Preferential Trade updates June 2024

July 8, 2024

Canada - Ukraine Modernized free trade agreement enters into force

The modernized free trade agreement between Ukraine and Canada has officially entered into force on July 1. This is a significant milestone in the Canada-Ukraine bilateral relationship. The modernized CUFTA will enhance trade, increase economic cooperation and support Ukraine’s financial reform and efforts to rebuild. It also signals Canada’s unwavering commitment to Ukraine’s long-term security, stability and economic recovery following Russia’s full-scale invasion of the country. Bilateral trade between Canada and Ukraine reached a peak of approximately $447 million in 2021, decreasing to $422 million in 2022 due to Russia’s illegal invasion of Ukraine in February 2022. In 2023, trade surged to $695 million, largely due to Canadian exports of various military equipment to Ukraine to aid in the war effort.

China, Switzerland to start talks for FTA upgrade

China and Switzerland signed a memorandum of understanding and agreed to officially start negotiations for the upgrade of the Sino-Swiss free trade agreement (FTA) as soon as possible, according to Chinese Ministry of Commerce. Chinese Minister of Commerce held talks with Swiss Federal Councilor, also head of the Federal Department of Economic Affairs, Education and Research, discussing the robust development of Sino-Swiss economic and trade relations. The Chinese side expressed its willingness to work with Switzerland to implement the important economic and trade consensus reached by the leaders of both countries.

China - Serbia free trade agreement to take effect on July 1

The free trade agreement (FTA) between China and Serbia will go into effect on July 1 as both countries have completed respective domestic approval processes. According to the deal signed in October 2023, approximately 90 percent of the products traded between China and Serbia will be exempted from tariffs, while over 60 percent of them will enjoy zero tariffs immediately after the FTA goes into effect. The tariffs on over 95 percent of the products will be gradually reduced to zero. The implementation of the FTA will promote the comprehensive upgrading of bilateral economic and trade cooperation and inject new momentum into deepening the China-Serbia comprehensive strategic partnership and the building of a China-Serbia community with a shared future in the new era. The Customs Tariff Commission of the State Council announced that China will impose the tariff rates it has pledged under the FTA on certain imports from the country starting from July 1, the same day the FTA comes into force. After the deal comes into force, China will exempt tariffs on some Serbian imports such as electric generators, electric motors, tires, beef, wine and nuts.

China, Peru completed ’substantial negotiations’ to upgrade FTA

China and Peru have achieved "substantial conclusion of negotiations" on the upgrading of a free trade agreement between both countries. Peru and China signed a free trade agreement in 2009, which helped the South American nation boost its exports. Peru’s press office reported that Boluarte and Xi also signed a series of agreements to strengthen ties, including one on Peruvian grape exports to China, and a memorandum of understanding establishing a Peruvian-Chinese Business Council.

Chile and Mexico successfully conclude negotiations to modernize free trade agreement

Two new chapters on Trade and Micro, Small, and Medium Enterprises have been added to the agreement that came into effect 25 years ago. The governments of Mexico and Chile successfully concluded negotiations to modernize the Free Trade Agreement (FTA) between the two nations, 25 years after it initially came into effect. In a joint statement, the authorities of both countries announced “the successful conclusion of technical negotiations to modernize this bilateral treaty, incorporating two new chapters.

CPTPP: impact assessment

The impact assessment on the UK’s accession to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) updates the preliminary analysis that was published in the UK approach to joining the CPTPP. The purpose of the impact assessment is to provide Parliament and the public with information on the potential economic impacts of the agreement. The Department for Business and Trade (DBT), with other government departments, has negotiated the United Kingdom’s (UK) accession to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). This comprehensive agreement will support UK businesses by making it easier for them to trade with CPTPP. It will facilitate innovation and provide consumers with more choice. The agreement could generate long-term benefits for both the UK and CPTPP, support UK jobs and provide opportunities for growth in sectors across the UK. For more details, please visit link.

EAEU, Mongolia complete talks on temporary trade agreement

The Eurasian Economic Union (EAEU) and Mongolia have completed negotiations on a temporary trade agreement; it might be signed by the end of this year, BelTA learned from the Eurasian Economic Commission (EEC). The first round of negotiations on the temporary trade agreement between the Eurasian Economic Union, its member states and Mongolia was held in Ulaanbaatar. The talks produced some definitive outcomes. The draft document, including agreements on reducing or eliminating duties on a limited range of goods was prepared in record time.

EU-Australia second digital dialogue

The European Union and Australia held a second virtual digital dialogue on June 12, 2024. The EU-Australia Digital Dialogue aims to promote inclusive digital transformation and foster innovation. On the occasion of the digital dialogue, the EU and Australia agreed to increased and systematic cooperation on platforms and, as a concrete tangible step, signed an administrative agreement to support enforcement of social media regulations. The partners also exchanged information on artificial intelligence (AI).  

EU and China strengthen Customs Cooperation

On 18 June, the 11th high-level meeting of the EU-China Joint Customs Cooperation Committee (JCCC) took place in Shanghai. It marks the 20th Anniversary of this cooperation. The EU and China reaffirmed their commitment to actively reinforce the effectiveness of customs controls and enhance fair and legitimate trade. The European Commission also recently completed an external study and an evaluation of the EU-China customs cooperation. In view of recent trends and challenges, the EU and China agreed to establish a new Working Group on cross-border e-commerce while intensifying their cooperation on designer drug precursors. The EU and China also asserted their commitment to actively strengthen their long-term customs cooperation. To this end, they agreed to engage in a review process that should improve and reach even better results. This process could lead to a renewed EU-China Customs Cooperation and Mutual Administrative Assistance (CCMAA) Agreement.

In the context of this cooperation, the EU and China also celebrate the 10th anniversary of their cooperation on better supply chain security via the Mutual Recognition (MR) of Authorized Economic Operators (AEO).  They both stressed the important contribution that customs cooperation makes in ensuring safety and security of supply chains and of traded goods.

European Union and Japan Economic Partnership agreement notice

European Union and Japan for an Economic Partnership regarding free flow of data will enter into force on 1 July 2024, in accordance with paragraphs 1 and 2 of Article 23.2 of the Agreement between the European Union and Japan for an Economic Partnership (Article 6 of the Protocol).

EU - Japan deal on data flows enters into force

The landmark deal on cross-border data flows between the EU and Japan entered into force.
This deal is a milestone in our joint efforts to advance the digitalisation of European and Japanese societies and economies. Its provisions will facilitate business on both sides, sending a strong signal against digital protectionism. With its inclusion in the EU-Japan Economic Partnership Agreement (EPA), the agreement will deliver real benefits to companies active across most sectors, such as financial services, transport, machinery, and e-commerce. Businesses can now handle data more efficiently, without cumbersome administrative or storage requirements, in a predictable legal environment.

This entry into force of this agreement also promotes the concept of ‘Data Free Flow with Trust’, a guiding principle for international cooperation on data flows, based on our shared values. It allows us to lay the foundation for a common approach on digital trade, acting against arbitrary unjustified restrictions to data flows, while promoting shared prosperity.

EFTA signs revised free trade agreement with Chile

The European Free Trade Association (EFTA), which includes Switzerland, signed a revised free trade agreement with Chile. The revised agreement with Chile was signed at a ministerial meeting of EFTA states (Switzerland, Liechtenstein, Iceland and Norway) in Geneva. Switzerland is the current chair. Negotiations were concluded last January after five years. Compared to the first agreement 20 years ago, components on sustainable development, financial arrangements, small and medium sized enterprises (SMEs) and e-commerce have been added. The new agreement will improve exports and the competitiveness of SMEs, which make up more than 90% of the volume of business in Switzerland, the economics minister told the Keystone-SDA news agency.

In recent free trade deals, the focus has mostly been on pharmaceuticals and multinationals. However, since the signing of the agreement with India a few months ago, SMEs have become more of an issue. From now on, 99.99% of Swiss exports to Chile will be exempt from customs duties. All intellectual property rights will also be applied. Total trade of goods between EFTA and Chile is estimated to have reached nearly CHF1 billion ($1.12 billion) in 2023.

Georgia - UAE comprehensive economic partnership agreement takes effect

The agreement on a comprehensive economic partnership between Georgia and the United Arab Emirates, which provides for the liberalization of products and services produced in Georgia, entered into force. This agreement, essentially a new generation free trade agreement, will further deepen economic integration between the two countries. Following the implementation of the agreement, the UAE will immediately open its market to several key Georgian products such as beef and mutton, honey, nuts, mineral water, most fruit and vegetable preserves, non-alcoholic beverages, nitrogen fertilizers, and textile products.

The United Arab Emirates is already Georgia’s leading trade partner among Arab countries. In 2023, the trade turnover between Georgia and the UAE increased by 39% compared to the same period in the previous year, with exports rising by 73%. Additionally, the volume of investments from the UAE in Georgia increased by 29%.

India and Bangladesh to negotiate free trade pact

India and Bangladesh have signed a series of new agreements pledging cooperation in various areas, from their shared border to space, and agreed to start negotiations on free trade during Prime Minister Sheikh Hasina’s second visit to New Delhi this month.

India to seek three-year carbon tax exemption for small businesses in upcoming free trade talks with EU

India is likely to ask for a three-year exemption for its micro, small and medium enterprises (MSMEs) from a proposed mandatory tariff on carbon-intensive imports in talks on a free trade deal with European Union negotiators starting next week. India, which opposed the tax at the World Trade Organization’s last ministerial meeting in February-March in Abu Dhabi, will make its stand clear again on the during upcoming talks on a free trade agreement (FTA) with the EU. The eighth round of FTA talks is slated to be held in Brussels on 24-28 June.

During the upcoming talks, the two sides will take up sticky issues like the carbon tax, India’s demand for EU to relax its rules on the maximum level of pesticide residues allowed in agricultural imports, rules of origin, and issues related to services. CBAM is a green tariff on carbon-intensive products, legislated as part of the European Green Deal. It effects in 2026, with the current transitional phase lasting between 2023 and 2025. The CBAM will initially apply to imports of certain goods that are is carbon intensive and at significant risk of carbon leakage, which includes sectors like cement, iron and steel, aluminium, fertilizers, electricity and hydrogen.

Iran - Oman kick off negotiations on launching PTA

First round of the talks for launching the Preferential Trade Agreement (PTA) between Iran and the Sultanate of Oman was held in Muscat. The trade and economic relations between the two countries have been following an upward trajectory in recent years, so that conclusion of the Preferential Trade Agreement and also establishing very close trade-economic relations between the two countries in all trade and economic fields are of paramount importance.

Kenya to open market for duty-free EU imports after trade deal takes effect

Kenya and the European Union have enforced a trade deal after a decade of negotiations, opening up the domestic market for tax-free goods from the 27-country bloc after 25 years. EU - Kenya Economic Partnership Agreement (EPA), which preserves unrestricted access of Kenyan goods to the European bloc except for arms, came into force on Monday, Kenya’s Cabinet Secretary for Investment, Trade and Industry Rebecca Miano announced. The pact, the first trade agreement between the EU bloc and a developing country, ensures Kenya’s largely agricultural produce such as vegetables, cut flowers, fruits, tea and coffee continue to enter the bloc duty-and quota-free. Kenya on the other hand, has committed to gradually lower duty on imports from Europe within 25 years after which trade will be liberalised. This means no duty will apply for goods from Europe such as machinery as well as mineral and chemical products, while investments from the EU will also be incentivised.

Thailand - EU free trade talks continue

The third round of free trade negotiations for a Thailand-European Union (EU) agreement recently finished, with the fourth round scheduled to be hosted by Thailand on Nov 4. Director-general of the Trade Negotiations Department, said the third round of negotiations on a Thailand-EU free trade agreement (FTA) took place June 17-21 in Brussels, Belgium. Discussions covered a full range of areas under the scope of the future agreement, with 20 negotiating groups meeting during the week. A schedule was set for all groups in terms of upcoming activities, including data and opinion exchange, additional draft discussions, as well as interim negotiations. These activities are to prepare for the most significant progress at the fourth round of negotiations scheduled to be held on Nov 4 in Bangkok. The department plans to invite stakeholders to a meeting to update them on progress in the negotiations and outline plans for future negotiation meetings. The government has prioritised the Thai-EU FTA, aiming to increase Thailand’s trade opportunities in the EU market, which has high purchasing power as the world’s third-largest economy with 27 member countries. The Thai administration also wants to attract investment from the EU and other regions.

UK - Australia FTA Joint Committee Statement

Officials from the governments of the United Kingdom and Australia met virtually on 11 June 2024 to discuss the United Kingdom-Australia Free Trade Agreement (FTA), one year after its entry into force, as per the obligation under Article 29.4(1) of the Free Trade Agreement between the United Kingdom of Great Britain and Northern Ireland and Australia. The meeting took place during the pre-election period, ahead of the United Kingdom’s general election on 4 July 2024.  As a result, discussions were limited to reflecting back on joint work and developments during the first year of the agreement being in force.

Both sides took stock of current trade flows. Total trade in goods between Australia and the UK totalled £6.7 billion or $12.7 billion between June 2023 and April 2024, with strong growth in those areas liberalised by the FTA. Meanwhile, total trade in services between the UK and Australia totalled £6.5 billion or $12.4 billion in the second half of 2023 (Q3 and Q4 2023).

Reflecting on the first year of the UK-Australia FTA, both sides highlighted key areas jointly delivered by the UK and Australia including the Strategic Innovation Dialogue, which focused on key areas such as:

  • health and biotechnology
  • battery technology
  • AI
  • offshore wind

The meeting also noted working group discussions held through the year on:

  • goods
  • rules of origin
  • sanitary and phytosanitary
  • animal welfare
  • services and investment
  • professional services
  • intellectual property
  • environment
  • cooperation
  • technical barriers to trade
  • innovation

Other areas of focus included the Legal Services Regulatory Dialogue, and the Artist’s Resale Right commitment, which, after its introduction on 31 March 2024, allows UK and Australian artists, including First Nations artists, to claim resale royalties each time their eligible artworks are resold.


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