India Korea FTA under WTO Scan
WTO members considered six regional trade agreements (RTAs)
involving countries and trading blocs from across the world at a meeting of the
Committee on RTAs on 18 November.
The
Economic Partnership Agreement between the European Union and Cameroon, applied
provisionally since 2014, provides for reciprocal liberalization of trade in
goods. All but 18 of the EU's tariff lines are now bound at zero for Cameroon's
exports and Cameroon will liberalize about 77 per cent of its tariff lines by
2029. The Agreement also includes provisions on competition and e-commerce and
provides for future gradual, reciprocal and asymmetrical services
liberalization.
The
EU stressed that it remains Cameroon's main trading partner, accounting for 47
per cent of Cameroon's global exports and 28 per cent of its imports in 2019.
Cameroon's main exports to the EU consist of oil, cocoa beans and bananas and
its main imports include machineries, medication, clothes, refined oils, cement
clinkers and cars. In 2019, total trade between the EU and Cameroon accounted
for almost USD 3.5 billion.
Through
this Agreement, Cameroon aims to diversify exports and attract further foreign
direct investment. Other objectives include infrastructural and rural development,
food security, industrial diversification, regional integration and business
environment improvement. Cameroon also noted that its banana growers registered
EUR 48 million worth of support from the EU over the period 2015-2020.
Under
the Economic Partnership Agreement between the European Union and the Southern
African Development Community (SADC) States (Botswana, Eswatini,
Lesotho, Mozambique, Namibia and South Africa), all but 1.3 per cent of the
EU's tariffs will be liberalized for imports from all SADC States except for
imports from South Africa for which all but 4.3 per cent of the EU's tariffs
will be liberalized. Liberalization by the SADC States will take place in
stages until 2028, at which time 13.9 per cent of the tariff lines of the
Southern African Customs Union (Botswana, Eswatini,
Lesotho, Namibia and South Africa) and 44.5 per cent of Mozambique's tariff
lines will remain subject to duties.
The
EU said that it is the SADC States' main trading partner, accounting for 20 per
cent of their exports and 22 per cent of their imports in 2019. Also in 2019,
the EU's exports to SADC amounted to EUR 24.6 billion while its imports were
worth EUR 23.1 billion. The SADC States' exports to the EU have increased by 19
per cent over the period 2015-2019. The trade flows essentially concern
industrial products. The SADC States mainly import car parts from the EU and mainly
export cars and other vehicles to the EU.
Botswana,
on behalf of the SADC States, noted that the Agreement aims to strengthen the
States' regional integration and participation in regional value chains and to
support the achievement of their development objectives. While preferential
market access is provided by both parties, the SADC States may protect some
sensitive sectors through safeguard measures. A bilateral protocol on trade in
wine and spirits and on the protection of geographical indications of wine,
spirits, beer and some agricultural products is also in place between South
Africa and the EU. Other objectives include harmonising
customs legislation and procedures and exchanging information on sanitary and phytosanitary measures in agriculture, including food
security.
Under
the Comprehensive Economic Partnership Agreement between India and Korea, India
liberalized 69.5 per cent of its tariffs and Korea 88.6 per cent. Rates were
also reduced on around 13.9 per cent of India's tariffs and 4.4 per cent of
Korea's tariffs. The Agreement's other provisions include sanitary and phytosanitary measures and technical barriers to trade,
safeguards, dispute settlement and customs cooperation.
India
said that the Agreement provides for a mutual expansion of job opportunities
for computer specialists, engineers, managing consultants and assistant English
teachers. Trade between both parties had increased by 70 per cent in ten years,
from USD 12 billion in 2009 to USD 21.3 billion in 2018. India's imports from
Korea almost doubled from around USD 8 billion in 2009-2010 to USD 16 billion
in 2018-2019 although exports to Korea had increased marginally, thus resulting
in an increasing trade imbalance.
Korea
said that the Agreement goes beyond each party's WTO commitments in many areas.
Investment flows between both countries have also grown by 124 per cent over
the period 2009-2019, from USD 349 million to USD 782 million. The parties are
currently negotiating to add to the Agreement provisions on goods, services and
investment, with the objective of maximizing benefits for both countries.
Immediate
tariff liberalization is foreseen by the European Free Trade Association (EFTA)
States on goods and services, with some limitations for some agricultural
products. By the end of the nine-year transitional period, the Philippines will
have progressively eliminated tariffs on almost 90 per cent of its imports from
EFTA States.
The
Philippines said that the Agreement is progressive in terms of scope and
coverage and ranges from investment to intellectual property rights, trade in
goods and government procurement. Total trade between both parties increased by
2.4 per cent between 2018 and 2019, from USD 802 million to USD 821 million.
The Philippines' exports to EFTA grew by 17 per cent between 2018 and 2019,
from USD 370 million to USD 434 million.
On
behalf of EFTA, Switzerland noted an increase in bilateral trade, with the
Philippines' exports to EFTA up from USD 250 million in 2017 to over USD 300
million in 2019. By providing stable and predictable trading conditions, the
Agreement provides a significant potential to further boost trade between the
two traders.
Bilateral
trade in goods between Hong Kong, China and Australia is entirely duty free
since the entry into force of the Free Trade Agreement in January 2020. Notable
market access improvements have also been made by the parties on trade in
services, and regulatory cooperation has been strengthened.
·
Australia said that Hong Kong, China was its
11th largest export market and 15th largest two-way trading partner in 2019. It
was also the fifth largest investor in Australia and tenth largest destination
for Australian investment overseas. Australia stressed the high quality of the
Agreement, which promotes growth in goods and services trade while also
addressing non-tariff barriers and ensuring efficient customs settings,
particularly for food and beverages.
·
Hong Kong, China pointed to improved business
opportunities and legal certainty for its traders and investors as a result of
the Agreement, in addition to simplified customs procedures and enhanced
customs cooperation, among other things.
The
Comprehensive Economic Partnership Agreement between Chile and Indonesia is
Indonesia's first free trade agreement with a Latin American country. The
Agreement essentially contains provisions on trade in goods and includes a clause
for the future incorporation of chapters on trade in services and investment.
Chile
said that Indonesia eliminated duties on approximately 55 per cent of its
tariff lines and provides for progressive duty-free access to 86 per cent of
its tariff lines for Chilean traders. Chile will progressively grant duty-free
access to Indonesia on 89.6 per cent of its tariff lines.
Some
of the Chilean goods that enjoy duty-free access to Indonesia are: butter, almonds, hazelnuts, fresh fruits such as
avocados, oranges, and lemons, honey, grape and apple juice. Indonesia said
that it is benefiting from a preferential tariff on its exports of products
ranging from footwear, motor vehicles and machinery to textiles, detergent and
perfume. Between January and September 2020, the total trade between the two
countries accounted for approximately USD 180 million. It is projected to
increase by 33 per cent from the date of entry into force in 2019 within the
next three years.
·
In accordance with the Transparency
Mechanism for RTAs, the Chair of the Committee, Ambassador Mārtiņš Kreitus of
Latvia, informed members that 36 early announcements of RTAs had been made and
were available on the WTO's webpage. Members' notifications can be found here.
·
Three notifications were submitted since the
last meeting in September: the entry into force of the Agreement between the
United States, Mexico and Canada (goods and services); the notification of
termination of the North American Free Trade Agreement (NAFTA) (goods and
services); and the accessions of Samoa and the Solomon Islands to the Interim
Partnership Agreement between the EU and the Pacific States (goods).
·
Two notifications of changes were received on
the services aspects of two agreements between China and respectively Macao,
China and Hong Kong, China. The Chair reported that 53 RTAs have still
not been notified to the WTO.
·
The Chair also noted that factual
presentations had to be prepared for 21 RTAs involving WTO members only and a
further 23 involving non-members, counting goods and services separately. The
Chair said he had held consultations with delegations for which the
consideration of RTAs remains delayed due to the lack of comments or data from
the members involved.