Preferential Trade updates December 2023

Angola and China sign investment protection agreement

Angola and China signed an Agreement on the Promotion and Reciprocal Protection of Investments to strengthen bilateral cooperation between the two countries. Angolan Foreign Minister and Chinese Commerce Minister signed the document, which aims to promote increasing economic cooperation and stimulate the flow of capital and economic development. An Angolan Foreign Ministry note states that the text will also ensure a stable, transparent, and non-discriminatory framework of investments between the two nations. Signed in Beijing, the Agreement represents an essential political, economic, and commercial gain for Angola and China, António pointed out. This is the end of 12 years of negotiations between both countries due to several constraints that have been overcome presently, the Angolan foreign minister said during a working meeting with Wentao. Data released during the 1st edition of the Angola-China Business Forum in Luanda in July 2023 states that the two nations’ trade balance jumped 23.3 percent, reaching 27.34 billion dollars. Angola is China’s second trading partner in Africa and its largest oil supplier on the continent.

Arab League meeting discusses facilitation of free trade zone

Saudi Arabia has proposed creating a platform for trade during an Arab League meeting to enhance communication among member states and find solutions to potential obstacles in the region. The 56th meeting of the Arab League’s Implementation and Follow-up Committee of the Economic and Social Council held on Dec. 10 focused primarily on implementing the Greater Arab Free Trade Area, according to the Saudi Press Agency.

Armenia government approves EAEU-Iran free trade agreement

The Armenian government approved the signing of the agreement on free trade between the Eurasian Economic Union (EAEU) and Iran. The main tasks of this agreement are:

• Using the regulatory part of the Interim Agreement within the free trade agreement as a basis for negotiations to significantly improve the regulatory environment.
• Ensuring duty-free access to the Iranian market for the maximum possible range of products, while ensuring that the access conditions contained in the Interim Agreement are not worsened in the event of the impossibility of reaching agreements on the elimination of import duties.

In terms of agricultural products, the proposals presented by the Armenian side mainly include those products that are of primary interest for Armenia’s export and that also have a large share in the exports from Armenia to Iran, in particular: mineral and carbonated waters, non-alcoholic beverages, chocolate, confectionery, tobacco, and mutton, which will be subject to zero import duties to Iran.

As for industrial products, the proposals submitted by the Armenian side mainly include those products that are of primary interest for Armenia’s export and that also have a large share in exports from Armenia to Iran, in particular, mineral raw materials (copper and zinc ore, molybdenum ore), silver items, copper anodes, steam generators, electronic cigarettes, thermostats, etc. Access to the Iranian market will also be liberalized for electricity and used batteries, and customs duties for importing jewelry and medicines to Iran will be reduced.

Bangladesh, India agree to conclude CEPA process

Bangladesh and India agree to wrap up negotiations on a much-vaunted comprehensive partnership forum by 2026, trying to give their close cooperation a further fillip. The issue of striking the Comprehensive Economic Partnership Agreement (CEPA) came into focus at the foreign-office consultation between the two countries, apart from other major issues of mutual interest. The proposed CEPA goes beyond the traditional free-trade agreements and also addresses trade in services, investment, intellectual-property rights and e-commerce.

China, Singapore upgrade FTA to expand trade, investment

China signed an upgraded free trade agreement with Singapore to further boost trade and investment liberalization between the two countries and solidify their economic ties. Both sides agreed to liberalize services and investment in the form of a negative list, thereby creating more market space for investors and service providers from both countries; adding that efforts will be made to further expand cooperation in emerging areas such as the digital economy. Over the past three years, the two sides have completed all negotiations after several rounds of consultations since December 2020. Going forward, China and Singapore will expedite their respective domestic legal steps and strive for the early implementation of the upgraded protocol, the ministry said.

EU amending Regulation No 978/2012 applying a scheme of generalized tariff preferences

On 22 September 2021, the Commission submitted a proposal for a regulation of the European Parliament and of the Council on applying a generalized scheme of tariff preferences and repealing Regulation (EU) No 978/2012 of the European Parliament and of the Council (3) (the ‘proposed successor regulation’). The proposed successor regulation is set to enter into force on 1 January 2024. However, the relevant ordinary legislative procedure is ongoing and there is a risk that it will not be concluded by 31 December 2023. In order to ensure continuity of the application of the scheme, it is necessary to extend the period of application of Regulation. The extension of the period of application of Regulation (EU) No 978/2012 should provide the time needed for the completion of the legislative procedure for the adoption of the proposed successor regulation. Accordingly, the period of application of Regulation (EU) No 978/2012 should be extended until 31 December 2027.

EU Notice concerning the date of entry into force of the Agreement between the European Union and the Republic of Chile

The Agreement between the European Union and the Republic of Chile pursuant to Article XXVIII of the General Agreement on Tariffs and Trade (GATT) 1994 relating to the modification of concessions on all the tariff rate quotas included in the EU Schedule CLXXV as a consequence of the United Kingdom’s withdrawal from the European Union, signed in Brussels on 9 June 2023, entered into force on 14 November 2023.

EU and Angola sign first-ever Sustainable Investment Facilitation Agreement

The EU and Angola have concluded the negotiations for a Sustainable Investment Facilitation Agreement (SIFA). The Agreement will make it easier to attract and expand investment  between the EU and Angola and it integrates sustainable development commitments in the EU-Angola investment relationship.

EU - Mercosur Joint Press Statement

The EU and Mercosur are engaged in constructive discussions with a view to finalizing the pending issues within the Association Agreement. Considerable progress has been made in the past months. Negotiations continue with the ambition to conclude the process and reach an Agreement that is mutually beneficial for both regions and which responds to the demands and aspirations of their respective societies. Based on the progress made so far in the negotiations, both parties hope to promptly achieve an agreement which corresponds to the strategic nature of the ties binding both parties and the crucial contribution they can offer to address the global challenges in areas such as sustainable development, reduction of inequality and multilateralism.

EU: Access to EU market boosts sustainable growth in low-income countries

A new joint report by the European Commission and the High Representative for the Common Foreign and Security Policy on the Generalised Scheme of Preferences (GSP) – the EU’s main trade policy tool to support developing countries’ exports to the bloc – has confirmed that the system continues to support economic stability and sustainable development in low-income countries, even in times of uncertainty.

In 2022, preferential imports from 65 GSP beneficiary countries reached an all-time high of €80.6 billion. The scheme proved to be beneficial for developing countries during the series of crises that affected global economy, such as the Covid-19 pandemic and the effects of Russia’s unprovoked and unjustified military aggression against Ukraine.

The report also highlights that GSP+ – the special incentive arrangement for sustainable development and good governance – has been effective in improving standards on human and labour rights, environmental and climate protection, and good governance. Positive developments were noted for example in advancing women’s and children’s rights, the fight against torture and ill treatment, and the eradication of child labour and forced labour in several beneficiary countries. As an illustration that this arrangement remains attractive, Uzbekistan joined the GSP+ in April 2021 after eradicating forced and child labour in its cotton harvest, and Tajikistan formally applied to join GSP+ in April 2023.

Landmark EU-Japan data deal one step closer to ratification

The landmark deal on cross-border data flows between the EU and Japan has taken a further important step towards ratification. the European Commission sent the outcome of the negotiations to the Council for authorising its signature. Once the Council gives its green light, the EU will sign the amendment of the Economic Partnership Agreement with Japan and then pass it to the European Parliament for consent.

This deal is a milestone in our joint efforts to advance the digitalisation of our societies and economies, and cross-border data flows are a crucial enabler of this development. Once ratified, the agreed provisions will be included in the EU-Japan Economic Partnership Agreement (EPA). These provisions lay the foundation for a common approach on digital trade, sending a strong message against digital protectionism and arbitrary unjustified restrictions to data flows. They are also consistent with the EU digital agenda and EU privacy rules, and deliver on the digital trade agenda of the EU's Indo-Pacific Strategy. Similar negotiations with Korea and Singapore are also taking place.

The agreement must now be authorised by the Council and then obtain the consent of the European Parliament. Once that happens, the agreement can enter into force.

EU Parliament overwhelmingly approves FTA with New Zealand

On 30 June 2022, the EU and New Zealand concluded negotiations for a Trade Agreement. The deal opens great economic opportunities for companies, farmers, and consumers. It includes unprecedented sustainability commitments, for example on respecting the Paris Climate Agreement and core labour standards, enforceable through trade sanctions as a last resort.

The EU and Chile have signed modern and ambitious trade and political agreements

The EU and Chile have signed an Advanced Framework Agreement and an Interim Trade Agreement to strengthen political cooperation and foster trade and investment. These agreements put in place an ambitious and modern framework to deepen and widen EU-Chile relations. They will create new economic opportunities for both sides while promoting shared values, including substantive commitments and specific provisions on human rights, sustainable trade and gender equality.

Responding to growing geopolitical challenges, the agreements facilitate cooperation between the EU and Chile as like-minded partners on global issues. This includes the de-risking of supply chains, the securing sustainable supply of critical raw materials, and addressing climate change. Such efforts will support the competitiveness of businesses on both sides while advancing the shared goal of achieving a net-zero economy. With this Agreement, Chile becomes the first country in the region to conclude a next generation agreement with the EU, bolstering a renewed ambition in tackling present and future challenges, such as the 2030 Agenda, climate action, state modernisation, sustainable development and gender equality.

The EU and Chile have agreed on a separate Interim Trade Agreement. This is a standalone agreement that replicates the provisions of the Trade and Investment pillar of the Advanced Framework Agreement, with the exception of the Investment protection provisions. The Interim Trade Agreement allows for an early entry into force of the modernised trade rules. It will expire automatically once the Advanced Framework Agreement enters into force.

India seeks to settle WTO import duty dispute with EU on ICT goods through free trade talks

India seeks to resolve a WTO import duty dispute with the European Union on certain information and technology products through the proposed free trade agreement, which is under active negotiations. Following a ruling of the World Trade Organisation’s (WTO) dispute panel on April 17 that import duties imposed by India on certain information and technology (ICT) products such as mobile phones and components, base stations, integrated circuits and optical instruments violate global trading norms, India and the European Union (EU) are discussing ways to resolve the matter amicably outside the ambit of the WTO. As part of the discussion, the EU has sought duty concessions from India on these goods as it was violative of the global trade norms, but India has stated that it would be again a breach of WTO rules, if the concessions be extended only to the EU. They are seeking duty concessions, which according to India can be discussed only under the free trade agreement (FTA). India can consider something under the FTA, but not on MFN (most favoured nation) basis.

India and EFTA states conclude 20th round of trade talks

India and the European Free Trade Association (EFTA) States, comprising Iceland, Liechtenstein, Norway, and Switzerland, recently completed the 20th round of negotiations for a Trade and Economic Partnership Agreement (TEPA). The discussions, which spanned ten days from November 20-30, were conducted via videoconference in Geneva. The negotiations delved into various aspects, including trade in goods and services, rules of origin, trade facilitation, technical barriers to trade, sanitary and phytosanitary measures, intellectual property rights, and trade and sustainable development. Additionally, a hybrid-format meeting between high-level representatives from India and the EFTA States took place to assess progress and address crucial challenges.

Jamaica signs Samoa Agreement

The Jamaican Government on signed the Samoa Agreement at the headquarters of the Organisation of African, Caribbean and Pacific States (OACPS) in Brussels, Belgium. Jamaica’s Ambassador to Belgium and Representative to the European Union inked the document on Jamaica’s behalf. In making the announcement, Minister of Foreign Affairs, in a statement, said the Government also used the opportunity to deposit an Interpretative Declaration to affirm the primacy of the Jamaican Constitution and laws and its contextual understanding thereof.

Philippines and UAE set to embark on a comprehensive economic partnership

Department of Trade and Industry (DTI) Secretary signed the Terms of Reference (TOR) for the Negotiations of a Comprehensive Economic Partnership Agreement (CEPA) with Minister of State for Foreign Trade as part of DTI’s side activities at Conference of the Parties (COP)28. The TOR for the Negotiations of the CEPA is the first step towards the proposed bilateral free trade agreement with the UAE. The TOR provides guidelines on the conduct of the negotiations and the scope and coverage of the proposed CEPA. The CEPA is envisioned to expand the flow of goods and services exports to the UAE and the greater Gulf region, generate more investments from UAE, and create more opportunities for professionals and service providers in the UAE. The CEPA with the UAE will operationalize the Philippines’ trade strategy to enter new markets as envisaged in the Philippine Development Plan (PDP) 2023-2023 and the Philippine Export Development Plan (PEDP) 2023-2028.

Serbia’s parliament ratifies Free Trade Agreement with China

Serbia’s parliament has ratified a Free Trade Agreement (FTA) with China, signed between the two countries this October in Beijing. Around 10,500 Serbian and 9,000 Chinese products are on the free trade list, meaning that there will be no import duties on trading those items between the two countries. Within a few weeks after the agreement was signed, a large group of business people from the Chinese city of Ningbo arrived in Serbia to meet with their potential Serbian partners. The consultation took place in the Serbian Chamber of Commerce in Belgrade, and its sole purpose was to lay the groundwork for both sides to eventually reap the benefits of the deal. The FTA will come into effect 90 days after the Chinese side ratifies it. The math says that should be sometime around June next year. From that moment on, Serbia will become the 27th country in the world to have free trade deal with China.

Singapore signs free trade deal with four-nation Latin American bloc to boost trade, investment

Singapore signed a ground-breaking free trade agreement (FTA) with four South American nations on Dec 8. The deal with Argentina, Brazil, Paraguay and Uruguay – a group known by the Spanish acronym Mercosur – is Singapore’s first trade pact with these states and the bloc’s first such deal with a South-east Asian nation. In January 2022, Singapore signed an FTA with another Latin American economic bloc called the Pacific Alliance, which comprises Chile, Colombia, Mexico and Peru. The agreement with Mercosur aims to facilitate greater trade flows through lowered tariffs and by establishing transparent investment conditions, noted Singapore’s Ministry of Foreign Affairs and Ministry of Trade and Industry. It will also foster cooperation in areas such as trade facilitation – a process that simplifies export and import procedures. The pact, known as the Mercosur-Singapore Free Trade Agreement (MCSFTA), is expected to engender entrepreneurship, speed up digitalisation and boost sustainable development and food supply security, while also helping small and medium-sized enterprises (SMEs) develop across the five economies.

South Korea, EU hold first round of talks on digital trade

South Korea’s trade ministry launched the first round of talks on digital trade with the European Union in line with efforts to seek broader partnerships in online and data industries. The three-day meeting that kicked off in Brussels came after Trade Minister agreed with his EU counterpart to start related negotiations in October. During the talks, the two parties plan to exchange opinions on a wide array of topics, including data transfer, personal information, and cybersecurity, according to the Ministry of Trade, Industry and Energy.

South Korea, Britain to launch talks for FTA upgrade next month

South Korea and Britain will begin negotiations for upgrading the bilateral free trade agreement (FTA) next month in response to changing global business circumstances. The two countries inked the FTA in August 2019, and the pact went effect in January 2021, following Britain’s departure from the European Union. Last month, the two nations agreed to modernize the bilateral free trade deal, and the negotiations will be held starting January 2024. 

South Korea, Indonesia discuss ways to improve bilateral free trade deal

South Korea and Indonesia held their first round of talks to discuss measures to improve their bilateral free trade agreement and review its progress. The meeting held in Bali, Indonesia, came around a year after the two countries implemented the Comprehensive Economic Partnership Agreement (CEPA) in January, according to the Ministry of Trade, Industry and Energy. The CEPA is a type of free trade agreement, which emphasizes a broader scope of economic cooperation and exchanges on top of market opening. During the joint committee meeting, South Korea and Indonesia discussed ways to further bolster trade and remove obstacles, including adopting an electronic exchange system for certificates of origin.

Tunisia and Turkey formalize revision of free trade agreement

As part of efforts to strengthen economic relations between Tunisia and Turkey, Tunisian Minister of Trade and Export Development, and her Turkish counterpart officially signed the revised free trade agreement between the two countries on December 3, in Istanbul. The agreement is the culmination of a negotiation process that began in October 2012. It has three main elements. The agreement provides for a reassessment of the tariffs applied to a specific list of industrial products intended for consumption that have locally manufactured equivalents. For a period of five years, these products will be subject to tariffs of between 27% and 37.5%, compared to 0% at present. This measure, which represents 75% of the tariffs generally applied, is intended to increase the competitiveness of local industry. The revision of the FTA will also include the application by Turkey of measures to promote Tunisian exports to that country. These measures will take the form of annual quotas for Tunisian agricultural products, which will be completely exempted from customs duties, an initiative designed to stimulate the Tunisian agricultural sector.