WTO Members Review
Six RTA including EU and ASEAN
At
the meeting of the Committee on Regional Trade Agreements (RTAs) on 8 April, WTO
members considered six RTAs involving the Association of Southeast Asian Nations
(ASEAN), Australia, Colombia, the European Union, Japan, Pacific Island countries,
Peru, the United Kingdom, and Viet Nam. Members furthermore discussed how to improve
the functioning of the Committee.
The
Committee considered the Association of Southeast Asian Nations (ASEAN) Trade in
Goods Agreement (ATIGA) under the Transparency Mechanism for RTAs. The Agreement,
in force since 17 May 2010 and whose beginnings date back to 1977, establishes a
free trade area among ASEAN member states. Liberalization is already fully implemented
except for petroleum products in Viet Nam (expected in 2024) and Cambodia (2025).
Tariffs on intra-ASEAN trade have been eliminated on most tariff lines, with the
remaining tariff lines comprising under 2% of the total excluded from liberalization.
Tariffs on those excluded lines range from 5% to 35%. ATIGA is one of the pillars
of the ASEAN Economic Community, which includes the ASEAN Framework Agreement on
Services (AFAS), the ASEAN Trade in Services Agreement (ATISA) and the ASEAN Comprehensive
Investment Agreement (ACIA).
The
Lao People's Democratic Republic (PDR), speaking on behalf of the ASEAN member states,
emphasized that the Agreement provides comprehensive trade measures including the
liberalization of rules of origin, trade facilitation and customs procedures, aiming
to enhance economic cooperation within ASEAN. Serving as a cornerstone for economic
integration efforts, the Agreement promotes regional trade, enhances competitiveness,
and drives economic growth within the region.
The
Committee also considered the services aspects of the Free Trade Agreement (FTA)
between Japan and the Member States of ASEAN. This is part of the ASEAN-Japan Comprehensive
Economic Partnership Agreement and entered into force between 1 August 2020 and
1 February 2022 for the various parties. It covers trade in services, movement of
natural persons and investment, and is complemented by supplementary provisions
on financial and telecommunications services. Liberalization commitments under the
Agreement are generally broader than those under the WTO General Agreement on Trade
in Services (GATS), with some exceptions.
Thailand,
speaking on behalf of the ASEAN member states, said that ASEAN and Japan continued
to strengthen their collaborative efforts aimed at enhancing trade and economic
cooperation. They firmly believe this agreement will facilitate increased cross-border
flow of investment and services among all parties involved.
The
Economic Partnership Agreement (EPA) between the European Union and the Pacific
States (Papua New Guinea, Fiji, Samoa and the Solomon Islands), Goods, has been in force
since 2009 between the European Union and Papua New Guinea, and from 2014 between
the EU and Fiji. Subsequently, Samoa and the Solomon Islands acceded in 2018 and
2020 respectively. Prior to entry into force, the EU already provided duty-free
and quota-free market access for most products under its “market access regulation”
for the African, Caribbean and Pacific (ACP) Group of States; this has continued
under the EPA. The Pacific States will liberalize between 77.9% and 90.7% of their
tariffs within a period of 15-25 years, with bilateral safeguards envisaged for
when compliance may cause difficulty in ensuring food security. The Agreement also
aims to promote sustainable development and the gradual integration of the Pacific
States into the world economy in conformity with their development priorities.
The
European Union stated that the Agreement is geared towards fostering collaboration
on customs and trade facilitation, technical barriers to trade, and sanitary and
phytosanitary (SPS) measures. It establishes dispute avoidance and settlement procedures
to ensure that consumers and businesses can fully leverage the trade and development
opportunities offered by the Agreement.
Samoa,
speaking on behalf of the Pacific States, highlighted that the Agreement's objectives
include enabling the Pacific States to capitalize on preferential access to the
EU market and promoting sustainable development alongside the gradual integration
of the Pacific States into the global economy.
The
Committee also considered the Free Trade Agreement between the United Kingdom and
Viet Nam, Goods and Services. The Agreement in large part replicates the provisions
of the agreement between the European Union and Viet Nam that the UK was party to
previously as a member of the EU. The UK expects to liberalize over 99% of its tariffs
for imports from Viet Nam at the end of implementation in 2027, while Viet Nam will
liberalize 97.6% of tariffs by 2035. On trade in services, most commitments made
by the parties in the EU-Viet Nam Agreement are replicated and there are some improvements
in certain business services, distribution, and financial services.
In
a joint statement with Viet Nam, the UK noted that the Agreement seeks to maintain
continuity in the UK-Viet Nam trading relationship, integrating relevant provisions
from the existing FTA. Substantive adjustments include modifications to tariff rate
quota volumes and rules of origin. There are also commitments in the Agreement relating
to trade and sustainable development, including labour, the environment and corporate
social responsibility.
The
Trade Agreement between the United Kingdom, Colombia, Ecuador and Peru, Goods and
Services, entered into force on 1 January 2021. It incorporates and modifies the
trade agreement previously established between the EU and Colombia, Ecuador, and
Peru. Each party will liberalize more than 95% of its tariffs by the end of implementation,
providing continuity in the preferential trade relationship between the UK and the
Andean countries. The parties also build on their commitments under the GATS.
The
UK, delivering a joint statement with Colombia, Ecuador, and Peru, emphasized that
the Agreement has already facilitated substantial trade and investment, with total
trade in goods and services between the UK and the Andean states reaching GBP 4.2
billion in the four quarters leading up to the end of Q4 2022. The UK looks forward
to the upcoming Trade Committee meeting with the Andean countries in July, aiming
to explore further opportunities for collaboration and enhance prospects for trade.
The
Pacific Agreement on Closer Economic Relations Plus (PACER Plus), Goods and Services,
entered into force between 13 December 2020 and 11 October 2022 among the various
parties: Australia, Cook Islands, Kiribati, New Zealand, Niue, Samoa, Solomon Islands,
Tuvalu, Tonga and Vanuatu. Australia and New Zealand liberalized all their tariffs
upon its entry into force. For the Pacific Island countries, meanwhile, zero (for
Kiribati) and 18.4% (for Vanuatu) of their tariff lines will remain dutiable for
imports from Australia and New Zealand. Furthermore, liberalization commitments
in trade in services, movement of natural persons, and investment vary among the
parties following the “positive list” approach.
Samoa,
speaking on behalf of the PACER Plus Parties, highlighted that the Agreement includes
tariff commitments, rules of origin, customs procedures, and SPS measures. It also
recognizes the importance of sustainable economic development and aims to address
unemployment in the Pacific Islands.
New
Zealand said it regards PACER Plus as a landmark agreement for the region, aiming
to support Pacific Island countries in becoming more active players in trade and
benefiting from regional and global trade. This, in turn, is expected to create
opportunities for growth, jobs, and increased living standards, it said.
Australia
emphasized that the Agreement will assist Pacific Island countries in addressing
challenges, providing a framework for increased predictability, transparency, and
stability in a professional business environment. It also aims to deliver targeted
and responsive technical assistance in areas relevant to Pacific Island countries'
trade.
Enhancing
the Committee's work
The
Committee took note of 11 regional trade agreement notifications and received two
further notifications after the meeting agenda was circulated to members.
The
chair, Ambassador Clare Kelly of New Zealand, noted that there are 30 RTAs involving
WTO members and 35 involving non-members for which a factual presentation has to
be prepared, counting goods and services separately. She also noted that the WTO
Secretariat had circulated a list of 56 RTAs currently in force that had not been
notified to the WTO, while end of implementation reports were due for 210 RTAs by
March 2024. Members discussed one end of implementation report of the Agreement
between Canada and Chile.
Members
discussed how to improve the functioning of the Committee. The chair, summarizing
the informal discussion, noted agreement among members regarding the inclusion of
an executive summary in the factual presentations, to be drafted and circulated
under the responsibility of the Secretariat. The chair stated that discussions on
other matters would continue in the next Committee meeting.
Election
of the chair
Members
elected Ambassador Salomon Eheth of Cameroon as the new
Committee chair. He replaces Ambassador Kelly.