Preferential Trade updates October 2022
AfCFTA launches guided trade initiative for seven countries
The African Continental Free Trade Area (AfCFTA) secretariat based in Accra, the capital of Ghana, launched a guided trade initiative for seven member countries. These seven countries which have signaled their readiness to start trading under AfCFTA were Tanzania, Mauritania, Kenya, Egypt, Cameroon, Rwanda, and Ghana. Secretary-General of the AfCFTA said at least 96 different products from the seven countries could be freely traded under the rules of AfCFTA. Products approved to trade under AfCFTA include horticultural products, pharmaceuticals, rubber, aluminum kitchenware, sugar, steel, and wooden products. These products originating from Africa will enjoy duty-free and quota-free trading among the partnering countries.
Chilean lawmakers approve Trans-Pacific Partnership
Chile’s congress voted to approve the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) trade deal after four years of legislative debate. Twenty-seven senators voted for the world’s largest copper producer to join the 11-country trade deal while 10 voted against and one senator abstained. The government had said the CPTPP was not part of its program, and it would not promote or hinder its passage. The trade deal had become a source of political debate, and protesters against the CPTPP gathered outside the Senate building on Tuesday to oppose the deal.
EU: Commission reports on ninth negotiation round with five Eastern and Southern African countries to deepen existing Economic Partnership Agreement
The European Commission has published the report summarising progress made during the latest negotiation round to deepen the existing Economic Partnership Agreement (EPA) with five Eastern and Southern African partners. As part of its transparency commitment, the European Commission has published the report summarising progress made during the latest negotiation round to deepen the existing Economic Partnership Agreement (EPA) with five Eastern and Southern African partners (ESA5): Comoros, Madagascar, Mauritius, Seychelles and Zimbabwe. The ninth negotiation round took place both in Antananarivo and via video conference between 19 and 23 September 2022. This round included all issues covered by this negotiation process except for the sanitary and phytosanitary and the customs and trade facilitation chapters. The meeting was held in a positive and constructive atmosphere. Progress varied depending on the thematic chapter.
The next round is tentatively scheduled to take place in December in Brussels.
India, UAE discuss possibilities of bilateral trade in national currencies
India and the UAE discussed ways to enhance bilateral investments in key sectors such as food security, manufacturing, infrastructure, energy and technology. Both sides also discussed the creation of a mechanism for carrying out bilateral trade in national currencies. Referring to the ongoing discussions between Reserve Bank of India and Central Bank of the United Arab Emirates on Unified Payment Interface (UPI) as a common digital payments platform.
In the India-UAE joint task force on investment co-chaired by Commerce Minister along with member of the executive council of Emirate of Abu Dhabi, it was agreed that the two sides will explore setting up efficient and integrated single window solutions and virtual trade corridors to reduce costs and time involved in trade and investment related procedures. This was the first meeting of the joint task force since the signing of the India-UAE Comprehensive Economic Partnership Agreement (CEPA) and
unveiling of the Joint UAE-India Vision Statement in February.
Israel-South Korea free trade deal to take effect Dec. 1
A free trade agreement between Israel and South Korea will go into effect on Dec. 1, 2022. Israel's Economy Ministry said, in a move expected to lower the prices of Korean-made cars, toys, video game consoles and soy sauce. The agreement was ratified by Korea's parliament. The ministry estimated that it would also improve the competitiveness of Israeli exporters, since South Korea has 18 other free trade deals, and benefit Israel's economy by about 500 million shekels ($141 million) a year.
It expects to boost and diversify Israeli exports to South Korea, as well as encourage South Korean investments in the Israeli market. The free trade deal, signed in May 2021, is Israel's first with an Asian country and tariff reductions will apply to imports, exports as well as to investments, the ministry said. More than 95% of Israeli exports to South Korea will be duty free.
Japan and the European Union start negotiations to include provisions on the free flow of data into the Japan-EU EPA with the European Union
In accordance with the Article 8. 81 of the Japan-EU EPA (Economic Partnership Agreement), Japan and the European Union (EU) have been exchanging views on the reassessment of the need for including provisions on the free flow of data into the Agreement.
Both sides are now ready to start negotiations for the inclusion of such provisions into the Agreement, and will commence formal negotiations.
The first round of negotiations will take place on October 24, 2022 in Brussels.
Kazakhstan ratifies agreement on free trade zone between EAEU and Iran
Kazakh President Kassym-Jomart Tokayev signed a law on Oct. 12 ratifying the agreement that leads to the formation of a free trade zone between the Eurasian Economic Union (EAEU) and Iran, reported the Akorda press service.
The interim agreement was signed on May 17, 2018, in the capital of Kazakhstan. It entered into force on October 27, 2019, with a duration of three years. The goal of the agreement is to develop and strengthen trade relations between the EAEU countries and Iran. The trade turnover between Kazakhstan and Iran in January-April 2022 totaled $253.2 million, which is 43.3 percent higher than in the same period of the previous year ($176.8 million).
Exports from Kazakhstan to Iran in January-April 2022 increased by 44 percent and measured up to $175.7 million.
Korea ratifies free trade deals with Israel, Cambodia
South Korea Trade Minister announced on September 27 that the National Assembly has ratified Korea’s FTAs with Israel and Cambodia, respectively. The ROK-Israel FTA was finalized in August 2019 after six official negotiation rounds and submitted to the National Assembly this January. The ROK-Cambodia FTA was finalized in February 2021 after four official negotiation rounds and submitted to the National Assembly this February. All necessary processes on Korea’s part are now complete, and the matter of when the FTAs will come into effect are soon to be settled through talks. According to their FTAs’ terms, the agreement comes into effect either on the 60th day following the reporting of domestic ratification completion or on another mutually designated day.
The South Korean government will continue talks with each partner country to make sure the respective FTAs come into force without delay by the end of the year.
PH-S. Korea free trade deal seen entering into force in 2023
The Philippines is eyeing the entry into force of a free trade agreement (FTA) with South Korea next year, with the bilateral pact seen benefiting local banana and processed pineapple exporters in the form of reduced tariffs. Trade and Industry Undersecretary told reporters last week that the signing of the agreement in November would hopefully push through after a meeting with South Korean government officials later this week.
Spain to follow Italy and Poland and leave the Energy Charter
Spain has initiated proceedings to withdraw from the Energy Charter Treaty (ETC), signed by 53 countries and in force since 1998, designed to protect foreign investment in energy infrastructure, according to Politico. Investors have invoked the treaty to litigate against Spain in more than 50 cases over renewable energy cuts.
The third vice-president of the government and minister for Ecological Transition, Teresa Ribera, had already pointed out on numerous occasions the need to update the treaty to the new energy reality, which is greener and far removed from more traditional energy sources.
Finally, the government has decided to abandon the treaty, considering that these negotiations have not been ambitious enough to meet the objectives set out in the 2015 Paris Agreement. Other signatory countries that have also been critical are the Netherlands and Luxembourg.
UK and Gulf Cooperation Council trade negotiations update
The first round of negotiations for a Free Trade Agreement (FTA) between the United Kingdom (UK) and Gulf Cooperation Council (GCC) took place between 22 August and 29 September 2022. The negotiations were conducted virtually. In this round of negotiations, the UK and GCC discussed their objectives for the FTA and exchanged technical information. Technical discussions were held across 29 policy areas over 33 sessions. In total, more than 100 UK negotiators from across government took part in this round of negotiations. An FTA will be a substantial economic opportunity, and a significant moment in the UK - GCC relationship. Government analysis shows that, in the long-run, a deal with the GCC is expected to increase trade by at least 16 percent, add at least £1.6 billion a year to the UK economy and contribute an additional £600 million or more to UK workers’ annual wages.
Both sides have committed to secure an ambitious, comprehensive and modern agreement fit for the 21st century.
Ukraine: New agreements on closer cooperation between the EU and Ukraine on customs and taxation
The Commission has signed two agreements between the EU and Ukraine which pave the way for Ukraine’s participation in the EU’s Customs and Fiscalis programmes. This means that Ukraine will be able to take part in the activities of both programmes with EU Member States and other participating countries. It is a major boost for cooperation between the EU and Ukraine on customs and tax matters.
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.
The Customs programme also promotes cooperation between authorities, particularly through its support for the development and operation of the central IT systems for EU customs. The programme helps customs administrations to deal more efficiently with increasing trade flows and emerging trends and technologies, while providing a better response to security threats. Ukraine’s participation in the Customs programme will also include connection to the common secure customs network (CCN/CSI), necessary for Ukraine to apply the New Computerised Transit System (NCTS).