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).
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.
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)
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.
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.
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.
Aviation Strategy for Europe: Commission signs landmark aviation agreements with China
The European Union and China have today signed an agreement on civil aviation safety and a horizontal aviation agreement to strengthen their aviation cooperation.
The agreements follow up on the EU-China Summit of 9 April and will serve to boost the competitiveness of the EU’s aeronautical sector and enhance overall EU-China aviation relations. This marks yet another key deliverable under the Juncker Commission’s Aviation Strategy for Europe – designed to generate growth for European business, foster innovation and let passengers profit from safer, cleaner and cheaper flights.
European Commission President Jean-Claude Juncker said: “In an increasingly unsettled world, Europe’s partnership with China is more important than ever before. The EU firmly believes that nations working together makes the world a stronger, safer and more prosperous place for all. Today we took a first big step in this direction by signing two aviation agreements with China that will create jobs, boost growth and bring our continents and peoples closer together. Today’s agreements show the potential of our partnership and we should continue on this path of cooperation. For it will always be in unity that we find strength.”
Commissioner for Transport Violeta Bulc said: “China is one of the European Union’s most important strategic partners and we attach a lot of importance to our excellent relations on transport matters. We are mutually interested in better connecting Europe and Asia and making it easier to move goods, services and people between Europe and China. That applies to aviation, too. Today’s agreements will boost the European Union’s trade in aircraft and related products, and ensure the highest levels of air safety.”
The main objective of the bilateral civil aviation safety agreement (BASA) is to support worldwide trade in aircraft and related products. This agreement will remove the unnecessary duplication of evaluation and certification activities for aeronautical products by the civil aviation authorities, and therefore reduce costs for the aviation sector. The BASA will also promote cooperation between the EU and China towards a high level of civil aviation safety and environmental compatibility.
The second agreement signed today is a so-called horizontal aviation agreement. It marks China’s recognition of the principle of EU designation, whereby all EU airlines will be able to fly to China from any EU Member State with a bilateral air services agreement with China under which unused traffic rights are available. Up until now, only airlines owned and controlled by a given Member State or its nationals could fly between that Member State and China. The conclusion of a horizontal agreement will thereby bring bilateral air services agreements between China and EU Member States into conformity with EU law – a renewed legal certainty which will be beneficial to airlines on both sides.
Both the European Commission and the Chinese transport administration will now proceed with their respective internal procedures to put the conclusion of the agreement in place.
EU Facility for Refugees in Turkey: Solid progress in supporting refugees
The Commission reported today good progress in the implementation and programming of €6 billion of the EU Facility for Refugees in Turkey. More than 80 projects are currently up and running delivering tangible results to refugees and host communities in particular on education and health. Out of the €6 billion, some €4.2 billion has been allocated, of which €3.45 billion has been contracted and €2.22 billion disbursed to date.
Johannes Hahn, Commissioner for European Neighbourhood Policy and Enlargement Negotiations,said: “We continue to make good progress in the implementation and programming of the Facility. More than 80 projects to date provide vital assistance in the areas of education, health, protection and socio-economic support, and more projects are in the pipeline. We remain committed to continue our support to refugees and host communities in Turkey, addressing current needs and increasing resilience and self-reliance for the longer term.”
Christos Stylianides, Commissioner for Humanitarian Aid and Crisis Management,added: “The European Union is continuing to support refugees in Turkey, in line with its commitment. 1.6 million refugees are receiving humanitarian assistance to meet their basic needs. Looking ahead to the future, we are working to make our support more sustainable. We remain committed to continue working closely with Turkey to make this possible.”
Today, the twelfth Steering Committee meeting of the EU Facility for Refugees in Turkey took place in Brussels. It was chaired by the Commission and brought together representatives of EU Member States and Turkey.
The Committee reviewed the third annual monitoring report on the implementation of the Facility and confirmed the progress made in the programming of the second €3 billion tranche of the budget of the Facility. It completed the evaluation of project proposals in the areas of socio-economic support and municipal infrastructure to the tune of €845 million.
The 84 projects set up in the framework of the Facility bring forth concrete outcomes and a significant positive impact for refugees and host communities alike, facilitating the integration of refugees in the Turkish society.
For education, one of the priority areas of action, the EU signed a €400 million contract to continue its support to existing programmes, which is to be complemented by a further €100 million before the summer. This involves the construction of 136 school buildings and 50 prefabricated schools well under way. This progress in education infrastructure goes hand in hand with the implementation of the project for Promoting Integration of Syrian Children into Turkish Education System (PICTES), which benefits 400,000 students.
In the area of health, 5 million healthcare consultations have been carried out, with 178 migrant health centres now operational, employing over 2,600 staff, two thirds of which are Syrian refugees.
The EU is highly focused on ensuring the sustainability of the Facility’s humanitarian and development activities, which aim to support the Turkish authorities in a structural manner and to facilitate refugee integration. Under the humanitarian strand of the second tranche, the EU is implementing projects for a total of €50 million in addition the ongoing projects under the first tranche, those have already delivered tangible results for refugees and host communities.
The EU Facility for Refugees in Turkey was set up in 2015 in response to the European Council’s call for significant additional funding to support Syrian refugees in Turkey.
It has a total budget of €6 billion divided into two equal tranches of €3 billion each, allocated over two periods: 2016-2017 and 2018-2019.Out of the operational funds of €6 billion, €2.22 billion has already been disbursed, €3.45 billion contracted, with over 80 projects rolled out.
The Facility provides a joint coordination mechanism, designed to ensure that the needs of refugees and host communities are addressed in a comprehensive and coordinated manner. The support seeks to improve conditions for refugees in Turkey as part of the EU’s comprehensive approach to addressing the refugee crisis inside and outside the EU.
EU and Tunisia work to strengthen their Privileged Partnership
There has been continued progress in the transition towards democracy in Tunisia in the last year, but this must be accompanied by equivalent economic and social progress to ensure that it can be sustained.
Ahead of the EU-Tunisia Association Council due to be held on 17 May, the EU has today published its latest report on developments in relations with Tunisia. The report describes the key aspects of the cooperation from the beginning of 2018 to March 2019.
‘We attach particular importance to our cooperation with Tunisia, built as it is on the foundation of our common history, shared values and mutual respect. Significant progress has been made in the last year within the framework of our Privileged Partnership. We remain steadfast in our commitment to the Tunisian people, and specifically to the future of its young people, in order to help establish lasting democratic rule of law and a safe and prosperous country’ , stated Federica Mogherini, High Representative/ Vice-President for Foreign Affairs and Security Policy.
‘The EU has continued to deploy all its cooperation instruments to support our Tunisian partner. In 2018, this led to the adoption of a financial assistance package worth € 305 million, in the form of grants, which is the highest amount ever allocated to Tunisia under the European Neighbourhood Instrument. At the same time, working together with eight European and international financial institutions, I launched an unprecedented initiative in order to highlight the need for Tunisia to follow through on its commitments to socio-economic reforms as soon as possible, for the benefit of all Tunisians’, said Johannes Hahn, Commissioner for European Neighbourhood Policy and Enlargement Negotiations.
The report is structured around the EU-Tunisia strategic priorities to be achieved by 2020, with the aim of describing in as much detail as possible the progress made in the Partnership’s priority areas. These priorities focus on inclusive and sustainable socio-economic development; young people, democracy, good governance and human rights; bringing peoples together, mobility and migration; as well as security and the fight against terrorism.
Since 2011, Tunisia has been transitioning towards democracy, making it a source of hope at regional level and beyond. Significant progress was made in 2018, particularly the holding of municipal elections in May 2018 with the full support of the EU, marking a key milestone in the decentralisation process. However, the report also notes that the transition can only be sustained if it is accompanied by social and economic progress on a similar scale. As a result, in this year of significant elections, it is vital to continue to make progress in implementing the strategic priorities of the EU-Tunisia Partnership and the EU-Tunisia Youth Partnership.
The report also notes that EU funding for cooperation has continued to strengthen the Privileged Partnership between the two parties. The intense work on EU-Tunisia relations over the last year resulted in an unprecedented financial commitment from the EU, using the Neighbourhood Instrument budget, totalling € 305 million in the form of grants for key sectors, such as support for innovation and start-ups, youth, energy efficiency, tourism diversification and the redevelopment of poorer neighbourhoods. In addition to this amount, there are also thematic lines and regional programmes.
The EU remains Tunisia’s main trading partner, and in 2018 it was the destination for three quarters of Tunisia’s exports and the source of over half of its imports. The EU is still the largest foreign investor in Tunisia, accounting for over 85 % of all direct foreign investment in the country, where there are more than 3 000 European companies employing over 300 000 people.
The main initiatives in 2018 include programmes to support competitiveness and exports, for both industry and agriculture, support for modernisation of the administration and tax reforms, as well as support to prepare for and reduce the risks of natural disasters. The impact and tangible results for citizens are central to the follow-up of these initiatives.
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