Preferential Trade updates March 2023

ASEAN, Australia, New Zealand complete negotiation for FTA upgrade

The Joint Committee (FJC) for the ASEAN-Australia-New Zealand Free Trade Area (AANZFTA) agreement has completed the negotiations for upgrading the plurilateral free trade deal at its recent 20th meeting in Indonesia. Dina Kurniasari, Director General of ASEAN Negotiation under the Indonesian Ministry of Trade, said that compared to the current agreement, the upgraded version will make it easier for businesses to exploit the ASEAN, Australian and New Zealand markets. It is also designed to be more responsive, adaptive and flexible to emergencies such as future pandemics or natural disasters.

In a press release, the official said the Second Protocol to Amend the Agreement Establishing the AANZFTA could be one of Indonesia’s achievements in its role as Chairman of the Association of Southeast Asian Nations (ASEAN) this year. The Agreement Establishing the AANZFTA was inked in Thailand on February 27, 2009. In 2021, total merchandise trade between ASEAN and Australia reached 81.6 billion USD, up 49% year-on-year and higher than pre-COVID-19 rates. Meanwhile, trade between the bloc and New Zealand hit 11 billion USD, growing by 22.5% annually. Also last year, FDI from Australia and New Zealand to ASEAN amounted to 589 million USD.

Botswana becomes 45th AU member to ratify African continental free trade agreement

Botswana has deposited its instrument ratifying the African Continental Free Trade Area (AfCFTA) agreement with African Union Commission Chairperson Moussa Faki Mahamat, local media reported. The southern African country becomes the 45th African Union (AU) member to ratify the AfCFTA. Botswana President Mokgweetsi Masisi presented the document to Faki at the the 36th Ordinary Session of the Assembly of Heads of State and Government of the AU in Addis Ababa, Ethiopia, on Sunday. The AfCFTA aims to boost intra-African trade in goods and services, covering 55 AU members with a population of 1.4 billion people and an estimated gross domestic product (GDP) of more than 3.4 trillion U.S. dollars.

Canada requests formal talks with Mexico on GMO restrictions

Canada has asked for formal consultations with Mexico over its restrictions on genetically modified (GM) agricultural imports under the North American free-trade agreement. Mexico plans to regulate GM corn for human consumption, which U.S. officials say puts some $5 billion of U.S. corn exports to Mexico at risk and could stifle biotechnology innovation. Canada however is not a major corn exporter and Ottawa is concerned overall about Mexico putting arbitrary prohibitions on agriculture produced using biotechnology, Bloomberg reported.

Colombia, Venezuela revive trade deal after 4-year suspension

The leaders of Colombia and Venezuela renewed a trade deal that had been suspended for four years, in the latest rapprochement between the neighbours. Venezuelan leader Nicolas Maduro, in a signing ceremony with Colombian President Gustavo Petro at a bridge border crossing, said he was committed to establishing a joint "economic zone" with specific conditions for trade. The original agreement had been signed in 2011 after Venezuela’s then-president Hugo Chavez chose to exit the Andean Community (CAN), a free-trade group which Colombia remains a part of. In 2008, trade between the two South American countries reached $7.2 billion, before plummeting to around $400 million during the diplomatic rupture. Resumption of normalized trade has brought that figure back up to $1.2 billion in 2022, according to estimates by the Colombian-Venezuelan Chamber of Integration (Cavecol).

Costa Rica and Ecuador sign trade agreement

Costa Rican and Ecuador has signed a trade agreement in San Jose. Such an agreement is a nod toward “the path of open trade” in the face of protectionist tendencies. The deal focuses on goods exports, plus facilitating discussions on best practices for gender-related issues in trade, workers’ rights, environmentalism and corporate responsibility, according to a statement from the Ecuadoran presidency. The plan will offer preferential access to 97 percent of Ecuador’s exports to Costa Rica, including paper, textiles and fishing products, among others, according to a statement from the Ecuadoran presidency. Costa Rican products covered under the agreement include raw materials such as steel and iron, along with medical supplies.

EAEU, UAE hold first round of FTA negotiations

The first round of negotiations on a free trade agreement between the Eurasian Economic Union (EAEU) and the United Arab Emirates (UAE) took place in Dubai on 6-8 March, BelTA learned from the press service of the Eurasian Economic Commission. The parties discussed the regulatory part of the future agreement, and identified key parameters to liberalize access to each other’s markets.

India-UK FTA talks covered 11 policy areas in seventh round

The seventh round of India-UK free trade agreement (FTA) talks concluded following technical discussions across 11 policy areas over 43 separate sessions between negotiators from both sides here last month. In an outcome statement released, the Department for Business and Trade did not give any further details on the policy areas covered, but confirmed that the eighth round of talks is due to take place in a few weeks’ time.

India, Iceland review ties, status of negotiations on trade agreement

The India-EFTA Trade and Economic Partnership Agreement (TEPA) negotiations started in October 2008. Several rounds of negotiations have been held so far. India and Iceland Monday reviewed the status of ties, including trade and investments and the India-EFTA Trade and Economic Partnership Agreement (TEPA) negotiations. India and Iceland held their third Foreign Office Consultations with the Indian side led by Sanjay Verma, Secretary (West), Ministry of External Affairs, and the Iceland side led by Martin Eyjlfsson, Permanent Secretary of State in Iceland’s Ministry of Foreign Affairs. During the talks, both sides comprehensively reviewed the status of relations in all fields, including political, trade and investments, India-EFTA-TEPA negotiations, fisheries, geothermal cooperation, capacity building, cultural relations and people-to-people contacts, a Ministry of External Affairs statement said. EFTA is limited to four countries - Switzerland, Norway, Iceland and Liechtenstein.

Iran, Pakistan negotiating free trade agreement

Iran and Pakistan are negotiating a free trade agreement with the aim of boosting their mutual trade to a targeted five billion dollars per year, an official with Iran’s Trade Promotion Organization (TPO) said. According to Qanadzadeh, the main draft of the FTA has been prepared and reviewed by the governments of the two countries and the two sides are currently working on a list of commodities to be included in the agreement. In December 2016, Iran and Pakistan started negotiating an FTA with the resolve to timely complete the negotiation process and achieve the objective of enhancing bilateral trade for the betterment of the people of both countries. The talks were an outcome of a memorandum signed by Islamabad and Tehran on a five-year strategic trade cooperation plan in March 2016.

South Korea and the GCC continue discussion for free trade agreement

South Korea is continuing negotiations on a free trade agreement with the Gulf Cooperation Council to enhance its energy security and improve the economics of importing sour crude from the Middle East. Discussions focus on opening markets for products and services, improving environmental trading conditions and intellectual property rights. Oil industry sources in Seoul and Ulsan say the free trade agreement between South Korea and the Gulf Cooperation Council would enhance the Asian nation’s energy security and help improve the economics of importing sour crude from the Middle East.

Türkiye, UAE sign free trade deal as ties improve

The oil-rich United Arab Emirates and Türkiye signed a free trade agreement on March 3, the Gulf country’s president said, the latest step in improving ties long strained by regional disputes. Turkish Trade Minister Mehmet Muş attended the signing in Abu Dhabi during a video summit between Sheikh Mohammed and President Recep Tayyip Erdoğan. The pact aims to eliminate or reduce customs duties on 82 percent of goods and products, accounting for more than 93 percent of non-oil trade, the official WAM news agency reported. Türkiye and the UAE have backed opposing sides in regional conflicts and have sparred over issues including gas exploration in the eastern Mediterranean.

US demands formal talks with Mexico over GMO corn dispute

The United States requested formal trade consultations with Mexico on Monday over U.S. objections to its southern neighbor’s plans to limit imports of genetically modified corn and other agricultural biotechnology products. The U.S. Trade Representative’s office announced the request for technical talks after months of informal discussions with Mexican officials over their plans to ban GMO corn for human consumption failed to satisfy U.S. trade officials. The consultations are the first formal step toward a U.S. request for a dispute settlement panel under the U.S.-Mexico-Canada Agreement on trade (USMCA) that could ultimately lead to retaliatory U.S. tariffs if no resolution is reached. The dispute could further strain U.S.-Mexico relations. U.S. officials say it puts some $5 billion of U.S. corn exports to Mexico at risk and could stifle biotechnology innovation at a time of high food inflation as increasingly severe weather threatens crop production.