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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

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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)


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

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)

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

  • 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 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 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 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 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 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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