Preferential Trade updates December 2022

Australia targets EU trade deal in first half of 2023

Australia is pushing to seal a free trade agreement with EU authorities in the first half of 2023. The European Union and Australia opened free trade negotiations in 2018 and have held 13 rounds of talks. But a deal has been held up by EU concerns over Australia’s climate change commitments and a bust-up over Canberra’s cancellation of a submarine contract with France last year. 

Australia eyes digital services pact with India

Australia is eyeing a pact on digital services as part of the Comprehensive Economic Partnership Agreement with India as the two countries aim to upgrade the bilateral relationship. Watts was in India to attend the Bengaluru Tech Summit and represent Australia at the Third Ministerial Conference on Counter-Terrorism Financing. According to the Australian government’s India Economic Strategy to 2035, an agreement could facilitate digital trade by including modern and forward-looking rules that support the use of digital tools to enable trade.

Bangladesh, Japan to conduct feasibility study for signing FTA

Bangladesh and Japan jointly announced the launching of a feasibility study on the future signing of a Free Trade Agreement (FTA) or Economic Partnership Agreement (EPA) to boost the bilateral trade between the two friendly countries. Commerce Minister of Japan announced the launching of the feasibility study at a press conference held at the Ministry of Commerce at Bangladesh Secretariat in the capital.

Cambodia-Korea FTA came into force

The Cambodia-Korea Free Trade Agreement or CKFTA has entered into force on 01 December 2022 and will be used by two parties to encourage more investors from The Republic of South Korea to invest in the Kingdom and export products to the Korean counterpart and third countries, according to a senior official of the Ministry of Commerce (MoC). Article 10.10 of CKFTA states that the free trade agreement between the two countries shall be effective 60 days after Cambodia obtained a diplomatic notification from its South Korean counterpart as per their negotiation and consent, said an official, who is also the spokesman of MoC.

EU and Chile strengthen a comprehensive political and trade partnership

The European Union and Chile have concluded negotiations on the EU-Chile Advanced Framework Agreement at a meeting between the Executive Vice-President and Commissioner for Trade and the High Representative/Vice-President, with the Chilean Minister of Foreign Affairs. This landmark agreement is of key geopolitical importance: with the new Advanced Framework Agreement, the EU and Chile take their partnership to the next level to strengthen political dialogue, deepen cooperation and foster trade and investment opportunities. In particular, the agreement puts shared values such as human rights, sustainable trade and gender equality at the core of EU-Chile relations. It strengthens EU-Chile cooperation on shared global challenges, such as the fight against climate change and the environment.  The agreement will deepen EU-Chile trade and investment relations and provide new opportunities for EU businesses in Latin America's fifth largest economy:

• 99,9% of EU exports will be tariff free, which is expected to increase EU exports to Chile by up to 4,5 billion euros.
• Greater access to raw materials and clean fuel crucial for the transition to the green economy, such as lithium, copper, and hydrogen.
• Easier for EU companies to provide their services in Chile, including in delivery, telecommunications, maritime transport and financial services.
• Same treatment for EU investors in Chile as for Chilean investors, including in the energy and raw material sector, and vice versa.
• Improved access for EU companies to Chilean government procurement contracts for goods, services, works and works concessions, and vice versa.
• A dedicated chapter on small and medium enterprises to help ensure that smaller businesses fully benefit from the agreement, including by cutting red tape.

Ghana, six others begin trade under AfCFTA

Ghana and six other countries have started trading goods and services under the African Continental Free Trade Area (AfCFTA). The countries are Cameroon, Egypt, Kenya, Rwanda, Tanzania, and Mauritius. Ghana has supplied palm oil, ceramic tiles, and cashew products to Kenya and Cameroon, while Kenya shipped its consignment of coffee, tea, and car batteries to Ghana. The AfCFTA Secretariat launched the Guided Trade Initiative in October, 2022, in Accra, which seeks to allow commercially meaningful trading and test the operational, institutional, legal, and trade policy environments under the AfCFTA. 

Israel and Bahrain expected to close free trade agreement

Israel and Bahrain are close to finalizing a free trade agreement, just over two years after the Gulf state, alongside the United Arab Emirates, signed an agreement to normalize ties with Israel, becoming the first Arab states in a quarter-century to recognize the Jewish state.

India, Canada likely to sign free trade pact

India and Canada are on the verge of signing the Free Trade Agreement, the sources observing the development say. “Five rounds of trade talks have been held between India and Canada; the last round got over on November 18. The sectors that talks have focused on include small and medium enterprises (SMEs), environment, labour and gender. This was excluding traditional matters under the Early Progress Trade Agreement (EPTA) that was relaunched in March. This would be followed by the Comprehensive Economic Partnership Agreement (CEPA) followed by the FTA. 
The joint statement of the MDTI emphasised that the agreement would help in expanding bilateral trade in goods and services by unlocking the potential across sectors. Both ministers agreed to formally re-launch the negotiations for India-Canada Comprehensive Economic Partnership Agreement (CEPA) and also consider an interim agreement or early progress trade agreement that could bring early commercial gains to both the countries.
The interim agreement would include high-level commitments in goods, services, rules of origin, sanitary and phytosanitary measures, technical barriers to trade, and dispute settlement, and may also cover any other areas mutually agreed upon.

India-UK FTA lands in row over patent evergreening

A clause allowing patent evergreening in the India-UK free trade agreement will harm India’s generics industry and the UK’s healthcare service that is dependent on Indian drugs, The Lancet warned, prompting the UK to declare the future of its health service is “not on the table". Controversy ballooned after a leaked draft intellectual property chapter of the FTA was said to include a clause that would allow British pharma companies to ‘evergreen’ their drug patents. Evergreening is the practice of companies filing for patent extensions by making minor changes to their drugs just before the patent expires at 20 years.

US-Japan beef trade agreement amendment to begin from January 1, 2023

United States Trade Representative and Japan’s Ambassador to the United States confirmed in an exchange of letters that amendments to the beef safeguard trigger level under the U.S.-Japan Trade Agreement (USJTA) will enter into force on January 1, 2023. The letters confirm that both countries have completed their respective domestic procedures with respect to the June 2, 2022, Protocol Amending the Trade Agreement Between Japan and the United States of America (Protocol) and also confirm the agreed upon entry into force date of January 1.

UAE, Israeli ratify comprehensive economic partnership agreement

The governments of the United Arab Emirates and Israel ratified their comprehensive economic partnership agreement, UAE minister of state for foreign trade confirmed. The free trade agreement, which was first signed in May, will remove or reduce tariffs on 96% of goods traded between the nations.