International Sweetener Colloquium

1. International Sweetener Colloquium The U.S. Trade Agenda -- 2009 and Beyond Paul Drazek DTB Associates Orlando, Florida February 10, 2009

2. Trade Issues Facing the New Administration Two immediate and over-arching questions: Doha: How and when (or whether?) to finalize the Round. Bilaterals: How and when (or whether?) to pursue implementation of three FTA’s. Then what? And, what about NAFTA?

3. Status of Current Negotiations& Agreements Doha Round Effort to conclude deal last year failed. Many remaining issues in agriculture and non-agricultural market access (NAMA) talks. Goal (Lamy’s) had been to conclude while Bush still President. Why? To avoid less favorably-disposed U.S. administration and possible long delay.

4. Status of Current Negotiations& Agreements Doha Round (continued) Obama Administration intends to take a period of time for “reflection,” to develop a policy “that can be supported by both Congress and our trading partners.” But -- May be mutually exclusive in advance of a deal. Hard to keep negotiating texts from going stale during reflection period. Suggests re-negotiating of texts with new U.S. positions. Inclusion of labor and environmental provisions (?) Domestic interests may seek pull back on domestic supports. Vilsack: May need to find new ways to support agriculture.

5. Status of Current Negotiations& Agreements Colombia FTA Administration sent implementing bill to Hill in April 2008. House response: to take out the “fast” in fast track. Moving goal posts? -- “Until and unless we have a robust trade adjustment assistance bill to help the people affected, then I don't see any chance for a Colombia free trade agreement.” Nancy Pelosi, March 2008. After agreement on TAA, Max Baucus argued against linking it with the Colombia FTA. “I want to bring Colombia up at the right time, but this is not the time.” he said. February 2009. Hung up now on issue of mistreatment of union officials in Colombia; also, TPA no longer applies to Colombia FTA.

6. Status of Current Negotiations (cont.) Panama FTA Hung up last year on on election of Panamanian official to head legislature accused of murdering a U.S. serviceman. Moving goal posts? – “Discussions with Panama on worker rights issues may resume soon,” Ways and Means trade subcommittee chairman Sander Levin, 1/15/09 “As Congress takes a closer look at Panama, other concerns will come to the fore, such as the country's reputation as a tax haven.” Thea Lee, policy director at the AFL-CIO, January 2009. But could Panama move quickly to prove Administration and Congress aren’t protectionist?

7. Status of Current Negotiations (cont.) Korea FTA Initially hung up on two issues: autos and beef. Now mainly autos (but protectionist sentiment also in the background). Only FTA that Obama administration has stated explicitly must be renegotiated. “If the South Koreans are willing to re-engage negotiations on these vital provisions of the agreement, we will work with them to get to resolution.” Hilary Clinton January, 2009.

8. Uncertainty About U.S. Trade Policy -- Talk of Re-opening of NAFTA Bail out of automobile and other sectors Buy America “Trade Enforcement” legislation with creation of Office of Congressional Trade Enforcer with power to indict countries for failure to adhere to trade agreements. “Do as I say, not as I do.” Concern about drift toward protectionism (others are probably just as guilty). Global Perception of U.S.

9. The Great Depression and Unemployment

11. What if Obama Decides to Move Ahead with Trade Agreements? Traditional supporters of trade seem ambivalent. Much of agriculture wouldn’t be too bothered if Doha went away and never came back. Industrial side not as active on Doha as in prior negotiations. Current economic situation makes trade deals a hard sell, despite what proponents say about importance.

12. No authority to negotiate. In 8 years of Clinton Administration, no new trade agreements (no TPA). In 8 years of Bush Administration, 13 new FTAs (counting CAFTA-DR as 6). Three others pending. Political climate may not permit next President to undertake new negotiations. 4-8 years with no new deals? Other countries are not so reticent.

21. CU=Customs Union; FTA=Free Trade Agreement; PS=Partial Scope

22. Parties Status of Negotiations/Agreements Australia – Chile Australia and Chile concluded a free trade agreement in May, 2008. It was signed by both parties on July 29, 2008 and will enter into force on January 1, 2009. Tariffs will be eliminated on 97% of existing merchandise trade upon entry into force and 100% of existing merchandise trade in each direction by 2015 with the exception of one component of Chile’s sugar tariff which will remain subject to its current ’price band’ system. Chile is Australia’s 3rd largest trading partner in Latin America. The full text of the FTA can be found at: http://www.dfat.gov.au/GEO/chile/fta/index.html Australia – Gulf Cooperation Council (Saudi Arabia, the UAE, Kuwait, Qatar, Oman and Bahrain) Free trade agreement (FTA) negotiations with the Gulf Cooperation Council (GCC) commenced on July 30, 2007. The second round of negotiations for a FTA with the GCC was held in Riyadh November 20-22, 2007. The second round made progress in a number of areas across the agreement. It concentrated on goods and on services/investment but also included sessions on government procurement, sanitary and phytosanitary measures (SPS), rules of origin, intellectual property (IP) and framework issues. There was an extensive exchange on respective approaches to market access for goods. Australia is currently working with the GCC on timing for the third round.  Australia – India Australia and India have agreed to undertake a joint feasibility study on the merits of a free trade agreement (FTA) between the two countries. Terms of reference for the study have been agreed upon. The study will examine the potential impact on Australia and India of an FTA, including implications for economic growth, trade in goods and services, and investment, as well as for other commercial linkages. The joint study is expected to be completed by early 2009. Indian Minister of Commerce has expressed his desire to finish the negotiations between the end of 2009 or mid 2010. India is the world’s second fastest growing major economy, with growth rates around 8-9 percent annually and it is Australia's fastest growing major export market for both goods and services - increasing at over 30 percent annually over the last five years. Michael Wood, the Australia-India FTA Study Director, said that on sensitive issues like agriculture, Australian agricultural exports could not only provide counter-cyclical supply to the domestic market but also logistics and cold chain technology. Judy Barfield, Department of Agriculture, said that dairy and farm goods exports remain on top of the agenda. Australia wants the proposed FTA to cover all products and specially give Australia more market access in agriculture, mining and financial services sectors in India. Mr Wood pointed out that while average tariffs in Australia were relatively low at about 3.9%, tariff elimination would help India. For products like textiles, clothing and footwear, where the tariffs are higher at about 15%, the gains would be much bigger. Australia is seeking removal of quarantine restrictions on dairy and other farm products, which India has in place, probably in answer to strict sanitary and phytosanitary norms observed by Australia.

23. Australia – Indonesia On July 27, 2007, Australia and Indonesia agreed to commence a joint feasibility study to examine the merits of a free trade agreement (FTA). The study will examine the impact on Australia and Indonesia of an FTA, including implications for economic growth, trade, investment, commercial linkages and competitiveness. The joint feasibility study commenced in August 2007 and is expected to be completed by the end of 2008. Indonesia hopes to complete its bilateral negotiations with Australia in 2009 if talks on the FTA at the ASEAN level (including Australia and New Zealand) are concluded this year. Two-way trade in goods and services reached A$10.2 billion in 2007, making Indonesia Australia’s 13th largest trading partner. Indonesia is an important and growing export market for Australia, ranked 11th overall. Australian investment in Indonesia is worth an estimated $3.1 billion and more than 400 Australian companies are operating in Indonesia in sectors including mining, construction, finance, food and beverage and transport. Australia is Indonesia's main wheat supplier, having exported 1.5 million tons in 2007. Australia – Malaysia (MAFTA) On April 7, 2005, Australia and Malaysia agreed to launch negotiations on a bilateral Free Trade Agreement (FTA). The various working groups met on October 1, 2007 in Kuala Lumpur to map a way forward for the negotiations. This followed a meeting between Australia’s lead negotiator and Malaysia’s new lead negotiator on June 4, 2007. There will be a further preparatory meeting in early 2008, leading to a full round of talks by mid-2008. The scoping study suggests that an agreement would increase Australia’s GDP by $1.9 billion and Malaysia’s GDP by $6.5 billion over the period to 2027. Malaysia gains more as the economy with higher trade barriers and a higher ratio of trade to GDP. Malaysia ranks as Australia’s 3rd largest trading partner in ASEAN and the 11th largest trading partner overall. Two-way trade between the two countries has grown steadily in recent years and in 2006-07 stood at around $11.9 billion. Australia – New Zealand & ASEAN (Indonesia, Malaysia, Philippines, Singapore, Thailand, Brunei Darussalam, Vietnam, Lao PDR and Myanmar, and Cambodia) (AANZFTA) Australia, the 10 countries of the Association of Southeast Asian Nations (ASEAN), and New Zealand agreed in 2004 to launch negotiations on a free trade agreement (FTA).  Negotiations began in March 2005.  At the 12th ASEAN Economic Ministers-CER Consultations, held in Manila on August 26, 2007, Ministers agreed to aim to conclude the negotiations by mid-2008. The 15th meeting of the negotiating committee took place in Hanoi, Vietnam from June 2-8, 2008. A special meeting of the committee took place in Singapore from July 23-25, 2008 and pending issues were resolved at the August 8 ASEAN-Closer Economic Relations Officials meeting in Brunei. FTA Negotiations concluded on August 28, 2008 during ASEAN-CER Economic and Trade Ministers meeting. The pact with the two southern neighbors covers services, investment, financial services, telecoms, electronic commerce, movement of people, intellectual property, competition policy and economic cooperation, according to a joint statement. The agreements need approval from the legislative bodies of participating countries before being ratified at an annual meeting of ASEAN foreign ministers in Bangkok in December.

24. Canada – CARICOM (Antigua & Barbuda, Bahamas, Barbados, Belize, Dominica, Granada, Guyana, Haiti, Jamaica, Monserrat, Trinidad & Tobago, St. Kitt, Nevis, St. Lucia, St. Vincent & the Grenidines, Surinam) On July 19, 2007, negotiations towards an FTA between Canada and the Caribbean Community member countries were formally announced. On October 18, 2007, Canadian and CARICOM chief negotiators held the inaugural meeting of the FTA negotiations, and the first full round of talks are scheduled for October 2008. A CARICOM technical working group will meet soon to finalize the group’s negotiating position. That paper will be presented for approval at a Special Council of Trade and Economic Development Ministers prior to the first negotiating session with Canada. It was agreed that negotiations start after summer. However, the Canadians were pushing for a September start, while the Caribbean team wanted to hold off until October to give the Organization of Eastern Caribbean States time to complete and submit a report on the impact of the agreement.Negotiations will cover a wide range of issues, including trade in goods, rules of origin, customs procedures, trade facilitation, non-tariff barriers, cross-border trade in services, temporary entry, investment, government procurement, dispute settlement and institutional provisions. Canada will also seek to address the social dimensions of economic integration through the negotiation of provisions on labor and environment. Given that the CARIFORUM-EC EPA will be signed on October 15th 2008, it is anticipated that the CARICOM-Canada negotiations will commence and intensify over the next few months. The Canadians have indicated their intention to use their FTA with Costa Rica as the template for negotiations with CARICOM with some possible variations. Canada – Colombia On June 7th, Canada announced that it had successfully concluded its FTA with Colombia, pending a legal review by Canadian and Colombian lawyers. The agreement hasn’t been made public. After the review is completed, it’ll be brought to the House of Commons of Canada for ratification, which should not be a problem for the Tories despite their minority government since the Liberals have said they’ll support it if it contains language on human rights. Canada’s key agricultural exports to Colombia include bovine and pork meat, pulses and canola. Major exports from Colombia to Canada consist of coffee, bananas, coal/oil and cut flowers. It is expected that Canada will limit the entry of dairy and poultry products through TRQs and that textiles will reach duty free entry in three years. Over 84 percent of Colombian imports of industrial products from Canada will be duty-free immediately upon entry into force of the agreement, and an additional 12 percent will be duty-free within five years.  All remaining tariffs will be eliminated within ten years. Canada – Dominican Republic Free trade negotiations between Canada and the Dominican Republic were launched on June 7, 2007. The first round of talks was held in Ottawa on December 10-14, 2007, while the second round, which was scheduled for February 18-22, 2008 in Santo Domingo, was postponed. Dominican officials are lobbying to be included in the Canada-Central American free trade agreement (CA4: Guatemala, Nicaragua, El Salvador and Honduras). Negotiations are likely to resume in summer 2008.

25. Canada – EFTA (Iceland, Norway, Switzerland, and Liechtenstein) Canada announced in January the signing of a free trade agreement that it had finalized last June with the four countries of the European Free Trade Association - Iceland, Liechtenstein, Norway and Switzerland. The free trade agreement is Canada's first with European countries. The agreement will liberalize trade in most industrial goods as well as processed agricultural goods. As is the case with most EFTA free trade agreements, the deal excludes commitments on trade in basic agricultural goods. Instead, tariff concessions on these goods are dealt with through bilateral agreements between the individual EFTA countries and Canada, which will enter into force at the same time as the overall agreement.The FTA was signed on January 26, 2008 and it is anticipated that it could be brought into force by January 1, 2009. The FTA is a “first-generation” agreement with an emphasis on tariff elimination. The EFTA countries are significant economic partners for Canada. In 2006, two-way merchandise trade was valued at $10.7 billion (Canadian exports: $3.1 billion; imports: $7.6 billion). The text of the agreement can be found at: http://www.international.gc.ca/trade-agreements-accords-commerciaux/agr-acc/efta-agr-acc.aspx?lang=en#2 Canada – Jordan On August 26, 2008 Canada and Jordan wrapped up free trade negotiations, along with parallel labor and environment agreements. The agreement needs to go through legal reviews in English, French and Arabic before being signed. In Canada, it then would go to the Parliament for 21 sitting days for review and debate, after which the government would introduce draft legislation for implementation. This FTA would be Canada's first with an Arab country and would serve as a gateway to Middle Eastern and North African markets. The first round of negotiations was held in Amman on April 13-17, 2008, and a second round was held July 29-August 1, in Ottawa. Canadian exports to Jordan amounted to $57 million in 2007, up from $29.5 million in 2003. Jordan exports to Canada were worth $15.2 million, bilateral trade in 2007 totaled $72.3 million. The top Canadian exports were forest products, electrical machinery, and agricultural and agri-food products. Jordan exports to Canada mainly consist of apparel and agricultural products. In June 2008, Canada’s Initial Environmental Assessment of the bilateral FTA was released. The report can be found at: http://www.sice.oas.org/TPD/CAN_JOR/Negotiations/env_asst_e.pdf Canada – Panama Canada and Panama held two rounds of exploratory discussions on the possibility of a free trade agreement on May 6-7, 2008 in Ottawa and July 7-8, 2008 in Panama City. The second round of discussions included issues such as policies on trade facilitation, public contracts, services and investments in the framework of policies of high labor and environmental standards and corporate social responsibility. Depending on the outcome of the exploratory talks, the government would embark on comprehensive consultations with stakeholders across Canada before a decision is made on the launch of formal FTA negotiations. Technical talks were held October 29 covering all aspects of trade between the two sides.

26. Canada – Peru On January 26, 2008 Canada and Peru finalized a bilateral free trade agreement, which was signed on May 29. According to Canada’s trade minister, the agreement will provide greater market access for Canadian agricultural products, paper products, and machinery and equipment, and includes agreement to protect Canadian investments in Peru's mining sector. Canada will provide immediate free access to almost 100% of current Peruvian exports, including textiles and apparel (except for 11 tariff codes), and 97% of its total tariff lines. The 23-chapter agreement with Canada, which was hammered out in less than a year, now has to be submitted to the respective legislatures for approval. The goal is to have the implementing treaties approved in the third quarter of 2008 and to become effective on January 1, 2009. The text of the agreement can be found at http://www.international.gc.ca/trade-agreements-accords-commerciaux/agr-acc/peru-perou/peru-perou-table.aspx Canada – Singapore Canada and Singapore announced the launch of negotiations of an FTA on October 21, 2001. Six rounds of negotiations were held between January 2002 and October 2003. Talks were suspended in December 2003, over an impasse on certain provisions of the FTA. In November 2006, the talks were resumed, with the seventh round of negotiations held on February 26-March 2, 2007, in Singapore and the eight round on August 13-15, 2007, in Ottawa. No date has been set yet for a next round of negotiations. Negotiations cover a wide range of topics, including trade in goods, trade in services, financial services, investment, government procurement, dispute settlement and competition policy. Chile - Vietnam Vietnam and Chile have established a joint mission to study the feasibility of a bilateral free trade agreement. As member of ASEAN, APEC and WTO, Vietnam is able to help Chile gain closer relations with other members of these organizations.Chile is also interested in other fields of cooperation with Vietnam such as mining and processing industries. The Chilean Trade Promotion Agency from April 16-19 organized a Chile week in Ho Chi Minh City, which includes a Vietnam-Chile Business Forum where businesses of both countries met to discuss cooperation.

27. China – ASEAN (ACFTA) (Brunei Darussalam, Indonesia, Malaysia, Philippines, Singapore, Thailand – ASEAN 6; Vietnam, Lao PDR and Myanmar, and Cambodia – Newer ASEAN) In November 2001, China and the 10-member country Association of South East Asia Nations (ASEAN) began negotiations to set up a free trade area (FTA). One year later, a framework agreement (FA) laying out the FTA plan was signed. As part of the FA, an Early Harvest Program (EHP) was negotiated. This program allows the accelerated reduction of tariffs on certain products before the onset of the FTA. It would reduce tariffs on these products over 3 years: to 10% by 2004, to 5% by 2005 and zero tariffs by 2006. For Singaporean exports to China, the EHP covers products from Chapters 1-8 of the HS code as well as 75 specific manufactured goods. Following the EHP, the Trade in Goods Agreement was signed in November 29, 2004 and came into force on July 20, 2005. Two protocols incorporating further tariff concessions were subsequently signed in 2006. Under this agreement, the six original ASEAN members and China have to eliminate tariffs on 90% of their products by 2010. The remaining ASEAN countries have until 2015 to do so. The remaining 10% are deemed sensitive by parties and will be reduced at a slower pace. ASEAN’s bilateral FTA with China is expected to be ready by the 12th ASEAN-China Summit in December 2008, with the signing of an investment agreement which follows the Trade in Goods and the Trade in Services agreements. Legal texts can be found at: http://www.iesingapore.gov.sg China – Australia On April 18, 2005, Australia and China agreed to undertake negotiations on a Free Trade Agreement following consideration of a joint FTA Feasibility Study. That study was completed in March 2005, and concluded that there would be significant economic benefits for both Australia and China through the negotiation of an FTA. The tenth round of FTA negotiations was held in Canberra on October 22-26, 2007. While differences were narrowed on some issues, overall progress in the negotiations continued to be slow. Market access negotiations on goods (including agriculture) remain on hold pending an improved offer by China. After the ninth round, a session was held on agricultural products affected by tariff rate quotas (cotton, wheat, rice, sugar, wool and corn). The focus was on wool and sugar with brief discussion of rice and corn (wheat and cotton were discussed at the ninth round). During the 11th round, hold from June 16-20 in Beijing, China tabled a revised tariff offer with some improvements on industrial products. However, both sides agreed that they will intensify discussions in coming months on priority product areas, particularly in agriculture, where Australia considers China’s offer needs to be improved. Australia’s Senate estimates hearings revealed that signing an FTA with China will make local growers even less competitive (currently, locally packaged frozen vegetables contain Chinese produce but are labeled as “Product of Australia”), unless the Australian government undertakes to make wages (the wage advantage of Australian farmers is 35 to 1), environmental practices and human rights part of the negotiations and guarantees government help to farmers. The 12th round of negotiations was held in Canberra from September 22 to 26. The two sides agreed to continue the market access discussion at the 13th round. Both sides made further progress on the proposed chapter on trade in goods, with much of this chapter now agreed.  There remain differences on the incorporation in the FTA of WTO-plus commitments on some issues.

28. China – Costa Rica Trade officials from Costa Rica and China concluded a first round of technical meetings on a possible FTA in January. A bilateral meeting in Beijing was scheduled for April and a follow-up meeting was planned in San Jose in June. A feasibility study for the FTA was expected in June, as well. Marco Vinicio, Costa Rica’s Minister of Trade, expressed his interest in establishing a hub to export electronics to China, which represents 90% of the country’s exports to China. Textiles, agricultural products and infrastructure are other key sectors for economical cooperation. Formal negotiations should begin by the end of 2008 and conclude in 2009. China – India A joint feasibility study on a possible FTA between India and China was initiated in April 2005 and completed in late 2007. The report was made available to each side before a meeting of their leaders in January 2008 in Beijing. It concluded that an FTA would be feasible but needed to be studied further. Following that meeting, Indian trade minister Kamal Nath said that a free trade agreement with China was a long way off, and that the two sides would not have any discussions on such an agreement during 2008. An FTA with China was not a "priority" for India due to "deep divisions" within the government and opposition from the industry. Industry groups have asked the government to adopt a cautious approach before pursuing an agreement, arguing that resultant tariff cuts would result in Chinese goods flooding Indian markets. India also fears that it will no longer be able to establish dumping to China. China – New Zealand An FTA between China and New Zealand was signed on April 7. This is China’s first FTA with a developed country. The FTA is scheduled to become effective by October of 2008, pending final approval from both nations. The agreement was the result of 15 rounds of negotiations over three years. Initial tariff cuts will result in the immediate elimination of tariffs on over $200 million worth of current New Zealand exports to China. By 2017, tariffs on 96 per cent of New Zealand’s exports to China will be phased out. New Zealand exports to China, currently at more than $2 billion a year, are estimated to grow by between $230-350 million a year faster than they would have without an FTA. On July 24, 2008, New Zealand parliament passed the China FTA Bill, which will bring into force the FTA on October 1. The text and more features of the agreement can be found at: http://www.chinafta.govt.nz

29. China – Peru China and Peru have begun talks on an FTA between the two nations. Five rounds of negotiations have been scheduled with a completion of the talks planned for before the Asia-Pacific Economic Cooperation summit in Lima in November. In the third round, Peru determined that agricultural products of export interest were being placed by China in the exclusion basket. China responded that those products are considered sensitive in the WTO negotiations and in previous FTAs it has negotiated. Both parties agreed that to improve product offers, it must be on the basis of a request of the interested party. Negotiations turned tough in the fifth round since China urged Peru to include textiles and footwear in the agreement, while it did not agree to eliminate tariffs to major agricultural export prospects from Peru. The sixth round was hold in October 13-16.The agreement is expected to be signed during APEC’s leaders meeting in November 2008. The joint feasibility study can be found at: http://www.mincetur.gob.pe/newweb/Portals/0/Peru-China%20JFS%20Final.pdf China - Singapore China and Singapore signed a bilateral free trade agreement between their countries on October 23 in Beijing. Talks for the deal began in October 2006 following a China-Singapore Joint Expert Group study on the feasibility of an FTA between the two countries. Following eight rounds of negotiations, the talks concluded on 3 September this year. The agreement will take effect on January 1, 2009, after both parties have completed legislative requirements. Singapore's government said that it expects the FTA to enhance economic and political ties between the two countries, and that the deal will add momentum toward the establishment of a China-ASEAN free trade zone.The comprehensive trade pact, China's first bilateral FTA with another Asian nation, covers trade in goods and services, rules of origin, trade remedies, sanitary measures, technical barriers to trade, customs procedures, economic cooperation and dispute settlement, among other things. Under the agreement, tariffs will be eliminated on more than 85 percent of Singapore's exports to China upon the FTA's entry into force, with an additional 10 percent of goods made duty-free by the next year. According to a Chinese statement, in total, a zero-tariff policy on 97.1 percent of Singaporean imported goods will be realized before the start of 2012. Although 260 specific goods are to be excluded, key products to be covered by the agreement include petrochemicals, processed foods and electrical products. In return, Singapore will eliminate all tariffs on Chinese exports when agreement comes into force. According to the Singaporean Ministry of Trade and Industry, trade between the two countries reached US$ 62 billion in 2007. China is Singapore's third-largest trade partner and largest investment destination, while Singapore is China's eighth-largest trading partner.

30. Colombia – EFTA (Iceland, Norway, Switzerland, and Liechtenstein) On October 5-6, 2006, EFTA and Colombia held the first meeting of the EFTA-Colombia Committee in Bogotá for the purpose of launching a free trade negotiation. The first negotiating session was held June 4-8, 2007 in Bogota. The second and third rounds were held August 27-31, 2007 in Lima and October 28, 2007 in Geneva. Negotiations were completed on June 13, 2008. The government of Colombia will seek ratification in the senate and chamber during legislative session that began July 20, 2008. EFTA expects the FTA to be ratified in the upcoming months. This is the first FTA by Colombia with European countries. For EFTA, this is the third agreement with Latin American countries, following Mexico and Chile’s. EFTA – GCC (EFTA: Iceland, Norway, Switzerland, and Liechtenstein GCC: Saudi Arabia, the UAE, Kuwait, Qatar, Oman and Bahrain) Negotiations between the GCC and EFTA have reportedly been finalized in April in Geneva after five rounds of talks. EFTA will seek ratification of the FTA in the upcoming months. The agreement will improve economic cooperation, increase the trade of goods, and offer further investment opportunities between the two regions.

31. EU – ACP Countries (African, Caribbean and Pacific Group of States: Angola, Antigua and Barbuda, Belize, Cape Verde, Comoros, Bahamas, Barbados, Benin, Botswana, Burkina Faso, Burundi, Cameroon, Central African Republic, Chad, Congo (Brazzaville), Congo (Kinshasa), Cook Islands, Cote d'Ivoire, Cuba, Djibouti, Dominica, Dominican Republic, Eritrea, Ethiopia, Fiji, Gabon, Gambia, Ghana, Grenada, Republic of Guinea, Guinea-Bissau, Equatorial Guinea, Guyana, Haiti, Jamaica, Kenya, Kiribati, Lesotho, Liberia, Madagascar, Malawi, Mali, Marshall Islands, Mauritania, Mauritius, Micronesia, Mozambique, Namibia, Nauru, Niger, Nigeria, Niue, Palau, Papua New Guinea, Rwanda, St. Kitts and Nevis, St. Lucia, St. Vincent and the Grenadines, Solomon Islands, Samoa, Sao Tome and Principe, Senegal, Seychelles, Sierra Leone, Somalia, South Africa, Sudan, Suriname, Swaziland, Tanzania, Timor Leste, Togo, Tonga, Trinidad and Tobago, Tuvalu, Uganda, Vanuatu, Zambia, Zimbabwe)

32. EU – Andean (CAN) (Bolivia, Colombia, Ecuador and Peru) The third round of negotiations for an association agreement between the European Union and the Andean Community (CAN), took place between April 21st and 25th in Quito. The talks have been stalled over disagreements among the Andean countries over the coverage and pace of the negotiations, with Ecuador and Bolivia demanding, among other things, non-reciprocal concessions from the EU. In May 2008, the CAN countries reached an agreement allowing the group to move ahead with negotiations with the EU while permitting each country to move forward at their own pace. On May 18, 2008 Alan Garcia, President of Peru, announced that the EU agreed to this “flexible framework” to allow deals to go into force with countries that are ready (Colombia and Peru) as talks move towards the trade agreement. Both Peru and Colombia want to work quickly to conclude bilateral trade deals with the EU. The two countries have been working since 2006 to negotiate a bi-regional trade agreement between the EU and the four-country Community of Andean Nations (CAN), but resistance from Bolivia and Ecuador has ground that process to a halt. Frustrated with the lack of progress, the presidents of Peru and Colombia sent separate but identical letters to European Commission President José Manuel Barroso urging him to accelerate bilateral trade negotiations with the two countries.On October 19 the Presidents of the CAN countries, except for Colombia, met in Guayaquil. Again, they could not agree on a common position to negotiate with the EU as a block. The last coordination meeting between CAN and EU to define the negotiating conditions will take place in Brussels on November 11.

33. EU – ASEAN (Indonesia, Malaysia, Philippines, Singapore, Thailand, Brunei Darussalam, Vietnam, Lao PDR and Myanmar, and Cambodia) On May 4, 2007, the EU and ASEAN agreed to start negotiations on a free trade agreement. However, since that time little progress has been made in the talks. The EU aims to conclude deals with the most advanced ASEAN economies within two to three years, but this target is seen as ambitious from the ASEAN perspective. The EU hopes to move forward with talks on trade, services and investment with individual countries that are ready to enter negotiations, including Singapore, Brunei and probably Malaysia. According to some sources, the final deal may take the form of separate agreements between the EU and individual ASEAN members, so that the EU can avoid any commitments to Myanmar. EU hoped a fast-track agreement on an FTA with Thailand could be wrapped up within a short period. Fast-track discussions have not yet begun, but the EU expects to start a first round of talks with Thailand soon. At the same time, the EU has urged the Philippines to start formal negotiations for a partnership cooperation agreement (PCA), a prerequisite deal for Manila to participate in the FTA between the EU and ASEAN. PCA negotiations with Indonesia are in an advance stage, while those with Thailand, Singapore, Vietnam and Malaysia are in the early stages of discussions. The EU proposal for the PCA covers measures that promote European core values such as human rights, rule of law and democracy, and provides for cooperation on counterterrorism, migration and ratification of human-rights treaties. Despite pressure from the EU side, ASEAN members want labor rights and environment legislation, covered under “sustainable development’’, to be excluded from the negotiations because each ASEAN country already has laws on those issues. Negotiations started in July last year, but five rounds of talks have yet to deliver any substantial agreements. The next round of negotiations is scheduled for October 15-17 in Hanoi. The EU aims for pacts that abolish 90% of tariffs within seven years and is concerned about non-tariff barriers and regulatory issues. Given that the negotiations between the EU and ASEAN countries have been going slowly, the EU is considering moving ahead by kicking off separate negotiations with some ASEAN countries that are ready to open their markets, including Vietnam. EU – Canada In 2007, the EU, under the presidency of German Chancellor Angela Merkel, agreed to launch a study on the possible benefits of an FTA with Canada. The report is expected to be made public in late spring. It is felt by some Canadians that an FTA with the EU would be a better opportunity for Canada than some of the other FTA negotiations underway. French President Nicolas Sarkozy, who will hold the six-month rotating EU presidency at the time of the Montreal summit on Oct. 17, has been pushed by the governments of Prime Minister Stephen Harper and Premier Jean Charest to launch trade negotiations at that time. However, the EU is so far showing only lukewarm enthusiasm for the idea, although Sarkozy will want to make a significant announcement at the Canada-EU Summit in Montreal.

34. EU – Central America (Guatemala, El Salvador, Honduras, Nicaragua, Costa Rica and Panama) The third round of free trade agreement negotiations (April 14-18, 2008) concluded with little progress on the thorniest issues. Johanna Hill, the Salvadorian vice-minister of the economy, stated that negotiators exchanged proposals and counterproposals on goods and services trade, rules of origin, safeguards, and a program for gradual tariff elimination. For El Salvador, Guatemala, Honduras, Costa Rica, and Nicaragua, the agreement should lock in and improve preferential market access currently granted by the EU. Panama is participating in the talks as an observer. In the fourth round of negotiations held on July 14-18, discussions centered on custom union issues, non-tariff barriers to trade (non-TBT) and Sanitary and Phytosanitary (SPS) issues. The EU’s Regional Ambassador Francesca Mosca recently confirmed that it intends to negotiate and sign one common regional agreement with the Central American countries. The EU demands Central America to free 90 percent of its import duties in exchange of keeping the Generalized System of Tariff Preferences. However, products such as coffee, sugar and banana are not included in the proposal of duty elimination. The fifth round will take place in Guatemala from October 6 to 10, 2008. The European Commission has offered to permanently scrap import duties on ethanol from Central America as part of ongoing discussions during the fifth round of talks concluded in early October. At present the six Central American countries Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua and Panama are able to export ethanol to the EU tariff-free as part of a special incentive arrangement GSP+ . On October 17, DR joined the FTA with the EU. The next new round of talks is due to take place in Brussels in December. EU – Gulf Cooperation Council (Saudi Arabia, the UAE, Kuwait, Qatar, Oman and Bahrain) EU officials have said they are close to reaching an agreement with the GCC, and that a draft could be initialed in the fall that would offer significant commitments on trade in services and investments, ambitious tariff liberalization, as well as commitments on technical barriers to trade, sanitary and phytosanitary standards, and improved intellectual property rights. However, concerns have been expressed about proposed social, environmental, and labor clauses, are said to be significantly weaker than those under discussion in other EU trade talks. Secretary General H.E. Abdurrahman bin Hamad Al-Attiyah laid the responsibility on the European Union for obstructing the conclusion of the FTA. He noted that the trade balance between the two sides was largely in favor of Europeans because of the obstacles the EU imposed on the GCC export and criticized the EU determination to connect between the free trade agreement and unrelated political issues such as human rights and counter terrorism.The GCC has been in talks with the EU about a free trade agreement since 1988.On the other side, GCC oil producers have criticized the EU for delaying the signing of a landmark FTA that could support their long-standing bid to diversify their oil-reliant economies. EU barriers on GCC petrochemicals and other non-oil exports have kept the trade balance largely in favor of the Europeans. The figures showed the GCC was the fifth largest market for European products in 2006, with EU exports to the region standing at nearly €55bn (Dh298bn). Its imports from the GCC, mostly oil and petroleum products, were estimated at €37.5bn, with a surplus of Dh95 billion. Between 2002 and 2006, the cumulative foreign investments by the GCC nations totaled about $542 billion, of which nearly $100bn was pumped into the EU. In contrast, the EU capital flow into the GCC stood at only about $2.6bn in 2006, less than one per cent of the European capital outflow.

35. EU – India Negotiations on the India-EU Comprehensive Economic Cooperation Agreement, encompassing both trade and investment, seem to have hit a roadblock with differences over the list of items which could be thrown open for trade without barriers. The EU is insisting that 90% of trade be covered. India has filed a first market access offer with the EU. The European parliament has called for the EU negotiate a free trade deal with India by the end of the year, though several members voiced concerns over human rights abuses, in particular against Christians. Negotiations were resumed during the annual India-EU summit in Paris on September 29- 30. The EU is India’s largest economic partner with trade doubling from $40.81 bn in 2003 to$78.48 dollars in 2007. The bloc exported goods worth $37.38 bn to India in 2007 while imports were $41.95 bn. EU - Israel The EU and Israel have reached a preliminary bilateral agreement on trade in agriculture and fisheries products subject to the completion of EC’s internal procedures. For agricultural, fish and fishery products, progress has been made towards the full liberalization of trade, whilst increased market access for more sensitive products such as sheep-meat, lemons, olives and soybean oil was achieved via the creation of tariff quotas and the increasing of existing duty-free quotas. For both sides, exporters will have immediate duty-free access to as high as 95% of processed agricultural products – with preferential treatment for some confectionary products, biscuits, vermouth, grape spirits and starch based glues. In terms of the time-line, the aim is for the agreement to enter into force by early 2009.The association agreement can be found at: http://www.delisr.ec.europa.eu/english/content/eu_and_country/asso_agree_en.pdf EU – Mercosur (Brazil, Argentina, Uruguay and Paraguay) In late 1995, the EU and Mercosur initiated negotiations on a bilateral free trade agreement in part as a reaction to the US’s push for a Free Trade Area of the Americas (FTAA). An agreement was initially intended to be completed in October 2004, but the talks stalled over each other’s offers. Mercosur was not satisfied with the EU’s agricultural market access offer and the EU was not satisfied with Mercosur’s offers on telecommunications and protections of European geographical indications. More recently, the talks have taken a back seat to the WTO negotiations. The two sides met in April in Brussels to discuss the state of play after which Brazil’s foreign minister said he believed the talks would make progress in the second half of 2008.

36. EU - Taiwan The European Chamber of Commerce (ECCT) had commissioned a feasibility study on the potential benefits for both Taiwan and the EU if the two sides signed a Trade Enhancement Measures Agreement. Initial findings of the study, which is now close to completion, reveal that trade enhancement measures would increase bilateral trade annually by billions of euros. This agrees with Taiwan’s Chung Hua Institution of Economic Research that showed that a trade agreement between the EU and Taiwan would boost trade and GDP for both sides. EU – Ukraine Ukraine is a priority partner country within the European Neighborhood Policy (ENP). A joint EU-Ukraine Action Plan was endorsed by the EU-Ukraine Cooperation Council on February 21, 2005. It is based on the Partnership and Co-operation Agreement (PCA) and provides a comprehensive and ambitious framework for joint work with Ukraine, in all key areas of reform. Negotiations on a new enhanced agreement with Ukraine, which is to be the successor agreement to the PCA, started in Brussels on March 5, 2007. Several negotiating rounds have since been organized, alternately in Brussels and Kiev. Free trade talks followed the finalization of Ukraine's accession to the WTO earlier in February, 2008, which was a prerequisite for the free trade negotiations. India – ASEAN (Indonesia, Malaysia, Philippines, Singapore, Thailand, Brunei Darussalam, Vietnam, Lao PDR and Myanmar, and Cambodia) India will substantially reduce duties on about 96 percent of items of the currently 30-billion-dollar trade with the ASEAN countries. The pact, which reduces or eliminates 489 existing tariff lines between various ASEAN countries and India, is scheduled to take effect on July 1, 2009. India and ASEAN sealed an agreement in August 2008 after six years of negotiations.The formal signing of the agreement is expected to be on December 18 during a summit in Bangkok.Talks between ASEAN and India on services and investment will begin next year and are scheduled for finalization by the end of 2009. Indonesia-India trade was valued at US$6.55 billion in 2007, 36 percent higher than the $4.8 billion booked the year before. India will also continue to protect textiles and chemicals, two areas of strength for the ASEAN. India has committed to cut import duties on crude palm oil (CPO) by 37.5 percent and on refined palm oil by 45 percent by 2018. Besides CPO and RPO, India has committed to lowering import duties on coffee, black tea and pepper to 45 percent, 45 percent and 50 percent, respectively, from current import duties of more than 100 percent, by 2018. India and the other ASEAN members also agreed to reduce, in their sensitive lists, 10 percent of tariff lines by 5 percent and eliminate altogether 4 percent of tariff lines by 4 percent by 2018. The ASEAN nations will be protecting its steel and automobile industries. All the countries bound in the pact — except Cambodia, Myanmar, Laos and Vietnam (CMLV) — agree to eliminate 80 percent of their tariff lines in their normal lists by 2012. CMLV are given five years longer for full implementation. For the CMLV sensitive lists, they are required to reduce 10 percent of tariff lines to five percent by 2020 and eliminate 4 percent of their lines by 2023. On the highly sensitive lists, India and ASEAN members excluding CMLV also agreed to reduce their tariff lines by up to 50 percentage points by 2018.

37. India – Canada India and Canada launched talks in April on a "high quality" FTA, with both countries agreeing on terms of reference for a feasibility study to remove all impediments to bilateral commerce. A first round of negotiations on a broad-based free tradeagreement between the EFTA States and India was held in New Delhi on 6-8 October 2008. During the first round, the talks focused on the scope and further process in the negotiations on a preferential agreement that would go beyond existing commitments under the WTO. Expert groups in particular discussed tariffs on industrial and agricultural goods, technical barriers to trade, sanitary and phytosanitary measures, rules of origin, trade in services, and intellectual property rights.  The basis for the negotiations was laid out in a joint EFTA-India feasibility study endorsed by Ministers from both sides in January 2008. The next round is expected to take place in December 2008 in Geneva. India – Chile In April, Chilean President Michelle Bachelet suggested to Indian President Pratibha Patil that the two countries further deepen their economic relationship, even if that takes the form of a Free Trade Agreement (FTA). Currently, India and Chile have a Preferential Trade Agreement implemented. India – EFTA (Iceland, Norway, Switzerland, and Liechtenstein) India and EFTA agreed to launch negotiations on a broad-based trade and investment agreement in January 2008, following recommendations of a Joint EFTA-India Study Group set up in December 2006. There would also be strong focus on implementation of intellectual property rights regime. It is most likely that the FTA will be in place by early 2009. India – Egypt Egypt announced in April that it would explore the possibility of a Free Trade Agreement with India to boost trade and investment between the two countries. Egyptian Minister of Trade and Industry, Mr Mohamed Rachid, said he would be meeting the Commerce and Industry Minister, Mr Kamal Nath to discuss the possibility. He said that the two countries need to enhance cooperation in areas of manufacturing goods, pharmaceuticals, oil and gas, mining, renewable energy, auto, construction materials and textiles.

38. India – Gulf Cooperation Council (Saudi Arabia, the UAE, Kuwait, Qatar, Oman and Bahrain) Discussions on an FTA between India and the GCC countries are expected to make a substantial progress within a year, but no deadline for the conclusion of the talks has been set. The two sides have been discussing the FTA since August 2004 when they signed a ‘Framework Agreement on Economic Cooperation’. In September, talks on the FTA made substantial progress with the two sides committing to conclude the deal as early as possible. The two sides have already exchanged draft agreements and are looking forward to an early deal signing. They also discussed export-import polices, tariff schedules and trade. The second round of talks, held after a gap of two and a half years since March 2006, showed full commitment by both sides. India is likely to seek greater safeguards for its chemicals and petrochemical industries with a view to protecting domestic players as crude price levels are very low in the GCC region. Other key issues include rules of origin and differential tariffs. India exports a variety of goods and materials to the GCC countries and mainly imports petroleum and petrochemical products, including fertilizers. Trade between India and the GCC region is growing steadily and has the potential to reach $25bn by 2010, the Association of Indian Chambers of Commerce said. Exports by India will account for $15bn while its imports will go up to $10bn. Bilateral trade is now worth $16bn. India’s exports to GCC comprise $9.4bn compared with imports at $6.9bn. Crude oil will form the major part of India’s import basket as domestic manufacturing activity is picking up, leading to higher energy demand. India – Hong Kong India and Hong Kong have reportedly initiated talks on a possible FTA in December and plan to enter into a double taxation avoidance agreement (DTAA) to promote bilateral trade and investment. India – Israel Israel has proposed an FTA with India to boost economic and bilateral ties. Israel’s deputy prime minister and Minister for Trade and Industry conveyed this during a meeting with Indian Minister of State for Trade and Industry during a high-level business delegation visit to Israel. India has said that it will actively consider Israeli proposal. The two countries had already agreed to consider a Preferential Trade Agreement (PTA), proposed by a Joint Study Group (JIGS), in December 2006. On July 3, 2008, Mr. Mark Sofe, Israeli ambassador in India, said that formal negotiations have not yet started and that there are complicated issues to solve, but he believed that an FTA will be in place in the not so distant future. He recalled that New Delhi and Tel Aviv did not even have diplomatic relations for over 40 years.

39. India – Malaysia According to Indian officials, Malaysia and India have agreed to conclude a Comprehensive Economic Partnership Agreement (CECA) by mid-2009, with another eight rounds of talks to go. The first round of talks took place in February 2008. On July 1-2, a second round was held. The third round, slated for October 13-15, will explore the agreement in detail to try to achieve a solid result on economic cooperation. In 2006, India was Malaysia’s ninth largest trading partner, ninth largest export destination and 17th largest import source. India - New Zealand During a visit to New Delhi in March, New Zealand Agriculture Minister Jim Anderton said that New Zealand would seek an FTA with India in the near future. Anderton said the India FTA would build upon existing agreements, including a recent Memorandum of Understanding between the two countries on sanitary phytosanitary issues. India and New Zealand want to complete a feasibility study for the FTA. Negotiations on the agreement could start in 2009. Hindi Minister Kamal Nath said there was scope for cooperation in a number of areas, including education, telecommunications, biotechnology and information technology. New Zealand agricultural technology, biotechnology and infrastructure engineering all have a big potential role to play in helping India lift food production, he added. India – Southern Africa Customs Union (SACU -Botswana, Lesotho, Namibia, South Africa and Swaziland) At a bilateral meeting between India and South African in New Delhi in July, 2002, a decision was made to enter into the negotiation of a Preferential Trading Arrangement (PTA) between the two countries. Subsequently, it was agreed to expand the negotiations to include the other partners of SACU in the negotiation of a more comprehensive trade agreement. A Joint Working Group (JWG) was set up to initiate negotiations on a Comprehensive Framework Agreement. The first meeting of the JWG took place in Pretoria on December 17-18, 2002 and the third meeting of the JWG took place in Windoek, Namibia on September 6-7, 2004 at which time the text of the Framework Agreement was finalized. The Framework Agreement provided for limited tariff concessions in a first stage. The intention was that it would then be expanded to a full FTA. There was no time frame agreed upon for initiating the negotiations on FTA and such negotiations have not yet begun. India – Thailand India and Thailand signed an early harvest agreement in 2003 with the intention of reaching agreement on a FTA by 2005 with full implementation by 2010. The early harvest FTA covers a common list of 84 items at the 6-digit level with the tariffs on those items phased out by March 1, 2006. The negotiations on the full FTA were slowed over differences over product coverage and were derailed after the coup in Thailand in 2006. Another effort was made to conclude the agreement by June of 2007, but, again, the effort bogged down. It now appears that India will focus its attention on an FTA with ASEAN before turning its attention back to Thailand. In the negotiations on goods, the India has agreed to eliminate tariffs on more than 4,000 products in a phased manner, while 500 others will be in the sensitive list, which will see partial duty cuts, over a period of time. Nearly 500 other items are in the negative list, which would not see any tariff cut, at all.

40. India – South Korea India and South Korea have ironed out the differences over signing a free trade agreement in goods, services and investment and have agreed to sign the pact by end of the year and would come into effect from first half of next year on a mutually agreed date. The two sides expect to finalise the formal text of the agreement by the end of next month. Issues were resolved after several rounds of negotiations for the Comprehensive Economic Partnership Agreement (CEPA) which had begun in 2006. The latest round of talks was held in Seoul on September 22-25. Bilateral trade has been growing at an average 27 percent over the last three years and was $11.2 billion in 2007. Israel – MERCOSUR (Brazil, Argentina, Uruguay and Paraguay) MERCOSUR and Israel signed an FTA on December 18, 2007. This is the first FTA entered into by MERCOSUR with a country outside Latin America. The agreement was announced on the sidelines of a two-day Summit of Heads of States of MERCOSUR held in Montevideo. It followed two years of negotiations between the two sides. The agreement will enter into force upon ratification by all parties. Uruguay was the first to ratify the agreement. In August 13, 2008, Uruguay Parliament ratified the FTA unanimously. The agreement can be found at: http://www.tamas.gov.il/ NR/exeres/F898B2EF-E863-448C-A4D8-6B2ECA6C814D.htm Japan – ASEAN (AJCEPA) (Indonesia, Malaysia, Philippines, Singapore, Thailand, Brunei Darussalam, Vietnam, Lao PDR and Myanmar, and Cambodia) In October 2003, the governments of Japan and the ASEAN nations agreed to a general framework for negotiating an FTA and the talks formally began in April 2005. The talks were concluded in November 2007, about two years sooner than had been initially anticipated. By April 2008, the FTA was signed by all of the parties. Under the accord, Japan will eliminate tariffs on 93 percent by value of imports from ASEAN within 10 years. However, sensitive products such as rice, beef and dairy products are excluded. Six major ASEAN members — Brunei, Indonesia, Malaysia, the Philippines, Singapore and Thailand — will abolish tariffs on 90 percent of imports from Japan within 10 years in terms of both value and the number of items. In October, Japan notified the Association of Southeast Asian Nations that it completed ratification of the CEPA, and the agreement will enter into force on December 1 with the ASEAN countries that have completed their domestic ratification processes. As of now, those are Singapore and Laos.The text of the agreement can be found at: http://www.mofa.go.jp/policy/economy/fta/asean/agreement.html

41. Japan - Australia The fifth negotiating round in Canberra held in early May 2008 ended with promising offers on services and investment, and progress in all areas - except agriculture. Japan rejected Australia’s request to remove a long list of barriers to imports of beef and dairy produce, declaring that these were politically sensitive issues. The next round of talks in late July will take place in Tokyo and will focus on the beef and dairy sectors, and progressively move to other sensitive products in the next and subsequent rounds. But the Japanese parliament in 2006 passed a resolution opposing any liberalization of beef, dairy, sugar, grains or rice markets as part of a free trade agreement with Australia. Japan agreed to the negotiations only after Australia allowed the US to exempt from the Australia-US FTA politically sensitive areas such as sugar, shipbuilding and textiles. The sixth round of negotiations was held in Tokyo from July 28 to August 1, 2008. The session on trade in goods chapter was brief, pending the advancement of market access negotiations that may lead to substantial discussions at the next round. This round is scheduled for late October, in Canberra. One of Japan’s primary goals in the negotiation is a written assurance from Australia on a stable supply of natural resources, particularly natural gas. This FTA would be Japan’s first with a major agricultural exporter. Japan – Brunei (JBEPA) Japan and Brunei signed a Economic Partnership Agreement (EPA) in June 2007 aimed at cutting tariffs and ensuring a stable supply of natural gas to Japan. The EPA will enter into force on July 31, 2008. Under the agreement, Brunei will notify Japan in advance if it introduces any measure to restrict exports of natural gas and also requires Brunei to abolish a 20-percent tariff on automobiles and auto parts from Japan within three years of the implementation of the agreement. Japan will eliminate tariffs on tropical fruits such as mangos immediately after the accord is put into effect. It will also gradually abolish tariffs on imports of other agriculture and forestry products. The text of the agreement can be found at: http://www.mofa.go.jp/region/asia-paci/brunei/epa0706/index.html Japan – Chile Japan and Chile reached agreement on a free trade deal in April 2007 and it took effect on September 3 of that year. The talks began in 2006. Chile is the first South American country to reach a free-trade accord with Japan. The FTA gives duty-free access to Japan for about 70 percent of goods exported by Chile. Japan will enjoy similar rights for around 90 percent of its exports to Chile. The text of the agreement can be found at: http://www.mofa.go.jp/policy/economy/fta/chile.html Japan – Gulf Cooperation Council (Saudi Arabia, the UAE, Kuwait, Qatar, Oman and Bahrain) Japan launched FTA negotiations with the GCC in September 2006 and has held one additional negotiating session since then, in January 2007. No further talks have been held, but during a visit to the region in May 2007 Prime Minister Abe and leaders of Saudi Arabia, the UAE, Kuwait and Qatar agreed to seek a successful conclusion of FTA negotiations at the earliest possible date. Japan wants the proposed FTA to contain the GCC’s pledge to ensure stable energy supplies to Japan. Over the past two decades, Japan has remained the GCC's top trading partner and the largest importer of Gulf oil.

42. Japan – India (CEPA) Japan and India began negotiations on a Comprehensive Economic Partnership Agreement (CEPA) in January 2007. The initial intention was to conclude a free trade agreement under this process in 2009. However, in December 2007 the two sides agreed to advance the conclusion of the FTA to mid-2008, at least six months ahead of previous target. The Hindi government has asked the industry to come up with an ‘offensive’ list of items of export interest to India in the Japanese market. Indian officials say they are committed to gaining market access by trying to set up a separate forum with Japan on non-tariff issues.The eighth round of negotiations was held from July 14- 17 in Tokyo where it was discussed market access of trade in goods. Talks between the two countries in Tokyo October hit a roadblock as Japanese trade negotiators were reportedly unwilling to grant market access to Indian pharmaceuticals and allow professionals, including nurses, to work in the that country. The Japanese side, sources said, was also unwilling to commit on allowing Indian banks to open branches. Japan – Indonesia (JIEPA) Japan and Indonesia entered into formal negotiations on a bilateral free trade and economic agreement in July 2006. The agreement was concluded in late 2006 and was signed on August 20, 2007. Tariff-free trade will reach 92% (by value) under the terms of the agreement. Indonesia is committed to eliminating about 93% of its 11,163 tariffs on Japanese goods, with 58% of these cut immediately upon implementation. Japan, for its part, will remove more than 90% of its 9,275 tariffs on Indonesian products, with 80% of these having been removed with implementation on July 1. These cover all of Indonesia’s main exports such as textiles, footwear, plywood, tropical fruits and fishery products. Japan will also almost completely eliminate tariffs on Indonesian industrial products. It is anticipated that bilateral trade will increase to an estimated $65 billion by 2010. The text of the agreement can be found at: http://www.mofa.go.jp/region/asia-paci/indonesia/epa0708/index.html Japan – Israel Israel’s Prime Minister, Ehud Olmert, met Japanese Minister of Economy, Trade and Industry, Akira Amari, in February to attempt to reach a bilateral economic cooperation agreement that would include a free-trade agreement. If an agreement is signed, it would include a range of goods involved in bilateral trade, and, according to reports, possibly exempt Israel from agricultural quotas. Japan – New Zealand New Zealand and Japan agreed on May 14, 2008 to undertake a study on the benefits of a closer economic partnership. A “closer economic partnership agreement” is a term used by Japan to describe its trade deals. New Zealand has been trying to convince Japan to undertake such a study for some time, but Japan, because of import sensitivities in agriculture has previously resisted the idea. Helen Clark, Prime Minister of New Zealand, has said that she believes the impact of the international food crisis has led Japan to look to secure its supply chains through bilateral free trade agreements.

43. Japan – Pakistan A Joint Study Group (JSG) between Pakistanand Japan considering the feasibility of Free Trade Agreement between Islamabad and Tokyo will submit its final report to the two governments by the end of November 2008.The Draft Report, which would include a "meaningful" roadmap on increasing Japanese investment in Pakistan and exports from Islamabad to Tokyo. Japan – Philippines (JPEPA) Japan and the Philippines reached a basic political agreement on a bilateral FTA — the Japan-Philippines Economic Partnership Agreement or "JPEPA" — on 29 November 2004, but the final agreement took almost two additional years to complete due to a number of thorny issues. The most serious of these was the number of Philippine nurses that would be allowed to work in Japan. The agreement was finally signed on September 9, 2006 and was expected go into effect before the end of 2007. However, an uproar developed in the Philippines over whether and how the FTA would encourage imports of toxic wastes from Japan and this has raised questions about its ratification. Since then additional concerns have been raised by activists opposed to the FTA, including the affect the agreement would have on Philippine fishermen. An attempt to obtain ratification from the Philippine congress may be made in August. The Japanese Parliament has already ratified the agreement. Under the agreement, Japan agreed to lower tariffs on pineapples and bananas from the Philippines, while rice and sugar were left untouched. The text of the agreement can be found at: http://www.mofa.go.jp/region/asia-paci/philippine/epa0609/index.html Japan – Switzerland Japan and Switzerland kicked off negotiations on a free-trade agreement (FTA) to eliminate import tariffs on almost all goods in May 2007. There have been a total of seven rounds of talks, the latest held in Tokyo from June 23-27, 2008. On September 29, Japan and Switzerland reached an agreement in principle on an economic partnership agreement, which would be the first comprehensive free trade agreement between Japan and a European country. The so-called Japan and the Swiss Confederation Free Trade and Economic Partnership Agreement (JSFTEPA) covers the broadest business-related transactions between the two countries, not just trade in goods and services but also rules of origin; customs procedures and trade facilitation; trade in services and movement of natural persons; investment; intellectual property; government procurement; competition policy; electric commerce and promotion of closer economic relations. The joint announcement said the two countries will eliminate or reduce tariffs on industrial, agricultural, forestry, and fishery products comprehensively and that the agreement contains provisions on non-tariff measures. An official of the Foreign Ministry's Economic Partnership Division said 99 percent of products in bilateral trade will be subject to tariff elimination or deep tariff cuts.

44. Japan – Thailand Japan and Thailand signed an FTA in April 2007 and it took effect on November 1. The agreement had been concluded in early 2006, but the official signing was delayed because of the political turmoil in Thailand that led to the September 19 military coup. Under the FTA, about 97 percent of Japanese exports to Thailand and 92 percent of Thai exports to Japan will be tariff-free within 10 years. Japan will eliminate tariffs on Thai shrimp and tropical fruit such as mangos, but will maintain protection on rice. Thailand will reduce tariffs on certain automobiles and will eventually eliminate all tariffs on steel imports from Japan. Information on the agreement can be found at: http://www.mofa.go.jp/policy/economy/fta/thailand.html Japan – Vietnam The Japan-Vietnam EPA negotiations were initiated in October 2006. After the ninth round, Japan called for a basic deal with Vietnam to conclude negotiations in September 29, 2008. Vietnam, the largest exporter of shrimps to Japan, was calling for duty-free market access to clothing, seafood and farm products. After the accord comes into effect as early as next year, about 92 percent of Japan-Vietnam bilateral trade in value will be duty-free in 10 years while tax rates imposed on some Vietnamese goods like garments and textiles will be reduced immediately. One of the benefits that Japan will enjoy under the EPA is that its steel products, spare parts and materials will attract lower tax rates. Moreover, it will be easier for products made by Japanese businesses in Vietnam to penetrate other Asian markets - Myanmar, Laos, Cambodia and India. For Vietnam, this will be its first concluded bilateral free trade agreement. Japan-Vietnam trade value totaled $12.26 billion in 2007, of which exports from Japan to the fast-growing country accounted for $6.12 billion, up 17.4 percent from the previous year. Korea – ASEAN (Indonesia, Malaysia, Philippines, Singapore, Thailand, Brunei Darussalam, Vietnam, Lao PDR and Myanmar, and Cambodia) AKFTA Negotiations on an FTA between Korea and ASEAN were begun in early 2005 and at the end of that year a Framework Agreement on Comprehensive Economic Cooperation between the two sides was signed. That agreement provided for the negotiation of several specific agreements, including ones on trade in goods, services and investment. The free trade agreement on goods was concluded in 2006 and took effect on June 1, 2007 between South Korea and five of the ASEAN member countries (Vietnam, Myanmar, Singapore, Malaysia and Indonesia). Four of the remaining five members (Brunei, the Philippines, Cambodia and Laos) were still in the process of obtaining the ratification of the deal, which was subsequently accomplished later that year. The final member, Thailand, stayed out of the agreement due to differences over the refusal of Korea to open its rice market, but in January 2008 reached agreement with Korea that provided other concessions in lieu of rice. Under the FTA, Korea and ASEAN will liberalize merchandise trade between the two sides by 2010. Korea will abolish tariffs on 4,742 items by 2010. Of the items on which tariffs are to be abolished, immediately eliminated tariffs on about 70 percent of them. The legal text and a summary of AKFTA commitments can be found at: http://www.iesingapore.gov.sg

45. Korea – Australia In December 2006, Australia and the Republic of Korea agreed to commence a joint non-government study to examine the merits of a bilateral free trade agreement (FTA). The study was undertaken by Melbourne-based trade consultancy, ITS Global, and the Korea Institute for International Economic Policy. It examined the effects of trade liberalization under an FTA and reviewed existing barriers to goods and services trade and investment. The report found that both Australia and Korea stand to gain from an FTA. On May 7, 2008 top Australian diplomat Smith during a visit to Seoul stated that on the economic front, completing a free trade agreement with South Korea is among Australia’s highest priorities. South Korea is Australia’s fourth largest trading partner and it is the third largest source of overseas students for Australia. The two sides released a joint non-government FTA study last April, which found that an FTA could boost South Korea’s gross domestic product by up to $26.9 billion between 2007 and 2020, and Australia’s by $22.7 billion. In August 2008, Australian Prime Minister Kevin Rudd has reached agreement with South Korean President Lee Myung-Bak to open preparatory talks. The two leaders welcomed the findings of a joint study on the FTA. Korea – Canada Canada and Korea met for a thirteenth round of negotiations in Ottawa, March 25-28, 2008, with progress achieved in several areas, and in particular on goods market access issues. Negotiations are now well advanced, but resolving the remaining sensitive issues will be challenging. Canada is seeking comprehensive tariff elimination for all its commercially significant exports and is working to address Canadian stakeholder concerns in respect of Korean non-tariff measures. Korea – China A Korea-China FTA joint study meeting was launched in 2007 with the aim of reviewing the feasibility of a free trade agreement between the two countries. The second round of the joint study meetings was held in September in Seoul and a third round was held in October in Beijing. Korean officials indicated last year that it is too early to discuss a launch date for negotiations. Korea – EU Korea and the EU held their 7th round of free trade talks in Belgium May 12-15, 2008, and concluded that they are ready to complete talks on a free trade agreement later in 2008. The next round of talks are planned for November in Brussels. The two sides began talks last May and have held seven rounds so far. Remaining sticking points reportedly include tariffs on goods, auto regulations and rules of origin. Korea would apply zero tariffs within three years for 72% of EU merchandises, compared to a previous offer of 68%. However, the EU still considers such offer to be less attractive than that in Korea-US agreement.

46. Korea – India Korea and India have been negotiating a Comprehensive Economic Partnership Agreement (CEPA) for over two years. A CEPA between the two was first proposed by Korean President Roh Moo-hyun during his visit to India in October 2004. Both countries have held six rounds of negotiations, but the pact was held up due to disputes over rules of origin, services and agricultural trade. In September, the two sides announced that remaining issues had been resolved and they expected to conclude the deal by the end of 2008. The two countries agreed at a summit meeting in February 2006 to conclude the CEPA negotiations by the end of 2008. Korea – Japan Korea and Japan have agreed to resume negotiations on an FTA, which have been suspended for three and a half years. However, the prospect for the negotiations is still in question. Korea and Japan took their first step toward FTA talks in November 1998. Between 2002 and 2003, the two sides held eight rounds of discussions with government officials, industry executives and professors, and official negotiations were launched in December 2003. The talks have been stalled since the sixth round in November 2004 because of differences in the scale of market opening for Japan’s farm and fisheries products. Agreement on the resumption of FTA talks was mainly initiated by Japan. Korea has been cautious about resuming the talks because of concern about the degree to which Japan is willing to open its agricultural market. Korea sees that an FTA with Japan could benefit its farmers, who have been damaged by a series of free trade deals with other nations. When the 2004 talks failed, Japan said it would open 56 percent of its agricultural market, while Korea requested an opening of more than 90 percent. Korea – Mexico Korea and Mexico began talks on a Strategic Economic Complementation Agreement in February 2006, but were unable to agree to proceed with a free trade agreement because of differences over the level of ambition on market access. In August 2007, the two sides agreed to resume the negotiations on a full free trade agreement. Senior officials from the two sides held several rounds of talks leading up to the August decision and had reached agreement to achieve a higher level of trade liberalization in all sectors. The first negotiating session was held in December 2007 in Mexico City. The two sides were reportedly immediately at odds over safeguards for farm goods. They also touched on sanitary and phytosanitary regulations for meat, as well as rules of origin and geographical identification of farm goods. A second round of talks was planned for March 2008 in Seoul, but there have been no reports that it took place. Both countries were also supposed to exchange their first proposals sometime in May 2008. Currently, around 92% of Korea’s exports to Mexico enter Mexico duty free because they are capital or intermediate products. In contrast, Korea charge taxes to around 20% for Mexican exports.

47. Korea – New Zealand New Zealand plans to hold exploratory free trade talks in Korea in May. A joint New Zealand-Korea feasibility study reported earlier this year that a free trade agreement between the two countries would "bring substantial economic benefits" to both nations. Work toward a bilateral trade deal began at the suggestion of Korean President Kim Dae-jung when he visited New Zealand in 1999. Korea – Peru Korea and Peru agreed in September 2007 to launch discussions on forming a free trade agreement during a meeting between Korean President Roh Moo-hyun and Peruvian President Alan Garcia on the margins of the APEC forum summit. The feasibility study for an agreement between the two countries was finished in June 2008. The beginning of negotiations will be announced during the APEC leaders meeting in November 2008. Korea -Pakistan Pakistan and Korea have announced that they will explore the possibility of concluding a Free Trade Agreement (FTA). This was agreed during the Seventh Round of Bilateral Policy Consultations between the two countries in late August. According to a Pakistan foreign office statement, the two sides reviewed the entire gamut of bilateral relations and expressed satisfaction over their growth since the establishment of diplomatic ties in 1983. It was noted that bilateral trade between the two countries had increased eight times since 1983 and is now more than $1 billion. The Pakistani side raised the issue of the trade imbalance and the requirements in Korea for imports of Pakistani fruits and vegetables. It also identified energy, agriculture, fisheries, textiles, leather, IT, telecommunications and infrastructure development as possible areas for joint ventures and investments. Mexico – MERCOSUR (Brazil, Argentina, Uruguay and Paraguay) Mexico and the Mercosur countries have discussed Mexico joining the organization for at least two years. Mexico currently participates in Mercosur meetings as an observer through an Economic Complementation Agreement (ACE No. 54) into force since January 5, 2006. Argentina’s president raised the possibility of membership for Mexico during a state visit to Mexico in 2007. However, to date there have been no formal discussions or negotiations toward an agreement.

48. Pakistan – Afghanistan Pakistan and Afghanistan announced in March that they have completed negotiations on a comprehensive free trade agreement. Pakistan – Indonesia Pakistan and Indonesia announced in August their intention to begin negotiations toward a free trade agreement, which would help in raising the volume of bilateral trade up to one billion dollars mark. Both countries have already signed the Comprehensive Economic Partnership (CEP) and now the negotiations are underway to sign a FTA. Trade figures between both countries have significantly increased mostly in favor of Indonesia. In 2007, trade volume between Indonesia and Pakistan reached 919.46 million dollars, whereas the export value of Indonesia to Pakistan was 846.62 million dollars. Similarly, Indonesia import from Pakistan was 72.84 million dollars. Indonesia’s market potential accounts for 225 million people, while Pakistan 160 million people. Pakistan – Mauritius Pakistan and Mauritius agreed on a Preferential Trade Agreement (PTA) last year and it came into force on November 30, 2007. At a meeting of a Joint Working Group in May, the two countries agreed to move to a full free trade agreement within 18 months to boost South-South trade. The FTA would go beyond trade in goods and encompass trade in services and trade-related investment. Panama – Guatemala Panama and Guatemala signed a free trade agreement in February after nine rounds of negotiations. The agreement will come into force by the end of 2008. Panama’s Commerce and Industry Minister Alejandro Ferrer said that the agreement, which still requires the ratification of the two countries’ legislatures, will help Panama expand its trade not only with Guatemala but with the whole of Central America. After the accord comes into effect, 93 percent of Panama’s exports to Guatemala and 80 percent in the reverse direction will be tariff-free, according to a communication released by Panama’s Ministry of Commerce and Industry. Peru – EFTA (Iceland, Norway, Switzerland, and Liechtenstein) The negotiations on the EFTA-Peru FTA were launched in Lima June 4-8, 2007. Three additional rounds of talks have been held since then, one in late August 2007, the next from October 28 to November 3 n Geneva, and the fourth in April 2008 in Bogota. Chapters that have been reportedly completed include, Competition Policies, Strengthening of Trade Capacities (Cooperation), and Phytosanitary and Sanitary Measures. FTA negotiations are expected to conclude by the end of 2008.

49. Peru – Singapore (PesFTA) On May 29, Peru and Singapore signed a bilateral free trade agreement. The negotiations were launched in November 2004 and after five rounds of talks were concluded in August 29, 2007. The agreement is comprehensive, covering 100% of goods trade between the two countries. Over 87 percent of Singapore’s total exports to Peru will benefit from duty free treatment immediately upon entry into force of the FTA. Tariffs for the rest of the goods currently exported by Singapore to Peru will be phased out over a 10 year period. All Peruvian exports will be granted tariff-free access to Singapore immediately. This FTA is the second bilateral FTA between Singapore and a South American country. The agreement is expected to enter into force in early 2009. The full text of the agreement can be found at: http://www.iesingapore.gov.sg Peru - Chile Chile and Peru signed a free trade agreement on August 22, 2006 and was ratified by the Chilean government in July 3, 2008. This agreement replaces the text, annexes and protocols of the Economic Complementation Agreement Nº 38, which was signed on June 22, 1998 and entered into force on July 1, 1998. The FTA includes chapters on investment, services and customs procedures, and competition policies, among others. In 2004, Chile and Peru initiated talks to renegotiate this agreement with a view to deepening their trade relations. On February 17, 2005 the Second Protocol to ACE 38 provided for the shortening of the tariff reduction period originally set out in the agreement. The text of the agreement can be found at: http://www.sice.oas.org/TPD/CHL_PER/CHL_PER_e.ASP Peru - Mexico Mexico and Peru are negotiating an FTA that will replace their Economic Complementation Agreement – ACE No. 8, which entered into forced on March 25, 1987. Peru’s list of sensitieve agricultural products includes a total of 75 tariff sub-codes of bovine and poultry meat, dairy products and sugar. Mexico’s initial offer excluded products that are of Peru’s interest, such as onions, garlic, beans, asparagus, paprika, grapes, potato, coffee, cocoa, artichoke, avocado, banana, etc. For the following eight round both countries have agreed to improve their offer list of agricultural products in early November. The hope is that the conclusion of the negotiations will be announced during the XVI Forum of Asia-Pacific Economic Cooperation (APEC) to be hold in Lima in November 22-23, 2008.

50. Taiwan – Dominican Republic (DR) Negotiations of a free trade agreement between both countries started in October 2006. The FTA will focus among others, on subjects relative to access to markets, services, investment and commerce and would “remarkably" increase Taiwanese investments in the country, while the Asian nation would receive Dominican products as cacao, tobacco products and coffee. In addition, the treaty would offer greater opportunities to both nations to accede the United States market. Bilateral commerce between Dominican Republic and Taiwan reached near 200 million dollars during 2005. A date for the free trade deal between both nations to take effect hasn’t been established yet, but it was reported in August that Taiwan president Ying Jeou Ma said he’s interested in accelerating talks. Taiwan – Honduras – El Salvador On July 15, 2008 the governments of Republic of China - Taiwan, El Salvador and Honduras signed the Certificate of Ratification to officially make the FTA come to effect. The negotiations started in May 2006, and concluded in November 2006 after four rounds of intensive negotiations. The agreement was signed on May 8, 2007 in San Salvador. Taiwan’s economy is complementary to those of El Salvador and Honduras, being Taiwan strong in agro-processed goods and industrial products.Under the agreement with Honduras, Taiwan will grant tariff exemption to 6,135 import products from Honduras while Honduras will exempt tariffs on 3,881 Taiwanese products. The text of the agreement can be found at: http://www.sice.oas.org/Trade/SLV-HND_TWN_FTA_s/Index_s.asp (in Spanish for Honduras and in English for Taiwan schedules) Taiwan – Singapore Taiwan’s newly elected president, Ma Ying-jeou, has expressed his wish to resume talks on a free trade agreement (FTA) with Singapore under the name the island uses at the World Trade Organization (WTO). Taiwan joined the WTO in 2002 under the name "Taiwan, Penghu, Kinmen and Matsu Customs Territory. Taiwan’s FTA discussions with Singapore, which started after Chen Shui-bian’s election as president in 2000, stalled when he insisted on signing the FTA as a political entity. To date, Taiwan has no FTA with any leading trade nation. Singaporean Minister Mentor Lee Kuan Yew expressed that Singapore’s position is that Singapore-Taiwan relations should not develop faster than Taiwan’s ties with China. Singapore – Gulf Cooperation Council (Saudi Arabia, the UAE, Kuwait, Qatar, Oman and Bahrain) Singapore concluded negotiations with the six-nation Gulf Cooperation Council (GCC) for a FTA. The final round of talks, held from January 28 through Thursday, was the last of four that started in January 2007. The GCC-Singapore free trade agreement (GSFTA) covers such areas as "trade in goods, trade in services including financial, e- commerce, government procurement, customs and cooperation. It is the first FTA concluded by the GCC outside the Middle East and the second that the city-state signs with Middle Eastern economies. Under the pact, goods from Singapore and the GCC will gain duty- free access into each other’s markets.