The is championing a new generation of FTAs, to be concluded first and foremost with the world’s largest growth regions. The idea is to boost growth and employment levels in Europe by improving European companies’ global competitiveness.
The development of multilateral trading relations and the successful conclusion of the Doha Round are a priority for both Germany and the European Union. In light of the bilateral FTAs that are being concluded by some of Europe’s important trading partners (including the US and Japan) and which could jeopardise the competitiveness of European companies on the global markets, the EU’s position on bilateral free trade agreements (FTAs) has evolved.
The new generation of free trade agreements that the EU aims to conclude with other countries is broad-based and covers a wide range of different aspects. These agreements not only touch upon the issue of tariffs (e.g. customs duties, export subsidies) but also set out rules for services, the elimination of non-tariff barriers to trade and other trade-related aspects such as investment and competition. As the scope of these agreements is wider than the WTO agenda, they are often referred to as ‘WTO+ agreements’.
EU-Japan Free Trade Agreement
Negotiations for an EU-Japan FTA were officially launched on 25 March 2013. Overall, 19 round of talks were held with Japan, the last of which took place from 12 to 30 June 2017. A political agreement ‘in principle’ was struck at the 24th EU-Japan Summit that took place on 6 July 2017. On 8 December 2017, it was announced that the negotiations had finally been concluded. The proposal for a decision to sign the agreement was transmitted to the European Council on 18 April 2018. The European Commission wants the agreement to take effect in 2019 at the latest.
Germany has always been working to conclude a comprehensive and ambitious EU-Japan FTA which includes not only the goods trade, but also services, rules on investment and competition, and on social and environmental standards. When measured against this objective, the Federal Government’s overall assessment of the results that have been achieved is positive. Only on the issue of investor-state dispute settlement has an agreement yet to be reached.
EU-Canada: Comprehensive Economic and Trade Agreement (CETA)
CETA eliminates most of the tariffs that still exist and provides for better mutual access to the goods and services markets in the EU and Canada. Following shared rules and creating open market access in this way will help the parties to CETA safeguard and expand their prosperity.
CETA not only creates better opportunities for European producers of industrial goods, agricultural produce and services. It also reaffirms social and environmental standards and provides for a modern form of investment protection. CETA is a modern agreement which creates a major opportunity for its parties to play an active role in globalisation and lay down fair and sound rules for this process. The high standards agreed between the EU and Canada will serve as a benchmark for future trade agreements.
CETA has been provisionally applied since 21 September 2017. This, however, applies to only to those chapters for which the EU undisputedly has sole responsibility. As a result of this provisional entry-into-force of the agreement, EU companies and citizens now benefit directly from CETA. Canada is abolishing all tariffs on 98 per cent of all the goods being traded between the EU and Canada (in terms of tariff lines). This will save EU companies an annual €590 million in customs payments. They also gain the best level of access to the Canadian federal, provincial and municipal public-sector markets that has ever been granted to non-Canadian companies. CETA will not enter into force in its entirety before all Member States have ratified the agreement in line with their individual national procedures under constitutional law. Among the provisions that require ratification by all EU Member States are those governing investor-state dispute settlement procedures, which, under CETA, will be handled by an investment court that is held accountable by the public. Click and/or visit the for detailed information on CETA and the next steps to be taken.
EU-US: Transatlantic Trade and Investment Partnership (TTIP)
The EU is one of the most important trading partners for the US. Similarly, the US is Germany’s first export market outside Europe and also the market where German companies invest the most. The envisaged between the EU and the US is an extraordinary joint project by the EU and the US intended to generate considerable growth and employment. A transatlantic agreement would boost growth and employment both in the EU and in the US. German SMEs, which do a great deal of business in the US, stand to be among the biggest winners of comprehensive trade liberalisation which would see tariffs and other barriers to trade eliminated.
The negotiations for a free trade agreement between the EU and several ASEAN (= Association of Southeast Asian Nations) countries have high significance for Germany in economic terms. The ASEAN region is growing dynamically and there is major potential for economic cooperation with Europe. The EU is currently negotiating with individual ASEAN members after initial negotiations with the region as a whole failed to deliver specific outcomes.
Singapore: In October 2014, the EU and Singapore concluded the negotiations on a common Free Trade Agreement EUSFTA ( = European Union-Singapore Free Trade Agreement); the chapter on investment protection was finalised in May 2015. Germany welcomes the success of these negotiations. Despite its small size, Singapore is one of Germany’s most important trading partners in the ASEAN region. The text of the EUSFTA was negotiated by the European Commission.
On 16 May 2017, the European Court of Justice (ECJ) – at the request of the European Commission – ruled that parts of the EU-Singapore agreement are matters of exclusive EU competence, while other parts like provisions on portfolio investment lie within the scope of shared responsibility between the EU and its Member States. As a consequence, the agreement has been divided into the EU-Singapore Free Trade Agreement and the Investment Protection Agreement. The Free Trade Agreement, including rules on trade in goods and services and intellectual property rights, can be concluded by the EU alone. In contrast, the Investment Protection Agreement containing rules on the protection of investment and on dispute settlement needs to be concluded jointly by the EU and its Member States.
In April, the proposals for approval were submitted to the Council for signature and for the conclusion of the two agreements. The aim is to sign the agreements before the end of 2018.
Viet Nam: The negotiations with Viet Nam that started in October 2012 have been progressing well. After agreement ‘in principle’ on an FTA with Viet Nam had been struck in summer 2015, the President of the European Commission, Mr Juncker, and the Prime Minister of Viet Nam, Mr Nguyen, presented the in early December that year.
The agreement will follow a new approach to investment protection. Viet Nam has accepted the EU proposals for a reformed dispute settlement procedure that will take place before a modern and transparent investment court.
The European Commission .the text of the FTA on 1 February 2016. The national parliaments, including the Bundestag and the Bundesrat, must give their approval before the agreement can enter into force. The text of the agreement will also be available in German in time for the deliberations.
Germany is Viet Nam’s largest trading partner within the EU and welcomes the fact that the negotiations have been successful. The FTA will secure access for German producers to the growing Vietnamese market, thereby allowing for existing jobs in Germany to be safeguarded and new ones to be created. By the same token, there will also be better access for Vietnamese products to the German market.
Malaysia: Talks towards establishing an EU-Malaysia free trade agreement began in October 2010. The negotiations have been stalled since the end of the 7th round in 2012. The European Commission is working towards reviving these talks.
Negotiations for an FTA with Thailand began in May 2013. They have been paused since the fourth round of negotiations in April 2014, as the military took control of the country shortly afterwards. It will only be possible for the EU to conclude an agreement with a Thai government that has been elected in a democratic process.
The Philippines and Indonesia started negotiations on an FTA with the EU in 2016. Text-based negotiations are due to begin in 2017.
The EU is currently preparing to take up negotiations on an EU-Australia FTA. On 22 May 2018, the EU Trade Ministers decided to start negotiations on a Free Trade Agreement. The negotiations are planned to begin in July, with further rounds of negotiations following at regular intervals.
In 2017, the trade volume between the EU and Australia amounted to more than €47.7 billion, with a trade surplus of over €21 billion to the benefit of the EU. EU exports to Australia comprise primarily finished goods, while Australia exports in particular mineral resources and agricultural products to Europe. EU businesses provide commercial services to Australia worth approx. €20 billion, and they invest around €160 billion in the country (2016 figures). The EU thus is Australia's third largest trading partner.
Negotiations on a FTA are also being prepared with New Zealand. On 22 May 2018, the EU Trade Ministers decided to start negotiations on a Free Trade Agreement with the country. The negotiations are planned to begin in July, with further rounds of negotiations following at regular intervals.
The EU is New Zealand's second largest trading partner. In 2017, the trade volume totalled more than €8.7 billion. Agricultural products account for the largest share of New Zealand's exports to the EU, while the EU primarily exports finished and industrial goods to New Zealand. In 2017, Germany's trade surplus with New Zealand amounted to €1.9 billion, and EU businesses accounted for more than €10 bilion of foreign direct investment in New Zealand.
An FTA between the EU and India can help eliminate existing barriers to trade and give fresh impetus to our bilateral cooperation. India’s population is the second-largest in the world, making the country a very important trading partner for German businesses. The Federal Government and the European Commission do, however, insist that any agreement must be comprehensive and ambitious.
Whilst negotiations for an FTA began as early as 2007, stark differences in expectations on both sides have resulted in these talks having been stalled since 2012.
The first EU FTAs to be concluded with Latin American countries were the Global Agreement with of 2000 and the Association Agreement with hof 2005. Going far beyond the scope of a mere free trade agreement, the Association Agreement and the Global Agreement also provide a broad contractual basis for political dialogue, economic relations, and economic cooperation.Negotiations are currently underway on a modernisation of the Global Agreement with Mexico. These talks are also focusing on the section on trade, which in future is to cover not only market access but also issues like sustainability, regulatory cooperation and the fight against corruption. Talks are also to commence in the near future on a modernisation of the agreement with Chile
The trade section of the EU’s Association Agreement with hentered into force provisionally at the end of 2013. The association agreement between the EU and Central America marks the first time that the EU has concluded such an agreement with an entire region. Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua and Panama are all involved in the agreement. The EU’s plurilateral agreement with entered into force provisionally in 2013. Ecuador acceded to the agreement in January 2017.
The year 2010 saw the resumption of talks on an FTA with the South American internal market (Mercado Común del Sur or ‘Joint Market of the South’), formed of Argentina, Brazil, Paraguay, Uruguay, Bolivia and Venezuela. These negotiations had been suspended in 2004.
The framework for the EU’s relations with Ukraine is provided by the Partnership and Cooperation Agreement (PCA), which entered into force in 1998. In 2014, the EU and Ukraine signed the Association Agreement that had been in preparation since 2008 and that is to both replace the existing Partnership and Cooperation Agreement and establish a deep and comprehensive free trade area. The political part of the agreement has been provisionally applied since 1 November 2014, to the extent that it falls within the scope of sole EU powers. The part of the agreement that provides for an FTA has been provisionally applied since 1 January 2016 – also to the extent that the EU has sole power of application.
Trade in Service Agreement (TiSA)
TiSA (= Trade in Services Agreement) is currently being drafted as a plurilateral agreement on trade in services. Above all else, it is to improve access to foreign services markets and to create fresh momentum for the negotiations on a multilateral trading system, which are largely stalled. The EU and the German Government hold the view that the new rules designed to facilitate the trade in services should, at a later stage, be embraced at WTO level. The EU is negotiating TiSA with 23 WTO member states which account for approx. 70% of the global trade in services.
Environmental Goods Agreement (EGA)
The Environmental Goods Agreement (EGA), which is currently being negotiated, is to deregulate the market for environmental goods. Whilst EGA is being negotiated as a plurilateral agreement (i.e. by only a few WTO member states), there is hope that it will later evolve into a multilateral agreement adopted by all WTO members. The initiative builds upon what is called the APEC List of Environmental Goods – a document that was approved in Vladivostok in September 2012 and which sets out the goal of limiting tariffs on a total of 54 environmental goods to a maximum of 5 per cent of the value of these goods by 2015.
The EU is joined at the table by representatives from 13 non-EU countries. The first round of negotiations on the EGA was held in Geneva in July 2014. For further information on the envisaged agreement, please visit the .