Globalization is the result, as well as the cause of the expansion of trade agreements and liberalization of capital flows. Regionalism is a side effect of globalization, of particular importance in EU. The article compares the opening and dependence of EU member states with that of similar regions in the world. It argues that the combination between free trade and regionalism is destined to evolve in time.globalization, European Union, liberalization, regionalism

Sorica Sava

English

Research Papers in Economics

Romanian Economic and Business Review – Vol. 1, No. 3 
 
  63 
THE OPENING – DEPENDENCE ON THE 
EUROPEAN UNION AND GLOBALIZATION 
 
Sorica Sava
* * * * 
 
Abstract 
                                        
Globalization is the result, as well as the cause of the expansion of trade agreements 
and  liberalization  of  capital  flows.  Regionalism  is  a  side  effect  of  globalization,  of 
particular importance in EU. The article compares the opening and dependence of EU 
member states with that of similar regions in the world. It argues that the combination 
between free trade and regionalism is destined to evolve in time. 
 
 
The  80’s  operate  a reshaping  of  the  global  economy.  Two  powerful  and  closely 
bound forces have created conditions for the nedw tendencies. 
The  first  one,  the  globalization  of  economy  –  resulting  from  the  expansion  of 
multinationals – accentuates the international interdependence to such an extent that the 
part  of  the  production  destined  to  trade  increases  and  the  direct  foreign  investments 
accumulate. 
The second one, the resurgence of regionalism – a phenomenon better observable in 
Europe, but also existent in other regions – has important consequences either. 
The increase  of  both  regionalism  and  globalization  leads  to  a  certain  number  of 
matters: the expansion of trade agreements and a new relation between regionalism and 
multilateral  liberalization  of  international  trade.  Globalization  expresses  the  growing 
influence of this movement and of the competitive game affecting the economy as a 
whole. 
This dynamics of international economic relations reveals the role of the regional 
integration process. The regionalization of the trade is distinctly more pronounced in the 
European Union. The European market has got a new physiognomy since the creation of 
the customs, economic and monetary union. So the EU has become a vast economic 
space, the most developed regional group and the biggest commercial entity. It is about a 
market of 309 millions of inhabitants (for countries members of the European Monetary 
Union). Therefore, Europe together with United States and Japan represents the biggest 
commercial triangle of the world. 
Besides, the European market has been the market with the strongest growth in the 
world for the last several years, as a result of the beneficial effects determined by these 
changes of structures. Among certain arrangements of regional integration, the EU is by 
far the most important regional zone whose total of exports and imports represents more 
than 40% of the world trade in goods and services. Since exports to countries of the third 
world have progressed faster than their imports, the intra-EU weight of trade of the total 
trade itself stays at a pretty high level of about two thirds of the total trade.  
The evolution of prices, the home demand and the monetary oscillations explain 
                                                            
* Sorica Sava is Professor of Economics at the Romanian American University in Bucharest.  
  64 
variations  of  relative  importance  in  the  intraregional  trade.  But  these  trades  between 
member countries contribute to themselves with more than a quarter of the world exports. 
Although the European Union represents a model of regional integration, it has become a 
component of the world free trade because of the commercial, financial and industrial 
interdependence and of the geographical, economic and political stakes. 
This approach incites us to place the European Union stakes between the creation of 
an  integrated  economic  space  and  the  national  extraversion  stimulated  by  the 
globalization of activities. 
The interaction between the liberal nature of the integration process and the national 
economies insertion in the globalization process expresses the specificity of this European 
economic space. This double liberalization submits the European Union to two types of 
forces, centrifugally produced by the globalization process and centripetally generated by 
the  economic  and  monetary  integration  objectives.  The  creation  of  a  general  union 
including  all  sectors  of  the  economic  activity  answered  to  an  internal  necessity,  the 
opening of the economies through the development of four liberties: free circulation of 
goods, services, capital and labor. But at the same time it is about a simultaneous opening 
under the notable external influence. 
The globalization – Europeanization relation was influenced by the involvement of 
the European countries in various multilateral negotiations of WTO (GATT) as well as in 
several agreements of association and other nature. The empiric analysis of the rates of 
commercial dependence and of the opening to the exterior can show us the impact of the 
constant interaction between the regionalization of trade and the advance of globalization. 
     
   The opening –dependence of the European Union in the period 1994-2004
1  
 
Billions of dollars and in percent 
  1994  2000  2004 
Export
2  770  792  1204 
Import
3  762  920  1281 
GDP in value
4  6806  6100  9500 
Rate  of 
dependence
5 
11,2  15,1  13,5 
Rate of opening
6 
(%) 
11,3  13,0  12,7 
E+I/2/PIB
7(%)  11,3  14,0  13,1 
Source :  Organisation  mondiale  du  Commerce  (1995  et  2005),  Le  commerce 
international : tendances et statistiques, Genève 
Rates of commercial dependence and opening to the exterior of the European Union 
                                                            
1 1994: 12 countries, 2000 et 2004 -25 countries. 
2 Extra European. 
3 Extra European. 
4 Gross domestic product. 
5 Import of the region/GDP of the region *100.  
6 Export of the region/GDP of the region * 100. 
7 Average of exports and imports brought back to the GDP of the considered area.   
  65 
show the relative importance of the world insertion. Data show us the greatest opening - 
dependence of the EU (13.5% of the GDP in 2004) compared to that of other areas, for 
example the United States (nearly 10% of the GDP). There is a meaning in comparing the 
United  States  to  the  European  Union,  because  these  two  big  partners  have  the  most 
important commercial and economic weight in the world. So, among the twenty leading 
exporters  and  importers  of  the  world,  eight  and  respectively  twelve  are  EU  member 
countries. As main part of possessions and commercial services world trade, EU had a 
considerable impact on the total trade and the international economic relation dynamics. 
However, the commercial extraversion is accompanied by an increasing opening of 
the economies to the productive and financial capital flows. This phase of opening of the 
economies  to  the  productive  and  financial  capital  flows  accelerated  the  process  of 
globalization. 
Such an evolution is justified by the needs of the economic private or public agents 
as a whole to reach the world market of capitals. It is about the necessity to finance the 
diversification  of  enterprises  and  the  improvement  of  the  efficiency  on  the  financial 
markets as well as to cover the macroeconomic unbalances. 
In this perspective, for a better adequacy between the financing capacities and needs, 
the  world  financial  system  has  become  a  big  market  through  the  permanent 
interconnections of national spaces. The European Union is not part of this movement, 
representing 54% of the world direct investments and reaching 42% of the foreign direct 
investments. 
The EU has actively participated in this movement of globalization of the capital 
through the creation of a big market and through the globalization of the financial system. 
This world insertion of the EU member countries was achieved in several stages: 
-  Globalization of goods and services trade 
-  Globalization of production and financial capital flows 
-  Global strategies development of the companies 
So, these are the characteristics of the international economic relations: 
-  On  one  hand,  the  increasingly  important  role  played  by  the  multinational 
businesses  in  the  world  environment  has  the  tendency  to  reach  an  integration  of  the 
production processes. 
-   On  the  other  hand,  there  is  the  acceleration  of  the  world  exchanges  at  an 
immaterial  level  (information,  services…),  these  domains  modifying  the  local/global, 
national/international ratios. 
Nevertheless,  the  implication  in  this  international  relations  dynamics  since  the 
middle  of  the  eighties  hasn’t  involved  in  any  way  slowing  down  the  regionalization 
process, as attested by the tendencies of regional integration, which has stayed the most 
intense in the world, even if it does exist in other regions, either. 
The regionalization of the intra-European trade stays the most intense in the world. 
Since the end of the sixties, goods trade in Europe and EU has known such a strong 
growth, that in 2004 it represented more than 40% world exports and imports. 
The home market and the monetary union can explain the commercial and financial 
regionalization and its effect produces the distribution of FDI flows: an intra-European 
flows’ intensification and the concomitant inflation of European origin FDI stocks. But 
the  regionalization  of  capital  and  production  movements,  of  alliances  and  fusions 
between  companies  is  conjugated  with  the  increasing  opening  of  the  European  
  66 
economies. 
In this way, EU has become a well integrated and also open economic space. These 
evolutions, justified by the need of private or public actors as a whole to reach the world 
economy,  show  us  that  the  new  axis  of  common  cooperation  has  become  “the  co-
regionalism free trade”. 
Therefore,  parallel  to  the  geographical  redeployment  of  various  activities,  the 
commercial arrangements sustaining different forms of cooperation of the EU with the 
rest  of  the  world  are  the  object  of  a  structural  reconfiguration.  The  European  Union 
sustains an open and free trade regionalism, able to procure gains of competitiveness. 
This  combination  between  free  trade  and  regionalism  is  destined  to  evolve.  For 
instance, the relations of the Union with the developing countries are in resonance with 
the multilateral doctrine of the OMC and beyond, with the liberal representation of a 
global economy. 
The  possibilities  that  EU  influence  the  relations  reside  in  the  fact  that  fifteen, 
respectively twenty-five member states provided in 2004 almost half of the world trade of 
goods and services. In fact, the economic action remains the fundamental dimension of 
the European Union foreign policy as international actor. 
      
                                                                 

The opening–dependence on the European Union and globalization

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The opening–dependence on the European Union and globalization

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