The EU negotiates various trade deals all over the world, but they depend on approval by the European Parliament. Read our overview of the negotiations in progress.

On 13 February, MEPs voted in favour of EU-Singapore trade and investment protection deals, which will eliminate nearly all tariffs within five years. This comes only two months after MEPs approved a major trade agreement and a strategic partnership with Japan.

The importance of trade agreements

Trade agreements are very important to the EU as they are a key driver of economic growth. In 2015 the EU was the world’s biggest exporter and importer of goods and services, covering 32.15% of the global trade, ahead of the US (12.01%) and China (10.68%). New trade agreements create new business opportunities for European companies, leading to more jobs being created, while consumers can look forward to more choice and lower prices.

There are concerns that trade agreements can lead to job losses in some sectors due to the increased competition, but these deals always create more jobs than they destroy. Another concern is that they could lead to high quality standards for products such as food being watered down. However, as the EU represents such a large market, it is in a good position to impose its standards on foreign companies. For MEPs, quality standards are always a red line in trade agreements and any attempt to lower them could be a reason for them to reject them. In addition EU negotiators often include clauses regarding human rights and labour rights in trade agreements to help improve the situation in the country we are trading with.

Types of agreements

The EU has different types of agreements in place with countries. They can focus on reducing or eliminating tariff barriers or establishing a customs union by removing customs duties and establishing a joint customs tariff for foreign imports.

It’s not all about tariffs though. It could also be about investment and how to deal with disputes involving investment. For example, when a company feels a decision by a government is affecting its investment in that country. Non-tariff barriers are also vital such as product standards (for example the EU has banned certain hormones in cattle farming over health fears).

North America

The free trade agreement with Canada, known as the Comprehensive Economic Trade Agreement (Ceta) provisionally entered into force on 21 September 2017. It will enter fully into force once all EU countries have ratified the agreement.

The Transatlantic Trade and Investment Partnership (TTIP) with the United States has proved very controversial due to concerns over product standards and the resolution of investment disputes. Negotiations were stopped until further notice at the end of 2016.

Asia

MEPs adopted a trade agreement with Japan during the December plenary.There are no free trade negotiations ongoing with China, but there are other talks as well such as negotiations for a comprehensive EU-China investment agreement. Launched in November 2013 and the latest negotiation round took place on 29-30 October 2018.

Negotiations with other Asian countries:

• Malaysia (both sides are assessing whether there is enough common ground to relaunch talks)
• Vietnam (free trade agreement is being prepared for signature)
• Indonesia (futher negotiations took place this year)
• Thailand (EU ready to resume talks)
• Philippines (no date yet for next round of negotiations)
• Myanmar (no date set yet for next round)
• India (both sides are in the process of assessing the outcomes of talks)

Oceania

Negotiations for a comprehensive trade agreement with Australia were launched on 18 June 2018. Negotiations for a deal with New Zealand were launched on 21 June 2018. In both cases there have been further rounds of talks since then.

Latin America

In Latin America the latest round of talks with Mercosur countries took place on 10-14 September 2018. The date for the next round still has to be confirmed.

Negotiations with Mexico on modernising the EU-Mexico Global Agreement started in June 2016. A political agreement was found on 21 April 2018 and the full legal text is expected to be finalised by the end of the year.

The latest round of negotiations with Chile took place in May 2018 and the date for the next one still has to be determined.

Southern Mediterranean and Middle East

There are various agreements, including association agreements to especially boost trade in goods. There are also talks on expanding these agreements in areas such as agriculture and industrial standards with individual countries.

Trade in Services

The Trade in Services Agreement (TiSA), is currently being negotiated by 23 members of the World Trade Organisation (WTO), including the EU. Together, the participating countries account for 70% of world trade in services. Talks were put on hold in late autumn 2016 and the next steps still need to be determined.

Parliament’s role

Since the Lisbon Treaty entered into force in 2009, trade agreements need the Parliament’s approval before they can enter into force. MEPs also need to be regularly updated on progress during negotiations.

Parliament has already shown it will not hesitate to use its veto if there are serious concerns. For example MEPs rejected the Anti-Counterfeiting Trade Agreement (Acta) in 2012.

The European Commission formally initiated work with Member States to finance joint industrial projects in the field of defence.

Once the Commission adopts the work programme for the European Defence Industrial Development Programme, it will launch calls for proposals under the EU budget for 2019-2020. This will help pave the way for the future European Defence Fund for the period 2021-2027.

In a world of increasing instability and cross-border threats to our security, no country can succeed alone. That is why the Juncker Commission is making an unprecedented effort to protect and defend Europeans. It has already taken first steps to boost cooperation between Member States in the field of defence research and defence industry development, with more to follow in 2019-2020. In June 2018, the Commission also proposed a fully-fledged €13 billion European Defence Fund for 2021-2027, which is now under discussion by the European Parliament and Council.

Vice-President Jyrki Katainen, responsible for Jobs, Growth, Investment and Competitiveness, said: “Defence cooperation in Europe helps Member States spend taxpayer money more efficiently, reduce duplications in spending, and get better value for money. Defence cooperation promotes a strong and innovative defence industry and raises the EU’s autonomy and technological leadership in defence. Unthinkable only a few years ago, defence cooperation is becoming a reality today.”

Commissioner Elżbieta Bieńkowska, responsible for Internal Market, Industry, Entrepreneurship and SMEs, added: “To protect our citizens, Europe needs cutting-edge, interoperable defence technology and equipment in novel areas like artificial intelligence, encrypted software, drone technology or satellite communication. Thanks to the European Defence Fund, we are making this happen. We are ensuring Europe becomes a stronger security provider.”

The European Commission, under the steer of President Juncker and with the support of Member States, is taking the following steps:

For the 2017-2020 EU budget period:

For the first time in European history, the EU is incentivising European defence cooperation with a budget envelope of €590 million (€90 million for research over 2017-2019 and €500 million for developing equipment and technology during 2019-2020).

• Defence research cooperation is already materialising. First EU grant agreements under the 2017 budget included the research project Ocean2020, which brings together 42 partners from 15 EU countries and supports maritime surveillance missions at sea and to that end will integrate drones and unmanned submarines into fleet operations. In the coming weeks the Commission will announce further collaborative defence research projects under the 2018 budget and present the work programme and final call for proposals under the remaining budget tranche for 2019.
• Following the views of Member States, in a few weeks, the Commission will adopt the first ever Work Programme to co-finance joint industrial projects in the field of defence under the EU budget for 2019-2020. The projects for which calls for proposals under the European Defence Industrial Development Programme (EDIDP) will be launched will be consistent with the priorities identified in the context of the Permanent Structured Cooperation (PESCO), the Capability Development Plan (CDP) and NATO.

For the 2021-2027 EU budget period:

On the basis of these two “pilot” programmes, the Commission proposed in June 2018 a fully-fledged European Defence Fund worth €13 billion under the next EU long-term budget to cover both the research and capability strands. Following positive votes in the European Parliament and Council, the proposal is now being discussed by the co-legislators in the final so-called trilogue negotiations.

Background

In his political guidelines in June 2014, President Juncker made strengthening European citizens’ security a priority. He announced the creation of a European Defence Fund in his 2016 State of the Union address.

The European Commission presented a first set of actions in June 2017 in order to allow defence cooperation at EU level to be tested by means of the Preparatory Action on Defence Research (PADR) for 2017-2019, as well as through the European Defence Industrial Development Programme (EDIDP) for 2019-2020.

The implementation of EDIDP requires that the Commission adopts a work programme to define the categories of projects which will be supported following open calls for proposals. The work programme will be adopted in the coming weeks after consultation with the Member States and a positive opinion to be adopted by qualified majority.

In June 2018, the Commission proposed a fully-fledged European Defence Fund delivering on the commitment made in June 2017 to scale up initial funding for the period 2021-2027.

The new €13 billion European Defence Fund will provide €4.1 billion to directly finance competitive and collaborative research projects, in particular through grants. Beyond the research phase, €8.9 billion will be available to complement Member States’ investment by co-financing the costs for prototype development and the ensuing certification and testing requirements. The Fund will place the EU among the top 4 defence research and technology investors in Europe, and act as a catalyst for an innovative and competitive industrial and scientific base. PESCO projects may, if eligible, receive an additional co-financing bonus of 10%, but funding is not automatic.

The European Defence Fund will complement other EU programmes, in particular the budget of €6.5 billion earmarked for the Connecting Europe Facility to enhance the EU’s strategic transport infrastructures to make them fit for military mobility, and the new €100 billion research and innovation programme Horizon Europe.

Unemployment is down globally but workers’ conditions have not improved, the UN said on Wednesday, warning that some businesses driven by new technology “threaten to undermine” hard-won social gains of recent decades.

According to the International Labour Organization (ILO), most of the 3.3 billion people employed worldwide in 2018 did not enjoy adequate levels of economic security, and lacked sufficient material well-being as well as too few opportunities for advancement.

In total, 172 million people were jobless last year – one in 20 individuals of working age – ILO’s Trends in Global Employment 2019 report shows.

This unemployment rate, which has only just returned to levels last seen before the 2008-9 financial crisis, is not expected to change this year or next, assuming stable global economic conditions; although current uncertainty is “already having a negative effect on the labour market” in upper middle-income countries, it says.

Nonetheless, “being in employment does not always guarantee a decent living,” said Damian Grimshaw, ILO Director of Research. “A full 700 million people are living in extreme or moderate poverty despite having employment.”

Fewer working-poor…in middle-income countries

On a positive note, the ILO report highlights that working poverty has decreased in middle-income countries over the past three decades, although poorer nations are likely to see a rise in the number of working poor.

This is because the pace of poverty reduction is not expected to keep up with employment growth in these emerging economies, despite China’s major contribution in reducing the working poor levels as a result of strong economic growth since 1993.

The ILO data also shows that 360 million people in 2018 worked in a family business and 1.1 billion worked for themselves – often in subsistence activities because of an absence of job opportunities in the formal sector and/or the lack of a social protection system.

Workers ‘unable to find more work or too discouraged to look’

Linked to the challenge of bringing down unemployment, the UN report identifies a lack of opportunity for those who want to work.

This includes those who would like to make the jump from part-time to full-time work and the long-term jobless, who become so discouraged that they stop looking.

Taken together, poor workplace conditions, unemployment and gender inequality have contributed to slower-than-anticipated progress in achieving the key development goal of sustainable work for all, as set out in the 2030 Agenda.

Under 48 per cent of women work, versus 75 per cent of men

Among the most striking labour issues in the report is the continued lack of progress made in closing the gender gap at work, with less than 50 per cent of women in the labour force in 2018, compared with three quarters of men.

This problem is universal, ILO maintains, although the gender gap is widest in the Arab States, Northern Africa and Southern Asia.

Another challenge is the size of the informal sector – a “staggering” two billion workers, or 61 per cent of the world’s workforce. “Informal employment is the reality for the majority of workers worldwide,” ILO notes.

Also of concern is the fact that more than one in five people under 25 years old are not in employment, education or training; part of 15 per cent decline between 1993 and 2018 that is set to continue.

Innovative technology threatens to undermine rights at work

Noting how a country’s level of development is linked to the availability of reasonably paid work or adequate welfare protection for those who need it, the report cautions that these and other labour market achievements “are still elusive” for many.

“Securing these gains is therefore a major challenge that policy-makers must face up to,” the ILO WESO report insists, noting also that innovative technologies “threaten to undermine” these labour market achievements and others, such as job security, collective bargaining and compliance with labour standards and rights at work.