Preferential Trade updates September 2023

September 22, 2023

EU and the Republic of Korea facilitate trade in agricultural products

The European Commission and the Republic of Korea signed an administrative arrangement to cooperate on electronic health certification and on the harmonisation of such certificates for exports of agricultural products from the European Union to the Republic of Korea. This agreement is a concrete demonstration of the mutual trust and confidence between the EU and Korean authorities, and gives effect to commitments undertaken between the EU and Korea in our bilateral FTA, and at the WTO.

The arrangement, which aims to be implemented before 2025, establishes a new electronic certification exchange system for bilateral trade of agricultural products. This will be a mutually beneficial tool, as it will enable EU exporters to reduce their administrative burden, and increase Korean consumers’ trust. It thus contributes to further digitalisation of trade – to the benefit of producers, traders and consumers alike, saving time and money through the real time exchange of information.

The electronic certification will benefit mutual trade and all EU Member States exporting processed meat, dairy and/or egg products, and it lays the ground for enhanced cooperation on additional future commodities exported to Korea.

India-Canada FTA talks paused due to political reasons

The negotiations between India and Canada on the free trade agreement (FTA), which resumed after a decade, have come to a halt due to political concerns. Without citing the Khalistan issue, which created differences between the two countries, the official said negotiations will resume once the “political issues" are resolved. The announcement comes after Canada recently said the negotiations were on hold. “There were certain political developments in Canada on which India has raised its objections. India has shown its resentment against certain political developments in Canada and, therefore, for the time being, till these political issues are settled, we have paused negotiations," the official said. Sikhs for Justice, a secessionist group, held the Khalistan referendum on 10 September at a gurdwara in British Columbia, Canada. Prime Minister Narendra Modi conveyed India’s serious concerns about the anti-India activities involving extremist factions in Canada to his counterpart Justin Trudeau. India also expressed concerns to the Canadian authorities over the rally by Khalistanis on 8 July.

India and Brazil to work together to expand India-Mercosur PTA

Mercosur, a Latin American trading bloc comprising Brazil, Argentina, Uruguay, and Paraguay, was at the centre of discussions in India-Brazil bilateral meeting. India and Brazil have joined forces to expand the India-Mercosur Preferential Trade Agreement (PTA), aiming to strengthen their economic ties, according to an official statement. Both leaders expressed their satisfaction with the growing trade between India and Mercosur and committed to collaborating on the expansion of the India-Mercosur PTA during Brazil’s Mercosur Presidency.

Kenya, Indonesia to sign preferential trade agreement

Kenya has signed a deal with Indonesia to manufacture and distribute medicines and vaccines as the country revamps its pharmaceutical industry, alongside six deals on food security, mining and renewable energy. The deals, which followed bilateral talks between President William Ruto and Indonesian President Joko Widodo, will see Kenya’s Biovax and Indonesia’s BioFarma collaborate to produce vaccines and other pharmaceutical products to enable easy access between the two countries. In a health memorandum of understanding (MoU), the two firms will explore the marketing of the vaccine portfolio to be manufactured by BioFarma in Kenya.

South Korea, Philippines sign free trade deal

South Korea and the Philippines signed a free trade pact in a move expected to bolster bilateral economic and industry ties. The two nations concluded the bilateral Free Trade Agreement (FTA) in June 2021 after two years of negotiations, and they wrapped up necessary follow-up procedures, such as legal scrubbing, in July 2023, according to the Ministry of Trade, Industry and Energy. Under the deal, South Korea will remove tariffs on 94.8 percent of all items and the Philippines will lift tariffs on 96.5 percent of all products traded, according to the ministry.

Singapore and Kenya BIT enters into force

The Singapore and Kenya bilateral investment treaty (BIT) came into force on 20 August. The agreement took effect five years after it was signed by former Senior Minister of State for Trade and Industry and former Kenyan Cabinet Secretary for the National Treasury, who in 2020 was removed from his position following charges of corruption. The deal is set to grant a wide range of protections to each country, including non-discriminatory treatment, the freedom to move capital across the borders, access to international arbitration in the case of investment disputes, fair treatment and protection under customary international law, protection from illegal expropriation, and non-discriminatory compensation for losses related to armed conflict, civil strife and war.

Tunisia to review free trade agreement with Turkey

Tunisia’s ministry of Trade is set to amend a free trade agreement with Turkey, believed detrimental to the North African country. The ministry indicated in a statement that the review will include the addition of new categories of products not concerned by preferential taxation, and focusing on products that have a locally-produced equivalent and on sectors that are experiencing difficulties due to increased imports of Turkish products. The ministry said the move is meant to avoid limiting the worsening of the trade deficit with Turkey. Both counties signed in 2005 a free trade agreement but the deal has been facing criticism in Tunisia whose trade deficit with Turkey, according figures from the ministry of Trade, amounts to around $900 million. The North African country had already demanded in 2021 the review of the free trade agreement with Turkey in a bid to protect national production.

UAE, Serbia launch negotiations towards a Comprehensive Economic Partnership Agreement

The United Arab Emirates and the Republic of Serbia have launched negotiations towards establishing a Comprehensive Economic Partnership Agreement, paving the way for increased trade and investment flows and private-sector collaboration. The pursuit of a CEPA reflects growing relations between the two nations. In the first half of 2023, bilateral non-oil trade reached US$57.6 million, surpassing the total recorded for the whole of 2020. The UAE is now the third-largest market for Serbian exports in the Middle East, while FDI has been flowing into a number of high-priority sectors including agriculture, food security, real estate, infrastructure, and logistics.


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