Import/export: in the jungle of EU trade agreements...

With recent agreements CETA (EU – Canada)and JEFTA (EU – Japan), the European Union can boast of an imposing « hunting table » on free trade... Not to mention the advanced negotiations with theVietnamand the resumption of discussions with MERCOSUR!

Those already in place in 2017 were screened in a recent Commission report*, one of the main merits of which is to provide a comprehensive overview of EU trade partnerships:

• Free trade agreements « New Generation » : South Korea, Colombia – Peru, and Central America
• Free trade agreements « thorough and comprehensive » : Ukraine, Moldova and Georgia.
• Economic Partnership Agreements (EPAs): Africa, Caribbean and Pacific (ACP)
• 1 Free Trade Agreements^era generation (before 2006):
• Turkey (Customs Union) ;
• Iceland, Norway and Switzerland (1970s);
• FTA with the Faroe Islands, Mexico, Chile and South Africa;
• FTA with the EU12 Mediterranean partners under Association Agreements (1990s).

So muchpotential opportunities for European traders, both import and export. Yet, according to the report, European companies are struggling to take advantage of the benefits of these agreements...

While the volume of bilateral trade is generally increasing after the entry into force of trade agreements, quota utilization rates and tariff preferences are very differentand, overall, much lower than expected...

EU–South Korea agreement As an example, EU exports have increased by almost 60% to this partner since the entry into force of the FTA in 2011, and the rate of use of tariff preferences by EU operators was 71% in 2016.

Conversely, FTA with Central America only had a small impact on the EU's external trade: only 20% increase in volume of trade with this partner since 2013. Tariff quotas are mostly neglected with the exception of a few specific products from the agri-food sector...

The Commission has identified three main reasons for the low use of FTAs:

• Lack of knowledge about FTAs;
• Difficulties in understanding the rules for each product;
• The cumbersome procedures for obtaining the documents necessary for preferential treatment.

In order to remedy this situation, the Commission has set out lines of communication:

• Improved information available on the web
• Development of IT tools mainly for SMEs
• Return and sharing of experience of companies benefiting from these agreements

The negotiations of future agreements should be further prepared, including drafting of a proposal for a road map for their implementation.

In terms of continuous improvement, it should be noted that the « New Generation » (e.g. CETA) also have a full structure with implementing bodies and committees meeting annually to report on possible difficulties and propose improvements.

It is also planned toupdate most first generation FTAs for «adapting them to today's more complex economic exchanges between the EU and its partners» In particular, negotiations would be initiated with Mexico, Morocco and Tunisia.

* « Commission report on the implementation of free trade agreements (1 January 2016 – 31 December 2016) » available to our subscribers on request.