Implementation of EU Free Trade Agreements

Abstract

The EU has a very active trade negotiating agenda, with new negotiations starting every year and being in preparation. Increasing number of free trade agreements (FTAs) are also being concluded. Against this background, and the fact that trade policy is attracting much more attention from the public that used to be the case still a few years back, effective implementation of EU trade agreements has become an important priority for the EU Trade policy. The EU needs to demonstrate that its trade agreements work in practice and deliver the negotiated benefits to EU operators. The EU FTAs currently in force are not identical in their scope and objectives, and this has to be taken into account also when looking into their implementation. EU FTAs can be divided in different groups on the basis of their scope and objectives. Since 2006 the Commission has been negotiating comprehensive FTAs which cover a wide range of areas including also inter alia services, investment, procurement, intellectual property rights, competition and trade and sustainable development. When speaking about FTAs, normally the main point of interest is to know whether the FTAs have led to an increase of trade flows between the partners in the areas of trade in goods, services and investment. In general it can be said that in large majority of cases, the trade in goods has increased during the period than the FTAs have been in force. In terms of services and investment, it is more difficult to see the link with the FTAs in developments in these areas. Preference utilization rates (PURs) of the EU FTAs have attracted a lot of attention since the Commission started producing them after the EU–Korea FTA started to be applied. In general, the PURs for EU operators are lower than those of our trading partners. New generation FTAs have a comprehensive structure of implementation bodies. A number of subcommittees and working groups covering different areas covered by the chapters of the FTA meet annually to address problematic issues. Sanitary and phytosanitary measures, restrictions in trade of agricultural products, enforcement of geographical indicators and public procurement have been areas most often discussed in these fora. Lack of awareness of the FTAs by EU companies and difficulties in understanding them is still a real issue preventing FTAs reaching their full potential. This has led the Commission to intensify its efforts to address better the awareness gap. In addition to the Commission, Member States and their business organizations have also a crucial role in disseminating information on FTAs to their stakeholders, in particular small and medium sized enterprise (SMEs), who often require information in a local language and locally in different regions. Close cooperation between Member States’ embassies and the EU delegations in the FTA partner countries has also been identified as a key factor to ensure effective implementation of the FTAs.