WTO Members Review Six Free Trade Agreements,
Stress Importance of Transparency
WTO members considered six free trade agreements
between Ukraine and Israel, Namibia and Zimbabwe, the United Kingdom and Jordan,
the United Kingdom and Chile, the United Kingdom and Canada, and the European Union
and Central America at a meeting of the Committee on Regional Trade Agreements (RTA)
on 27 June. Members also reviewed implementation of the RTA Transparency Mechanism,
under which members are required to notify their RTAs to the WTO. Members stressed
the importance of providing information on time to ensure the Transparency Mechanism
can be implemented efficiently.
Since its last meeting in March, the Committee received
notifications on two RTAs. One refers to the suspension of the free
trade agreement between Nicaragua and the Separate customs territory of Taiwan,
Penghu, Kinmen and Matsu on goods and services and the other
refers to the signature of the Comprehensive Economic Partnership Agreement
between the European Free Trade Association states and Indonesia on goods and services(1).
Members considered the Free Trade Agreement between Ukraine and Israel (goods and services),
which entered into force on 1 January 2021. Under this agreement, Israel abolished
duties on 9 per cent of its imports of agricultural products from Ukraine and 80
per cent of its imports of Ukrainian industrial goods. Ukraine did so for approximately
7 per cent of its imports of agricultural products from Israel and 70 per cent of
industrial goods.
Members heard that Israel's exports to Ukraine increased from USD 197
million in 2020 to USD 234 million in 2021. Ukraine's exports to Israel also rose,
accounting for USD 776 million in 2021, from USD 640 million in 2020. In 2021, 64
per cent of Israel's exports to Ukraine consisted of chemicals and chemical products,
followed by food and agriculture and electrical and machinery equipment. Israel's
imports from Ukraine consisted mainly of food and agriculture products.
Several members took the floor to express their strong opposition to
the invasion of Ukraine. The Russian Federation responded by saying that the WTO
was not the proper venue for a discussion of this nature.
Members considered the Preferential Trade Agreement between Namibia and Zimbabwe on
goods, which entered into force in April 1993. The parties noted
that this agreement is based on the Southern African Development Community Protocol
on Trade, which seeks to promote trade as an engine for economic development
and poverty eradication in the region.
The PTA provides for reciprocal duty-free market access, subject to
rules of origin that require at least 25 per cent of local content for manufactured
products. The entry into force of this agreement allowed for trade between Namibia
and Zimbabwe to increase significantly from below USD 5 million in the 1990s to
over USD 20 million in 2019.
Members considered the Association Agreement between the United Kingdom and Chile on
goods and services, which entered into force on 1 January 2021.
The UK noted that the FTA largely replicates the European Union-Chile Agreement
and covers goods, services, government procurement and intellectual property. In
addition to containing 17 joint declarations - including on trade in wine and spirits
- the agreement provides for an annual trade dialogue between the UK and Chile to
review its operationalization at ministerial level.
Members considered the Agreement on Trade Continuity between the United Kingdom and
Canada on goods and services, which entered into force on 1 April
2021. Replicating the European Union-Canada Comprehensive Economic Agreement, the
agreement provides for the elimination of tariffs on most of the bilateral trade,
which amounted to GBP 21 million in 2021. Investor-state dispute settlement provisions
are suspended, with the parties agreeing to undertake a comprehensive joint review.
The parties noted that the provisional agreement was replaced by a UK-Canada Free
Trade Agreement, which entered into force on 24 March 2022.
Members considered the Association Agreement between the United Kingdom and Jordan
on goods, which entered into force on 1 May 2021. The agreement
replicates the European Union-Jordan trade agreement. Under the Agreement, 97.1
per cent of Jordan's tariffs became duty free, representing 98.9 per cent of Jordan's
total imports from the UK over the period 2018-2020 while 94.8 per cent of the UK's
tariff is duty free, accounting for almost 100 per cent of the UK's imports from
Jordan during this period.
Members considered the Association Agreement between the European Union and Central
America on goods and services(2),
which entered into force in 2013. It contains
provisions on special and differential treatment to help drive economic growth in
Central America and further its integration into the world trading system. Since
the agreement's entry into force in 2013, the EU's exports to the region have increased
by 44 per cent and Central America's exports to the EU by 96 per cent. At the end
of a transition period in 2022, Central American exporters will face zero duties
on 95 per cent of the EU's tariff lines while EU exports will face zero duties for
95-96 per cent of Central American tariffs.
Members were informed that 61 RTAs in force
are yet to be notified to the WTO. In addition, a factual presentation has to be
prepared for 64 RTAs involving WTO members and 37 involving non-members, counting
goods and services separately.
The 2006 RTA Transparency Mechanism provides for early announcement by members of their RTAs and for notification
to the WTO
and a transparency process in the Committee on RTAs.
The next meeting of the RTA Committee is scheduled for 22-23 September.
1.Iceland, Liechtenstein,
Norway and Switzerland
2.Central America comprises
Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua and Panama