Free trade agreements are a key factor in competitiveness and an essential element of the strategy of logistics transport companies.
Since Donald Trump’s arrival in January 2017, bilateral discussions between the United States and the European Union, which began under the Obama administration in 2013, have been completely abandoned.
The Transatlantic Trade and Investment Partnership (TITP), better known as TAFTA (Transatlantic Free Trade Aagreement), had become definitively obsolete, but there were signs that a rapprochement between the two parties was underway. An opportunity for CERL to inform you about the latest free trade agreements that could boost your business!
The European Union begins negotiations with the United States
A first bilateral meeting had already taken place in July 2018 to record this first rapprochement. The American President had agreed with the President of the European Commission, Jean-Claude Juncker, to relaunch a new phase of negotiations. An economic study had been conducted on the impact that the removal of tariff barriers on certain industrial products between the USA and the European Union would have. According to this analysis, the feedback for both sides was very positive.
Last April, the European Council approved the mandates authorising the European Commission to open formal negotiations with the United States. The negotiations are based on two mandates:
- Elimination of tariffs on industrial products (agricultural products are excluded, as are public procurement and services)
- Elimination of non-tariff barriers, “by making it easier for companies to prove that their products meet the technical requirements of both the EU and the United States, while maintaining a high level of protection in the EU“, according to the European Council communiqué. This part of the agreement clearly aims at approximating compliance standards to enable better trade between the parties. Harmonisation of standards is a significant lever for lowering trade costs and facilitating international trade.
The EU may unilaterally suspend negotiations if the United States imposes new trade restrictions on EU products.
The steel and aluminium war with the USA is not forgotten in this mandate… A means like any other to protect oneself from the wrath of Donald Trump when negotiations are not going in the right direction. Recently, the American President warned by a simple tweet of a 25% increase in customs duties on certain products from China. As negotiations with China are not progressing fast enough, this increase is an obvious means of pressure to accelerate the decisions of the Chinese leaders. To be continued…
Update on free trade agreements in 2019
Beyond the future USA/EU and USA/China agreement, the CETA, a free trade agreement with Canada, did indeed enter into partial application at the end of 2017. According to Eurostats, it can be noted that the agreement has so far benefited Europeans. Exports of goods from the European Union to Canada increased by 7% in value between September 2017 and July 2018 compared to the same period in the previous year.
Since 1 February 2019 Japan has also joined the list of countries benefiting from an agreement with the EU. It should lead to the elimination of customs duties on almost 90% of the products exported to Japan by the EU. For other products, the elimination of customs duties will be gradual over a period of 20 years. Ultimately, the agreement will eliminate 97% of customs duties on goods exported to Japan.
The European Commission is currently negotiating with many other countries for free trade agreements that could be quickly unveiled: Vietnam, Singapore and probably soon Great Britain in a context of Brexit.
How can we accelerate its growth by monitoring the latest free trade agreements in progress?
The Customs website has dedicated a special page on free trade agreements granted by the European Union. Essential and practical, the site is useful for all questions relating to origins and to find the regulatory basis for agreements concluded by the EU.
CERL can assist you in your imports and exports
No matter the size of your project, CERL can assist you in all your transportation and logistics projects. Our teams are trained to perfectly master the latest developments in customs, tax and economic matters.
Together with you, we will design the optimal solution for your supply chain.
From the pick-up to the final delivery of the goods, our teams provide you with an adapted and individualized professional solution!
Feel free to test our solutions.