EU trade agreements and future trade and investment agenda
FTAs are major catalysts in opening markets and increasing exports. While only less than a quarter of EU trade was covered by FTAs before 2006, currently this figure is more than 35% and could reach two thirds if all ongoing negotiations are concluded. This is by far the most ambitious trade agenda in the world today.
In the past few years, EU has negotiated landmark agreements with Canada and Japan. The EU-Canada Comprehensive Economic and Trade Agreement (CETA) was signed on 30 October 2016 and provisionally entered into force on 21 September 2017. The EU and Japan's Economic Partnership Agreement was signed on 17 July 2018 and entered into force on 1 February 2019.
The EU and Singapore signed trade and investment agreements on 19 October 2018 and application of FTA is planned by the end of 2019. Trade and Investment Protection agreements with Vietnam were signed on 30 June 2019 and application of Trade Agreement is expected in 2020.
On 28 June 2019, The EU became the first one to reach an “agreement in principle” on FTA with MERCOSUR region (Brazil, Argentina, Uruguay, Paraguay). Moreover, the "agreement in principle" on the trade part of a modernized EU-Mexico Global Agreement was reached on 21 April 2018.
In June 2018, the EU started FTA negotiations with Australia and New Zealand. The EU’s negotiating agenda also covers Chile, Tunisia and several ASEAN countries – such as Indonesia, Philippines and Thailand. The negotiations with China for a comprehensive investment agreement are also ongoing.
The EU’s first ever trade deal with an Asian country was FTA with South Korea which provisionally entered into force in 2011 and was formally ratified in 2015. The EU has also signed and implemented FTAs with six countries of Central America (Honduras, Nicaragua, Panama, El Salvador, Guatemala) as well as with three Andean Community countries (Peru, Colombia, Ecuador).
The EU also has Deep and Comprehensive Free Trade Agreements (DFCTAs) with three Eastern Neighborhood countries: Ukraine, Moldova and Georgia. According to DFCTAs, Eastern neighbors not only cut tariffs, but also harmonize many of EU’s norms and standards in industrial and agricultural products.
Ensuring fair trade rules
The World Trade Organization (WTO) is made of governments and customs territories that set global legal rules for trade between themselves through international trade negotiations. The WTO rules ensure open and fair international trade so it is vital that they are respected. In case of possible breaches, European interests are represented and defended in the court system of the World Trade Organisation to ensure that WTO obligations are met.
The EU also ensures fair competition in its market. Trade defence measures prevents unfair injury to European companies and their workers. Foreign direct investment screening framework provides an instrument to identify, assess and mitigate potential risks for security or public order.
EU trade policy aims to open new markets for European exporters, workers and investors through lifting barriers to the markets of our trading partners. The EU works closely with countries outside Europe to:
- remove trade barriers in third countries
- increase the opportunities for EU businesses to get equal access to procurement markets outside the EU
- reduce counterfeiting and piracy of European goods
- open up new opportunities for European investment
Lithuania in the EU trade policy
Lithuania is highly dependent on foreign trade due to the large exporting industrial and agricultural sectors with almost a one-third of exports going to non-EU countries. Therefore, Lithuania seeks that the rules of international trade, set in WTO agreements, would be smoothly implemented and their review in the negotiations would contribute to the strengthening of the multilateral trade system. The European Commission represents the EU in most WTO meetings after having consulted EU Member States. However, all EU Member States are full WTO Members and can be elected as a Chair of various WTO bodies. Lithuania has been a member of WTO since 31 May 2001 and has held chairmanship of the WTO Committee on Customs Valuation, Committee on Subsidies and Countervailing Measures, Committee on Balance-of-Payments Restrictions, Committee on Budget, Finance and Administration and Committee on Trade facilitation. Lithuania’s membership in WTO is coordinated by the Ministry of Foreign Affairs.
Lithuania is also a strong supporter of EU‘s trade and investment policy serving business and society, strengthening its industry and boosting growth, competitiveness and employment within the EU. Lithuania has an interest in open and fair trade policy which ensures level playing field both in the EU market and in third countries. The European Commission negotiates with the trading partners on behalf of the EU working closely with the Member States in the EU Council and keeping the European Parliament fully informed. The Council sets out the general objectives to be achieved in the negotiations before giving the Commission an authorization to negotiate a trade agreement. Ministry of Foreign Affairs is responsible for the coordination and representation of Lithuanian trade policy in the EU Council, committees and working groups. During the process of negotiations, the Commission reports regularly to the Council and the European Parliament. Once the negotiations have been completed, the Commission presents the deal to the Council and the European Parliament which then have to agree to the negotiated outcome and prepare the way for signature and ratification of the deal.
The Market Access Database (MADB) gives information to companies exporting from the EU about import conditions in third country markets, such as tariffs, procedures and formalities, statistics, trade barriers, sanitary and phytosanitary (SPS) issues, rules of origin and services for small and medium enterprises (SME).
The EU Tariff section from the Market Access Database provides information on EU tariffs and other import measures applied to a given product imported into the EU.