The World Trade Organisation (WTO) gave the European Union a pat on the back on Wednesday for its "generally open" trade policy, but said it could do better in the farm and services sectors.
Further liberalisation of agricultural trade, particularly by simplifying and reducing tariffs and cutting subsidies, "would substantially contribute to the promotion of world trade," it said.
On services, by far the biggest component of the EU economy, continuing differences in domestic regulations were holding up the creation of an effective single market across the bloc, the WTO said in a review of EU trade policy.
But overall, the 25-state bloc had a "generally open trade regime" and had played a key role in the launch and progress of the WTO's Doha Round of free trade negotiations which aims to further lower barriers to business around the globe.
Brussels welcomed the report, saying it showed the international view of EU policy was "more positive now than ever."
"Today the WTO gave an 'A' grade to EU trade policy," said EU Trade Commissioner Pascal Lamy in a statement.
The trade policy review, which all WTO members periodically face, noted moves by the EU to reform its huge farm budget by reducing the link between production and payments, blamed by critics for swelling spending and creating large surpluses.
But the plans fell short of liberalising EU agriculture, it added. Import tariffs for farm goods averaged 10.0 or 16.5 percent, depending on the definition, which was significantly higher than the average 6.4 percent for industrial goods.
While reforms to financial services, including banking and insurance, telecommunications and transport were underway, they still lagged in terms of harmonisation.
"Further liberalisation of services is considered as the most important mid- and long-term goal of (EU) reforms ... it would boost the overall competitiveness of the economy," it said.
In the debate which accompanied the release of the report, the United States attacked EU use of non-tariff barriers, particularly safety regulations.
US trade ambassador Linnet Deily said the WTO report card should have drawn attention to the EU's failure to consult with trading partners when drawing up such rules.
New regulations on chemicals, for example, would leave manufacturers having to prove the safety of tens of thousands of chemical agents if they wanted to continue doing business in the bloc, she said.
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