The success of EEC depends on its achievements of larger markets and economies of scale; promotion of competition; increase in productive efficiency; removal of trade restrictions; and expansion of trade. EEC is slowly moving towards monetary integration, and then finally towards economic integration.
EEC is the world’s largest trading block. It accounts for 40% of the total international trade. EEC is the largest trading partner of India. In the recent years, the EEC supplied nearly 32% of India’s imports and absorbed about 25% of her exports. This also indicates that India has an adverse balance of payments with EEC.
India’s imports from EEC have generally been manufactured products, especially, plant and machinery, chemicals, steel, and transport, equipment.
On the other hand, India’s exports to EEC largely comprise traditional goods, including textiles, garments, tea, tobacco, spices, leather, gems and jewellary, handicrafts, etc.
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In 1981, Indian and EEC have also signed a new agreement for economic and commercial cooperation. This Indo-EEC agreement provides for increased investment opportunities in India and joint ventures in both Europe and the third world.
The attitude of EEC towards the developing countries has not been favourable and helpful. It follows protectionist policies. The developing countries cannot expect to earn from EEC through trade.
EEC and other developed countries import raw materials without restrictions, but the finished goods are subject to heavy import duties. Concessions are, however, granted after long negotiations and that too at the cost of making the less developed countries to import more from developed countries.
Regarding the financial assistance, the EEC encouraged either private lending by commercial banks at the market rate of interest or direct investment through multi-nationals in the developing countries.