus, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Malta, Poland, the Slovak Republic and Slovenia. Thee countries are expected to become full members in May 2004.

RELATIONS WITH OTHER COUNTRIES

The EU is the largest trading entity in the world. In April 1992, the EU and the seven-member European Free Trade Association (Austria, Finland, and Sweden were EFTA members before joining the EU) signed an agreement to broaden their existing free trade agreement and create a European Economic Area (EEA). The EEA establishes free movement of goods, services, capital, and labor throughout the combined territory. In a December 1992 referendum, Switzerland rejected participation in the EEA.

The EU and its member states have long-standing political and economic ties with the formerly communist countries of Central Europe and the New Independent States (former Soviet republics). The EU has provided significant economic assistance to these new emerging democracies and has eased access to its markets for them. The EU created a new kind of association agreement for the countries of Central Europe.

These agreements, also known as Europe agreements, cover industrial, technical, and scientific cooperation, financial assistance, and political dialogue. Most importantly, these agreements envision eventual EU membership for these Central European states.

In 1989, the European Commission began coordinating aid from the then-24 countries (including the U.S.) of the Organization for Economic Cooperation and Development to Central and Eastern Europe; this process is known as the Group of 24. The objective is to strengthen the process of political and economic reform, with emphasis on improving the private sector. The European Bank for Reconstruction and Development (of which the United States is an active member) was established in 1990 to support investment and the development of market economies in these countries.

In January 1992, the commission announced that it would negotiate new agreements with the former Soviet republics to replace the 1989 EU-U.S.S.R. trade and cooperation agreement. In June 1994, the EU signed a partnership and cooperation agreement (PCA) with Russia which provides for political dialogue at all levels; possible talks in 1998 on a free trade area; EU support for eventual Russian accession to the World Trade Organization (WTO); and EU assistance on nuclear safety, restructuring state-run enterprises, and economic reforms.

The EU also signed a similar PCA with Ukraine in June 1994. The EU has initialed less-extensive PCAs with Kyrgyzstan, Kazakhstan, Belarus, and Moldova. The Union has placed priority on improving relations with developing countries.

The Lome Convention provides a framework for EU development cooperation with 70 African, Caribbean, and Pacific (ACP) countries. In 1989, a new 10-year agreement was signed with the ACP states to provide aid to development projects, free access to EU markets for almost all manufactured imports from those countries, and incentives to promote European investment.

The Union is linked with a number of countries in the Mediterranean by either association or preferential trade agreements that provide duty-free access for industrial products and direct grants and loans. EU economic ties to Asia and Latin America usually take the form of bilateral agreements that allow preferential access and certain types of development aid.

Countries of the World and Their Leaders Yearbook 2006