International trade featured prominently at the G7 Summit in Taormina on 26-27 May and it is also set to be a key issue on the agenda of the G20 Summit in Hamburg on 7-8 July. In the final Taormina communiqué, leaders acknowledged that free, fair and mutually beneficial trade and investment are key engines for growth and job creation. Leaders also vowed to keep markets open and fight protectionism, while standing firm against all unfair trade practices. Trade was also a central theme at the EU-China Summit of 1-2 June in Brussels. There was no joint statement to wrap-up the meeting, but European Council President Donald Tusk underlined how EU-China cooperation continues to broaden and strengthen on issues like trade and investment, climate change and Africa.
During her exchange with INTA MEPs on 30 May, Commissioner Malmström stressed how, despite a more confrontational environment for trade and multilateralism worldwide, the EU is keen on defending a rules-based system and working towards a successful Ministerial Conference in Buenos Aires in December. The latter will be the main subject of the topical exchange between MEPs and WTO Director-General Roberto Azevêdo at the next INTA meeting. In the upcoming meeting MEPs will also debate the 400-plus amendments to the “Dual Use” report and they will vote on the agreements reached with Council after trilogue negotiations on granting macro-financial assistance to Moldova and granting temporary autonomous trade measures for Ukraine. MEPs will also vote on the amendments to the report on the new methodology of TDI calculations. The meeting will open with a discussion on a working document on the joint report by FEMM and INTA Committees on Gender Equality in EU Trade Agreements in the presence of the Executive Director of the International Trade Centre Arancha González. The meeting will be closed by a hearing on Intellectual Property Rights in International Trade.
“While Chinese investment into the European Union increased by 77% in 2016, the flow in the other direction declined by almost a quarter. To put that into context, EU investment into China last year was roughly 3% of what we invested into the United States […].We applaud the ambition of China's reform path. We recognise that reforms have been made and that plans have been established. But we would like to see implementation speed up – so that your policies are in line with your world vision.”
The road to Buenos Aires: Azevêdo in INTA
The Director-General of the World Trade Organization Roberto Azevêdo will address INTA MEPs on 20 June. The exchange will offer an opportunity to discuss the state of play in the run up to the 11th WTO Ministerial Conference (MC) that will take place in Buenos Aires between 10 and 13 December this year. The MC was one of the key issues debated at the OECD Council Meeting at ministerial level on 7-8 June in Paris. Speaking at an informal ministerial meeting on 8 June in the margins of the OECD meetings in Paris, Director-General Azevêdo urged WTO members to show flexibility in striving for a successful MC. “We need continued engagement at ministerial level from now until Buenos Aires. I ask ministers to instruct their Geneva delegations to remain ready to work constructively, and with a willingness to engage with greater specificity. More importantly, given the lack of specificity in most discussions, and how tough all of them are, it is essential that ministers instruct their delegations to show open-mindedness and pragmatism", Azevêdo said. The European Parliament is contributing to building momentum behind the MC. The Steering Group of the Parliamentary Conference on the WTO met in Strasbourg on Wednesday 14 June to discuss the latest developments at the WTO, the preparations for the WTO Public Forum (Geneva, 26-28 September 2017) and for the Parliamentary Conference on the WTO that will precede the MC in Buenos Aires.
State of play of TDI files
A fourth trilogue took place in Strasbourg on 13 June on the modernisation of Trade Defence Instruments (report by Christofer Fjellner EPP, SE). Under the Maltese presidency and following from the Joint Declaration of 13 December 2016 by the three Presidents on the EU’s legislative priorities for 2017, much progress has been made on updating the EU trade defence tools. Yet, negotiations will have to continue as a few outstanding issues continue to divide EP and Council negotiators.
EU Investment Policy: promotion, protection and adjudication
Trade MEPs are set to take the pulse to some key issues encompassed by the EU investment policy by debating three agenda items related to investments in the upcoming committee meeting of 19 June. MEPs will present a proposal for a Union act on the screening of foreign investment in strategic sectors, Professor Hindelang will present a Study and Commission will update the work-in-progress as regards EU Investment Policy.
Following the debate surrounding the controversial Investor State Dispute Settlement (ISDS) and pressure by the European Parliament, the European Commission vowed to abandon ISDS provisions from upcoming agreements and work towards establishing a Multilateral Investment Court.
INTA eyes revamped EU-Chile trade ties
Trade MEPs will debate two files related to EU-Chile trade relations: the recommendations to the Council, Commission and the EEAS on the modernisation of the trade pillar of the EU-Chile Association Agreement and the agreement between the EU and the Republic of Chile on trade in organic products. The rapporteur for these two files and INTA standing rapporteur for Chile is Inmaculada Rodríguez-Piñero Fernández (S&D, ES). Both Chile and EU are now readying for an update of the 14-year old trade agreement to realise the untapped potential of enhanced trade and investment flows.
Singapore ruling and its aftermath
The European Court of Justice delivered on 16 May its key ruling on the issue of competences for the conclusion of the EU-Singapore Free Trade Agreement. By clarifying which exclusive external competences the EU enjoys and which external competences are shared with the Member States, the ECJ settled a contentious issue that had weighed on EU trade policy for years. The Court’s ruling placed
almost all of the EU - Singapore FTA provisions within the exclusive competence of the Union with the exception of non-direct investment and those concerning dispute settlement between investors and states. The impact of the ruling was the subject of an exchange between Trade MEPs and Joost Korte, Deputy Director General of DG Trade at the 30 May INTA meeting. INTA MEPs will return on the subject by putting an Oral Question asking the Commission to define what the ruling’s implications for EU trade policy are with respect to future trade agreements and their ratifications.
Towards a Digital Trade Strategy
INTA members will hold a first exchange of views on the own-initiative report “Towards a digital trade Strategy” by rapporteur Marietje Schaake (ALDE, NL). The internet, digitisation and new technologies have deeply changed the way in which global trade takes place. These changes to how companies do business have a profound impact on the global trading system and raise new questions about the extent to which third countries regulate access to their digital economies, the role of trade-agreements and multilateral trade organisations and the potential of international trade to contribute to protecting digital rights. Digital issues are increasingly featuring in ongoing trade negotiations and there are new initiatives on e-commerce at the WTO. The report, to which IMCO, ITRE and LIBE will provide opinions, will set out the EP position on this topical issue.
Bangladesh in plenary
On Thursday 15 June, plenary adopted a resolution tabled by INTA on the State-of-Play of the implementation of the Sustainability Compact in Bangladesh, an EU-driven initiative to strengthen labour rights and safety at work in the ready-made garment sector of Bangladesh. Stakeholders, including the Commission, the ILO, business and the government of Bangladesh, have just met to follow-up on its implementation in May in Dhaka. The INTA resolution expresses concerns for the lack of progress in a number of areas of the Sustainability Compact, such as amending labour laws for guaranteeing the freedom of association and collective bargaining and in improving safety and working conditions and workers’ rights in the garment sector. These concerns are shared by the European Commission that just sent a letter to the government of Bangladesh highlighting the need to do more to align Bangladeshi laws and practise with the recommendations of the ILO. The respect of core labour and human rights stems from the generous unilateral trade preferences granted to Bangladesh by the EU.
RECENT TRADE NEWS
Dutch Senate gives go-ahead to EU-Ukraine trade deal
With 50 senators voting in favour and 25 against, the Dutch Eerste Kamer gave its go-ahead on 30 May to the EU-Ukraine Association Agreement, following the intense debate which followed from the April 2016 referendum. The vote paves the way for the ratification of the agreement which is expected at the EU-Ukraine Summit of 12-13 July in Brussels. The European Parliament gave its consent to the EU-Ukraine Association agreement, which included a Deep and Comprehensive Free Trade Area (DCFTA), on 16 September 2014.
The agreement between Council and Parliament reached on 13 June in Strasbourg on temporary autonomous trade measures for Ukraine is set to complement the DCFTA provisions and further strengthen the ties between the two partners. On 11 May the Council also adopted the Commission proposal for visa liberalisation for Ukraine which lifted EU visa requirements for Ukrainian citizens. On 11 June, the first visa-free citizens from Ukraine travelled to Europe.
Commission imposes duties to counter Chinese subsidies on steel
On 9 June, the European Commission decided to impose definitive anti-subsidy measures on imports from China of certain hot-rolled flat steel products. The Commission found that the Chinese government is supporting its steel industry through substantial subsidies and competition distorting measures. These subsidies have given Chinese companies an advantage through artificially low prices on the EU market. In order to reestablish a level playing field, the Commission decided to impose definitive countervailing duties of up to 35.9%. Commenting on this Commissioner Malmström stated: “We are continuing to act, when necessary, against unfair trading conditions in the steel sector, and against foreign dumping. With today's decision we take another instrument from our trade defence toolbox, to shield our industry from damaging effects of unfair foreign subsidies. I hope our decision and the discussions in the Global Forum dedicated to the problem of steel overcapacity will eventually convince China to remove its unfair schemes to ensure a level playing field for all steel producers”.
STATE OF PLAY OF EU TRADE DISPUTE SETTLEMENT
WTO rules in favour of Airbus in its dispute with Boeing
On 9 June, the WTO issued its latest rulingon the long lasting dispute between the American and European airplane builders. Both sides claimed the ruling as being in their favour. The WTO panel ruled that the US had failed to comply with the March 2012 appellate body decision against the billion dollars worth of state and federal funding Boeing received in the form of subsidies and tax cuts. The US officials have said however that the remaining Washington state tax breaks for Boeing, totalling around 325 million dollars between 2013-2015, is trivial when compared to the harm caused by the EU’s financial support of Airbus.
Russia and EU agree on transition period for the removal of Russian import bans on European pork
Following the ruling by the WTO that the restrictions that Russia put on the imports of European pork and pigs went against the organisation’s rules, the EU and Russia have determined the reasonable amount of time which Russia will have to remove its unjustified restrictions. Russia will have until early December of this year to fully comply with the WTO ruling.
4th Round of EU-Mexico Free Trade Agreement: 26-30 June, Mexico City
EU-Mercosur Association Agreement: 3-7 July, Brussels
DG EXPO Policy Department
Studies and workshops:
Study on "Openness of public procurement markets in key third countries"
Study on "International Court System’s mechanisms in recently negotiated and future EU FTAs"
EP Research Service library collection
The regulation of international trade, Volume 1. GATT, Petros C. Mavroidis, MIT Press, 645 p., 2016, “P. Mavoidis offers detailed examination of the GATT regime for international trade, discussing the negotiating record, policy background, economic rationale, and case law. He offers a substantive first chapter that provides a detailed historical background to GATT. Each of the following chapters examines the disciplines agreed to, their negotiating record, their economic rationale, and subsequent practice.” [e-book: log in as guest user or create an account, use Firefox web browser]
International political economy in the 21st century: contemporary issues and analyses, Roy Smith, Imad El-Anis and Christopher Farrands, Routledge, xix-340 p., 2017, “This book considers traditional and alternative approaches to IPE, and in doing so elucidates key concepts, assumptions and the intellectual and historical context in which they arose and developed. It makes clear their relevance to issues from trade, finance and government, to environment, technology, health, labour, security, migration, development and culture. Each chapter presents theoretical analysis alongside contemporary issues.”
The European Union's Policy Towards Mercosur: Responsive Not Strategic, Arantza Arana, Peter Humphreys and Andrew Geddes, Manchester University Press, x-238 p., 2017, “This book seeks to examine the motivations that determine the EU's policy towards Mercosur, the most important relationship the EU has with another regional economic integration organization. In order to investigate these motivations (or lack thereof), this study examines the contribution of the main policy- and decision-makers, the European Commission and the Council of Ministers, as well as the different contributions of the two institutions.”
Research and information sources related to International Trade, a fact sheet that lists information sources offered via EPRS Library subscriptions; Newsletters, databases, e-journals and e-books.
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