EU report details progress made by FTA network - here's how it's all working

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The FTAs negotiated by the EU appear to be paying dividends, a new report has suggested.


The European Union (EU) has released a new trade agreements implementation annual report, which details how the bloc has 'continued to make good use of the opportunities created by the European Union's trade network'.

Here, we'll take an in-depth look at this year's report, the details within it, and how the EU intends to conduct trade going forward.

The EU and trade

Currently, the EU has the largest trade network in the world, with 41 trade agreements covering 72 nations.

These include first-generation agreements, which were negotiated before 2006 and focus on tariff elimination; second-generation agreements, which are newer and extend to include factors such as intellectual property rights; Deep and Comprehensive Free Trade Areas (DCFTA) for the EU and its neighbouring countries; and Economic Partnership Agreements (EPA), which zoom in on African, Caribbean and Pacific regions.

Trade agreements help businesses to access new markets by eliminating tariffs, facilitating administrative procedures and ensuring greater coherency on standards and rules for goods and services.

Findings for this year

The latest report published this month focuses on 2018 and shows the EU's free trade network covered 31 per cent of its trade exchanges that year, with the European Commission predicting this figure will rise to almost 40 per cent as more deals enter into force.

It showed exports to and imports from trade agreement partners grew by two and 4.6 per cent respectively, while 36 million jobs were being supported by exports to countries outside the EU.

There was also a surplus of €84.6 billion in trade in goods with FTA partners, compared to the overall rest-of-the-world deficit of about €24.6 billion.

In particular, the market for food and drink exports was found to be flourishing, thanks to lower tariffs and legal protection abroad for artisanal EU products such as Champagne and Feta. This led to agri-food exports registering an overall growth rate of 2.2 per cent compared to 2017.

Another growth sector was industrial goods, where exports increased by two per cent overall and 2.5 per cent for chemicals, six per cent for mineral products and 4.4 per cent for base metals within that industry.

Canada as a case in point

The new report used the recent free trade agreement with Canada as a case in point and success story.

It showed that in the first full year of the EU-Canada trade agreement being in effect, bilateral trade in goods grew by 10.3 per cent while the EU's trade surplus increased by a staggering 60 per cent.

EU goods going to Canada as exports went up by 15 per cent, particularly in sectors such as pharmaceuticals, machinery and organic chemicals where import duties had previously been high.

Other major partners

It was found that among other preferential partners, the EU trades most with Switzerland (27 per cent), Turkey and Norway (11 per cent each), while top destinations for EU exports among FTA partners were the same three nations.

Commenting on the report, commissioner for trade Cecilia Malmstrom said: "Today's report shows that overall trade is up, and more of our global trade is covered by preferential deals than ever before."

Going forward

The EU has made it clear that it intends to continue to focus on FTAs, as long as the terms include acceptable levels of regulatory protection, as per an October 2015 report entitled 'Trade for All'.

It said it aims to use FTAs to promote sustainable development, human rights, fair and ethical trade and the fight against corruption, as well as the responsibility of supply chains.

It pointed out that such international engagement makes even the smallest businesses more competitive, ensuring the productivity gains and private investment the bloc needs.

"To boost the EU's capacity to benefit from trade and investment, the commission has developed an ambitious bilateral agenda that complements the EU's engagement at the World Trade Organization," that document concluded.

With this in mind, the EC is likely to hope it continues to be rewarded with such positive figures as those included in the 2019 report for any new deals it negotiates.