The global financial crisis and associated recession are putting pressure on many countries to increase protection for domestic firms. The next few years will be very challenging for global trade policy. The EU has a significant interest in opposing rising protectionist sentiment and undertaking further trade liberalisation. Historically, trade liberalisation in the EU has followed a number of tracks: multilateral through the WTO; reciprocal through bilateral and regional preferential trade agreements (PTA); and non-reciprocal through initiatives such as the General System of Preferences (GSP), GSP+ and Everything But Arms (EBA) initiative that give special access to European markets to the developing and least developed countries. As a result, the European market is already significantly open to the rest of the world. An important challenge for the EU is ensuring that its initiatives in all of these areas are mutually reinforcing and that resources devoted to negotiating new PTAs do not detract from efforts in the multilateral sphere. The efficiency of the Common Agricultural Policy (CAP) has improved considerably during the course of this decade as payments to producers have become increasingly decoupled from production. Nevertheless, the overall size of support to the agricultural sector remains close to the OECD average and the biggest farms continue to receive the bulk of funds under the Single Payment Scheme. There is still considerable scope to improve the targeting of payments under the CAP. As is the case for the other OECD countries, further reducing export subsidies and tariffs on agricultural imports as already proposed by the EU in the context of the Doha Round would benefit consumers.