WTO Members Review three RTAs, Receive Update on Transparency Mechanism

(1) European Union-Viet Nam;

(2) United States-Canada-Mexico, and

(3) Australia-Indonesia trade agreements at a meeting of the Committee on Regional Trade Agreements (CRTA)

WTO members reviewed European Union-Viet Nam, United States-Canada-Mexico, and Australia-Indonesia trade agreements at a meeting of the Committee on Regional Trade Agreements (CRTA) on 1 November 2021. The Chair of the Committee, Dr. Cleopa Kilonzo Mailu (Kenya), updated members on the Committee’s work and the implementation of the Transparency Mechanism for RTAs. Members also adopted the Annual Report of the Committee.

The parties to the Free Trade Agreement between the European Union (EU) and Viet Nam said their agreement, which was concluded on 30 March 2020 and entered into force on 1 August 2020, is a new-generation, high-standard and ambitious free trade agreement (FTA) with a wide range of coverage and advanced level of commitment, from traditional trade issues to modern ones.

Viet Nam said that since the Agreement entered into force, it has been making efforts to promote institutional reform and transparency and build an open and favourable trade investment environment for businesses from both sides. Viet Nam said the Agreement signals that the trade and investment relationship between the two parties can keep getting stronger in the future.

The EU said the Agreement is one of the most ambitious agreements the EU has concluded so far, with a very broad scope ranging from trade in goods, services and investment to government procurement, intellectual property rights, technical barriers to trade (TBT), sanitary and phytosanitary (SPS) measures, and trade and sustainable development. Despite the current economic and geopolitical challenges, the EU noted, the Agreement has shown that both parties have maintained strong trade and investment links and remain confident they will continue to build on the strong partnership for resilient and sustainable recovery from COVID-19.

For the Agreement between the United States, Mexico and Canada (USMCA/CUSMA/T-MEC), which entered into force on 1 July 2020 and replaced the North American Free Trade Agreement (NAFTA), Canada took the floor on behalf of the three signatories.

Canada underlined that the objectives sought while negotiating the new pact were duly reflected in the Agreement's preamble. These include strengthening a new but longstanding friendship between the parties and their peoples and the strong economic cooperation that has developed through trade and investment, preserving and expanding regional trade and production by further incentivizing the production and sourcing of goods and materials in the region and enhancing and promoting the competitiveness of regional exports and firms and global markets and conditions of fair competition in the region.

Other objectives include establishing a clear, transparent and predictable legal and commercial framework for business planning that supports the further expansion of trade and investment, recognizing the importance of increasing engagement by indigenous peoples in trade and investment, and seeking to facilitate women's enhanced equal access to benefit from the opportunities created by the Agreement and to support the conditions for women's full participation in domestic regional and international trade and investment.

The European Union acknowledged the Agreement updates NAFTA in several respects, including on sustainability issues, labour and the environment, agriculture and intellectual property, digital trade, anti-corruption, good regulation practices, and small and medium sized enterprises. The EU said this reflects the trend and content of recent EU FTAs, but expressed concern that it might have possible negative effects on EU trade and investment.

The two parties to the Comprehensive Economic Partnership Agreement between Indonesia and Australia, which entered into force on 5 July 2020, underlined that the Agreement has opened a new chapter in economic relations between two close neighbours and important trading partners. Australia noted the Agreement seeks to promote growth in trade and investment in line with WTO principles and provides substantial liberalisation across all sectors, particularly on services, with several improvements over WTO commitments under the General Agreement on Trade in Services (GATS). These sectors include education, mining, energy, communications, health care, tourism, architecture, engineering and construction, legal, financial, and infrastructure and transport services. It also provides a framework for developing the investment relationship to its full potential.

Indonesia stressed the comprehensiveness of the Agreement, which covers a wide range of issues, including rules of origin, customs procedures and trade facilitation, TBT and SPS, movement of natural persons, financial services, telecommunications and professional services, investment, e-commerce, competition policy, economic cooperation, and institutional framework provisions. In Indonesia's view, the Agreement will facilitate the flow of goods and services, access to investment promotion and protection, and the development of human resources and economic cooperation programmes. It will also contribute to the post COVID-19 economic recoveries of both countries.

Transparency mechanism implementation

The Chair of the Committee provided members with an update of the Committee's work and the implementation of the Transparency Mechanism. A total of 36 early announcements of RTAs are currently on the WTO website (not counting those which have been subsequently notified). The latest early announcement received was for the free trade agreement between Canada and MERCOSUR. The Chair thanked members who have submitted information in line with the requirements of the Transparency Mechanism and encouraged others to do so.

Three notifications were received since the 100th Session of the CRTA held on 21 June 2021: the ASEAN Trade in Goods Agreement (ATIGA) (WT/REG457/N/1); the Trade Continuity Agreement between the United Kingdom and Mexico (WT/REG456/N/1-S/C/N/1060); and the Agreement on Trade Continuity between the UK and Canada (WT/REG419/N/1/Add.1-S/C/N/1061). Since the last meeting, one notification of changes to existing RTAs, concerning the ATIGA, was received.

An updated list of non-notified RTAs was recently circulated. It contains 56 RTAs issued in factual presentations up to 25 October 2021. Compared to the list issued before the last CRTA meeting in June, no RTA was removed from the list, and one agreement was added, namely Israel-Colombia.

As regards the preparation of the factual presentations under the remit of the CRTA – in the case of RTAs involving WTO members only – there are currently 69 RTAs for which a factual presentation has to be prepared, counting goods and services separately. Factual presentations on a further 34 RTAs involving non-members are to be prepared, counting goods and services separately, as previously agreed by the Committee.

The factual presentation for six other services agreements remain on hold, pending the negotiation of services commitments. The Chair had held consultations with delegations regarding the backlog due to late receipt of data necessary for the preparation of factual presentations and comments on factual presentations. He called on members to provide the missing information as soon as possible. An updated list of all such RTAs was recently circulated.