Barriers to EU trade and investment

Every year, the European Commission publishes a report on the barriers to trade and investment faced by European Union (EU) companies in the markets of its key economic partners. The 2015 report concludes that, despite global economic recovery, these barriers still remain.

ACT

Report from the Commission to the European Council - Trade and investment barriers report 2015 (COM(2015) 127 final of 17.3.2015).

SUMMARY

WHAT DOES THIS REPORT DO?

The report is part of the EU’s trade enforcement strategy set out in 2010 to complement the Europe 2020 strategy.

The report:

• gives an overview of EU trade and investment negotiations;
• examines barriers to trade and investment faced by EU businesses in Argentina, Brazil, China, India, Japan, Russia and the United States;
• outlines actions taken by the Commission to secure access to global markets for European firms.

KEY POINTS

Ongoing negotiations

Milestones in 2014 include:

• outstanding issues of the WTO ‘Bali Package’ solved - including those related to the Trade Facilitation Agreement;
• negotiations with the US on a Transatlantic Trade and Investment Partnership continued;
• negotiations completed on the EU-Canada trade agreement;
• signing of association agreements with the EU by Moldova and Georgia, which include deep and comprehensive free trade areas;
• negotiations under way with China on a comprehensive investment agreement. This is expected to benefit both sides by ensuring that markets are open to investment in both directions.

Examples of key trade and investment barriers identified

Argentina and Brazil:

• Argentina's ‘sworn prior importer declaration’ for all imports remains a major challenge;
• Argentina’s restrictions on the transfer of foreign currencies, dividends* and royalties*;
• foreign ownership limitations in Brazil, for example in the media, aviation and mining sectors;
• discriminatory taxes and subsidisation of domestic producers in Brazil;
• Brazil’s measures distorting the conditions for participation in public tenders.

China:

• significant restrictions on foreign investment;
• issues regarding the respect for intellectual property rights;
• only Chinese-developed information security technology is regarded as ‘safe’;
• market access barriers in the health and cosmetics sectors;
• sanitary and phytosanitary-related barriers.

India:

• market access barriers in the IT and electronics sectors;
• restrictive approach for the use of stickers on packaging, which triggered a serious disruption in trade of foodstuffs.

Japan:

• public procurement (including railways).

Russia:

• incorrect implementation of WTO bound tariffs for many products;
• new law on personal data localisation requires all personal data of Russian individuals to be physically stored and processed in Russia, with no exemptions for commercial data; this has clear implications for EU companies that will only be able to use Russian-based data centres when processing the details of Russian individuals;
• sanitary and phytosanitary-related barriers;
• ban on agricultural products and foodstuffs from the EU due to sanctions against Russia in the context of the situation in Ukraine;
• regulations that often establish excessive certification and conformity assessment requirements;
• subsidies for manufacturers and purchasers of agricultural machinery with certain local content conditions.

United States:

• ‘Buy American’ restrictions governing public procurement;
• sanitary and phytosanitary-related barriers;
• difficulties protecting intellectual property rights - such as EU geographical indications on food and drinks.

Commission market access efforts

The Commission uses different tools to address trade and investment barriers:

• ongoing free trade agreement (FTA) negotiations (the EU in negotiation with four of the six partners);
• implementation and enforcement of existing FTAs;
• WTO dispute settlement proceedings;
• WTO committees;
• International summits (often in G20 format, i.e. meetings involving the world’s 20 largest economies).

For more information, see accessing markets on the European Commission’s website.

KEY TERMS

* Dividends: money paid out by a company to its shareholders.

* Royalties: sums paid to the holder of intellectual property for its use. Examples include payment to a musician for each recording sold or to an inventor for the use of a patent.

last update 07.08.2015