Preferential Trade updates 03/22

Canada Withdraws Most Favoured Nation Status from Russia and Belarus

The Canadian government issued an order removing Most Favoured Nation status from Russia and Belarus. The measure comes as a further response to Russia’s invasion of Ukraine and support provided by Belarus. The effect of the withdrawal of Most-Favoured-Nation status from Russia and Belarus is that the duty rate on goods from these jurisdictions will increase to 35% (the General Tariff rate). This measure comes in addition to several trade measures introduced by the Canadian government in recent days. These include announced prohibitions on all Russian owned or registered ships from entering Canadian ports and internal waters, the closure of Canadian airspace to Russian owned, operated or chartered aircraft and a ban on crude oil imports. 

EU considers removal of Russia’s ‘ Most Favoured Nation’ trade status at World Trade Organisation

The European Union (“EU”) has confirmed that it is considering the removal of Russia’s Most Favoured Nation (“MFN”) status at the World Trade Organisation (“WTO”) in response to the ongoing conflict in Ukraine. As a consequence, the EU would be free to increase tariffs or establish quotas on Russian imports. MFN treatment refers to the WTO principle of equal treatment among trade partners — meaning that preferential treatment given to a trade partner by one WTO member must be extended to all others. 

India, Canada agree to consider interim trade deal

India and Canada have agreed to resume negotiations for a free trade agreement (FTA) and are eying an interim trade deal to bolster bilateral commerce. The move came after commerce and industry minister held talks with his Canadian counterpart, as part of the fifth ministerial dialogue on trade & investment. While no timeframe has been given for hammering out the interim pact, official sources indicated that it could be concluded as early as in six-nine months. This will be followed up with the broader FTA.
Both the countries have now decided to expedite the negotiations for the India-Canada Comprehensive Economic Partnership Agreement (CEPA), as the FTA will be formally called, which was stalled for a long time. Both the sides are now considering an Interim Agreement or Early Progress Trade Agreement (EPTA) that could bring early commercial gains to both the countries, according to a statement by the Indian commerce ministry. 

India wants EU to start FTA negotiations, drop preconditions

India is trying to persuade the European Union to come to the negotiating table to work out the contours of the proposed bilateral free trade agreement instead of putting in place numerous preconditions for starting the talks. The Commerce Ministry has now sent a communication to the EU proposing that negotiations should begin across the table so that all concerns can get sorted out through face-to-face discussions and greater progress can be made. 

Panama seeks review of US trade pact, flags certain farm goods

The Central American country is seeking dialog to protect its local production of rice, milk products, chicken and pork. Panama requested a review of the terms of the Tariff Elimination Program under the United States–Panama Trade Promotion Agreement (TPA) for those products. Panama seeks to “promote new trade conditions for these sensitive items, without affecting Panamanian agricultural production and the generation of employment that these items represent for our economy,” the country said in an official letter to U.S. Agriculture Secretary Thomas Vilsack and U.S. Trade Representative Katherine Tai. 

Pakistan, China may renegotiate FTA benefits

Pakistan and China are expected to renegotiate the benefits under the current phase of Free Trade Agreement (FTA) as trade results for 38 export items to China have not been very encouraging. Pakistan has started drafting a renegotiation deal concerning the export of these items to China. Pakistan wants more concessions exclusive to its products, like rice, and aims for larger market access to increase its share in bilateral trade. According to officials of the Ministry of Commerce, Pakistan started deliberations with China to renegotiate the terms and tariff lines for the second phase of FTA during Prime Minister Imran Khan’s recent visit to China. Pakistan hopes that talks may complete before the conclusion of the budgetary exercise for fiscal year 2022-23. 

United States: Fourth meeting of the US-Ecuador Trade and Investment Council (TIC)

The United States and Ecuador held the fourth meeting of the United States-Ecuador Trade and Investment Council (TIC). The TIC meeting and the working group meetings held by officials from the Office of the U.S. Trade Representative and the Ministry of Production, Foreign Trade, Investment and Fisheries highlighted the importance of the United States-Ecuador relationship, ongoing engagement on bilateral issues, and a commitment to collaboration. Both countries reaffirmed their commitment to pursuing a bilateral trade policy that is resilient, supports workers, protects our shared environment, and fosters equitable growth. On the topic of agriculture, dialogue focused on improving the import licensing system. Meetings held on labor identified progress made to eradicate child labor and improve labor inspections. Both sides agreed to identify areas of technical cooperation. The working group and other bilateral meetings on environment addressed progress made in relation to conservation of natural resources such as fisheries, forests and wildlife, and actions to address climate change and marine debris, including promoting circular economy approaches. In addition, developments in implementing regulations for the fisheries and aquaculture sectors were presented, including efforts to combat illegal fishing and progress to conserve marine resources. Both sides agreed to continue with technical dialogues across the range of shared priority trade and environment issues, including to identify future areas of collaboration.