The EU uses its trade policy to make the most of globalisation and its economy thrives because of free trade. However, sometimes it can be undermined by countries imposing unfair tariffs on its products or selling their goods at abnormally low prices. There is also the risk of conflicts over trade escalating into a trade war, which is when both parties keep on increasing tariffs or create other barriers, which can make products more expensive and complicate things for companies. The EU can use a variety of trade defence instruments in these situations. Read on to find out how and to discover examples of recent trade conflicts.

Calling in arbitration - the role of the WTO

The EU and its member states are among the 164 members of the World Trade Organisation (WTO), which exists to guarantee a rule-based international trading system. It has the power to rule on trade disputes and enforce decisions. In the past this has helped to prevent trade disputes escalating.

On the basis of pre-defined rules, any WTO member can lodge a complaint over breaches of WTO rules and seek reparations.

Since the WTO’s creation in 1995, the EU has been involved in 181 cases: 97 as a complainant and 84 as a defendant.