BILATERAL TRADE NEGOTIATIONS: STATE OF PLAY

Transcription

1 CIVIL SOCIETY MEETING BILATERAL TRADE NEGOTIATIONS: STATE OF PLAY Date: 10 November 2011 Time: 10:00 12:00 Location: Centre Albert Borschette, room AB.0B, 36, rue Froissart, 1040 Brussels Lead Participants Mr Georg Roebling, Deputy Chief Negotiator for FTA Negotiations with Singapore, Directorate General for Trade Mr Kristofer du Rietz, Policy Co-ordinator, Trade Relations with North America, Directorate General for Trade Ms Claudia Weiss, Policy Co-ordinator, Trade Relations with South Asia, Korea and ASEAN, Directorate General for Trade Mr Juan Ramon Calaf Sole, Policy Co-ordinator, Trade Relations with South Asia, Korea and ASEAN, Directorate General for Trade Ms Maaike Hofman, Policy Co-ordinator, Trade Relations with South Asia, Korea and ASEAN, Directorate General for Trade Mr Jan Schmitz, Trade negotiator Economic and Trade Affairs Manager, Trade in Services and Investment, Directorate General for Trade Moderator Ms Ramona Samson, Co-ordinator Relations with Civil Society, Directorate-General for Trade Panel Presentations EU-Singapore FTA DG Trade (GR) recalled that following the pause in negotiations on an FTA with ASEAN at the regional level, Singapore was the region's first country with which bilateral FTA negotiations had been launched. At the stock-taking meeting at ministerial level in May this year, it was confirmed that good progress had been achieved so far and Ministers agreed to intensify negotiations. The eighth negotiating round was held in October. On substance, a good outcome on services was a priority. The Commission was pushing for improved protection of geographical indications (GI). The EU also sought a good result on government procurement. With regard to sanitary and phyto-sanitary (SPS) rules, efforts were made to facilitate exports by European meat exporters to Singapore. On rules of origin (RoO) provisions, the Commission was seeking to achieve as uniform as possible rules throughout the different FTAs with ASEAN countries. European Commission 1/8

2 Finally, the innovative chapter on Sustainable Development (SD) in the EU-South Korea FTA was also an inspiration for discussions with Singapore. A satisfactory outcome in this area was of particular importance. Discussion Highlights / Questions and Replies IFAW referred to the SD chapter and wanted to know the outcome of discussions. DG Trade (GR) informed that the chapter's main elements related to environmental as well as social standards, each of them including references to international conventions. A third pillar provided for civil society involvement. It should also be taken into account that the Partnership and Cooperation Agreement between the EU and Singapore, which was being negotiated in parallel under the lead of the European External Action Service, was set to offer additional avenues for discussions between the Parties in this area. EUROTHON enquired whether the route the EU would take on RoO would be similar to the one in the FTA with South Korea. In addition, clarifications were requested on the relationship between the RoO provisions in the FTA and those under the GSP scheme. DG Trade (GR) confirmed that the EU followed a similar approach to RoO as adopted in the South Korea agreement. Referring to the second question, he explained that at present Singaporean exporters did not benefit from the EU's GSP scheme. EUCOLAIT asked whether under the Singapore FTA, invoice declaration was the only acceptable proof of preferential origin as it was already the case in the EU-South Korea FTA. DG Trade (GR) indicated that this was the approach the EU was about to take. Japan Machinery Center wanted to have information on the negotiations of provisions on intellectual property rights (IPR) and investment protection (IP). DG Trade (GR) answered that due to the structure of the Singaporean economy, which was aiming for the development of an innovative industry, it was important for Singapore to achieve high standards of IPR protection. Therefore, there was a mutual interest to have a good outcome on this chapter. As to IP, negotiations had just started and the Commission was in consultations with EU Member States (MS) to find consensus on a satisfying outcome. Concerning the IPR chapter, IFPI requested that the EU should give equal importance to commit the partner to compliance with international conventions. DG Trade (GR) recalled that a number of international conventions in the IPR field were only signed by some countries and there was no obligation for all to sign. Eurocommerce wondered what happened if one MS had better conditions under its bilateral IP agreement than it would under the new FTA. DG Trade (GR) admitted that this question was still under discussion inside the EU. ESSU enquired how EU citizens would benefit from the FTA with Singapore. DG Trade (GR) explained that the FTA was the first step towards improving access for European exporters to the fast-growing, emerging markets in the ASEAN region. European Commission 2/8

3 Gdynia Cotton Association expressed the concern that through the FTA, Singapore might become a channel for cheap textile imports from other ASEAN countries. DG Trade (GR) informed that this was not the case since RoO in the textile sector were very strict and ensured that only textiles to which a value was added in Singapore would classify as "Singaporean products" and thus benefit under the FTA. On the contrary, the FTA preferences would not apply to products that only passed through the country for logistical reasons but originated in another country. CETA EU-Canada DG Trade (KdR) informed that negotiations of a Comprehensive Economic and Trade Agreement (CETA) with Canada had been launched in 2009 and that 9 rounds had been held so far. Meanwhile, this ambitious agreement was taking shape and DG Trade was confident that it would boost trade flows. An agreement between the EU and Canada would be a wide-reaching FTA, including chapters on IPR, public procurement (PP), competition, mode 4 and SD. On process, the EU estimated that there was a fair chance for conclusion next year. Turning to specific issues it had so far been difficult to find common ground on the SD chapter. Canada was less keen than the EU but the EU was positive to achieve a satisfying outcome. RoO was proving to be a difficult area, where two different and highly developed systems, the Canadian and the EU's required creative solutions. Given the structure of the Canadian economy, with its close approximation with the US economy, Canada would not change its RoO system. The EU would in its turn not change its system either. IPR was also an important area in the negotiation. Discussion Highlights / Questions and Replies Community of European Shipyards Association wanted to know whether the EU considered addressing the high tariffs on vessels and marine equipment in Canada. It was also brought forward that Canada protected its own shipyard industry by stimulating demand internally through PP, while EU companies were excluded from the market. DG Trade (KdR) confirmed that the limitation of tariffs in this sector was an EU objective in the negotiations and elaborated that negotiations were ongoing since Canada did not want to concede this point. As to the PP problem, it would be a success if EU companies could be placed on equal footing with regard to the civilian sector. IFPI was interested in the state of play of negotiations on the IPR chapter and especially with regard to enforcement. Information was also welcomed on the next steps in the negotiation process. DG Trade (KdR) informed that incremental progress was made so far and that negotiations could only proceed step by step given that it was a key problem area. On the process it was pointed out that smaller meetings would take place and that there was a chance for a broad agreement before next summer. However, a speedy conclusion was not considered a goal in itself. IFAW raised the question to what types of international conventions the SD chapter would refer to. DG Trade (KdR) briefed that as to labour standards the EU strived for a reference to ILO conventions. Concerning environmental agreements, it remained still unclear, which agreements would exactly be mentioned in the CETA. European Commission 3/8

4 EDA asked about the latest developments on supply management provisions given that the Canadians were considered to be very defensive in this point. DG Trade (KdR) noted that negotiations were ongoing but given the political sensitivity a solution would most likely have to be found at ministerial level. ESSU wanted to know whether the requirement of an economic needs test (ENT) would be part of the mode 4 regulations. EUROTHON wondered what kind of compromises on RoO the EU expected for fish. DG Trade (KdR) elaborated that the fish sector was one of the most difficult areas due to the high integration of the Canadian economy with the American one. Nevertheless, the EU undertook efforts to achieve a good outcome. Federation of Norwegian Food and Drink Industry asked for the likelihood of an elimination of discriminatory practices in the liquor sector. DG Trade (KdR) confirmed that Canada maintained a very restricted system in this area. COPA-COGECA & Association of Poultry Processors and Poultry Trade in the EU Countries enquired to what extent the CETA would improve market access for beef and poultry. DG Trade (KdR) informed that with regard to both sectors, parties had an offensive interest, which was the reason why negotiations were still ongoing. Nevertheless the EU had a positive outlook to open up access to the Canadian food market. EU-Malaysia FTA DG Trade (CW) gave an overview of the negotiation process by informing that after the last round in October, negotiations were currently in a mid-term phase and that the aim was conclusion of the agreement in the course of Although negotiations were generally on good track, upcoming elections in Malaysia next year as well as ongoing policy reviews in many important sectors could influence the process. In addition, the ongoing Transpacific Partnership (TPP) negotiations with the US as well as issues of competence of the sub-federal states of Malaysia were other factors of uncertainty. In general, the EU-Malaysia FTA set an important precedent for the rest of the ASEAN countries. When elaborating on specific issues, DG Trade informed that in respect of tariffs, both sides had exchanged offers in April this year. Progress had recently been made on Malaysia providing general indications on the liberalisation of a number of sectors of EU interest. Concerning wines and spirits, Malaysia did not provide any indications due to the policy review and it would be dealt with at a later stage. Export duties were high up on the EU agenda, given that there still existed a considerable number of them on important Malaysian export products (e.g. timber or palm oil). The EU did not expect a quick solution to this issue. On RoO, although progress was made on technical level during this round, there was still a lot of work to be done. Related to services, Malaysia had tabled a first offer, which, however, did not yet include financial and postal services. Although the offer contained some DDA+ elements and was in line with what Malaysia had offered its FTA partners so far, it fell short of EU expectations. An improvement of the offer was also necessary for foreign equity caps. On mode 4, Malaysia was not very forceful so far and did not come up with a concrete request. The EU was working on an initial offer that was expected to be handed over in December. European Commission 4/8

5 On the IPR chapter, some progress was made on the enforcement part of the chapter. Enhanced protection of GIs for products beyond wines and spirits, border measures and pharma issues had also been discussed. DG Trade (MH) explained that a first exchange on Non-Tariff-Barrier (NTB) annexes (car, pharma and green technology) had taken place during the last round. The car annex could only be discussed after the Malaysian policy review had been finalised. On Pharmaceutical annex, first general discussions could be held. The EU was pushing for elaborated discussions on cars in February. The chapter on SPS was quite advanced, although the issue of prelisting and verifications was still open. Malaysia was showing more willingness to discuss prelisting as regards pork and fish. There seemed to be some readiness to look into options on how to address halal. The first indication on what Malaysia would offer on Government Procurement fell short of EU expectations and a serious first offer was requested. In the field of competition, especially subsidies and merger control represented a difficulty, with mergers not covered by new Malaysian Competition law. The discussions of the Trade and SD chapter proved to be complex and slow because of respective competences in Malaysia split between the federal and sub-federal level and ongoing internal consultations. Discussion Highlights / Questions and Replies Eurocommerce requested information on the Malaysian offer on trade in services and asked whether distribution services were part of it. DG Trade (CW) indicated that distribution was included but the Malaysian offer was disappointing and not acceptable for the EU. ECPA asked DG Trade for more information on the discussions on data exclusivity. DG Trade (CW) explained that the Malaysian legislation in place only granted crop data protection for five years. After this period they were required to reapply for another five years, which was a cumbersome procedure. The EU held the view that its companies should obtain a right for ten years at once. Both ENDS was interested in whether social and environmental issues with regard to palm oil production had been discussed during the negotiations. DG Trade (MH) pointed out that the issue of sustainable palm oil had not been explicitly discussed. The issue was, however, addressed via the proposed language in the Trade and SD chapter. EUROTHON enquired to what extent tuna was treated as a sensitive topic and whether Malaysia would accept the EU's RoO. DG Trade (CW) confirmed that this was a sensitive product. On RoO, however, Malaysia had been fairly forthcoming on EU rules so far. ESSU asked for more information on mode 4 commitments, especially with regard to contractual service suppliers (CSS) and the EU's offer on mode 4. European Commission 5/8

6 DG Trade (CW) informed that the discussions on CSS and independent professionals were not very advanced. Malaysia appeared to be interested, but had not tabled a request so far. Therefore, the EU would present an offer not taking into account any Malaysian requests. FEDIOL expressed its concern that Malaysia had zero tariffs in place for refined palm oil, whereas tariffs for crude palm oil were high and asked about the state of play of negotiations. DG Trade (CW) indicated that export duties in general were a very difficult issue for Malaysia, which was true not only for palm oil but also for timber and metals. The EU was pushing hard and a possible ministerial meeting in the upcoming weeks would also raise this issue. IFPI enquired about the state of play on phonogram protection rights and whether the fact that Malaysia had amended some IPR legislation presented scope for further legislative changes. DG Trade (CW) stated that this appeared not to have been a major issue in the negotiations with Malaysia so far. The EU was encouraging Malaysia to undertake legislative changes where relevant. EU-India FTA DG Trade (JRCS) elaborated that since the last EU-India summit in December 2010, a lot of meetings had taken place and recalled that at the last session in July this year, negotiations were delayed regarding the mandate received in the 2010 Summit. In a "landing zone paper", issued in September, the Commission announced its red lines for different issues. In addition, it recommended a conclusion of the agreement by the next summit in February Otherwise a long election period in India could considerably complicate and delay the negotiation process. This proposal was endorsed by the EU Foreign Affairs Council. India was currently showing flexibility on main controversial issues in order to ensure a conclusion by that date. With regard to specific topics, tariffs, services and PP turned out to be the most difficult issues. Some Non-Agricultural-Market-Access (NAMA) issues had a deep political meaning for both partners and the services package remained very much open as well. With regard to mode 4 India's main offensive interest the EU offer was contingent on the services package offered by India. In the areas of retailing and banking no legislative measures had to be undertaken on the Indian side. India would still have to adopt new legislation in the insurance sector, legal and accountancy, postal and financial services. PP is another problematic chapter, where the Indian government had decided to overhaul legislation. Finally, GIs and agricultural safeguard measures remained open as well. The EU would have to insist during next weeks to close remaining gaps and be able to present an offer that was mutually satisfying in order to reach an agreement by the deadline set. Until the next full negotiation round in January, different sectoral negotiations and high level exchanges would take place. In case that there was no political agreement reached by 10 February, the parties would enter in a reflection process, in which the likelihood of a closure of negotiations would be assessed. Discussion Highlights / Questions and Replies British Retail Consortium took up a statement referring to single-brand and multi-brand retailing and asked for further elaboration. DG Trade (JRCS) explained that according to an Indian policy paper, the Indian offer intended to achieve a 100% increase in the FDI generated by single brand retailing. The EU expected that the offer was further clarified by the end of the year. On the contrary, India was opposed to multi-brand retailing and the EU did not know what India would offer on this point. European Commission 6/8

7 Both ENDS asked about likely cross-area issue linkages in the negotiation process. DG Trade (JRCS) clarified that there were clear distinctions made between negotiations on NAMA and AGRI as well as between SPS and other areas. EUCOLAIT raised the question to what extent the offer on tariffs in the "landing zone paper" was different to the one in the first EU offer from March DG Trade (JRCS) recalled that for the EU, the question of tariffs had always been a major offensive interest. The EU had received the assurance that India would table a concrete indication in December but the direction of the negotiations on the AGRI chapter was still far from being clear. The EU had priority lines in certain sectors such as poultry, dairy, cereals and malt PAPs and oil. European Patent Office enquired what kind of IPR provisions would be part of the FTA and what kind of outcome could be expected. On agriculture negotiations, DG Trade (JRCS) replied that the EU needed to have the assurance that European GIs were fully protected. Concerning the IPR negotiations, provisions on enforcement were still an open issue and the EU awaited a reaction from India on the text presented in May, which was expected soon. IFPI referred to recent media information, according to which no progress had been achieved on the protection of IPR in the digital environment and asked to what extent this problem was discussed. DG Trade (JRCS) briefed that India had not undertaken a commitment to adapt its internal legislation in this area. Next weeks would define the path of the negotiations. European Crop Protection made the point that the Indian draft legislation proposal on IPR for pesticides by which the country amends its legislation to the EU's requests fell short of the expectations. It requested that the EU asked more commitments in this area. DG Trade (JRCS) clarified that in IPR, the commitment was to establish a link with the internal Indian legislation. Community of European Shipyards Association expressed its concern that India put a lot of money in the capacity building of its own ship industry and therefore raised the question whether the EU had adopted a WTO+ approach as regards state aid and subsidies. DG Trade (JRCS) stated that it was not until April that India showed some openness to include subsidies. The chapter would have to be closed following further discussions with experts and the EU was looking forward to the outcome. ESSU asked for information on the nature of the EU's offer on mode 4 and emphasized that the UK Trade Unions Congress had demonstrated its opposition to an inclusion of mode 4 provisions. DG Trade (JS) explained that India had asked the EU for strong commitments and unless the EU did not show flexibility, there would be no overall agreement in the end. Therefore, EU would have to go beyond what they were usually willing to offer. More concretely, provisions on CSS, independent professionals and broad elimination of ENT were subject to discussions. The EU was also contemplating to include a safeguard clause as to service providers. On this last issue, the Commission was in contact with EU trade unions and MS. European Commission 7/8

8 Japan Machinery Center enquired whether India would be ready to accept the main elements of the EU's IP offer. DG Trade (JRCS) stated that the Commission now had a mandate from the Council. India had accepted to enter into negotiations on such a chapter, which would take place in February, after the conclusion of other issues. Upon a final remark, DG Trade (JRCS) clarified that the provisions for PP could only be negotiated and applied to the Indian central state authority. State level entities had competence for conducting their own PP policy and were excluded from the negotiations. European Commission 8/8