Preferential Trade updates November 2023

EU and Angola sign first-ever Sustainable Investment Facilitation Agreement

The EU and Angola signed a Sustainable Investment Facilitation Agreement (SIFA), the first EU agreement of its kind, during the EU-Angola Business Forum in Luanda. It responds to Angola's ambition to diversify its economy beyond the oil and gas sectors, which historically attracted most foreign investment. The agreement, with its commitments to improve business climate and sustainability across the economy, is expected to attract new EU investment to sectors where Angola's potential is currently untapped. The EU-Angola Business Forum confirmed opportunities for investments notably in green energy, agri-food value chains, digital innovation, fisheries, logistics, and critical raw materials. The main objective is to increase sustainable investment by EU businesses in Angola, while Angolan businesses will benefit from facilitation measures and from improved linkages between foreign investors and domestic suppliers.

EU and Japan conclude landmark deal on cross-border data flows at High-Level Economic Dialogue

The EU and Japan have concluded, on the margins of the G7 Trade Ministerial in Osaka, a landmark deal to make doing business in the online world easier, less costly and more efficient. The agreement was concluded at the EU-Japan High-Level Economic Dialogue (HLED), co-chaired by European Commission Executive Vice-President, Japanese Minister of Economy, Trade and Industry, and Japanese Minister of Foreign Affairs. The EU and Japan are both among the world's largest digital economies. This deal is a milestone in our joint efforts to advance the digitalisation of our societies and economies. Cross-border data flows are a crucial enabler to this development. Once ratified, the agreed provisions will be included in the EU-Japan Economic Partnership Agreement (EPA). They lay the foundation for a common approach on digital trade, sending a strong message against digital protectionism and arbitrary restrictions. 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 due to follow.

Iran, EAEU member states to launch FTA in 2024

Iran deputy head of the Trade Promotion Organization for international affairs said a Free Trade Agreement between Iran and the Eurasian Economic Union’s member states will come into effect in the next Iranian year. He pointed out that the EAEU’s member states import $380 billion worth of products annually. An interim contract under the Preferential Trade Agreement (PTA) was signed between Iran and EAEU’s member states in 2016, he said, adding that Iran’s exports to these countries registered an eighty percent growth in the first year after the implementation of the PTA. The talks between Iran and member states of the union on the FTA kicked off in 2020 and the final document of the FTA will be signed between Iran and the five member states of the union within the next one or two months. Once the document is signed at the parliaments of the countries, it is predicted that the FTA will come into effect as of the next Iranian calendar year (March 21, 2024).

India-UK free trade agreement faces hurdle over medical devices

Finalising the rules of origin for the medical devices sector remains a sticking-point in the proposed free-trade agreement (FTA) between India and the UK and the talks are on to iron out the differences. Huge potential is there in the medical devices sector in India, as it imports about 80 per cent of its requirement, with the US, Germany, China, Singapore and Netherlands being top exporters of such devices to the country. The government has taken steps to promote domestic manufacturing of medical devices/equipment and attract large investment in the sector. Such schemes/initiatives include Promotion of Medical Device Parks, National Biopharma Mission, and a production-linked Incentive scheme for the sector. The six major categories of medical devices that are being mainly imported into the country include consumables, disposables, electronics and equipment, implants, IVD reagent and surgical instruments.

The ’rules of origin’ provision prescribes minimal processing that should happen in the FTA country, so that the final manufactured product may be called originating goods in that country. Under this provision, a country that has inked an FTA with India cannot dump goods from some third country in the Indian market by just putting a label on it. It has to undertake a prescribed value addition in that product to export to India. Rules of origin norms help contain dumping of goods.

India reviewing FTAs with ASEAN, Korea

The India is closely monitoring all the free trade agreements which it has signed and based on stakeholder consultations, existing FTAs with ASEAN and Korea are being reviewed, Parliament was informed recently. Minister of State for Commerce and Industry confirmed that the government is negotiating FTAs with the European Union, the UK, European Free Trade Association (EFTA) and Canada. These negotiations or its review are a long-drawn process and the timeline for completion of such negotiations cannot be predicted since the parties to the negotiations are required to agree to the outcome.

Sri Lanka, Thailand to sign trade agreement in February 2024

Sri Lanka plans to conclude free trade agreement (FTA) talks with Thailand in December and sign a deal on Feb. 3, Sri Lanka’s cabinet spokesperson confirmed. The island nation has been renewing a focus on trade deals to foster growth and help its battered economy recover from the worst financial crisis in decades.

Korea, Georgia launch negotiations for economic partnership

Korea’s trade ministry has agreed with Georgia to officially launch negotiations for a comprehensive economic partnership on trade and supply chains. An EPA is meant to establish a mutually beneficial trade network with partner nations beyond a simple market opening, though it covers a smaller scope of areas compared with a traditional free trade agreement. Georgia is the transportation and logistics hub of the Caucasus region, has significant potential for bilateral cooperation in various areas, including the energy sector. The two countries plan to hold the first round of negotiations in the first quarter of 2024.

India, Sri Lanka resume talks on economic, technology cooperation

After a five-year hiatus, India and Sri Lanka have re-launched talks on the Economic and Technology Cooperation Agreement. The two sides held the 12th round of negotiations on the agreement in Colombo. Talks between New Delhi and Colombo paused after 11 rounds of negotiations held between 2016 and 2018.

Peru moving closer to signing FTAs with India and Hong Kong

Peru expects to sign two free trade agreements (FTAs) with India and Hong Kong, for which it has been working actively so that talks can be concluded in 2024. Similarly, the FTA with India, whose negotiations started a few months before the COVID-19 pandemic hit, is expected to be concluded in the second half of next year. Likewise, Peru has set its sights on a third Asian country: Indonesia, a nation with which initial negotiations will be launched in the last month of 2023.

Taiwan signs Enhanced Trade Partnership Arrangement with UK

Taiwan has signed an Enhanced Trade Partnership (ETP) Arrangement with the United Kingdom, paving the way for talks about digital trade, green energy, and investments. The agreement is the first of its kind to be concluded between Taiwan and a European country, according to chief trade negotiator. Taiwan’s envoy in London and the U.K. representative in Taiwan signed the ETP by video conference.

EFTA and Ukraine heads of delegation meet to discuss modernisation of their Free Trade Agreement

On 25 October 2023, high-level representatives from the EFTA States (Iceland, Liechtenstein, Norway, and Switzerland) and Ukraine convened in Geneva to discuss the way forward in the modernisation of their existing EFTA-Ukraine Free Trade Agreement (FTA) originally signed in 2010. Delegations discussed the modalities of the upcoming modernisation process, including the format of negotiation rounds, the exchange of initial text proposals and the working groups to set up. They agreed to tentatively schedule the first round of negotiations in the first quarter of 2024. The modernisation process of the EFTA-Ukraine FTA was formally launched during the EFTA Ministerial meeting held in June 2023.

India works on free trade deal with Gulf countries

After a delay of several months, India and the Gulf Co-operation Council (GCC) have begun discussing the contours of a free trade agreement, which may not include a bilateral investment treaty. Through the agreement, India will be eyeing a large and affluent market for its goods and also concessions on visas in a region, which has traditionally seen a flow of a large number of Indian workers and professionals. In return, it will also hope to attract investment. But officials indicated that a bilateral investment treaty may be replaced by a chapter in the agreement, and both sides are seen to be open to this kind of a deal. Detailed negotiations for the proposed treaty are yet to begin.

South Korea, EU to launch talks for digital trade agreement

South Korea’s trade ministry has agreed with the European Union to launch negotiations for a digital trade agreement in line with efforts to seek broader partnerships in online commerce and data industries. The two parties said the agreement will provide legal certainty for businesses and consumers engaged in digital trade, enhance their protection in digital transactions, and foster an open, free and fair online environment. Korea and the EU share long-standing and robust economic relations underpinned since 2011 by the Korea-EU Free Trade Agreement. South Korea has been making efforts to expand its digital trade agreements around the globe. So far, it has clinched such agreements with Singapore, Chile and New Zealand.