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Deep and C omprehensive F ree T rade A reas with Eastern Partnership C ountries Presentation at the European Security and Defen c e College by Ewa Synowiec, Head of the European Commission Representation Warsaw, 10 March 2011. A BASIS FOR NEW GENERATION OF FREE TRADE AGREEMENTS.

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A basis for new generation of free trade agreements

Deep and Comprehensive Free Trade Areas with Eastern Partnership CountriesPresentation atthe European Security and Defence College by Ewa Synowiec, Head of the European Commission RepresentationWarsaw, 10 March 2011

A basis for new generation of free trade agreements


Commission Communications:

Global Europe: Competing in the World(October 2006)

Eastern Partnership(December 2008)

Trade, Growth and World Affairs

(November 2010)

A basis for new generation of free trade agreements

New generation: deep and comprehensive free trade agreements

  • A stronger engagement in FTAs with major emerging economies/regions and neighborhood countries

  • Broader scope & sharper focus on behind the border barriers to trade (regulatory issues)

    - Technical, sanitary and phyto-sanitary regulations

    - Services and investments

    - Customs and trade facilitation

    - Intellectual property rights (IPR)

    - Public procurement

    - Competition (State aid, antitrust)

    - Trade related energy issues

    - Trade and sustainable development

Eu eastern partnership countries

EU - Eastern Partnership countries

Current legal framework for trade relations

  • WTO rules

  • Non-preferential Partnership and Cooperation Agreements concluded in the 1990s

  • General System of Preferences (or GSP+) 2009-2011(Autonomous Trade Preferences (ATP) for Moldova)

  • ENP Action Plans(Association Agenda for Ukraine)+ Eastern Partnership actions/instruments

  • In future: Association Agreementswith deep and comprehensive free trade areas (PCA+ & WTO+) →political association + economic integration

Association agreements aa

Association Agreements (AA)

Deep and comprehensive free trade area

as a core economic part of AA

  • Should be in full compliance with WTO rules (art. XXIV GATT):

    - to cover substantially all trade in goods (at least 95% of trade value & tariff lines);

    - no sectors excluded (even if coverage is met);

    - reasonable transitional periods;

    - maximum front loading as concerns tariff liberalization;

    - neutrality towards 3rd countries (no increase in barriers)

D c free trade area

D&C Free Trade Area

  • Regulatory approximationin trade related areas as a crucial component of FTA:

    - law harmonization

    - law implementation

    - law enforcement

    - institutional capacity building

  • Regulatory approximation as a pre-condition for market opening

D c free trade area1

D&C Free Trade Area

Regulatory approximation:

  • gradual but focused(priorities!)

  • triggering short to medium term adjustment costs for:

    - public administration,

    - business community

  • in the form of binding provisions & cooperation provisions

  • monitoringof implementation & enforcement + problem solving(dispute settlement)

D c free trade area2

D&C Free Trade Area

Free movement of goods

  • Trade in goods

  • Rules of origin

  • Trade Defence Instruments

  • Technical regulations on industrial products, standards & conformity assessment procedures; market surveillance

  • Sanitary & phytosanitary measures

  • Trade facilitation & customs

  • Anti-fraud measures/customs cooperation

D c free trade area3

D&C Free Trade Area

Services and investment

  • Freedom to provide services

  • Right of establishment(liberalized with only small amount of exclusions)and self-employment without a possibility to look for a job at EU market

  • Movement of workers (key personnel; self-employed)

  • Recognition of qualifications

  • Capital movement & payments

  • Full regulatory approximation as a precondition for opening of the EU market (e.g. financial services!)

D c free trade area4

D&C Free Trade Area

Institutional provisions

  • Dispute settlement/mediation mechanism (WTO-like; specific for disputes related to regulatory approximationandenergy)

  • Institutional bodies

  • Advanced implementationwithout waiting for full ratification (Interim Agreement)

D c free trade area5

D&C Free Trade Area

Stages needed to embark

on the negotiationprocess

  • WTOmembership (for Belarus and Azerbaijanstill pending)

  • Results and recommendation of the FTA feasibility study

  • Shared objective by the partner country to negotiate deep and comprehensive FTA

  • Present ability to negotiate, implement and sustain the ambitious FTA

  • Preparatory process supported by the EU(„key recommendations”related to the crucial reformsas a follow up of the Commission’s fact-finding missions, prepared by the COM and endorsed by EU Member States and partner country)

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