What EU Free Trade Agreements deliver

The 2018 Annual Report on FTA Implementation

Geraldine Emberger, DG TRADE

Civil Society DialogueBrussels, 21 November 2018

FTAs in effect and in the pipeline...

1. New generation FTAs: Korea, Central America, Columbia-Peru-Ecuador, Canada

2. Deep and comprehensive FTAs: Georgia, Moldova, Ukraine

3. First Generation FTAs: EEA, CH, Turkey (CU), Balkans, Med countries

4. Economic Partnership Agreements (EPAs): Africa, Pacific, Caribbean

5. Negotiations finalised: Japan, Singapore, Vietnam, Mexico

6. Negotiations on-going: Mercosur, Chile, Indonesia, Tunisia, Australia, New Zealand

1. The 2018 FTA Implementation Report:

Main findings

EU trade under FTAs in 2017…

• 35 FTAs with 62 countries and regions in effect

• Top 4 partners: CH (7% of total EU external trade); TU (4.1%), NO (3.4%), SK (2.7%)

• 32% of total EU external trade; 40% (JP, VNM & SG)

• 1179 billion EUR in trade

• Imports: 542 billion EUR

• Exports: 637 billion EUR

• Export growth under 2nd generation FTAs 10% (>growth in total EU exports with 7.6%)

FTAs boost trade and support EU exports in goods….

Examples:

SK: 12.2% growth in EU exports

COL, PE: plus 10.5% & 12.2%

CAN: 7% in 9 months

6 Central American partners: 7% growth in EU-CA trade

And services….

•Trade increased for FTAs with South Korea, Colombia, Ecuador, Peru and Central America.

•Similar upward trend for the "first generation" agreements with Chile and Mexico.

•The value of services trade provided by EU companies in CH and vice versa is growing fast, with a positive balance for the EU.

•Trade in services and investment with Ukraine and Moldova under the DCFTAs continued to rise.

FTAs increase market access and help address barriers…

• Chile opened its beef market and Peru opened its dairy market to EU exports.

• Mexico facilitated the approval of health products and agro-chemicals.

• Ukraine stopped applying higher export duties on metal scrap exports to the EU.

• Turkey abolished export restrictions on copper and aluminium scrap and removed paper products from the scope of its import surveillance scheme.

Results on rules …..

• IPR/Geographic indications:

143 additional GIs under CETA

116 in Ecuador

Prosecco now protected in Moldova

• Procurement:

Georgia, Moldova and Ukraine took steps to reform their government purchase regimes.

Agri-food trade in the focus…

• Agri-food trade success story: EUR 138 billionexports in 2017, EUR 117 billion imports

• Trade under FTAs: 1/3 for exports, 40% for imports

• Both "first generation" and "new generation" FTAs contribute

• Exports under FTAs: primary + processed agriculturalproducts, beverages

• Imports: mostly primary products (72%)

Agri-food trade in the focus (2)… • FTAs help to remove/mitigate SPS barriers

• (Chile, Peru, Mexico, COL, Costa Rica and Panama on prelisting of EU establishments; Ukraine accepted EU regionalisation)

• Economic Partnership Agreements (EPA) provide asymetrical market access for ACPs

• +71% value of EU agri-food imports from ACP between 2007 and 2017

• Beyond trade: Cooperation and Partnership with African countries (e.g. Task Force Rural Africa)

• COM study on FTAs concluded (2016/17): CH, SK, MEX confirms

• FTAs boost exports (+ EUR 1 billion)

• create value added (+ EUR 600 million)

• support jobs (20.000 jobs in agri-food + 7.000 in other sectors)

Trade and Sustainable Development

•Horizontal section and individual country reports

•Reports on results of TSD committee meetings and Civil Society Dialogues

•Dialogues took place including on

• 4 ILO labour conventions with Korea,

• labour standards and inspections with Georgia and Moldova

• responsible business conduct with Central America, etc.

Trade

FTA body and institutional structures are crucial…..

• The agreed FTA text provides legal security

• Regular meetings and reporting; track record

• Prioritisation of work

• Escalation up to Ministerial Level possible

13

2. The 2018 FTA Implementation Report:

Utilisation and uptake of FTAs

How much are EU companies using the FTAs?

• Average preference utilisation rate on EU exports is 78.2% across 19 FTAs.

• Examples for strong PUR: SK: 74%; CH: 78%; MEX, Chile: 75 and 76%; Morocco: 75%; Western Balkans: average 86%.

• Examples for weak PUR: PE: 52%; EGY: 44%; ECU: 42%

EU use of preferences under 19 FTAs

41.8

43.9

51.8

58.3

59.9

61.6

68.4

74.3

75.2

75.9

76.9

78.2

78.2

78.3

85.9

86.0

87.5

88.9

90.6

94.3

0.0 10.0 20.0 30.0 40.0 50.0 60.0 70.0 80.0 90.0 100.0

Ecuador

Egypt

Peru

Lebanon

South Africa

Dominican Republic

Colombia

South Korea

Mexico

Chile

Georgia

All partners (19)

Albania

Switzerland

Israel

Montenegro

Bosnia-Herzegovina

FYRoM

Serbia

Turkey

EU PUR in partner country markets (2017)

Duty savings of EU exports by HS Section (€ million)

There is still a lot of potential…

• Foregone duty savings (FDS) for the EU for the 20 partners amounted to 3.5 billion Euro in 2017

• Examples:

• FDS for Germany 1084 million Euro; PUR: 76%

• FDS for France: 480 million Euro; PUR: 69%

• FDS for Italy: 571 million Euro; PUR: 74%

3. Strengthening FTA Implementation

"Transparency in Action"

• Impact and ex post assessments of FTAs

• EU proposals for legal texts

• Proposed and final negotiating directives

• Negotiating rounds reports

• Text of the agreement, once negotiations conclude

• As of CETA: Agendas and reports of committees and working groups

• Webpage: http://trade.ec.europa.eu/doclib/press/index.cfm?id=1395

"Information in Action"

OBJECTIVE: user friendly one-stop-shop to assist business, notably SMEs, in international trade by summer 2019

• One portal for import and export, integrating & upgrading the MADB & EU Trade Helpdesk (new functionalities e.g.alerts for individual users…).

• More information on FTAs in force (CETA model, beyond goods e.g. customs, procurement, GIs..)

"Communication in Action"

Outreach campaigns:

• new material on FTAs aimed at SMEs in all EU languages;

• targeted dissemination/outreach in some MS including in DE (social media, trade fairs, etc.)

• COM will be working with Enterprise Europe & existing national networks how to ensure

complementarity/best use resources?

Thank you very much for your attention!

2018 FTA Implementation Report:

http://trade.ec.europa.eu/doclib/docs/2018/october/tradoc_157468.pdf

Staff Working Document: http://trade.ec.europa.eu/doclib/docs/2018/october/tradoc_157473.PDF

Fact Sheet: http://trade.ec.europa.eu/doclib/docs/2018/october/tradoc_157469.pdf