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FTAs & Trade Policy Update

Trade in Services Agreement (TISA): is a proposed international trade treaty between 24 Parties, including the EU and the US. The agreement aims at liberalising the worldwide trade of services such as banking, health care and transport. The process was an initiative of the US. The EU and the US are the main proponents of the agreement, and the authors of most joint changes. The agreement covers about 70% of the global services economy.

The participating countries started crafting the proposed agreement in February 2012 and presented initial offers at the end of 2013.

Update

  • There are now 25 participating countries in the agreement, with Uruguay and Mauritius having recently joined. 
  • Progress on financial services had been disappointing, with several key parties raising concerns about the text. 
  • It has been agreed that all Members would be expected to have tabled their offer in the Autumn and, after July, no new proposals would be able to be included in the negotiation. 
  • The next round would take place in October, where the focus would be the temporary movement of services professionals.

Transatlantic Trade and Investment Partnership (TTIP)
TTIP is a proposed free trade agreement between the EU and the US. The US and EU together represent 60% of global GDP, 33% of world trade in goods and 42% of world trade in services. A free trade area between the two would represent potentially the largest regional free-trade agreement in history, covering 46% of world GDP.

The first round of negotiations took place in July 2013 in Washington DC.
Latest round, the tenth round took place from 13–17 July 2015 in Brussels

Update

  • There had been two positive developments recently, the Trade Promotion Authority Bill had been signed by President Obama on 29 June, and the European Parliament recently approved compromised wording on ISDS.
  • G7 leaders have also recently issued a joint statement saying they would continue to aim for political agreement by the end of this year.

The Comprehensive Economic and Trade Agreement (CETA)
This is a free trade agreement between Canada and the EU. CETA is Canada's biggest bilateral initiative since NAFTA.

Officials announced the launch of negotiations on 6 May 2009 at the Canada-EU Summit in Prague.
An agreement in principle was signed on 18 October 2013, with negotiations concluding on 1 August 2014.

Update
•    Currently undergoing legal review and translation.
•    CETA is expected to be implemented in late 2016, with 98% of both Canadian and EU tariffs eliminated immediately upon entry into force.
•    UKTI had already started the promotional work and expect a report on the opportunities to be finalised by the end of 2015.  

WTO – the Agreement on Trade Facilitation and the Post-Bali Work Programme
Agreement on Trade Facilitation: The WTO Agreement on Trade Facilitation is the first full new WTO Agreement since the WTO was formed in 1995.  Once it enters into force, the agreement is expected to reduce total trade costs by more than 14% for low-income countries and more than 13% for upper middle-income countries by streamlining the flow of trade across borders. It would enter into force once two-thirds of WTO Members had completed their internal ratification processes.  

Post-Bali work programme: This programme was an attempt to close the remainder of a negotiation which was now nearly 15 years old.  The real deadline for concluding this is in mid-December. There would still be a long-term work programme for the WTO because much of the basis for FTAs and their rules was WTO-based, so the WTO would continue to play a key role.


EU-Latin America
Latin America and the EU have long sought to create a free trade agreement, yet internal discord and division within Mercosur has hampered efforts. Mercosur is the largest customs union in Latin America. The bloc differs from other Latin America trade unions by intending to create a common South American market with a political integration agenda. The bloc’s legal framework requires that Mercosur members – Brazil, Argentina, Paraguay, Uruguay, and Venezuela – negotiate trade agreements with third countries as a group. In opposition to this state of affairs, smaller blocs in the region have succeeded in implementing agreements with the EU. In June 2012, members of the Andean Community (Peru, Colombia and Ecuador) signed a comprehensive trade agreement with the EU, and, in 2015, the Caribbean community (CARICOM) launched an Economic Partnership Agreement (EPA) with their European counterparts.

Update

  • Brazil and Uruguay having both announced that the aim was to exchange offers in 2015. 
  • Brazil, Paraguay and Uruguay were close to 90% liberalisation but Argentina was not yet ready for that level of liberalisation.
  • A technical meeting in September would reveal if Mercosur was ready, if so a date would be set to exchange offers before the end of the year.  

EU-Mexico
EU-Mexico concluded an Economic Partnership, Political Coordination and Cooperation Agreement (the Global Agreement) in 1997, that entered into force in October 2000 for the part related to trade in goods - and in 2001 for that related to trade in services.

Update

  • Mexico, the EU and the UK were keen on modernisation. The Impact Assessment should be complete by the end of this year and negotiations launched in mid-2016. This negotiation would hopefully be quick.

Andean FTA
Andean Community is a customs union comprising the South American countries of Bolivia, Colombia, Ecuador, and Peru. The trade bloc was called the Andean Pact until 1996 and came into existence when the Cartagena Agreement was signed in 1969. Recently, with the new cooperation agreement with Mercosur, the Andean Community gained four new associate members: Argentina, Brazil, Paraguay, and Uruguay.

Update

  • The accession of Ecuador to the Andean FTA was on track for implementation in mid-2016.

China Bilateral Investment Agreement (BIT)
A BIT is an agreement between two countries on foreign investment in each other’s countries. More than five years after the US and China agreed to start negotiations of a BIT the launch of the negotiations between the EU and China towards a BIT was announced at the China-E.U. Summit held in Beijing on 21 November 2013.  

Update

  • Unlike most of the other on-going EU negotiations which contain investment provisions as part of a FTA, the negotiations on an EU-China Investment Agreement were for a standalone investment protection treaty – for which China was the demandeur.

EU- Vietnam FTA
On 4 August 2015, the EU and Vietnam reached an agreement  in principle for a free trade deal. Negotiations were launched in June 2012. The EU and Vietnam still need to settle remaining technical issues and finalise the legal text. Once finalised, the agreement will need to be approved by the Council and the Parliament. The agreement will contain a legally binding link to the Partnership and Cooperation Agreement (PCA) that governs the overall relationship between the EU and Vietnam.


EU-Singapore FTA completed negotiations on 17 October 2014. The initialled agreement needs now to be formally approved by the European Commission and then agreed upon by the Council of Ministers and ratified by the European Parliament.

Update

  • The Singapore Competence Review had been submitted to the European Court of Justice in July.  

EU-Indonesia
EU-Indonesia signed a Partnership Cooperation Agreement in 2009. Intense contacts have taken place since 2011 to explore the possibility to further deepen EU-Indonesia relations and negotiate a Comprehensive economic partnership agreement.

Update

  • A scoping study for Indonesia was started in 2012, but was not completed.
  • Indonesia was now interested in re-engaging. 
  • The EU-Indonesia dialog in September would explore this.

Malaysia-EU FTA (MEUFTA)
In September 2010 the EU Member States approved the launch of negotiations for a Free Trade Agreement with Malaysia.

Update

  • Malaysia had also now shown more interest in re-engaging on trade and may be likely to return to negotiations towards the end of 2015 as expected. 
  • A formal round could take place as early as the first half of 2016.

EU-Japan FTA
The EU-Japan Free Trade Agreement negotiations were officially launched on 25 March 2013. During the negotiations a number of EU concerns will be addressed, including the non-tariff barriers which European companies encounter in Japan and the further opening of the Japanese public procurement market. There have been eleven negotiating rounds so far, with the latest one in July 2015.

Update

  • The UK was still aiming for an agreement to be reached in 2015. 
  • There had been some progress on Non-Tariff Barriers. 
  • Japan’s linking of the Economic Partnership Agreement to the Trans-Pacific Partnership and the Trade Promotion Authority in the US had slowed things. 
  • Discussion was around adequate provisions for SMEs in the Japan text, in view particularly of the cultural and linguistic barriers.  The text covers SME aspects carefully at several points without the need for a separate SMEs chapter.

EU-India FTA
The EU and India are committed to further increase their trade flows in both goods and services as well as bilateral investment and access to public procurement through the Free Trade Agreement negotiations that were launched in 2007. Key areas that need to be discussed include: improved market access, government procurement and sustainable development.

Update

  • The UK was trying to unlock negotiations with the awareness that India still needed to open its markets in services, automotive, spirits and Government procurement.
  • UK Minister of State for Trade and Investment, Francis Maude, would be in India in September.
  • Indian PM Modi would be in the UK in November followed by potentially Brussels for an EU-India Summit.

Eastern European Partnership (EaP)
EaP is a joint initiative of the EU and its Eastern European partners: Armenia, Azerbaijan, Belarus, Georgia, the Republic of Moldova and Ukraine. This was initiated by Poland and a subsequent proposal was prepared in co-operation with Sweden. The Eastern Partnership was inaugurated by the European Union in Prague on 7 May 2009.

Update

  • Georgia and Moldova agreements were now in place. 
  • The Ukraine DCFTA is still on track to be implemented in January 2016.
  • The Armenia agreement would now be a broader light-touch cooperation agreement covering a wide range of partnership areas rather than a trade agreement with any real ambition.
  • Sanctions on Russia were likely to remain in place until the Minsk Agreement was implemented in full.

Economic Partnership Agreements (EPAs) and Generalised Scheme of Preferences (GSP)
EPAs provided immediate duty-free access to the EU for all developing country products, while in return developing countries gradually reduce duties on 75-80% of EU imports, over 15-20 years.   

Update

  • Ministers from EU Member States and most West African countries had signed the EU-West Africa EPA in December 2014.
  • Nigeria had not yet signed.
  • Some MEPs had suggested they could reject the West Africa EPA when it came for approval to the European Parliament due to a lack of clauses on labour rights and human rights.


GSP continued to provide full duty-free access to EU markets for the 48 Least Developed Countries. However in the coming years as other countries were removed from GSP, we would expect there to be only a little over 20 other countries eligible for reduced tariffs under GSP. The majority of these were currently eligible to apply for GSP+.

Update

  • 4 countries removed from GSP on 1 Jan 2015: China, Thailand, Ecuador and the Maldives had now been removed from GSP preferences as from 1 January 2015. This reflected the fact that these countries had been classed “upper middle income” for the previous three years. Provisions had however been put in place to transition Ecuador to the Andean FTA.
  • 11 countries to be removed from GSP on 1 Jan 2016: Turkmenistan, Namibia and Botswana had now been classified as an upper middle income country for three consecutive years and would also be removed from GSP from 1 January 2016.
  • Colombia, Costa Rica, Guatemala, El Salvador, Honduras, Nicaragua, Panama and Peru would also be removed from GSP from 1 January 2016 as these countries were now applying an FTA with the EU.
  • Officials were also preparing for Georgia, Iraq, Tonga, the Marshall Islands, Fiji and Cameroon to be removed from GSP on 1 January 2017.
  • A report on GSP+ implementation would be published by the European Commission at the end of this year.
  • There were currently 13 countries granted GSP+, although this number would go down on 1 Jan 2016 due to above changes.
  • Kyrgystan had expressed interest in applying for GSP +.
  • Potential interest from Sri Lanka was also discussed.

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