Globalisation of the economy

Globalisation refers to the phenomenon of the opening up of economies and borders. It results from the increase in trade and capital movements, the movement of people and ideas and the spread of information, knowledge and technology. This process, both geographic and sectorial, is not recent and has been accelerating over the past three decades.

Globalisation is the source of many opportunities for the European Union (EU), such as lower prices and greater choice for consumers. However, due to competition from low-wage countries, it can also have downsides, including job loss and downward pressures on wages and working conditions, as well as the relocation of jobs outside of the EU (off-shoring).

To address the challenges that globalisation presents within its borders, the EU:

takes measures to improve the functioning of EU markets and boost innovation performance;
helps to shorten the adjustment process; and
by means of targeted policy actions, such as the European Globalisation Adjustment Fund (EGF), helps workers who lose their jobs due to the relocation of production outside the EU by funding aspects such as training, careers advice and assistance to find a new job.

Through its trade policy, the EU manages the opportunities that globalisation offers to:

open up external markets in order to increase trade opportunities through trade agreements; and
protect EU producers from unfair competition by means of anti-dumping and anti-subsidy rules.

Both the EU and the individual EU countries are members of the World Trade Organization. Because trade is an exclusive competence of the EU, the European Commission negotiates on behalf of the EU countries. This gives the EU more weight in negotiations setting global trade rules designed to keep the world’s trading system predictable and fair.

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Globalisation of the economy