Highlights
The European Parliament adopted on 5 April a resolution setting out its red lines on the upcoming negotiations with the United Kingdom following its 29 March notification that it intends to withdraw from the European Union. In the resolution adopted with an overwhelming majority (516 votes in favour, 133 against, with 50 abstentions) it is stated that only when “substantial progress” has been made in talks on how the UK is to leave the EU can discussions begin on possible transitional arrangements. Trade will be in the focus. These arrangements must not last longer than three years, while an agreement on a future relationship can only be concluded once the UK has left the EU. Between 18 and 20 April a delegation of trade MEPs paid a visit to Côte d'Ivoire and Ghana to debate the implementation of the interim Economic and Partnership Agreements (iEPA) with the two countries. Between 22 and 24 May a delegation of INTA members will be in Jakarta to debate with government, parliament, industry and civil society representatives the prospects of closer trade and investment ties between the EU and Indonesia. Trade MEPs are set to meet on 3 and 4 May with a packed agenda that will include among others two hearings and votes on the fertilisers regulation, EU accession to the International Cotton Advisory Committee (ICAC) and macro-financial assistance to Moldova.
Michel Barnier – Chief Negotiator for the Preparation and Conduct of the Negotiations with the United Kingdom (debate in the European Parliament on 5 April 2017)
“[…] the sooner we agree on the principles of an orderly withdrawal, the sooner we can prepare our future relations in trade: obviously, a free and fair trade agreement, a level playing field, but also in security and defence. It is on the basis of these three conditions – unity, lifting uncertainty, and phasing of negotiations – that we can succeed […]”
EP presses for swift agreement on TDI files
Trilogue negotiations between Council and Parliament on the modernisation of Trade Defence Instruments (report by Christofer Fjellner EPP, SE) continued in April with a second trilogue taking place on Thursday 27 April. INTA MEPs are set to debate on Thursday 4 May the draft report by Salvatore Cicu (EPP, IT) on the new methodology of TDI calculation.
Modernisation of trade ties with Turkey under scrutiny
During their last Committee meeting, trade MEPs decided to postpone the vote on the report by David Borrelli (EFDD, IT) on the modernisation of the Customs Union with Turkey in order to allow for a comprehensive debate to take place in plenary on Wednesday 26 April on EU-Turkey relations in the aftermath of the 16 April constitutional referendum. In February Chairman Lange wrote to Maltese Economy Minister Christian Cardona, urging the Council presidency not to authorise the opening of trade negotiations with Turkey before the European Parliament had stated its position on the proposed negotiating mandate.
Trade MEPs to weigh in on EU-Cuba relations
INTA members will debate whether to give their go ahead to the Political Dialogue and Cooperation Agreement (PDCA) between the EU and Cuba as well as the resolution accompanying the decision (INTA rapporteur Reimer Böge – EPP, DE). Council may only adopt the act following the consent of the European Parliament. Relations between the EU and Cuba are currently governed by the December 1996 EU's Common Position 96/697/CFSP. The negotiations between the EU and Cuba on the PDCA began in April 2014 and were concluded after seven rounds in March 2016. The agreement builds on a three-pillar structure: political dialogue, cooperation and sector policy dialogue and trade cooperation. The trade part of the agreement codifies the conventional (WTO-related) basis for EU-Cuba trade and includes provisions on trade facilitation and cooperation in areas such as technical barriers to trade and standards, with a view to improving the prospects for deeper economic relations. It also includes a clause envisaging the future development of a stronger framework for investments.
Trade MEPs in West Africa to scrutinise interim EPAs
A delegation of six trade MEPs headed by INTA Chair Bernd Lange (S&D, DE) visited Côte d'Ivoire and Ghana between 18 and 20 April to highlight the political commitment of the European Parliament to strengthening ties with Western African partners. The delegation emphasised the importance of fast implementation of the interim Economic Partnership Agreements (iEPA) pending the signature of regional EPAs by other members of the Economic Community of West African States (ECOWAS). The meetings with trade ministers and parliaments of both countries were an opportunity to have a frank exchange on the implementation challenges ahead. The INTA Delegation also met with EU and local business representatives, various NGOs, UNICEF, EU Ambassadors, trade unions and think tanks. The delegation also focused on assessing whether the iEPAs live up to their promise of being genuine and sustainable trade and development agreements. In this respect MEPs held a visit to a sustainable banana plantation and to a chocolate factory.
Further strengthening of EU-Chile ties in sight
At their upcoming meeting, trade MEPs will debate three items related to EU-Chile relations: the agreement between the EU and the Republic of Chile on trade in organic products, the protocol to the EU-Chile Association Agreement to take account of the accession of Croatia to the EU and finally they will hold a first exchange of views on the recommendations to the Council, Commission and the EEAS on the modernisation of the trade pillar of the EU-Chile Association Agreement. The rapporteur for all three files is Inmaculada Rodríguez-Piñero Fernández (S&D, ES). Chile was the first South American country to conclude an Association Agreement with the EU. The trade pillar of the EU-Chile Association Agreement entered into force in February 2003. The FTA included in the trade pillar has brought about a significant increase in trade in goods and services between the EU and Chile. In 2015 bilateral trade in goods had more than doubled, from the initial € 7.7 billion in 2003 to € 16.6 billion in 2015. Yet both Chile and EU are now readying for an update of the 14-year old agreement to realise the untapped potential of enhanced trade and investment flows.
INTA to vote on EU accession to International Cotton Advisory Committee
The International Cotton Advisory Committee (ICAC) is the International Commodity Body (ICB) for cotton. Its goal is to assist governments in fostering a healthy world cotton economy. ICAC acts as a statistical observer and brings together producing, consuming, and trading countries and all segments of the cotton industry acting as a facilitator. To date, the ICAC is one of the few ICBs where the EU is not a member, whereas nine Member States have been members of the ICAC in their own right. These Member States have withdrawn their membership in anticipation of the EU accession. The European Parliament has to approve the EU’s bid to ICAC membership. INTA will vote on the report by Fernando Ruas (EPP, PT) on 4 May, whilst the vote in plenary is foreseen for Thursday 18 May.
Bangladesh and the Sustainability Compact
INTA is currently working on a resolution on the “State-of-play of the implementation of the Sustainability Compact in Bangladesh”. The INTA Standing Rapporteur for South Asia, Mr. Sajjad Karim (ECR, UK) will present his draft resolution to be considered at the next INTA Committee’s meeting on 3 May. The following day INTA will adopt questions for oral answer to the Commission on this matter. The ‘Sustainability Compact’ was set-up in 2013 by the ILO, the Commission and key trading partners to strengthen labour rights as well as to improve health and safety in the ready-made-garment sector. A parliamentary delegation to Bangladesh in November 2016 could already ascertain progress as regards health and safety at work in the garment sector. However, the upcoming review of the Compact on 18 May as well as recent developments like the arrest of trade union leaders and other threats to labour rights in Bangladesh, has prompted the INTA Committee to take action and follow-up more closely on recent developments. The EP resolution aims also at contributing to the enhanced dialogue on human and labour rights, which the Commission has launched with Bangladesh in March based on the GSP regulation.
Business and human rights in EU external policies – Joint INTA-DROI hearing
When companies work internationally in global value chains, their responsibility to society at large needs to be reviewed. In a joint hearing INTA and DROI members will discuss with experts from business, civil society and international organisations, such as UN and OECD, what are the most effective mechanisms and what policy tools can be used to ensure companies respect human rights. Tools to be discussed could include Corporate Social Responsibility (CSR) clauses, the Non-Financial Reporting Directive, mandatory due diligence, labels and preferential access to public procurement contracts in case of good company behaviour.
INTA Hearing on Rules of Origins in Trade in Goods
Rules of origin are a key criterion to determine the national source of a product and in turn the duties and restrictions which may apply to such product. Despite being an essential element for the proper conduct of global trade, governments across the world apply a number of different practices with regard to the rules of origin: substantial transformation, change of tariff classification, ad valorem percentage and the manufacturing or processing operation criteria are all used to different degrees. The misuse of rules of origin may transform them into a trade policy instrument hampering the smooth running of trade. INTA aims to hear from academics, practitioners and government representatives what the shortcomings of the current system are and how they can best be addressed in the light of increasingly faster and heavily interconnected production chains.
INTA-FEMM hearing: Gender Equality in EU Trade Agreements
The International Trade and the Women’s Rights and Gender Equality Committees will hold a joint hearing on 11 May. The promotion of gender equality is a core priority of the EU. However, certain policy areas, including trade policy, have not yet been fully explored in the pursuit of this goal. Research has shown that trade and investment agreements have different effects on women and men, and that trade is not a "gender neutral" policy area. The hearing will count of the participation of academic, civic society and the European Commission representatives. The hearing will give elements for drafting a future joint own initiative report on the same topic.
INTA in plenary
On Monday 15 May, MEPs are set to debate the report by Tiziana Beghin (EFDD, IT) on the evaluation of external aspects of the customs performance and management as a tool to facilitate trade and fight illicit trade and the vote is set to follow on the next day. On Tuesday 16 May, the plenary will debate the report by Adam Szejnfeld (EPP, PL) on the implementation of the EU-Korea Free Trade Agreement and will vote on it on Wednesday. On Tuesday 16 May the plenary will also debate the report on the implementation of the sustainability compact in Bangladesh and the report by David Borrelli (EFDD, IT) on the EU-Norway agreement with respect to the EEA Financial Mechanism 2014-2021 and the increase in Norwegian duties on agricultural products/recent negotiations on the fish trade protocol. Finally, on Thursday 18 May the plenary is set to vote on the EU accession to ICAC.
RECENT TRADE NEWS
“Mauritius Convention on Transparency” set to enter into force
With the ratification by Switzerland, the United Nations Convention on Transparency in Treaty-based Investor-State Arbitration is now set to enter into force on 18 October 2017. Following Canada and the Mauritius, Switzerland is the third state to ratify the “Mauritius Convention on Transparency” as the text is commonly known. The convention aims to provide states and regional economic integration organisations with an efficient mechanism that extends the scope of the UNCITRAL (United Nations Commission on International Trade Law) Rules on Transparency in Treaty-based investor-State Arbitration to investment treaties concluded before the Rules entered into force on 1 April 2014. The Rules on Transparency provide procedural guidelines that guarantee transparency and public access to treaty-based investor-State arbitration.
EU and Mercosur conclude 27th round of negotiation
The European Union and Mercosur concluded on 24 March in Buenos Aires the 27th round of negotiations on a future Association Agreement. According to the final joint communiqué substantial progress was achieved in the three parts of the future agreement: the Trade Part, Political Dialogue and Bi-Regional Cooperation. The EU tabled among others textual proposals on Trade and Sustainable Development, Transparency, access to energy and raw materials, an annex on technical barriers to trade in the automotive sector, and a proposal on agriculture. The documents are available on DG Trade “Transparency in Action” website. The next negotiating Round will take place in Brussels in July, preceded by an inter-sessional meeting of the Trade Part in Buenos Aires, in late May.
STATE OF PLAY OF EU TRADE DISPUTE SETTLEMENT
Appellate Body on Russian pigs imports ban
Following the circulation of the Appellate Body report in the case on Measures on the Importation of Live Pigs, Pork and Other Pig Products. The WTO Appellate Body has affirmed that the Russian Federation violated its WTO obligations by imposing an EU-wide ban on live pigs and pork products, in breach of the WTO Agreement on the Application of Sanitary and Phytosanitary Measures (the "SPS Agreement"). The DSB adopted the Appellate Body report and the panel report, as modified by the Appellate Body report on 21 March 2017, the two parties may agree on a reasonable period of time for Russia to comply. If there is no agreement, this period will be decided by an arbitrator.
Panel established in China Anti-Dumping Complaint against EU
In December 2016 China lodged a complaint against the EU at the WTO, regarding anti-dumping proceedings. After the issue was not solved during the three month consultation period the Chinese delegation on 9 March, requested for a dispute settlement panel to be established. The European Union said it regretted China's decision to request the establishment of a panel. The measure at issue, Article 2(7) of the EU's Basic Regulation, is currently the subject of an internal legislative process, which could result in its withdrawal. Consequently, the EU called on China to withdraw its panel request. Following China’s second request, however the Dispute Settlement Body agreed to establish a panel at its special meeting of 3 April 2017. Australia, Brazil, Canada, Colombia, Ecuador, India, Indonesia, Japan, Kazakhstan, Korea, Mexico, Norway, the Russian Federation, Chinese Taipei, Turkey and the United States reserved their third party rights to participate in the panel proceedings.
Panel report partly backs China over EU poultry quotas
At a meeting on 19 April 2017, the WTO’s Dispute Settlement Body (DSB) adopted the panel report regarding the European Union’s allocation of tariff rate quotas on imports of poultry meat products. In the report, a WTO dispute settlement panel agreed with China that the EU’s March 2013 amendment giving Brazil and Thailand the bulk of access to the EU's low-tariff quota for certain poultry products was “inconsistent” with Article XIII: 2 of the General Agreement on Tariffs and Trade. The panel rejected various other claims from China in the proceeding. In those claims, China alleged violations of Article XXVIII: 1, Article XXVIII: 2, Article XXVIII, Article XIII: 2(d) and others. The rejected claims cover allegations that the EU failed to “maintain a general level of reciprocal and mutually advantageous concessions not less favourable to trade than that existing prior to the modification,” refused to enter into “meaningful” discussions with China and failed to annually update the initial TRQ allocations, among other things, according to the report. The EU welcomed the findings of the panel and accepted the adoption of the panel report.
TRADE NEGOTIATIONS
EU-China Investment Agreement: 13th round of negotiations, 15-19 May, Beijing, China
EU-Japan Free Trade Agreement: 19th round of negotiations, 15-19 May, Brussels, Belgium
PUBLICATIONS
DG EXPO Policy Department
Studies and workshops:
INTA/DEVE joint study on "Human rights provisions in Economic Partnership Agreements in light of the expiry of the Cotonou Agreement in 2020"
Upcoming publication: INTA study “Openness of public procurement markets in key third countries"
European Parliamentary Research Service
EU flagship initiative on the garment sector, Krisztina Binder, At a Glance, European Parliament, EPRS, 2017, 1 p.
Mexico: Economic indicators and trade with EU, Giulio Sabbati, Enrique Gomez Ramirez and Caterina Francesca Guidi, EPRS/EUI At a Glance - GlobalStat, March 2017, 2 p.
EP Research Service library collection
International Trade Agreements Before Domestic Courts : Lessons from the EU and Brazilian Experiences, Maria Angela Jardim de Santa Cruz Oliveira, Springer, xi-209 p., 2015, "This comparative study analyzes the differences, similarities and consequences of Brazilian and European courts’ decisions in relation to the WTO agreements, which have “direct effect” in Latin American emerging economies, but not in the European Union or other developed countries."
Looking Behind the Label : Global Industries and the Conscientious Consumer, Tim Bartley, Sebastian Koos, Hiram, Indiana University Press, 304 p., 2015, "This book presents an informative introduction to global production and ethical consumption, tracing the links between consumers' choices and the practices of multinational producers and retailers. Case studies of several types of products—wood and paper, food, apparel and footwear, and electronics—are used to reveal what lies behind voluntary rules and to critique predominant assumptions about ethical consumption as a form of political expression."
Cultural politics and the transatlantic divide over GMOs, Hannes R. Stephan, Palgrave Macmillan, 267 p., 2015, “Alongside other factors, cultural values and identities help to explain different regulatory frameworks for genetically modified organisms. This book uses insights from environmental history and sociology to illuminate the cultural politics of regulation in the US and the EU, with particular attention to public opinion and anti-GMO activism.”
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International investment agreements and EU law, Tomás Fecák, Kluwer Law International, xv-582 p., 2016, “This book examines the competence of the EU to conclude investment treaties in the light of the investment protection rules of IIAs, explores how far the EU regime for cross-border investment and investors’ rights under IIAs can be considered comparable, and brings about an extensive analysis of existing agreements of Member States and their compatibility with EU law, with detailed investigation of how the potentially conflicting obligations of Member States under the two regimes can be reconciled.”