Preferential Trade updates July 2023

July 19, 2023

Canada-Indonesia trade negotiations

A fifth round of Canada-Indonesia negotiations on the proposed Comprehensive Economic Partnership Agreement (CEPA) took place in Ottawa between May 29 and June 2. Canadian negotiators said they were pleased with the progress. The 23 issue tables met over 65 sessions and text was progressed across a majority of issues, in particular with respect to institutional chapters, dispute settlement, financial services, investment, rules of origin, telecoms, and transparency.

With respect to goods, negotiators explained that Indonesia’s offer, agreed in May, would provide full tariff liberalization, at some point in the future, for 85% of Canadian exports; Canada would do the same for at least 90% of Indonesia’s current exports. Canada expected Indonesia to complete its list of goods covered by that agreement by end of June, at which point negotiators will review before beginning to negotiate market access.

EU – Central America preferential trade: update to Harmonised System 2022

The EU-Central America Association council has adopted on 29 June 2023 the Decision No 1/2023 modifying the list of working or processing required to be carried out on non-originating materials in order that the product manufactured can obtain originating status, to reflect the Harmonised System (HS) 2022.

The Decision will enter into force 180 days after the adoption on 29 December 2023 and will be published in the Official Journal, C series, in due time. The Decision covers the update of the product-specific rules of origin set up in the Appendix 2 and the Note 4 of Appendix 2A to Annex II, concerning the definition of the “Concept of “Originating Products” and Methods of Administrative cooperation” to the Agreement establishing an Association between the European Union and its Member States, on the one hand, and Central America (Nicaragua, Honduras, Panama, El Salvador, Costa Rica and Guatemala), on the other hand.   The product-specific rules of origin are updated to reflect the HS 2022 adjustments. The tariff codes of the products of Chapters 61 and 62 within annual quotas are adjusted to reflect the HS 2022 update.

India, EU disagree over dispute settlement in proposed investment protection pact

India and the EU are at loggerheads over dispute settlement under the bilateral investment protection agreement being negotiated parallelly with the free trade agreement. New Delhi is opposed to the EU’s proposal for an investor court model while Brussels is not comfortable with the exhaustion of local remedies clause in India’s model BIT. The EU, on the other hand, is opposed to the arbitration model under the model BIT drafted by the Finance Ministry to check the rising number of investment disputes filed by foreign companies against the Indian government. It is important for the two sides to resolve their differences and arrive at a consensus on investment protection as the India-EU FTA has to be concluded together with the investment protection agreement.

India had discontinued almost all its Bilateral Investment Treaties (BIT), including those with EU countries, between 2016 and 2019, as the government faced several arbitration claims from investors due to the “excessively’’ investor friendly dispensation under the Investor State Dispute Settlement (ISDS) treaties.

India, EFTA agree for early conclusion of talks for free trade agreement

India and the four-nation bloc EFTA have agreed for early conclusion of negotiations for a free trade agreement, which aims at increasing economic ties between the countries. India and European Free Trade Association (EFTA) states — Iceland, Liechtenstein, Norway, and Switzerland — are negotiating the Trade and Economic Partnership Agreement (TEPA). Commerce and Industry Minister Piyush Goyal held discussions on the progress of the agreement with a delegation from the European Free Trade Association, led by the Swiss State Secretary for Economic Affairs, Helene Budliger Artieda, in London on July 11 and 12.

The Gambia Revenue Authority Elevates the Expertise of Officers in Rules of Origin

The EU-WCO Rules of Origin Africa Programme, funded by the European Union and run by the World Customs Organization (WCO), held an Advanced Training on Rules of Origin workshop in Banjul, The Gambia, from 3 to 7 July 2023, in partnership with the Gambia Revenue Authority (GRA). Customs officials from various units and border stations within the Customs & Excise department participated in this workshop.  This workshop followed on from the Basic training on rules of origin workshop that was held in Banjul in November 2022. The objective of the workshop was to assist GRA in enhancing its knowledge of preferential rules of origin. The training aimed to enable Customs officials to enhance their understanding of rules of origin, including AfCFTA rules of origin, and heighten their capacity to analyze rules of origin requests and queries, and address day-to-day issues related to rules of origin within their organization.

Morocco, Guinea sign 8 agreements to boost bilateral cooperation

Morocco and Guinea signed eight cooperation agreements and conventions during the 7th session of the Moroccan-Guinean joint cooperation commission. Morocco’s Foreign Affairs Minister co-chaired the meeting in Dakhla, in southern Morocco along with his Guinean counterpart. The agreements include a security cooperation deal, with the goal of strengthening “cooperation mechanisms” so both countries can act jointly against terrorism and other forms of transnational crimes – including drug trafficking and irregular migration. Morocco and Guinea also signed an agreement on international road transport of passengers and goods, with a shared objective to improve the sector. One of the agreements signed also concerns the field of hydrocarbons, with the two countries pledging to create a collaboration framework to implement actions resulting in the realization of projects in the sector. Morocco and Guinea also signed memoranda of understanding, including one that aims to strengthen and promote cultural cooperation. The two countries share good diplomatic ties based on exchanges and cooperation in different sectors, including trade.

South Africa government officials head to U.S to save AGOA trade deal

A South African government delegation will embark on a charm offensive in the US this week aiming to defuse tensions with the African nation’s second-biggest trading partner over foreign policy and retain its preferential access to American markets. Finance Minister is among those who plan to meet with US lawmakers and lobby for South Africa to retain its eligibility to export goods duty-free to the US under the African Growth and Opportunity Act (AGOA). The officials also intend to try and dispel what the government has termed misinformation about its stance toward Russia’s war in Ukraine. South Africa has maintained what it terms a non-aligned position toward the invasion, a stand that has irked Washington.

Trans-Pacific trade deal in effect in all member states

A major trans-Pacific trade deal has come into force in all 11 countries that originally signed it. This comes after the Southeast Asian nation of Brunei completed its ratification process. The deal, known as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, creates a massive free trade bloc spanning the Pacific. Among its members are Japan, Australia, New Zealand, Canada, Mexico and Singapore. The pact took effect in December 2018 after being ratified by more than six signatories.

Brunei says it aims to expand trade with North and South America, including Canada and Chile. As of 2021, the CPTPP countries had a population of around 500 million, and a combined GDP of nearly 12 trillion dollars. The pact eliminates tariffs on a wide range of items and sets out common rules for investment and services.


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