REGIONAL TRADE AGREEMENTS
The Committee considered the Trade and Cooperation Agreement between the EU and the UK, Goods and Services, under the Transparency Mechanism for RTAs. The Agreement was applied provisionally on 1 January 2021 following the UK's withdrawal from the EU and entered into force on 1 May 2021. The EU said the Agreement sets out preferential arrangements between the two parties in areas such as trade in goods and services, digital trade, intellectual property, public procurement, energy, social security coordination, law enforcement and judicial cooperation on criminal matters, cooperation and participation in EU programmes.
The Agreement offers predictability in order to facilitate trade, the EU said, noting that the tariff liberalization in the Agreement is unprecedented and ensures low prices for consumers and producers. Other provisions will ensure that the EU and UK maintain strong trade and investment links, the EU said.
The UK highlighted provisions in the Agreement, such as for investment liberalisation, trade in services, energy and free flow of capital. The Agreement also contains disciplines and transparency obligations for subsidies. It achieves a high level of ambition and is resilient to the changing regulatory environment for the digital economy, the UK said.
The Committee also considered the Economic Partnership Agreement (EPA) between the ESA States and the UK, Goods. The Agreement entered into force on 1 January 2021 for the UK, Mauritius, Seychelles and Zimbabwe. Madagascar and Comoros have also signed the Agreement but have not yet put it into force under their domestic legislation. In a joint statement, the four current parties to the Agreement said the EPA provides continuity and certainty for ESA and British businesses following the UK's withdrawal from the European Union. Overall trade was worth GBP 1.1 billion pounds in 2022 and all parties are keen to see further growth.
The Agreement is development orientated with asymmetrical tariff liberalization commitments, providing duty-free, quota-free market access for goods originating in ESA States in the UK market. The Agreement also provides for generous rules of origin to allow more ESA products to qualify for preferential tariffs. On the other hand, ESA States will progressively and gradually liberalise their tariffs over a number of decades for goods originating from the UK.
The EPA also allows ESA States to maintain regional preferences to other African countries and regions without having them extended to the UK. The UK is also required to extend to ESA States any more favorable treatment resulting from a future trade agreement with a third party. The asymmetrical tariff liberalization schedule is designed to help ESA States grow their economies and participate in global trade.
For the Comprehensive Economic Partnership Agreement (CEPA) between the UK and Japan, Goods and Services, which entered into force on 1 January 2021, the two members said in a joint statement that the CEPA builds upon the EU-Japan EPA and goes beyond the continuity arrangements put in place during the UK's withdrawal from the EU. In the long term, 94% of Japanese tariff lines and 99% of Japanese imports from the UK will be fully liberalised, whilst more than 99% of UK tariff lines and UK imports from Japan will be fully liberalised. The CEPA contains more liberal rules of origin provisions in support of established supply chains.
Provisions on trade in services, meanwhile, incorporate additions from the WTO Joint Initiative on Services Domestic Regulation and include commitments on the temporary movements of highly skilled professionals. The UK and Japan expect furthermore to cooperate under the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) once the UK's accession is complete.
For the Comprehensive Economic Cooperation and Partnership Agreement between India and Mauritius, the Committee considered the services aspects of the Agreement as the goods aspects will be taken up at the Committee on Trade and Development. India said the Agreement is its first with an African country. The Agreement, which entered into force on 1 April 2021, includes provisions on the movement of natural persons, telecommunications, financial services, dispute settlement and cooperation in other areas. Since 2005, India has been among the largest trading partners of Mauritius and has been one of the largest exporters of goods and services to Mauritius, India said.
Mauritius said the conclusion of the Agreement marks an important milestone in relations between the two countries. Mauritius said the parties undertook commitments relating to insurance services, banking, telecommunications and professional services.
The Committee also considered the Free Trade Agreement between Türkiye and Serbia, Services, which entered into force on 1 June 2019. Türkiye said the Agreement expands existing arrangements on trade in services between the two parties. It added that the parties to the Agreement followed a similar approach as in the WTO General Agreement on Trade in Services (GATS). Türkiye noted commitments it undertook to liberalize business services, construction, distribution services, and recreational, cultural and sporting services.
Serbia, a WTO observer, said the main purpose of the Agreement is to enhance bilateral economic cooperation, facilitate investments and increase trade. Tourism and transport are the key services sectors traded between the two countries. It is now more important than ever to support an open trade environment based on global trading rules that underpin mutual growth and prosperity, Serbia said.
Election of the chair
Members elected Ambassador Clare Kelly of New Zealand as the new Committee chair at the start of the meeting. She replaces Ambassador Taeho Lee of Korea.
Enhancing the Committee's work
The Committee took note of seven RTA notifications, three of which concerned new RTAs. Ambassador Kelly noted that there are 51 RTAs involving WTO members and 37 involving non-members for which a factual presentation has to be prepared, counting goods and services separately. The factual presentations for seven services agreements, one of which involves a non-member, are on hold pending the negotiation of services commitments. She also noted that the Secretariat had circulated a list of 57 RTAs currently in force that had not been notified to the WTO, while end of implementation reports were due for 194 RTAs by March 2023.
Members discussed how to improve the functioning of the Committee in response to questions the United States circulated in January. The chair, summarizing the informal discussions noted that there was a lot of interest in making sure members make the most out of the Committee. The chair said she will hold further informal consultations with members on the matter.
The next Committee meeting is tentatively scheduled for 3-4 July.
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