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WTO members considered five regional trade agreements (RTAs) between the United Kingdom and various trading partners, namely Central America, the Southern African Customs Union (SACU) and Mozambique, Moldova, Albania and Georgia at the 20, 21 and 27 November meetings of the Committee on Regional Trade Agreements (CRTA). They also considered two RTAs between the European Free Trade Association (EFTA) and two trading partners — Ecuador and Indonesia. In addition, they continued their discussions on improvements to the functioning of the CRTA and adopted the Committee’s annual report.
Under the Transparency Mechanism for RTAs, the Committee considered five RTAs between the UK and its trading partners aimed at maintaining the continuity of previous trade arrangements before the UK’s withdrawal from the European Union.
The Association Agreement between the United Kingdom and Central America: Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua and Panama (Goods and Services) entered into force on 1 January 2021. The Agreement maintains most commitments under the Association Agreement between the European Union and its Member States and Central America. The UK liberalized all but 4.9% of its tariffs upon entry into force of the Agreement while 4%-5.2% of Central American tariffs will remain dutiable for imports from the UK by 2027.
Under the Agreement, the liberalization of cross-border trade in services is taken on the basis of a positive list, indicating the sectors covered. The Agreement also includes provisions on investment, government procurement, intellectual property rights (IPRs), competition and sustainable development.
The UK, on behalf of all the parties, said the Agreement reproduces as closely as possible the EU-Central America Agreement. The parties are working together to ensure that all institutional mechanisms reflect the joint desire to support business growth and development and to ensure citizens benefit from increased free and fair trade, the UK said.
The Economic Partnership Agreement between the United Kingdom, the Southern African Customs Union (SACU) and Mozambique (Goods) entered into force on 1 January 2021. The Agreement maintains most commitments under the Economic Partnership Agreement (EPA) between the European Union and its Member States and the Southern African Development Community (SADC) EPA States. The UK will eliminate duties on all but 4.7% of its tariffs for imports from South Africa and 0.2% for imports from the other parties. SACU members will maintain duties on 13.5% of the common external tariffs for imports from the UK while Mozambique will maintain duties on 59.7% of its tariffs for imports from the UK.
The UK, on behalf of all the parties, said the EPA plays a vital role in providing both continuity and certainty for businesses. The UK noted that it also allows for other states in the region to accede to the EPA with the agreement of the parties.
The Strategic Partnership, Trade and Cooperation Agreement between the United Kingdom and the Republic of Moldova (Goods and Services) entered into force on 1 January 2021. It maintains most of the links between the parties under the EU-Moldova Agreement. For trade in goods, the parties are eliminating customs duties on all but 0.1% and 1% of the tariffs of the UK and Moldova, respectively. For trade in services, sectoral commitments taken by the parties under the Agreement improve on their commitments under the WTO General Agreement on Trade in Services (GATS).
The UK, delivering a joint statement with Moldova, said both parties have had access to a wide range of trade preferences that they benefited from under the EU-Moldova Agreement. Both parties furthermore agreed this year to temporarily liberalize all tariffs on imports from Moldova until 31 July 2024 to provide Moldova with support during the war in Ukraine.
The Partnership Trade and Cooperation Agreement between the United Kingdom and Albania (Goods and Services) entered into force on 3 May 2021. The Agreement maintains most commitments under the EU-Albania Stabilization and Association Agreement. Under the Agreement, the UK eliminates duties on all but 2.8% of its tariffs for imports from Albania while Albania eliminates duties on all but 7.3% of its tariffs for imports from the UK. Existing trade in services and establishment restrictions are “bound,” with progressive liberalization envisaged on the condition of Albania’s legislative alignment to that of the UK.
The UK, delivering a joint statement with Albania, said the Agreement replicates the trade preferences of the EU-Albania Agreement. High liberalization in trade continues to apply within the Agreement to prevent any disturbance to companies, allowing the business sector to trade on a preferential basis.
The Strategic Partnership and Cooperation Agreement between the United Kingdom and Georgia (Goods and Services) entered into force on 1 January 2021. The Agreement maintains most commitments under the EU-Georgia Deep and Comprehensive Free Trade Area. For trade in goods, Georgia is eliminating all tariffs while the UK maintains duties only on one tariff line (fresh or chilled garlic) for imports from Georgia. Trade in services is liberalized through a hybrid approach, with commitments following a negative list approach for establishment (indicating the excluded sectors) and a positive list approach for cross-border trade in services. The Agreement also covers rules of origin, safeguards, intellectual property, competition, sustainable development, e-commerce, small and medium enterprises, and trade-related energy issues.
Georgia, delivering a joint statement with the UK, said the Agreement provides important continuity and predictability to individuals, businesses and stakeholders in both countries. The Agreement lays the foundation for substantially enhanced trade and economic relations, with the latest data covering the eight months of 2023 showing a 24% year-on-year growth in bilateral trade to almost US$ 100 million.
The Committee also considered the Comprehensive Economic Partnership Agreement between the EFTA States and Ecuador (Goods and Services), which entered into force on 1 November 2020. The four EFTA states are Iceland, Liechtenstein, Norway and Switzerland. The Agreement provides preferential treatment on trade in goods and services between each of the EFTA parties which implemented commitments on entry into force, and Ecuador for which the transition period lasts until 2036. More than 90% of the parties’ tariff lines will be duty-free, except for Ecuador towards Iceland, and Switzerland towards Ecuador. The parties improved upon their GATS commitments for several sectors based on a positive list approach. Investment, IPRs, competition, government procurement, environment and labour are also regulated by the Agreement.
Switzerland, speaking on behalf of the EFTA states, said the parties confirmed the good functioning of the Agreement roughly one year on at a meeting held in December 2021. Furthermore, strong ties under the Agreement allowed parties to sustain trade even during disruptions posed by the COVID-19 pandemic. Ecuador said the stable relationship forged by the Agreement has increased trade flows and bilateral investment, and created jobs in the export sector.
The Comprehensive Economic Partnership Agreement between the EFTA States and Indonesia (Goods and Services) entered into force on 1 November 2021. Upon entry into force, EFTA states eliminated duties on at least 86% of lines in their respective tariffs while Indonesia will eliminate duties on 84% of its tariffs by 2032. Building on their GATS commitments, the parties also commit to further liberalize trade in services. The Agreement also includes provisions on IPRs, competition and sustainable development.
Switzerland, speaking on behalf of the EFTA states, said parties likewise confirmed the good functioning of the Agreement roughly one year on at a meeting held in December 2022 and discussed further work on monitoring the Agreement’s utilisation. Indonesia emphasized the comprehensive nature of the Agreement, which reflects a shared commitment to building a strong and inclusive framework that addresses the many facets of modern trade relations.
Notifications of RTAs
The Committee took note of seven regional trade agreement notifications, two of which concerned new agreements and five concerned changes to existing RTAs.
The Chair, Ambassador Clare Kelly of New Zealand, said that a factual presentation is to be prepared for 41 RTAs involving WTO members and 35 involving non-members, counting goods and services separately. The factual presentations for eight other services agreements, one of which involves a non-member, are on hold pending the negotiation of services commitments. She also noted that 56 RTAs currently in force have not been notified to the WTO according to a list compiled by the WTO Secretariat.
Members furthermore heard an update on the Australia-New Zealand Closer Economic Relations Trade Agreement on the occasion of its 40th anniversary. The Agreement allows for the seamless integration of the two economies while also reinforcing WTO rules, Australia said. New Zealand said trans-Tasman merchandise trade has increased 10.6% annually under the Agreement.
Improving the Committee’s work
Members discussed suggestions to improve the work of the Committee. The Chair, summarizing the discussions, noted that while members hold mixed views on scheduling thematic sessions about RTAs, they acknowledge that these can be taken up in informal meetings or by putting topics on the Committee’s agenda. Members also expressed support for procedural improvements implemented by the Secretariat such as making the work programme available online and providing a draft summary of a factual presentation as requested by members. The Chair said they will continue discussions in the Committee’s first meeting in 2024. Members furthermore adopted the Committee’s annual report.
Date of next meeting
The next Committee meeting is tentatively scheduled for 27-28 March 2024.
Source: WTO News