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Document 52019SC0370

COMMISSION STAFF WORKING DOCUMENT Individual reports and info sheets on implementation of EU Free Trade Agreements Accompanying the document REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE AND THE COMMITTEE OF THE REGIONS on Implementation of Free Trade Agreements 1 January 2018 - 31 December 2018

SWD/2019/370 final

Brussels, 14.10.2019

SWD(2019) 370 final

COMMISSION STAFF WORKING DOCUMENT

Individual reports and info sheets on implementation of EU Free Trade Agreements

Accompanying the document

REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE AND THE COMMITTEE OF THE REGIONS

on Implementation of Free Trade Agreements



1 January 2018 - 31 December 2018

{COM(2019) 455 final}


DATA USED FOR THE COMPILATION OF INDIVIDUAL REPORTS AND INFORMATION SHEETS    

PART I:    NEW GENERATION FREE TRADE AGREEMENTS    

ANNUAL REPORT ON THE IMPLEMENTATION OF THE COMPREHENSIVE ECONOMIC AND TRADE AGREEMENT (CETA) BETWEEN THE EU AND ITS MEMBER STATES AND CANADA    

1.    Introduction    

2.    Evolution of trade    

3.    Activities of the implementation bodies    

4.    Implementation of the provisions on trade and sustainable development    

5.    Agriculture    

6.    Regulatory Cooperation    

7.    Conclusions and outlook    

8.    Statistics    

ANNUAL REPORT ON THE IMPLEMENTATION OF THE EU-SOUTH KOREA FREE TRADE AGREEMENT    

1.    Introduction    

2.    Evolution of bilateral trade    

2.1 Trade in Goods    

2.2 Trade in agricultural goods    

2.3 Trade in Services and Foreign Direct Investment (FDI)    

3.    Activities of the implementation bodies    

4.    Implementation of the provisions on trade and sustainable development    

5.    Specific areas subject to monitoring    

6.    Progress, main open issues and follow-up actions    

7.    Conclusions and outlook    

8.    Statistics    

ANNUAL REPORT ON THE IMPLEMENTATION OF THE EU-COLOMBIA/ECUADOR/PERU TRADE AGREEMENT    

1.    Introduction    

2.    Evolution of trade    

2.1 Trade in Goods    

2.1.1 Overall evolution    

2.1.2 Trade in agricultural goods    

2.2 Trade in Services and development of investment    

2.2.1 Trade in Services    

2.2.2 Foreign Direct investment (FDIs)    

3    Activities of the implementation bodies    

4.    Implementation of the provisions on trade and sustainable development    

5.    Specific areas subject to reporting or monitoring    

6.    Conclusions and outlook    

7.    Statistics    

ANNUAL REPORT ON THE IMPLEMENTATION OF PART IV OF THE ASSOCIATION AGREEMENT BETWEEN THE EU AND ITS MEMBER STATES AND CENTRAL AMERICA    

1.    Introduction    

2.    Overall assessment: evolution of bilateral trade    

2.1    Trade in Goods overall    

Sectoral structure of trade    

Country-by-Country analysis    

2.2    Trade in agricultural goods    

2.3    Trade in Services and Foreign Direct investment (FDIs)    

Trade in Services    

Development of Foreign Direct investment (FDI)    

3    Activities of the implementation bodies    

4    Implementation of the provisions on trade and sustainable development    

5    Specific areas subject to reporting or monitoring    

6    Conclusions and outlook    

7    Statistics    

PART II: ANNUAL REPORT ON THE IMPLEMENTATION OF THE DEEP AND COMPREHENSIVE FREE TRADE AREA (DCFTA) BETWEEN THE EU AND UKRAINE, MOLDOVA AND GEORGIA    

ANNUAL REPORT ON THE IMPLEMENTATION OF THE DEEP AND COMPREHENSIVE FREE TRADE AREA (DCFTA) BETWEEN THE EU AND ITS MEMBER STATES AND UKRAINE    

1.    Evolution of trade    

1.1 Trade in goods overall    

Scope of trade liberalisation    

Sectoral structure of EU-Ukraine trade in goods    

1.2 Trade in agricultural goods    

Use of Tariff Rate Quotas    

1.3 Autonomous trade measures    

1.4 Establishment, trade in services and investments    

Market access related to establishment and trade in services    

Trade in services    

Foreign Direct investment (FDI)    

1.5 EU support to the implementation of the DCFTA    

1.5 EU support for Small and Medium sized Enterprises (SMEs)    

2    Activities of the implementation bodies    

2.1 Joint decisions of the Association Bodies    

2.2 Meetings of the Association Bodies    

3    Implementation of the provisions on trade and sustainable development    

4    Progress made, main open issues and follow-up actions    

4.1 Wood export ban    

4.2 Value added tax law 2440    

4.3 Poultry meat imports    

4.4 Technical barriers to trade    

4.5 SPS aspects    

4.6 Customs and Trade facilitation    

4.7 Intellectual property rights (IPR)    

4.8 Geographical indications (GIs)    

4.9 Competition and State aid    

4.10 Public procurement    

5    Conclusions and outlook    

6    Statistics    

ANNUAL REPORT ON THE IMPLEMENTATION OF THE DEEP AND COMPREHENSIVE FREE TRADE AREA (DCFTA) BETWEEN THE EU AND ITS MEMBER STATES AND GEORGIA    

1.    Evolution of trade    

1.1 Trade in Goods overall    

The scope of trade liberalisation    

Overall evolution of EU–Georgia trade in goods    

Sectoral structure of EU-Georgia trade in goods    

1.2 Trade in agricultural goods    

1.3 Use of Tariff Rate Quotas (TRQ)    

1.4 Establishment, trade in services and investments    

Market access related to establishment and trade in services    

Trade in services    

Foreign Direct investment    

2.    Activities of the implementation bodies    

2.1 Joint decisions of the Association Bodies    

2.2 Meetings of the Association Bodies    

3.    Implementation of the provisions on trade and sustainable development    

4.    Specific areas subject to reporting or monitoring    

5.    Progress made, main open issues and follow-up actions    

6.    EU support to DCFTA implementation    

7.    Conclusions and outlook    

7.    Statistics    

ANNUAL REPORT ON THE IMPLEMENTATION OF THE DEEP AND COMPREHENSIVE FREE TRADE AREA (DCFTA) BETWEEN THE EU AND ITS MEMBER STATES AND MOLDOVA    

1    Evolution of trade    

1.1 Trade in goods overall    

The scope of trade liberalisation    

Overall evolution of EU-Moldova trade in goods    

Sectoral structure of EU-Moldova trade in goods    

1.2 Trade in agricultural goods    

Review clause for agricultural products    

Anti-circumvention mechanism for agricultural products    

Use of Tariff Rate Quotas (TRQs)    

1.3 Establishment, trade in services and investments    

Market access related to establishment and trade in services    

Trade in Services    

Foreign Direct investment (FDIs)    

2.    Activities of the implementation bodies    

2.1 Joint decisions of the Association Bodies    

2.2 Meetings of the Association Bodies    

3.    Implementation of the provisions on trade and sustainable development    

4.    Progress made, main open issues and follow-up actions    

4.1 SPS aspects    

4.2 Technical Barriers to Trade    

4.3 Customs and Trade Facilitation    

4.4 Energy    

4.5 Competition policy    

4.6 Intellectual Property Rights    

4.7 Services    

4.8 Public Procurement    

5.    EU support to DCFTA implementation    

5.1 EU Support to DCFTA-related reforms    

5.2 EU Support for SMEs    

6.    Outlook and Conclusion    

7.    Statistics    

PART III: FIRST GENERATION FREE TRADE AGREEMENTS    

FIRST GENERATION FREE TRADE AGREEMENTS WITH MEDITERRANEAN PARTNERS    

ANNUAL INFO SHEET ON THE IMPLEMENTATION OF THE EU-ALGERIA ASSOCIATION AGREEMENT    

1.    Introduction    

2.    Evolution of trade    

2.1 Trade in Goods    

2.2 Trade in agricultural goods    

2.3 Trade in Services and Investment    

3.    Issues addressed in the Sub-Committee meetings    

4.    Specific areas of importance    

5.    Progress made, main open issues and follow-up actions    

6.    Conclusions and outlook    

7.    Statistics    

ANNUAL INFO SHEET ON THE IMPLEMENTATION OF THE EU-EGYPT ASSOCIATION AGREEMENT    

1.    Introduction    

2.    Evolution of trade    

2.1 Trade in Goods    

2.2 Trade in agricultural goods    

2.3 Trade in Services and Foreign Direct Investment    

3.    Issues addressed in the Joint Committee meetings    

4.    Specific areas of importance    

5.    Progress made, main open issues and follow-up actions    

6.    Conclusions and outlook    

7.    Statistics    

ANNUAL INFO SHEET ON THE IMPLEMENTATION OF THE EU-ISRAEL ASSOCIATION AGREEMENT    

1.    Introduction    

2.    Evolution of trade    

2.1    Trade in Goods    

2.2    Trade in agricultural goods    

2.3    Trade in Services and Foreign Direct Investment (FDI)    

3.    Issues addressed in the Annual (Joint Committee/Trade Committee) meeting    

4.    Specific areas of importance    

5.    Progress made, main open issues and follow-up actions    

6.    Conclusions and outlook    

7.    Statistics    

ANNUAL INFO SHEET ON THE IMPLEMENTATION OF THE EU-JORDAN ASSOCIATION AGREEMENT    

1.    Introduction    

2.    Evolution of trade    

2.1.    Trade in Goods    

2.2.    Trade in agricultural goods    

2.3.    Trade in Services and Investment    

3.    Issues addressed in the Annual (Joint Committee/Trade Committee) meeting    

4.    Specific areas of importance    

5.    Progress made, main open issues and follow-up actions    

6.    Conclusions and outlook    

7.    Statistics    

ANNUAL INFO SHEET ON THE IMPLEMENTATION OF THE EU-LEBANON ASSOCIATION AGREEMENT    

1.    Introduction    

2.    Evolution of trade    

2.1 Trade in Goods    

2.2 Trade in agricultural goods    

2.3 Trade in Services and Foreign Direct Investment (FDI)    

3.    Issues addressed in the Annual Joint Committee meetings    

4.    Specific areas of importance    

5.    Progress made, main open issues and follow-up actions    

6.    Conclusions and outlook    

7.    Statistics    

ANNUAL INFO SHEET ON THE IMPLEMENTATION OF THE EU-MOROCCO ASSOCIATION AGREEMENT    

1.    Introduction    

2.    Evolution of trade    

2.1 Trade in Goods    

2.2 Trade in agricultural goods    

2.3 Trade in Services and Foreign Direct investment (FDIs)    

3.    Issues addressed in the Joint Committee meetings    

4.    Specific areas of importance    

5.    Progress made, main open issues and follow-up actions    

6.    Conclusions and outlook    

7.    Statistics    

ANNUAL INFO SHEET ON THE IMPLEMENTATION OF THE EU-PALESTINE INTERIM ASSOCIATION AGREEMENT    

1.    Introduction    

2.    Evolution of trade    

2.1 Trade in Goods    

2.2 Trade in agricultural goods    

2.3    Trade in Services and Foreign Direct investment (FDIs)    

3.    Issues addressed in the Annual (Joint Committee/Trade Committee) meeting    

4.    Specific areas of importance    

5.    Progress made, main open issues and follow-up actions    

6.    Conclusions and outlook    

7.    Statistics    

ANNUAL INFO SHEET ON THE IMPLEMENTATION OF THE EU-TUNISIA ASSOCIATION AGREEMENT    

1.    Introduction    

2.    Evolution of trade    

2.1 Trade in Goods    

2.2 Trade in agricultural goods    

2.4 Trade in Services and Investment    

3.    Issues addressed in the Joint Committee meetings    

4.    Specific areas of importance    

5.    Progress, main open issues and follow-up actions    

6.    Conclusions and outlook    

7.    Statistics    

FIRST GENERATION FREE TRADE AGREEMENTS WITH THE WESTERN BALKAN PARTNERS    

ANNUAL INFO SHEET ON THE IMPLEMENTATION OF THE TRADE PILLAR OF THE EU-ALBANIA STABILISATION AND ASSOCIATION AGREEMENT    

1.    Introduction    

2.    Evolution of trade    

2.1 Trade in Goods    

2.2 Trade in agricultural goods    

2.3 Trade in Services and Foreign Direct investment (FDIs)    

3.    Issues addressed in the Joint Committee meetings    

4.    Specific areas of importance    

5.    Main open issues and follow-up actions    

6.    Conclusions    

7.    Statistics    

ANNUAL INFO SHEET ON THE IMPLEMENTATION OF THE TRADE PILLAR OF THE EU-BOSNIA AND HERZEGOVINA STABILISATION AND ASSOCIATION AGREEMENT    

1.    Introduction    

2.    Evolution of trade    

2.1 Trade in Goods    

2.2 Trade in agricultural goods    

2.3 Trade in Services and Foreign Direct investment (FDIs)    

3.    Issues addressed in the annual Committee meetings    

4.    Specific areas of importance    

5.    Main open issues and follow-up actions    

6.    Conclusions    

7.    Statistics    

ANNUAL INFO SHEET ON THE IMPLEMENTATION OF THE TRADE PILLAR OF THE STABILISATION AND ASSOCIATION AGREEMENT BETWEEN THE EU AND NORTH MACEDONIA    

1.    Introduction    

2.    Evolution of trade    

2.1 Trade in Goods    

2.2 Trade in agricultural goods    

2.3 Trade in Services and FDI    

3.    Issues addressed in the annual Committee meetings    

4.    Specific areas of importance    

5.    Main open issues and follow-up actions    

6.    Conclusions    

7.    Statistics    

ANNUAL INFO SHEET ON THE IMPLEMENTATION OF THE TRADE PILLAR OF THE EU-KOSOVO STABILISATION AND ASSOCIATION AGREEMENT    

1.    Introduction    

2.    Evolution of trade    

2.1 Trade in Goods    

2.2 Trade in agricultural goods    

2.4 Trade in Services and Foreign Direct investment (FDIs)    

3.    Issues addressed in the annual Committee meetings    

4.    Specific areas of importance    

5.    Main open issues and follow-up actions    

6.    Conclusions    

7.    Statistics    

ANNUAL INFO SHEET ON the IMPLEMENTATION OF the trade pillar of the EU-MONTENEGRO STABILISATION AND ASSOCIATION AGREEMENT    

1.    Introduction    

2.    Evolution of trade    

2.1 Trade in Goods    

2.2 Trade in Agricultural Goods    

2.3 Trade in Services and Foreign Direct investment (FDIs)    

3.    Issues addressed in the annual Committee meetings    

4.    Specific areas of importance    

5.    Main open issues and follow-up actions    

6.    Conclusions    

7.    Statistics    

ANNUAL INFO SHEET ON the IMPLEMENTATION OF the TRADE PILLAR OF THE EU-SERBIA STABILISATION AND ASSOCIATION AGREEMENT    

1.    Introduction    

2.    Evolution of trade    

2.1 Trade in Goods    

2.2 Trade in agricultural goods    

2.3 Trade in Services and Foreign Direct investment (FDIs)    

3.    Issues addressed in the annual trade committee meeting    

4.    Specific areas of importance    

5.    Main open issues and follow-up actions    

6.    Conclusions    

7.    Statistics    

FIRST GENERATION FREE TRADE AGREEMENTS WITH LATIN AMERICAN COUNTRIES    

ANNUAL INFO SHEET ON IMPLEMENTATION OF THE TRADE PILLAR OF THE EU-CHILE ASSOCIATION AGREEMENT    

1.    Introduction    

2.    Evolution of trade    

2.1    Trade in Goods    

2.2    Trade in agricultural products    

2.3    Trade in Services and Foreign Direct investment (FDIs)    

3.    Annual Trade Coordinators Meeting and Trade-related Sub-committees    

4.    Progress made, Main open issues and follow-up actions    

5.    Conclusions and outlook    

6.    Statistics    

ANNUAL INFO SHEET ON IMPLEMENTATION OF THE TRADE PILLAR OF THE EU-MEXICO ASSOCIATION AGREEMENT    

1.    Introduction    

2.    Evolution of trade    

2.2 Trade in goods    

2.2 Trade in agricultural goods    

2.3 Trade in services and Foreign Direct investment (FDIs)    

3.    Issues addressed in the joint committee meetings    

4.    Progress made, main open issues and follow-up actions    

5.    Conclusions and outlook    

6.    Statistics    

FIRST GENERATION FREE TRADE AGREEMENTS WITH THE EFTA COUNTRIES NORWAY AND SWITZERLAND    

ANNUAL INFO SHEET ON IMPLEMENTATION OF THE EU-NORWAY FREE TRADE AGREEMENT    

1.    Introduction    

2.    Evolution of trade    

2.1 Trade in Goods    

2.2 Trade in agricultural goods    

2.3 Trade in Services and Foreign Direct investment (FDIs)    

3.    Issues addressed in the EEA and FTA Joint committees    

4.    Specific areas of importance    

5.    Progress made, main open issues and follow-up actions    

6.    Conclusions and outlook    

7.    Statistics    

ANNUAL INFO SHEET ON IMPLEMENTATION OF THE EU-SWITZERLAND FREE TRADE AGREEMENT    

1.    Introduction    

2.    Evolution of trade    

2.1.    Trade in Goods    

2.2.    Trade in agricultural goods    

2.3.    Trade in Services and Foreign Direct investment (FDIs)    

3.    Issues addressed in the annual joint committee meeting    

4.    Specific areas of importance    

5.    Progress made, main open issues and follow-up actions    

6.    Conclusions and outlook    

7.    Statistics    

THE CUSTOMS UNION WITH TURKEY    

ANNUAL INFO SHEET ON IMPLEMENTATION OF THE EU-TURKEY CUSTOMS UNION AND TRADE AGREEMENTS    

1.    Evolution of trade    

1.1    Trade in Goods    

1.2 Trade in agricultural goods    

1.3    Trade in Services and Foreign Direct investment (FDIs)    

2    Issues addressed in the Committee Meetings    

3    Specific areas of importance    

4    Progress made, main open issues and follow-up actions    

5    Conclusions and outlook    

6.    Statistics    

PART IV: ANNUAL INFO SHEET ON THE IMPLEMENTATION OF THE ECONOMIC PARTNERSHIP AGREEMENTS (EPAs) WITH AFRICAN, CARRIBEAN AND PACIFIC COUNTRIES    

ANNUAL INFO SHEET ON THE IMPLEMENTATION OF THE ECONOMIC PARTNERSHIP AGREEMENT (EPA) BETWEEN THE EU AND THE SOUTHERN AFRICAN DEVELOPMENT COMMUNITY (SADC)    

1.    Introduction    

2.    Evolution of trade    

2.1 Trade in goods    

2.2 Trade in services    

2.3 Foreign Direct Investment (FDI)    

3.    Issues addressed in the annual EPA Committee meeting    

4.    Specific areas of importance    

5.    Progress made, main open issues and follow-up actions    

6.    Conclusions and outlook    

7.    Statistics    

ANNUAL INFO SHEET ON THE IMPLEMENTATION OF THE INTERIM ECONOMIC PARTNERSHIP AGREEMENT BETWEEN THE EU AND EASTERN AND SOUTHERN AFRICAN STATES    

1.    Introduction    

2.    Evolution of trade    

2.1 Trade in Goods    

2.2 Trade in Services    

2.3 Foreign Direct investment (FDI)    

3.    Issues addressed in the annual EPA Committee Meeting    

4.    Development Cooperation    

5.    Progress made, main open issues and follow-up actions    

6.    Conclusions and outlook    

7.    Statistics    

Madagascar    

Mauritius    

Seychelles    

Zimbabwe    

ANNUAL INFO SHEET ON THE IMPLEMENTATION OF THE ECONOMIC PARTNERSHIP AGREEMENT (EPA) BETWEEN THE EU AND COTE D’IVOIRE    

1.    Introduction    

2.    Evolution of trade    

2.1 Trade in goods    

2.2 Trade in services    

2.3 Foreign Direct investment (FDI)    

3.    Issues addressed in the annual EPA Committee meeting    

4.    Development Cooperation    

5.    Progress made, main open issues and follow-up actions    

6.    Conclusions and outlook    

7.    Statistics    

ANNUAL INFO SHEET ON THE IMPLEMENTATION OF THE ECONOMIC PARTNERSHIP AGREEMENT (EPA) BETWEEN THE EU AND GHANA    

1.    Introduction    

2.    Evolution of trade    

2.1 Trade in goods    

2.2 Trade in services    

2.3 Foreign Direct investment (FDIs)    

3.    Issues addressed in the first meeting of the joint EPA Committee    

4.    Development Cooperation    

5.    Follow-up actions    

6.    Conclusions and outlook    

7.    Statistics    

ANNUAL INFO SHEET ON THE IMPLEMENTATION OF THE ECONOMIC PARTNERSHIP AGREEMENT (EPA) BETWEEN THE EU AND CAMEROON    

1.    Introduction    

2.    Evolution of trade    

2.1 Trade in goods    

2.2 Trade in services    

2.3 Foreign Direct investment (FDI)    

3.    Issues addressed in the annual EPA Committee meeting    

4.    Development Cooperation    

5.    Main open issues and follow-up actions    

6.    Conclusions and outlook    

7.    Statistics    

ANNUAL INFO SHEET ON THE IMPLEMENTATION OF THE ECONOMIC PARTNERSHIP AGREEMENT (EPA) BETWEEN THE EU AND CARIFORUM    

1.    Introduction    

2.    Evolution of trade    

2.1 Trade in goods    

2.2 Trade in services    

2.3 Foreign Direct investment (FDI)    

3.    Issues addressed in the EPA Committee meetings    

4.    Specific areas of importance    

5.    Progress made, main open issues and follow-up actions    

6.    Conclusions and outlook    

7.    Statistics    

ANNUAL INFO SHEET ON THE IMPLEMENTATION OF THE ECONOMIC PARTNERSHIP AGREEMENT (EPA) BETWEEN THE EU AND PACIFIC STATES    

1.    Introduction    

2.    Evolution of trade    

2.1 Trade in goods    

2.2 Trade in services    

2.3 Foreign Direct investment (FDI)    

3.    Issues addressed in the EPA Committee meetings    

4.    Development Cooperation    

5.    Progress made, main open issues and follow-up actions    

6.    Conclusions and outlook    

7.    Statistics    



DATA USED FOR THE COMPILATION OF INDIVIDUAL REPORTS AND INFORMATION SHEETS

The trade statistics used in this report and the attached staff working document on the evolution of trade and investment flows are based on EUROSTAT data as available on 30 March 2019, except where indicated otherwise. The most recent annual data available for trade in goods are for 2018, and for services and investment for 2017, except where indicated otherwise.



PART I:    NEW GENERATION FREE TRADE AGREEMENTS



ANNUAL REPORT ON THE IMPLEMENTATION OF THE COMPREHENSIVE ECONOMIC AND TRADE AGREEMENT (CETA) BETWEEN THE EU AND ITS MEMBER STATES AND CANADA

1.Introduction

The EU-Canada Comprehensive Economic and Trade Agreement (“CETA”) has been provisionally applied since 21 September 2017. 2018 was the first full year of provisional application. While it is too early to take a definitive view on the economic impact of the Agreement, trade flows suggest a positive trajectory with EU goods exports rising by 15% compared to the average of the previous three years. Good progress has also been achieved in implementing the institutional structure foreseen by the Agreement, with the parties identifying the co-chairs and contact points for the twenty committees and dialogues established under CETA and almost all committees and dialogues held their first meetings in the course of 2018 (more details below). Important efforts were made to ensure that the conduct of these meetings is transparent and inclusive. Meeting schedules, provisional agendas and reports of all CETA committees and dialogue meetings were made public on DG TRADE's website ( http://trade.ec.europa.eu/doclib/press/index.cfm?id=1811 ). Civil society mechanisms as foreseen by agreement were set up and further initiatives of civil society engagement were implemented for committees like the Regulatory Co-operation Forum, in light of the interest of stakeholders regarding the Forum.

On 26 of September 2018, the EU and Canada held the first CETA Joint Committee, which is the highest body under the agreement. They reviewed progress made by the various CETA committees and dialogues and discussed the effective implementation of the agreement. Several Member States and Canadian provinces participated in the meeting.

Issues of concern that the EU raised related notably to the cheese TRQ management by Canada, access to the Canadian Wines & Spirits and Geographical Indications (GI) protection in Canada. From the Canadian side, main concerns relate to EU legislation in the Sanitary and phytosanitary (SPS) field (Country of Origin Labelling, Maximum Residue Levels), the implementation of the conformity assessment protocol and the beef and pork TRQ management.

The Joint Committee formally adopted three recommendations, which set the stage for further work, namely to encourage small and medium-sized enterprises (SMEs) to use opportunities offered by CETA, to work jointly on climate action measures and the implementation of the Paris Agreement within the CETA context, and to work jointly to better understand how trade agreements can contribute to gender equality. The Parties also set up dedicated contact points for trade and gender and trade and SMEs. Work is underway to implement the concerned recommendations. For instance, a CETA Workshop on Trade and Gender, co-organised by the Commission and by the Mission of Canada to the EU, took place in Brussels on 1 April 2019. Participants from business, civil society, EU Member States and international organisations engaged with the objective to learn from women-led businesses about their experiences under CETA and challenges faced when participating in international trade more generally. Participants also discussed potential actions to implement CETA’s trade and gender recommendation. To help SMEs, the EU and Canada put online a dedicated webpage with information useful to smaller businesses on accessing Canadian and EU markets such as import requirements and other information considered to be useful for SMEs.

In line with its commitments in the recommendation on climate action, a joint EU-Canada conference on Trade and Climate was organised in Brussels on 24 January 2019. The event provided a platform for policy makers, businesses, non-governmental organisations to engage (more details below).

Work has also been ongoing on the foundations of the Investment Court System (ICS) already established in CETA. Although the ICS provisions are not provisionally applied, the contours of the further work on the ICS has been agreed between EU and Canada in the Joint Interpretative Instrument on CETA 1 and is also reflected in the Commission and Council Statement No 36 2 . In the course of 2018, the Commission has consulted with Member States and discussed with Canada on how to bring forward the work that has been committed to during the CETA ratification process.

In particular, the Commission has been working with the Member States at the Trade Policy Committee (Services and Investment) on four strands of action for the implementation of the Investment Court System: (1) the rules regarding the functioning of the Appellate Tribunal, (2) the code of conduct for the Members of the Tribunals, (3) the rules for mediation and (4) the procedure to adopt binding interpretations. The European Parliament has been kept informed of the discussions. At the first inaugural meeting of the CETA Committee on Services and Investment on 18 September 2018, the EU and Canada had first positive exchanges on the draft decisions. The Commission continued technical discussions on the texts with the EU Member States and with Canada. The aim is to reach a technical agreement on those texts in due course.

The Commission started work on other areas related to the implementation of the Investment Court System, in particular on the selection mechanism for the Members of the Court. Discussions on this issue with the Member States at the Trade Policy Committee (Services and Investment) started in December 2018 and are ongoing. In its Opinion 1/17 delivered on 30 April 2019, the Court of Justice of the EU confirmed the compatibility of the CETA’s provisions on the Investment Court System with EU law 3 .

At the time of writing, 13 Member States had notified the completion of their ratification process (Austria, Czech Republic, Denmark, Estonia, Spain, Croatia, Latvia, Lithuania, Malta, Portugal, Finland, Sweden and the UK). The ratification process is still ongoing in other Member States and the Commission continues to be engaged with Member States and stakeholders to create awareness of the opportunities and to ensure EU stakeholders are able to derive full benefits of the agreement. As part of these efforts, the Commission developed specific guides to assist EU businesses which are or want to become active on the Canadian market (notably on the protection of geographical indications and public procurement). More such guides are in the process of being developed (notably on services and investment). The Commission also updated its Market Access Data Base to provide more information useful to EU exporters to Canada, in particular SMEs.

2.Evolution of trade

In terms of trade in goods, Canada is now the EU’s 10th largest trading partner (imports plus exports), with total trade flows worth €72 billion, or 2% of the EU’s total trade with third countries 4 .

The EU had a trade surplus of €10.4 billion, which amounted to a €3.9 billion improvement compared to the average between 2015 and 2017.

Although one year after the provisional application of CETA some caution is needed to interpret the limited data available, EU exports were on a positive trajectory in 2018. EU goods exports to Canada increased by 15% percent when compared to the average of the three previous years (€36 billion). This meant a stronger increase than for EU goods exports to third countries, which went up by 8% during the same period. Over the same period, total EU goods imports from Canada increased by 5% or €1.5 billion.

The EU’s most important export items all experienced a significantly stronger export performance when compared to the average of the three previous years: ‘Machinery and mechanical appliances’ were up 16% (accounting for almost one-fifth of total EU exports to Canada); ‘Vehicles and parts’ were up 11% (accounting for 14% of total EU exports to Canada); ‘Pharmaceuticals’ were up 29% (accounting for 12% of total EU exports to Canada); ‘Agricultural goods’ were up 7% (accounting for 9% of total EU exports to Canada); ‘Electrical machinery’ was up 2% and ‘Organic chemicals’ were up by 77%.

At the same time, EU imports from Canada increased during the same period by 5% or €1.5 billion, from on average €29.5 billion in 2015-2017 to €31.0 billion in 2018. Imports from Canada grew at a slower pace than overall EU imports from third countries, which over the same period grew by 12%.

Canada is the EU’s 12th largest source of imported goods, accounting for 2% of all goods imported from countries outside the EU. To put this into perspective, 20% of the EU’s total imports originate from China (€394 billion), which is the EU’s first trading partner in terms of imports.

The EU's most important imports from Canada are displayed in the graph below.

With the exception of aircraft and spacecraft and ores, slag and ash, these sectors are also part of the EU's top ten sectors when it comes to overall world imports.

Concerning services, total exchanges in 2018 amounted to €38.7 billion, an 11% increase compared to 2017 (see section statistics for the 2017 data). EU exports to Canada amounted to €23.5 billion, whilst Canada’s exports to the EU amounted to €15.1 billion; the EU maintained a trade surplus at around €8.3 billion.

In 2017, total FDI stocks amounted to €600 billion.

3.Activities of the implementation bodies

In 2018, 18 of the 20 the committees and dialogues established under CETA met (only the Dialogue on electronic commerce and the Mutual recognition of Professional Qualifications Committee did not meet). For more details, the agendas and reports of these meetings can be found on the Commission’s "CETA – Meetings and documents" webpage 5 .

Committees

The CETA Joint Committee met in Montreal on 26 September 2018 (details provided in the introduction). The activities of the other committees and dialogues were as follows:

The first meeting of the CETA Committee on Government Procurement took place on 15 March 2018 in Brussels. The Parties exchanged recent legislative developments and discussed inter alia technical updates that need to be made to Annex 19-8 of Canada’s market access schedule, ongoing work in developing Canada’s single point of access for public procurement, existing bid challenge mechanisms/domestic review procedures, as well as public procurement opportunities, particularly in the space sector.

The first meeting of the Sanitary and Phytosanitary Joint Management Committee (JMC) on 26-27 March 2018 in Ottawa, achieved the following outcomes (i) identification of priority SPS issues affecting trade between the European Union and Canada, and (ii) establishing the foundations for bilateral exchanges of information and for ongoing cooperative efforts including cooperation on animal welfare and antimicrobial resistance. More specifically, the EU and Canada identified the topic of long distance transport of animals as a topic for engagement within the context of the CETA Regulatory Cooperation Forum meeting of December 2018.

During the 2nd SPS JMC meeting in February 2019 the agreed follow-up actions were further deepened to make the outcome more result- oriented on several pending market access issues, as reflected in more detail in the public report ( http://trade.ec.europa.eu/doclib/docs/2019/march/tradoc_157809.pdf ).

The Committee on Geographical Indications (GIs) convened on 17 May 2018. Canada explained the important changes it had made to its legislative framework to meet its CETA commitments on the protection of GIs. Concerns were raised by the EU about Canada’s implementation of CETA articles regarding administrative enforcement of GI protection and the lack of a list of companies entitled to use the grandfathering clause. Canada committed to organising explanatory meetings in certain EU Member States, which notably took place in Brussels, Paris, Madrid and Rome.

The Joint Customs Cooperation Committee (JCCC) convened in Brussels on 22 June 2018. Parties exchanged information about recent legislative and regulatory developments in the field of customs, explored bilateral and international cooperation topics and made progress towards the mutual recognition of the EU and Canada Authorised Economic Operator programmes.

The Wine and Spirits Committee met in Brussels on 5 July 2018. Parties had a detailed discussion on the implementation of the CETA Joint Declaration on wines and spirits, which contributed to developing a mutual understanding of their respective views. The EU expressed concerns about the enforcement of the protection of certain EU Wines and Spirits GIs, which the Canadian counterparts explained they were resolving. The EU provided an overview of its legislation on certain duty reductions, as well as on the on-going recast of the EU wine legislation, which should address Canada's concern about red ice wine.

The Financial Services Committee met in Brussels on 19 June 2018. The Parties discussed financial sector developments as well as regulatory and supervisory issues relating to banking and capital markets. They also discussed issues pertaining to financial stability as well as cybersecurity, consumer and data protection and sustainable finance.

The Committee on Trade and Sustainable Development (TSD) met in Brussels on 13 September 2018. The meeting was preceded and informed by exchanges of the first CETA Civil Society Forum, which took place on 12 September 2018. In addition, the Parties met with the representatives of the domestic advisory groups (DAGs) referred to by the TSD chapters, and debriefed them on the TSD Committee discussions. They exchanged views on the subjects raised during the TSD meeting and discussed expectations for future work between the DAGs and the Parties. The EU and Canada acknowledged the envisaged adoption of three recommendations on trade and climate, trade and gender and trade and SMEs, which had been prepared in the framework of the TSD implementation work and which were subsequently adopted by the CETA Joint Committee on 26 September 2018.

The Committee on Services and Investment met in Brussels on 18 September 2018. On investment protection, the Parties discussed the functioning of the Appellate Tribunal, the code of conduct and rules for mediation. Both the EU and Canada agreed that subsequent work will be carried out at technical level to produce a draft decision in early 2019. On services, the Parties exchanged information on Mutual Recognition Agreements, Canada’s coastal shipping legislative reform, ongoing negotiations relating to the development of performance requirements obligations for financial services, and the provision of information on temporary entry. Both Parties agreed that technical level discussions would advance these issues further.

The Agriculture Committee met on 19 September 2018 in Brussels. Reviewing their respective trade data, both Parties welcomed increased imports across most agricultural goods. Canada raised concerns about the EU’s beef and pork quota management system and asked about data access, while the EU expressed concern about the Canadian cheese quota administration and the very low uptake of the quota until late in 2018. Other issues discussed were Canada’s price class for milk protein ingredients as well as European national measures on origin labelling. Both Parties agreed to engage in information sharing to remedy the flagged issues, calling for more collaboration in order to take advantage of CETA’s new opportunities.

On 16 November 2018, the Joint Sectoral Group (JSG) on Pharmaceuticals convened by videoconference. Six administrative arrangements to facilitate the effective implementation and monitoring of the CETA Good Manufacturing Practices Protocol (GMP) on Pharmaceuticals were approved (Components of the Information Sharing Process; Two-way Alert Program; Procedure for Evaluating New Regulatory Authorities; Equivalence Maintenance Program; Components of a GMP Compliance Program; Contact Points). Canada’s Proposal on a Mutual Recognition Agreement (MRA) for Drug Facility Inspections in third countries and the Recognition of the Active Pharmaceutical Ingredients Program under the CETA GMP Protocol on Pharmaceuticals were discussed, with Parties agreeing to develop a common approach and propose a plan. The JSG confirmed the continued mutual recognition of GMP inspections and batch certification between the Parties.

On 29 November 2018, the Trade in Goods Committee convened via videoconference. The Committee welcomed the progress made on the reciprocal exchange of information on the safety of consumer products and discussed the implementation of the Protocol on conformity assessment. The Parties also exchanged information regarding the informal IPR dialogue in June 2018, the joint report of the Joint Sectoral Group on Pharmaceutical products, which took place on 16 November, as well as legislative developments. The Reports of the Agricultural Committee and the Wines & Spirits Committee were discussed thereafter, covering a range of issues (including the cheese TRQ, provincial discriminatory measures against EU wines exporters, enforcement of W&S GI protection, origin declaration on Wines & Spirits, veterinary medicines regulation, and country-of-origin labelling, amongst others).

The Regulatory Cooperation Forum met on 14 December 2018 in Brussels (and videoconference) and agreed on a work plan. It was also agreed that the plan should be published online and updates should be published regularly. Topics retained in the work programme were ‘cybersecurity and the Internet of Things’, ‘animal welfare’, ‘cosmetics-like drug products’, and ‘pharmaceutical inspections’. Both Parties emphasised the importance of safety of consumer products and welcomed the new administrative arrangement adopted to exchange non-personal information on dangerous non-food consumer products. Finally, the Forum debriefed civil society stakeholders and in response to requests of stakeholders conveyed openness to receiving suggestions for new topics, if there is a common interest. Stakeholders welcomed the increased transparency.

The Joint Committee on Mutual Recognition of Professional Qualifications met in Brussels on 16 April 2019. The Committee officially acknowledged the receipt of documents submitted by the Canadian Architectural Licensing Authorities (CALA) and the Architects’ Council of Europe (ACE) with a view to providing a joint recommendation on a Mutual Recognition Agreement (MRA) between Canada and the EU concerning the profession of architects. The Committee discussed the joint submission in light of Article 11 of CETA and exchanged views about the next steps in the process of the possible negotiation and adoption of the MRA.

Dialogues

The Bilateral Dialogue on Forest Products held a productive meeting on 23 May 2018 by videoconference, discussing resource efficiency of wood-based products, their sustainable use, product standards, hazard-based approach to regulation of plant protection products/biocides and EU-Canada cooperation on research and innovation.

The Bilateral Dialogue on Raw Materials took place on 16 November 2018 and discussed research and innovation aspects of the raw materials life cycle. The EU and Canada also agreed to continue to exchange best practices on sustainable mining as well as to find synergies to boost investment opportunities in exploration and mining in the EU and Canada. Stakeholder representatives joined part of the meeting to report on the main outcome of the EU-Canada Raw Materials Stakeholders Forum.

The 14th Joint Science and Technology Cooperation Committee meeting - the first under CETA- acknowledged the importance of the recent research and innovation policy developments in Canada and in the European Union - Budget 2018 and Horizon 2020. Reinforcing the links between industry and research was a key objective of both Parties for this meeting and they agreed to continue their strong cooperation in key areas like marine, health, aeronautics and agricultural research. Mobility of Canadian and European researchers was strongly reaffirmed and continued development of appropriate framework conditions for research cooperation was agreed.

The Dialogue on Biotechnology took place on 26 April 2018 by videoconference. Both Parties underlined the importance of information exchange on regulatory and technical issues affecting trade in agricultural products of biotechnology. Both sides exchanged information on legislative and policy developments. The EU raised the issue of Genetically Modified (GM) animals in Canada, specifically about GM salmon and its traceability requirements. Canada reaffirmed that all products exported to the EU, including salmon, must meet EU import requirements and therefore no GM salmon is exported to the EU.

The meeting of the Bilateral Dialogue on Motor Vehicle Regulations was held via videoconference on 5 October 2018 and focused on regulatory developments with respect to motor vehicles. Regulatory ambitions in the Automated Driving sector were discussed and the Parties agreed to hold additional technical meetings on regulations of relevance ahead of the UNECE meetings in Geneva. Both sides confirmed their willingness to continue technical exchanges on issues of common interest.

4.Implementation of the provisions on trade and sustainable development

In the context of the Trade and Sustainable Development Committee, the EU and Canada discussed issues of common interest in the multilateral context and exchanged views on potential priority areas in the trade and labour, trade and environment and other cross-cutting fields. The Parties recalled the existing high intensity of bilateral relations on environmental issues in general, and noted their commitment to future cooperation under CETA. The Parties updated each other on their relevant processes in relation to multilateral environment agreements (MEAs). In this context, the Parties also exchanged views on areas of mutual interest, such as trade in plastics, trade and biodiversity and clean technology. The Parties provided updates on their respective mechanisms and practices in receiving communications on the Trade and Environment Chapter (Canada) and Trade and Sustainable Development (EU) from non-governmental stakeholders and the wider public.

To expand the awareness of EU-Canada trade and climate action in the context of CETA, the EU and Canada hosted a conference in Brussels on 24 January 2019 to explore how to best leverage CETA’s institutional and legal framework to encourage further joint actions to support implementation of the Paris Agreement. At this conference business, civil society and policy communities from both sides of the Atlantic discussed topics such as the application of CETA to support sustainable and green investment, regulatory cooperation and trade in green technologies and services.

In relation to trade and labour, the Parties outlined their respective legal mechanisms for monitoring and ensuring compliance with core labour standards, and discussed possible priorities for cooperation. In this context, the EU and Canada expressed their preliminary interest in working jointly on (i) labour issues in relation to global supply chains in third countries; (ii) on collective bargaining in the context of the changing world of work, in particular on the platform economy; and (iii) on gender-related issues in the world of work, also in coordination with the work on the Trade and Gender Recommendation.

Under cross-cutting issues, the Parties also stressed the important role of businesses in promoting labour and environmental objectives and outlined their respective ongoing efforts in promoting responsible business conduct/corporate social responsibility with their trade partners. They agreed as a follow-up to explore potential synergies and cooperation activities.

Trade and Sustainable Development (TSD) review

The review process was formally initiated by an exchange of letters between the EU and Canada after CETA provisionally came into force on 21 September 2017. In the course of 2018, the Parties held several technical level discussions and exchanged views in the context of the early review of the Trade and Sustainable Development chapters. Canada and the EU reconfirmed their commitment to advance this process and agreed to intensify their efforts on this commitment, with a view to reviewing the implementation of the TSD chapters, including their enforcement mechanisms, to propose solutions and outcomes at the second CETA Joint Committee meeting and subsequent Joint Committee meeting as pertinent. In parallel, the EU Commission published a 15-point action plan to make EU trade and sustainable development chapters more effective and which is informing the EU position on TSD. The Parties devised a joint work plan to be implemented in advance of the second CETA Joint Committee meeting.

5.Agriculture

Since the provisional application of CETA on 21 September 2017, the Commission has been closely following the implementation of the commitments made in the field of agriculture. Canada is the 10th most important market for EU agri-food exports. In 2018, the EU’s trade surplus with Canada grew by 31.5% to reach €1.7 billion.

EU-28 agri-food exports to Canada were up 4% in value when compared to 2017 and increased by 7% when compared with the average of the last three years (2015-2017). This is just slightly below the 4.3% annual growth recorded in the previous 4 years.

Meanwhile EU imports fell by nearly 12%. This was largely due to a sharp decline of 40% in oilseeds (notably rapeseeds and soybeans) and a decline of 26% in wheat imports. The tariff rate quotas opened by the EU for the import of Canadian agricultural products were hardly utilised. The highest fill rate was 11% for the common wheat and sweet corn quotas. For meat, fill rates ranged from 0% for frozen beef to 4% for bison meat. They were particularly low (0%–1%) for the origin quotas for sugar-containing products, chocolate, food preparations and pet food.

The additional duty free quotas for cheese are among the major gains for the EU in CETA. The EU therefore pays particular attention to ensure that the administration of this quota by Canada is in line with the principles agreed in CETA.

In 2018, the CETA cheese quota was nearly completely filled (96.4%), an even better result than in 2017. The quota uptake, however, was very slow to take off for well over the first half of 2018 and the EU raised its concerns in this regard to Canada, both in CETA’s Agriculture Committee as well as in the CETA Joint Committee. In these forums, the EU also highlighted other concerns with the Canadian quota management system, which notably foresees that 50% of quota licenses be allocated to Canada’s cheese manufacturers, which would not appear to constitute the most likely users of the quota. At the CETA Joint Committee it was agreed that in order to draw meaningful conclusions it was important to have data for the first full year of quota utilisation. The experience of the first full year of application of CETA has confirmed concerns raised by EU stakeholders about a large number of quota licenses (up to 40%) being transferred to other operators. Such transfers add costs to EU cheeses in Canada. In April 2019, the EU therefore requested that Canada conduct a mid-term review of its CETA cheese quota administration system.

Utilisation of the CETA quota for EU cheese

Tariff Code

Product

Quota 2018 (tonnes)

Utilisation 2018 (tonnes)

Utilisation rate

0406

Cheese

  of which:

   high quality

   industrial

5 900

5 333

567

5 693

5 290

403

96,5 %

99,2 %

71,1 %

Source: Global Affairs Canada.

On various occasions in 2018, the EU also expressed concerns about Canada’s price class for milk protein ingredients (milk class 7), which are made available to the food processing industry at world prices.

Canada for its part, raised concerns about the EU’s quota management system for meat quotas, specifically the automatic on-demand issuance of import licenses. The EU explained that for volumes not allocated during the initial application period, import licenses are automatically issued on-demand after they are processed. Canada also called for better access to quota utilisation data. The EU pointed out that data on quota allocation, which is publically available on-line, was a reliable guide to actual imports.

Alcoholic beverages, in particular wines and spirits, top the list of EU agricultural exports, accounting for over 40%. Many discriminatory practices remain in Canada against imported wines and spirits, notably at provincial level. Ontario and Quebec have implemented the commitment foreseen in CETA and have moved away from ad-valorem cost of service differential fees to a volume based system. In accordance with the agreement, the EU has requested that Ontario and Quebec carry out new audits of their accounting system. In addition, the EU called for more transparency and clarity on cost allocation in relation to these cost of service differential fees (some costs are seen as unduly absorbed by imported products). The federal excise duty on imported wine (that exists since 2006) was increased in 2017 by 2% and an escalator clause linked to inflation was included. The EU requested that the discriminatory aspects of the tax to be removed. The tax has also been challenged in the World Trade Organisation by Australia. Finally, the Commission is working with the Canadian authorities to seek mutually agreed solutions to the multitude of concerns relating to the discrimatory treatment of EU alcoholic beverages compared to local ones across few provinces.

Since the entry into force of CETA 143 EU food geographical indications (GIs) enjoy full protection from imitations in Canada, at a level comparable to that under EU law. The Commission worked with Canada to ensure that the protection of these GIs would be fully enforced. The amendment of Canada’s Trade-Mark Act to protect the geographical indications of food products, which was introduced as a result of CETA, established a procedure for the direct application for protection by EU rights-holders. The new system delivered its first result in September 2018 with the protection of an additional EU GI “Prosciutto di Carpegna”. This progress should be seen as a concrete positive outcome of CETA. European producers who are interested in exporting to Canada have for the first time access to an effective and easy mechanism to protect their geographical indications. In order to assist EU GI right holders to fully avail themselves of this new mechanism, the EU produced a GI guide available to businesses on the Commission’s webpage . Certain concerns remain as to how the administrative enforcement can be ensured notably for the 8 grandfathered GIs for which a specific regime applies in view of certain prior uses on the Canadian market. The Commission will continue to engage with Canada on this issue. In addition, the EU and Canada will also continue to work on updating the Annex of Wines and Spirits GIs. In the case of alcoholic beverages, CETA, as a result of the incorporation of the EU Canada wines and spirits agreement, only provides a list of GI names which are eligible for protection in Canada. EU GI rights-holders would still need to submit an application to Canadian authorities.

SPS measures

Currently only 17 EU Member States are authorised to export meat to Canada. Work is ongoing to ensure that the remaining EU Member States will also have access to this market. At the end of 2018, a process was agreed for Canada to recognise the EU Meat inspection system, based on an additional set of audits of a selection of EU Member States in 2019. If this were to result in a satisfactory outcome in all audited EU Member States, Canada would allow the exports of meat from all EU Member States for bovine, swine and poultry. This process will not affect ongoing trade for those EU Member States currently authorised to export meat to Canada.

Work on the harmonisation of EU export certificates continues, with priorities put forward by both sides aiming at some tangible initial results in 2019.

For some plant commodities, Canada does not recognise alternatives to the use of methyl bromide as a pest mitigating measure for trade. In 2018, an EU project on alternatives to the use of methyl bromide was launched in close cooperation with Canadian authorities with the objective to identify risk measures not based on the use of a pesticide which is known to be an ozone depleting compound. A workshop with experts on both sides took place in March 2019. The outcome of this cooperation will result in a guidance document for EU exporters of plants and plant products for the Canadian market.

Several other SPS issues are still outstanding and are being further discussed with Canada with a view to finding a solution. For example, the export of EU bovine semen is limited only to Schmallenberg Virus serologically negative animals, while there is no scientific basis to justify this restriction. Exports from the EU to Canada are also not authorised for potatoes for planting (called also “potato mini tubers” by Canada) and fresh tomato with vines, stems, and calyces, due to restrictive plant health requirements for Canadian imports. Discussions are ongoing with the Canadian authorities to identify appropriate solutions.

6.Regulatory Cooperation 

Chapter 21 of CETA lays out the framework for voluntary regulatory cooperation activities, including the establishment of the “Regulatory Cooperation Forum” (the Forum). The Forum builds on the existing regulatory cooperation agreement between the EU and Canada signed in 2004.

To prepare for this first meeting, both the EU and Canada held stakeholder consultations to identify issues, priorities, and sectors that the Forum could consider to include into its first work plan. In January 2018, the Commission published a call for proposals inviting civil society to come forward with suggestions for topics for regulatory cooperation with Canada. The Commission received 26 responses to this call, which were made public 6 . From February to April 2018, Canada also sought comments from stakeholders on potential areas for regulatory cooperation with the EU. Canada received close to 40 responses, which were also made public 7 .

The first meeting of the Forum took place on 14 December 2018 in Brussels (and via video conference). The topics to be included in the work plan were drawn from the consultations following feedback from EU and Canadian regulators, before being agreed between the EU and Canadian Co-chairs. In choosing the topics, the EU and Canada also took into account the readiness of the topics proposed for regulatory cooperation and whether or not the topics were already dealt with in other CETA committees or existing bilateral or international dialogues. Regulators from both sides provided an update on the feedback received during the consultations, how the initiatives were identified for cooperation, bilateral discussions to date and next steps. On this basis, the parties agreed on a work-plan including the following 5 topics: (i) cybersecurity and the internet of things; (ii) animal welfare – transportation of animals; (iii) re-testing of cosmetics-like products; (iv) co-operation on pharmaceutical inspections in third countries; and (v) exchange of information on the safety of consumer products.

The last topic already saw the conclusion of an administrative arrangement for the exchange of information on dangerous non-food consumer products between the European Commission’s Directorate-General for Justice and Consumers (DG JUST) and Health Canada on 13 November 2018, during International Product Safety Week. The Forum welcomed the agreed administrative arrangement and took stock of the context, scope, and type of information that will be exchanged under the administrative arrangement. Furthermore, it was agreed that it would be relevant for the Forum to receive a report of the implementation of the administrative arrangement at the next meeting.

During the civil society meeting, co-chairs and regulators from the EU and Canada debriefed civil society stakeholders about the Forum’s activities. Audiences from multiple physical locations participated in this exchange: stakeholders participating in person in Brussels, in Ottawa via video conference, and from desks and conference rooms via web streaming. Several stakeholders in Brussels and Ottawa participated and had the opportunity to comment on the outcomes of the Forum and indicated their interests for future initiatives to strengthen regulatory cooperation.

7.Conclusions and outlook

The first year of provisional application of CETA showed good results. The institutional structure of the Agreement was set up and committees and dialogues started their activities. Important efforts were made to ensure the conduct of meetings was transparent and inclusive and this was welcomed by stakeholders and civil society.

Trade statistics for 2018 indicated that companies were starting to benefit from the signficant reduction of duties applicable since 21 September 2017 (i.e. 98% of the overall duties which will be ultimately reduced by CETA). We can observe an increase in trade in many sectors, particularly in those sectors where duties were high before the entry into force of CETA. The preliminary statistics also indicated an increase of EU exports to Canada for agricultural products, in particular for processed agricultural products and cheeses where the EU has strong economic interests. CETA also offers the protection of 143 distinctive EU food products labelled with GIs. Thanks to CETA, the Canadian Trade Mark Act was amended to allow for a procedure for the direct application for protection by EU rights-holders of food GIs. A first successful additional protection of an EU GI was delivered through that mechanism in September 2018.

CETA also provides for a significant further opening of the Canadian procurement market, including at provincial and local level which represent an important percentage of public procurment. These openings have been vigourously welcomed by EU companies. CETA also gives unparalleled services market access for the EU, including new market access in maritime services, and more globally establishes legal certainty in all key economic sectors. It also includes provisions to facilitate the movement of professionals and the recognition of qualifications. A first proposal for a Mutual Recognition Agreement (MRA) was made in 2018 by the Canadian Architectural Licensing Authorities (CALA) and the Architects’ Council of Europe (ACE) aiming to facilitate recognition and licensing procedures of architects in the EU and in Canada, thus completing a first step of the mutual recognition framework outlined in CETA.

The Commission will continue its work to ensure correct implementation of CETA in all areas and will collaborate with EU Member States and stakeholders in order to make sure that EU companies and citizens take full advantages of the benefits created by CETA.

8.Statistics

Merchandise trade EU28 2014-2018

 

2014

2015

2016

2017

2018

EU28 trade with Canada (mio €)

 

 

 

 

Imports

27.431

28.027

29.016

31.509

30.988

Exports

31.654

35.145

35.228

37.704

41.355

Balance

4.223

7.118

6.212

6.195

10.366

Share Canada in EU28 trade with Extra-EU28

 

 

 

 

Imports

1,6%

1,6%

1,7%

1,7%

1,6%

Exports

1,9%

2,0%

2,0%

2,0%

2,1%

Total (I+E)

1,7%

1,8%

1,9%

1,9%

1,8%

Share EU28 in trade Canada with world

Imports

11,3%

11,4%

11,4%

11,7%

12,3%

Exports

7,4%

7,2%

7,7%

7,3%

7,4%

Total (I+E)

9,4%

9,4%

9,6%

9,6%

10,0%

Source Trade G2 Statistics/ISDB

 

 

25-mars-19

Trade EU28: Eurostat COMEXT; Trade Canada: IMF Dots

 

 

 

 

 

 

 

 

Total merchandise trade EU28 with Canada (mio €)

Canada

2017

2018

Growth

mio €

annual %

Imports

 

31.509

30.988

-521

-1,7%

Exports

 

37.704

41.355

3.651

9,7%

Balance

 

6.195

10.366

4.172

 

Total trade

 

69.213

72.343

3.130

4,5%

Source Trade G2 Statistics/ISDB from Eurostat COMEXT

 

 

Agrifood trade EU28 with Canada (mio €)

Canada

2017

2018

Growth

mio €

annual %

Imports

 

2.251

1.988

-263

-11,7%

Exports

 

3.560

3.707

147

4,1%

Balance

 

1.309

1.720

411

 

Total trade

 

5.810

5.695

-116

-2,0%

Source Trade G2 Statistics/ISDB from Eurostat COMEXT

 

 

NAMA trade EU28 with Canada (mio €)

Canada

2017

2018

Growth

mio €

annual %

EU28 imports

29.258

29.001

-258

-0,9%

EU28 exports

34.144

37.647

3.503

10,3%

Balance

 

4.886

8.647

3.761

 

Total trade

 

63.403

66.648

3.245

5,1%

Source Trade G2 Statistics/ISDB from Eurostat COMEXT

 

 

Services trade EU28 with Canada (mio €)

 

 

Canada

2016

2017

Growth

mio €

annual %

Imports

 

12.067

13.228

1.160

9,6%

Exports

 

20.221

21.681

1.460

7,2%

Balance

 

8.154

8.454

300

 

Total trade

 

32.288

34.909

2.620

8,1%

Source Trade G2 Statistics/ISDB from Eurostat BOP statistics

 

Services trade EU28 with Canada (mio €)

 

2013

2014

2015

2016

2017

Imports

11.684

11.036

12.640

12.067

13.228

Exports

17.976

16.558

19.376

20.221

21.681

Balance

6.292

5.522

6.736

8.154

8.454

Total trade

29.661

27.594

32.017

32.288

34.909

Source Trade G2 Statistics/ISDB from Eurostat BOP statistics

 

 

 

 

 

FDI EU28 with Canada (mio €)

 

2013

2014

2015

2016

2017

FDI Stocks

Inward

165.239

211.486

245.556

299.979

292.998

Outward

256.748

286.867

283.214

315.153

304.782

FDI Flows

Inward

20.367

17.856

30.507

40.437

29.400

Outward

22.243

9.291

-10.475

21.918

4.058

Source Trade G2 Statistics/ISDB from Eurostat BOP statistics

 

 

 

 

 



ANNUAL REPORT ON THE IMPLEMENTATION OF THE EU-SOUTH KOREA FREE TRADE AGREEMENT

1.Introduction

The Free Trade Agreement (FTA; referred to as ‘the Agreement’) between the EU and its Member States and the Republic of South Korea (in this report referred to as "South Korea") has been provisionally applied since July 2011. On 13 December 2015, it entered formally into force after ratification by EU Member States. The Additional Protocol to the FTA, to take into account the accession of Croatia to the EU, has been provisionally applied since 26 May 2014 and it entered into force on 1 January 2016.

The EU-South Korea FTA is the first of a new generation of comprehensive FTAs meaning that apart from providing market opening commitments as well as a basis for regulatory co-operation in key sectors, it includes a substantial chapter on sustainable development that upholds and promotes social and environmental standards.

This is the 7th Annual Report on the implementation of the EU-South Korea FTA, which presents the recent evolution of EU-South Korea bilateral trade and investment and against 2010, which is the last year before the Agreement went into force. An overview of activities of the FTA Working Groups and Committees is also included in the report. Special attention is given to the Trade and Sustainable Development chapter.

According to the ex-post evaluation of the EU-South Korea FTA conducted by an independent contractor, published in March 2019 8 , the EU economy gained additional €4.4 billion and the South Korean economy €4.9 billion through the FTA. This happened despite the fact that the external environment, notably the post financial crisis period was not particularly supportive, weighing on demand and international trade.

2.Evolution of bilateral trade

2.1 Trade in Goods

In 2018, South Korea accounted for 2.5% of the EU’s total trade in goods and was the EU's eighth largest trading partner. The liberalisation of trade in goods has been beneficial for EU exports as the introduction of the EU-South Korea FTA saw EU exports in goods rise from €27.9 billion in 2010 to €49.2 billion in 2018, a 76% increase. EU imports of South Korean products also grew significantly over the same period, albeit at a slower pace, as values increased from €39.5 billion in 2010 to €51 billion in 2018.

While historically, the EU has had a trade deficit with South Korea, the sharp rise in exports since the introduction of the FTA led to an EU trade surplus from 2013 to 2016. Data for 2018 shows that the EU has a slight trade deficit of -€1.9 billion, however it is clear that there is now a more balanced level of trade in goods between the two partners.


The increase in EU exports over the 2010-2018 period was driven by a surge in trade in some key product categories. Machinery and appliances accounted for almost 30% (€14.2 billion) of EU exports to South Korea. Exports in this category have increased by 31% since 2010. The largest gains over the 2010-2018 period have been in transport equipment (+187%) which accounts for just under one fifth (€9.6 billion) of total EU exports. This was driven by a +226% increase in motor vehicles (including parts) which were valued at €8.6 billion (17% of total EU exports) in 2018.

At the same time, EU imports of machinery and appliances made up over one third of total EU imports (€18.4 billion) in 2018. There was a sharp decline in the import of these products in the first years after the FTA’s entry into force (falling as low as €13 billion in 2013), however since 2015 there has been a resurgence and imports of machinery and appliances are now at a very similar level as they were in 2010 (i.e. €18 billion). Imports of transport equipment grew by 16% and made up a quarter (€12.7 billion) of EU imports in 2018. Again, this increase was triggered by a substantial rise in imports of motor vehicles (including parts) (+165%) over the 2010-2018 period. Motor vehicles (including parts) accounted for 20% (€10.2 billion) of total EU goods imported from South Korea in 2018.

Annual comparisons show that both the EU total exports and imports from South Korea slithly decreased in 2018, compared to 2017, in line with the overall slowdown of international trade dynamics.

2.2 Trade in agricultural goods

With respect to trade in agriculture goods, EU exports to South Korea continued to grow in 2018 at 4.8%, albeit at a slower pace than in previous years and stood at €3 billion in 2018. Imports from South Korea in the agri-food sector stagnated at the record high of €201 million reached in 2017, resulting in a surplus of € 2.8 billion in 2018. Overall, EU exports have increased by 37.8% and imports have increased by 62% since 2014, the strongest growth rate in the agri-food sector among FTA partners. Main products exported by the EU are pork (24.6% of EU agricultural exports to South Korea), followed by beer, cheese, chocolate, confectionery and ice cream, spirits and liqueurs and wine.

The main impediments to expanding trade were again the following: first, approvals of EU beef (due to a Bovine Spongiform Encephalopathy (BSE)-related import ban) remained pending and have been for some Member States since 2004, and also for poultry there was no progress in revising the Korean policy of country-wide import bans in the event of an outbreak of avian influenza. Similarly, the country-wide bans of pork imposed on Belgium, Hungary and Poland due to African Swine Fever (ASF) were not lifted by South Korea. South Korea recently filed applications for beef exports to the EU, which might indicate a stronger trade orientation in the South Korean administration.

For sensitive agricultural products the EU-South Korea FTA foresees specific tariff rates quotas (TRQs). The fill rate of these import quotas applied by South Korea to goods originating in the EU decreased for 3 out of 10 product groups. Only in case of oranges the TRQ was not used in the two reference periods.

EU-South Korea FTA TRQ Fill Rates

Utilisation Rate

7/2016 to 6/2017

7/2017 to 6/2018

Milk Powder, Condensed milk (cream)

99.9 %

100.0 %

Butter

100.0 %

99.9 %

Food Whey

98.3 %

99.0 %

Cheeses

99.9 %

99.1 %

Prepared dry milk

99.8 %

60.5 %

Natural honey

98.9 %

49.1 %

Oranges

0.0 %

0.0 %

Marling barley, malt

99.0 %

80.8 %

Supplementary feed

99.0 %

99.2 %

Dextrin

78.7 %

70.6 %

Source: South Korean authorities

2.3 Trade in Services and Foreign Direct Investment (FDI)

EU exports of services to South Korea increased from €7.4 billion in 2010 to €13.5 billion in 2017 while EU imports rose by 66% (€3.1 billion) over the same period to €7.9 billion in 2017. Although trade in services have grown in both directions, the EU has consistently held a trade surplus with South Korea that peaked at €6.3 billion in 2015. This fell to €5.6 billion of a surplus in 2017, which is greater than the 2010 balance (€2.6 billion).

Transport services account for the highest share of both EU imports (€2.4 billion) and exports (€2.9 billion) of services to South Korea. EU imports of construction services have increased significantly since the introduction of the EU-South Korea FTA, rising from €87 million in 2010 to €818 million in 2017 while other business services increased by 161% over the same period to €2.8 billion in 2017.

The largest gains in EU exports to South Korea include travel (+120%), telecommunications (+125%) and intellectual property (+189%) which account for over 40% (€5.3 billion) of total EU exports to South Korea in 2017.

As is the case with goods and services, the EU-South Korea FTA has also stimulated growth in FDI between the two partners. Latest available data shows that the stock of EU FDI in South Korea rose from €37.5 billion in 2010 to €51.3 billion in 2017, a 37% increase. The stock of South Korean FDI in the EU more than doubled, rising from €13.1 billion in 2010 to €28.3 billion in 2017.

3.Activities of the implementation bodies

The institutional provisions of the EU-South Korea FTA (Article 15) established seven Specialised Committees, seven Working Groups and an Intellectual Property (IP) and Electronics Dialogue. The annual meeting of the Trade Committee at ministerial level plays a supervisory role and ensures that the FTA operates properly. The summary below presents activities of Working Groups and Committees that took place between June 2018 and May 2019. 9  

The Trade Committee met for the 8th time on 9 April 2019 in Seoul. Both sides agreed that the FTA is a success that has significantly increased bilateral trade and investment even though some concerns on implementation persist, including the long delayed market access for EU beef and the non-ratification of four fundamental ILO Conventions. Furthermore, the deteriorating business climate in South Korea remains a challenge for businesses to fully benefit from the FTA.

While recognising some positive developments related to the beef issue, the EU highlighted that the market remained closed and South Korea agreed to rapidly complete the technical steps for the most advanced applicants. On TSD, the EU recognized that some efforts have been made by the South Korean government but progress has been insufficient for South Korea to comply with its commitments. With regard to the car sector, both sides endorsed the finalisation of the administrative amendment of the car annexes under the written procedure. The Commissioner also raised the concerns that the car sector has highlighted regarding the difficult business climate. The EU also raised the well-known Intelletual Property Rights related issues (i.e. public performance rights and geographical indications) while South Korea repeated its request for market access for Samgyetang (chicken ginseng soup) and asked for a solution for the long-standing surimi issue. South Korea was also concerned about the adverse effect of the EU steel safeguards measures.

The 6th meeting of the Working Group on Geographical Indications was held in Brussels, on 30 May 2018. The extension of the initial list of EU Geographical indications remains a significant irritant with respect to the implementation of the FTA provisions on protection of intellectual property. With the recent adoption of the rules of procedures of the said Working Group, the EU now expects Korea to examine the 2014 EU request to add 46 GIs to the list of EU GIs protected under the FTA.

On 22 November 2018, the Customs Committee met in Brussels. It mostly addressed issues related to rules of origin, in particular origin verification procedures and issues related to the approved exporter system. The EU also raised duty relief on goods re-entered after repair and both sides discussed mutual administrative assistance, including the exchange of information points and cooperation on specific cases in which the level of co-operation from South Korea was considered by the EU side as unsatisfactory.

On 7 November 2018, the 4th EU-South Korea Dialogue on Electronics took place in Brussels. A wide range of issues was discussed, including the following: the implementation and enlargement of the scope of Annex 2-B of the agreement to include radio equipment testing; the review of Appendix 2-B-3 of the agreement to simplify conformity assessment procedures; a future cooperation on the development of new standards; modifications on the EU Eco-design Regulation for Electronic Display asked by South Korea. Discussions were also held on EU energy labelling requirements for electronic displays, light source and household refrigerating appliances.

The Working Group on Motor Vehicles and Parts met in Brussels on 4 December 2018 and addressed environmental issues, technical standards, harmonization, convergence and market access issues. Compared to previous years, the Working Group also discussed different issues related to broader cooperation on trade policy, including international developments, the state of play of bilateral trade flows and investments and the business climate in the sector. During the April 2019 Trade Committee the EU and South Korea concluded to endorse the administrative amendment of Annex 2-C in order to be implemented by September 2019. On the regulatory side, the parties agreed to share information on CO2 emission regulations for passenger cars, heavy-duty vehicles and “Emission Related Components” certification procedures. The EU agreed to provide additional information on the entry into force of the EU “Whole Type Approval”. Market access issues discussed included, inter alia, truck-tractors, self-certification and marking of car parts, vehicle width limit, homologation certificates and producers responsibility for end of life vehicles.

The 7th meeting of the Working Group on Pharmaceuticals and Medical Devices took place on 5 December 2018. In the area of medical devices, the parties exchanged information on i.a. the current draft of the Unique Device Identifier (UDI) rules in South Korea and on the objective and future implementation of the Integrated Medical Device Information System (IMDIS) in South Korea. Concerning pharmaceuticals, both sides discussed i.a. the draft amended premium pricing policy published on 7 November 2018 by South Korea that amends the conditions for rewarding innovations in new pharmaceutical products in South Korea.

The Working Group on Chemicals organised a videoconference on 5 March 2019 and engaged in useful exchanges on regulatory developments of interest to both sides. The EU notably requested additional information and clarifications on i.a. the amendments to the South Korean REACH legislation implemented in January 2019 and on the requirements for treated articles placed on the South Korean market under the South Korean Biocidal Product Regulation.

The Committee on SPS Measures met in Brussels on 19 September 2018. The Parties discussed pending applications for import of EU and South Korean beef, the recognition of regionalisation measures for avian influenza and African swine fever, and policies related to certification. South Korea also requested to discuss the pending application for export of chicken-ginseng soup and dairy products to the EU. The meeting was followed by a one-day seminar to discuss regionalisation policies in the EU and South Korea to control outbreaks of highly pathogenic avian influenza.

The 7th EU-South Korea Trade in Goods Committee was held on 6th December 2018 in Brussels. A number of sectoral issues wre discussed including the preparation of the next Trade Committee foreseen for April 2019. The meeting brought many clarifications on the cosmetics sector legislation in South Korea and the F-gas quota system in the EU. While no breakthrough was registered at the meeting, enhanced cooperation on electronics with the view to enlarge the annex to radio equipment was agreed. EU concerns were raised with regard to an increased support to shipbuilding by the South Korean government and the EU requested more transparency and a dedicated dialogue. The implementation of the competition chapter was also raised. Finally, both sides discussed the preparation of the Trade Committee.

The 5th and the 6th meetings of the Trade Remedy Cooperation Working Group were held on 7 December 2018 in Brussels and 20 May 2019 in Seoul, respectively. The latter meeting took place back-to-back with the International KTC Seoul Forum on Trade Remedies in which the EU side participated. During the 5th and the 6th meetings of the Trade Remedy Cooperation Working Group, the two sides updated each other on latest developments in domestic trade remedy laws, policies and practice. The EU side notably debriefed South Korea on the entry into force and implementation of the two latest amendments to the EU Trade Remedy basic legislation, namely the ‘new anti-dumping methodology’ and the ‘modernisation of trade defence instruments’, which had entered into force in December 2017 and June 2018 respectively 10 . South Korea expressed concerns with respect to the EU steel safeguard measures 11 and the EU briefed South Korea on the upcoming review investigation of the steel safeguard measures. The EU expressed concerns with the respect of general fairness and transparency principles in a recent investigation conducted by South Korea against Italian exports of stainless steel bars. The EU invited South Korea to revise its policy and methodology accordingly. The two sides also shared statistics on Trade Defence cases and exchanged views on global trends in trade remedy investigations, and related WTO litigation.

The meeting of the Working Group on Government Procurement took place in Brussels on 26 November 2018. The Parties provided information  on recent legislative developments, discussed market access issues and potential irregularities raised by European and South Korean industries. Both sides are committed to ensure that the FTA is implemented and any irregularity in the effective public procurement market access is corrected. Among other issues the Parties exchanged views on cooperation on SME policy (that may require a follow up with a recently established Ministry for SMEs in South Korea) and the EU inquired about a possible interest from the South Korean side to integrate a machine translation tool for tender notices in its e-procurement portal.

The 6th EU-South Korea Cultural Cooperation Committee convened on 13 May 2019 in Seoul, followed by a 2 day study visit to various South Korean cultural institutions. The topics discussed included performing arts, culture and cities, new developments in cultural and creative sectors- namely cultural entrepreneurship, the cultural content industry and the connections between arts, science and technology- architecture and audio-visual co-productions.

4.Implementation of the provisions on trade and sustainable development

The Commission continued to express its serious concerns and stepped-up its messages vis-à-vis the South Korean government regarding FTA commitments related to international (ILO) standards and agreements. These concerns have been raised in the framework of regular FTA committees including at the 6th meeting of the TSD committee of 13 July 2018 12 . Also, civil society has again raised these concerns in the context of regular work of the Domestic Advisory Groups and the Civil Society Forum under the FTA.

Due to insufficient progress on the envisaged steps presented by Korea at the 6th Committee on Trade and Sustainable Development, and in line with the more assertive approach to enforcement of commitments as outlined in the TSD 15-point action plan of February 2018, on 17 December 2018 the Commission formally requested the government request consultations under Article 13.14 of the FTA to seek a mutually satisfactory solution 13 .

In that context, the EU raised concerns with regard to Korea’s issues with respecting in law and practice of the core International Labour Organisation (ILO) principles of the freedom of association and right to collective bargaining, and with regard to the insufficient efforts by Korea towards the ratification of four outstanding fundamental ILO Conventions.

Government consultations are a first step of dispute settlement proceedings. This is the first dispute settlement initiated by the EU under bilateral trade agreement. The EU held government consultations with Korea on 21 January 2019. Korean government has engaged cooperatively however the consultations however these did not lead to any satisfactory solution and the progress made until now by Korea has been insufficient. In the follow-up to the government consultations, the Commission raised the insufficient progress on labour commitments at meetings with Korean trade and labour ministers at the occasion of 8th Trade Committee on 9 April 2019 in Seoul.

Since the outcome of the efforts by the Korean government remain uncertain, on 4 July 2019, the EU requested the establishment of a panel 14  (the 2nd stage of the arbitration procedure under the FTA) to examine the matters that have not been satisfactory addressed through government consultations. During the panel proceedings, the Commission will remain open to continue looking for a mutually agreed solution to the dispute. If Korea does not comply with its commitments in a timely manner, the panel of experts will deliver a public report with recommendations on achieving compliance. The implementation of the recommendations of the panel report will then be monitored by the Trade and Sustainable Development Committee created under the terms of the EU-Korea trade agreement.

5.Specific areas subject to monitoring

In line with Article 14 of the protocol on Rules of Origin, South Korea’s imports of key car parts and electronics from the most important suppliers (outside the EU) have been monitored. China and Japan remain the largest car parts suppliers. Japan still pays full duty on car parts while China benefits from tariff reduction (within the South Korea-China agreement most car parts will be liberalised in 10 or 15 years).

Source: KITA

In conclusion, the import pattern has not fundamentally changed since the EU-South Korea FTA was signed and there was no significant increase in imports of car components and key electronics from the largest suppliers to South Korea in 2018 compared to 2017. Based on these trade statistics, it is not possible to establish a link between the allowance of duty drawback and the increase in EU imports of cars from South Korea.

6.Progress, main open issues and follow-up actions

Progress on the implementation of the Trade and Sustainable Development chapter of the FTA by South Korea has not been sufficient with regard to the ratification of the four pending ILO conventions and protection of labour rights. Therefore, the Commission stepped up the engagement with South Korea and launched dispute settlement proceedings under the FTA in order to address these issues.

Access of EU beef to the South Korean market, which has been closed to all EU imports since January 2001, remains another EU key concern. By mid-2019, South Korea carried out audits in two Member States (Denmark and The Netherlands) which depending on the conclusions of the auditors, open the door to beef from these two Member States on the South Korean market. However, the acceptance of the principle of regionalisation for animal diseases by South Korea remains an important topic in the sanitary and phyto-sanitary area in particular for the exports of pig meat and poultry products.

In the area of Intellectual Property, South Korea still needs to establish an effective remuneration system for public performance rights. Lack of progress in this area remains a concern to the EU. The revised Presidential Decree, which entered into force in August 2018 did not sufficiently address the core issues of exempting the majority of retail venues from paying remunerations and the low level of fees. These issues will be discussed again at the next EU-South Korea Intellectual Property Dialogue under the FTA in autumn 2019. The extension of the geographical indications’ (GI) list protected by the FTA is also still pending. Recent adoption of the Rules of Procedure of the EU-South Korea GIs Working Group should ease the way towards adding further EU and South Korean geographical indications to the Annex of the FTA.

Improvements in the area of customs procedures could contribute to increase the preference utilisation rates, and further facilitate the participation of small and medium sized enterprises (SMEs).

7.Conclusions and outlook

The EU-South Korea FTA offers a sound institutional framework for bilateral trade between the EU and South Korea despite the fact that some difficulties persist as outlined in section 6. The ex post evaluation study of the FTA published by the EU Commission in March 2019 concluded that in the vast majority of areas the implementation works well, supporting economic development on both sides.

Both parties continue working on the implementation of the EU-South Korea FTA in order to bring further benefits to their businesses and consumers. In this respect, the specialised committees and working groups established under the EU-South Korea FTA serve as a forum to discuss and seek solutions to the implementation and market access issues, including regulatory developments on both sides.

8.Statistics

Total merchandise trade EU28 with South Korea (mio €)

South Korea

2017

2018

Growth

mio €

annual %

Imports

 

51.734

51.089

-645

-1,2%

Exports

 

50.132

49.250

-882

-1,8%

Balance

 

-1.601

-1.839

-238

 

Total trade

 

101.866

100.339

-1.527

-1,5%

Source Trade G2 Statistics/ISDB from Eurostat COMEXT

 

 

Agrifood trade EU28 with South Korea (mio €)

South Korea

2017

2018

Growth

mio €

annual %

Imports

 

203

201

-2

-0,9%

Exports

 

2.889

3.028

139

4,8%

Balance

 

2.686

2.827

141

 

Total trade

 

3.092

3.229

137

4,4%

Source Trade G2 Statistics/ISDB from Eurostat COMEXT

 

 

NAMA trade EU28 with South Korea (mio €)

South Korea

2017

2018

Growth

mio €

annual %

EU28 imports

51.531

50.888

-643

-1,2%

EU28 exports

47.244

46.222

-1.021

-2,2%

Balance

 

-4.287

-4.666

-378

 

Total trade

 

98.774

97.110

-1.664

-1,7%

Source Trade G2 Statistics/ISDB from Eurostat COMEXT

 

 

Services trade EU28 with South Korea (mio €)

 

 

South Korea

2016

2017

Growth

mio €

annual %

Imports

 

7.215

7.939

724

10,0%

Exports

 

12.608

13.520

912

7,2%

Balance

 

5.393

5.581

188

 

Total trade

 

19.823

21.459

1.637

8,3%

Source Trade G2 Statistics/ISDB from Eurostat BOP statistics

 

Services trade EU28 with South Korea (mio €)

 

2013

2014

2015

2016

2017

Imports

5.653

6.310

6.917

7.215

7.939

Exports

10.662

11.761

13.247

12.608

13.520

Balance

5.010

5.451

6.330

5.393

5.581

Total trade

16.315

18.071

20.164

19.823

21.459

Source Trade G2 Statistics/ISDB from Eurostat BOP statistics

 

 

 

 

 

FDI EU28 with South Korea (mio €)

 

2013

2014

2015

2016

2017

FDI Stocks

Inward

15.517

17.922

18.571

24.308

28.288

Outward

32.105

42.976

42.520

47.013

51.286

FDI Flows

Inward

1.868

4.286

2.068

1.809

2.245

Outward

868

7.731

-5.195

3.244

4.978

Source Trade G2 Statistics/ISDB from Eurostat BOP statistics

 

 

 

 

 



ANNUAL REPORT ON THE IMPLEMENTATION OF THE EU-COLOMBIA/ECUADOR/PERU TRADE AGREEMENT

1.Introduction

2018 marked the fifth full year of implementation of the Trade Agreement between the European Union and its Member States, of the one part, and Colombia and Peru, of the other part 15 , as amended by the Protocol of Accession of Ecuador (‘the Agreement’). The Agreement has been provisionally applied with Peru since March 2013, with Colombia since August 2013, and with Ecuador since 1 January 2017. Ratification by Member States of both the Trade Agreement and the Protocol of Accession of Ecuador is ongoing 16 .

The Agreement was also amended through the Protocol of Accession of Croatia to the EU. After completion of the ratification procedure by Peru on 6 April 2017, this Protocol entered into force with Peru on 1 May 2017. The ratification process by Colombia is ongoing.

This report shows that the results after almost six years of provisional application in the case of Peru and Colombia, and almost three years in the case of Ecuador, remain positive, although bilateral trade with Colombia and Peru in 2018 underwent a slight decrease after the rebound of 2017. The Agreement offers tariff-free access for virtually all industrial and fishery products from the three Andean countries, and substantial tariff preferences for the few agricultural products which were not fully liberalised, with very few exceptions. This improved market access, more predictable trade and investment relationship and the better rules have helped partner countries diversify trade and notably Andean countries’ exports of agri-food products. Regarding EU exports, several industrial sectors including pharmaceuticals, machinery and vehicles, have also strongly benefitted from the improved market access.

The Parties are dedicating important resources to the implementation process through the work in the bodies under the Agreement, notably the Trade Committee and its eight specialised Sub-committees. The Trade Committee and its Sub-Committees have met on an annual basis since 2013. Ecuador joined the institutions in 2017. The institutional structure of the Agreement is common and the Trade Committee and the Sub-committees take place in the presence of all Parties, i.e. between the EU and the three Andean partner countries.

In December 2018, the annual meetings of the Trade Committee and eight Sub-committees met in Quito (Ecuador) (see below). 

In accordance with Article 13 of Regulation (EU) No 19/2013 of the European Parliament and of the Council of 15 January 2013 implementing the bilateral safeguard clause and the stabilisation mechanism for bananas of the Trade Agreement between the European Union and its Member States, of the one part, and Colombia and Peru, of the other part 17  (‘Regulation’), the Commission committed to submit an annual report to the European Parliament and the Council on the application, implementation and fulfilment of obligations of the Agreement and the Regulation. This report responds to this requirement (see section 5 below).

2.Evolution of trade

2.1 Trade in Goods

The present section focuses on bilateral trade in goods as well as on Non-Agricultural Market Access (NAMA) products. As per the definition in the WTO Agreement on Agriculture, these non-agricultural products include industrial goods, manufactured goods, textiles, fuels and mining products, footwear, jewellery, forestry products, fish and fisheries, and chemicals.

2.1.1 Overall evolution

Colombia

In 2018, the EU has gone from Colombia´s second to third trading partner (14%), after the US (26%) and China (16%). In fact, bilateral trade between the EU and Colombia decreased by 4%. Colombian exports to the EU saw a 9% decline amidst falling global prices of coffee, a key export product. Compared to 2012 (year before the application of the Agreement), bilateral trade decreased by 22%, in line with the 22% decrease of Colombia’s total trade with the rest of the world over the same period.

In 2018, bilateral trade amounted to €11 billion, compared to €11.5 billion in 2017. While historically, Colombia ran a trade surplus with the EU, this trend reversed since 2017 and the EU now posts a trade surplus of €925 million.

EU exports to Colombia increased by 1% in 2018 to €6 billion. The headings that recorded the largest increases were pharmaceutical products, vehicles, electrical machinery and base metals while exports of machinery products and aircrafts suffered the greatest declines.

EU imports from Colombia amounted to €5.1 billion in 2018, down from €5.6 billion in 2017, representing a 9% decrease. It is noteworthy that for the first time agricultural products represented the same share (43%) of total exports from Colombia as minerals. Overall, the export basket of Colombia to the EU is more diversified than Colombia's trade with China and the US, more dominated by coal and petroleum products.

EU-Colombia trade in non-agricultural products (NAMA)

EU exports to Colombia of NAMA products amounted to €5.6 billion in 2018, increasing by 1%. The most important categories in 2018 were:

·Machinery and mechanical appliances (HS 84) represented the largest share of EU exports at 16%, amounting to €978 million despite suffering the largest drop in absolute terms, with a decrease of 17% compared to 2017.

·Pharmaceutical products (HS 30), totalling €813 million, or 14% of EU exports, increased by 12%;

·Motor vehicles (HS87), registered a 17% increase up to €556 million, now representing 9% of total EU exports.

EU imports from Colombia of NAMA products amounted to €2.9 billion in 2018, decreasing by 9% compared to the previous year. The main categories in 2018 were:

·Minerals (HS 27), €2.1 billion, representing 43% of total EU imports from Colombia, versus 46% in 2017;

·Precious stones and minerals (mainly emeralds and gold) (HS 71); increased by 171% compared to 2017, now representing €156 million, or 5% of total imports,

·Base metals (HS 72 to 83) (of which mainly iron and steel) amounted to €99 million, representing 2% of EU imports, an increase of 3% compared to 2017. 

Peru

The EU is Peru’s third largest trading partner (14% of total Peruvian trade), after China (24%) and the US (19%). In 2018, bilateral trade with the EU amounted €9.9 billion, decreasing by 3% compared to 2017, while Peru’s overall trade with the rest of the world increased by 17% over the same period. The EU’s trade deficit increased from €2.1 billion to €2.4 billion.

EU exports to Peru amounted to €3.7 billion, an 8% decrease when compared to 2017. 93% of EU exports are industrial products, mostly machinery and appliances, chemical products and transport equipment.

EU imports from Peru remained stable when compared to 2017 (€6.2 billion), Peru increased its exports to the rest of the world by 23%. Key export items are ores, slag and ashes, minerals, fruits, coffee and fishery products. The share of agricultural products in imports from Peru into the EU continued to increase.

EU-Peru trade in non-agricultural products (NAMA)

EU exports to Peru of non-agricultural products amounted to €3.47 billion in 2018, a 9% decrease (from €3.8 billion in 2017). The most important categories in 2018 were:

·Machinery, mechanical appliances (HS 84), amounting to €898 million representing 24% of total EU exports to Peru, with a 7% decrease compared to 2017;

·Electrical machinery and equipment (HS 85), or €327 million, accounting for 9% of total EU exports to Peru, and with a 18% contraction compared to 2017;

·Vehicles and parts (HS 80), worth €300 million or 8% of EU exports, decreasing by 1% compared to 2017;

·Pharmaceutical products (HS30), amounting to €198 million, or 5% of EU exports, decreasing by -3% compared to 2017.

EU imports from Peru of non-agricultural products also decreased by 4% amounting to €3.87 billion in 2018 (from €4.02 billion the previous year). The main categories in 2018 were:

·Ores (HS 26), amounting to €1.7 billion representing 27% of total EU imports from Peru, versus 30% in 2017, with a 10% decrease compared to 2017;

·Mineral fuels (HS27) mainly natural gas, worth €496 million, representing 8% of EU imports, a 26% decrease of 26% compared to 2017;

·Fish and crustaceans (HS 03), amounting to €308 million or 5% of EU imports, with a strong 18% increase compared to 2017.

Ecuador

In 2018, the EU remained Ecuador´s second largest trading partner (14% of total Ecuador trade) after the US (27%) and ahead of China (12%). In 2018, bilateral trade amounted to €5.4 billion, a 3% increase compared to €5.2 billion in 2017, a much slower rate compared to the remarkable 20% growth registered in 2017, the first year of application of the Agreement. Ecuador’s trade with the rest of the world increased by 12% in 2018, compared to 16% in 2017. Several factors may explain these figures: i) a strong dollar reducing the competitiveness of Ecuadorian products in international markets; ii) a slowdown in Ecuador´s domestic consumption; and iii) a trade diversion towards Central American countries and China. While the EU has historically maintained a trade deficit with Ecuador, this deficit is getting progressively reduced.

EU exports to Ecuador increased by 6% year-on-year (2017: €2.2 billion; 2018: €2.3 billion) and concentrated on agricultural products and fishery products.

EU imports from Ecuador grew by 1% year-on-year (2017: €3 billion; 2018: €3 billion). Key categories were machinery and appliances, chemical products and mineral products.

EU-Ecuador trade in non-agricultural products (NAMA)

EU exports to Ecuador of NAMA products increased by 5% amounting €2.2 billion in 2018. The most important categories in 2018 were:

·Machinery and mechanical appliances (HS84), worth €425 million and accounting for 18% of total EU exports to Ecuador, shrunk by 3% compared to 2017;

·Mineral fuels (HS 27), amounting to €350 million, or 15% of total EU exports, contracted by 11%;

·Vehicles and parts (HS87), of a value of €171 million, or 7% of EU exports, grew by 70%; Railways and trams (HS86), of €15 million, registering a 730% increase, as a consequence of works on the public transportation system (the metro of Quito, the tramway of Cuenca, and the cableway in Guayaquil).

·Pharmaceutical products (HS 30), €166 million, or 7% of EU exports, grew by 6%;

·Fishery products (HS03), worth €98 million accounting for 4% of EU total exports to Ecuador.

EU imports of NAMA products from Ecuador decreased by 2% amounting to €1.42 billion in 2018. The main categories in 2018 were:

·Fish and crustaceans (HS 03), amounted to €657 million, and accounted for 22% of total EU imports from Ecuador, shrunk by 3%;

·Preparation of fish (tuna) (HS 16) worth €656 million, or 22% of total EU imports, shrunk by 2%;

2.1.2 Trade in agricultural goods

This section focuses on agricultural products as defined by Article 2 of the WTO Agreement on Agriculture and as listed in Annex 1 of the same agreement.

Colombia

EU exports to Colombia of agricultural products increased by 7% in 2018, and were dominated by:

·Beverages and spirits (HS22) at €91.4 million, or 21% of EU exports of agricultural products to Colombia;

·Preparations of cereals, flour, starch (HS19) and preparation of vegetables, fruits, nuts or plants (HS20) account for 1% of agricultural exports each.

·Animal and vegetable fats and oils (HS15) increased by 5%, representing 1% of EU agricultural exports.

EU imports of agricultural products from Colombia amounted to €2.2 billion, decreasing by 9% from 2017 to 2018. The most important categories in 2018 were:

·Fruits (HS08), worth €1 billion, accounting for 20% of total EU imports from Ecuador, down by 5% when compared to 2017. Bananas represented 83% of all fruits exported, followed by avocados with 6%. From 2017 to 2018, there was a strong increase in exports of limes (78%), guavas, mangoes and mangosteens (31%) and oranges (19%);

·Coffee (HS09), €491 million, decreased by 20%, represents 10% of EU imports;

·Crude palm oil (HS151110) and crude palm kernel oil decreased by 15% and 5% respectively but still accounted for 5% and 1% of imports.

Total EU imports of agricultural products from Colombia have increased by 45% since 2012, and now account for 43% of Colombian exports to the EU, versus 18% in 2012.

Use of Tariff-rate quotas (TRQs)

The Agreement provides for Tariff Rate Quotas (TRQs) which grant the other party preferential tariff treatment up to the quota’s quantitative threshold, above which imports are subject to the applicable Most-Favoured Nation tariff.

Colombia’s use of the TRQ for cane sugar and chemically pure sucrose decreased to 64.8%. The TRQ for Rum was used for the first time in 2018. Other TRQs are hardly utilised or not utilised at all.

Rate of utilisation of EU TRQs by Colombia

2013

2014

2015

2016

2017

2018

Cane sugar and chemically pure sucrose

88.4%

85.7%

93.8%

96.2%

94.8%

64.8%

Sugar confectionery

1.4%

1.3%

1.2%

1.5%

1.5%

1.3%

Rum in containers holding > 2 litres

0%

0%

0%

0%

0%

58.8%

Source: TAXUD, Surveillance Database

The EU is fully using the TRQs established for mushrooms, milk and cream in powder and sweetcorn, to a somewhat lesser extent the TRQs on preparations for infant use (almost fully used) and ice cream, which experienced a substantial increase through a better implementation of the Agreement. The TRQ for yogurt has experienced a sharp decrease after two years being almost fully used, while the one for cheese has increased although it remains low (13.4%). The EU barely uses its TRQ on sugar confectionery (less than 5% in 2018).

Rate of utilisation of Colombia TRQs by the EU

2013

2014

2015

2016

2017

2018

Mushrooms

1.6%

5%

100%

100%

100%

100%

Milk and cream in powder

0%

34.9%

100%

100%

82.5%

100%

Whey

57.6%

50%

92.9%

No more TRQ

Preparations for infant use

40.4%

67.5%

99.1%

100%

100%

99%

Yogurt

0%

0.5%

0.8%

100%

99%

17.4%

Sweetcorn

0.4%

54.2%

100%

100%

100%

100%

Ice cream

5.3%

13.4%

7.4%

25.9%

45.7%

87%

Cheese

9%

8%

8.2%

7.9%

3.1%

13.4%

Sugar confectionary

1.8%

3.4%

3.1%

3.8%

3.9%

4.7%

Source: DIAN (Dirección de Impuestos y Aduanas nacionales)

Peru

EU exports to Peru of agricultural products in 2018 increased by 1% compared to 2017. The most important categories in 2018 were:

·Beverages and spirits (HS22), accounting for 23% of total EU exports of agricultural products to Peru have decreased by -6% compared to 2017;

·Preparations of vegetables (HS20), representing 11% of total EU exports of agricultural products to Peru decreased by -8% compared to 2017;

·Dairy products (HS04), posting a strong 26% increase compared to 2017 thanks to the introduction of a harmonized import certificate in 2017. Dairy exports represent 11% of total EU exports of agricultural products to Peru.

EU imports of agricultural products from Peru increased by 6% from 2017 to 2018. The most important categories in 2018 were:

·Fruits (HS08), accounted for 52% of total EU imports of Peruvian agricultural products , up 17% compared to 2017; avocados accounted for 32% of all fruits exported, a remained equal compared to 2017, followed by fresh grapes representing 20% (+68%), mangos 14% (+10%), fresh blackberries 12% (+59%) and fresh bananas 8% (+10%);

·Coffee (HS09) represents 16% of total EU imports of agriculture products from Peru decreasing by 9.6% from 2017.

·Edible vegetables which account for 9% of total of agriculture products from Peru raised by 6% between 2017 and 2018

Total EU imports of agricultural products from Peru increased by 49% since 2012, and now account for 37% of Peruvian exports to the EU, versus 24% in 2012.

Use of Tariff-rate quotas

Sweetcorn is the only product under TRQ where Peru has reached almost 100% utilisation rate in 2018, maintaining a positive trend since the date of application of the Agreement. Quota utilisation of both cane sugar and garlic has steeply dropped in 2018. Peru is starting to take advantage of the TRQ on maize (corn). Other TRQs have very low utilisation rate. The quotas for the other 11 products have not been utilised at all since the date of application of the Agreement.

Rate of utilisation of EU TRQs by Peru

 

2013

2014

2015

2016

2017

2018

Cane sugar

100%

100%

3,5%

99,9%

100%

9,2%

Sweetcorn

21%

76%

83,2%

87,3%

95,7%

97,7%

Garlic

0%

0%

2,4%

53,8%

54,2%

0%

Rum

0%

0%

0,0%

7%

0%

5,7%

Maize (Corn)

0,7%

2,9%

1,8%

6,1%

13,1%

15,5%

Sugar confectionery

0,02%

0,01%

0,2%

0,1%

0,3%

0,02%

Rice

0%

0%

0%

0%

0%

0,04%

Source: TAXUD, Surveillance Database

The EU is fully using the TRQ established by Peru for milk powder and almost fully for ice cream and butter thanks to the harmonized certificate for dairy products. Good progress for rum. Other TRQs are barely used.

Rate of utilisation of Peru TRQs by the EU

 

2013

2014

2015

2016

2017

2018

Butter

0%

0%

96%

100%

82%

100%

Cheese

0%

0%

0%

4,3%

5,4%

5%

Ice cream

59%

89,6%

98,5%

95,6%

94,2%

100%

Milk powder

0%

4,1%

99,7%

100%

100%

100%

Milk for babies

0%

0%

0%

29,9%

0,0%

0%

Sugar confectionery

0%

0%

0,1%

2,2%

3,4%

2%

Sugar

0%

0%

0%

0%

0%

0%

Rum

4%

0%

3,5%

5,8%

4,2%

27%

Source: SUNAT (Superintendencia Nacional de Aduanas y de Administracion Tributaria)

Ecuador

EU exports of agricultural products to Ecuador amounted to €157 million in 2018, a 29% increase compared to 2017, although the SPS chapter has not been fully implemented and some obstacles still persist. Agricultural products represented 7% of total EU exports to Ecuador. The most important categories in 2018 were:

·Beverages and spirits (HS22) amounting €36 million, growing by 102%, representing 23% of total EU agricultural exports, but 2% of total EU exports;

·Miscellaneous edible preparations (HS21), worth €25 million, a 29% increase compared to 2017, and 16% of EU agricultural exports;

·Residues and waste from food industry (HS23) increased by 23%, representing 11% of EU agricultural exports.

EU imports of agricultural products from Ecuador increased by 2% in 2018, reaching a total of €1.61 billion. EU continues to be Ecuador´s prime market for non-oil exports. Agricultural products represented 53% of total EU imports from Ecuador. The most important categories in 2018 were:

·Fruits (HS08), accounting for €1 billion or 64% of total EU imports of AMA (a 9% increase compared to 2017) and 34% of total EU imports from Ecuador. Bananas accounted for 94% of fruit imports (+10% in 2018 compared to 2017). Fresh tamarinds grew by 19%, fresh plantains and dried bananas by 10% and 15% respectively, while fresh pineapples and frozen fruit both decreased by 17%.

·Live trees and other plants, mainly fresh cut flowers (HS06) accounting for 13% of total AMA imports, increased by 11% compared to 2017.

·Cocoa and cocoa preparations (HS18), accounting for 10% of EU agricultural imports (and 5% of total Ecuador’s exports to the EU), shrunk by 13% compared to 2017.

Use of Tariff Rate Quotas (TRQs)

Ecuador´s use of the TRQs is progressively increasing in some categories of products.

Rate of utilization of EU TRQs by Ecuador

2017

2018

Sweet corn, uncooked, or cooked

3.3%

9.5%

Sweet corn provisionally preserved

-

0.7%

Rice

0.01%

0.3%

Raw cane sugar not containing added flavouring or colouring

4.3%

8.3%

Sugar and sugar products

1.6%

0.6%

Source: TAXUD, Surveillance Database

In 2018, the EU use of TRQs established for dairy products (powder milk, butter milk serum, whey) has almost tripled compared to the first year of FTA implementation. Other products where significant increases were registered are processed sweet corn and pork products (10 and 14% increase respectively).

A complex TRQ management system set out by the Ecuadorian authorities together with a slow process of registration of sanitary and phytosanitary conditions of Member States and EU establishments may explain the low TRQ use by the EU.

Rate of utilization of Ecuador TRQs by the EU

2017

2018

Preparations for animal feeding

6.1%

8.1%

Preparations for animal feeding

0%

2.7%

Bovine guts

0%

0%

Dairy products: Powder milk, butter milk serum, whey

12.5%

35.7%

Dairy products: Evaporated milk, condensed milk 

1.0%

3.0%

Diary products: Yoghourt, cheeses: grated or powdered, melted, others

2.7%

19.0%

Dairy products: Blue-veined cheese, mature cheese

3.9%

7.0%

Fresh sweet corn: Sweet corn, fresh, refrigerated

Processed sweet corn: Sweet corn: frozen, canned

21.9%

32.8%

Swine products: cured ham, bellies (streaky) sausages and similar meat products

5.7%

18.9%

Frozen potatoes

0%

1.9%

Confectionary product (high sugar content): Juices, chocolate, coffee, tea and others

0.9%

0%

Source: Ministry of Agriculture and Livestock

Preference Utilization Rate (PUR)

In the context of the Sub-committee on Market Access, the Parties agreed in 2015 to exchange data on PUR on an annual basis. During the annual meeting that took place in December 2018 in Quito, the EU stressed the need to have reliable data to get a better overview of the effects of the Agreement and to explore means to assist economic operators, in particular SMEs, to make better use of the opportunities.

2.2 Trade in Services and development of investment

2.2.1 Trade in Services

Colombia

Bilateral trade in services between the EU and Colombia increased by 22% in 2017 compared to 2016, totalling €5.4 billion. Both EU exports and Colombian exports increased during this period of time by 26% and 13% respectively.

According to Colombian statistics (DANE), the EU’s share in Colombia’s total trade in services represented 16% in 2018. Key EU exports of services are travel, IT and passenger air transport.

Peru

In 2017, EU-Peru bilateral trade in services amounted to €3 billion. Both EU exports (€1.9 billion) and Peruvian exports (€1.1 billion) increased year-on-year by 21% and 13% respectively. Balance remains positive for the EU.

Ecuador

In 2017, bilateral trade in services between the EU and Ecuador increased by 11% year-on-year to amount to €1.6 billion. EU exports amounted to €1 billion, increasing by 4% year-on-year. Ecuadorian exports of services (€582 million) experienced a 27% growth. The EU maintains a surplus in trade in services in 2017 although this surplus has shrunk by 15%. According to Ecuador’s Central Bank data, the EU share in Ecuador´s total trade in services represented 35%.

2.2.2 Foreign Direct investment (FDIs)

Colombia

For the fourth year in a row, the EU was the first foreign investor in Colombia, totalling €15 billion of Foreign Direct Investment (FDI) stocks in 2017. According to Colombian statistics, EU FDI accounted for 39% of the total FDI inflows to Colombia in 2018. Colombian FDI stocks in the EU increased by 33% since 2016, totalling €4.6 billion in 2017, and according to Colombian statistics, 31% of its outward flows went to the EU in 2018.

Peru

The EU is according to Peruvian statistics the first foreign investor in Peru. EU FDI stocks in Peru slightly decreased (-1%) between 2016 and 2017, totalling €16.6 billion in 2017. Between 2013 and 2014 total EU FDI stocks in Peru increased by 74%.

Peru’s FDI stocks in the EU increased by 21% compared to 2016 totalling €3.4 billion in 2017.

Ecuador

In 2017, EU FDI stocks have remained constant at €5.12 billion compared to 2016. According to Ecuador´s Central Bank statistics, in 2017, the EU was the first foreign investor, accounting for 32% of total FDI inflows into Ecuador.

3Activities of the implementation bodies

The fifth meeting of the Trade Committee took place on 13 and 14 December 2018 in Quito (Ecuador). It was preceded between 29 November and 12 December 2018 by meetings of all 8 Sub-committees under the Agreement.

Trade Committee

The EU and Colombia signed a Decision to include nine new Colombian geographic indications (GIs) to the Annex of the Trade Agreement . This is the first time since the provisional application of the Agreement.

The Trade Committee was able to take stock of progress achieved in the eight Sub-committees. The EU reiterated some of its main concerns, notably: with Colombia, the imposition of anti-dumping duties against frozen potatoes from Belgium, Germany and the Netherlands, the de facto lack of access to sub-central entities despite the signature of the Decision of the Trade Committee in 2017, the backtracking on truck scrappage policy with the six-month extension of its elimination, and discriminatory measures on alcoholic beverages (beers and spirits); with Peru, the continued discrimination of imported spirits in Peru, the lack of enforcement for EU GIs and cumbersome procedures to facilitate imports of medical devices and medicines from the EU; with Ecuador, the discriminatory treatment for imported alcoholic beverages, and trade-restrictive management of tariff-rate quotas (TRQs).

The EU also expressed concerns on slow progress on SPS matters with the three countries, notably on the approval of harmonised procedures (certificates and prelisting) or long delays or deviations from international standards attributed to Community of Andean Nations legislation and procedures. The EU called specifically upon Colombia to progress or lift trade restrictions imposed on Belgium over outbreaks of African Swine Fever in wild boars.

The EU called for more constructive engagement from the three Andean countries to change their provisions defining direct transport to allow for the splitting of consignments for products transiting a third country.

Colombia, Peru and Ecuador raised concerns about the potential impact of some EU SPS measures on their exports of agricultural products. They also showed interest to examine in 2019 the improvement of tariff liberalisation for bananas pursuant to the clause in the agreement. They expressed concerns about the recent increase of the autonomous TRQs for tuna and shrimps, which they consider to erode their preferences. Colombia and Ecuador conveyed their preoccupations about EU legislative activities that they consider may affect their exports of palm oil to the EU.

The EU gave an update on the state of ratification process in EU Member States of both the Agreement and the Protocol of Accession of Ecuador. Colombia informed about the ratification process regarding the Protocol to the Agreement to take account of the accession of the Republic of Croatia to the European Union.

Sub-Committee on Customs, Trade Facilitation and Rules of Origin


The two main issues discussed were the following:

The EU raised the update of the rule on Direct Transport with a view to allowing the splitting of consignments for originating goods transiting regional transport hubs in third countries. Unfortunately, no agreement could be reached on moving forward on this point.

For regional cumulation between the Andean countries and Central America, the parties discussed the requirement for adequate customs cooperation agreements. The two regions are in the process of finalising a region to region agreement to re-establish the agreement that existed under the Generalised System of Preference (GSP).

Sub-Committee on Government Procurement

The EU raised concerns on the interpretation by Colombia of the Decision 1/2017 of the Trade Committee adopted in November 2017 on the coverage by Colombia of some government procurement contracts at municipal level. As a result of Colombia’s interpretation of the exemption related to sub-central contracting entities with industrial and commercial character, EU companies are not granted national treatment in public procurement procedures in those contracts. This impacted the EU participation in major infrastructure projects in Colombia such as metros and hospitals and pressed Colombia to find a solution to remedy the situation and meet the legitimate EU expectations. Colombia and the EU agreed to work towards a mutually agreeable solution on this issue.

The Andean countries expressed their interest in exchanging information on the functioning of the EU public procurement platform SIMAP-TED, in order to facilitate the identification of business opportunities for Andean economic operators in the EU public procurement market.

Sub-Committee on Technical Barriers to Trade (TBT)

With regard to Peru, the EU reiterated its concerns about the lack of recognition by Peru of all Member States as having ‘strong health monitoring’ (“Alta Vigilancia Sanitaria”), as it facilitates the recognition of their certification for pharmaceutical and medical devices products to be exported to Peru.

Colombia, Ecuador and Peru expressed their concerns as regards EU legislation on endocrine disruptors. Colombia and Ecuador raised concerns about EU legislation on renewable energy that, in their view, may have a negative impact on their exports of palm oil to the EU.

Sub-Committee on Sanitary and Phytosanitary matters (SPS)

For the EU, the main offensive points were to make progress on the approval of harmonised certificates, to obtain the lifting or progress concerning trade restrictions imposed by Colombia on Belgium over outbreaks of African Swine Fever in wild boars, and ensuring that the Agreement’s provisions on communication, emergency measures and regionalization for animal diseases are respected.

The EU also pushed for progress on several market access applications, for which Colombia, Ecuador and Peru refer to SPS legislation (or procedures) at Community of Andean Nations (CAN) level to justify long delays or deviations from international standards. While respecting the role of CAN, the EU insisted that the provisions of the Agreement and international standards must be complied with.

Peru, Colombia and Ecuador reiterated their concerns on issues already raised bilaterally or multilaterally in other fora (for example, Codex, WTO SPS Committee, etc.), in particular the EU measures for maximum levels of cadmium in some cocoa-based products (e.g. chocolates), the ongoing revision of the maximum residue limits (MRLs) for some pesticides, the legislative framework on endocrine disruptors and the approval procedure for novel food.

Both sides agreed on an agenda and actions plans for the main points. Finally, the Andean countries presented several requests for technical assistance.

Agricultural Sub-Committee

The Parties exchanged information on the trade flows in agri-food trade (including the use of preferences and of tariff-rate quotas) and on the implementation of the Banana Stabilisation Mechanism.

Concerning Colombia, the EU expressed concerns on the methodology for the calculation of retail prices on alcoholic beverages, as well as about a new certification of Good Manufacturing Practices, which - if adopted - could impose additional requirements affecting EU exports. With Ecuador, the EU raised concerns about the system in place for granting import licences and the administration of tariff-rate quotas. With Peru, the EU raised concerns on the longstanding tax discrimination against spirits aggravated and invited Peru to take appropriate action.

Colombia and Ecuador expressed concerns on legislative developments in the EU that may affect their exports of palm oil as well as concerning production of cacao and coffee. They also reiterated their interest to negotiate with the EU bilateral agreements on organic production.

Sub-Committee on Intellectual Property Rights

Regarding Geographical Indications (GIs), the Parties addressed specific issues regarding on-going investigations launched by Colombia on the usurpation of certain EU cheese GIs, as well as effective action needed on Peru’s side to protect a number of EU GIs suffering from usurpation. The request for corrections to the names of certain EU GIs already recognised in Peru was also discussed, as well as a case of alleged usurpation of an EU GI in Ecuador. Peru referred to the protection of “Pisco” in the EU in relation to registration of trademarks.

The EU informed of work concluded for the protection of nine additional Colombian GIs, and on-going work concerning the recognition of additional GIs from Colombia, Ecuador and Peru. The Parties also exchanged information concerning non-agricultural GIs in their respective markets.

Other issues discussed included the overall enforcement of intellectual property rights (IPR), including on-line and at the border, patentability issues in Colombia and Ecuador, as well as the protection of regulatory data submitted for marketing authorisations of pharmaceuticals and agro-chemicals. Copyright and related rights in the framework of revised legislation (Colombia) or implementing regulations (Ecuador) were also addressed, as well as the importance of effective protection of plant variety rights in Ecuador.

Cooperation projects were discussed in the context of activities already implemented by the IP Key Latin America Programme, and future possible activities aimed at supporting the implementation of IPR commitments in the Trade Agreement.

Market Access Sub-Committee

The Parties exchanged statistics on trade flows, including the use of preferences and tariff rates quotas.

With Colombia, the EU raised its concerns regarding the decision in November 2018 to impose anti-dumping duties against EU frozen potatoes, the extension by six months of the elimination of the truck scrappage policy, discrimination against imported beers in some departments, the implementation of the spirits law. On anti-dumping, Colombia mentioned the possibility for the EU to request an administrative review of the decision. With Ecuador, discussions focused on discriminatory treatment against imported spirits, where Ecuador indicated that it would need an additional 6 to 12-month period to remove the discrimination.

Colombia, Ecuador and Peru referred to the clause in the Agreement to examine in 2019 a possible improvement of tariff liberalisation for bananas. They also expressed concerns about the recent increase of the EU autonomous TRQs for tuna and shrimps, which they consider may erode their preferences.

4.Implementation of the provisions on trade and sustainable development

The fifth meeting of the Sub-committee on Trade and Sustainable Development (TSD) reviewed the progress made during a year of stepped-up engagement on TSD issues, which was accompanied by regular exchanges between the Parties.

The intense engagement with Peru reflects the more assertive EU stance on enforcing TSD commitments, in line with the European Commission’s 15-point action plan to improve implementation of TSD chapters. In her letter of July 2018 to Peru’s Trade Minister Rogers Valencia Commissioner Malmström expressed EU’s concerns regarding the implementation by Peru of some of the commitments undertaken in the TSD chapter. These concerns related to the right on freedom of association and collective bargaining (notably for workers in particular sectors including textiles and agriculture), the high levels of child labour and informality as well as weak capacity of labour inspection. The letter also signaled the need to sustain environmental protection levels and highlighted the insufficient civil society consultation on labour and environmental issues related to the implementation of the TSD chapter. The submission filed with the European Commission by a group of civil society organisations in October 2017 also raised some of these issues.

Following this letter, the EU and Peru engaged in more sustained contacts aiming to renew the impetus on the implementation of the TSD chapter, which included a technical mission of the Commission’s services to Lima in October 2018. Throughout the process, the Commission maintained a regular dialogue with civil society organisations, including the social partners.

The result of this engagement is reflected in the minutes of the TSD Sub-committee meeting that are available on the Commission’s website . Peru reiterated its commitment to the full implementation of the TSD chapter and listed the main policy initiatives already in place (or in preparation) to address the substantive challenges identified, while acknowledging that efforts needed to continue to ensure the commitments are met. Peru also agreed to be proactive in using the domestic mechanisms it chose to rely on to engage civil society on TSD-related issues.

Furthermore, the TSD Sub-committee meeting reviewed progress made by Colombia and Ecuador in the implementation of the TSD chapter. On labour, Colombia made advances notably through the implementation of initiatives to reduce labour informality and child labour. These included the national network of labour formalisation and the revision of the list of hazardous occupations. However, the persistence of cases of violence against trade union leaders remains concerning. In Ecuador, the right to freedom of association also continues to be a concern as well as labour informality. Both countries need to intensify efforts to strengthen labour inspection. The EU also encouraged all parties to ratify the 2014 Protocol to the ILO Forced Labour Convention.

On environment, Colombia and Ecuador continued to put in place initiatives to address deforestation and implement the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES). Colombia also adopted a national strategy for circular economy and a programme to support green business. The fight against the use of mercury in mining and industrial activities remains a main challenge for the country. Ecuador also made noteworthy advances by ratifying the Nagoya Protocol of the Convention of Biological Diversity in December 2017. In April 2018, the country adopted the Organic Environmental Code. The fight against illegal mining remains a concern as well as Ecuador’s compliance with its commitments on illegal, unreported and unregulated fishing.

There was good progress in the involvement of civil society in accompanying the implementation of the TSD chapter. The EU domestic advisory group (DAG) met regularly throughout 2018 to discuss issues of relevance to the TSD chapter. In Colombia, the dedicated consultative group continued to be consolidated. In Ecuador, the government organised a consultation process with civil society that led to the setting up of a dedicated consultative group for TSD issues in December 2018. Peru committed to make a more proactive use of its domestic consultative mechanisms. In line with Article 282 of the Agreement, the Sub-committee on TSD organised an open session on 12 December 2018 in Quito.

The Parties made progress with cooperation activities. In Colombia, two workshops were organised in March 2018: one on the use of mercury for gold extraction and one on responsible mining. The implementation of a new EU-financed project led by the ILO to strengthen labour inspection in agricultural areas started in January 2019. With Ecuador cooperation initiatives mostly focused on assisting the early phase of TSD implementation. These included the drafting of a TSD implementation handbook in partnership with Sweden. With Peru, a regional workshop on circular economy was organised in Lima in September 2018.

The positive momentum achieved with all three partner countries will allow further engagement to continue. It also reflects the more assertive and focused efforts by the EU, grounded on a closer partnership with EU Member States and the ILO and on the greater involvement of civil society, in accordance with the 15-point action plan .

5.Specific areas subject to reporting or monitoring

The Agreement provides a preferential customs duty on bananas under heading 0803.00.19 (fresh bananas), progressively reduced since the date of provisional application of the Agreement until the year 2020 (following a schedule indicated in a tariff reduction table). This special treatment is linked to a ‘stabilisation clause’ that sets out an annual trigger volume for imports from each Andean country during the transition period.

Article 15 of Regulation (EU) No 19/2013 18 provides for the stabilisation mechanism. When the annual trigger volume of imports per country as set in the Agreement is met, the Commission examines the impact of these imports on the situation of the Union market for bananas and take a decision to either temporarily suspend the preferential customs duty or determine that such suspension is not appropriate. The stabilisation mechanism shall apply until 31 December 2019.

In this context and in accordance with Articles 3 and 13 of Regulation 19/2013, the Commission has been monitoring the evolution of imports of fresh bananas from Colombia, Peru and Ecuador.

2018 imports of fresh bananas from Colombia, Ecuador and Peru

Country

Used volume (tonnes)

Trigger level

(tonnes)

%

Colombia

1.286.314

1.890.000

68%

Ecuador

1.514.549

1.880.127

81%

Peru

127.168

97.500

130%

Total

2.928.031

3.867.627

76%

Source Eurostat

In 2018, EU imports of fresh bananas from Colombia amounted to 1 286 313 metric tons. Colombia remained 32% below the trigger volume of 1 890 000 metric tonnes established by the Agreement.

Ecuador exported 1 514 548 metric tons of fresh bananas to the EU, with imports remaining 19% below the trigger level of 1 880 127 metric tonnes, established for Ecuador in the Agreement.

Peru exceeded its trigger volume established in the Agreement (97 500 metric tonnes) on 15 October 2018. In line with Article 15(3) of the above-mentioned Regulation(EU) No 19/2013, the Commission examined the impact on the EU market taking into account, inter alia, the effects on the price level, developments of imports from other sources and the overall stability of the EU market.

As a result of the examination, the Commission concluded that the suspension of the preferential duty on fresh bananas originating in Peru was not appropriate for the following reasons 19 :

1.the share of imports from Peru (2.2%) in the overall imports of bananas over the period 1 January 2018 - 15 October 2018 was very small and the price development of imports from Peru remained in line with other import prices;

2.the other exporting countries remained - at that moment of the year - far below the thresholds defined for them (annual exports from the three Andean countries reached 76% of the cumulated trigger level);

3.Peruvian imports did not show any negative effect on the EU wholesale price for bananas, which has remained fairly stable during the period.

Therefore, there was no indication that the stability of the EU market or the situation of the EU producers was affected by the level of Peruvian exports. Nevertheless, the Commission will continue its reinforced monitoring of banana imports and evaluate the market situation.

6.Conclusions and outlook

After almost six years of provisional application with Colombia and Peru and the three years with Ecuador, the Agreement continues to function well and has created important business opportunities, which are being increasingly seized by businesses and exporters from both sides. Despite a slight decrease in bilateral trade with Colombia and Peru in 2018, the Agreement continues to contribute to an important diversification of Colombia and Peru’s exports, away from mineral products or ores, notably in favour of the agricultural sector, thus creating new opportunities, notably for SMEs. With Ecuador, results after two years of implementation are positive and there is still potential for growth and diversification on both sides.

Full implementation of the Agreement remains a priority for the EU. The institutional framework under the Agreement has been working well and allows for discussions to seek solutions to the implementation and market access issues on both sides. Nevertheless, some difficulties persist and all Parties should continue working on the implementation of the Trade Agreement in order to bring further benefits to their businesses and consumers.

In 2018, the Commission will launch an external ex post evaluation on the five years of implementation of the Agreement, which will undertake an in-depth analysis of the trade and economic impacts, social impacts, impact on labour and human rights, and environmental impacts of the Agreement. Stakeholders and the civil society will be widely consulted, including through dedicated meetings.

7.Statistics

Colombia

Merchandise trade EU28 2014-2018

 

2014

2015

2016

2017

2018

EU28 trade with Colombia (mio €)

 

 

 

 

Imports

8.178

6.724

5.443

5.590

5.085

Exports

6.352

6.523

5.403

5.973

6.010

Balance

-1.826

-202

-40

383

925

Share Colombia in EU28 trade with Extra-EU28

 

 

 

 

Imports

0,5%

0,4%

0,3%

0,3%

0,3%

Exports

0,4%

0,4%

0,3%

0,3%

0,3%

Total (I+E)

0,4%

0,4%

0,3%

0,3%

0,3%

Share EU28 in trade Colombia with world

Imports

13,7%

15,3%

13,5%

14,7%

15,1%

Exports

17,1%

16,6%

12,8%

13,4%

12,5%

Total (I+E)

15,3%

15,8%

13,2%

14,1%

13,9%

Source Trade G2 Statistics/ISDB

 

 

25-mars-19

Trade EU28: Eurostat COMEXT; Trade Colombia: IMF Dots

 

 

 

 

 

 

 

 

Total merchandise trade EU28 with Colombia (mio €)

Colombia

2017

2018

Growth

mio €

annual %

Imports

 

5.590

5.085

-505

-9,0%

Exports

 

5.973

6.010

37

0,6%

Balance

 

383

925

542

 

Total trade

 

11.564

11.095

-468

-4,0%

Source Trade G2 Statistics/ISDB from Eurostat COMEXT

 

 

Agrifood trade EU28 with Colombia (mio €)

Colombia

2017

2018

Growth

mio €

annual %

Imports

 

2.407

2.187

-220

-9,1%

Exports

 

400

428

27

6,8%

Balance

 

-2.007

-1.760

247

 

Total trade

 

2.808

2.615

-193

-6,9%

Source Trade G2 Statistics/ISDB from Eurostat COMEXT

 

 

NAMA trade EU28 with Colombia (mio €)

Colombia

2017

2018

Growth

mio €

annual %

EU28 imports

3.183

2.898

-285

-9,0%

EU28 exports

5.573

5.582

9

0,2%

Balance

 

2.390

2.684

295

 

Total trade

 

8.756

8.480

-276

-3,1%

Source Trade G2 Statistics/ISDB from Eurostat COMEXT

 

 

Services trade EU28 with Colombia (mio €)

 

 

Colombia

2016

2017

Growth

mio €

annual %

Imports

 

1.381

1.554

173

12,5%

Exports

 

3.063

3.846

783

25,6%

Balance

 

1.682

2.292

610

 

Total trade

 

4.444

5.400

956

21,5%

Source Trade G2 Statistics/ISDB from Eurostat BOP statistics

 

Services trade EU28 with Colombia (mio €)

 

2013

2014

2015

2016

2017

Imports

1.453

1.538

1.466

1.381

1.554

Exports

2.563

2.398

2.966

3.063

3.846

Balance

1.111

860

1.500

1.682

2.292

Total trade

4.016

3.935

4.431

4.444

5.400

Source Trade G2 Statistics/ISDB from Eurostat BOP statistics

 

 

 

 

 

FDI EU28 with Colombia (mio €)

 

2013

2014

2015

2016

2017

FDI Stocks

Inward

4.789

3.828

8.214

3.457

4.589

Outward

17.848

16.223

21.738

15.382

15.051

FDI Flows

Inward

1.365

-214

2.348

-584

650

Outward

-261

71

1.579

-2.010

1.313

Source Trade G2 Statistics/ISDB from Eurostat BOP statistics

 

 

 

 

 

Ecuador

Merchandise trade EU28 2014-2018

 

2014

2015

2016

2017

2018

EU28 trade with Ecuador (mio €)

 

 

 

 

Imports

2.621

2.595

2.724

3.018

3.032

Exports

2.199

2.010

1.638

2.214

2.353

Balance

-422

-586

-1.086

-804

-679

Share Ecuador in EU28 trade with Extra-EU28

 

 

 

 

Imports

0,2%

0,2%

0,2%

0,2%

0,2%

Exports

0,1%

0,1%

0,1%

0,1%

0,1%

Total (I+E)

0,1%

0,1%

0,1%

0,1%

0,1%

Share EU28 in trade Ecuador with world

Imports

11,0%

11,6%

11,5%

13,0%

12,9%

Exports

11,6%

15,1%

16,9%

16,6%

15,1%

Total (I+E)

11,3%

13,2%

14,2%

14,7%

14,0%

Source Trade G2 Statistics/ISDB

 

 

25-mars-19

Trade EU28: Eurostat COMEXT; Trade Ecuador: IMF Dots

 

 

 

 

 

 

 

 

Total merchandise trade EU28 with Ecuador (mio €)

Ecuador

2017

2018

Growth

mio €

annual %

Imports

 

3.018

3.032

15

0,5%

Exports

 

2.214

2.353

140

6,3%

Balance

 

-804

-679

125

 

Total trade

 

5.232

5.386

154

2,9%

Source Trade G2 Statistics/ISDB from Eurostat COMEXT

 

 

Agrifood trade EU28 with Ecuador (mio €)

Ecuador

2017

2018

Growth

mio €

annual %

Imports

 

1.567

1.606

39

2,5%

Exports

 

122

157

35

28,6%

Balance

 

-1.445

-1.449

-4

 

Total trade

 

1.689

1.763

74

4,4%

Source Trade G2 Statistics/ISDB from Eurostat COMEXT

 

 

NAMA trade EU28 with Ecuador (mio €)

Ecuador

2017

2018

Growth

mio €

annual %

EU28 imports

1.451

1.427

-24

-1,7%

EU28 exports

2.092

2.197

105

5,0%

Balance

 

641

770

129

 

Total trade

 

3.543

3.623

80

2,3%

Source Trade G2 Statistics/ISDB from Eurostat COMEXT

 

 

Services trade EU28 with Ecuador (mio €)

 

 

Ecuador

2016

2017

Growth

mio €

annual %

Imports

 

458

582

124

27,2%

Exports

 

1.016

1.055

40

3,9%

Balance

 

558

473

-85

 

Total trade

 

1.474

1.638

164

11,1%

Source Trade G2 Statistics/ISDB from Eurostat BOP statistics

 

Services trade EU28 with Ecuador (mio €)

 

2013

2014

2015

2016

2017

Imports

378

408

374

458

582

Exports

1.141

1.309

1.094

1.016

1.055

Balance

764

901

720

558

473

Total trade

1.519

1.716

1.468

1.474

1.638

Source Trade G2 Statistics/ISDB from Eurostat BOP statistics

 

 

 

 

 

FDI EU28 with Ecuador (mio €)

 

2013

2014

2015

2016

2017

FDI Stocks

Inward

399

536

230

176

178

Outward

4.052

5.157

8.254

5.152

5.123

FDI Flows

Inward

-56

-233

-177

-115

-13

Outward

-119

2

1.087

80

349

Source Trade G2 Statistics/ISDB from Eurostat BOP statistics

 

 

 

 

 

Peru

Merchandise trade EU28 2014-2018

 

2014

2015

2016

2017

2018

EU28 trade with Peru (mio €)

 

 

 

 

Imports

4.978

5.033

5.183

6.175

6.157

Exports

3.236

3.732

3.614

4.053

3.731

Balance

-1.742

-1.301

-1.569

-2.122

-2.426

Share Peru in EU28 trade with Extra-EU28

 

 

 

 

Imports

0,3%

0,3%

0,3%

0,3%

0,3%

Exports

0,2%

0,2%

0,2%

0,2%

0,2%

Total (I+E)

0,2%

0,2%

0,3%

0,3%

0,3%

Share EU28 in trade Peru with world

Imports

11,8%

11,7%

12,0%

12,3%

12,1%

Exports

16,6%

16,1%

15,1%

14,7%

15,1%

Total (I+E)

14,0%

13,7%

13,5%

13,5%

13,7%

Source Trade G2 Statistics/ISDB

 

 

25-mars-19

Trade EU28: Eurostat COMEXT; Trade Peru: IMF Dots

 

 

 

 

 

 

 

 

Total merchandise trade EU28 with Peru (mio €)

Peru

2017

2018

Growth

mio €

annual %

Imports

 

6.175

6.157

-18

-0,3%

Exports

 

4.053

3.731

-322

-7,9%

Balance

 

-2.122

-2.426

-303

 

Total trade

 

10.228

9.888

-340

-3,3%

Source Trade G2 Statistics/ISDB from Eurostat COMEXT

 

 

Agrifood trade EU28 with Peru (mio €)

Peru

2017

2018

Growth

mio €

annual %

Imports

 

2.158

2.280

122

5,6%

Exports

 

251

255

4

1,4%

Balance

 

-1.907

-2.026

-118

 

Total trade

 

2.410

2.535

125

5,2%

Source Trade G2 Statistics/ISDB from Eurostat COMEXT

 

 

NAMA trade EU28 with Peru (mio €)

Peru

2017

2018

Growth

mio €

annual %

EU28 imports

4.017

3.876

-140

-3,5%

EU28 exports

3.802

3.476

-325

-8,6%

Balance

 

-215

-400

-185

 

Total trade

 

7.818

7.353

-466

-6,0%

Source Trade G2 Statistics/ISDB from Eurostat COMEXT

 

 

Services trade EU28 with Peru (mio €)

 

 

Peru

2016

2017

Growth

mio €

annual %

Imports

 

978

1.108

130

13,3%

Exports

 

1.621

1.955

335

20,6%

Balance

 

643

848

205

 

Total trade

 

2.599

3.063

464

17,9%

Source Trade G2 Statistics/ISDB from Eurostat BOP statistics

 

Services trade EU28 with Peru (mio €)

 

2013

2014

2015

2016

2017

Imports

840

910

899

978

1.108

Exports

1.699

2.109

1.710

1.621

1.955

Balance

859

1.199

812

643

848

Total trade

2.538

3.020

2.609

2.599

3.063

Source Trade G2 Statistics/ISDB from Eurostat BOP statistics

 

 

 

 

 

FDI EU28 with Peru (mio €)

 

2013

2014

2015

2016

2017

FDI Stocks

Inward

244

158

2.293

2.812

3.416

Outward

9.567

9.702

13.244

16.754

16.630

FDI Flows

Inward

129

-363

836

769

60

Outward

519

-1.440

2.613

3.862

752

Source Trade G2 Statistics/ISDB from Eurostat BOP statistics

 

 

 

 

 



ANNUAL REPORT ON THE IMPLEMENTATION OF PART IV OF THE ASSOCIATION AGREEMENT BETWEEN THE EU AND ITS MEMBER STATES AND CENTRAL AMERICA

1.Introduction

The trade pillar (Part IV) of the European Union - Central America Association Agreement (“the Agreement”) 20  has been in application for five years.

Under Article 13 of Regulation (EU) No 20/2013 of the European Parliament and of the Council of 15 January 2013 implementing the bilateral safeguard clause and the stabilisation mechanism for bananas of the Agreement establishing an Association between the European Union and its Member States, on the one hand, and Central America on the other 21 , the Commission committed to submit an annual report to the European Parliament and the Council on the application, implementation and fulfilment of obligations of the Agreement and the Regulation. This report also responds to this requirement.

2.Overall assessment: evolution of bilateral trade

2.1Trade in Goods overall

The EU trade with Central America in 2018 was overall quite balanced, with only a slight overall deficit of around €0.1 billion in favour of Central America. The EU enjoyed a considerable surplus of around €1.8 million with Panama and a €0.5 billion surplus with El Salvador. This surplus, however, is netted out by the deficit recorded with Costa Rica (€1.6 billion) and Honduras (€0.6 billion). Trade flows with Guatemala were quite balanced whereas with Nicaragua the EU recorded a deficit of about €0.2 billion.

EU imports amounted to around €6.2 billion and remained roughly at the same level as in 2017. They were however still around 5.5% higher than the average value for the period 2014-2018. The EU maintained a stable level of imports from its largest supplier in the region, Costa Rica. A significant increase in relative terms (almost 40%) was recorded in imports from Panama, but that growth translated to a still relatively low level in absolute terms (€0.7 billion). On the whole, Central America accounts for around 0.3% of total EU trade with the world.

In constrast to previous years, in 2018 EU exports to Central America registered an annual double-digit growth of 11%. This growth fits into the general trend of increasing EU global exports (4% over 2017). The increase in exports was mainly due to increased exports to Panama (up 15%) and El Salvador (up 68%). As regards other countries in the region, no significant change in trade flows was observed. Panama imported almost 2.5 times more transport equipment from the EU than in 2017 (ships and aircraft). El Salvador made similar purchases to the value of €0.3 billion, unobserved in previous years (aircraft).

Sectoral structure of trade

EU imports

Agricultural foodstuffs make up 2/3 of EU imports from Central America, totalling €4.1 billion. Fruits constitute the largest chunk of those agricultural imports (close to €2 billion), including mainly bananas (€1.2 billion), pineapples, melons and papayas. Costa Rica is responsible for exports of a vast majority of these fruit to the EU. 2018 was another record setting year in the sale of fruits to the EU, in particular in the case of bananas. Other significant items include coffee (€0.9 billion), and animal and vegetable oils (€0.5 billion). Coffee comes mainly from Honduras, and to a smaller extent from Guatemala, Costa Rica and El Salvador. In 2018 Honduras was the third EU’s supplier of coffee (unroasted) (after Brazil and Vietnam). Vegetable oils include primarly palm oil (85% of the category) and coconut oil. Honduras and Guatemala and the biggest exporters of palm oil from the region, together accounting for around 11% of EU imports of palm oil. Little changes in trade in these main agricultural items were observed over the year, with a slight fall in the value of coffee (down 6%) and a slight increase in fruits (up 4%). Yet, on a national level, Honduras suffered a strongest decline (down 11%) which was compensated to some extent by others (e.g. Guatemala, Nicaragua).

Another major category of imports are medical instruments and devices that the EU sources from Costa Rica. These supplies are on the upward path, up 10% from the previous year. They accounted for around 12% of imports from Central America last year.

EU exports

EU exports to Central America are more diversified than imports. Around 60% of EU exports are concentrated in three major product categories: chemical industry products, machinery and appliances, and transport equipment. The chemical industry products are mainly pharmaceuticals and cosmetics, going primarily to Panama. Exports of transport equipment included ships and aircraft. EU exports of chemical products remained at a similar level as in 2017; a slight drop (8%) was observed in the case of machinery and appliances, whereas in the case of transport equipment, the EU recorded a spectacular growth of 144%. As explained above this was mainly due to increased purchases of Panama and El Salvador.

Country-by-Country analysis

On a national basis, the Costa Rica accounts for 44% of all EU imports from the six Central American countries. By contrast, Panama is the greatest recipient of EU exports, with a 42% share in the EU’s total exports to these countries.

The top three recipients of EU exports are Panama, Costa Rica and Guatemala, together accounting for around 75% of EU sales to the region in 2018. By contrast, the top three sources of imports were Costa Rica, Honduras and Guatemala with a combined 79% share in EU total imports from the six Central American countries.

Country

EU exports (mio €)

% share

EU imports (mio €)

% share

Trade balance

Costa Rica

1.046

17%

2.689

44%

-1643

El Salvador

807

13%

221

4%

586

Guatemala

986

16%

981

16%

5

Honduras

480

8%

1.148

19%

-668

Nicaragua

190

3%

390

6%

-200

Panama

2 527

42%

729

12%

1798

TOTAL

6.036

100%

6.158

100%

-122

Source: Eurostat

Costa Rica

EU trade with Costa Rica in 2018 remained at the level of 2017. No particular change occurred in the structure of trade in comparison with 2017. Costa Rica is the EU’s largest supplier of bananas and pineapples to the EU in the region. The EU exports mainly machinery, transport equipment and chemical products to Costa Rica. Some drop in exports of these categories was observed in 2018: transport equipment down by 16%; chemical products down by 9% but a slight increase (5%) was observed in the case of machinery. Overall, EU exports slightly declined (down by 5%).

El Salvador

The trade flows between the EU and El Salvador were at the level of €1 billion in 2018, with EU exports shooting up by 68% i.e. by €0.3 million. The surge in exports was due to increased purchases of transport equipment from the EU (aircraft). Another item that El Salvador typically buys from the EU is machinery and appliances – no particular change was observed here in the value of annual purchases.

Imports from El Salvador went down by around 12%, to the level of €0.2 million. This was due to a drop in sales of frozen fish, apparel and clothing as well as sugar. The main categories of products imported by the EU are electrical capacitors (up 20%), frozen fish (down 26%) and fish products (no change), coffee (up 26%).

Guatemala

Trade with Guatemala remained very balanced. Both imports and exports amounted to around €1 billion in each direction. Only a slight drop was observed in the overall imports value (down 5%). Around half of EU exports to Guatemala are machinery and appliances (down 16%), products of the chemical industry (up 5%), which include also pharmaceutical products. Other exported items were vehicles, including cars (down 8%), as well as aluminium (up 9%).

Guatemala’s top export items were palm oil (up 3%) with around 22% share in total Guatemala’s exports, coffee (up 9%) bananas (up 49%) altogether accounting for close to a half the country’s exports. Other items exported by Guatemala include iron and steel, spirit drinks as well as sugar.

Honduras

In 2018, the EU recorded a deficit of about €0.7 billion, with imports amounting to €1.1 billion. The top item imported from Honduras that accounted for around 50% of EU imports was coffee (down by 11%). Other products included palm oil (down 7%) with a 20% share and fruit (melons and papayas, bananas) (up 8%), with a 6% share in 2018.

EU’s exports (€0.5 billion) are more diverse, with machinery and mechanical appliances (up 39%), electrical and electrical appliances (down 24%) accounting for about 45% of EU exports to Honduras. Other export items include products such as pharmaceutical products, paper and plastics, amongst others.

Nicaragua

Nicaragua is the smallest trading partner of all the six countries of the region. Similarly to the case above, the EU typically records a trade deficit in trade with Nicaragua, which in 2018 increased further to €200 million. EU’s exports dropped by 22% over the year, down to 190 million. The EU mainly imports coffee (up 10%) with a 28% share in total imports from Nicaragua, fish and crustaceans (up 3%) with a 23% share, as well as peanuts (no change) with a 13% share in total imports. Other import items are mainly agricultural foodstuffs.

EU exports are more diverse and cover various, mainly industrial, product categories. The top three export items to Honduras include machinery and mechanical appliances (down 34%), electrical machinery (down 30%) as well as pharmaceutical products (down 26%). All these categories accounted together for over 40% of EU exports.

Panama

Panama remained the EU’s top export market in the region, receiving around €2.5 billion worth of EU goods. Over 40% of EU exports to the region are destined for Panama. Note however that these data does not capture goods that may be later re-exported via Panama, which can amount to quite a considerable amount. Pharmaceutical products and cosmetics made up about 21% of EU exports in 2018, with a slight drop (down by 5% for cosmetics and down by 2% for pharma). Machinery and mechanical appliances accounted for about 10% of EU exports (down by 20%). 2018 saw a significant change in the purchases of aircraft (increasing from €8 million to €243 million). Other significant surges in sales concerned railway or tramway locomotives (up 320%) as well as vehicles (cars) (up 39%).

In 2018 imports from Panama largely consisted of fruit (mainly bananas which represent 35% of imports and were up by 2%) and ships and boats (33% share, up by 287%). Other important import items included gold, rubber, as well as fish and crustaceans.

2.2Trade in agricultural goods

The Agreement defines a number of tariff rate quotas (TRQs) with parties granting each other a preferential tariff treatment up to the quota’s quantitative threshold. Imports over this threshold are subject to the applicable Most-Favoured Nation (MFN) tariff.

Under the Agreement, the EU grants eight TRQs in favour of Central America on products that did not enjoy preferential access to the EU market prior to the date of application of the Agreement. In 2018, as in previous years, the cane sugar and rum quotas were fully utilised. Guatemala supplied most of the rum imported under the quota and even increased its share to 86%, up from 82% the previous year. Guatemala also increased its market share in the sugar quota up to 48% (vs 43% in 2017). While five quotas remained unused in 2018, the manioc starch quota was filled by 13%.

TRQs granted by the EU to Central America – Utilisation in 2018

Origin

Product

Unit

TRQ volume

EU imports

Utilisation rate

Central America

Garlic

Tonnes

550

0

0%

Rice

25 000

0

0%

Bovine meat

11 875

0

0%

Mushroom

275

0

0%

Manioc starch

5 000

646

13%

Sweetcorn

2 040

0

0%

Central America except Panama

Sugar

172 500

165 388

96%

Rum in container > 2 l

hl pure alcohol

8 500

8 500

100%

Source: European Commission.

The Central American countries grant TRQs for four EU products. In 2018, EU exporters continued to make use of some of the opportunities offered by these TRQs. Notably, the milk powder quota was fully utilised in Honduras, as was the cheese quota in Costa Rica. The quota fill rate was also high for those two products in Panama. However, a margin of growth remains as the overall fill rate was below 50% for those dairy quotas across the region. An even larger margin of growth remains for preferential exports of pork.

TRQs granted by Central American countries to the EU – Utilisation in 2018

Products

Quota (tonnes)

Annual increase (tonnes)

Importing country

Volume (tonnes)

Utilisation rate

Cured hams
(joint quota)

1 125

45

Costa Rica

55

35%

El Salvador

21

Guatemala

43

Honduras

0

Nicaragua

0

Panama

274

Prepared swine meat
(joint quota)

1 125

45

Costa Rica

13

10%

El Salvador

0

Guatemala

27

Honduras

0

Nicaragua

0

Panama

75

Powdered milk
(6 country-specific quotas)

2 375

95

Costa Rica

0

0%

El Salvador

105

42%

Guatemala

25

5%

Honduras

500

100%

Nicaragua

0

0%

Panama

545

87%

Cheese
(6 country-specific quotas)

3 750

150

Costa Rica

396

100%

El Salvador

165

23%

Guatemala

332

44%

Honduras

312

50%

Nicaragua

0

0%

Panama

594

79%

Source: Data collected at national level in the Central American countries.

2.3Trade in Services and Foreign Direct investment (FDIs)

Trade in Services

As in previous years, trade in services between the two regions accounted for around 40% of total trade in goods and services. In 2017, total trade in services amounted to €7.8 billion, out of which Panama made up over 60%. Costa Rica was next in line with a share of almost 20% in total trade in services.

Similarly to the trade in goods, three countries stand out as the top recipients of EU exports of services (85% in total): Panama (58%), Costa Rica (18%) and Guatemala (8%). The same countries are the three top destinations for EU exports of goods.

Country

2016

2017

EU Exports

EU Imports

Total

%

EU Exports

EU Imports

Total

%

Costa Rica

786

555

1341

18%

770

749

1519

19%

El Salvador

258

94

352

5%

229

91

320

4%

Guatemala

298

249

547

7%

316

306

622

8%

Honduras

171

94

265

4%

205

124

329

4%

Nicaragua

176

69

245

3%

178

96

274

4%

Panama

2 330

2 403

4 733

63%

2 306

2 435

4 741

61%

Total

4 019

3 464

7 483

100%

4 004

3 801

7 805

100%

Source: Eurostat

Development of Foreign Direct investment (FDI)

As in previous years, in 2018 EU’s FDI concentrated in three countries: Panama, Costa Rica and Guatemala, with Panama alone benefiting from around 75% of investment in the region. The overall outward investment of EU’s investors in the economies of the six countries slightly decreased (by 6%), still representing a figure that is comparable to the investment made in Colombia and Peru all together. Except for Guatemala and Nicaragua, Central American countries saw some decline in the value of stocks of EU’s direct investment in the region.

In 2017, a noticeable downturn in inward investment occurred, with Panamanian investors cutting their stocks in the EU by around half. As a result, the total value of stocks held by Central American investors in the EU was over 40% lower in 2017 compared to 2016.

Country

2016

2017

Inward

Outward

Total

%

Inward

Outward

Total

%

Costa Rica

1 157

3 499

4 656

8%

1 272

3 113

4 385

10%

El Salvador

29

984

1 013

2%

147

854

1 001

2%

Guatemala

1 374

2 387

3 761

6%

2 729

2 615

5 344

12%

Honduras

15

480

495

1%

32

384

416

1%

Nicaragua

57

345

402

1%

95

428

523

1%

Panama

25 593

23 688

49 281

83%

11 551

21 987

33 538

74%

Total

28 225

31 383

59 608

100%

15 826

29 381

45 207

100%

3Activities of the implementation bodies

The body implementing the agreement is the Association Committee. It met in June 2018. The meeting of Association Committee and the meeting of its sub-committees (Market access, Customs and rules of origin, Technical Barriers to Trade (TBT), SPS, Intellectual Property Rights (Geographical Indications), Board on Trade and Sustainable Development, Government Procurement) were reported on in the 2018 Staff Working Document on FTA Implementation (2018) 454 final/2. During the Association Committee of June 2018, the Parties reached an agreement on the incorporation of Croatia to the Association Agreement, including the offer on compensation for bananas as submitted earlier by the EU. In order to start the final administrative procedures to adopt the relevant protocol, after the Committee meeting in 2018, the EU submitted a final revised text of the Croatia Protocol to Central America for confirmation so that the procedure for incorporation of Croatia into the agreement could eventually be completed.

The Parties continued to work on the collection of reliable data on the use of tariff preferences by EU exporters as deficiencies in this regard had been identified in previous years. Both parties had technical exchanges which aimed at finding a solution to the issue.

In the course of 2018, the Parties also worked on the preparation of several procedural decisions that were pending in the area of customs and rules of origin.

During the 2018 Committee, Central America insisted on the need to establish clear and workable procedures for cumulation of origin with other countries of Latin America. In this regard, the EU clarified that it is awaiting the confirmation of existence of administrative cooperation arrangements between the countries of Andean Community and Central America.

The fourth meeting of the sub-committee on Sanitary and Phytosanitary Measures (SPS), held on 4-5 June 2018, delivered positive outcomes and consolidated progress was made to date. The EU highlighted the following issues:

The importance for Central America to fulfil procedures established in the Association Agreement to ensure that market access requests are handled in a timely and transparent manner, including the approval of lists of establishments and verifications, among others.

The importance of complying with standards, guidelines and recommendations of the international standard setting organisations.

4Implementation of the provisions on trade and sustainable development

Representatives of the EU and of the six Central American countries met in the Trade and Sustainable Development (TSD) Board established under the EU Central America Association Agreement on 11-12 June 2018 in Brussels. A report on the meeting is available. A Civil Society Forum took place on 13 June 2018.

Implementation activities were framed by the 15-point action plan published by the Commission in February 2018. The EU continued to provide support to the ILO Regional Office for Central America to assist its efforts to support implementation of the fundamental ILO Conventions in Guatemala and El Salvador. Commission’s services (DG TRADE and DG EMPL) also held several videoconferences with Guatemala regarding its implementation of a country-specific ILO Roadmap. Some progress was made in Guatemala, notably the establishment of a tripartite Labour Council. Nonetheless, significant challenges remain with regards to ensuring labour rights and the implementation of the fundamental ILO Conventions, particularly in Guatemala, El Salvador and Honduras.

A seminar and workshop on “Decent Work, Corporate Responsibility and the EU-Central America Association Agreement” was held in Guatemala City on 15-16 May 2018 with the participation of representatives of OECD and the ILO and support of the regional project ATEPECA and Guatemala government. The event drew considerable interest with over 200 participants, including from other Central American countries. The EU Delegation in Costa Rica also provided support to the Costa Rican government for the development and implementation of a new national policy on Corporate Social Responsibility, which takes into account Costa Rica’s international commitments and the Sustainable Development Goals (SDGs).

In addition, the EU, through in-country meetings and other contacts, encouraged Central American domestic advisory groups (DAGs) established under the Association Agreement to take an active role in implementation of the Trade and Sustainable Development Chapter.

5Specific areas subject to reporting or monitoring

Political situation

In the course of last year, the EU monitored closely the situation of the civil society in Nicaragua in the context of human rights’ violation. The EU condemned the repression of peaceful demonstrations, independent media and civil society. It is to be noted that the respect of the rule of law and human rights constitute an essential element of the EU-Central America Association Agreement.

The EU continues to monitor an alarming situation in Guatemala with respect to the rule of law and respect of human rights, while it continues to make diplomatic efforts to encourage a peaceful solution of the crisis.

Special clauses: banana mechanism

The Agreement provides a preferential customs duty on bananas under heading 0803.00.19 (fresh bananas), progressively reduced since the date of application of the Agreement until the year 2020 (following the schedule indicated in a tariff reduction table). This special treatment is linked to a stabilisation clause that sets out an annual trigger volume for imports from each Central American country during the transition period. If as a result of the reduction of customs duties the level of imports of bananas is such as to cause or threaten to cause serious injury to the EU banana sector, the Regulation establishes the appropriate procedures to be adopted to avoid serious harm to this sector.

Implementation of Regulation (No) 20/2013

Article 15 of Regulation (EU) No 20/2013 22 provides for the stabilisation mechanism for fresh bananas (HS code 08 03 90 10). When the annual trigger volume of imports per country as set in the agreement is met, the Commission examines the impact of these imports on the situation of the Union market for bananas and takes a decision to either temporarily suspend the preferential customs duty or determines that such suspension is not appropriate. The stabilisation mechanism shall apply until 31 December 2019.

In this context and in accordance with Articles 3 and 13 of Regulation 20/2013, the Commission has been monitoring the evolution of imports of fresh bananas from the Central American countries party to the free trade agreement (Guatemala, Honduras, Nicaragua, Panama, Costa Rica and El Salvador).

2018 EU imports of fresh bananas from Central America

Country

Used volume

Trigger level

%

Guatemala

149.509.230

70.000.000

214%

Honduras

20.759.675

70.000.000

30%

Nicaragua

80.097.320

14.000.000

572%

Panama

253.458.920

525.000.000

48%

Costa Rica

1.188.350.193

1.435.000.000

83%

El Salvador

0

2.800.000

0

Total

1.692.175.338

2.116.800.000

80%

Source: Eurostat

Imports of fresh bananas from Central America as a whole did not reach their trigger level under the stabilisation mechanism. At the end of 2018, the overall total import volume that had benefitted from preferential treatment in Central America was 80%. These import volumes were higher, but still close to the 74.4% reached in the previous year, and did not threaten the EU banana sector.

Nevertheless, banana imports from both Guatemala and Nicaragua exceeded their individual trigger level for 2018, as they did in previous years, by 114% and 472% respectively. In line with Article 15(3) of the Regulation, the Commission examined the impact on the EU market taking into account, inter alia, the effects on the price level, developments of imports from other sources and the overall stability of the EU market.

Notwithstanding these individual countries’ level of exports, the Commission concluded that the suspension of the preferential duty on imports of fresh bananas originating in Guatemala and Nicaragua was not appropriate as 23 the share of imports from these two countries (1.2% for Nicaragua and 2.95% for Guatemala) in the overall imports of bananas was very small at the moment the respective thresholds were exceeded; imports from the other countries remained far below the thresholds defined for them at the moment the respective thresholds were exceeded; and these imports did not show any negative effect on the EU wholesale price for bananas, which remained fairly stable in 2018.

6Conclusions and outlook

Five years after the application of the agreement, EU exports picked up to bring to a balance the trade flows between Central America and the EU. EU exports to the region were up by 11%, reaching a record high of €6 billion in 2018. Similarly to previous years, Panama was the main destination of EU exports to the region and, together with El Salvador, accounted for most of the growth of EU’s annual exports.

The correct functioning of the institutions created by the Agreement is necessary for its proper implementation.

Building upon the positive cooperation now established with Central America is an ongoing priority for the EU, so as to continue contributing to the common aim of achieving a complete and correct implementation of the Agreement by all relevant actors. This has allowed economic operators, consumers and civil society from both regions to take advantage of numerous opportunities provided by the Agreement.

In 2018, the Commission will launch an ex-post evaluation study into the Agreement. The study will assess the impact of the trade pillar of the Association Agreement (economic, social and environmental impact and impact on human rights). The findings are meant to offer lessons for the further improvement of the implementation of the Agreement.

7Statistics

Merchandise trade EU28 2014-2018

 

2014

2015

2016

2017

2018

EU28 trade with Central America 6 (mio €)

 

 

 

 

Imports

6.228

5.215

5.488

6.097

6.158

Exports

5.254

5.719

5.294

5.446

6.037

Balance

-974

504

-193

-651

-121

Share Central America 6 in EU28 trade with Extra-EU28

 

 

 

 

Imports

0,4%

0,3%

0,3%

0,3%

0,3%

Exports

0,3%

0,3%

0,3%

0,3%

0,3%

Total (I+E)

0,3%

0,3%

0,3%

0,3%

0,3%

Source Trade G2 Statistics/ISDB

 

 

25-mars-19

Trade EU28: Eurostat COMEXT; Trade Central America 6: IMF Dots

 

 

 

 

 

 

 

Total merchandise trade EU28 with Central America 6 (mio €)

Central America 6

2017

2018

Growth

mio €

annual %

Imports

 

6.097

6.158

60

1,0%

Exports

 

5.446

6.037

591

10,8%

Balance

 

-651

-121

530

 

Total trade

 

11.543

12.194

651

5,6%

Source Trade G2 Statistics/ISDB from Eurostat COMEXT

 

 

Agrifood trade EU28 with Central America 6 (mio €)

Central America 6

2017

2018

Growth

mio €

annual %

Imports

 

4.209

4.121

-88

-2,1%

Exports

 

637

679

42

6,6%

Balance

 

-3.571

-3.442

130

 

Total trade

 

4.846

4.800

-46

-0,9%

Source Trade G2 Statistics/ISDB from Eurostat COMEXT

 

 

NAMA trade EU28 with Central America 6 (mio €)

Central America 6

2017

2018

Growth

mio €

annual %

EU28 imports

1.889

2.037

148

7,8%

EU28 exports

4.809

5.358

549

11,4%

Balance

 

2.920

3.321

401

 

Total trade

 

6.697

7.394

697

10,4%

Source Trade G2 Statistics/ISDB from Eurostat COMEXT

 

 

Costa Rica

Merchandise trade EU28 2014-2018

 

2014

2015

2016

2017

2018

EU28 trade with Costa Rica (mio €)

 

 

 

 

Imports

3.771

2.250

2.404

2.648

2.689

Exports

829

976

1.052

1.095

1.046

Balance

-2.942

-1.275

-1.352

-1.552

-1.643

Share Costa Rica in EU28 trade with Extra-EU28

 

 

 

 

Imports

0,2%

0,1%

0,1%

0,1%

0,1%

Exports

0,0%

0,1%

0,1%

0,1%

0,1%

Total (I+E)

0,1%

0,1%

0,1%

0,1%

0,1%

Share EU28 in trade Costa Rica with world

Imports

8,3%

9,2%

9,6%

10,0%

9,6%

Exports

17,6%

18,8%

21,0%

20,9%

20,9%

Total (I+E)

12,0%

12,9%

14,1%

14,4%

14,2%

Source Trade G2 Statistics/ISDB

 

 

25-mars-19

Trade EU28: Eurostat COMEXT; Trade Costa Rica: IMF Dots

 

 

 

 

 

 

 

Total merchandise trade EU28 with Costa Rica (mio €)

Costa Rica

2017

2018

Growth

mio €

annual %

Imports

 

2.648

2.689

41

1,6%

Exports

 

1.095

1.046

-49

-4,5%

Balance

 

-1.552

-1.643

-91

 

Total trade

 

3.743

3.735

-8

-0,2%

Source Trade G2 Statistics/ISDB from Eurostat COMEXT

 

 

Agrifood trade EU28 with Costa Rica (mio €)

Costa Rica

2017

2018

Growth

mio €

annual %

Imports

 

1.830

1.781

-48

-2,6%

Exports

 

120

116

-4

-3,3%

Balance

 

-1.709

-1.665

45

 

Total trade

 

1.950

1.897

-52

-2,7%

Source Trade G2 Statistics/ISDB from Eurostat COMEXT

 

 

NAMA trade EU28 with Costa Rica (mio €)

Costa Rica

2017

2018

Growth

mio €

annual %

EU28 imports

818

908

90

11,0%

EU28 exports

975

930

-45

-4,7%

Balance

 

157

22

-135

 

Total trade

 

1.793

1.838

44

2,5%

Source Trade G2 Statistics/ISDB from Eurostat COMEXT

 

 

Services trade EU28 with Costa Rica (mio €)

 

 

Costa Rica

2016

2017

Growth

mio €

annual %

Imports

 

555

749

193

34,8%

Exports

 

786

770

-16

-2,0%

Balance

 

231

22

-209

 

Total trade

 

1.341

1.519

178

13,2%

Source Trade G2 Statistics/ISDB from Eurostat BOP statistics

 

Services trade EU28 with Costa Rica (mio €)

 

2013

2014

2015

2016

2017

Imports

497

493

530

555

749

Exports

600

621

617

786

770

Balance

104

128

86

231

22

Total trade

1.097

1.115

1.147

1.341

1.519

Source Trade G2 Statistics/ISDB from Eurostat BOP statistics

 

 

 

 

 

FDI EU28 with Costa Rica (mio €)

 

2013

2014

2015

2016

2017

FDI Stocks

Inward

406

879

880

1.157

1.272

Outward

1.648

2.339

2.708

3.499

3.113

FDI Flows

Inward

51

21

60

369

52

Outward

200

140

400

210

308

Source Trade G2 Statistics/ISDB from Eurostat BOP statistics

 

 

 

 

 

El Salvador

Merchandise trade EU28 2014-2018

 

2014

2015

2016

2017

2018

EU28 trade with El Salvador (mio €)

 

 

 

 

Imports

184

195

217

249

221

Exports

530

546

472

481

807

Balance

346

351

255

232

587

Share El Salvador in EU28 trade with Extra-EU28

 

 

 

 

Imports

0,0%

0,0%

0,0%

0,0%

0,0%

Exports

0,0%

0,0%

0,0%

0,0%

0,0%

Total (I+E)

0,0%

0,0%

0,0%

0,0%

0,0%

Share EU28 in trade El Salvador with world

Imports

5,9%

6,4%

4,7%

6,3%

7,7%

Exports

3,5%

2,9%

3,1%

3,1%

2,8%

Total (I+E)

5,1%

5,2%

4,1%

5,2%

6,0%

Source Trade G2 Statistics/ISDB

 

 

25-mars-19

Trade EU28: Eurostat COMEXT; Trade El Salvador: IMF Dots

 

 

 

 

 

 

 

Total merchandise trade EU28 with El Salvador (mio €)

El Salvador

2017

2018

Growth

mio €

annual %

Imports

 

249

221

-29

-11,5%

Exports

 

481

807

326

67,8%

Balance

 

232

587

355

 

Total trade

 

730

1.028

298

40,8%

Source Trade G2 Statistics/ISDB from Eurostat COMEXT

 

 

Agrifood trade EU28 with El Salvador (mio €)

El Salvador

2017

2018

Growth

mio €

annual %

Imports

 

69

54

-14

-21,0%

Exports

 

48

52

5

9,8%

Balance

 

-21

-2

19

 

Total trade

 

116

107

-10

-8,4%

Source Trade G2 Statistics/ISDB from Eurostat COMEXT

 

 

NAMA trade EU28 with El Salvador (mio €)

El Salvador

2017

2018

Growth

mio €

annual %

EU28 imports

181

166

-14

-7,8%

EU28 exports

434

755

322

74,2%

Balance

 

253

589

336

 

Total trade

 

614

922

308

50,1%

Source Trade G2 Statistics/ISDB from Eurostat COMEXT

 

 

Services trade EU28 with El Salvador (mio €)

 

 

El Salvador

2016

2017

Growth

mio €

annual %

Imports

 

94

91

-3

-3,3%

Exports

 

258

229

-29

-11,4%

Balance

 

164

138

-26

 

Total trade

 

352

319

-33

-9,2%

Source Trade G2 Statistics/ISDB from Eurostat BOP statistics

 

Services trade EU28 with El Salvador (mio €)

 

2013

2014

2015

2016

2017

Imports

94

84

106

94

91

Exports

224

242

276

258

229

Balance

130

158

170

164

138

Total trade

318

327

382

352

319

Source Trade G2 Statistics/ISDB from Eurostat BOP statistics

 

 

 

 

 

FDI EU28 with El Salvador (mio €)

 

2013

2014

2015

2016

2017

FDI Stocks

Inward

47

48

21

29

147

Outward

710

933

1.101

984

854

FDI Flows

Inward

-18

7

-13

-2

140

Outward

-408

326

213

-109

-266

Source Trade G2 Statistics/ISDB from Eurostat BOP statistics

 

 

 

 

 

Guatemala

Merchandise trade EU28 2014-2018

 

2014

2015

2016

2017

2018

EU28 trade with Guatemala (mio €)

 

 

 

 

Imports

691

864

920

1.035

981

Exports

894

956

906

994

986

Balance

203

91

-14

-40

5

Share Guatemala in EU28 trade with Extra-EU28

 

 

 

 

Imports

0,0%

0,1%

0,1%

0,1%

0,0%

Exports

0,1%

0,1%

0,1%

0,1%

0,1%

Total (I+E)

0,0%

0,1%

0,1%

0,1%

0,0%

Share EU28 in trade Guatemala with world

Imports

7,1%

7,5%

7,2%

7,4%

7,3%

Exports

7,5%

7,8%

9,0%

9,1%

9,4%

Total (I+E)

7,3%

7,6%

7,9%

8,0%

8,0%

Source Trade G2 Statistics/ISDB

 

 

25-mars-19

Trade EU28: Eurostat COMEXT; Trade Guatemala: IMF Dots

 

 

 

 

 

 

 

 

Total merchandise trade EU28 with Guatemala (mio €)

Guatemala

2017

2018

Growth

mio €

annual %

Imports

 

1.035

981

-54

-5,2%

Exports

 

994

986

-9

-0,9%

Balance

 

-40

5

45

 

Total trade

 

2.029

1.967

-63

-3,1%

Source Trade G2 Statistics/ISDB from Eurostat COMEXT

 

 

Agrifood trade EU28 with Guatemala (mio €)

Guatemala

2017

2018

Growth

mio €

annual %

Imports

 

718

787

68

9,5%

Exports

 

125

132

8

6,0%

Balance

 

-594

-654

-61

 

Total trade

 

843

919

76

9,0%

Source Trade G2 Statistics/ISDB from Eurostat COMEXT

 

 

NAMA trade EU28 with Guatemala (mio €)

Guatemala

2017

2018

Growth

mio €

annual %

EU28 imports

316

194

-122

-38,5%

EU28 exports

870

853

-16

-1,9%

Balance

 

553

659

106

 

Total trade

 

1.186

1.048

-138

-11,7%

Source Trade G2 Statistics/ISDB from Eurostat COMEXT

 

 

Services trade EU28 with Guatemala (mio €)

 

 

Guatemala

2016

2017

Growth

mio €

annual %

Imports

 

249

306

57

23,0%

Exports

 

298

316

19

6,2%

Balance

 

49

10

-39

 

Total trade

 

547

623

76

13,9%

Source Trade G2 Statistics/ISDB from Eurostat BOP statistics

 

Services trade EU28 with Guatemala (mio €)

 

2013

2014

2015

2016

2017

Imports

205

214

297

249

306

Exports

875

541

343

298

316

Balance

671

327

46

49

10

Total trade

1.080

755

640

547

623

Source Trade G2 Statistics/ISDB from Eurostat BOP statistics

 

 

 

 

 

FDI EU28 with Guatemala (mio €)

 

2013

2014

2015

2016

2017

FDI Stocks

Inward

153

4.041

2.628

1.374

2.729

Outward

1.527

1.870

3.075

2.387

2.615

FDI Flows

Inward

-34

421

245

11

266

Outward

127

140

618

234

22

Source Trade G2 Statistics/ISDB from Eurostat BOP statistics

 

 

 

 

 

Honduras

Merchandise trade EU28 2014-2018

 

2014

2015

2016

2017

2018

EU28 trade with Honduras (mio €)

 

 

 

 

Imports

841

1.015

1.048

1.263

1.148

Exports

450

496

452

437

480

Balance

-391

-519

-596

-826

-668

Share Honduras in EU28 trade with Extra-EU28

 

 

 

 

Imports

0,0%

0,1%

0,1%

0,1%

0,1%

Exports

0,0%

0,0%

0,0%

0,0%

0,0%

Total (I+E)

0,0%

0,0%

0,0%

0,0%

0,0%

Share EU28 in trade Honduras with world

Imports

6,7%

7,1%

6,9%

5,9%

6,2%

Exports

21,8%

23,8%

25,0%

33,5%

29,0%

Total (I+E)

11,3%

12,0%

12,4%

14,7%

12,9%

Source Trade G2 Statistics/ISDB

 

 

25-mars-19

Trade EU28: Eurostat COMEXT; Trade Honduras: IMF Dots

 

 

 

 

 

 

 

 

Total merchandise trade EU28 with Honduras (mio €)

Honduras

2017

2018

Growth

mio €

annual %

Imports

 

1.263

1.148

-115

-9,1%

Exports

 

437

480

43

9,8%

Balance

 

-826

-668

158

 

Total trade

 

1.701

1.629

-72

-4,2%

Source Trade G2 Statistics/ISDB from Eurostat COMEXT

 

 

Agrifood trade EU28 with Honduras (mio €)

Honduras

2017

2018

Growth

mio €

annual %

Imports

 

1.049

947

-102

-9,7%

Exports

 

49

54

5

10,3%

Balance

 

-1.000

-893

107

 

Total trade

 

1.098

1.001

-97

-8,8%

Source Trade G2 Statistics/ISDB from Eurostat COMEXT

 

 

NAMA trade EU28 with Honduras (mio €)

Honduras

2017

2018

Growth

mio €

annual %

EU28 imports

214

201

-13

-6,1%

EU28 exports

388

426

38

9,8%

Balance

 

174

225

51

 

Total trade

 

603

627

25

4,1%

Source Trade G2 Statistics/ISDB from Eurostat COMEXT

 

 

Services trade EU28 with Honduras (mio €)

 

 

Honduras

2016

2017

Growth

mio €

annual %

Imports

 

94

124

30

32,3%

Exports

 

171

205

34

19,9%

Balance

 

77

81

4

 

Total trade

 

265

329

64

24,3%

Source Trade G2 Statistics/ISDB from Eurostat BOP statistics

 

Services trade EU28 with Honduras (mio €)

 

2013

2014

2015

2016

2017

Imports

187

81

107

94

124

Exports

196

163

182

171

205

Balance

9

83

75

77

81

Total trade

383

244

289

265

329

Source Trade G2 Statistics/ISDB from Eurostat BOP statistics

 

 

 

 

 

FDI EU28 with Honduras (mio €)

 

2013

2014

2015

2016

2017

FDI Stocks

Inward

-5

93

27

15

32

Outward

372

473

532

480

384

FDI Flows

Inward

51

-8

-90

-0

2

Outward

145

41

12

-36

-91

Source Trade G2 Statistics/ISDB from Eurostat BOP statistics

 

 

 

 

 

Nicaragua

Merchandise trade EU28 2014-2018

 

2014

2015

2016

2017

2018

EU28 trade with Nicaragua (mio €)

 

 

 

 

Imports

285

327

309

375

390

Exports

223

225

236

244

190

Balance

-62

-101

-73

-130

-200

Share Nicaragua in EU28 trade with Extra-EU28

 

 

 

 

Imports

0,0%

0,0%

0,0%

0,0%

0,0%

Exports

0,0%

0,0%

0,0%

0,0%

0,0%

Total (I+E)

0,0%

0,0%

0,0%

0,0%

0,0%

Share EU28 in trade Nicaragua with world

Imports

6,1%

7,6%

5,3%

5,4%

4,6%

Exports

6,5%

6,5%

9,1%

11,6%

11,7%

Total (I+E)

6,3%

7,1%

6,4%

7,2%

7,0%

Source Trade G2 Statistics/ISDB

 

 

25-mars-19

Trade EU28: Eurostat COMEXT; Trade Nicaragua: IMF Dots

 

 

 

 

 

 

 

 

Total merchandise trade EU28 with Nicaragua (mio €)

Nicaragua

2017

2018

Growth

mio €

annual %

Imports

 

375

390

15

4,0%

Exports

 

244

190

-54

-22,1%

Balance

 

-130

-200

-69

 

Total trade

 

619

580

-39

-6,3%

Source Trade G2 Statistics/ISDB from Eurostat COMEXT

 

 

Agrifood trade EU28 with Nicaragua (mio €)

Nicaragua

2017

2018

Growth

mio €

annual %

Imports

 

250

260

10

4,2%

Exports

 

24

24

0

1,2%

Balance

 

-226

-236

-10

 

Total trade

 

274

285

11

3,9%

Source Trade G2 Statistics/ISDB from Eurostat COMEXT

 

 

NAMA trade EU28 with Nicaragua (mio €)

Nicaragua

2017

2018

Growth

mio €

annual %

EU28 imports

125

129

5

3,7%

EU28 exports

220

166

-54

-24,7%

Balance

 

95

36

-59

 

Total trade

 

345

295

-50

-14,4%

Source Trade G2 Statistics/ISDB from Eurostat COMEXT

 

 

Services trade EU28 with Nicaragua (mio €)

 

 

Nicaragua

2016

2017

Growth

mio €

annual %

Imports

 

69

96

26

38,2%

Exports

 

176

178

2

1,1%

Balance

 

107

83

-24

 

Total trade

 

245

274

28

11,6%

Source Trade G2 Statistics/ISDB from Eurostat BOP statistics

 

Services trade EU28 with Nicaragua (mio €)

 

2013

2014

2015

2016

2017

Imports

47

90

89

69

96

Exports

206

126

164

176

178

Balance

159

36

75

107

83

Total trade

253

217

252

245

274

Source Trade G2 Statistics/ISDB from Eurostat BOP statistics

 

 

 

 

 

FDI EU28 with Nicaragua (mio €)

 

2013

2014

2015

2016

2017

FDI Stocks

Inward

57

19

62

57

95

Outward

874

296

419

345

428

FDI Flows

Inward

27

-15

120

-6

41

Outward

656

-572

48

35

145

Source Trade G2 Statistics/ISDB from Eurostat BOP statistics

 

 

 

 

 

Panama

Merchandise trade EU28 2014-2018

 

2014

2015

2016

2017

2018

EU28 trade with Panama (mio €)

 

 

 

 

Imports

455

564

590

528

729

Exports

2.327

2.521

2.176

2.194

2.527

Balance

1.872

1.956

1.586

1.666

1.799

Share Panama in EU28 trade with Extra-EU28

 

 

 

 

Imports

0,0%

0,0%

0,0%

0,0%

0,0%

Exports

0,1%

0,1%

0,1%

0,1%

0,1%

Total (I+E)

0,1%

0,1%

0,1%

0,1%

0,1%

Share EU28 in trade Panama with world

Imports

11,4%

11,7%

11,0%

10,6%

10,0%

Exports

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