China, Switzerland open talks on free trade agreement upgrade
China and Switzerland began negotiations on an upgrade of the Sino-Swiss free trade agreement (FTA), with both sides agreeing to intensify consultations and reach a high-level upgrade agreement as soon as possible on the basis of mutual benefits. The Chinese Ministry of Commerce said in a statement that Chinese Minister of Commerce and Swiss federal councilor and head of the Swiss Federal Department of Economic Affairs, Education and Research, announced the launch of talks through a livestream.
Upgrading the FTA will help expand bilateral trade and boost two-way investment, and promote the upgrading of economic and trade cooperation between the two countries, Wang said, adding that it will also showcase the two countries’ support for free trade and openness to the outside world at a time when economic globalization is encountering headwinds.
FOCBS - Regional Convention on Pan-Euro-Mediterranean Preferential Rules of Origin (PEM Convention)
Entry into force of the revised rules of origin on 1.1.2025 - Information note for the attention of business circles. Link
EU-India conclude ninth round of free trade agreement talks, core issues remain
The European Union and India have concluded the ninth round of talks on a proposed free trade agreement (FTA). Although divergences on key issues remain, an FTA is in the interest of both sides. Negotiations on an India-EU FTA were formally relaunched in June 2022, and rapprochement has mainly focused on reaching this deal. Last year, the EU overtook the United States, becoming India’s largest trading partner. These discussions have taken place in the context of the EU-India Trade and Technology Council (TTC), launched in February 2023, aiming to increase bilateral cooperation and boost trade and investment to ensure the parties’ technological and industrial leadership.
In a recent interview with Euractiv, the Indian Ambassador to the EU, described the TTC as an important mechanism of the partnership, with both sides working in areas such as digital transformation, green technologies and trade.
What do the EU and India want?
A report of the Global Trade Research Initiative (GTRI) think tank ahead of the ninth round of talks recommends a political push and a pragmatic approach to bridge gaps and ensure that an FTA becomes a cornerstone of the strategic economic partnership. According to the report, a successful FTA would boost trade and investment, create new opportunities for businesses and contribute to economic growth for both sides, especially through tariff reduction and enhanced commitments in services. It would also boost exports from both sides. Major Indian goods exported to the EU, such as ready-made garments, steel, petroleum products, electrical machinery and pharmaceuticals, would become more competitive. Services exports such as telecommunications, business and transportation services would also see substantial growth.
On its side, the EU would benefit from the increased export of essential goods from India, such as aircraft and parts, electrical machinery, chemicals, and diamonds. The services sector would also benefit, with enhanced trade in other business services, intellectual property services, and telecommunications and IT services. The EU seeks to eliminate tariffs on over 95 per cent of its exports, including sensitive agricultural products and automobiles. India wants to open only around 90 per cent of its market, hesitating to lower tariffs on bulk agricultural products.
Although India is committed to sustainability and environmental protection, it is against instruments such as the deforestation regulation (EUDR) and CBAM becoming part of trade commitments. These are perceived as instruments of protectionism and act as non-tariff barriers.
India and Maldives discussing a free trade agreement
India and Maldives have started discussions for a free trade agreement, Prime Minister Narendra Modi and Maldivian President Mohamed Muizzu mentioned in their press address after the bilateral and delegation-level talks here in New Delhi. However, both leaders did not give further details about the bilateral trade agreement. A key emphasis of the Indian government has been on ensuring that the benefits of the Unified Payments Interface are not limited to India only; other countries, too, benefit from it.
India and Republic of Uzbekistan sign Bilateral Investment Treaty in Tashkent
The BIT between India and Uzbekistan assures appropriate protection to Uzbekistan investors in India and Indian investors in the Republic of Uzbekistan, in light of relevant international precedents and practices. It will increase the comfort level and boost the confidence of investors by assuring a minimum standard of treatment and non-discrimination, while providing for an independent forum for dispute settlement through arbitration. The BIT also provides for protection to investments from expropriation, provides for transparency, transfers and compensation for losses. However, while providing such investor and investment protection, balance has been maintained with regard to State’s right to regulate and thereby provides adequate policy space.
The signing of the BIT reflects both nations’ shared commitment towards enhancing economic cooperation and creating a more robust and resilient investment environment. The BIT is expected to pave the way for increased bilateral investments, benefiting businesses and economies in both countries.
India-EU FTA Next round of talks in 2025
The next round of India-European Union free trade agreement (FTA) negotiations is likely to be held in the first quarter of next year even as the two sides made limited progress on issues such as rules of origin and government procurement in the just concluded ninth round from September 23-27. In government procurement, issues related to state owned enterprises, Make in India and its application to EU bidders and goods remain unresolved.
India and the EU re-launched negotiations for an FTA after a nine-year hiatus and started separate negotiations for an Investment Protection Agreement and an Agreement on Geographical Indications in June 2022. Negotiators said that EU wanted India to give explanation on the foreign direct investment proposals it rejects, something that New Delhi is apprehensive about.
The positions of the two sides on the negotiations on origin rules, which are key to check FTA circumvention and cheap imports, and technical regulations and conformity assessment were different on some products. They discussed rules of origin for textile products, wood and paper products, chemicals, precious metals and related products, machinery and electronics. On the other hand, discussions on market access in goods, sectoral annexes on cars, pharmaceuticals and disciplines relating to financial services, and recognition of professional qualifications were positive.
Indonesia pushes for ATIGA upgrade signing in 2025
Indonesia has pushed for the finalization and signing of the upgraded ASEAN Trade in Goods Agreement (ATIGA) next year in view of the significant progress made during the 38th ASEAN Free Trade Agreement (AFTA) Council Meeting. The meeting was held as part of the 56th ASEAN Economic Ministers’ Meeting, which is taking place from September 15 to 22 in Vientiane, Laos.
Indonesia-Peru speed up to complete comprehensive economic agreement
Indonesia and Peru agreed to accelerate the completion of the Indonesia-Peru Comprehensive Economic Partnership Agreement (IP-CEPA) negotiations. The completion of the Indonesia-Peru CEPA negotiations will be a catalyst for the expansion of trade and investment cooperation between the two countries. the agreement was reached at the Indonesia-Peru Bilateral Consultation Forum (FKB) in Lima, Peru, on September 10 on the sidelines of the Indonesia-Latin America and Caribbean Business Forum (INALAC Business Forum).
Japan aims to expand auto exports to UAE via trade pact
Japan and the United Arab Emirates agreed to start negotiations on an economic partnership agreement, as Tokyo hopes to boost its automobile and machinery exports while promoting investment in energy. Japan’s exports to the UAE totaled 1.57 trillion yen ($11.1 billion at current rates) in 2022. The Middle Eastern country levies a 5% tariff on many items, including autos, and these account for about 60% of the total. Japan hopes to negotiate a reduction or elimination of these duties in the partnership agreement.
In addition to cars and energy, the two sides look to promote investment in digital technology and health care. They also look to promote free movement of data. Oil and fuel made up 95% of Japan’s 6.07 trillion yen in imports from the UAE in 2022. No tariffs applied to more than 98% of these imports.
GCC, Indonesia begin free trade agreement negotiations
The Gulf Cooperation Council and Indonesia are set to begin the first round of negotiations for a free trade agreement in Jakarta, the Saudi Press Agency reported. The talks, being held from Sept. 9-13, aim to lay the groundwork for a comprehensive trade agreement, focusing on enhancing economic cooperation between the bloc and the Southeast Asia nation. Key areas of discussion will include trade in goods and services, investment, and customs procedures, as well as rules of origin, technical barriers, sanitary and phytosanitary measures, digital trade, and trade remedies.
The initial round seeks to set the principles for the agreement and then finalize it within 24 months. The negotiations will also address trade challenges, facilitate information exchange, and build mutual trust to pave the way for further discussions.
Kenya, US edge closer to landmark trade deal as talks enter eighth round
As Kenya and the United States gear up for the eighth round of negotiations under the Strategic Trade and Investment Partnership (STIP), the urgency to conclude a long-delayed free trade agreement has intensified. This comes as President William Ruto prepares for his visit to the United States later this month for the United Nations General Assembly (UNGA). Meanwhile, Ruto’s government is keen to secure a deal before the African Growth and Opportunity Act (AGOA) expires in 2025. AGOA allows Kenya and other Sub-Saharan African nations to export products to the US without facing tariffs or quotas.
Dig deeper: The next round of talks, set for September 16–27, 2024, in Washington, will be led by Principal Secretary for Trade Alfred K’Ombudo on the Kenyan side, and Assistant U.S. Trade Representative Constance Hamilton for the US. Seven key areas are on the agenda, including agriculture, trade facilitation, and workers’ rights. According to sources familiar with the talks, both nations are under pressure to finalise the agreement amid growing geopolitical concerns.
The looming expiration of AGOA adds another layer of pressure. The programme has been a critical element of Kenya’s export strategy, with over Ksh50 billion in exports to the US annually. A new trade deal would ensure continued access to the US market and prevent economic disruptions. However, the path to an agreement has not been smooth. When Biden took office, he sought to shift away from traditional free trade deals, focusing instead on non-tariff measures to promote trade and investment.
Kosovo completes free trade negotiations with EFTA
Kosovo’s industry ministry said it has successfully concluded negotiations for a free trade agreement with the European Free Trade Association (EFTA), which includes Switzerland, Norway, Iceland and Liechtenstein. The agreement, which was reached after four rounds of talks, covers both trade of goods and services. Kosovo opened negotiations with EFTA in 2022. The agreement grants Kosovo access to EFTA’s markets with reduced or eliminated tariffs on a range of goods, while also improving access for Kosovo service providers to EFTA markets. The deal is pending approval from the legislative bodies of all countries involved.
Korea, Mongolia hold new round of talks for economic partnership agreement
Korea launched the third round of talks for a comprehensive economic partnership with Mongolia on that focuses on stronger cooperation on trade and supply chains, Seoul’s industry ministry said. The third official round of negotiations for the bilateral economic partnership agreement (EPA) began on the day in Ulaanbaatar for a four-day run, as the two sides have agreed to clinch one that aims to boost overall economic cooperation and ensure stable supply chains, according to the Ministry of Trade, Industry and Energy. The initial round of official talks was launched in December 2023. During the latest meeting, the two sides plan to discuss 13 segments, such as goods, services, investment and digital trade, as well as ways of enhancing cooperation on stable supply chains and joint responses to climate changes.
Malaysia joins six countries to ratify UK’s accession into CPTPP
Malaysia has officially ratified the United Kingdom’s (UK) accession to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), a significant milestone as it is effectively Malaysia’s first bilateral free trade agreement with the UK. In a statement today, the Investment, Trade and Industry Ministry (MITI) said Malaysia joins Japan, Singapore, Chile, New Zealand, Vietnam, and Peru in the ratification process.
The UK’s entry into the CPTPP will swell the combined gross domestic product (GDP) value of the bloc to US$15.4 trillion, or 15 per cent of the global GDP. MITI said the ratification allows Malaysian exports to benefit from immediate duty-free treatment on 94 per cent of tariff lines, particularly for palm oil, cocoa, rubber, electric and electronics, chemicals as well as machinery and equipment. The agreement is expected to enter into force by end-2024 for the UK and the countries that have ratified it.
Philippines, UAE to continue FTA negotiations in October
A high-ranking trade official said that further progress has been made during the negotiations for the free trade agreement (FTA) between the Philippines and United Arab Emirates (UAE) last week, with the continuation of the discussions scheduled for the fourth week of October. Trade Undersecretary, who is heading the negotiations for the Philippine side, told the Inquirer that some chapters of the Comprehensive Economic Partnership Agreement (CEPA) with the Middle Eastern country are almost substantially concluded after the latest round of talks held last week.
Philippines-South Korea FTA Update
The Senate ratified the free trade agreement (FTA) between the Philippines and South Korea, a move that will pave the way for increased exports of Philippine bananas and processed pineapples to Seoul. Twenty-one senators voted in favor of the ratification of the free trade pact, which will remove Philippine tariffs on 96.5% of goods from South Korea, while Seoul will lift tariffs on around 94.8% of Philippine products. The Constitution requires concurrence by two-thirds of the Senate’s members for ratification of international agreements and treaties. The Philippines and South Korea signed the free trade pact in September last year, which will boost trade between the two countries. However, the deal is still undergoing the ratification process at the Korean National Assembly.
Under the deal, the Philippines secured the elimination of 1,531 tariff lines on agricultural goods, of which 1,417 would be removed after the FTA enters into force. It will also remove 9,909 tariff lines of industrial goods, 9,747 of which would be removed after the deal enters into force. South Korean automakers are expected to benefit from the FTA, which will remove the 5% import duties on Korean-made automobiles. Tariffs on Korean electric and hybrid vehicles would also be eliminated within five years.
The Philippines is expected to attract as much as P200 billion worth of foreign direct investments for the electric vehicle industry and agricultural processing sector within three years, according to estimates from the Department of Trade and Industry. The Philippines is also seen to increase banana and processed pineapple exports to Seoul. Tariffs on Philippines bananas, which currently have a 30% tariff, will be removed within five years. At the same time, the 36% tariff on processed pineapples from the Philippines will be removed in seven years.
Oman, UK discuss GCC free trade agreement
Minister of Commerce, Industry and Investment Promotion met with the United Kingdom’s Minister of State for Trade Policy and Economic Security, to explore ways to strengthen cooperation between the two countries in commerce, industry, and investment. The discussions focused on increasing trade and investment, enhancing inter-trade growth, and advancing negotiations for a Free Trade Agreement (FTA) between the Gulf Cooperation Council (GCC) and the UK.
The meeting had a visual presentation on the depth of Omani-British relations, Oman Vision 2040, and an overview of the investment environment in Oman, including economic developments and investment incentives offered by the ministry. The meeting was attended Undersecretary of the Ministry of Commerce and Industry, and Advisor for Foreign Trade and International Cooperation, alongside UK representatives including Trade Commissioner to the Middle East, the UK’s Chief Negotiator for FTA, and the British Ambassador to Oman.
The UK accounts for nearly half of the entire foreign direct investment in Oman creating jobs and opportunities on both sides. Oman is a valued investor in the UK in turn, signing major deals in areas like green energy with UK companies. UK ministers are in the Gulf this week to boost trade and investment and hold talks for an FTA with the GCC. The UK government in July announced its plan to deliver a high-quality trade deal with the GCC bloc, along with other countries including India, Switzerland and South Korea.
A GCC trade deal could boost the UK economy in the long run, while allowing UK companies to take advantage of this booming market and giving British consumers access to more high-quality goods and services, the UK government said in a press statement.
Sri Lanka-Thailand FTA to be implemented from Jan. 1, 2025
Creating a landmark in Sri Lanka’s economic history, the much awaited and long overdue Sri Lanka- Thailand Free Trade Agreement (FTA) would be implemented by January 1, 2025. This would be Sri Lanka’s fourth FTA after India, Pakistan and Singapore. The island nation is in talks with China for FTA, Indonesia and Bangladesh for PTA which President Ranil Wickremesinghe has said was important to create an export-oriented economy. The agreement covers trade in goods, trade in services, investment, economic cooperation which includes 11 areas; trade and investment promotion, infrastructure, agriculture agro industry, fisheries, gems and jewellery, tourism, SMEs and MSMEs, financial cooperation, packaging industry, ICT, technical and vocational education and training.
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).
Türkiye officially ratifies free trade agreement with Ukraine
The Free Trade Agreement between Türkiye and Ukraine has been approved by President Recep Tayyip Erdogan and published in the official gazette. Signed on July 3, 2022, in Kyiv, the agreement aims to strengthen economic cooperation and elevate living standards for citizens of both nations. It seeks to gradually eliminate trade barriers and restrictions while promoting the ongoing liberalization of services trade. sThe agreement also aims to enhance the harmonious development of economic relations by expanding bilateral trade, removing trade impediments, and contributing to the steady growth of global trade. Additionally, it focuses on promoting fair competition conditions in trade.