05 nov EU trade agreements
Closed EU trade agreements and ongoing negotiations
The European Union is striving to expand global free trade, because international trade is an important source of income for the EU. By concluding trade agreements with third countries or other organizations, the EU ensures that trade barriers and import duties are removed. Trade agreements are binding agreements that the EU enters into with third countries, trade blocs or international organizations. The purpose of this type of agreement is to promote trade between the participating countries or groups of countries. This article highlights the most important closed trade agreements and ongoing negotiations.
Types of EU Trade agreements
The EU has in place, or is negotiating, trade agreements with countries and regions around the world.
There are three main types of agreement: Customs Unions, Association Agreements, Stabilization Agreements, (Deep and Comprehensive) Free Trade Agreements and Economic Partnership Agreements and Partnership and Cooperation Agreements.
1. Customs Unions
- Eliminate customs duties in bilateral trade, and;
- Establish a joint customs tariff for foreign importers.
2. Association Agreements, Stabilization Agreements, (Deep and Comprehensive) Free Trade Agreements and Economic Partnership Agreements
- Remove or reduce customs tariffs in bilateral trade
3. Partnership and Cooperation Agreements
- Provide a general framework for bilateral economic relations, and;
- Leave customs tariffs as they are
Closed agreements – Status today
EU – Vietnam
The European Union and Vietnam signed a Trade Agreement and an Investment Protection Agreement on 30 June 2019. The agreement provides opportunities to increase trade and support jobs and growth on both sides, through:
- Eliminating 99% of all tariffs.
- Reducing regulatory barriers and overlapping red tape.
- Ensuring protection of geographical indications.
- Opening up services and public procurement markets.
- Making sure the agreed rules are enforceable.
According to EU-commissioner Malmström is this the most ambitious Trade Agreement with a rising economy.
EU – Japan
- Removes tariffs and other trade barriers and creates a platform to cooperate in order to prevent obstacles to trade.
- Helps us shape global trade rules in line with our high standards and shared values.
- Sends a powerful signal that two of the world’s biggest economies reject protectionism.
EU – Canada (CETA)
CETA is a new trade agreement between the EU and Canada. It cuts tariffs and makes it easier to export goods and services, benefitting people and businesses in both the EU and Canada. CETA entered into force provisionally on 21 September 2017, meaning most of the agreement now applies. National parliaments in EU countries – and in some cases regional ones too – will then need to approve CETA before it can take full effect.
EU – South Korea
Since 2011 the EU and Korea are linked by a trade agreement and it was formally ratified in December 2015. It goes further than any previous agreements in lifting trade barriers and was also the EU’s first trade deal with an Asian country. The agreement was amended in 2014 to allow Croatia to benefit from the same preferences as the other 27 EU Member States since its date of accession to the EU on 1 July 2013. Croatia was not yet a member of the EU when the agreement was signed back in 2010.
The opening of the Korean market has been possible thanks to consistent efforts undertaken jointly by the European Commission and EU Member States. The removal of the trade restrictions imposed in 2001 in reaction to the bovine spongiform encephalopathy (BSE) outbreak is a sign of well-deserved trust in the EU’s comprehensive, multi-layered and very efficient food safety and animal health control system. The EU-Korea trade agreement has helped intensify exchanges, resolve numerous trade impediments on both sides and increase bilateral agri-food trade by 10% per year.
Positive news for the farmer industries in Denmark and the Netherlands. After almost 2 decades, the Republic of Korea lifted its import restrictions on beef and beef products. Producers from Denmark and the Netherlands are the first countries from the European Member States to be able to resume exports. Recently Korean authorities provided assurances that the pending applications from EU Member States (others than Denmark and the Netherlands) would be processed in due time. Now, that the sanitary restrictions on Danish and Dutch beef are lifted, producers from those countries will finally be able to enjoy the tariff reductions available under the agreement.
EU – Singapore
The European Union and Singapore have negotiated a Free Trade Agreement and an Investment Protection Agreement.
The agreement aims to:
- Remove nearly all customs duties and get rid of overlapping bureaucracy.
- Improve trade for goods like electronics, food products and pharmaceuticals.
- Stimulate green growth, remove trade obstacles for green tech and create opportunities for environmental services.
- Encourage EU companies to invest more in Singapore, and Singaporean companies to invest more in the EU.
EU – Mexico
The European Union and Mexico have reached an “agreement in principle” on the main trade parts of a new EU-Mexico association agreement. The new agreement replaces a previous deal between the EU and Mexico from 2000.
The original association agreement brought many trade benefits to the EU and Mexico, though some trade barriers still remain.
The new deal will:
- Scrap high Mexican tariffs on European food and drinks.
- Allow EU firms to sell more services to Mexico.
- Pledge to protect workers’ rights and the environment.
Negotiations with Mexico started in May 2016 and both sides reached an agreement in principle on the trade part in April 2018. The new agreement, once ratified, will replace the existing EU-Mexico Global Agreement, which entered into force in 2000.
EU – New Zealand
The European Union has launched negotiations for a comprehensive and ambitious trade agreement with New Zealand.
Bilateral trade in goods between the two partners has risen steadily in recent years, reaching almost €8.7bn in 2017. The EU is New Zealand’s third-biggest trade partner.
According to the impact assessment, trade between New Zealand and the EU could increase by 36%; trade in goods could increase by 47%, whereas the services trade could increase by 14%.
The trade negotiations aim to:
- Reduce existing barriers to trade in goods and services.
- Make sure that European companies compete on a level playing field with businesses from countries that already have a trade agreement with New Zealand.
- Promote smart, sustainable and inclusive growth.
The Council of the European Union authorized opening negotiations for a trade agreement between the EU and New Zealand on 22 May 2018.