Highlights
The International Trade Committee renewed its mandate to start trilogue negotiations with the Council on the report by Christofer Fjellner (EPP, SE) on the reform of the trade defence instruments (TDI) to combat dumped or subsidised imports from third countries. The first trilogue meeting is now set for 21 March. At their next meeting (20-21 March), Trade MEPs will vote on the opinion on the Guarantee Fund for external actions and are set to adopt a report on customs performance as a tool to ease trade and fight illegal activities. The two-day session of the INTA meeting will be opened on Monday jointly with the Foreign Affairs Committee to debate the impact and the implementation of the ruling of the European Court of Justice on EU trade relations and cooperation with Morocco. On Monday evening Trade MEPs will discuss granting autonomous trade measures to Ukraine to supplement the existing trade concessions under the Association Agreement. The INTA meeting will be concluded with an exchange of views with DG Trade Director General Jean-Luc Demarty and a public hearing on the Dual Use reform.
UNCTAD (United Nations Conference on Trade and Development) Secretary-General Mukhisa Kituyi on women and trade
“Trade policies that are ‘gender-blind’ can inadvertently undermine women's economic empowerment. The only way to avoid these unintended negative gender ramifications is to assess a policy's potential effects beforehand. Such analysis is difficult but necessary.”
TDI trilogue off the starting blocks
After almost four years since the Commission original proposal and three years after the Parliament’s position at first reading, trilogue negotiations on the reform of the trade defence instruments (TDI) to combat dumped or subsidised imports from third countries are set to start on 21 March after Member States finally agreed on their negotiating position in December last year. The Parliament and the Council negotiators will have to bridge inter alia differences on the conditions and limits on the deviations from the “lesser duty” rule for countries flouting the rules, the length of the investigation period and the time gap between the announcement and the application of the defensive duties. The report by Christofer Fjellner (EPP, SE) will be the basis for the Parliament’s position on the negotiations. The report by Salvatore Cicu (EPP, IT) on the alternative methodology constitutes the second pillar of the reform of the Trade Defence Instruments (TDIs) on which lawmakers are working on. These two reports were the subject of a widely attended hearing organised by the INTA committee on 28 February.
MEPs discuss how to move EU-Morocco trade relations forward following ECJ ruling
In 2012, the EU and Morocco concluded an agreement providing for reciprocal liberalisation measures on agricultural products, processed agricultural products and fish and fishery products. The parties considered this agreement to be applicable also to Western Sahara, an issue contested by the Front Polisario. In its 21 December 2016 ruling (judgment in Case C-104/16 P Council vs Front Polisario) the Court of Justice of the European Union found that the Association and Liberalisation Agreements are not applicable to Western Sahara. The Court of Justice set aside the previous judgment of the General Court which had found the opposite to be the case. Among others, the December judgement stated that it is clear from international practice that, where a treaty is intended to apply not only to the sovereign territory of a State but also beyond it, that treaty must state so expressly. INTA will be debating the impact and the implementation of the ECJ ruling on EU trade relations and cooperation with Morocco jointly with AFET and the EP Maghreb Delegation.
Dual Use Hearing
On Tuesday 21 March, Trade MEPs will discuss with various experts and stakeholders how to make the EU export control regime 'future-proof'. The issues to be addressed potentially are plentiful: due diligence, human rights, catch-all clauses, new surveillance technologies, intangible transfers, a new licensing architecture, to name just a few. Members of the Trade Committee already debated the Commission proposal for reviewing 'Dual Use’ regulation (rapporteur: Klaus Buchner Greens/EFA, DE) during the INTA meeting on 28 February. The vote in INTA is provisionally scheduled for June 2017. A negotiating mandate could possibly be endorsed by Plenary in July.
Lange defends rule based trade system before Trade Ministers in Malta
INTA Chair Bernd Lange was in Valletta on 2 and 3 March. On Thursday 2 March he spoke at the informal meeting of Trade Ministers to which the newly reappointed Director General of the World Trade Organization Roberto Azevêdo also participated. Chairman Lange took the opportunity to congratulate Mr Azevêdo on his re-election and for the entry into force of the Trade Facilitation agreement and thanked him for the good cooperation with the European Parliament throughout his first mandate. Mr
Lange also expressed Parliament’s support for a rule-based and strong multilateral trade system with the WTO at its core. On Friday 3 March Chairman Lange met with the leaders of the Maltese Chamber of Commerce, Enterprise and Industry, the main Trade Union (GWU) and held an exchange of views with the full Committee on Europe and Foreign Affairs of the Parliament of Malta on the future of the EU common commercial policy.
MPs and MEPs discuss prospects of December Buenos Aires Ministerial Conference
On 9 March the European Parliament and the Inter-Parliamentary Union (IPU) hosted the 38th session of the Steering Committee of the Parliamentary Conference on the WTO. The meeting was attended by members of Parliament from more than 16 countries and served as the preparation for the annual Parliamentary Conference on the WTO which is to be held ahead of the WTO Ministerial Conference. The steering committee agreed that the parliamentary conference will be held on 10 December, just ahead of MC11 (11-14 December in Buenos Aires). Members of the Steering Committee exchanged views on the MC11 priorities with WTO Deputy Director-General David Shark and also debated the upcoming WTO Public Forum to be held on 26-28 September in Geneva. The members also heard and debated a presentation by the Director of Bruegel, Guntram Wolff on the future of trade policy and in the afternoon participated to a conference organised by the EPRS on the future of global trade.
EU-South Korea FTA five years on
At their March meeting Trade MEPs will vote on the implementation report on the FTA with South Korea by rapporteur Adam Szejnfeld (EPP, PL), a novel instrument for an innovative agreement. The report welcomes the positive impact of the agreement. After 5 years of implementation the FTA has led to a 47% increase in EU exports to Korea, turning around a 7.6 billion EU trade deficit into a 2.5 billion euro surplus. FDI grew quickly from both sides. The agreement’s trade and sustainable development chapter (TSD) with a clear role for civil society has not yet had the hoped for results with respect to South Korea’s respect for labour rights conventions. Members support the further deepening of trade and investment relations, listing specific issues to be addressed, but expect that before those negotiations, the difficulties concerning the TSD chapter be resolved.
INTA in plenary: conflict minerals, wildlife and agreement with Brazil on Croatia accession
The “Conflict Minerals” regulation (rapporteur: Iuliu Winkler EPP, RO) was voted in Strasbourg this Thursday, more than three years after the original Commission proposal aimed at ending the financing of armed groups via trade in conflict minerals. The Parliament succeeded in creating an efficient system of mandatory due diligence by importers of minerals and metals using the international norms of the OECD mandatory for importers of minerals and metals, while reducing red tape where possible. On 2 March, MEPs in plenary also adopted an own initiative report by Emma McClarkin (ECR, UK) on the “Common Commercial Policy in the context of wildlife sustainability imperatives” which recommends the full use of all existing instruments to tackle illegal trade in wildlife as well as the elimination of all remaining legal loopholes that could facilitate the ‘laundering’ of illegally sourced wildlife and wildlife products. On Wednesday 15 March, plenary also adopted a report by José Ignacio Salafranca Sánchez-Neyra (EPP, ES) on the EU-Brazil Agreement on the modification of concessions in the schedule of Croatia in the course of its accession.
RECENT TRADE NEWS
Roberto Azevêdo reappointed WTO Director-General
On 28 February, WTO members meeting in the General Council agreed by consensus to appoint Roberto Azevêdo for a second four-year term as Director-General. Mr Azevêdo had announced his intention to seek a second four year term in office on 3 November 2016. He is set to formally begin his second term on 1 September 2017. Upon taking office Mr Azevêdo stated that the “WTO is stronger today than it was in 2013. But we can do much more — particularly for the smaller players and those who feel cut off from the economic benefits of trade. We must build a more inclusive trading system.”
EU-ASEAN trade talks reloaded
ASEAN Economic Ministers (AEM) and EU Trade Commissioner Cecilia Malmström met on 10 March in Manila for the Fifteenth AEM-EU Trade meeting. The two sides issued a statement in which they agreed to take new steps towards resuming free trade talks between the two regions. Negotiations with the regional grouping of 7 ASEAN Member States started in July 2007. In March 2009, the two sides agreed to take a pause in the regional negotiations. The March 2017 meeting aimed to breathe new life into the talks. Commissioner Malmström stated that "There is still much to be done to unlock the full potential of the EU-ASEAN relationship, and the quickly changing international environment now makes us turn our eyes even more towards Asia."
Commissioner Hogan buoyant on trade’s impact on agri-food sector
On 27 February the European Commission released the findings of a commissioned independent study which showed how trade agreements have benefitted the EU agri-food sector. The study focused specifically on trade with three countries: Switzerland, South Korea and Mexico. The three agreements in question have increased EU agri-food exports by more than €1 billion and raised value-added in the agri-food sector by €600 million. The specific benefits of these three agreements are in line with an overall positive trend for the agri-food sector. In 2016 the EU agri-food exports reached total exports worth €130.7 billion, up €1.7 billion on 2015. The agri-food sector accounted for 7.5% of total EU exports in goods in 2016. With a surplus of €18.8 billion, the agri-food sector contributes almost half of the overall surplus of the European Union in merchandise trade.
G20 merchandise trade growth picks up in Q4 2016
On 28 February the OECD released figures for G20 merchandise trade in last quarter of 2016. The findings shows a continued recovery in trade levels even though merchandise trade still remains around 10% below its pre-crisis level. G20 economies’ international merchandise seasonally adjusted trade grew for the third straight quarter in the last trimester of 2016. Export growth picked up strongly to 1.5%, compared with 0.3% in the previous quarter. Imports increased by 0.8%, marginally up on last quarter’s 0.7% growth.
STATE OF PLAY OF EU TRADE DISPUTE SETTLEMENT
China challenges EU Trade Defence Instruments
In December 2016 China lodged a complaint against the EU at the WTO against anti-dumping measures on a number of imports. After the issue was not solved during the three month consultation period, on 9 March the Chinese delegation requested the establishment a dispute settlement panel. The panel is set to meet for the first time on 21 March. The EU can reject China’s request once, but Beijing will then still be able to refile its lawsuit ahead of the next dispute settlement meeting. The European Commission has proposed a new method for the calculation of anti-dumping duties in November, hoping that the new legislation will be approved when the WTO dispute has been settled.
Appellate Body Report confirms Russian pork ban is illegal
On 23 February 2017, the Appellate Body report was published regarding the case which pitted Russia against the EU on imports of pork. The WTO Appellate Body has affirmed that Russia 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").
ECJ approves of trade defence on solar panels
In 2013, following an investigation by the Commission, the Council imposed anti-dumping duties on the imports of solar panels and key components originating from China. At the same time the Council introduced a definitive anti-subsidy duties on imports of the same products. 26 companies hurt by these duties applied for the annulment of these measures. On the 28 February 2017 the General Court of the EU dismissed these applications and confirmed all the duties set by the Council.
TRADE NEGOTIATIONS
- EU-Mercosur Association Agreement: 2nd round of trade negotiations since resumption in 2016, 20-24 March, Buenos Aires, Argentina
- Microstates: 6th Round, 21-23 March, Brussels
- 3rd Round of EU-Mexico Free Trade Agreement: 3-7 April, Brussels
PUBLICATIONS
DG EXPO Policy Department
Studies and workshops:
Study: Economic Diplomacy
Study: "The role of border management in implementing trade policy goals
European Parliamentary Research Service
Reinvigorating EU-Turkey bilateral trade: Upgrading the customs union, Krisztina Binder, Christian Dietrich and Giulio Sabbati, EPRS Briefing (International Agreements in Progress), March 2017, 12 p
EU-US trade and investment relations: Effects on tax evasion, money laundering and tax transparency. Ex-Post Impact Assessment, Isabelle Ioannides, EPRS In-Depth Analysis, March 2017, 35 p.
Revision of the calculation methodology of dumping, Ex-Ante Impact Assessment, Alina Alexandra Georgescu, EPRS Briefing, February 2017, 8 p.
EP Research Service library collection
The world trade system: Trends and challenges, MIT Press, 400 p., 2017, “With the failure to close the Doha Round and the emergence of bilateral and plurilateral preferential trade arrangements such as the TPP, the future of the multilateral WTO seems uncertain. In this book, the contributors discuss such topics as the effect of trade on poverty and inequality, PTAs and litigation between trading partners, the WTO Trade Facilitation Agreement, and the relationship of food security and trade liberalization. They also offer regional perspectives on the TPP and trans-Atlantic free trade.”
Global Corporations in Global Governance, Christopher May, Taylor and Francis, 165 p., 2015, “This book offers an overview and analysis of the place of large multinational and regional corporations in the political economy of global governance. May argues that not only do corporations have an impact on the institutions of global governance, but they must be understood as a multifaceted institution of global governance in their own right, controlling and shaping significant aspects of the global political economy.”
Emissions Trading and WTO Law: A Global Analysis, Felicity Deane, Edward Elgar, x-223 p., 2015, “The book includes the following chapters: 1. Introduction -- 2. Contextual elements of emissions trading -- 3. The law of the WTO and emissions trading -- 4. The classification of GHG tradable instruments as goods -- 5. Emissions trading and the General Agreement on Trade in Services -- 6. The subsidies of emissions trading schemes -- 7. The border adjustments of emissions trading schemes -- 8. Conclusion.”
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