RESTRICTED  
  
WT/TPR/G/395  
10 December 2019  
(19-8494) Page: 1/24 
Trade Policy Review Body   Original: English  
 
TRADE POLICY REVIEW  
REPORT BY  
EUROPEAN UNION 
Pursuant to the Agreement Establishing the Trade Policy Review Mechanism (Annex 3 of the 
Marrakesh Agreement Establishing the World Trade Organization), the policy statement by European 
Union  is attached.  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Note: This report is subject to restricted circulation and press embargo until the end of the first 
session of the meeting of the Trade Policy Review Body on European Union . WT/TPR/G/395 • European Uni on 
 
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  Contents  
1   INTRODUCTION  ................................ ................................ ................................ ..........  3 
2   TRADE AND THE EC ONOMIC ENVIRONMENT  ................................ ................................  3 
2.1   The EU economic environment and its macroeconomic policy  ................................ ............  3 
2.2   Trends in foreign trade and foreign direct investment ................................ .......................  4 
3   DEVELOPMENTS IN THE INTERNAL MARKET ................................ ................................  5 
3.1   The EU's better regulation policy  ................................ ................................ ...................  5 
3.2   Single market for goods  ................................ ................................ ...............................  6 
3.3   The EU public procurement market  ................................ ................................ ................  6 
3.4   Single market for services  ................................ ................................ ............................  7 
3.5   Capital markets union  ................................ ................................ ................................ .. 8 
3.6   Digital single market  ................................ ................................ ................................ .... 8 
3.7   Common agricultural policy  ................................ ................................ .......................... 10 
3.8   Sanitary and phytosanitary requirements  ................................ ................................ ......11 
3.9   New measures for fair taxation  ................................ ................................ ..................... 11 
3.10   Small and medium -sized enterprises  ................................ ................................ ........... 12 
3.11   The implementation of the EU Environment Action Programme  ................................ .......13 
3.12   The EU's actions on climate change  ................................ ................................ ............. 13 
3.13   Clean Energy for all Europeans Package  ................................ ................................ ......14 
3.14   The withdrawal of the United Kingdom from the European Union  ................................ ....15 
4   TRADE AND INVEST MENT POLICY DEVELOPM ENTS  ................................ ...................  16 
4.1   Multilateral trade policy  ................................ ................................ ............................... 16 
4.1.1   WTO reform  ................................ ................................ ................................ ............ 16 
4.1.2    WTO negotiations and initiatives  ................................ ................................ ................ 18 
4.2   The EU bilateral negotiating agenda  ................................ ................................ .............. 18 
4.3   Promoting a sustainable approach to trade  ................................ ................................ ....20 
4.3.1    Promoting labour rights and environmental protection  ................................ .................. 20 
4.3.2    Supporting inclusive growth in developing countries  ................................ ..................... 20 
4.3.3    Promoting human rights  ................................ ................................ ........................... 21 
4.3.4    Gender equality and economic empowerment of women  ................................ ............... 21 
4.3.5    Ensuring responsible management of supply chains  ................................ ..................... 21 
4.3.6    Promoting fair and ethical trade schemes ................................ ................................ ....22 
4.3.7    Transparency, anti -corruption and promoting good governance  ................................ .....22 
4.4   Trade Policy for open and fair trade  ................................ ................................ .............. 22 
5   LOOKING AHEAD  ................................ ................................ ................................ ....... 23 
 
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  1  INTRODUCTION  
1.1.  International trade plays a central role in the EU's economy and drives its prosperity. It 
accounts for almost 35% of the EU's GDP (2017 figures) and supports more jobs than  ever 
(36 million in 2018, two thirds more than in 2000). Since the last trade policy review in 2017, the 
EU has benefited and should continue to benefit from the opportunities that open and fair trade 
provides: creating high quality jobs, paid on average 12% better than in the rest of the economy, 
supporting EU exports and investment, increasing the competitiveness of EU businesses which 
strongly benefit from their integration in the global value chains and providing greater choice for 
EU consumers.  
1.2.  Prese rving a stable and predictable international trading environment based on clear and 
enforceable rules is of strategic importance for the EU. Without such an environment, trade cannot 
flourish. The international rules -based trading order with the World Trad e Organization (WTO) at its 
core is facing its biggest crisis in decades. Faced with this critical challenge the EU considers the 
modernisation of the WTO as a priority. For this reason, the EU presented a comprehensive approach 
to reforming the WTO in Sep tember 2018. It aims to revitalise negotiations; to preserve the dispute 
settlement system and to ensure better monitoring of its Membership's trade practices. The EU has 
tabled concrete proposals in these areas together with other WTO Members.  
1.3.  EU trade po licy aims at fostering open, fair and sustainable trade. Openness is necessary to 
maintain the connection between the Single Market and global sources of growth that support job 
creation, innovation and upstream integration in global value chains that tran slates into high 
value -added exports. Fairness and sustainability are necessary to promote EU principles and values 
and help maintain EU competitiveness against distortions induced by state capitalist practices and 
lower standards, while providing protecti on to EU citizens. In addition to multilateral and plurilateral 
approaches, the EU pursues market opening through bilateral and regional trade agreements.  
1.4.  EU trade policy stays firmly grounded in universal fundamental rights and values – like 
promoting am bitious climate change mitigation, protecting the environment and guaranteeing food 
safety and security as well as the protection and promotion of labour rights. It does so by also 
actively promoting the mutual supportiveness between EU trade policy and th e multilateral 
governance on such issues in the United Nations and the International Labour Organisation context. 
As enshrined in the EU Treaty, the EU has an obligation to ensure a coherent approach in terms of 
foreign policy. EU  trade policy therefore is  consistent with its wider foreign policy objectives – that 
are to pursue a policy that benefits society as a whole – and promotes European and universal 
standards and values alongside core economic interests, putting a greater emphasis on sustainable 
development, human rights, consumer protection, and responsible and fair trade.  
1.5.  The objective of EU trade policy is also to keep foreign markets open and to create opportunities 
for EU companies through concrete actions towards the implementation of agreements , the 
enforcement of EU rights under negotiated Free Trade Agreements (FTAs) and further trade 
negotiations.  
1.6.  The EU believes in the importance of inclusiveness, transparency and communication to achieve 
better understanding and awareness by the general pub lic of the gains of trade.  
2  TRADE AND THE ECONOM IC ENVIRONMENT  
2.1  The EU economic environment and its macroeconomic policy  
2.1.  The European economy continued expanding during the period under review. In 2017, 
economic growth reached 2.6% compared to 2.0% in 2016.  However, economic growth slowed to 
2.0% during 2018, in particular, due to a less favorable external environment. Growth in the global 
economy and trade weakened amid tightened global financing conditions, trade tensions, high 
uncertainty, and an exceptio nal weakness in the manufacturing sector . 
2.2.  Looking forward, based on the 2019 summer forecast1, the European Commission expects 
growth of the European economy to continue despite global challenges. Growth is expected to 
                                                
1 Viewed at: https://ec.europa.eu/info/sites/info/files/economy -finance/ip108_en.pdf . WT/TPR/G/395 • European Uni on 
 
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  moderate to 1.4% in 2019 and to incre ase to 1.6% in 2020. GDP in all EU Member States is expected 
to grow supported by domestic demand.  
2.3.  In 2018, the employment rate reached its highest on record and job creation continued to 
increase in the first quarter of 2019. The EU unemployment rate dec reased from 8.6% in 2016 to 
6.8% in 2018, its lowest level since 2000, and it further declined to 6.2% in August 2019. Combined 
with a steady rise in wages, muted inflation and supportive fiscal measures in some Member States, 
job creation should continue to underpin household spending in 2019 and 2020.  
2.4.  The EU youth unemployment rate and the rate of young people neither in employment nor in 
education or training (NEETs) dropped to record low levels (14.6% and 10.2%, respectively in 2018) 
since the launch o f the Youth Guarantee flagship initiative to bring jobs and training opportunities 
to young people.2 More than 14 million young people have benefitted from it since 2014. Although 
the youth unemployment rate remains double the overall unemployment rate, it  has been decreasing 
faster.  
2.5.  Downside risks to the outlook remain prominent. Externally, these include the risk of a further 
escalation of trade tensions as well as a more persistent than forecast slowdown in global growth 
and foreign trade. Domestically,  these include a possible negative spillover from the manufacturing 
recession to other sectors such as services and the uncertainty surrounding the United Kingdom's 
withdrawal from the EU, inter alia . 
2.6.  The European Fund for Strategic Investments (EFSI), cre ated in 2015, continues supporting 
investment in the EU. The Fund provides a first loss guarantee under the EU budget to the European 
Investment Bank Group, allowing it to invest in more projects. The original investment target of 
EUR 315 billion by mid -2018 was achieved well ahead of time. As of September 2019, it is expected 
to trigger nearly EUR 433 billion in investments, with around 945,000 small and medium -sized 
business expected to benefit from improved access to finance. In parallel, low financing c osts from 
an accommodative monetary policy should support investment.  
2.2  Trends in foreign trade and foreign direct investment  
2.7.  The EU is the number one trading block in the world, ahead of the United States, China, and 
Japan. In 2018, the EU accounted for 15 .7% (EUR 5.6 trillion) of total world trade in goods and 
services (see Table 1).  
Table 2.1 Total world trade by reporter (goods and services)  
(EUR billion)  
 Imports  Exports  Imports + exports  
2016  2017  2018  2016  2017  2018  2016  2017  2018  
World  16,003  17,104  17,851  15,732  16,969  17,810  31,735  34,072  35,661  
EU28 2,446  2,579  2,709  2,616  2,792  2,874  5,062  5,371  5,583  
US 2,438  2,554  2,627  1,999  2,074  2,111  4,437  4,628  4,737  
China  1,844  2,036  2,252  2,120  2,220  2,344  3,964  4,256  4,595  
Japan  717 765  810  741 783  787  1,458  1,548  1,597  
% world  2016  2017  2018  2016  2017  2018  2016  2017  2018  
EU28 15.3%  15.1%  15.2%  16.6%  16.5%  16.1%  16.0%  15.8%  15.7%  
US 15.2%  14.9%  14.7%  12.7%  12.2%  11.9%  14.0%  13.6%  13.3%  
China  11.5%  11.9%  12.6%  13.5%  13.1%  13.2%  12.5%  12.5%  12.9%  
Japan  4.5%  4.5%  4.5%  4.7%  4.6%  4.4%  4.6%  4.5%  4.5%  
Note:  Services figure does not include the value of services provided by EU -owned companies established 
in other countries (i.e. Mode 3).  
Source:  IMF, WTO, Eurostat/DG Trade (Intra -EU trade excluded).  
2.8.  As a share of GDP, in 2018, total EU trade did not change significantly compared to previous 
years, remaining at around 35%. As noted above, there are about 36 million EU jobs which depend 
                                                
2 Viewed at: https://ec.europa.eu/social/main.jsp?catId=1079 . WT/TPR/G/395 • European Union  
 
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  on EU exports. The share of EU employment supported by sales of goods and services to the rest of 
the world over total employment increased from 10.1% in 2000 to 15.3% in 2017. This means that 
one in seven EU jobs is supported either d irectly or indirectly by extra -EU exports.3 
2.9.  The United States is the EU's largest export market for goods. In 2018, it accounted for 
EUR 406 billion (21%) of total EU goods exports. Other large export markets are China at 
EUR 210 billion (11%) and Switzerland at EUR 156 billion (8%). The EU imported EU R 395 billion 
(20%) of goods from China, EUR 267 billion (14%) from the US and EUR 168 billion (8%) from the 
Russian  Federation.  
2.10.   In services, EU exports are directed primarily to the United States (20%), Switzerland (10%), 
and China (4%), while the EU's l eading suppliers are the United States (20%), followed by 
Switzerland (6%) and China (3%).  
2.11.   In 2017, EU companies were the source of EUR 7,400 billion outward Foreign Direct 
Investment (FDI) stocks worldwide, while non -EU companies had FDI stocks in the EU  worth around 
EUR 6,300 billion. The figures remained similar compared to 2016 (see Table 24). The main leading 
sources of FDI are the United States, Switzerland, Canada, China, and Japan, while the leading 
destinations of EU FDI are the United States, Swi tzerland, Brazil and Mexico.  
Table 2.2 EU28 FDI  
(EUR billion)  
 Inward  Outward  
2016  2017  2016  2017  
Stocks  6,313  6,295  7,782  7,412  
Flows  387 146 357 219 
Source:  Eurostat.  
3  DEVELOPMENTS IN THE INTERNAL MARKET  
3.1.  Marking the 25th anniversary of the Single Market, the European Commission adopted a 
Communication in November 2018 presenting a fresh assessment of the situation in the Single 
Market5 and calling on Member States to renew their political commitment to the Single Market.  
3.2.  The Communication recalled that, over the last 25 years, the Single Market has made Europe 
one of the most attractive places to live and to do business. Its four freedo ms – the free movement 
of people, goods, services and capital – have helped improve the citizens' prosperity and strengthen 
the EU's competitiveness. A deep and integrated EU single market is not just good for the EU and 
its Member States; it also provides  benefits to third countries, our trading partners, giving them 
access to a single market of over 500 million consumers in which goods can circulate freely.  
3.3.  To exploit its full potential in the digital era and ensure sustainable growth of the economy, the  
Single Market needs to function properly and constantly evolve in a rapidly changing world. The 
following represent the main recent developments in the Single Market.  
3.1  The EU's better regulation policy  
3.4.  EU regulatory policy advanced under the Better Regula tion Agenda (designing EU policies and 
laws in all policy areas so that they achieve their objectives at minimum costs and in a transparent 
manner), which was adopted in 2015.  
3.5.  The stocktaking of the agenda was completed in April 2019, acknowledging achiev ements 
regarding key measures introduced in the Better Regulation Agenda6: 
                                                
3 Viewed at: http://trade.ec.europa.eu/doclib/press/index.cfm?id=1947 . 
4 The data on FDI in 2018 is not available yet.  
5 European Commission, The Single Market in a changing world - A unique asset in need of renewed 
political commitment . Viewed at: https://ec.europa.eu/transparency/regdoc/rep/1/2018/EN/COM -2018-772-
F1-EN-MAIN -PART-1.PDF . 
6 Viewed at: https://ec.europa.eu/info/sites/info/files/better -regulation -taking -stock_en_0.pdf . WT/TPR/G/395 • European Uni on 
 
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  a. Improved stakeholder participation through (i) feedback opportunities over the entire 
policy lifecycle, including on draft delegated and implementing acts; (ii) a commitment to 
consult for a period of 12 weeks on all new proposals and evaluations; and (iii) a new 
web-based common portal where all stakeholders can obtain information about new 
initiatives and express their views;  
b. Integrated guidelines and a comprehensive toolbox for th e European Commission staff on 
how to apply better regulation across the policy cycle;  
c. A renewed commitment to evaluate existing legislation before proposing changes 
("evaluate first");  
d. An independent Regulatory Scrutiny Board reviewing the quality of all  impact assessments 
and major evaluations, comprising seven full -time members who are not involved in the 
policymaking process, including three appointed from outside of the EU's institutions;  
e. A new commitment to systematically verify the opportunities for  simplification and greater 
efficiency when revising existing legislation without undermining its purpose;  
f. A REFIT Platform7 to provide bottom -up support to the Commission in the above task; and  
g. A proposal on the basis of which a new Interinstitutional A greement on Better Law -Making 
between the European Parliament, the Council of the European Union and the European 
Commission was agreed on 13 April 2016.8 
3.2  Single market for goods  
3.6.  Since the last review in 2017, the EU adopted the Regulation on the Mutual Re cognition of 
Goods9, which will be applied as of 19 April 2020. The aim is to achieve a fairer and deeper single 
market for goods through more and better mutual recognition. Companies will be able to use a 
voluntary declaration to demonstrate that their pr oducts meet all the relevant requirements in their 
country. This will make it easier for the national authorities in the Member States to assess whether 
the mutual recognition principle should be applied. Furthermore, the envisaged problem resolution 
mecha nism will allow for a faster resolution of disputes between companies and national authorities.  
3.7.  To further improve the free flow of goods, the European Commission adopted the  Regulation 
on Compliance and Enforcement .10 The aim is to create a fairer internal market for goods through 
more cooperation among national market surveillance authorities.  The new regulation will strengthen 
the enforcement of EU health, safety and environmental protection rules and the application  of 
harmonised EU legislation in order to keep non -compliant products from being placed on the market.  
3.3  The EU public procurement market  
3.8.  Since the previous review, the EU has made progress towards a full electronic procurement 
system in the EU: as of Octob er 2018, e -submission became mandatory for all contracting authorities 
and all procurement procedures. As of April 2019, all public buyers should be in a position to receive 
and process electronic invoices, following the European Standard11. 
3.9.  The European Co mmission adopted a "Recommendation on the professionalisation of public 
procurement" in October 2017 and continues to encourage the professionalisation of the 
procurement systems, through the development of active professionalisation policies. The 
Commissi on is also working on updated guidance on socially -responsible public procurement.  
                                                
7 Platform members consider suggestions made by citizens and stakeholders.  
8 OJ L 123, 12.5.2016 , p. 1.  
9 Regulation (EU) 2019/515, OJ L 91, 29.3.2019, p. 1.  
10 Regulation (EU) 2019/1020, OJ L 169, 25.06.2019, p. 1. The regulation will be applied as of 
16 July 2021, except articles 29, 30, 31, 32,3 3 and 36, which will be applied as of 1 January 2021.  
11 Pursuant to Directive 2014/55/EU on electronic invoicing in public procurement,  OJ L 133, 6.5.2014, 
p.1, the deadline for the transposition and implementation by all Member States was 17 April 2019.  WT/TPR/G/395 • European Union  
 
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  3.10.   On 24 July 2019, the European Commission adopted the Communication "Guidance on the 
participation of third country bidders and goods in the EU procurement market".12 
3.4  Single m arket for services  
3.11.   In June 2018, the EU adopted the Directive on proportionality test before adoption of new 
regulation of professions .13 Under the Directive, EU Member States should conduct a proportionality 
test (to ensure that national professional requi rements are justified and proportionate) before 
adopting or amending national rules on professional services. This will ensure that the national rules 
are not too burdensome for qualified candidates from across the EU to access jobs.  
3.12.   Following the amendmen ts to the Professional Qualifications Directive14, which initiated a 
process of evaluation of all national professional regulations in the EU Member States, the European 
Commission adopted a Communication with recommendations on national reforms aiming at 
improving the regulatory environment for a number of professional services with high growth and 
jobs potential (i.e. architects, engineers, lawyers).15 
3.13.   Under the Services Directive16, Member States have the obligation to notify certain new 
requirements on ser vices providers. In January 2017, the European Commission proposed 
legislation17 to improve this notification procedure. A more effective notification procedure will 
prevent the introduction of unjustified authorisation schemes or requirements. This legisla tive 
instrument will increase the efficiency of the notification procedure, improve the quality and content 
of the notifications submitted, and cover additional requirements that could constitute barriers to 
the internal market for services. EU Member Stat es will be obliged to notify measures via the Internal 
Market Information System before the final adoption, when adjustments can still be made. The 
proposal is under the EU legislative process.  
3.14.   In the field of transport services, three "mobility packages"  were released in 2017 and 2018, 
including a number of initiatives aimed at harmonising and simplifying the legal framework applicable 
to road transport and other modes. These should result in better, and more consistent enforcement 
of the rules across EU Member States, support social fairness  and fair competition, improve the 
environmental performance  of road transport and encourage innovation. A Regulation on a European 
Maritime Single Window environment18 was adopted and will bring together all reporting obligations 
associated with a port call, including customs procedures for entry and exit of goods. It will start 
applying in 2025 and is expected to have a major trade facilitating effect, as it will halve the time 
used by the shipping sector for reporting . In addition, several other European Commission proposals 
(on the functioning of the road haulage market, on public procurement of clean vehicles19 and on 
electronic freight transport information20) aim to develop smart infrastructure, support the roll out 
of clean vehicles and address the challenges of digitalisation in mobility.  
                                                
12 European Commission, Guidance on the participation o f third country bidders and goods in the EU  
procurement market . Viewed at: https://ec.europa.eu/transparency/regdoc/rep/3/2019/EN/C -2019-
5494-F1-EN-MAIN -PART-1.PDF . 
13 Directive (EU) 2018/958, OJ L 173, 9.7.2018, p. 25.  
14 Directive 2005/36/EC as amended in 2013/55/EU, OJ L 354, 28.12.2013, p. 132.  
15 European Commission, reform recommendations for regulation in professional services . Viewed at: 
https://eur -lex.europa.eu/legal -content/EN/TXT/PDF/?uri=CELEX:52016DC0820&from=EN . 
16 Directive 2006/123/EC, OJ L 376, 27.12.2006, p. 36.  
17 European Commission, on the enforcement of the Directive 2006/123/EC on services in the internal 
market, laying down a notification procedure for authorisation schemes and requirements related to services, 
and amending Directive 2006/123/EC and Regulation (EU) No 1024/2012 on administrative cooperation 
through the Internal Market Information System. Viewed at: https://secure.ipex.eu/IPEXL -
WEB/dossier/document/COM20160821.do . 
18 Regulation (EU) 2019/1239, OJ L 198, 25.7.2019, p. 64.  
19 European Commission, amending Directive 2009/33/EU on the promotion of clean and energy -
efficient road . Viewed at: https://eur -lex.europa.eu/resource.html?uri=cellar:ef8ec14a -c55d-11e7-9b01-
01aa75ed71a1.0001.02/DOC_1&format=PDF . 
transport vehicles.  
20 European Commission, electronic freight transport information . Viewed at: 
https://ec.europa.eu/transparency/regdoc/rep/1/2018/EN/COM -2018-279-F1-EN-MAIN -PART-1.PDF . WT/TPR/G/395 • European Uni on 
 
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  3.5  Capital markets union  
3.15.   The Capital Markets Union is essential for making the Economic and Monetary Union and the 
EU Member States' economies more resilient, safeguard financial st ability, strengthen the 
international role of the euro and create new opportunities for businesses and investors across the 
Single Market. It will lead to consumers having a greater choice of investment products, which will 
become cheaper and better. It wi ll give SMEs access to more diverse sources of funding and will 
enable financial services providers to scale up by offering their services across the European Union. 
In addition, the Capital Markets Union will also help financial services providers to addr ess the 
challenges posed by technological developments, but also use the opportunities offered by them. In 
promoting the reorientation of capital flows to more sustainable economic activities, the Capital 
Markets Union will contribute to achieving the Sust ainable Development Goals as well as the 
objectives of the Paris Agreement on Climate Change.  
3.16.   The Capital Markets Union takes the form of an action plan launched in 2015 and reviewed in 
2017.21 It consists of a package of both legislative and non -legislative initiatives, aimed at 
stimulating the development of new EU -wide products and services, through simpler clearer and 
more proportionate rules, as well as a more efficient supervision of the f inancial industry.  
3.17.   Since 2017, the European Commission proposed and agreed with the co -legislators a number 
of important pieces of financial services legislation. These include among others, a Regulation on 
standard, transparent and safe securitisation, re viewed rules on prospectus and venture capital 
funds, as well as proposed and agreed rules on preventive restructuring and a second chance for 
honest entrepreneurs. Furthermore, the European Parliament and the Council of the European Union 
reached an agree ment on the rules on the distribution of collective investment funds, framework for 
covered bonds, pan -European personal pension products and reviewed rules governing SME growth 
markets. In addition, co -legislators reached an agreement on reviewed rules on  an EU supervision 
framework, in view of making supervision more efficient and effective. This review was 
complemented by a review of the supervisory framework for central counterparties. As part of the 
2018 sustainable finance action plan, the European Pa rliament and the Council reached an 
agreement regarding sustainability disclosure requirements for asset managers as well as agreed on 
the creation of a climate -transition and Paris Agreement - aligned benchmarks. The co -legislators 
are still deliberating on a European Commission proposal to establish a classification of sustainable 
economic activities as well a proposal on crowdfunding.22 
3.6  Digital single market  
3.18.   The EU's Digital Single Market strategy adopted in 2015 and almost completed, represents a 
major s tep forward in improving the functioning of the EU's Single Market to the benefit of 
enterprises and consumers from both EU Member States and third countries. The measures create 
a level playing field and ensure equal treatment for all companies, and impro ve doing business 
through harmonising 28, previously different, laws in EU Member States into coherent EU wide legal 
acts, leading to both cost and timeline savings.  
3.19.   Important legislative developments during the period under review include:  
a. Regulation on the Free Flow of Non -Personal Data23 harmonizing the rules on non -personal 
data in all EU Member States. The  regulation  makes it easier for professional users of data 
storage or other processing services to switch service providers and to port data, while 
not creating an excessive burden on service providers or distorting the market.  
b. Regulation on promoting fairness and transparency for business users of online 
intermediation services ("P2B Regulation")24 creating a fairer and more predictable 
environment for  business users in the EU to grow their business on online platforms and 
                                                
21 Viewed at: https://ec.europa.eu/info/publications/mid -term-review -capital -markets -union -action -
plan_en . 
22 Capital markets union action plan implementing measures. Viewed at: 
https://ec.europa.eu/info/business -economy -euro/growth -and-investment/capital -markets -union/capital -
markets -union -action -plan_en . 
23 Regulation (EU) 2018/1807, OJ L 303, 28.11.2018.  
24 Regulation (EU) 2019/1150, OJ L 186, 11.7.2019, p. 57.  WT/TPR/G/395 • European Union  
 
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  to reach consumers. It will attract more business users towards using online platforms, 
which is of particular benefit to many EU SMEs;  
c. Directive establishing the European Electronic Communications Code25 updating the 
common EU rules on electronic communications networks and services, regulatory 
authorities and universal service;  
d. Regulation establishing the Body of European Regulators for Electronic Communications 
(BEREC) and the BEREC Office26 entities ensuring the consistent implementation of the 
regulatory framework for electronic communications;  
e. Directive on open data and the re -use of public sector information27 making real-time 
public sector data as well as data from research perfor ming organisations and public 
undertakings more easily available and usable by machines and humans alike , helping in 
turn to fuel the development of data -intensive technologies such as artificial intelligence;  
f. Directive on copyright and related rights in t he Digital Single Market28 increasing the 
availability of creative works for people across Europe, ensuring a better -functioning 
copyright marketplace for creators and modernising EU rules applicable to key exceptions 
and limitations in the areas of teachin g, research and the preservation of cultural heritage, 
with a focus on digital and cross -border uses;  
g. Directive on the exercise of copyright and related rights applicable to certain online 
transmissions of broadcasting organisations and retransmissions of television and radio 
programmes29 simplifying cross -border distribution and retransmission of television and 
radio programmes across the EU;  
h. Regulation on the cross -border portability of online content services in the internal 
market30 establishing rules for  providers of online content services (films, sports 
broadcasts, music, e -books and games) with the aim of broadening access to online 
content services for travellers in the EU;  
i. Audiovisual Media Services Directive31 consisting of among others, a strengthen ed Country 
of Origin with more clarity on which EU Member State's rules apply, certain audio -visual 
rules to extend to video sharing platforms (such as YouTube), better protection of minors 
against harmful content in the online world, and increased obligat ions to promote 
European works for on -demand services;  
j. Geo-blocking Regulation32 addressing unjustified geo -blocking and other forms of 
discrimination based on customers' nationality, place of residence or place of 
establishment within the internal market;  
k. Regulation establishing a single digital gateway .33 The purpose of the gateway is to provide 
access to information on rules and rights that apply to citizens and businesses who want 
to get active in another EU Member State as well as to procedures and to a ssistance and 
problem -solving services ; 
l. New Consumer Protection Cooperation Regulation34, equipping national authorities with 
the necessary tools to address online infringements, such as the power to remove or block 
online shopping scams, to conduct test pu rchases and mystery shopping. The European 
Commission will be able to coordinate enforcement investigations in the event of 
                                                
25 Directive (EU) 2018/1972, OJ L 321, 17.12.2018, p. 36.  
26 Regulation (EU) 2018/1971, OJ L 321, 17.12.2018, p. 1.  
27 Directive (EU) 2019/1024, OJ L 172, 26.6.2019, p. 56.  
28 Directive (EU) 2019/790, J L 130, 17.5.2019, p. 92.  
29 Directive (EU) 2019/789, OJ L 130, 17.5.2019, p. 82.  
30 Regulation (EU) 2017/1128, OJ L 168,  30.6.2017, p. 1.  
31 Directive (EU) 2018/1808, OJ L 303, 28.11.2018, p. 69.  
32 Regulation (EU) 2018/302, OJ L 60I , 2.3.2018, p. 1.  
33 Regulation (EU) 2018/1724, OJ L 295, 21.11.2018, p. 1.  
34 Regulation (EU) 2017/2394, OJ L 345, 27.12.2017, p. 1.  WT/TPR/G/395 • European Uni on 
 
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  Union -wide infringements of EU consumer protection legislation, e.g. in the field of 
e-commerce, such as geo -blocking or the portabi lity of online content;  
m. Two directives on digital contract rules35 harmonising key consumer contract law rules 
across the EU. The harmonised rules apply to contracts for the supply of digital content 
and digital services and to contracts for the sale of go ods and "smart goods". They will 
reduce the costs for traders selling in multiple EU countries and ensure transparency, 
certainty, and a high level of protection for consumers when they buy goods and digital 
content or digital services across the EU. The n ew rules will begin to apply throughout the 
EU in January 2022;  
n. Further to Directive on Security of Network and Information Systems36 the Cybersecurity 
Act was adopted37, strengthening the role of the European Cybersecurity Agency (ENISA) 
and establishing a common European Cybersecurity certification framework for 
IT Services, systems and equipment.  
3.20.   The EU has also launched a series of initiatives on Artificial Intelligence (AI). These include 
the adoption of ethics guidelines for trustworthy AI38 in May 2019 . Additionally, the European 
Commission and the Member States published a Coordinated action plan on the development of AI 
in the EU39 in order to promote the development of artificial intelligence (AI) in Europe and work on 
issues around liability of new t echnology, in the context of a reflection on an appropriate legal 
framework for AI.  
3.7  Common agricultural policy  
3.21.   During the reporting period, the Common Agricultural Policy (CAP) continued on  the path 
towards market orientation and away from trade -distorting support measures. The sugar production 
quota ended on 30 September 2017.  
3.22.    The Council and European Parliament also adopted the important legislative initiative on 
Unfair Trading Practices40 strengthening the position of small and medium -sized enterprises in the 
food supply chain. They also agreed on new rules for organic production and labelling of organic 
products41 to ensure an update of EU regulations for this growing segment of the agric ultural market.  
3.23.   Based on the Commission proposal for the Multiannual Financial Framework (MFF) for 
2021-27, which sets the budgetary framework, and main orientations for the CAP42, the Commission 
adopted proposals for a set of regulations laying down the fr amework for the CAP during the period 
2021-27. For the 2021 -27 period, the European Commission is proposing a total CAP budget of 
EUR 365 billion, a reduction of 5% of annual amounts compared to 2020. The CAP will account for 
just under one -third of the ov erall EU budget. The proposed CAP budget will be divided between its 
two traditional "pillars": direct support for farmers/market measures and rural development. The EU 
aims to use 40% of the overall financial envelope of the CAP in support of climate obje ctives.  
                                                
35 Directive (EU) 2019/770, OJ L 136, 22.5.2019, p.1 and Directive (EU) 2019/771, OJ L 136, 
22.5.2019, p. 28.  
36 Directive (EU) 2016/1148, OJ L 194, 19.7.2016, p. 1.  
37 Regulation (EU) 2019/881, OJ L 151, p. 15.  
38 Viewed at: https://ec.europa.eu/digital -single -market/en/news/ethics -guidelines -trustworthy -ai. 
39 Viewed at: https://ec.europa.eu/digital -single -market/en/news/coordinated -plan-artificial -
intelligence . 
40 Directive (EU) 2019/633, OJ L 111, 25.4.2019, p. 59.  
41 Regulation (EU) 2018/848, OJ L 150, 14.6.2018, p. 1.  
42 European Commission, laying down the multiannual financial framework for the years 2021 to 2027 . 
Viewed at: https://ec.europa.eu/transparency/regdoc/rep/1/2 018/EN/COM -2018-322-F1-EN-MAIN -PART-
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  3.24.   The proposal covers three regulation proposals: CAP Strategic Plan Regulation43, 
CAP Horizontal Regulation44, CAP Common Market Organisation Regulation.45 The CAP reform 
proposal also includes the repeal of all remaining export subsidy provisions.  
3.8  Sanitary and phytosanitary requirements  
3.25.   Since the last review, the EU adopted three major legislative acts in the SPS field, namely the 
Regulation on Official Controls46, the Regulation on Veterinary Medicines47 and the Regulation on 
transparency and sustainabi lity of risk assessment in the food chain .48  
3.26.   The Regulation on Official Controls will provide a single framework for all official controls along 
the agri -food chain. Businesses and authorities will benefit from reduced administrative burdens, 
more efficien t processes and strengthened controls. The Regulation on Veterinary Medicines will 
strengthen the EU action in fighting antimicrobial resistance (AMR), which a global threat to public 
health. It lays down a wide range of measures to fight AMR and to promot e the prudent and 
responsible use of antimicrobials, following the approach of the European One Health Action Plan 
against AMR.  
3.27.   The new legislation on transparency and sustainability of risk assessment in the food chain is 
an important step towards the modernisation of the EU food safety policy; it will ensure greater 
transparency, strengthen the governance and the scientific cooperation and facilitate the 
development of comprehensive risk communication.  
3.28.   During the reporting period, the EU has been devel oping implementing measures for these 
regulations as well as for two legislative acts, on plant health49 and on animal health50, which had 
been adopted during the previous review period.  
3.9  New measures for fair taxation  
3.29.   In recent years, the EU adopted several legislative proposals ensuring the proper allocation 
of taxing rights, limiting profit -shifting and securing, at the same time, a stable business 
environment for trade by avoiding distortions and double taxation. With the Anti-Tax Avoidance 
Directive51, the amendments of the Directive on Administrative Cooperation52 and the EU list of 
non-cooperative tax jurisdictions53, the EU has achieved significant outcomes in recent years to fight 
against tax avoidance. Rules, such as controlled foreign company provisions , exit tax rules, interest 
limitations rules and provisions to tackle hybrid mismatches, are efficient tools for ensuring a 
minimum level of protection against tax avoidance.  
                                                
43 European Commission, establishing rules on support for strategic plans to be drawn up by Member 
States under the Common agricultural policy (CAP Strategic Plans) and financed by the European Agricultural 
Guarantee Fund (EAGF) and by the European Agricultural Fund for Rural Development (EAFRD) and repealing 
Regulation (EU) No. 1305/2013 of the European Parliament and of the Council and Regulation (EU) 
No. 1307/2013 of the European Parliament and of the Council.  Viewed at: 
https://ec.europa.eu/commission/sites/beta -political/files/budget -may2018 -cap-strategic -plans_en.pdf . 
44 European Commission, financing, management and monitoring of the common agricultural policy and  
repealing Regulation (EU) No. 1306/2013 . Viewed at: 
https://ec.europa.eu/transparency/regdoc/rep/1/2018/EN/COM -2018-393-F1-EN-MAIN -PART-1.PDF . 
45 European Commission, amending Regulations (EU) No. 1308/2013 establishing a common 
organisation of the markets in agricultural products, (EU) No. 1151/2012 on q uality schemes for agricultural 
products and foodstuffs, (EU) No. 251/2014 on the definition, description, presentation, labelling and the 
protection of geographical indications of aromatised wine products, (EU) No. 228/2013 laying down specific 
measures f or agriculture in the outermost regions of the Union and (EU) No. 229/2013 laying down specific 
measures forvagriculture in favour of the smaller Aegean islands. Viewed at: 
https://ec.europa.eu/transparency/regdoc/rep/1/2018/EN/COM -2018-394-F1-EN-MAIN -PART-1.PDF . 
46 Regulation (EU) 2017/625, OJ L 95, 7.4.2017, p. 1.  
47 Regulation (EU) 2019/6, OJ L 4, 7.1.2019, p. 43.  
48 Regulation (EU) 2019/1381, OJ L 231,  6.9.2019, p. 1.  
49 Regulation (EU) 2016/2031, OJ L 317, 23.11.2016, p. 4.  
50 Regulation (EU) 2016/429, OJ L 84, 31.3.2016, p. 1.  
51 Directive (EU) 2016/1164, OJ L 193, 19.7.2016, p. 1.  
52 Directive (EU) 2018/822, OJ L 139, 5.6.2018, p. 1.  
53 OJ C 114, 26.3.201 9, p. 2.  WT/TPR/G/395 • European Uni on 
 
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  3.30.   The VAT Directive and the Implementing Regulation have been amended54 recently to tackle 
tax problems in cross -border e -commerce trade. A level playing field between EU and 
non-EU established traders is restored by abolishing the small consignment exemption for imported 
goods. At the same time, VAT obligations are simplified for busines s by extending the scope of the 
VAT One Stop Shop, which has proven to be an effective means of collecting VAT. A "marketplace 
liability" has been introduced to make a platform, which facilitates supplies of goods in certain 
situations liable to pay VAT in stead of the actual seller. This measure will simplify tax collection in 
cases where it is difficult for tax administrations to enforce collection from non -EU established 
businesses. At the same time, this enhanced role for marketplaces to collect the VAT will reduce 
burdens for small businesses, which are thus not required to comply with all the VAT obligations 
arising from selling goods online to customers located in the EU. These amendments will help tackle 
VAT losses due to both non -compliance and under -declaration of imported goods. The measures will 
enter into force on 1 January 2021.  
3.31.   The 5th Anti -Money Laundering Directive55, which amends the 4th Anti -Money Laundering 
Directive56 (entered into  application in June 2017), was adopted in June 2018. The Member States 
must transpose this Directive by 10 January 2020. These amendments introduce substantial 
improvement to better equip the Union to prevent the financial system from being used for money  
laundering and for funding terrorist activities.  
3.32.   These amendments will enhance transparency by: setting up publicly available registers for 
companies, trusts and other legal arrangements; enhance the powers of EU Financial Intelligence 
Units and provide them with access to broad information for the carrying out of their tasks; limit the 
anonymity related to virtual currencies and wallet providers, but also for pre -paid cards; broaden 
the criteria for the assessment of high -risk third countries and improve  the safeguards for financial 
transactions to and from such countries; set up central bank account registries or retrieval systems 
in all Member States; improve the cooperation and enhancement of information between anti -money 
laundering supervisors, prude ntial supervisors and the European Central Bank.  
3.10  Small  and medium -sized enterprises  
3.33.   The EU recognizes the global importance of helping small and medium -sized enterprises 
(SMEs) to participate more actively in international trade as well as in the internal market.  
3.34.   The EU recognises the role of SMEs57 in the EU economy with the "Small Business Act" for 
Europe (SBA), an overarching framework for guiding SME policy -making for EU Member States. 
Every year the European Commission prepares an annual SME Performanc e Review, which is used 
to monitor and assess countries' progress in implementing the SBA recommendations.  The last 
annual report for 2017/201858 provides a synopsis of the size, structure and importance of SMEs to 
the European economy and an overview of th e past and forecasted performance of SMEs from 2018 
to 2019. Comparisons with partner countries outside the EU and with the large enterprise sector are 
also included.  
3.35.    The European Commission is implementing the programme for Competitiveness of 
Enterprises  and small and medium -sized enterprises (COSME).59 COSME has been implemented 
since 2014 through the annual work programmes60 in which all details can be found about the actions 
carried out with their main objectives and budget.  
3.36.   The COSME Loan Guarantee Faci lity (LGF) was reinforced with additional resources allocated 
from EFSI for an amount of EUR 550 million in 2017 and a further increased to a total of 
EUR 770 million in January 2019. An additional top -up of EUR 230 million is under preparation to 
                                                
54 Directive (EU) 2018/2057, J L 329, 27.12.2018, p. 3 and Council Implementing Regulation (EU) 
2017/2459, OJ L 348, 29.12.2017, p. 32.  
55 Directive (EU) 2018/843, OJ L 156, 19.6.2018, p. 43.  
56 Directive (EU) 2015/849, OJ L 141, 5.6.2015, p. 73.  
57 An EU definition of SMEs, which the Commission follows in its policies (e.g. State aid) was set up in 
2003 by Commission Recommendation of 6 May, OJ L 124, 20.5.2003.p.23. It is not legally binding on EU 
Member States however.  
58 Viewed at: https://ec.europa.eu/growth/smes/business -friendly -environment/performance -
review_en . 
59 Regulation (EU) No 1287/2013, OJ L 347, 20.12.2013, p. 33.  
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  allow fo r the catering of continued strong market demand and for the digitalisation pilot that will be 
launched in the framework of the LGF.  
3.11  The implementation of the EU Environment Action Programme  
3.37.   The EU Environment Action Programme provides strategic guidance and ensures predictable 
and coordinated action for Europe's environment and climate policy. The 7th Environment Action 
Programme ( "7th EAP ") entered into force in 2014 and runs until the end of 2020. The 7th EAP has 
been a crucial governance tool, with str ong links to national environment strategies and has led to 
more coherent and effective policy -making. The findings from the 7th EAP Evaluation61 will inform 
future decisions about a successor environment action programme.  
3.38.   The Circular Economy Action Plan (CEAP), which was adopted in 2015 and established a 
comprehensive framework introducing measures covering the whole product lifecycle from 
production via consumption to waste management and the market for secondary raw mate rials, is 
now fully implemented. On 4 March 2019, the European Commission adopted a comprehensive 
report on the implementation of the CEAP.62 The report on the implementation of the Circular 
Economy Action Plan  presents the plastics strategy as an example o f where a systemic approach 
was successfully adopted to tackle barriers and challenges in a material specific lifecycle. In 
January  2018, the EU adopted the EU Strategy for Plastics in a Circular Economy .63 The strategy 
pursues an ambitious approach for pla stic packaging recyclability and contains a strong response to 
the problem of microplastics, which are a significant source of marine pollution.  By 2030, all plastic 
packaging should be reusable or recyclable. Furthermore, the strategy calls for global act ion to 
reduce plastics pollution.  
3.39.   In the area of biodiversity, as regards the implementation of the Regulation on the prevention 
and management of the introduction and spread of invasive alien species64, the EU adopted 
Commission Implementing Regulation upd ating the list of invasive alien species of Union concern65 
increasing the number of invasive alien species of Union concern subject to the restrictions to 49 
and Commission Delegated Regulation on risk assessments in relation to invasive alien species66 
specifying the elements to be covered by the risk assessments.  
3.40.   Furthermore, the European Commission adopted the Communication on Stepping up 
EU Action to Protect and Restore the World's Forests .67 The overall aim is to protect and grow the 
world's forest cover  to improve public health and livelihoods. This is in line with the EU's broader 
objective to halt global forest cover loss by 2030 and with the EU's existing international 
commitments. Halting deforestation and forest degradation, combined with sustainabl e restoration, 
re- and afforestation activities, provide opportunities for economic development. This requires 
putting a particular emphasis on the sustainable production and consumption of agricultural and 
forest -based products.  
3.12  The EU's actions on clima te change  
3.41.   The EU has put climate action as a central policy objective. The EU is on track to keep its 
2020 greenhouse gas emissions well below the target  and finalised the legislative framework to 
deliver on its objectives for 2030. This should allow the E U to adopt an ambitious long -term strategy, 
striving for climate neutrality in line with the Paris Agreement and confirming Europe's commitment 
to lead in global climate action to the UNFCCC by 2020. Transitioning to a low greenhouse gas 
emission, resource  efficient, and climate resilient economy will require a transformative effort 
                                                
61 Viewed at: https://ec.europa.eu/environment/action -programme/evaluation.htm . 
62 European Commission, implementation of the Circular Economy Action Plan . Viewed at: 
https://ec.europa.eu/transparency/regdoc/rep/1/2019/EN/COM -2019-190-F1-EN-MAIN -PART-1.PDF . 
63 European Commission, A European Strategy for Plastics in a Circular Economy . Viewed at: 
https://op.europa.eu/en/publication -detail/ -/publication/2df5d1d2 -fac7-11e7-b8f5-01aa75ed71a1 . 
64 Regulation (EU) 1143/2014, OJ L 317, 4.11.2014, p. 35.  
65 Regulation (EU) 2017/1263 (EU) 2017/1263, OJ L 182, 13.7.2017, p. 37.  
66 Commission Delegated Regulation (EU) 2018/968, OJ L 174, 10.7.2018, p. 5.  
67 European Commission, Stepping up EU Action to Protect and Restore the World's Forests . Viewed at: 
https://eur -lex.europa.eu/resource.html?uri=cellar:a1d5a7da -ad30-11e9-9d01-
01aa75ed71a1.0001.02/DOC_1&format=PDF . WT/TPR/G/395 • European Uni on 
 
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  demanding a fundamental shift in technologies, energy systems, business and investment 
behaviour, and ultimately, in society as a whole.  
3.42.   The climate and energy framework was rev ised upwards in 2018 setting three updated key 
targets for the year 2030: at least a 40% cut in greenhouse gas emissions from the 1990 level: at 
least a 32% share for renewable energy and at least a 32.5% improvement in energy efficiency. 
Both the renewabl e energy and the energy efficiency targets are subject to an upward review clause 
by 2023.  
3.43.   A transparent and dynamic governance process has been developed to help deliver the Energy 
Union, including the 2030 climate and energy targets, in an efficient and coherent manner. This 
approach for the period up to 2030 helps ensure regulatory certainty for investors and coordinate 
EU Member States' efforts.  
3.44.   In 2018, the EU adopted a directive revising the EU Emission Trading System for the period 
2021-2030 (so -called "phase 4")68, including a reduction of the number of quotas by 2.2% per year 
from 2021, instead of 1.74% at present. It includes strict, predictable and equitable rules to prevent 
risks of carbon leakage.  
3.13  Clean Energy for all Europeans Package  
3.45.   The EU Clean Energy Package sets the EU energy efficiency and renewable energy ambitions 
for the 2030 horizon . It also updates the rules that govern the functioning of the internal electricity 
market and the transmission and distribution grids.  
3.46.   The package , proposed by the European Commission in November 2016, included several 
legislative proposals, which have partially entered into force and are partially awaiting the final step 
in the legislative process:  
a. The Regulation on Governance of the Energy Union and Climate Action69 aims to set up a 
governance system allowing the EU Member States to achieve the 2030 objectives and 
targets, for energy and climate in a coherent and most efficient way. It creates more 
transparency and predictability, also for investor s. It aims to significantly reduce the 
administrative burden for national and EU stakeholders ; 
b. Electricity market design legal acts70 - Electricity market Regulation and the Electricity 
market Directive; the Regulations on Risk Preparedness and on the Agenc y for the 
Cooperation of Energy Regulators (ACER) - will make the energy market fit for the future 
and allow for new flexibility in the energy system with a view to facilitating an increased 
uptake of renewable energy. The new rules are designed to empower  energy consumers 
to play an active role in driving the energy transition and to fully benefit from a less 
centralised, and more digitalised and sustainable energy system. The new rules not only 
enable the active participation of consumers but they also pu t in place a strong framework 
for consumer protection. By allowing electricity to move freely to where it is most needed, 
energy generation will be optimised and society will increasingly benefit from cross -border 
trade and competition, thus keeping energy  costs and prices in check.  
c. The revised  Renewable Energy Sources Directive71 introduces a new approach to address 
emissions from indirect land -use change ("ILUC") associated to the production of biofuels, 
bioliquids and biomass fuels. It includes a binding renewable energy target for the 
European Union for 2030 of 32% with an upwards revision clause by 2023. The rules also 
serve also to create an enabling environment to accelerate the penetration of renewable 
energy, as well as public and private investment in innovation and modernisation in all 
key sectors. The criteria determining high ILUC -risk feedstock for biofuels and the criteria 
                                                
68 Directive (EU) 2018/410, OJ L 76, 19.3.2018, p. 3.  
69 Regulation (EU) 2018 /1999, OJ L 328, 21.12.2018, p. 1.  
70 Viewed at: https://ec.europa.eu/energy/en/topics/markets -and-consumers/market -
legislation/electric ity-market -design . 
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  for certifying low ILUC –risk biofuels, bioliquids and biomass fuels are detailed in 
Commission Delegated Regulation (EU) 201 9/80772;  
d. The revised  Energy Efficiency Directive73 includes an energy efficiency target for the EU 
for 2030 of  32.5% with an upwards revision clause by 2023. The extension of the energy 
saving obligation beyond 2020 aims to attract investments in the energy market and 
encourage the uptake of innovative tec hnologies and services which will stimulate the 
demand for energy efficiency improvement measures.  
e. The Energy Performance in Buildings Directive74 aims to accelerate the cost -effective 
renovation of existing buildings, with the vision of a decarbonised bui lding stock by 2050 
and the mobilisation of investments. It also supports electro -mobility infrastructure 
deployment in buildings' car parks and introduces new provisions to enhance smart 
technologies and technical building systems, including automation.  
f. Energy labelling and eco -design measures under  the EU's energy labelling framework 
regulation75 and the EU's Ecodesign Directive76: The energy labelling measures and 
eco-design measures have been prepared for adoption for domestic refrigerators and 
freezers, lighting products, televisions and electronic displays, washing machines and 
washer -dryers, commercial refrigerators and freezers. These measures are progressively 
submitted to the Council and Parliament for scrutiny, and is planned to be adopted in 
2019. Eco-design (only) measures have also been prepared for enterprise servers, electric 
motors, power transformers, external power supplies, and welding equipment . These 
measures will help consumers to choose the most energy efficient appliances.  
3.14  The withdrawal of the United Kingdom from the European Union  
3.47.   On 29 March 2017, the United Kingdom notified the European Council of its intention to leave 
the European Union. To provide for an orderly withdrawal and give legal certainty to businesses, 
citizens,  and stakeholders as to how the disentanglement of the United Kingdom from the EU will 
work, a Withdrawal Agreement77 was negotiated between the EU and the United Kingdom. On 
25 November 2018, the European Council endorsed the Withdrawal Agreement. Before i t can enter 
into force, the Withdrawal Agreement needs to be ratified.  
3.48.   On 29 October  2019, the European Council decided, in agreement with the United Kingdom, 
to further extend the two -year period provided for by Article 50(3) of the Treaty on European Un ion, 
until 31 January 2020 . In the event that the Withdrawal Agreement is not approved by the House 
of Commons in the United Kingdom by the withdrawal date , all Union primary and secondary law 
will cease to apply to the United Kingdom. The United Kingdom w ill then become a third country. 
Should the United Kingdom ratify the Withdrawal Agreement at any stage before 31 January 2020 , 
the withdrawal will take place on the first day of the month following the completion of the ratification 
procedures.  
3.49.   Given the  uncertainty about when and under which conditions the United Kingdom will 
withdraw from the EU, the EU needs to prepare for a withdrawal without a Withdrawal Agreement 
(no-deal scenario). The no -deal scenario means that trade between the EU and the United  Kingdom 
will take place on MFN terms and that EU trade agreements with third countries will cease to apply 
to the United Kingdom as of the United Kingdom's withdrawal.  
                                                
72 OJ L 133, 13.03.2019, p. 1  
73 Directive (EU) 2018/2002 of the European Parliament and of the Council of 11 December 2018 
amending Directive 2012/27/EU on energy efficiency, OJ L 328, 21/12/2018, p. 210.  
74 Directive (EU) 2018/844 amending Directive 2010/31/EU, OJ L 156, 19/06/2018, p. 75.  
75 Regulation (EU) 2017/1369, OJ L 198, 28.7.2017, p. 1  
76 Directive 2009/125/EC, OJ L 285, 31/10/2009, p. 10.  
77 Viewed at: https://ec.europea.eu/commission/sites/beta -
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  3.50.   The European Commission has published a number of communications78 and notices79 
covering  a broad range of policy areas, which aim to prepare businesses, citizens and stakeholders 
for the withdrawal of the United Kingdom under a no -deal scenario.  
3.51.   The Withdrawal Agreement includes a transition period during which the EU law would apply 
in and to the United Kingdom as if it were still a Member State. This means that the United Kingdom 
would continue to participate in the EU Customs Union and the Single Market and all Union policies 
including trade policy. The United Kingdom would remain bound by  the obligations stemming from 
the EU's international agreements, including FTAs. The EU's WTO commitments and schedules would 
continue to cover the United Kingdom during the transition period.  
3.52.   The EU trade policy will not change as a result of the United Kingdom's withdrawal. The EU 
will honour its obligations and the EU's WTO schedules will remain in place. However, the United 
Kingdom's withdrawal from the EU will have implications in the WTO context. Quantitative 
commitments under the goods schedule need  to be apportioned. To this end, as early as October 
2017, the EU and the United Kingdom engaged jointly with other WTO Members on the envisaged 
approach of apportionment of tariff -rate quotas with the key principle of maintaining the existing 
level of mar ket access to the EU27 and the United Kingdom. The negotiations under the Article 
XXVIII80 procedure are currently ongoing with the relevant WTO Members.  
3.53.   The Withdrawal Agreement is accompanied by a Political Declaration81, which was agreed by 
negotiators an d endorsed by the European Council. It sets out the framework for the future 
relationship between the EU and the United Kingdom, allowing for a range of outcomes. The EU aims 
to have as close as possible a partnership with the United Kingdom  in the future in line with the 
Political Declaration.  
4  TRADE AND INVESTMENT  POLICY DEVELOPMENTS  
4.1.  During the period under review, EU trade policy continued to be guided by the Trade for All 
Communication82, adopted in October 2015.  
4.1  Multilateral trade policy  
4.1.1   WTO reform  
4.2.  The E U firmly believes that the World Trade Organization (WTO) remains the cornerstone of 
the multilateral trading system and is indispensable for ensuring free and fair trade. Presently, 
however, the rules -based multilateral trading system with the WTO at its heart is facing the deepest 
crisis since its inception, with the continued blockage of WTO Appellate Body Members' appointments 
and the escalation of unilateral measures and mercantilist deals. The origin of this crisis, however, 
lies in the collective ina bility of the Membership to update the WTO rulebook in order to address the 
economic and technological changes of the past few decades.  
4.3.  Considering that the only and best way to deal with current global trade challenges is by 
preserving and strengthening t he multilateral trading system, resisting any move to managed trade, 
the EU took the initiative to propose a comprehensive reform of the three main functions of the WTO 
(rulemaking, dispute settlement and monitoring/deliberation). Following the call of the  
European  Council (27 -28 June 2018), the European Commission presented, on 18 September 2018, 
an approach to make the WTO more relevant and fit for a changing world. To this end, the EU is 
engaging with the Membership on its approach and submitted textual proposals in various areas.  
Dispute settlement  
4.4.  The EU's priority in its reform efforts has been to preserve and strengthen the main features 
of the dispute settlement system,  which risked paralysis, at the time of writing, by the end of 2019 
                                                
78 Viewed at: https://ec.europa.eu/info/brexit/brexit -preparedness/other -preparedness -activities_en . 
79 Viewed at: https://ec.europa.eu/info/brexit/brexit -preparedness/preparedness -notices_en . 
80 WTO document G/SECRET/42, 24 July 2018.  
81 Viewed at: https://ec.europea.eu/commission/sites/beta -
political/files/revised_political_declaration.pdf . 
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  if the appoint ment of Appellate Body members remained blocked. To that end, the EU, together with 
a coalition of 13 WTO Members, submitted proposals83 to the WTO in November 2018, which 
addressed concerns of the Members blocking appointments and were discussed in a dedic ated 
process facilitated by the Ambassador of New Zealand.  
Negotiating function  
4.5.  The failure of the 11th Ministerial Conference in December 2017 in Buenos Aires (MC11) to find 
compromises confirmed the blockage of the WTO's negotiating function. In respons e to the 
impossibility to conclude any ongoing negotiation or start discussing new issues, several groups of 
Members, comprising a wide range of developed and developing countries, initiated various strands 
of plurilateral work. In the case of e -commerce a nd domestic regulation, these initiatives have led 
to the start of WTO negotiations in the meantime.  
4.6.  While this has breathed some oxygen into the system, the multilateral trade rule book needs 
updates in more chapters than those addressed in the Buenos Air es initiatives. Updates are essential, 
in particular, to address distortions caused by non -market policies and practices, which are core 
underlying reasons of current trade tensions.  
4.7.  The EU considers that updating the rules on industrial subsidies in the A greement on Subsidies 
and Countervailing Measures is fundamental for modernising WTO rules. The present rules are not 
sufficient for addressing practices which developed since the crafting of the Agreement and have led 
to serious distortions. With a view t o eventually preparing WTO negotiations in this area, the EU has 
undertaken exploratory talks with various Members in different formations.  
Monitoring and regular work  
4.8.  Reinvigorating the so -called regular work in the WTO's councils and committees can also 
contribute to addressing the challenges the organisation faces and to maintaining it as the 
institutional bedrock for international trade relationships. The potential for useful work of the regular 
WTO bodies is overall under -utilised. Making this regular work respond more effectively to the 
interests of stakeholders would help keep the WTO relevant.  
4.9.  To this end, the EU advocates improving Members' collective compliance with their notification 
obligations. Together with other Members, in November 2018 the EU co -sponsored a proposal, 
originally put forward by the United States, to improve notification compliance in the area of trade 
in goods.84 The proposal responds to the long -standing problem of significant delays in submitting 
some notifications. It su ggests a two -fold solution by increasing focus on assistance for developing 
countries who encounter capacity constraints for fulfilling their transparency requirements on the 
one hand, and applying administrative measures as a consequence where obligations  are neglected 
for reasons other than capacity constraints.  
4.10.   In the same vein, the EU, together with other Members, made a proposal to the 
General  Council in July 2019 to develop guidelines for WTO councils and committees in which 
Members raise and discuss trade concerns .85 Despite the significant amount of time and resources 
that many Members put into alleviating concerns on trade measures at a pre -litigation stage, the 
outcomes are often inadequate. To make discussions more effective, the EU and others prop osed to 
streamline meeting arrangements, strengthen Members' engagement and promote additional 
informal avenues for dialogue.  
4.11.   Finally, the EU is of the view that active participation of Members in formal, as well as informal, 
meetings of the regular bodie s is essential for a dynamic organisation. The EU seeks to lead by 
example by contributing to the monitoring and deliberative work of these bodies and engaging in 
dialogue with all parts of the Membership.  
                                                
83 WTO documents WT/GC/W/752/Rev.2 and WT/GC/W/753/Rev.1, 11 December 2018.  
84 WTO document JOB/CTG/14/Rev.2, 27 June 2019.  
85 WTO document WT/GC/W/777/Rev. 4, 21 October 2019.  WT/TPR/G/395 • European Uni on 
 
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  4.1.2   WTO negotiations and initiatives  
4.12.   The only ongoing multilateral negotiation stemming from the Doha Development Agenda, the 
negotiation to discipline fisheries subsidies aims at prohibiting fisheries subsidies, which contribute 
to overcapacity and overfishing and eliminating subsidies that contribute to ill egal, unreported and 
unregulated fishing. The EU has taken a leading position in advancing this important work and is 
committed to finalising negotiations by December 2019, as agreed in Buenos Aires and in line with 
the UN Sustainable Development Goal 14.6 .  
4.13.   The EU is fully supportive of the work ensuing from the Buenos Aires Joint Statement 
initiatives launched in the margins of MC11 on e -commerce, domestic regulation in services and 
investment facilitation. The EU is guided by the approach of "flexible mu ltilateralism", through which 
plurilateral negotiations should lead to multilateral, MFN -based outcomes. This has somewhat 
stimulated the WTO's negotiating system and led to constructive meetings or even launch of new 
negotiations.  
4.14.   Building on the exploratory work carried out in 2018, the EU was pleased to participate in the 
launch of plurilateral WTO negotiations under the Joint Statement initiative on e -Commerce in 
January 2019 in the margins of the World Economic Forum in Davos. T he EU aims to negotiate a set 
of multilateral rules and commitments that would enhance global e -commerce and facilitate business 
operations, notably for small and medium -sized enterprises, e.g. by ensuring validity of e -signatures 
and e -contracts and prohi biting unjustified requirements to retain data in a specific location, as well 
as to enhance consumer trust in the online environment. Committed to making the initiative a 
success, the EU tabled negotiating proposals on priority issues for business and con sumers, such as 
a set of horizontal digital trade provisions and a set of rules applying to telecommunication services, 
as well as market access requests in sectors particularly relevant for e -commerce. The EU  advocates 
for a commercially meaningful outcom e, broad participation and a negotiating framework that 
provides some flexibility to the participants.  
4.15.   Clear and enforceable domestic regulation disciplines for services is an important complement 
to existing liberalisation under the GATS. The process set  up under the Joint Statement Initiative on 
Domestic Regulation allowed significant progress to be made since MC11. This created a real 
opportunity to conclude more than 20 years of WTO negotiations on this important topic, which 
would bring tangible benef its to services operators. The next Ministerial Conference in Nur -Sultan in 
Kazakhstan in 2020 provides a natural deadline for doing this, as confirmed by the Ministerial 
Statement issued in May 2019 in the margins of the OECD Ministerial Meeting.  
4.16.   The EU is equally active in and supportive of the structured discussions under the Joint 
Statement Initiative on Investment Facilitation for Development on developing a multilateral 
framework on investment facilitation and the Informal Working Group on Micro, Sma ll, and 
Medium -Sized Enterprises (MSMEs). As the EU believes that trade can be a driver of gender equality, 
it also supported the Buenos Aires Declaration on Trade and Women's Economic Empowerment.  
4.2  The EU bilateral negotiating agenda  
4.17.   The EU has continued b uilding its trade network via its bilateral agenda while fully respecting 
WTO rules.  To date, European companies and citizens benefit from free trade agreements with 
72 countries under 41 existing agreements. The EU has concluded, and put into operation th e 
EU's two biggest trade agreement in terms of market size. On 21 September 2017, the 
Comprehensive Economic and Trade Agreement (CETA) between the EU and Canada entered into 
provisional application. Some provisions,  including those on investment protectio n and the 
Investment Court System will only enter into force when all EU Member States ratify the agreement. 
In February 2019, the EU -Japan Economic Partnership Agreement (the EU -Japan EPA) entered into 
force.  
4.18.   The two agreements are new generation free tr ade agreements. They go beyond trade in 
goods and services; they  cover also intellectual property, investments, government procurement, 
customs and trade facilitation, competition, regulatory cooperation, trade and sustainable 
development. Moreover, the EU -Japan EPA was the first agreement to include a chapter dedicated 
to smaller businesses. Together, these agreements will help EU businesses to save up to 
EUR 1.6 billion in customs duties per year. EU exports to Japan are expected to rise by EUR 13 billion  WT/TPR/G/395 • European Union  
 
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  per year while exports to Canada in 2018 (the first full year of provisional application) increased by 
15% in comparison to the preceding 3 years).  
4.19.   In South East Asia, on 30 June 2019, the EU signed the Free Trade Agreement and the 
Investment Protection Agreement with Vietnam. The agreement will soon be presented for the 
ratification procedure. In addition, the EU -Singapore Free Trade Agreement and Investment 
Protection Agreement, signed in October 2018, is under the ratification process. The EU also 
continues bilateral free trade agreement negotiations with Indonesia, launched in 2016.  
4.20.   The Court of Justice confirmed in its opinion 2/15 on the EU -Singapore Free Trade Agreement 
that the majority of areas covered by this FTA (ranging from trade in goods, to services, to public 
procurement or sustainable development) fall under the exclusive competence of the EU. Only as 
regards portfolio investment and the settlement of disputes between foreign investors and states, 
the EU shares competence with Member States . In view of this, the EU has introduced a new 
approach to its trade and investment agreements: free trade agreements cover areas where the EU 
has exclusive competence, while investment protection agreements cover areas of both EU exclusive 
and shared comp etence. Japan, Singapore and Vietnam were the first trade and investment partners 
with whom the EU followed this new approach. In addition, the EU is pursuing negotiations for 
standalone investment agreements, including with China.  
4.21.   As regards Africa, in Se ptember 2018, Commission President Juncker proposed to deepen the 
EU's economic and trade relationships with Africa through a new Africa -Europe Alliance for 
Sustainable Investment and Jobs. The European Commission proposes to boost trade and 
investment, fu rther attract private investors, support education and skills development for 
employability, as well as to improve the business climate.  
4.22.   As of February 2018, the southern African Economic Partnership Agreement, already applied 
to other countries, entered into provisional application with Mozambique. In February 2019, Comoros 
ratified the Eastern and Southern African Economic Partnership Agreement and joined the Eastern 
and Southern Partnership already in implementation since 2012.  
4.23.   The EU is also active wit h partners in Latin America. In November 2017, the EU and Chile 
launched negotiations for an Association Agreement – deepening and expanding the existing 
Agreement. In 2018, the EU reached a political agreement with Mexico on the modernisation of the 
current Association Agreement. In June 2019, the EU concluded negotiations with Mercosur for an 
ambitious, balanced and comprehensive trade agreement.  
4.24.   In the Pacific, the EU  launched negotiations for comprehensive trade agreements with 
Australia and New Zealan d in June 2018.  
4.25.   At the end of 2018, Samoa completed its accession to the EU -Pacific Economic Partnership 
Agreement, which is currently implemented by Papua New Guinea and Fiji.  
4.26.   In the EU's own neighbourhood, the EU is continuing its negotiations on the D eep and 
Comprehensive Free Trade Agreements with Morocco and Tunisia, which were launched respectively 
in March 2013 and in October 2015.  
4.27.   In the reviewed period, the EU also launched negotiations for enhanced, non -preferential 
trade agreements with Azerbai jan and Kyrgyzstan in 2017, and with Uzbekistan in 2018.  
4.28.    Finally, during a meeting of Presidents Juncker and Trump in Washington D.C. on 
25 July 2018, the two Presidents announced the launch of a new phase in the bilateral EU -US trade 
relationship. In Apr il 2019, EU Member States adopted the European Commission proposal allowing 
the EU to enter into formal negotiations for a tariff elimination agreement on industrial goods and 
an agreement on conformity assessment with the U.S.  
4.29.   The EU is putting increasing  efforts into implementation and enforcement of commitments 
made under bilateral trade agreements. Following its 2015 commitment, the European Commission 
published its third annual report on implementation of EU free trade agreements in October 2019.86 
                                                
86 Viewed at: https://trade.ec.europa.eu/doclib/docs/2019/october/tradoc_158387.pdf . WT/TPR/G/395 • European Uni on 
 
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  This report is complemented by a comprehensive working document which provides detailed 
information on the implementation of each agreement, including on the work of committees and 
sub-committees established under the agreements.  
4.30.   The annual report on implemen tation of free trade agreement now provides information on 
the preferential utilisation of the agreement for EU imports based on EU statistics. The EU works 
closely with its trade partners to obtain reliable statistics on preferential utilisation for EU ex ports in 
order to be able to assess the effects of the agreement.  
4.3  Promoting a sustainable approach to trade  
4.31.   The EU Treaties require that the EU's external action promote the principles and international 
values upon which the European Union is founded, inc luding sustainable development, democracy, 
the rule of law, and respect for fundamental rights. This is done in a positive, incentive -based way 
and at different levels.  
4.3.1   Promoting labour rights and environmental protection  
4.32.   At multilateral level and as a WTO Member, the EU is an active player in the WTO negotiations 
on fisheries subsidies and in the WTO Committee on Trade and Development. It also is actively 
involved in the work of the WTO Committee on Trade and Environment a nd supports efforts to 
liberalise trade in environmental goods and services.  
4.33.   At bilateral level, the EU promotes labour and environmental considerations in its trade 
agreements through dedicated chapters on trade and sustainable development (TSD). Bilater al 
agreements under implementation that contain such chapters include those with Canada, Central 
America , Colombia, Ecuador and Peru, Georgia, Moldova, South Korea  and Ukraine. Also, the 
recently signed agreements with Japan,  Mexico, Singapore and Vietnam have a TSD chapter, as 
does the recently concluded agreement with Mercosur. TSD chapters include commitments to ratify 
and effectively implement fundamental International Labour Organization  conventions and 
Multilateral Environmental Agreements. The chapters also contain specific provisions on the 
conservation and sustainable management of natural resources (e.g. timber, fish and wi ldlife) and 
the promotion of practices favouring sustainable development and responsible business practices. 
They also aim to prevent the risk of a race to the bottom, by prohibiting derogations from or lack of 
enforcement of domestic environmental or labo ur laws in order to encourage trade and investment.  
4.3.2   Supporting inclusive growth in developing countries  
4.34.   At unilateral level, the EU's Generalised Scheme of Preferences (GSP) removes duties from 
products coming into the EU market from vulnerable developing countries. Under the general GSP 
arrangement, the EU grants partial or full tariff reductions on around 66% of tariff lines. The Special 
Incentive Arrangement for Sustainable Development and Good Governance (GSP+) grants mostly 
duty-free treatment to essen tially the same 66% of tariff lines. The Everything But Arms (EBA) 
arrangement, also a part of the EU's GSP, gives Least Developed Countries (LDCs) tariff -free, quota -
free access to the EU market for all products except arms and ammunition.  
4.35.   Under the EU's  current GSP Regulation, all GSP beneficiary countries (including Everything 
But Arms beneficiaries) have to respect the principles of fifteen core conventions on human and 
labour rights. The GSP+ arrangement requires countries to fulfil, ratify and effect ively implement a 
total of 27 international conventions covering core human and labour rights, environmental 
protection, and good governance. An independent mid -term evaluation concluded in 2018 that the 
EU's GSP is effective, showing that imports from ben eficiary countries have increased substantially. 
In 2018, the share of EU imports coming from LDCs stood at 2.26%, more than double the overall 
LDC share of world exports (0.98% in 2017).87 
4.36.   In December 2017, the EU and its Member States updated their joint Aid for Trade (AfT) 
Strategy to change their collective approach towards supporting developing countries' trade and 
productive capacities88. The objective of the updated strategy is to better align EU AfT interventions 
                                                
87 WTO document WT/COMTD/LDC/W/66, 2 October 2018.  
88 Council Conclusions (15573/17) adopted on 11 Dece mber 2017.  WT/TPR/G/395 • European Union  
 
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  with actual market -driven opportunitie s and constraints, to ensure a better quantitative focus on 
LDCs and to increase the contribution of AfT to sustainable development goals, while supporting a 
stronger participation of women in the economy. The most recent EU Aid for Trade Progress Report 
(2019) was presented at the 7th Global Aid for Trade Review in July 2019.89 
4.37.   The EU and its Member States collectively constitute the world's largest AfT donor, accounting 
for more than one -third of global AfT, with collective commitments amounting to EUR 14. 5 billion in 
2017 (increase of 7.8% compared to 2016). The EU's and its Member States' commitments for Trade 
Related Assistance reached EUR 4.5 billion in 2017 (increase of 31% compared to previous year).  
4.3.3   Promoting human rights  
4.38.   The Union's trade policy hel ps to promote and protect core human rights around the world. 
EU policy involves various trade policy instruments including the EU's unilateral trade preferences 
(GSP), bilateral and regional free trade agreements and trade impact assessments and evaluatio ns.  
4.39.   The EU's free trade agreements concluded with trading partners are linked to the human 
rights "essential elements" clause contained in the political framework agreements with these 
countries.  
4.40.   In the context of the Alliance for Torture -Free Trade, the  EU continues efforts within the 
United  Nations to ban or control worldwide trade in products used for torture and capital punishment. 
In September 2018, during the Alliance's first Ministerial, members agreed to work towards an 
UN instrument (such as a bi nding convention) and in June 2019 the UN passed a resolution launching 
the process to this effect.  
4.3.4   Gender equality and economic empowerment of women  
4.41.   The EU is committed to gender equality, to which various policy areas, including trade, can 
contribute. Th e EU supported the adoption of the Joint Declaration on Trade and Women's Economic 
Empowerment at the 11th WTO Ministerial Conference in Buenos Aires in December 2017. In this 
context, the EU co -hosted a workshop on Women and Digital Trade in Geneva on 1st July 2019 to 
discuss the opportunities and challenges for women in digital trade. The EU's updated Aid fo r Trade 
strategy also explicitly recognises gender equality as a fundamental human right, putting women's 
economic empowerment at its forefront.  
4.42.   EU trade agreements contain commitments related to the implementation of fundamental 
ILO conventions targeting  non-discrimination in employment (ratification and implementation of 
ILO Conventions 100 and 111 on equal remuneration and non -discrimination), in a specific chapter 
on Trade and Sustainable Development. In addition, the EU is negotiating specific provisi ons on 
trade and gender equality in the context of the modernisation exercise of EU Chile Association 
Agreement. Such provisions will help acquiring a better understanding of the constraints and 
opportunities faced by women in the trade arena, as well as s haring best practices. The EU and 
Canada are cooperating along the same lines in the context of the EU -Canada Comprehensive 
Economic and Trade Agreement (CETA).  
4.43.   The GSP+ scheme includes the UN "Convention on the Elimination of All Forms of 
Discrimination a gainst Women".  
4.3.5   Ensuring responsible management of supply chains  
4.44.   All recently concluded trade agreements by the EU contains specific provisions on Corporate 
Social Responsibility/Responsible Business Conduct (CSR/RBC), committing the parties to promoting 
internationally agreed instruments in this area. This also translates into dedicated implementation 
activities with FTA partner countries building on the expertise and leverage of relevant international 
organisations and stakeholders.  
4.45.   In 2018, the EU launc hed the "Responsible Supply Chains in Asia" pilot project funded under 
the EU Partnership Instrument for three years and developed by the EU together with the ILO and 
                                                
89 Viewed at: https://ec.europa.eu/europeaid/eu -aid-trade -progress -report -2019_en . WT/TPR/G/395 • European Uni on 
 
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  OECD. The EU launched a similar project to promote CSR/RBC and Business and Human Rights in 
selected Latin America countries. The project started in early 2019 for 4 years.  
4.46.   Regarding horizontal due diligence legislation, in 2018, for the first time, listed companies, 
banks and insurance companies with more than 500 employees were required to disclose 
non-financial information in their management reports relating to environmental, social and labour 
issues, respect for human rights, anti -corruption and bribery issues.90 The non -financial statement 
should include information on the due diligence p rocesses implemented by the company, as well as 
on the principal risks linked to the company's operations, including, where relevant and 
proportionate, how the company manages those risks. The so -called conflict minerals regulation of 
2017 will help to ens ure that EU imports of tin, tantalum, tungsten and gold and the minerals 
containing them do not contribute to armed conflict and associated human rights abuses along the 
supply chain. It will start to apply on 1 January 2021.  
4.3.6   Promoting fair and ethical tr ade schemes  
4.47.   The EU continues to promote fair and ethical trade schemes with a view to raising awareness 
on both the supply - and the demand -side and on developing more sustainable trade opportunities 
for small producers in third countries. The EU has introd uced initiatives which aim to recognise 
cities'  positive impact in social, economic and environmental sustainability in international trade. 
In 2017, the "EU Cities for Fair and Ethical Trade Award" was set up as a project.  
4.48.   In addition, a market study on consumer demand for fair and ethical products was finalised 
and presented in May 2018. The study focused on selected EU Member States and concluded that 
sustainable product sourcing has become a top priority for retailers who are increasingly "greening" 
their supply chains, adopting fair and ethical trade criteria and applying sustainability standards in 
overwhelming numbers.  
4.49.   Fair and ethical trade schemes are promoted as part of the EU's concluded bilateral trade 
agreements and through the network of EU d elegations.  
4.3.7   Transparency, anti -corruption and promoting good governance  
4.50.   The EU is committed to transparency as it considers it essential to ensure inclusiveness, 
legitimacy and accountability and facilitates a mutual understanding of policy in any area by  
enhancing public trust. To pursue a pro -active transparency policy the European Commission 
publishes all its draft negotiating directives, reports of negotiating rounds and other relevant 
documents. In addition, to engage with civil society, public stakeh older events on trade are regularly 
organised with representatives of non -governmental organisations, trade unions, business 
organisations and other groups. In this way, the European Commission receives concrete substantive 
input to improve its trade polic y and to make it evidence -based.  
4.51.   EU trade policy also contributes to the prevention and fight against corruption, for instance 
by increasing the transparency of regulations and procurement processes, or by simplifying customs 
procedures. The modernised tr ade agreement with Mexico, for which an agreement in principle was 
announced on 28 April 2018, contains provisions which seek to fight corruption, notably by making 
active and passive bribery of public officials a cr iminal offence , as foreseen in the UN Co nvention 
Against Corruption. There are also detailed provisions to tackle money laundering.  
4.4  Trade Policy for open and fair trade  
4.52.   While the EU is one of the most open economies in the world, it also believes in fair trade. 
The EU continued to stand against unfair and illegal practices and state subsidies, aiming at ensuring 
a level playing field to its economic operators.  
4.53.   The EU took several significant measures to achieve open but fair trade:  
a. Trade defence area: There were two changes to the EU's basic anti-dumping and 
anti-subsidy legislation in December 2017 and June 2018 respectively.  The first of these 
                                                
90 Directive 2014/95/EU amending Directive 2013/34/EU, OJ L 330, 15.11.2014, p. 1. WT/TPR/G/395 • European Union  
 
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  changes to the antidumping rules91 introduced a new methodology to calculate the normal 
value of goods subject to investigation, in case of significant  distortions induced by the 
authorities of the exporting country. At the same time there was also a strengthening of 
the anti -subsidy rules92, which allow the European Commission to better capture the full 
magnitude of subsidisation by making it possible to  also address subsidies identified during 
the course of an investigation. The second set of changes, in June 2018, involved a 
modernisation of the trade defence instruments93 and introduced inter alia , shorter 
investigation deadlines, more transparent inves tigations as well as, rules more adapted to 
face the challenges of the global economy, i.e. the existence of raw materials distortions, 
which more and more plague today's commercial exchanges.  
b. Regulation on Screening of Foreign Direct Investment94: The regu lation  entered into force 
on 10 April 2019. It will become fully applicable as of 11 October 2020. In some exceptional 
cases (foreign investment affecting critical technologies, infrastructure, supply of critical 
inputs or access to sensitive data), it wil l help European Union safeguard its security 
interests from foreign investment targeting the acquisition of critical European assets. The 
EU screening framework does not replace or duplicate existing national mechanisms, and 
hence does not add red tape for  investors. It is not targeted against investors from any 
particular country: non -discrimination is a key principle of the new Regulation and 
screening mechanisms of EU Member States will need to respect this principle. In addition, 
requirements applying t o national screening mechanisms include rules on transparency, 
confidentiality of information exchanged, possibility of recourse against screening 
decisions, and measures to identify and prevent circumvention by foreign investors.  
c. In the context of a growi ng number of trade tensions and protectionist measures, the EU 
continued defending interests of its companies in the global market and ensured95 that 
European products are not blocked through barriers to trade. The latest Trade and 
Investment Barriers Repor t96 shows that 123 barriers hindering EU exports opportunities 
have been removed since 2014. In the Report, the European Commission elaborated on 
the EU's wide toolbox to tackle market access barriers, including dispute settlement where 
appropriate, providi ng specific examples from the report about cases which have led to 
the resolution of barriers.  
d. Following the European Council conclusions of March 201997, the EU resumed discussions 
on the International Procurement Instrument (IPI) and the legislative proce ss is ongoing. 
IPI aims at improving access of EU economic operators to public procurement and 
concessions markets in third countries.  
5  LOOKING AHEAD  
5.1.  The WTO is facing its deepest crisis since the end of the Second World War, with the risk of 
paralysis of t he dispute settlement system and a growing recourse to unilateral, WTO -inconsistent 
measures. For the EU, the collapse of the multilateral system, which has for decades underpinned 
prosperity across the world and, moreover, rising living standards in devel oping countries, must be 
avoided at all costs.  
5.2.  The only way to achieve this is by strengthening and reforming the WTO in a way that allows 
that all members make a renewed commitment to an updated balance of rights and obligations. The 
EU's reform proposal s have this aim in view, in terms of all three pillars of WTO action: dispute 
settlement, deliberative discussions and negotiations.  
5.3.   Demonstrating the value of the negotiating function is of particular importance. Any successful 
WTO reform must deliver s trengthened rules on non -market policies and practises that are distorting 
                                                
91 Regulation (EU) 2017/2321, OJ L 338, 19/12/2017, p. 1.  
92 Regulation (EU) 2017/2321, OJ L 338, 19/12/2017, p. 1.  
93 Regulation (EU) 2018/825, OJ L 143, 7.6.2018, p. 1.  
94 Regulation (EU) 2019/452, OJ L 79, 21/3/2019, p. 1.  
95 Viewed at: http://trade.ec.europa.eu/doclib/docs/2019/june/tradoc_157929.pdf . 
96 Viewed at: http://trade.e c.europa.eu/doclib/docs/2019/june/tradoc_157929.pdf . 
97 Viewed at: https://data.consilium.europa.eu/doc/document/ST -1-2019-INIT/en/pdf . WT/TPR/G/395 • European Uni on 
 
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  trade, such as industrial subsidies and forced technology transfers, which are the root causes of 
current trade tensions. The EU will continue to work towards this goal.  
5.4.  At the sam e time the EU will continue to support the ongoing negotiations under the 
WTO's  aegis, including multilateral negotiations such as on fisheries subsidies and the plurilateral 
Joint Statement Initiatives, including the e -commerce in particular, which is one  of the examples 
how WTO Members can work together and achieve meaningful results, although in a non -traditional 
way. 
5.5.  In parallel, the EU will also continue to use its bilateral trade agenda to promote our values on 
sustainable development with social and environmental standards and sending a signal to the world 
that we are committed to open, fair and well -regulated markets hereby contributing to the 
preservation of a rules bases global governance system.  
 
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