US, Chile further extend Free Trade Agreement
The United States and Chile have approved an agreement between the two countries that further enhances the existing U.S.-Chile Free Trade Agreement. The exchange of letters contained in this agreement formalize protections for U.S. cheese exports to Chile, which make up over half of all U.S. dairy exports to Chile and exceeded $55 million in 2023. Chile, which makes up well over half of all U.S. cheese exports for the continent and is by far the largest U.S. cheese market in South America, recently concluded its negotiations for a free trade agreement with the European Union. In that agreement, the EU sought protections for its geographical indications (GI), including popular U.S. cheese exports to Chile such as parmesan (as well as gruyere and feta). At the urging of the International Dairy Foods Association (IDFA) and fellow industry representatives, the Biden Administration engaged in negotiations on an exchange of letters to attach to the existing U.S.-Chile free trade agreement (FTA) that would further protect some U.S. cheeses from losing access once the EU’s GI commitments enter into force, according to the International Dairy Foods Association (IDFA).
China, Belarus to sign FTA
Belarus, which has been hit by Western sanctions over its support for Russia’s offensive in Ukraine; it will sign a free trade deal with China for services and investment. Belarus has been targeted by sanctions over its support of Russia’s military offensive on Ukraine and Lukashenko’s crackdown on protesters following his disputed 2020 re-election. It is hugely reliant on economic support from Moscow. China meanwhile is flexing its economic muscle across Eurasia through vast infrastructure and financial projects, seeking to build up its soft power in an investment splurge that has concerned the West. Both Belarus and China have been accused of enabling and supporting Moscow’s military offensive on Ukraine.
EU's first Sustainable Investment Facilitation Agreement enters into force with Angola
September 1st, the EU-Angola Sustainable Investment Facilitation Agreement (SIFA) has entered into force. This is the first-ever EU agreement on investment facilitation. It aims to stimulate foreign investments needed to achieve sustainable development goals. The SIFA will create a more transparent, efficient, and predictable business environment for investors in Angola and to promote sustainable investment by EU businesses in Angola.
The SIFA focuses on improving the business environment through investment facilitation measures, such as increasing the transparency of investment regulations, promoting the use of e-government for authorisations, and enhancing stakeholder involvement. Investment facilitation benefits both foreign and local investors, especially small and medium-sized enterprises. The agreement also upholds environmental and climate commitments, as well as respect for labour rights, ensuring that the facilitation of investments is aligned with sustainability objectives.
Joint press statement of the EU and Fiji on the implementation of the EU-Pacific interim Economic Partnership Agreement
The IEPA is a trade and development agreement, which liberalises bilateral trade, in order to promote sustainable development and the integration of Fiji into the world economy. While the European Union had already eliminated customs duties and quotas on all imports originating from Fiji, the Government of Fiji has now taken the decision to phase out the duties in the committed tariff lines on imports from European Union Members States. These are referred to as committed basket of tariff lines.
Tariffs on selected imports from the European Union will remain or continue to apply, primarily to protect Fijian food security and the development of domestic value chains. This is called the “exclusion basket of tariff lines”. The effective implementation of the IEPA and its tariff liberalisation commitments is expected to further enhance trade opportunities for businesses and investors. The current tariff phase out will also ensure that cheaper inputs are available for products made in Fiji, increasing the competitiveness of locally produced goods, and supporting both local industrial development and integration into global value chains.
Indonesia pushes for concluding negotiations on IEU-CEPA in September
Trade Minister is pushing for the completion of negotiations on the Indonesia-European Union Comprehensive Economic Partnership Agreement (IEU-CEPA) in September 2024. According to the minister, the IEU-CEPA agreement can resolve various trade barriers between Indonesia and the European Union. Indonesian footwear products so far exported to the European Union have been subject to import duties of five to six percent in the absence of a trade agreement. Meanwhile, Vietnam is able to export footwear to the European Union with zero import duty.
India-Oman free trade pact talks at advanced stage
Negotiations for the proposed free trade agreement (FTA) between Oman and India are in an advanced stage, with both countries aiming to finalise the pact soon. The proposed India-Oman free trade pact, officially referred as the Comprehensive Economic Partnership Agreement (CEPA), will give a significant push to bilateral trade and investment ties between the two countries.
India-Australia comprehensive trade pact talks in November
Senior officials of India and Australia are expected to hold their next round of talks for a compressive free trade agreement in November. The two countries implemented an interim trade agreement in December 2022 and are now under negotiations to expand its scope. It said that the tenth round of India-Australia CECA (comprehensive economic cooperation agreement) negotiations was held from 19-22 August in Sydney in the areas of goods, services, digital trade, government procurement, rules of origin and agri-tech. Intense discussions were held on each of these tracks bringing in clarity and understanding for convergence in the remaining provisions, it added.
Further the ministry said that the Australian side proposed to hold the first meeting of the India-Australia Agri Tech Forum (IAATF), a newly constituted forum by Australia, in New Delhi on September 23, with the Indian agricultural stakeholders including industry, research institutions and government. The objective of the meet is to build on mutually beneficial relationships by exploring opportunities for focused activity around technology transfer and knowledge sharing in agriculture and horticulture sectors.
In India’s FTA talks with EU, sustainability a key issue
The European Union (EU)’s insistence on sustainability measures such as deforestation rules and carbon tax on imports of steel, cement and hydrogen are akin to non-tariff barriers that can impede ongoing free trade negotiations with India. The next round of talks for the proposed India-EU free trade agreement (FTA) is scheduled for September 23-27, and New Delhi will simultaneously discuss sustainability measures such as the Carbon Border Adjustment Mechanism (CBAM) and EU deforestation regulation (EUDR) with the 27-nation bloc.
This will be the ninth round of talks on the FTA since the two sides relaunched negotiations in June 2022. Besides the FTA, negotiations were launched for an Investment Protection Agreement (IPA) and a Geographical Indicators (GIs) Agreement. The eighth round was completed in June, leading to the conclusion of two chapters so far — one on small and medium enterprises and the other on sustainable food systems.
India is committed to environment protection and sustainability, the people said, citing Prime Minister Narendra Modi’s Lifestyle for the Environment (LiFE) initiative. India, however, is against making instruments such as EUDR and CBAM part of trade commitments because these are perceived as instruments of protectionism and act as non-tariff barriers (NTBs), one of the people said. The Indian side believes CBAM is a form of tax that can lead to tariffs of up to 35% on imports of high-carbon goods such as cement, aluminium, fertilisers, chemicals including hydrogen, iron and steel from India.
Iran-EAEU FTA to be launched soon
The deputy head of the Trade Promotion Organization of Iran (TPOI) said that the Free Trade Agreement (FTA) between Iran and the Eurasian Economic Union (EAEU) will be launched soon. Once the Free Trade Agreement between Iran and member states of the union is notified, more than 87 percent of the tariffs’ code between the two sides will reduce to zero level.
Korea, Paraguay sign economic partnership agreement on trade and investment
Korea and Paraguay have signed an economic partnership agreement on trade and investment, marking the second country in South America’s Mercosur bloc to clinch such a deal. A TIPF is a nonbinding agreement that calls for enhancing economic ties and facilitating cooperative exchanges in various areas. The agreement, however, does not include tariff-free terms like a traditional FTA. The ministry noted that Paraguay is an attractive trade partner, being one of the fastest-growing countries in the region, with its economy expanding 4.6 percent on year in 2023. Paraguay also has the potential to become a significant manufacturing hub for Korean businesses in the region.
Oman-India working on Free Trade Agreement
The Minister of Commerce, Industry and Investment Promotion is in India along with, Adviser for Foreign Trade and International Cooperation at the Ministry of Commerce, Industry and Investment Promotion, to prepare the course for the Free Trade Agreement (FTA) between the Sultanate of Oman and India. In fact, work is on for an India-Oman Comprehensive Economic Partnership Agreement (CEPA) so that the trade between the two countries gets a further boost.
Malaysia, New Zealand to conduct scoping exercise prior to FTA
Malaysia Prime Minister and New Zealand Prime Minister tasked officials to conduct a scoping exercise before launching a review of the Malaysia-New Zealand Free Trade Agreement (MNZFTA). The exercise would also involve identifying new areas and gaps that could be addressed under the review to enhance bilateral economic relations. t added that New Zealand and Malaysia would work together on the General Review of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) to update and enhance the agreement to ensure that the CPTPP remains the gold standard for trade agreements.
Maldives-Turkey Free Trade Agreement formulated
Maldives has formulated the Maldives-Turkey Free Trade Agreement (FTA), the Minister of Economic Development and Trade announced. Agreement is expect to take effect around December or by January. Earlier, the Maldives government indicated that 214 items would be eligible for export to Turkey at a zero percent tariff under the FTA. Minister revealed that the Maldives has requested the Turkish government to reduce duties on 38 additional products. Turkey has reduced the duty on most items. However, we still have 38 items with a zero tariff, highlighting yellowfin tuna, skipjack tuna, dried fish, and various fish products as top priorities.
Sri Lanka- Thailand FTA Cabinet approves ratification
The Cabinet of Ministers has approved the proposal presented by the President in his capacity as Minister of Finance, Economic Stabilization and National Policy to ratify the Sri Lanka-Thailand Free Trade Agreement. The Sri Lanka-Thailand Free Trade Agreement between Sri Lanka and Thailand was signed by the Minister of Trade, Commercial and Food Security of Sri Lanka and Minister of Commercial of Thailand on 03-02-2024 and the said agreement has been tabled in the Parliament on 12-07-2024.
Switzerland govt submits EFTA-India trade agreement to Parliament
The Swiss government has submitted a ‘dispatch’ on the free trade pact between India and the European Free Trade Association (EFTA) to the Parliament, as a first step towards ratifying the ambitious deal that could open up the Indian market to Swiss exports. Besides Switzerland, the EFTA nations also include Iceland, Norway, and Liechtenstein. “On September 4, the Federal Council adopted a dispatch on the free trade agreement between the EFTA states and India… In its dispatch, the Federal Council commends and sets out the content of the agreement and places it in the overall context of Switzerland’s relations with India. Parliament is expected to debate the dispatch in the upcoming winter or spring sessions,” a press statement from the Swiss government said.
However, a Swiss official said that before the Parliament approval, the trade deal will now be open for public consultation involving cantons, civil society and business communities. An association of citizens or a political party can ask for a referendum during the public consultation if they could collect 50,000 signatures. In 2018, after EFTA and Indonesia signed a free trade agreement (FTA), a Swiss non-government organisation Public Eye highlighted deforestation in Indonesia for palm tree cultivation as well as the death of orangutans. These concerns triggered a nationwide referendum in Switzerland which the government managed to win by 51 per cent votes. However, the referendum delayed the implementation of the FTA between both sides until late 2021. After 16 years of negotiations, Switzerland and the other EFTA states succeeded in becoming the first European partners to conclude an FTA with India in March this year.
Turkey ratifies free trade zone agreement with Ukraine
Turkey ratified the agreement on a free trade zone with Ukraine on Aug. 2, more than two years after the agreement was originally signed. The idea for the free trade zone agreement first emerged in 1998, but talks did not officially begin until 2007. Negotiations stalled for years due to disagreements over grains and metal. Once ratified by both countries, the agreement will "open up new opportunities for duty-free or partially duty-free trade. Once the agreement is implemented, Ukraine will abolish import duties for 56% of industrial goods and 11.5% of agricultural goods. Turkey will abolish import duties for 93.4% of industrial goods and 7.6% of agricultural goods. The import duties will be abolished further after an implementation period of up to five years for industrial goods and up to 10 years for agricultural goods.
UK to join Trans-Pacific trade agreement by December 15
The British government says its agreement to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) will enter into force by December 15 after it received the final ratification required. CPTPP is a free trade agreement sealed in 2018 between 11 countries - Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam. Britain is the only European member of CPTPP and the first new country to join since its inception. Britain concluded negotiations to join the pact in March 2023 and formally signed the accession treaty in July that year but required the ratification by its own government and at least six other member states.
Britain said Peru had become the sixth country to ratify the terms of its accession after Japan, Singapore, Chile, New Zealand and Vietnam. The agreement will come into force with those members this year, and subsequently with other members as they ratify. The CPTPP requires countries to eliminate or significantly reduce tariffs, make strong commitments to opening services and investment markets and has rules around competition, intellectual property rights and protections for foreign companies. The British government said more than 99 per cent of current UK goods exports to CPTPP members would be tariff-free once the deal enters into effect, potentially helping boost the UK economy by around STG2 billion ($A3.9 billion) annually by 2040.
Vietnam strives to enact FTA with Israel from Oct
The Ministry of Finance is drafting a government decree on tax for the implementation of the Vietnam-Israel Free Trade Agreement (VIFTA) in 2024-2027, aiming to start the decree from October 15. In a preview of the draft document, the Ministry of Finance asked the Ministry of Justice to recommend the effective date of the decree whether on or after October 15, as the VIFTA will become effective on that date. The expiry date of the draft decree is December 31, 2027.
In line with Vietnam’s commitment per the ASEAN Harmonized Tariff Nomenclature 2022 (AHTN 2022), the decree will provide preferential tax rates for 11,446 tax lines. The average tax rates will be reduced gradually from 10.3% in 2024 to 9.3% in 2025, 8.4% in 2026, and 7.5% in 2027. In July 2023, Vietnam’s Ministry of Industry and Trade and Israel’s Ministry of Economy and Industry signed the VIFTA after seven years of negotiations. It was the 16th FTA of Vietnam and the first FTA between Israel and a Southeast Asian nation.
Per the VIFTA, Israel is committed to cutting 92.7% of tax lines and Vietnam will remove 85.8% of the tax lines, towards bilateral trade of over $3 billion soon. Vietnam-Israel trade reached $2.68 billion in 2023, up 20% year-on-year.
Vietnam, UAE to ink Comprehensive Economic Partnership Agreement
As the signing of the CEPA with the UAE has become one of Vietnam’s key priorities, the MoIT has made efforts aimed at accelerating the negotiation process to put the trade pact into effect in order to further promote trade and investment activities between the two countries moving forward. Currently, provisions set out at a ministerial level have been agreed upon. Accordingly, the two sides will complete the entire negotiation process and officially sign the deal as soon as possible.
With regard to prospects for greater co-operation between the two countries, a number of large Vietnamese corporations have begun implementing investment activities in the UAE as part of efforts to seize opportunities from the trade pact. Meanwhile, UAE investors have also conducted investment survey on a number of large projects in the nation.
According to details given by the MoIT, the UAE became the largest Vietnamese export market and the second largest trading partner in West Asia last year. Two-way trade turnover between the two countries in the 2019 to 2023 period averaged about US$4.8 billion per year. In terms of trade balance, the nation always enjoys a large trade surplus of over US$3 billion each year with the UAE.
In the first half of the year, total bilateral trade surged by 43% to reach over US$3.2 billion against the same period from last year, of which Vietnamese exports soared by 47% to over US$2.8 billion and imports rose by 25% to over US$435 million.
Vietnamese staple items to the UAE include mobile phones, machinery, equipment, other spare parts, computers and components, footwear, textiles, means of transport and spare parts, agricultural products such as cashew nuts, pepper, vegetables, and rice.