Preferential Trade updates 06/22

AfCFTA Members meet to discuss Outstanding Rules of Origin and the AfCFTA Draft Manual on Rules of Origin

From May 16 to 27, May 2022, Members of the African Continental Free Trade Area (AfCFTA) held the 7th meeting of the Sub-Committee on Rules of Origin (RoO) to discuss outstanding issues, the draft AfCFTA RoO manual, and the alignment of Rules of Origin legal texts and related trading documents. The meeting took place in Accra, Ghana. The meeting was organized jointly by the AfCFTA Secretariat and the EU-WCO Programme for Rules of Origin in Africa (RoO-Africa Programme), funded by the European Union. About eighty RoO experts representing 40 Member administrations, the East African Community, ECOWAS and the Community of Sahel-Saharan States took part in the meeting. In his opening remarks, Mr. Didier Bonyeme, on behalf of the Director of Trade in Goods and Competition of the AfCFTA Secretariat, expressed his appreciation for the support provided by the EU and the WCO on the implementation of the Rules of Origin under the RoO-Africa Programme. He emphasized the importance of continued support being provided to the AfCFTA in order to appropriately implement Annex 2 Rules of Origin of the AfCFTA trade agreement. He further encouraged the delegates to productively work on the outstanding issues during the meeting. 

Britain launches free trade deal talks with Mexico

Britain and Mexico agreed a continuation trade deal before Britain left the sphere of the European Union, but that arrangement is based on an EU-Mexico trade agreement negotiated over 20 years ago. A free-trade agreement with Mexico would also boost Britain’s foreign policy tilt towards the Indo-Pacific. Mexico is a member of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), which Britain wants to join. The free trade area, established in 2018, is now made of Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, and Vietnam. Britain’s trade relationship with Mexico is currently worth over 4 billion pounds ($5 billion). 

Canada, India welcome progress in negotiations towards interim trade pact

Canada and India have welcomed the progress in the second round of negotiations towards an interim trade pact. The matter was discussed during a virtual meeting between Canada’s Minister of International Trade, Export Promotion, Small Business and Economic Development and India’s Commerce and Industry Minister. The Early Progress Trade Agreement (EPTA) was decided upon when Ng visited India this March. At the same time, the two countries “continue to work towards a Comprehensive Economic Partnership Agreement”, a readout from Global Affairs Canada, Canada’s foreign ministry said. The MoU was signed on the margins of the Stockholm+50 meeting in the Swedish capital. Last month, the India-Canada Science and Technology Cooperation Committee meeting took place in Ottawa, and was chaired by Department of Science and Technology Secretary and Deputy Minister for International Trade at Global Affairs Canada. 

China, Papua New Guinea discuss free-trade deal

China and Papua New Guinea held talks on a free-trade deal Friday, as Beijing’s foreign minister wrapped up a landmark tour of the Pacific Islands with a stop in the resource-rich nation. China is already a major investor in Papua New Guinea and buys much of the country’s gas, minerals, timber and other resources. Beijing is vying with Australia to be Papua New Guinea’s leading trading partner. 

Ecuador and Mexico move closer to a trade deal in ninth round of talks

Ecuador and Mexico made "substantial progress" toward a Productive Integration Agreement in the ninth round of negotiations held May 23 to 27 in Quito. The negotiating teams of both countries held high-level technical meetings in which significant progress was made with a view to closing the agreement.  The latest round of talks addressed such issues as market access, rules of origin, sustainable fishing, commercial defense, institutional matters, and services and investment. 

India, EU to resume FTA talks from June 27

India signed an FTA with the UAE in February, New Delhi’s first such pact with any economy in a decade, and sealed another trade deal with Australia in April. After a gap of about nine years, India and the EU will likely resume the much-awaited negotiations for a proposed free trade agreement (FTA) from June 27, as both the sides eye a deal by next fiscal. Before the negotiations begin, commerce and industry minister may visit Brussels later this month — either ahead of the next ministerial of the World Trade Organization starting June 12, or after that — to set the stage for the talks. Formal negotiations between the two sides for the FTA were stuck over stark differences after 16 rounds of talks between 2007 and 2013. The EU insisted that India scrap or slash hefty import duties on sensitive products such as automobiles, alcoholic beverages and dairy products, and open up legal services. Similarly, India’s demand included greater access to the EU market for its skilled professionals, among others. However, both the sides have now decided to take the negotiations to their logical conclusion. 

Israel signs first Arab free trade agreement with UAE

Israel has signed a free trade agreement with the United Arab Emirates, its first big trade accord with an Arab state and a move aimed at boosting trade between the two Middle Eastern nations. The pact was signed in Dubai by Israel’s Minister of Economy and Industry Orna Barbivai and her counterpart, UAE Minister of Economy, after months of negotiations. President of the UAE-Israel Business Council Dorian Barak said the trade agreement defined tax rates, imports and intellectual property, which would encourage more Israeli companies to set up offices in the UAE, particularly in Dubai. The Council predicts there will be almost 1,000 Israeli companies working in or through the UAE by the end of the year, doing business with South Asia, the Far East and the Middle East.
Ahead of the signing, Israel’s economy ministry had said the accord would remove tariffs on 96% of goods, including food, agriculture, cosmetics, medical equipment and medicine. The UAE predicts that the Comprehensive Economic Partnership Agreement, as the accord is known, would boost bilateral trade to more than $10bn a year within five years. 

Oman - UK FTA likely soon

A Free Trade Agreement (FTA) between the Sultanate of Oman and Britain is likely to be entered into by both parties and discussions are currently under way for a region-wide FTA, it is learnt. Such an agreement will be beneficial for both the GCC and the UK as the GCC is the 4th largest trade partner with the UK after the US, Europe and China. The GCC was previously unsuccessful in establishing an FTA with the European Union, however since triggering Article 50 of the Lisbon Treaty to formally begin the process of exiting the EU, British Prime Minister Theresa May has looked for improved trade relations with the GCC. 

Philippines, Israel sign deal to strengthen economic ties

The Philippines and Israel have vowed to strengthen bilateral economic relations by signing the Investment Promotion and Protection Agreement (IPPA). The agreement was officially signed by Trade Secretary Ramon Lopez and Israel Finance Minister Avigdor Lieberman in Jerusalem, Israel on June 7, 2022. The two countries agreed to cover national treatment, most favored nation treatment, free transfers, rules-based expropriation and compensation, and investor-state dispute settlement under the IPPA. Among the industries prioritized under the IPPA include agro-tech, life sciences and healthcare, water technologies, high-technology and semiconductors, cybersecurity, financial technology, defense industry, smart transportation, clean technology, smart manufacturing, and the diamond industry. 

Taiwan and US to launch trade talks

Taiwan and the US yesterday announced that they would commence negotiations on a new trade agreement, dubbed the “Taiwan-US Initiative on 21st-century Trade,” signaling a breakthrough after Taiwan was excluded from a US-led regional trade framework. The first round of negotiations would be held in Washington at the end of this month. The negotiations would cover 11 areas, but would not include tariffs. The 11 areas include trade facilitation, agricultural trade, fighting corruption, common standards on digital trade, workers’ rights, environmental regulations and state-owned companies. The bilateral initiative largely parallels US President Joe Biden’s Indo-Pacific Economic Framework (IPEF), an economic partnership with 13 Asian countries that he launched last week during a visit to Seoul and Tokyo. Taiwan was not included, although more than 200 members of the US Congress had called for its inclusion. 

UK: New Bill to enable implementation of Australia and New Zealand trade deals

The UK government has introduced a bill which will help to bring into force its first independently negotiated Free Trade Agreements in more than 50 years. The UK signed the Australia Agreement in December and the New Zealand Agreement in February. Together, they will deliver benefits to people, businesses and communities throughout the country and support the levelling-up agenda.
The UK-Australia Agreement is expected to increase trade by 53 percent, boost the economy by £2.3 billion and increase wages each year in the long-run. The UK-New Zealand Agreement is expected to increase trade by almost 60 percent and boost the economy by £800 million.
Introducing this Bill is an important step in ratifying these trade agreements so that UK businesses can begin benefiting and expanding their trade with Australia and New Zealand as soon as possible. To bring these agreements into force, the following will have to happen:

• Parliament must formally scrutinise the agreements under the Constitutional Reform and Governance Act.
• The Trade (Australia and New Zealand) Bill has to be agreed by Parliament.
• Necessary secondary legislation has to be passed by Parliament to make the changes required to our procurement regime to meet the terms of the Agreements.
• Only once the steps above have been completed can these agreements be ratified and brought into force.

In line with our commitment to transparency and scrutiny, the government has:

• Published the full text for both agreements as soon as they were signed, along with full independently scrutinised impact assessments.
• Ensured the Trade and Agriculture Commission – a panel of independent experts – has over three months to report on the agreements. The Trade & Agriculture Commission’s report on the UK-Australia Agreement was published on 13 April. The Commission is due to report on the UK-New Zealand Agreement in June.