Preferential Trade updates February 2023

China-ASEAN negotiations enter next round

The first-round consultations of Version 3.0 China-ASEAN Free Trade Area (FTA) negotiations started on February 7. Relevant authorities of China and the ASEAN countries, as well as officials from the ASEAN Secretariat, attended the meeting via video link. The two sides held in-depth discussions on the procedural rules, organizational arrangements and work plans of the negotiations, and worked out a timetable and road map for follow-up negotiations. In November 2022, China and ASEAN jointly announced the official launch of the Version 3.0 China-ASEAN FTA negotiations. The two sides agreed that the negotiations will cover the fields including trade in goods, investment, digital and green economy, so as to build a more inclusive, modern, comprehensive and mutually beneficial China-ASEAN FTA.

EU and Singapore launch Digital Partnership

The EU and Singapore are strengthening their cooperation as strategic partners. Following the announcement of a new Digital Partnership between the EU and Singapore by President von der Leyen and Prime Minister Lee at the EU-ASEAN summit in December 2022, Commissioner for the Internal Market Thierry Breton and Singapore Minister of Industry and Trade S Iswaran signed a Digital Partnership that will strengthen cooperation between the EU and Singapore on digital technology areas. Executive Vice-President Dombrovskis and Minister Iswaran also signed Digital Trade Principles. A key deliverable of the Digital Partnership, the Principles seek to facilitate the free flow of goods and services in the digital economy, while upholding privacy.

The EU-Singapore Digital Partnership reflects the dynamic relation the EU has built with an open and outward-oriented economy and a vibrant logistics and financial hub in South-East Asia. Both sides have agreed to work together on critical areas such as semiconductors, trusted data flows and data innovation, digital trust, standards, digital trade facilitation, digital skills for workers, and the digital transformation of businesses and public services. This Partnership is in line with the 2030 Digital Compass, the European way for the Digital Decade and represents another key step in the implementation of the EU's Indo-Pacific Strategy.

The Digital Partnership will, for example:

• Enhance research cooperation in cutting-edge technologies such as Artificial Intelligence (AI) and semiconductors;
• Promote cooperation in regulatory approaches such as in the field of AI and Electronic Identification (eID);
• Foster investments in resilient and sustainable digital infrastructures, including data centres and submarine telecommunications cables for connectivity between the EU and Southeast Asia;
• Ensure trusted cross border data flows in compliance with data protection rules and other public policy objectives;
• Promote information exchange and cooperation in the field of cybersecurity;
• Build alliances in international organisations and standardisation fora;
• Facilitate digital trade, including by working towards joint projects such as paperless trading, electronic invoicing, electronic payments, electronic transactions framework.

EU-Moldova: New agreements on closer cooperation in the areas of customs and taxation

The Commission has signed two agreements between the EU and Moldova which cements Moldova’s participation in the EU’s Customs and Fiscalis programmes. This means that Moldova will be able to take part in the activities of both programmes alongside EU Member States and other participating countries. The agreements were signed by Paolo Gentiloni, EU Commissioner for Economy, and Natalia Gravrilita, Prime Minister of Moldova, back-to-back to the EU – Moldova Association Council meeting held in Brussels.

Moldova’s participation in Customs and Fiscalis programmes is an important step in further strengthening operational cooperation in the areas of customs and taxation and is emblematic of the mutual commitment towards closer ties. It will allow Moldovan customs and tax authorities to participate in various collaborative activities and to benefit from a wide-ranging training. All these new cooperation avenues are of particular importance considering Moldova’s status of candidate country to the EU.

Fiscalis is the EU’s programme for cooperation in the field of taxation. Amongst other things, it allows tax administrations to work together in fighting tax fraud, evasion and aggressive tax planning. The programme also facilitates information exchange and administrative cooperation between authorities and helps to reduce administrative burdens and compliance costs for taxpayers.

India: amended notification regarding India-UAE Comprehensive Economic Partnership Agreement.

India customs authority has further amended notification No. 22/2022-Customs regarding India-UAE Comprehensive Economic Partnership Agreement.

South Korea, Arab nations to hold new round of FTA talks

South Korea and a group of Arab countries will hold a new round of negotiations for their free trade deal in Saudi Arabia this week. The seventh round of talks for a bilateral free trade agreement (FTA) between South Korea and the Gulf Cooperation Council (GCC) will be held for a three-day run according to the Ministry of Trade, Industry and Energy. The GCC consists of six countries -- the United Arab Emirates, Bahrain, Saudi Arabia, Oman, Qatar and Kuwait. The two sides will discuss various issues, including goods and services trading, ways to improve trade conditions, digital trade and intellectual property rights, the ministry said. South Korea and the GCC resumed FTA negotiations last year after a 13-year hiatus, with the last session taking place in Seoul in October.

Qatar, Morocco Hold Second Round of Free Trade Agreement Negotiations

The second round of negotiations on the Free Trade Agreement between Qatar and Morocco took place on January 22 and January 23, 2023, at the headquarters of the Ministry of Commerce and Industry in Doha. Qatar’s representatives at the negotiations were headed by Saleh Abdullah Al Mana, Director of the Department of International Cooperation and Trade Agreements at the Ministry of Commerce and Industry, while the Moroccan delegation was headed by Abdelouahed Rahal, Director General of Trade at the Kingdom of Morocco’s Ministry of Industry and Trade. The second round of negotiations builds on the first round of negotiations, organised in the Moroccan capital, Rabat. The convening parties discussed ways to consolidate their comprehensive economic partnership and enhance trade and investment relations between the two countries, in order to serve their common interests. The free trade agreement comprises a means that supports inter-trade. Additionally, it contributes to increasing the volume of investments, increasing exports of both sides, organising competition, facilitating the free flow of goods and services, and settling trade transactions.

Thailand, UAE to form closer trade ties

Thailand and the United Arab Emirates (UAE) have agreed to form a Comprehensive Economic Partnership Agreement (CEPA) and establish a Joint Business Council to expand bilateral trade and investment cooperation. The two nations aim to complete the details of the planned agreement within six months.

The CEPA will help expand bilateral trade, investment and economic cooperation in terms of both depth and breadth. Thailand and UAE business sectors also signed a memorandum of understanding (MoU) to set up a Joint Business Council to move forward with trade, investment and economic cooperation. 

Thailand businesses in the logistics and transport sector also signed an MoU yesterday on logistics cooperation with Dubai World, a global air freight network with 78 ports and 240 airports around the world.

U.S. Establishes Second USMCA Dispute Panel on Canada Dairy TRQ Policies

United States Trade Representative Katherine Tai today announced that the United States is establishing a dispute settlement panel under the United States-Mexico-Canada Agreement (USMCA) regarding Canada’s dairy tariff-rate quota (TRQ) allocation measures. In this new panel proceeding, the United States is challenging Canada’s revised dairy TRQ allocation measures that use a market-share approach for determining TRQ allocations, and impose new conditions effectively prohibiting retailers, food service operators, and other types of importers from utilizing TRQ allocations.  Through these measures, Canada undermines the market access it agreed to provide in the USMCA.

The United States has raised concerns under the USMCA previously about Canada’s dairy TRQ allocation measures. In December 2021, a USMCA dispute settlement panel found Canada’s dairy TRQ allocation measures to be inconsistent with Canada’s USMCA obligations.  In response to the adverse findings of the panel, Canada introduced changes to its TRQ allocation measures, but these new policies are still inconsistent with Canada’s obligations under the USMCA.