RESTRICTED  
  
WT/TPR/G/442  
11 April 2023  
(23-2264) Page: 1/37 
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/442 • European Union  
 
- 2 - 
 
  Contents  
1   INTRODUCTION  ................................ ................................ ................................ ..........  4 
2   TRADE AND THE ECONOMIC ENVIRONMENT  ................................ ................................  4 
2.1   The EU economic environment and its macroeconomic policy  ................................ ...........  4 
2.2   Trends in foreign trade and foreign direct investment  ................................ .....................  6 
3   MULTILATERAL AND BILATERAL TRADE POLICY  ................................ .........................  7 
3.1   The EU's multilateral  trade agenda  ................................ ................................ ...............  7 
3.1.1   WTO Reform  ................................ ................................ ................................ ..........  7 
3.1.2   WTO response to global challenges  ................................ ................................ ...........  10 
3.2   The EU's bilateral  agenda  ................................ ................................ ..........................  11 
3.2.1   Bilateral trade agreements  ................................ ................................ ......................  11 
3.2.2   Trade -related cooperation  ................................ ................................ .......................  15 
4   TRADE AND DEVELOPMENT  ................................ ................................ .......................  17 
4.1   Supporting  inclusive growth in developing countries  ................................ ......................  17 
4.2   Aid for Trade  ................................ ................................ ................................ ............  17 
5   SUSTAINABILTY  ................................ ................................ ................................ ........  18 
5.1   The EU's actions on climate change and environmental protection  ................................ ... 18 
5.1.1   Overview of the actions  on climate change and environmental protection  .......................  19 
5.1.2   Sustainable  food systems  ................................ ................................ ........................  20 
5.1.3   Decarbonising  Energy and Sustainable Transport  ................................ ........................  21 
5.2   Sustainability , fairness and inclusiveness  ................................ ................................ ..... 23 
5.2.1   Protecting  human rights and promoting labour rights  ................................ ..................  23 
5.2.2   Promoting sustainability  ................................ ................................ ..........................  24 
5.2.3   Small and Medium Sized  enterprises (SMEs)  ................................ ..............................  24 
5.2.4   Transparency  ................................ ................................ ................................ ........  25 
5.2.5   Gender equality and women's economic empowerment  ................................ ...............  25 
6   ENFORCEMENT  AND RESPONDING TO TRADE DISTORTIVE PRACTICES  ....................  26 
6.1   Enforcement  ................................ ................................ ................................ ............  26 
6.2   Trade Defence ................................ ................................ ................................ ..........  27 
6.3   EU State aid control  ................................ ................................ ................................ .. 28 
6.4   The EU's public  procurement policy  ................................ ................................ .............  29 
7   TRADE  POLICY RESPONSE TO CRISIS  ................................ ................................ ....... 29 
7.1   COVID -19 related temporary measures  ................................ ................................ ....... 29 
7.2   Sanctions  ................................ ................................ ................................ ................  30 
8   DEFENDING THE EU'S INTERESTS AND VALUES  ................................ ........................  31 
8.1   Investment  Screening  ................................ ................................ ...............................  31 
8.2   Export  controls  ................................ ................................ ................................ .........  31 
8.3   Acting against  economic coercion  ................................ ................................ ................  32 
9   EXTERNAL  IMPACTS OF THE EU'S INTERNAL POLICIES  ................................ .............  32 
9.1   Digital Services and online platforms  ................................ ................................ ...........  32 WT/TPR/G/442 • European Union  
 
- 3 - 
 
  9.2   Single Market  for goods  ................................ ................................ .............................  34 
9.3   Single Market in services  ................................ ................................ ...........................  34 
9.4   Common agricultural  policy  ................................ ................................ ........................  35 
9.5   Customs and trade facilitation  ................................ ................................ ....................  36 
 
 
  WT/TPR/G/442 • European Union  
 
- 4 - 
 
  1  INTRODUCTION  
1.1.  In the three years since its last Trade Policy Review, the European  Union  (EU)'s trade policy 
has continued to operate in a very challenging international environment. Geopolitical tensions have 
been on the rise, most recently with the Russian  Federation 's illegal and unjustified war of aggression 
against Ukraine, with spill -over effects affecting nations around the world. Economic headwinds have 
been setting in with inflation on the rise and the persisting impacts of the COVID -19 pandemic. The 
negative imp acts of climate change have been increasingly felt around the world with severe 
droughts, flooding and temperature anomalies compounding an already difficult situation. The world 
is in transition. An active trade policy is necessary to navigate today 's troubled waters.  
1.2.  In February  2021, the EU set out its new trade strategy in the Trade Policy Communication1 
("2021 Trade Policy Communication "). Responding to the challenges the EU faces and the political 
priorities of supporting the green and digital transitions, the new strategy was based on the concept 
of open strategic autonomy, designed to enhance the EU 's ability to make its own choices and shape 
the world around it through leadership and engagement; and which also reflects the EU 's 
fundamental be lief that addressing today 's challenges requires more rather than less global 
cooperation.  
1.3.  The new strategy was underpinned by openness, sustainability and assertiveness.  
a. Openness  – because the EU remains a firm believer in the benefits that deep, stable, and 
predictable trade relations can bring to all those involved. International trade has been a 
motor of growth for the EU 's economy and for that of its partners and also helps to 
strengthen the bonds with our international partners more broadly. Everythin g possible 
must be done to sustain the benefits of cooperation and avoid a protectionist spiral.  
b. Sustainability  – because trade policy needs to do what it can to support sustainable 
development, including combatting climate change, minimising its negative effects, and 
supporting adaptation, while also promoting sustainable environmental practices and 
labour rights.  
c. Assertiveness  – because in a world of geopolitical, economic, and environmental 
transition, the EU needs to be able to effectively defend its interests and enforce its rights .  
1.4.  The multilateral trading system and the World Trade Organization (WTO) remain at the centre 
of the EU 's trade policy. A testimony to  the importance attached to multilateralism, the 2021 Trade 
Policy Communication  includes a detailed annex on WTO reform. Preserving a stable and predictable 
international trading environment based on clear and enfor ceable rules that all WTO members abide 
to is of fundamental strategic interest for the EU. The EU has remained committed to the WTO, while 
also advocating for its reform through its biggest crisis in decades and will continue to do so. The 
outcome of the 12th Ministerial Conference (MC12) has shown that these efforts were not in vain and 
will hopefully give a new impetus to the continuous efforts to strengthen  the multilateral trading 
order. Maintaining the momentum for MC13 is critical.  
2  TRADE AND THE ECO NOMIC ENVIRONMENT  
2.1  The EU economic environment and its macroeconomic policy  
2.1.  The COVID -19 pandemic represented a huge shock for global and EU economies, with severe 
economic and social consequences over the last years. Economic activity in the EU suffered a sharp 
contraction in 2020 as containment measures were imposed, supply chains were put under pressure 
or disrupted, and international trade choked. After expanding by 1.8% in 2019, the EU economy 
contracted by 5.7% in 2020. The successful roll -out of the v accination campaign, better adaptation 
of firms and households to the constraints of the pandemic environment and policy actions at 
national and EU level paved the way for a rebound of 5.4% in 2021.  
 
1 European Commission, Trade Policy Review – An Open, Sustainable and Assertive Trade Policy . Viewed 
at: https://trade.ec.europa.eu/doclib/docs/2021/february/tradoc_159438.pdf . WT/TPR/G/442 • European Union  
 
- 5 - 
 
  2.2.  Decisive and coordinated policy actions at national and EU level in response to the COVID -19 
pandemic helped alleviate the negative impact of the pandemic -related shock. To highlight some 
key policy actions, the European Central Bank announced a EUR  750 billion pandemic emergency 
purchase programme (PEPP) with an additional EUR  600 billion  added later. The EU also redirected 
up to EUR  65 billion  cohesion funds to help Member States tackle the COVID -19 crisis. The 
European  Investment Bank (EIB) Group put in place a EUR  25 billion  pan-European guarantee fund 
and p rovided loans up to EUR  200 billion  for companies with a focus on small and medium -sized 
enterprises (SMEs) throughout the EU. The EU activated the general escape clause under the 
Stability and Growth Pact to accommodate exceptional government spending in response to the 
pandemic. The EU also established an instrument to support temporary unemployment schemes 
throughout the crisis, the "Support to mitigate Unemployment Risks in an Emergency " (SURE).  
2.3.  Russia 's war of aggression against Ukraine poses new chall enges to the EU economy. The 
invasion has implied renewed disruptions in global supply chains, fuelled commodity price surge and 
inflation, and heightened uncertainty. The EU is particularly hit due to its geographical proximity to 
Russia and Ukraine, heav y reliance on imported fossil fuels (especially from Russia), and high 
exposure to related supply chain disruptions. After expanding by 3.3% in 2022, the 
European  Commission 's autumn forecast expects EU economic growth to decelerate sharply to 0.3% 
in 2023 , with several EU countries expected to face a recession. Easing inflation and normalisation 
of supply chain pressures is expected to contribute to a modest recovery in 2024, with economic 
growth in the EU reaching 1.6%.  
2.4.  The impact of the pandemic led to a deterioration of the labour market, but EU and national 
government policy measures successfully contained the downturn. In 2019, EU employment reached 
a record high in absolute terms, and the unemployment rate was at its lowest level since 2000. 
Durin g the pandemic, the widespread use of job retention schemes kept many employees attached 
to their jobs. As a result, the unemployment rate increased only moderately from 6.8% in 2019 
to 7.2% in 2020. In line with the improving economic situation, the labou r market started to regain 
strength and the unemployment rate decreased to 7% in 2021 and is expected to go further down 
to 6.2% in 2022. Despite the challenging environment and the subsequent shocks from Russia 's war 
of aggression against Ukraine, the EU labour market is expected to show resilience with the 
unemployment rate moderately increasing to around 6.5% in 2023 and then declining to 6.4% 
in 2024.  
2.5.  Surging inflation is currently a key challenge eroding households ' real disposable income. The 
harmonis ed consumer price inflation rate (HICP) reached 1.4% in 2019. Suppressed economic 
activity due to the pandemic and falling energy prices pushed down consumer price inflation to 0.7% 
in 2020. Inflation started to increase from early 2021 as economic activit y picked up and energy 
prices increased. The subsequent energy and commodity price shock combined with supply chain 
disruptions caused by the Russia 's war of aggression against Ukraine from early 2022 further fuelled 
price increases. As a result, inflation  in the EU surged from 2.9% in 2021 to 9.3% in 2022 – the 
highest in decades. Inflation is expected to gradually decline to 7% in 2023 and then to 3% in 2024.  
2.6.  The expected economic growth and inflation in the EU are surrounded by exceptionally large 
risks and resulting uncertainty. A major downside risk for growth is related to the security of gas 
supplies. Further supply shocks in the commodity markets also continue to pose a risk and could 
further fuel inflation. Inflationary pressures could become more e ntrenched, further eroding 
households ' income and weigh on the recovery. Risks stemming from the global economic growth 
remain significant.  
2.7.  On the other hand, several crucial EU policy actions will support economic growth in the coming 
years. In 2020, the EU unveiled its Next Generation EU2 (NGEU) recovery plan with the aim to 
support the recovery of EU countries from pandemic and foster the green and digital transitions . 
Financial support under the NGEU reaches EUR  750 billion  and it is channelled through  seven 
programmes in the form of grants (EUR  390 billion ) and loans (EUR  360 billion ). The Recovery and 
Resilience Facility (RRF) represents the bulk of the NGEU effort comprising close to 90% of the total 
budget. According to the RRF, Member States applyi ng for financial support, have to submit national 
recovery and resilience plans setting out their reform and investment agenda up to 2026.  
 
2 Viewed at: https://ec.europa.eu/info/strategy/recovery -plan-europe_en . WT/TPR/G/442 • European Union  
 
- 6 - 
 
  2.8.  Following Russia 's war of aggression against Ukraine, the EU has launched the REPowerEU Plan 
with the objective to en d the EU 's dependence on Russian fossil fuels. The plan aims at fostering 
energy savings, diversification of energy supplies and accelerated roll -out of renewable energy. The 
RRF would be at the core of the implementation of the REPowerEU. Upon approval of  the 
Commission 's proposal, Member States would have to integrate a dedicated REPowerEU chapter in 
their Recovery and Resilience Plans (RRPs).  
2.9.  The EU is also revising its economic governance framework which aims to guide Member States 
in achieving their ec onomic and fiscal policy objectives. It seeks to achieve macroeconomic 
convergence, safeguard sound public finances and address macroeconomic imbalances. Together 
with a common monetary policy and a common currency in the euro area, the framework has creat ed 
conditions for economic stability, sustainable economic growth and higher employment for those 
living in the EU. Following a public debate, which started in February  2020, the Commission 
published a Communication presenting its orientations for the futu re of the EU economic governance 
on 9 November  2022.3 
2.2  Trends in foreign trade and foreign direct investment  
2.10.  The EU remains the number one trading bloc in the world looking at imports and exports of 
goods and services combined, ahead of the United  States , China, Japan and the UK. In 2021, the  EU 
accounted for 16.2% (EUR  6.3 trillion ) of total world trade in goods and services (see  Table  1). 
Taking trade in goods separately (exports and imports combined), the EU is the world's 
second  largest trading block ( after China). The EU holds a leading position (and the share of 25%) 
in the global trade of services.  
Table  1 Total world trade by reporter (goods and services)  
(EUR billion)  
  Exports  Imports  Exports  + Imports  
2019*  2020  2021  2019*  2020  2021  2019*  2020  2021  
World  18,307 16,068 19,461 18,425 16,045 19,227 36,732 32,113 38,688 
EU28 3,108 .. .. 3,028 .. .. 6,136 .. .. 
EU27  3,214 2,852 3,238 2,966 2,597 3,036 6,180 5,448 6,275 
China  2,485 2,520 3,180 2,295 2,137 2,638 4,780 4,658 5,818 
US 2,262 1,889 2,159 2,762 2,454 2,867 5,024 4,344 5,026 
UK 793 684 742 859 735 767 1,652 1,419 1,509 
% of world:  
EU28 17.0%  .. .. 16.4%  .. .. 16.7%  .. .. 
EU27  17.6%  17.7%  16.6%  16.1%  16.2%  15.8%  16.8%  17.0%  16.2%  
China  13.6%  15.7%  16.3%  12.5%  13.3%  13.7%  13.0%  14.5%  15.0%  
US 12.4%  11.8%  11.1%  15.0%  15.3%  14.9%  13.7%  13.5%  13.0%  
UK 4.3%  4.3%  3.8%  4.7%  4.6%  4.0%  4.5%  4.4%  3.9%  
Note:  Services figure does not include the value of services provided by EU -owned companies established 
in other countries (i.e. Mode  3).  
 * - For the ease of comparison with the following years values of UK trade in 2019 are taken out of 
the EU aggregate and presented separately from the ones for EU27.  
Source:  IMF, WTO, Eurostat/DG Trade (Intra -EU trade excluded).  
2.11.  As a share of GDP, total EU trade in goods and services corresponded to around 43% in 2021 
and has been following an increasing trend over the last decade. Notwithstanding this trend, 
world -wide lockdowns related to the COVID -19 pandem ic resulted in a temporary decline in 2020.  
2.12.  About 38  million  EU jobs depend on EU exports. The share of EU employment supported by 
sales of goods and services to the rest of the world in total employment increased from 12% in 2000 
to 18% in 2019. This means that one in five EU jobs is supported either directly or i ndirectly by 
extra-EU exports .4 
 
3 Viewed at: https://economy -finance.ec.europa.eu/system/files/2022 -11/com_2022_583_1_en.pdf ; 
European Commission, Communication on orientations for a reform of the EU economic governance framewor k, 
COM(2022)  583 final . 
4 Viewed at: https://circabc.europa.eu/ui/group/50a0487d -086a-4a75-a1ff-
92bdd2ec2c4b/librar y/628961d7 -1870-4113-9724-ed2bbf19ea84/details . WT/TPR/G/442 • European Union  
 
- 7 - 
 
  2.13.  The United  States  is the EU 's largest export market for goods. In 2021, it accounted for 
EUR 400 billion  (18%) of total EU goods exports. Other large export markets are the UK at 
EUR 284 billion  (13%), China at EUR  224 billion (10%) and Switzerland at EUR  157 billion  (7%). 
The same year, the EU imported EUR  473 billion  (22%) of goods from China, EUR  233 billion  (11%) 
from the US and EUR  163 billion  (8%) from the Russian  Federation . 
2.14.  The spike in energy prices has negatively a ffected the EU 's energy trade balance and the EU 
merchandise trade surplus moved to a deficit in 2022. Over the course of the first half of 2022, this 
deficit has widened.  
2.15.  With respect to services, EU exports are directed primarily to the United  Kingdom  (20%) and 
the United  States  (20%), as well as to Switzerland (12%), and China (5%). The EU 's leading 
service  suppliers are the United  States  (30%), followed by the United  Kingdom  (18%) and 
Switzerland (7%). The proportion of EU services exports (e xcluding investment) accounted for by 
digitally -enabled services, amounts to 48%.  
2.16.  In 2020, EU companies were the source of around EUR  8,600  billion  outward Foreign Direct 
Investment (FDI) stocks worldwide, while non -EU companies had FDI stocks in the EU wo rth around 
EUR 7,300  billion . The figures remained similar compared to 2018 (see Table  2). The main leading 
sources and destination of FDI are the United  States , the United  Kingdom  and Switzerland (both for 
inward and outward stocks).  
Table  2 EU27 FDI  
(EUR billion)   
Inward  Outward  
2018  2019  2020  2018  2019  2020  
Stocks 6,900 7,176 7,317 8,661 9,083 8,589 
Flows -263 55 302 -205 128 106 
Source:  Eurostat.  
3  MULTILATERAL AND BILATERAL TRADE POLICY  
3.1  The EU 's multilateral  trade agenda  
3.1.  Against the backdrop of major transformations such as the green and digital transitions, as 
well as serious geopolitical tensions, global rules-based trade and trade cooperation with the WTO 
at its core is more important than ever. A well -functioning WTO is vital for ensuring free and fair 
trade.  
3.2.  Accordingly, the EU has put WTO reform at the heart of its trade policy agenda in the review 
period and actively pursues its objectives.  The 12th Ministeri al Conference (MC12), which was one 
of the most successful Ministerial Conferences since the establishment of the WTO, has vindicated 
the EU 's approach  and should help to give new impetus to the continuous efforts for further reform .  
3.3.  MC12 delivered signif icant outcomes. The WTO has been able (i)  to show that it remains 
relevant and responsive to current challenges with outcomes in health, food security, and 
sustainability; and (ii)  to equip itself for the future with the commitment to WTO reform. The fishe ries 
subsidies agreement achieved two strategic objectives: integrating sustainability into WTO rules and 
reinforcing disciplines on subsidies. The extension of the moratorium on customs duties on 
e-commerce until MC13 or until 31  March  2024 sent an import ant message to business.  
3.1.1   WTO Reform  
3.4.  The EU welcomes in particular that the MC12 outcome document identifies WTO reform as a 
fundamental interest and contains a political commitment to discussions with a view to having a fully 
and well -functioning dispute settlement mechanism by 2024. The EU remains determined to push 
forward with WTO reform across the three core functions (dispute settlement, negotiation, and 
deliberation) of the organisation in preparation for MC13 .  WT/TPR/G/442 • European Union  
 
- 8 - 
 
  a. Dispute settlement  
3.5.  No WTO reform is more critical or urgent than delivering on the aim identified in the MC12 
outcome document of having a "fully and well -functioning dispute settlement system " by 2024. 
The EU is constructively engaged in reform discussions. Time before 2024  is tight. The EU believes 
that reform discussions should be focussed on identifying solutions for a limited set of issues that 
require improvement with a view to reaching agreement no later than MC13.  
3.6.  While the EU 's priority is finding a lasting multilate ral solution to the Appellate  Body situation, 
in the meantime, the EU will continue to support the smooth operation of and foster participation in 
the Multi -party interim appeal arbitration arrangement (MPIA) . The MPIA is an interim 
arrangement designed to  preserve, in any WTO disputes among participating WTO members, the 
right to a functioning two -tier and independent dispute settlement mechanism under WTO rules. The 
MPIA is open to all WTO members to join, for as long as the Appellate  Body is not able to function 
fully. Not only is the MPIA of use to regular users of WTO dispute settlement; more fundamentally, 
it signals commitment to a rules -based international trading system, with properly functioning 
WTO dispute resolution at its heart.  
b. Negotiating f unction  
(i) Multilateral negotiations  
 
3.7.  The EU played an active role at the MC12 in June 2022 to reach a landmark Agreement on 
Fisheries Subsidies delivering on UN Sustainable Development Goal Target 14.6 (SDG14.6) . The 
agreement prohibits subsidies to vessels or operators engaged in illegal, unreported and unregulated 
(IUU) fishing, prohibits subsidies to fishing on overfished stock without appropriate measures being 
in place to rebuild the stock, prohibits subsidies to fishing on unregulated high seas, and inc ludes 
far-reaching transparency provisions .  
3.8.  The EU 's internal procedures are already underway to accept the agreement and to have it 
enter into force as soon as possible. To assist developing countries to implementing the new 
agreement, the EU supports th e new WTO fisheries funding mechanism . The EU is committed to 
constructively engage in the continued negotiations to deliver a comprehensive agreement 
addressing subsidies that contribute to overcapacity and overfishing.  
3.9.  While the success of the fisheries  agreement has breathed some oxygen into the system, there 
are more WTO rules in need of modernisation. The EU considers that work on level playing field 
issues, including on industrial subsidies is fundamental to making the WTO fit for current challenges.  
In view of the increasing importance of industrial policy, it is important to reinforce the deliberating 
function in the WTO on how to address distortions arising from a wide range of state interventions, 
including subsidies and activities of State -owned enterprises. While state interventions can be an 
appropriate tool to contribute to important public objectives, such as the climate transition, the state 
interventions should be designed so as to avoid or minimise negative spill over effects on trading 
partners.  
(ii) Plurilateral negotiations  
 
3.10.  The plurilateral initiatives (on domestic regulations, e -commerce and investment facilitation 
for development) have played an important role in enabling WTO members to work on new rules 
and the finalisation of the ongoing  open plurilateral Joint Statement Initiatives (JSIs) negotiations 
on investment facilitation for development and e -commerce are of strategic importance for the 
credibility of the system.  
Joint Statement Initiative on Services Domestic Regulation  
 
3.11.  The EU has been at the forefront of the negotiations on a landmark deal to cut red tape in 
services. In December  2021, 67 WTO members, including the EU, successfully concluded the 
negotiations of the Joint Statement Initiative on Services Domestic Regulation ( 2 more members 
joined the Initiative since then). It is the first WTO deliverable in the area of trade in services in 
more than 20 years. The negotiated outcome will cut red tape, simplify unnecessarily complicated WT/TPR/G/442 • European Union  
 
- 9 - 
 
  regulations and ease procedur al hurdles faced by service suppliers. The agreed disciplines will enter 
into force upon completion of the certification procedure in the WTO.  
Investment facilitation for Development  
 
3.12.  Given investment facilitation 's contribution to the development agenda, the EU attaches great 
importance to negotiations under the Joint Statement Initiative on Investment Facilitation for 
Development. The EU considers that the future agreement could benefit all WTO members, notably 
developing countries, as they seek to attrac t foreign direct investment and bridge the current 
"investment gap " in order to reach the SDGs. The agreement will include provisions on special and 
differential treatment that recognise the need to support capacity building in developing countries. 
The EU  is committed to successfully finalize the process already in 2023, so that this agreement 
becomes a deliverable of MC13.  
e-commerce  
 
3.13.  The plurilateral WTO Joint Statement Initiative on e -commerce remains the EU 's priority in 
the area of digital trade. Within this Joint Statement Initiative, 87 WTO members, representing a 
mix of developed, developing and least -developed countries, are conducting negotiations on trade -
related aspects of electronic commerce. The COVID -19 pandemic highlighted the imp ortance of 
digital economy and its huge opportunities by lowering the costs for businesses – particularly micro -, 
small and medium sized enterprises (MSMEs) – to access and participate in global markets. A global 
set of rules and commitments on digital tra de within the WTO framework could greatly help to unlock 
these opportunities, particularly for the developing and least developed countries.  
3.14.  The EU therefore continues to play a constructive role with a view of driving these negotiations 
towards a high -standard and commercially significant outcome building on existing WTO agreements 
and frameworks. The EU welcomes the positive negotiating momentum and the substantial progress 
made to date in the negotiations. A positive outcome in the negotiated areas will  deliver important 
benefits including boosting consumer confidence and supporting businesses trading online.  
3.15.  In addition to the plurilateral work on e -commerce, the EU remains committed to maintaining 
the multilateral moratorium on custom duties on electro nic transmissions. The EU is of the view that 
digital trade should be free of customs duties in order to facilitate the widespread adoption of digital 
technologies, which are key for the economic growth of both developed and developing countries, 
their abi lity to innovate and the prosperity of their citizens. The EU also remains committed to the 
reinvigoration of the Work Programme on Electronic Commerce, and particularly its development 
dimension, as instructed in the MC12 ministerial decision.  
c. Monitori ng and deliberative function  
3.16.  The WTO 's large network of regular councils and committees present an important pool of 
expertise when it comes to the challenges the organisation faces. These specialized bodies can play 
an essential role to elevate policy dis cussion, facilitate the diffusion of information, help to solve 
specific trade concerns, share experiences, identify best practices and issue non -binding 
recommendations.  
3.17.  At the same time, there is significant room for improvement when it comes to transpar ency 
and the effective functioning of WTO bodies. In this context, the EU has put forward a proposal to 
develop guidelines for WTO councils and committees in which Members raise and discuss trade 
concerns5 and co -sponsored the proposal on notification com pliance in the area of trade in goods .6 
The EU remains committed to work actively with other Members on improving the efficiency and 
functioning of WTO bodies through discussions in specific Committees, as well as in the 
General  Council.  
3.18.  Besides the work on improving the practical functioning of WTO bodies, the EU sees the need 
for more meaningful policy deliberation on major pressing trade policy challenges to help build 
convergence. To name a few areas: the nexus between trade and climate, addressing dis tortive 
 
5 WTO Document, WT/GC/W/777/Rev. 6. 
6 WTO Document, JOB/CTG/14/Rev. 8. WT/TPR/G/442 • European Union  
 
- 10 - 
 
  state interventions and finding new ways to support developing countries facing difficulties in 
integrating into the global trading system and global value chains.  
d. Development  
3.19.  Contributing towards development is a critical challenge of the WTO agenda. The EU considers 
development to be a cross -cutting issue as an area for policy deliberation . It is imperative that the 
WTO finds new ways to support the efforts of those developing countries that face particular 
difficulties in integrating into  the global trading system . Improving the deliberative function in key 
committees, including the Committee on Trade and Development (CTD), and making them a forum 
for meaningful policy discussions could help identify how the WTO can support integration in global 
value chains as well as the process of regional integration and industrialisation. Particular attention 
should be given to Least Developed Countries, including to ensure a smooth transition in the case 
of graduation.  
3.1.2   WTO response to global challenge s 
a. Trade and Health  
3.20.  The EU has been at the forefront of the work on the WTO response to the COVID -19 pandemic, 
including through its participation in the Ottawa Group. In June  2021, the EU put forward in the WTO 
a comprehensive approach in relation to tr ade and health, which included elements such as trade 
facilitating measures, improved transparency, restraint from export restrictions, as well as 
expanding production capacity. Intellectual property was also part of this proposed broader solution. 
Followi ng the 2022 MC12 outcome, the EU has actively participated in the various committees 
mentioned in the Ministerial Declaration on the WTO Response to the COVID -19 Pandemic and 
Preparedness for Future Pandemics through experience sharing sessions.  
3.21.  WTO member s also agreed at MC12 on a Ministerial Decision on the WTO  Agreement  on 
Trade -Related Aspects of Intellectual Property Rights (TRIPS) that provides for a number of 
clarifications and a waiver of certain obligations of the TRIPS  Agreement  to allow eligible 
WTO members to authorise a company to manufacture and export COVID -19 vaccines in a fast and 
simplified manner without the consent of the patent owner. The EU has remained engaged in this 
important and difficult discussion and has been instrumental in arri ving to this outcome.  
3.22.  Work on trade and health must continue beyond MC12. The pandemic highlighted the crucial 
role of trade in combatting public health crises. There is a need to take stock of the lessons learnt 
and make the WTO more responsive for future  pandemics.  
b. Agriculture and Food Security  
3.23.  The EU 's active and constructive engagement contributed to the successful adoption of the 
Declaration on the Emergency Response to Food Insecurity and the Decision in support of the 
World  Food Programme during MC12. These outcomes demonstrate that the WTO can deliver a 
timely response to the current challenges. Addressing the food security concerns was a key priority 
for the EU for MC12 and will continue to play a crucial role in the preparations for MC13.  
3.24.  The EU remains fully engaged in the discussions on the implementation of the MC12 Ministerial 
Declaration. In this context, transparency is one of the priorities, including transparency 's role in 
addressing food security challenges for example in relation to e xport restrictions, which can be 
detrimental to food importing countries. Further work on improving transparency across the board 
in agriculture is necessary. The EU will also continue to push for reforms of trade distorting domestic 
support, which can adv ersely impact food security. A new approach in the agricultural negotiations 
post MC12 is needed: integrating issues of food security, environment, climate, poverty and 
sustainable production.  
c. Trade  and Environment & Climate  
3.25.  The EU believes that the WTO  must help  to address the urgent challenges of climate change 
and environmental sustainability. The EU has co -sponsored and been actively engaged in the Trade 
and Environmental sustainability structured discussions, Informal Dialogue on the Plastics Pollut ion WT/TPR/G/442 • European Union  
 
- 11 - 
 
  and Sustainable Plastics Trade and the Fossil Fuel Subsidy Reform initiatives in the WTO in this 
regard.  
3.26.  Trade and Environmental Sustainability structured Discussions can contribute by considering 
how trade related climate measures and policies can be  designed in a way that maximises 
environmental and climate impact at the same time limiting impacts on trade; explore approaches 
for facilitating access to environmental goods and services; identify trade policy actions that can 
contribute to transition t o resource efficient and circular economy; and exploring the ways to 
enhancing transparency on subsidies and exchange best practices in design environmentally positive 
subsidies in conformity with relevant WTO rules.  
3.27.  The Fossil Fuel Subsidy Reform initiat ive shows the way how the WTO can play a role  in 
reducing harmful fossil fuel subsidies, while taking into account the development and social aspects 
and as a first step to increase transparency on fossil fuel subsidies.  
3.28.  The Informal Dialogue on the Plasti cs Pollution will help shape understanding of global trade 
in plastics, including flows of plastics embedded in internationally traded goods and how the WTO 
can contribute to the United Nations Environment Assembly (UNEA) process to end plastic pollution.  
3.29.  The EU is also one of the initiating members (together with Ecuador, Kenya and New  Zealand ) 
launching  the Coalition of Trade Ministers on Climate. The Climate Coalition was officially launched 
during the World Economic Forum Annual Meeting in Davos on 19  January  2023. The coalition 
establishes  a high -level political dialogue providing guidance on how trade and trade policies can 
help respond to the climate crisis, sustainable development and contribute to the just transition.  
3.30.  Beyond its participation in different plurilateral initiatives, the EU is convinced of the 
importance of reinforcing multilateral deliberation in the WTO on critical trade and environmental 
challenges  in particular those related to the climate transition. The WTO Committee on Trade and 
Environment could play a critical role in this regard .  
3.2  The EU 's bilateral  agenda  
3.31.  The EU continued to pursue an active bilateral trade agenda in an increasingly difficult 
international environment affected by the COVID -19 pandemic, Russia 's war of aggression against 
Ukraine and rising protectionism. The EU 's efforts concentrated on strengthening bilateral 
partnerships; creating the conditions to support the security, resilience, and stability of supply 
chains; crea ting new opportunities for businesses through diversification of imports, exports and 
investments; and supporting sustainable development.  
3.2.1   Bilateral trade  agreements  
3.32.  The EU has in place 42 preferential trade agreements with 74 partners. In 2021, EU trade 
with preferential partners amounted to EUR 1,891  billion  covering 44% of its external trade. 
EU exports to those countries reached EUR 1,049  billion  and EU imports from them amounted to 
EUR 841 billion . Adding trade with partners that the EU has concluded n egotiations on agreements  
with, but where the agreements  are in the process of being adopted or ratified (3.4%), the share of 
EU preferential trade in its total external trade would rise to 47 .4%. EU trade in services with 
preferential partners saw a trade  surplus of EUR 91 billion  in 2020 down from EUR 106 billion  in 2019 
but still almost three times as much as the EU surplus with all trading partners (i.e., EUR 33 billion  
in 2020, down from EUR 50 billion  in 2019).  
a. Europe and its Neighbourhood  
3.33.  The EU has Association Agreements with Georgia, Republic of Moldova and Ukraine . 
These agreements include Deep and Comprehensive Free Trade Areas which cover trade 
liberalization and approximation with the EU acquis in selected areas, notably  Technical Barriers to 
Trade (TBT), Sanitary and Phytosanitary measures (SPS), customs, procurement and services . On 
23 June, the European Council decided to grant candidate country status to Ukraine and Moldova, 
and recognise European perspective of Ukrai ne, Moldova and Georgia.  WT/TPR/G/442 • European Union  
 
- 12 - 
 
  3.34.  With effect of 4  July 2022, the EU granted temporary trade -liberalisation measures to Ukraine 
supplementing trade concessions applicable under the EU -Ukraine Association Agreement .7 
3.35.  The European Commission has been also providing  macro -financial assistance (MFA) loans to 
Ukraine. The total MFA support provided to Ukraine since the beginning of the war was 
EUR 7.2 billion , which was fully  disbursed until end of 2022. Moreover, on 9  November  2022, the 
Commission proposed an unpreced ented support package for Ukraine of up to EUR 18 billion  in 
highly concessional loans under the new MFA+ instrument, which was approved by the co -legislators 
in mid -December, to be  disbursed in regular instalments as of early  2023. First tranche of 
EUR 3 billion  was already disbursed in January  2023.  
3.36.  Ukraine has been formally invited to join to the EU -Common Transit Countries ' Convention on 
a Common Transit Procedure and the Convention on the Simplification of Formalities in Trade in 
Goods. It deposited its instruments of accession to the Conventions in August and can therefore 
operate common transit from 1  October  2022. This i s an important step forward in Ukraine 's 
pre-accession strategy and will greatly support the work on Solidarity Lanes to and from Ukraine.  
3.37.  These Conventions enable goods to move much more easily between the EU and the Common 
Transit Countries .8 Simplified  rules, such as mutually recognised financial guarantees and less 
controls, help to cut down on costs for EU and partner country businesses, while facilitating and 
boosting trade. As such, Ukraine 's participation in these Conventions will facilitate trade between 
Ukraine and the EU Member States, as well as other common transit countries. In addition, the EU 
has also concluded temporary road transport agreements with Ukraine and Moldova, which have 
partly liberalised road freight transport between the parti es and thereby supported the Ukrainian 
and Moldovan economies in light of Russia 's war of  aggression  against Ukraine . 
3.38.  With effect of 23  July 2022, the EU granted autonomous trade measures to Moldova  in the 
form of one -year additional tariff rate quotas for  the seven agricultural products which are not yet 
fully liberalized under the EU -Moldova Deep and Comprehensive Free Trade Agreement (DCFTA) .9 
3.39.  In addition, in December 2020, the EU extended pre -existing autonomous trade measures 
applying to the Western B alkans  for a further period of five years, until 31  December  2025.10 The 
measures provide additional market access going beyond the trade preferences set out in the 
Stabilisation and Association Agreements that the EU has signed with each of the Western Balkans 
partners.  
3.40.  The EU concluded negotiations for enhanced non -preferential trade agreements with 
Kyrgyz  Republic  in July  2019 and with  Uzbekistan  in June  2022, continues negotiations for such 
an agreement with Azerbaijan, launched in 2017, and the mandate to open negotiations for an 
enhanced non -preferential trade agreeme nt with Tajikistan was validated  by the Council in 
December  2022. 
3.41.  The EU-UK Trade and Cooperation Agreement  (TCA) concluded between the EU and 
the UK was applied provisionally as of 1  January  2021 and entered into force on 1  May 2021. It 
includes preferent ial trade commitments in trade in goods (zero tariffs and zero quotas), services 
and investments, digital trade, good regulatory practices and regulatory cooperation, capital 
movements, intellectual property, public procurement, aviation and road transport . Those 
commitments are underpinned by provisions ensuring a level playing field and sustainable 
development (LPFS). The TCA goes beyond trade and it also covers energy, fisheries, social security 
coordination, law enforcement and judicial cooperation in c riminal matters, thematic cooperation, 
participation in Union programmes and dispute settlement.  
b. Africa  
3.42.  In the 2021 Trade Policy Communication the EU committed to reinforce its engagement with 
African countries by, inter  alia, deepening and widening its existing trade agreements with African 
regional economic communities and strengthening their sustainability dimension, as well as 
 
7 Regulation (EU) 2022/870 , OJ L 152 , 3/6/2022 , p. 103. 
8 Norway, Iceland, Switzerland, North  Macedonia , Serbia, T ürkiye and UK.  
9 Regulation (EU) 2022/1279 , OJ L 195 , 22/7/2022 , p. 6. 
10 Regulation (EU) 2020/2172 , OJ L 432 , 21/12/2020 , p. 7. WT/TPR/G/442 • European Union  
 
- 13 - 
 
  supporting cooperation with the African Union  and its members and the smooth implementation of 
the African Continental Free Trade Area.  
3.43.  That communication also proposed to set up a EU-AU High level dialogue  on economic 
integration, between the two Commissions aiming at supporting the implementation of the African 
Continent Free Trade Area (AfCFTA), no tably through sharing expertise and lessons learnt on matters 
pertaining to trade, investment, regional value chains, industrial development, customs union and 
single markets. Another objective is to enhance EU -AU cooperation in the WTO. This high level 
dialogue was launched during the Commission -to-Commission meeting that took place in Brussels 
on 28  November  2022, and its first meeting is foreseen in 2023. The EU is also foreseeing to adopt 
a Memorandum of Understanding with the Secretariat of the African  Continental Free trade Area to 
notably improve communication and enhance policy discussion between both sides on matters 
pertaining to trade and economic integration.  
3.44.  Negotiations of a Sustainable Investment Facilitation Agreement between the EU and Angol a 
was concluded in November  2022. The agreement, once signed and ratified by the parties, will 
facilitate investment, simplify procedures, enhance public -private dialogue and promote responsible 
investment. Negotiations to extend the scope of the existing Economic Partnership Agreement 
between the EU and five Eastern and Southern African  countries (Comoros, Madagascar, 
Mauritius, Seychelles and Zimbabwe) beyond trade in goods and development cooperation to other 
trade-related issues were launched in October  2019 with 10 rounds of negotiations having taken 
place by December  2022. The EU is currently negotiating with Kenya  the bilateral implementation 
of the Economic Partnership Agreement concluded in 2014 with the five countries of the East African 
Community but not implemented. Under the EU -Central Africa Economic Partnership Agreement, the 
EU and Cameroon  concluded in June  2022 the negotiation for a protocol on rules of origin.  
3.45.  The EU and the six countries implementing the EU-SADC  Economic Partnership Agree ment 
(Botswana, Eswatini, Lesotho, Mozambique, Namibia and South  Africa ) are working on its review 
and impact assessment. Under the EU -Ghana  Interim Economic Partnership Agreement, Ghana 
started effective implementation of tariff cuts for EU products enter ing Ghana on 1  July 2021 (in 
addition to products covered by 0% most -favoured -nation (MFN) tariffs were liberalised in 
early 2020); further liberalisation by Ghana started on 1  January  2022, according to the agreed 
schedule. Under the EU -Ivory Coast  Interi m Economic Partnership Agreement, the Ivory Coast 
started the second phase of liberalisation (tariff cuts) on 1  January  2021.  
c. Asia 
3.46.  In Southeast Asia, on 30  June 2019 the EU signed the Free Trade Agreement and the 
Investment Protection Agreement with Viet Nam. The EU -Viet Nam Free Trade Agreement entered 
into force on 1  August  2020 and establishes a free trade area between the EU and Viet  Nam and 
sets out the rules accompanying trade liberalization, in a manner mindful of high levels of 
environmental and labour protection and relevant internationally recognised standards and 
agreements. The EU -Vietnam Investment Protection Agreement is ratifie d by Viet  Nam and will enter 
into force once ratified by all EU Member States.  
3.47.  In addition, the EU-Singapore  Free Trade Agreement entered into force on 
21 November  2019. The EU -Singapore Investment Protection Agreement will enter into force once 
ratified by all EU Member States. The EU also continues negotiations for a free trade agreement with 
Indonesia , a process launched in September  2016.  
3.48.  The EU has relaunched negotiations on a comprehensive free trade agreement with  India  on 
17 June 2022 and launched separate negotiations for an Investment Protection Agreement and an 
Agreement on Geographical Indications. The first rounds of negotiations were held in June – July, 
in October and in December  2022.  
3.49.  Negotiations on data flows in the framework of t he EU-Japan  Economic Partnership 
Agreement, which contains an explicit review clause on data flows, were launched on 
24 October  2022.  WT/TPR/G/442 • European Union  
 
- 14 - 
 
  d. Pacific  
3.50.  On 30  June 2022 the EU and New  Zealand  concluded the negotiations for a modern free 
trade agreement with severa l new important and ambitious provisions. This is the first agreement 
reflecting the outcome of the EU 's 2022 Trade and Sustainable Development review, with 
sanctionable commitments on the Paris Climate Agreement as well as the International Labour 
Organiz ation (ILO) core labour standards. Moreover, this is the EU 's first trade agreement with a 
dedicated chapter on sustainable food systems, with provisions on gender equality and on trade and 
fossil fuel subsidies reform, also comprising unique commitments o n circular economy, 
deforestation, carbon pricing, and protection of the marine environment.  
3.51.  Negotiations for a comprehensive trade agreement with Australia , launched in June  2018, 
are ongoing.  
3.52.  The Solomon  Islands  acceded to the EU -Pacific States Economic Partnership Agreement on 
17 May 2020. An accession process is underway with Tonga. Timor Leste , Tuvalu , Niue and Vanuatu  
informed the EU on 15  October  2020, 9  June 2022, 29  November  2022 and 1  December  2022 
respec tively of their intention to accede to the agreement.  
e. Latin  America and the Caribbean  
3.53.  The EU is also active in developing the trade relations with partners in Latin America and 
the Caribbean . Since the political conclusion of the negotiations of the tra de part of the 
EU-Mercosur  agreement in June  2019, the EU together with Mercosur has been engaged in 
technical work to finalise the Agreement.  
3.54.  Negotiations with Chile  to modernise and upgrade the existing bilateral agreement started 
in 2017 and on 9  December  2022, the EU and Chile concluded negotiations on an "Advanced 
Framework Agreement ". The agreement will help deepen existing cooperation. It aims at boosting 
trade and investment also to support of the green and digital transitions and to provide n ew 
opportunities for businesses . The EU -Chile Advanced Framework Agreement is a comprehensive 
agreement that beyond its trade component, covers also political dialogue and cooperation (including 
with respect to human rights as well as climate change and th e environment).  
3.55.  In 2018, the EU reached a political agreement with Mexico  on the modernisation of the 
current Global Agreement (in force since 2000) and complemented by the commitments on public 
procurement in 2020. The conclusion of the negotiations of th e political and cooperation pillar took 
place in 2019. The legal revision of the EU -Mexico modernised Agreement is currently ongoing.  
3.56.  EU and Central America  (CA) pursued the dynamic implementation of the trade pillar of 
their Association Agreement. EU and CA signed the protocol for Croatia 's accession to the Agreement 
in 2020, the EU agreed to protect 11 new Central American new geographical indications in 
June 2022 and an ex -post evaluation published by the EU in September  2022 showed that 
provisional appl ication of the trade pillar of the Agreement since 2013 had contributed to create 
jobs, increase welfare and decrease poverty in Central America.  
3.57.  2022 marked the 10th anniversary of application of the Multi -party Trade Agreement 
(2013) with Peru and Colom bia and the 5th anniversary of the accession of Ecuador  (2017). 
The Agreement gradually opens up markets on both sides increases the stability and predictability 
of trade and investment flows and supports structural reforms.  
3.58.  Negotiations on an agreement to  protect geographical indications in the context of the 
implementation of the EU -CARIFORUM  Economic Partnership Agreement11 are ongoing. The second  
evaluation and implementation study following the 10th year of implementation of the 
EU-CARIFORUM Economic P artnership Agreement was published in 2021 and its results are being 
used in the ongoing joint review of the agreement.  
 
11 Antigua and Barbuda, Bahamas, Barbados, Belize, Dominica, Dominican  Republic , Grenada, 
Guyana,  Haiti, Jamaica, S aint Lucia, S aint Vincent and the Grenadines, S aint Kitts and Nevis, Suriname, 
Trinidad and Tobago . WT/TPR/G/442 • European Union  
 
- 15 - 
 
  3.2.2   Trade -related cooperation  
3.59.  Apart from negotiations of new trade agreements, the EU is also engaged in other forms of 
trade-related cooperation with certain trade partners.  
3.60.  During the bilateral summit on 15  June 2021, the EU and the US agreed to suspend for a 
period of five years retaliatory tariffs authorised by the WTO and move forward with a Cooperative 
Framework for L arge Civil Aircrafts  (LCAs). The parties agreed to only finance their LCA 
manufacturers on market terms and provide R&D funding through an open and transparent process. 
The Cooperative Framework for LCA also established a working party, chaired by each par ty's trade 
minister, tasked with analysing and addressing non -market practices of third parties in this sector.  
3.61.  Encouraged by resolving one of their most ardent trade conflicts, the EU and the US 
announced the beginning of a renewed transatlantic partnersh ip at their bilateral summit on 
15 June 2021.12 Strengthening trade, investment and technological cooperation is a key priority of 
both parties in a multilateral and bilateral context. Kick -starting this positive agenda, the EU and US 
agreed to establish t he EU-US Trade and Technology Council (TTC)  as platform for cooperation.  
3.62.  The objective of the TTC is to enhance trade and investment, strengthen technological and 
industrial leadership, and boost innovation, by promoting emerging technologies and infrastru cture, 
and encouraging compatible standards and regulations based on shared democratic values.  
3.63.  Throughout the TTC process, the EU and US welcome and facilitate dialogue with business, 
trade unions, consumer organizations, and environmental and other non -government organizations. 
The TTC working groups organise many events with stakeholders and publish feedback on the EU 's 
online discussion platform, Futurium .13 Furthermore, a tripartite Trade and Labour Dialogue was set 
up during the second TTC ministerial meeting in spring 2022, which brings together representatives 
of trade unions, businesses and government and which had its inaugural meeting in 
September  2022.14 Its objective is to explore ways to promote internationally recognised labour 
rights, includin g the eradication of forced labour and child labour.  
3.64.  The most recent ministerial meeting of the TTC took place on 5  December  2022. In the area 
of trade, the TTC agreed at this occasion on the need to advance the transition to a low -carbon 
economy in a mann er that is mutually supportive and to embark on a Transatlantic Initiative on 
Sustainable Trade. Continued cooperation on investment screening and on export controls, including 
as regards sanction -related restrictions of exports to Russia by intensifying i nformation exchange 
was also agreed. The EU and US decided to continue work to facilitate transatlantic trade giving 
impetus to expansion of existing mutual recognition agreements for marine equipment and the 
pharmaceutical sector, explore sectorial confor mity assessment for example in the area of machinery 
or promote the use of digital tools to facilitate bilateral trade and investment. The EU and US will 
also continue on non -market economic policies and practices and on shared concerns as regards 
economic  coercion. In the area of technology, the TTC presented a joint roadmap to develop common 
tools and standards for trustworthy artificial intelligence, launched cooperation on quantum and tech 
for public good, agreed on an early warning mechanism and increa sed transparency commitments 
for public support in the semiconductor sector and announced digital initiative projects with the 
partner countries Kenya and Jamaica.  
3.65.  On 31  October  2021, as demonstration of renewed trust, the EU and the US jointly announced 
their intention to agree on a Global Arrangement on Sustainable Steel and Aluminium (GSA) . 
The parties also agreed to pause the WTO disputes they initiated against each other regarding the  US 
Section  232 measures (DS548) and the EU 's additional duties (DS559) respectively. The US 
unilaterally suspended its application of the Section  232 duties with respect to the EU, however 
quantitatively restricting duty -free imports of EU steel and aluminium based on historical volumes. 
In parallel, the EU decided to  suspend its commensurate rebalancing measures.  
 
12 Viewed  at: https://www.consilium.europa.eu/media/50758/eu -us-summit -joint-statement -15-june-
final-final.pdf . 
13 Viewed at: https://ec.europa.eu/futurium/en.html . 
14 Viewed at: https://circabc.europa.eu/ui/group/09242a36 -a438-40fd-a7af-
fe32e36cbd0e/library/14bf0332 -62ee-411b-8c74-bea38cd79efb/details . WT/TPR/G/442 • European Union  
 
- 16 - 
 
  3.66.  The aim of the GSA is to address shared challenges in the global steel and aluminium sector, 
stemming from global non -market excess capacity as well as the carbon intensity of the industries. 
The GSA is inte nded to become a multilateral effort and is open to interested countries that share 
the commitment of the EU and the US to restore market orientation and reduce trade in 
carbon -intensive steel and aluminium products.  
3.67.  On 25  April 2022, India 's Prime Minister Modi and Commission President von der Leyen agreed 
to establish an EU-India Trade and Technology Council (TTC)  to provide political steer on 
strategic issues at the nexus of trade, trusted technology and security, and to deepen their bilat eral 
coordination in these fields .15 The aim is to launch the TTC in the run -up to the next EU -India 
Summit.  
3.68.  In its "Strategy for Cooperation with the Indo -Pacific ", the EU announced the intention to 
develop Digital Partnerships  with Japan, the Republic  of Korea and Singapore. The 
Partnerships  are flexible instruments going beyond dialogue and exchange of information in order 
to create a collaboration vehicle to deliver concrete deliverables, such as collaboration in the field of 
Research  & Innovation, regu latory cooperation and mechanisms for collaboration in international 
fora. 
3.69.  Key topics included in the scope of each Partnership comprise: semiconductors supply chain 
resilience; 5G/6G; cybersecurity; platform, data and AI regulation; digital trade; digital  identity and 
digital signatures; closing the digital skills gap and digital inclusion.  
3.70.  The EU -Japan Digital Partnership was launched at the EU -Japan Summit on 12  May 2022 and 
now both sides are working on its implementation. Priority deliverables in the i mplementation phase 
include Semi -conductors, 5G/6G, Data Free Flow with Trust (DFFT), and the Far North Fiber (FNF) 
undersea cable.  
3.71.  The Digital Partnership with the Republic  of Korea was signed on 28  November, and the one 
with Singapore on 1  February  2023. 
3.72.  The Digital Partnerships have non -binding Digital Trade Principles as a key deliverable. The 
Digital Trade Principles with the Republic of Korea were signed on 30  November  2022, and the one 
with Singapore on 31  January  2023. The Digital Trade Principles with Japan are expected to be 
adopted in the near future.  
3.73.  Canada and the EU have taken a further step in the implementation of the Comprehensive 
Economic and Trade Agreement (CETA). Negotiations on a mutual recognition agreement for 
the professional qualifications of architects  have been successfully concluded in  March  2022, 
making this the first ever such agreement on professional qualifications negotiated by the EU. 
Following its adoption and entry into force, architects from the EU and Canada, who meet the criteria 
set out in the agreement, will be able to have  their qualifications recognised and thus supply their 
services in the other Party 's territory more easily.  
3.74.  The pan -Euro -Mediterranean (PEM) Convention on rules of origin  establishes common 
rules of origin (RoO) among the countries in the PEM zone in orde r to facilitate trade and the 
integration of supply chains within the area. In the context of fast -moving trade relations and 
evolving world economies, the current rules of origin are outdated, and hence need to be revised 
and modernised.  
3.75.  In the context of  the revision of the PEM Convention, the EU and a majority of PEM Contracting 
parties decided to start applying the new, modernised rules of origin in advance (the so -called 
transitional rules), pending the adoption and entry into force of the revised PEM Convention.  
 
15 Following preparatory discussions with the Indian authorities, the EU -India TTC foresees the setting 
up of three Working Groups (WGs), namely: WG1 on Strategic Technologies, Digital Governance and Digital 
Connectivity; WG2 on Green and Clean Energy Technol ogies; and WG3 on Trade, Investment and Resilient 
Value Chains.  WT/TPR/G/442 • European Union  
 
- 17 - 
 
  4  TRADE AND DEVELOPMENT  
4.1.  Besides active involvement on development in the WTO and in bilateral trade cooperation, the 
EU also deploys autonomous trade and development policy tools with the objective of fulfilling its 
political commitment to suppor t sustainable development globally, as reflected in the 
implementation of the United Nations (UN) Agenda  2030 for Sustainable Development and 
Sustainable Development Goals (SDGs) – to which all WTO members have committed.  
4.1  Supporting  inclusive growth in de veloping countries  
4.2.  At unilateral level, the EU 's Generalised Scheme of Preferences  (GSP) removes import 
duties for products coming into the EU market from vulnerable developing countries. Under the 
standard GSP arrangement, the EU currently grants partial or full tariff reductions on around 66% 
of tariff lines to 11 countries. The Special Incentive Arrangement for Sustainable 
Development and Good Governance  (GSP+) grants mostly duty -free treatment to essentially the 
same 66% of tariff lines after applicatio n and a positive assessment by the EU. In 2022 there are 
eight GSP+ beneficiaries. The "Everything But Arms " (EBA) arrangement under 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. 46 LDCs benefit from the EU 's EBA in 2022; in 2021 over 
EUR 22 billion  of imports into the EU from LDCs used EBA preferences, or 66% of all goods imported 
from LDCs.  
4.3.  Under the EU 's current GSP Regulation, all GSP beneficiary countrie s (including EBA 
beneficiaries) have to respect the principles of 15 core conventions on human and labour rights. In 
addition, the GSP+ arrangement requires countries to fulfil, ratify and effectively implement a total 
of 27 international conventions cover ing core human and labour rights, environmental protection, 
and good governance. A central part of the EU 's approach to GSP is to carefully monitor the 
beneficiary countries ' respect of these conditionalities. In case of concerns in this respect, the EU 
engages with the relevant beneficiary countries, and can as a last resort withdraw the preferences.  
The EU reported on the implementation of the scheme in 202016 and will publi sh a new report 
in 2023.  
4.4.  The EU GSP is undergoing a review since the current Regulation expires on 31  December  2023. 
The review aims to maintain the key features of the current scheme, building on its success as 
evidenced in a 2018 independent mid -term ev aluation and in the impact assessment for the 
Commission proposal for GSP post 2023. Targeted improvements aim to better respond to the 
evolving needs of developing countries and reinforce the scheme 's social and environmental impact. 
A new regulation was proposed by the European Commission on 22  September  2021.17 The proposal 
is currently before the EU legislator, and is to be adopted in time to provide predictability and stability 
to beneficiaries and business.  
4.2  Aid for Trade  
4.5.  To support developing countrie s' integration into the world economy, poverty reduction and 
sustainable development, the EU views Aid for Trade  (AfT) as a crucial tool. EU and Member States ' 
AfT is based on the 2017 joint AfT Strategy, with five overarching priorities: (i)  reducing 
fragmentation, integrating development tools, increasing leverage of AfT through better informed 
and coordinated delivery; (ii)  scaling up impact – making the most of instruments across EU external 
policies, (iii)  stronger focus on social and environmental sus tainability and inclusive economic 
growth; (iv)  a more differentiated approach to countries, with increased focus on LDCs; and 
(v) improved monitoring and reporting. The most recent EU Aid for Trade Progress Report (2022) 
was launched in December 2022.18 The reporting is also informing the EU 's participation in the 
monitoring of the AfT initiative globally. During the eight Global Review of AfT at the WTO in 
 
16 European Commission (EU), Joint Report to the European Parliament and the Council on the 
Generalised  Scheme of Preferences covering the period 2018 -2019, JOIN/2020/3 final.  
17 Viewed at: https://policy.trade.ec.europa.eu/news/commission -proposes -new-eu-generalised -
scheme -preferences -promote -sustainable -development -low-income -2021-09-22_en . 
18 Viewed at: https://op.europa.eu/en/publication -detail/ -/publication/c2814529 -8fce-11ed-b508-
01aa75ed71a1/language -en. WT/TPR/G/442 • European Union  
 
- 18 - 
 
  July 2022, the European Commission co -hosted two events in addition to those organised by 
EU Member States and with speakers in additional sessions.  
4.6.  The EU and its Member States collectively constitute the world 's largest AfT donor, accounting 
for around 40% of global AfT, with collective commitments amounting to EUR  22.9 billion  in 2020 
(the latest year  for which there is data, and an increase of 22% from 2019). 13% of the EU 's AfT 
went to LDCs. Following the integration of the European Green Deal, EU AfT targeting climate change 
adaptation or mitigation has been steadily growing over the decade, triplin g in real terms 
between  2011 and 2020, with almost half of EU AfT addressing climate change by 2020. EU AfT 
addressing environmental issues more than doubled over the same period.  
4.7.  EU AfT is a tool to deliver on the Global Gateway .19 Launched in December  2021 it is a new 
strategy to mobilize investments totalling EUR  300 billion  over the period 2021 -27. Accordingly, 
EU AfT is more and more driven by innovative de -risking tools to catalyse private sector investment. 
This is done primar ily through blending operations (i.e., a combination of EU grants with loans or 
equity from public and private financiers) and financial guarantees. In line with the EU 's geopolitical 
objectives and commitment to the 2030 Agenda, the Global Gateway strateg y aims to boost smart, 
clean and secure investments in digital, energy and transport, and to strengthen health, education 
and research systems across the world to underpin a lasting global recovery while promoting 
universal values and high standards, good governance and transparency.  
5  SUSTAINABILTY  
5.1  The EU's actions on climate change and environmental protection  
5.1.  In late  2019, the European Commission tabled an agenda to become the world 's first climate 
neutral continent by 2050 . The European Green Deal , which is based on that target, is a 
comprehensive plan to make the EU 's economy and society ready for a climate neutral future.  
5.2.  The European Green Deal seeks to transform the EU into a modern, resource -efficient and 
competitive economy where there are no net emissions of greenhouse gases by 2050, economic 
growth is decoupled from resource use, and no one is left behind in what will be a just transition.  
5.3.  The European Green Deal provides a comprehensive set of actions to reach these goals, in the 
form of str ategies, regulations, standards in the areas of climate, energy, transport, agriculture, 
industry, environment and oceans, finance and regional development, research and innovation20 
(see below in section 5.1.1 an overview of the actions).  
5.4.  The EU is aware  that if it wants to pursue global challenges such as combating climate change, 
biodiversity loss, pollution, or promoting more sustainable production and consumption, it needs to 
increase cooperation with third countries. In the cases where the European G reen Deal policies have 
an external dimension, the EU is engaging with its partners. The EU makes sure that its external 
assistance actively promotes effective and ambitious climate and environment action and 
integration. The EU designs its climate and env ironmental policies in line with the WTO rules and 
provides a full transparency on EU climate - and environmental measures to the EU trading partners 
bilaterally, including in the context of trade agreements, and in the WTO. The EU has made numerous 
present ations on the policies with potential trade impacts in the WTO Committee on Trade and 
Environment, and other committees, and will continue this engagement in the future. The objective 
of this has been early engagement with partners to understand any potent ial concerns and see how 
they could be addressed in the policy design as well as to avoid any adverse implications or impacts 
for international trade in goods affected by EU legislation, while at the same time improving the 
understanding of the applicable rules on the EU market. The EU intends to further pursue dialogue 
and cooperation regarding the implementation of the EU 's autonomous sustainability instruments.  
 
19 Viewed at: https://ec.europa.eu/info/strategy/priorities -2019-2024/stronger -europe -world/global -
gateway_en . 
20 Viewed at: https://ec.europa.eu/info/strategy/priorities -2019-2024/european -green -
deal_en#thematicareas .  WT/TPR/G/442 • European Union  
 
- 19 - 
 
  5.1.1   Overview of the actions  on climate change and environmental protection  
5.5.  The adoption of the Climate Law  on 9 July 2021 sets a legally binding target for the EU to 
reach net zero greenhouse gas emissions by 2050 as well as to reduce net greenhouse gas emissions 
by at least 55% by 2030 compared to 1990 levels. This allowed the EU to adopt and submi t to the 
United Nations Framework Convention on Climate Change (UNFCCC)  in December 2020 an updated 
and significantly enhanced Nationally Determined Contribution in line with the Paris Agreement, 
confirming Europe 's commitment to lead in global climate act ion. 
5.6.  On 14  July 2021, the Commission proposed a package21 of climate , energy  and transport  
legislation, the "Fit for 55 " package, to accomplish this transformational change across the EU 's 
economy and society – matched by commitment to a socially fair tran sition, which leaves no one 
behind .  
5.7.  The Carbon Border Adjustment Mechanism (CBAM)22 is a climate measure aimed at 
decreasing global GHG emissions by preventing the risk of carbon leakage and by supporting 
increased ambition on climate mitigation, while en suring WTO compatibility. The CBAM will equalise 
the price of carbon between domestic products and imports and ensure that the EU 's climate 
objectives are not undermined by production relocating to countries with less ambitious climate 
policies .  
5.8.  The EU Em issions Trading System  puts a price on carbon and lowers the cap on emissions 
from certain economic sectors every year. The European Commission has proposed23 to lower the 
overall emission cap even further and increase its annual rate of reduction, to phas e out free 
emission allowances for aviation and align with the global Carbon Offsetting and Reduction Scheme 
for International Aviation (CORSIA) and to include shipping emissions in the EU ETS. To address the 
lack of emissions reductions in road transport and buildings, a separate new emissions trading 
system is set up for fuel distribution for road transport and buildings.  
5.9.  Both proposals have been preliminarily agreed in December  2022 and must now be formally  
adopted by the co -legislators: the European Pa rliament and the Council.  
5.10.  The 2030 legally binding priority objectives set out in the 8th Environment Action Programme 
("8th EAP")24 include the significant reduction of key environmental and climate pressures related to 
the EU 's production and consumption, including, among others, in the area of trade.  
5.11.  In May  2020 the EU adopted its Biodiversity Strategy  for 2030 .25 The strategy is a  
comprehensive, ambitious and long -term plan to protect nature and reverse the degradation of 
ecosystems.  A key element of the Strategy is the proposal for a Nature Restoration Law26 adopted 
by the European Commission on 22  June 2022.  
 
21 This policy package is based on a comprehensive  set of impact assessments and includes:  
• application of emissions trading to new sectors ( shipping, transport and buildings) and a 
strengthening of the existing EU Emissions Trading System (EU ETS);  
• a Social Climate Fund, to ensure that  the green transit ion leaves no -one behind  
• updating Member State emissions reduction targets (Effort Sharing Regulation) in line with the 2030 
climate target plan;  
• increased targets for renewable energy and for energy efficiency;  
• a faster roll -out of low emission transport  modes  (including through an obligation that all new cars 
and vans sold in the EU from 1  January  2035 need to be zero -emission vehicles ) and the 
infrastructure and fuels to support them;  
• an alignment of taxation policies with the European Green Deal objec tives;  
• measures to better prevent carbon leakage in the form of a carbon border adjustment mechanism 
(CBAM);  
• and tools to preserve and grow natural carbon sinks, with the aim of a climate -neutral land and 
agriculture sector by 2035  (Land Use, Land -Use Ch ange and Forestry Regulation).  
22 European Commission (EU), Proposal for a Regulation on the European Parliament and the Council 
establishing a carbon border adjustment mechanism, COM(2021)  564 final.  
23 Decision (EU) 2022/591, OJ L 114 , 12/4/2022 , p. 22. 
24 Decision (EU) 2022/591, OJ L 114 , 12/4/2022 , p. 22. 
25 COM(2020)  380 final . 
26 COM(2022)  304 final Nature restoration law (europa.eu) . WT/TPR/G/442 • European Union  
 
- 20 - 
 
  5.12.  On 6 December  2022, t he European Parliament and the Council reached a provisional political 
agreement on an EU Regulation on deforestation27, paving the way for the final adoption of the 
regulation in early 2023. It aims to curb EU -driven deforestation and forest degradation. By 
promoting the consumption of "deforestation -free" products and reducing the EU 's impact on global 
deforestation and forest degradation, the new rules will bring down greenhouse gas emissions and 
global biodiversity loss and minimise consumption, and therefore decrease the trade of products 
coming from supply chains associated with deforestation or forest degradation, wh ile increasing the 
trade of sustainable products. The proposal is part of a broader plan of actions to tackle deforestation 
and forest degradation first outlined in the 2019 Commission Communication on Stepping up 
EU Action to Protect and Restore the World 's Forests .28 
5.13.  Furthermore, in the area of fighting pollution, the European Commission adopted the 
Zero Pollution Action Plan  in May  2021.29 The main objective is to provide a compass for including 
pollution prevention in all relevant EU policies, including  trade policies and free trade agreements, 
and to reduce air, water and soil pollution to levels no longer considered harmful to health and 
natural ecosystems and that respect the boundaries our planet can cope with, thus creating a 
toxic-free environment.  
5.14.  In the area of waste, in November  2021, the Commission adopted  a proposal for a new 
regulation on Waste Shipment30, which aims to ensure that the EU does not export its waste 
challenges to third countries and supports a clean and circular economy.  
5.15.  The new Circular Economy Action Plan  (CEAP)31 was adopted in 2020 and aims to 
accelerate the transformational change required by the European Green Deal .32 Under the new CEAP, 
the European Commission adopted in March and November  2022, two packages  of initiatives to 
make sustainable products the norm on the EU market .33 The cornerstone of the measures  is the  
legislative proposal for a Regulation on Ecodesign for Sustainable Products (ESPR)34 that aims to 
better cover product circularity issues such as durability and reparability, and to address  the 
carbon - and environmental footprints of products , amongst other aspects . 
5.1.2   Sustainable  food systems  
5.16.  The Farm to Fork  (F2F) Strategy adopted in May  2020 is the EU 's contribution to the global 
transition towar ds sustainable food systems. It aims to ensure food security, nutrition and public 
health, access to sufficient, safe, nutritious, sustainable food for all, and this while having a neutral 
or positive environmental impact. To achieve the transition, the St rategy 's action plan sets out both 
regulatory and non -regulatory initiatives, including the EU Code of Conduct on responsible food 
business and marketing practices35 that entered into force in July  2021.  
5.17.  The Commission is also carrying out preparatory wor k concerning the flagship initiative of 
the F2F strategy: the framework legislation for a Union sustainable food system. It will aim at 
accelerating and facilitating the transition to sustainability by establishing new foundations for future 
 
27 European Commission, Proposal for a Regulation of the European Parliament and of The Council on 
the making available on the Union ma rket as well as export from the Union of certain commodities and 
products associated with deforestation and forest degradation and repealing Regulation (EU) No 995/2010, 
COM(2021) 706 final.  
28 European Commission, Stepping up EU Action to Protect and Resto re the World 's Forests , 
COM(2019)  352. 
29 European Commission, Pathway to a Healthy Planet for All EU Action Plan: 'Towards Zero Pollution for 
Air, Water and Soil ', COM(2021) 400.  
30 European Commission, Proposal for a Regulation of the European Parliament a nd of The Council on 
shipments of waste and amending Regulations (EU) No 1257/2013 and (EU) No 2020/1056, COM(2021) 709.  
31 European Commission, A new Circular Economy Action Plan For a cleaner and more competitive 
Europe , COM(2020) 98 final. 
32 European Commission, Closing the loop – An EU action plan for the Circular Economy , 
COM(2015)  614 final.  
33 European Commission, Making sustainable products the norm , COM(2022) 140 final. 
34 European Commission, Proposal for Proposal for a Regulation of the European Parliament and of The 
Council establishing a framework for setting ecodesign requirements for sustainable products and repealing 
Directive 2009/125/EC , COM(2022) 142 final.  
35 Viewed at: https://food.ec.europa.eu/horizontal -topics/farm -fork-strategy/sustainable -food-
processing/code -conduct_en .  WT/TPR/G/442 • European Union  
 
- 21 - 
 
  food policies.  The transition towards sustainable food systems has to be supported by sanitary and 
phytosanitary requirements responding to key challenges .  
5.18.  The draft regulation on lowering the maximum residue levels (MRLs) for the two neonicotinoid 
substances clothianidin and thiamethoxam, is the first regulation implementing the F2F Strategy36 
on imported food in relation to pesticides residues. The environmental aspects targeted by this 
regulation relate to the protection of pollinators. This is an issue of g lobal concern, which goes 
beyond national boundaries and cannot be solved through actions at EU level alone. The draft 
regulation is lowering the maximum residue levels (MRLs) for the two neonicotinoid substances 
clothianidin and thiamethoxam, known to con tribute significantly to the decline of pollinator 
populations because of their intrinsic properties that lead to adverse effects on pollinators 
independent of where they are used geographically .37,38 The regulation includes trade facilitating 
provisions, mainly to postpone the application date of the regulation to 36  months after entry into 
force (instead of 6  months, which is the standard period foreseen by WTO rules) and to allow 
products placed on the market before the application date to remain on the market until the end of 
their shelf life.  
5.19.  The implementing measures for the Regulation on Veterinary Medicinal Products adopted 
during the previous review period will strengthen the EU action in fighting antimicrobial resistance 
(AMR) and promote a pruden t and responsible use of antimicrobials. These measures have been 
supplemented recently by the Delegated Regulation setting the criteria to designate antimicrobials 
to be reserved for treatment of certain infections in humans39, as well as an Implementing Regulation 
listing the designated antimicrobials to be reserved for treatment of certain infections in humans .40 
Furthermore, the Regulation on Official Controls was amended to ensure that the single framework 
for official controls is also applicable to th e relevant provision of the Veterinary Medicinal Products 
Regulation.  
5.1.3   Decarbonising  Energy and Sustainable Transport  
5.20.  Since 2019, the energy policy and legal framework of the EU has significantly evolved. These 
were partially driven by the European Green De al and the Fit for 55 legislative proposals. Another 
driver was Russia 's war  of aggression  against Ukraine, which significantly impacted the EU 's energy 
market, including security of supply.  
5.21.  The Fit for 55 package (see section  5.1.1) of proposals  sets amb itious targets for the energy 
sector across the board, including on renewable energy41, energy efficiency42 and the energy 
performance of buildings .43 Other ongoing legislative initiatives include new rules44 to reshape the 
market design for gases, in particular biomethane and hydrogen, as well as new requirements 
relating to methane emissions reduction45 in the energy sector.  
 
36 European Commission, A Farm to Fork Strategy, COM(2020) 381 final, p.  18: the Commission will 
take into account environmental aspects when assessing requests for import tolerances for pesticide 
substances no longer approved in the EU, while respecting WTO standards and obligations.  
37 EFSA Jo urnal 2018;16(2):5179.  
38 EFSA Journal 2018;16(2):5177.  
39 Regulation (EU) 2021/1760, OJ L 353 , 6/10/2021 , p. 1. 
40 Regulation (EU) 2022/1255, OJ L 191 , 20/7/2022 , p. 58. 
41 European Commission, Proposal for a Directive of the European Parliament and the Council amending 
Directive (EU) 2018/2001 of the European Parliament and of the Council, Regulation (EU) 2018/1999 of the 
European Parliament and of the Council and Directive  98/70/EC of the European Parliament and of the Council 
as regards the promotion of energy from renewable sources, and repealing Council Directive (EU) 2015/652, 
COM(2021) 557 final . 
42 European Commission, Proposal for a Directive of the European Parliamen t and the Council on Energy 
Efficiency  recast), COM(2021) 558 final . 
43 European Commission, Proposal for a Directive of the European Parliament and the Council on the 
energy performance of buildings, COM(2021) 802 final . 
44 European Commission, Proposal for a Directive of the European Parliament and the Council on the 
interna l markets for renewable and natural gases and for hydrogen (recast), COM(2021) 804 final . 
45 European Commission, Proposal for a Directive of the European Parliament and the Council on 
methane emissions reduction in the energy sector and amending Regulation  (EU) 2019/942, 
COM(2021)  805 final. WT/TPR/G/442 • European Union  
 
- 22 - 
 
  5.22.  A revised regulation on gu idelines for trans -European energy infrastructure46 has also been 
proposed, which enables the identification of the cross -border energy infrastructure projects and 
related investments across the Union and with third countries that are necessary for the ene rgy 
transition and achievement of the climate targets.  
5.23.  The proposal for the REPowerEU Plan47 includes complementary short, mid and long -term 
initiatives in view of phasing out the use in the EU of all Russian fossil fuels as soon as possible. 
Measures include those relating to gas storage48, reduction of demand for gas49 and electricity .50 In 
addition, it proposes to increase the EU 's renewable energy and energy efficiency targets and to 
accelerate the permitting procedures for renewable energy  deployment under the 'Fit for 55 ' 
proposals.  
5.24.  In the area of transport, a Revised Clean Vehicles Directive  was adopted in June  2019 to 
promote clean mobility solutions in public procurement tenders, providing a boost to the demand 
and further deployment of  low- and zero -emission vehicles. The directive defines "clean vehicles " 
and sets national targets for their public procurement. It applies to different means of public 
procurement, including purchase, lease, rent and relevant services contracts. In Decemb er 2020, 
the Commission adopted the Sustainable and Smart Mobility Strategy , setting the vision and 
announcing measures to reduce transport emissions by 90% by 2050 in line with the 
European  Green Deal goals.  
5.25.  Under the Fit for 55 Package, several legislat ive initiatives were proposed in July  2021 on the 
decarbonisation of transport:  
• A proposal for a new Alternative Fuels Infrastructure Regulation51 sets binding national 
minimum targets for the rollout of certain alternative fuels infrastructure on roads, in ports 
and in airports. A revision of the CO2 standards for cars52 and vans setting a trajectory of 
targeted reduction of emissions with the fina l aim that by 2035, all new cars and vans will 
need to be zero -emission.  
 
• The revision of the EU ETS, including its extension to shipping and establishing a separate 
emission trading system for road transport53, as well as a gradual phase out of the free 
emissions allowances in the aviation sector .54 
 
• A revision of Energy Taxation Directive55 removes the mandatory tax exemptions on aviation 
and maritime fuels.  
 
• A new legislative proposal on ReFuelEU Aviation56 that aims to decarbonise the aviation sector 
by mandating supply of jet fuels blended with minimum shares of sustainable aviation fuels 
 
46 Regulation (EU) 2022/869, OJ L 152 , 3/6/2022 , p. 45. 
47 European Commission, REPowerEU Plan, COM(2022) 230 final.  
48 Regulation (EU) 2022/1032, OJ L 173 , 30/6/2022 , p. 17.  
49 Regulation (EU) 2022/1369, OJ L 206, 8 /8/202 2, p. 1. 
50 Regulation (EU) 2022/1854, OJ L 261I, 7 /10/2022 , p. 1. 
51 European Commission, Proposal for a Regulation of the European Parliament and the Council on the 
deployment of alternative fuels infrastructure, and repealing Directive 2014/94/EU of the European Parliament 
and of the Council , COM(2021) 559 final . 
52 European Commission, Proposal for a Regulation of the Europea n Parliament and the Council 
amending Regulation (EU) 2019/631 as regards strengthening the CO2 emission performan ce standards for 
new passenger cars and new light commercial vehicles in line with the Union 's increased climate ambition , 
COM(2021) 556 final. 
53 European Commission, Proposal for a Directive  of the Europe an Parliament and the Council amending 
Directive 20 03/87/EC establishing a system for greenhouse gas emission allowance trading within the Union, 
Decision (EU) 2015/1814 concerning the establishment and operation of a market stability reserve for the 
Union greenhouse gas emission trading scheme and Regulat ion (EU) 2015/757 , COM(2021)  551 final. 
54 European Commission, Proposal for a Directive  of the Europea n Parliament and the Council amending 
Directive 2003/87/EC as regards aviation 's contribution to the Union 's economy -wide emission reduction target 
and appropriately implementing a global market -based measure , COM(2021) 552 final. 
55 European Commission, Proposal for Council Directive on restructuring the Union framework for the 
taxation of energy products and electricity, COM(2021)563 final.  
56 European Co mmission, Proposal for a Regulation of the European Parliament and the Council on 
ensuring a level playing field for sustainable air transport, COM(2021) 561 final.  WT/TPR/G/442 • European Union  
 
- 23 - 
 
  (SAF) and uptake of fuels by airlines departing from Union airports. The FuelEU Maritime57 
legislative proposal sets the objective to promote the uptake in the use o f renewable, 
low-carbon fuels and low carbon -intensive energy options, in maritime transport, including 
additional requirements for zero emissions at berth, for both containerships and passenger 
ships.  
 
5.2  Sustainability , fairness and inclusiveness  
5.2.1   Protecting  human rights and promoting labour rights  
5.26.  EU trade policy helps to promote and protect human rights around the world. The EU 's broader 
set of policies and actions in this respect includes various trade policy instruments such as the EU 's 
unilateral trade preferences (GSP ) (see section  4.1), bilateral and regional free trade agreements 
and trade impact assessments and evaluations.  
5.27.  Under the GSP, the EU monitors respect for the principles of core international conventions 
on human rights by beneficiary countries. In September  2021, the Commission adopted the 
legislative proposal for a new EU 's GSP Regulation to apply as from January  2024, reinforcing 
support for the promotion of international standards in GSP beneficiary countries, including by 
adding new international human rights instruments and by rendering the export of goods made by 
internationally prohibited child labour and by forced labour a ground to possibly withdraw trade 
preferences.  
5.28.  The EU 's free trade agreements are typically linked to the human rights "essential elements " 
clause contained in the political framework agreements with these countries, enabling the parties to 
take appropriate measures in case of breaches by the other party . The European Commission 
conducts human rights impact assessments as a key element of its sustainability impact assessments 
of the EU 's ongoing trade negotiations, including through ex post  evaluations of the EU 's existing 
trade agreements.  
5.29.  In July  2021, the E uropean Commission and the European External Action Service published 
guidance on due diligence to assist EU businesses in taking appropriate measures to address the 
risk of forced labour in their operations and supply chains, in line with international st andards.  
5.30.  In September  2022, a legislative proposal was adopted to prohibit products made with forced 
labour to be placed on or exported from the EU market .58 The proposal covers all products, namely 
those made in the EU for domestic consumption and export s, and imported goods, without targeting 
specific products, companies, industries or geographies. The proposal builds on internationally 
agreed definitions and standards. It underlines the importance of close cooperation with global 
partners. Once the prop osal is adopted by the EU co -legislators, national authorities will be 
empowered to withdraw from the EU market products made with forced labour, following an 
investigation. According to the proposal, EU customs authorities will identify and stop products made 
with forced labour at EU borders. The proposal is now with the EU co -legislators, the 
European  Parliament and the Council.  
5.31.  On 23  February  2022, the Commission adopted a legislative proposal for a Directive on 
corporate sustainability due diligence. T he aim of this Directive is to foster sustainable and 
responsible corporate behaviour and to anchor human rights and environmental considerations in 
companies ' operations and corporate governance. The proposal is still with the EU 's legislature, and 
the ne w rules once adopted will ensure that businesses address adverse impacts of their actions, 
including in their value chains inside and outside Europe.  
5.32.  Regulation (EU) 2017/821 (the so -called Conflict Minerals Regulation)59 lays down supply 
chain due diligence obligations for EU importers of Tin, Tantalum, Tungsten and Gold (3TG). It was 
adopted in 2017 and its operational due diligence requirements apply since 1  January  2021. It aims 
 
57 European Commission, Proposal for a Regulation of the European Parliament and the Council  on the 
use of renewable and low -carbon fuels in maritime transport and amending Directive 2009/16/EC, 
COM(2021)  562 final.  
58 European Commission, Proposal for a Regulation of the European Parliament and of the Council on 
prohibiting products made with for ced labour on the Union market, COM(2022) 453 final.  
59 Regulation (EU) 2017/821, OJ L 130 , 19/5/2017 , p. 1. WT/TPR/G/442 • European Union  
 
- 24 - 
 
  to ensure that EU imports of 3TG do not contribute to armed conflict and associated human rights 
abuses along the supply chain. At the same time, the regulation aims to promote sustainable 
development in the countries concerned, by encouraging responsible sourcing also from 
conflict -affected and  high-risk areas with the help of the necessary due diligence safeguards.  
5.33.  In the Communication on Decent Work Worldwide60 of February 2022 the EU reaffirmed its 
commitment to champion decent work in cooperation with other countries. The EU promotes decent 
work across all sectors and policy areas in line with a comprehensive approach that addresses 
workers in domestic markets, in third countries and in global supply chains (see section  5.2.1).  
5.2.2   Promoting sustainability  
5.34.  All modern EU trade agreements include Trade and Sustainable Development (TSD) chapters 
with a broad set of mutually agreed commitments based on international labour and environmental 
standards. In June  2021, the Commission launched an in -depth review with the objective of 
strengthening the abi lity of trade agreements as a whole – including their TSD chapters – to 
champion sustainable trade, in cooperation with trade partners and in concert with other relevant 
EU policy instruments, including the European Green Deal. The Communication "The power  of trade 
partnerships: together for green and just economic growth "61 of 22 June 2022 sets out this enhanced 
approach to sustainability in the EU trade agreements .62 The Communication identifies policy 
priorities, such as results -oriented and priority -based engagement with partner countries and more 
participation and support for civil society; and 20 key action points, which will further enhance the 
effectiveness of the engagement -based approach to TSD, grounded in the international framework 
and standards , with stronger implementation and enforcement.  
5.35.  In addition to TSD chapters, the sustainability dimension will continue to be reflected also in 
other aspects of the EU 's trade and investment agreements. They support the diffusion of clean and 
more efficien t production methods and technologies, including promoting trade in green goods and 
services, supporting the transition to climate neutral economies, or the transition to sustainable food 
systems by proposing to the FTAs partners to include a new Sustainab le Food Systems chapter.  
5.2.3   Small and Medium Sized  enterprises (SMEs)  
5.36.  The EU actively supports the participation of SMEs in international trade and in the EU 's 
internal market. SMEs are the backbone of the EU economy, providing jobs and growth opportunities.  
Out of the 675 ,000 EU companies, who export outside the EU, 94% were SMEs and their exports 
amounted to 31% of the total value of EU exports in 2020 .63 
5.37.  SMEs need a transparent, predictable and more certain global environment to make the most 
of trade opportunities. Thus, the EU encourages raising awareness and promoting the use of 
information platforms, such as the European Commission 's Access2Markets platform64, to help SMEs 
understand and reap the benefits of international trade and of EU trade agree ments.  
5.38.  New generation EU trade agreements now include dedicated SME chapters65 to help SMEs 
grow their business with and in those foreign markets. These dedicated SME chapters are meant to 
raise awareness and provide for a number of practical steps further  to increase transparency, notably 
through information sharing. In addition, they provide for dedicated SME contact points tasked with 
 
60 European Commission, Decent work worldwide for a global just transition and a sustainable recovery , 
COM(2022) 66 final . 
61 European Commission, The power of trade partnership: together for green and just economic growth , 
COM(2022) 409 final.  
62 The Communication was supported by the Council  as well as the European  Parliament . 
63 Eurostat TEC database (tables ext_tec01, ext_tec03, ext_tec10) . Viewed at: 
https://ec.europa.eu/eurostat/databrowser/view/ext_tec01/default/table?lang=en ; 
https://ec.europa.eu/eurostat/databrowser/view/ext_tec03/default/table?lang=en ; and 
https://ec.europa.eu/eurostat/databrowser/view/ext_tec10/default/ table?lang=en .  
64 Viewed at: https://trade.ec.europa.eu/access -to-markets/en/home .  
65 There EU trade agreements in force with Japan and the UK include a dedicated SME chapter while the 
agreement with Canada includes a joint SME Recommendation which content -wise mirrors the provisions in 
SME chapters. There is also a dense pipeline of future EU trade agreements with New  Zealand , Mercosur, Chile, 
Mexico, Australia, Indonesia and India that w ould include an SME provisions.  WT/TPR/G/442 • European Union  
 
- 25 - 
 
  ensuring that SME interests and perspectives are reflected in the implementation of the respective 
agreements.  
5.39.  The Commis sion adopted on 10  March  2020 a new SME strategy66, which builds on policy 
initiatives, such as the 2008 Small Business Act and the Competitiveness for Small and Medium 
Enterprises (COSME) programme .67 The SME Performance Review68 is one of the main tools that the 
European Commission uses to monitor the progress in the implementation of the SME strategy and 
the EU 's Small Business Act (SBA). The report includes information about the performances of 
European SMEs and their size and structure.  
5.40.  The EU also ha s several funding  programmes targeted at SMEs , for example : 
• Single Market Programme (SMP) : The EU has been implementing the Single Market 
Programme (SMP)69 which has a dedicated SME pillar that focuses on strengthening SMEs' 
competitiveness and sustainability. This SME Pillar co -finances various actions to help 
European businesses with international expansion, including the Enterprise Europe Network 
(EEN) th at provides advice and partnership services to help businesses innovate and grow 
on an international scale. EEN is the world's largest support network for SMEs with 
international ambitions. Inter alia, the SME Pillar provides support for the EU-Japan Cente r 
for Industrial Co -operation  and for Joint Cluster Initiatives that help to boost the resilience 
of industrial ecosystems and strengthen their  access to global supply and value chains.  
 
• InvestEU : The InvestEU SME Window70 provides SMEs access to and availability of debt 
and equity financing, running from 2021 to 2027. The Single Market Programme and 
InvestEU SME Window build on the previous COSME Programme running from 2014 -2020.  
 
5.41.  The EU is preparing a SME Relief Package to help SMEs address, inter alia, issues related to 
supply chains bottlenecks. It  will include the revision of the Late Payment Directive, measures to 
improve doing business in the Single Market and facilitating access to skills and finance.  
5.42.  The EU financed four international Intellectual Property SME Helpdesks (China, Latin America, 
South -East Asia, India) which assist EU SMEs and beneficiaries of EU -funded programmes by 
providing information and advice on  intellectual property  and related  matters.  
5.2.4   Transparency  
5.43.  Being a transparent trade authority is an important priority for the Europ ean Commission. 
Transparency is essential to ensure inclusiveness, legitimacy and accountability and facilitates a 
mutual understanding of policy by enhancing public trust. A pro -active transparency policy is 
maintained through two main work strands: the p ublication of relevant documents and the 
systematic engagement with civil society. Draft negotiating directives, reports of negotiating rounds, 
initial EU text proposals, reports of committees and dialogues as well as many other relevant 
documents are publ ished. Regular public stakeholder events that include representatives of non -
governmental organisations, trade unions, business organisations and other groups, is part of the 
EU's transparency measures.  
5.2.5   Gender equality and women 's economic empowerment  
5.44.  The EU is committed to promoting gender equality, including through trade policy. The 
2021 Trade Policy Communication indicates that the EU works with partners to ensure adherence to 
universal values, including the promotion and advancement of  gender equality . 
 
66 European Commission, An SME Strategy for a sustainable and digital Europe , COM(2020) 103 final.  
67 The actions of the strategy are focused on three pillars: 1) supporting SMEs in their green and digital 
transition, 2) red ucing regulatory burden and improving market access and 3) improving access to finance .  
68 Viewed at:  https://single -market -economy.ec.europa.eu/smes/sme -strategy/sme -performance -
review_en#paragraph_885 ; Regulation (EU) 2021/690, OJ L 153 , 3/5/2021 , p. 1. 
69 Regulation (EU) 2021/690,  OJ L 153, 3.5.2021 , pp. 1–47, EUR-Lex - 32021R0690 - EN - EUR-Lex 
(europa.eu) . 
70 Regulation (EU) 2021/523, OJ L 107 , 26/3/2021 , p. 30.  WT/TPR/G/442 • European Union  
 
- 26 - 
 
  5.45.  The EU is supportive of the inclusion of the trade and gender equality dimension in the WTO 
context. From the outset, the EU has been a strong proponent of the 2017 Buenos Aires Joint 
Declaration on Trade and Women 's Economic Empowerment. The EU has been  a member of the 
informal working group (IWG) on trade and gender in the WTO since its creation in the autumn 
of 2020. In early 2022, the EU launched a project with the International Trade Centre that looks at 
applying a gender lens to the work of the WTO.  In this context, four webinars have been organised 
on topics such as e -commerce, trade facilitation, investment facilitation and government 
procurement.  
5.46.  EU trade agreements contain commitments related to the implementation of fundamental ILO 
conventions t argeting non -discrimination in employment (including the ratification and 
implementation of ILO Conventions 100 and 111 on equal remuneration and non -discrimination), in 
a specific chapter on Trade and Sustainable Development (TSD). In June  2022, the EU co ncluded 
negotiations for a comprehensive trade agreement with New  Zealand  that includes TSD Chapter with 
commitment of the parties to advance relevant UN and ILO conventions advancing women 's 
economic empowerment and gender equality, including promoting co operation in international fora 
to advance these objectives.  In the modernised EU -Chile Advanced Framework Agreement, 
politically concluded in December  2022, such commitments are placed in a dedicated Trade and 
Gender Equality chapter.  
5.47.  Under the EU 's Gener alised Scheme of Preferences (GSP), the EU monitors respect by 
beneficiary countries for the principles of core international conventions on promoting women 's 
rights and gender equality, notably the UN Convention on the Elimination of All Forms of 
Discrimi nation against Women the Convention concerning Equal Remuneration of Men and Women 
Workers for Work of Equal Value, and the Convention concerning Discrimination in Respect of 
Employment and Occupation .  
5.48.  The Action Plan on Gender Equality and Women 's Empowerment in External Relations 2020 –
2025 (GAP III) , in line with the Gender Equality Strategy 2020 -2025,  makes the promotion of gen der 
equality a priority of all external policies and actions; offers a roadmap for working together with 
stakeholders at national, regional and multilateral levels; steps up action in strategic thematic areas; 
calls for the institutions to lead by example and; ensures the transparency of the results.  
6  ENFORCEMENT  AND RESPONDING TO TRADE DISTORTIVE PRACTICES  
6.1.  Implementation and enforcement of trade policy is a key priority  for the EU, as set out  in 
the 2021 Trade Policy Communication. In a world of geopolitica l, economic and environmental 
transition, the EU 's openness to trade and investment must be coupled with its ability to effectively 
defend its interests and enforce its rights, notably with a view to ensuring a level playing field both 
within the EU and gl obally. This includes our renewed multilateral and bilateral agenda as well as 
making the best use of existing rules and structures around the newly created Chief Trade 
Enforcement Officer (CTEO)  and closing the gap in our toolbox for dealing with new chal lenges, 
including competitive distortions (as well as sustainability and security concerns). To this end, the 
Foreign Subsidies Regulation (section  6.3) and the International Procurement Instrument 
(section  6.4) and are now in place.  
6.1  Enforcement  
6.2.  The EU ma intains an active trade implementation and enforcement policy and has developed 
a number of measures and tools to ensure the defence of EU interests and the compliance by 
third countries with the obligations and commitments they have undertaken vis -à-vis the EU.  
6.3.  On 24  July 2020, the European Commission created the position of a Chief Trade 
Enforcement Officer71 who steers and coordinates all EU actions in relation to the implementation 
and enforcement of the EU 's trade policy, both for issues related to market access and for issues of 
non-compliance with sustainability commitments by the EU 's trading partners.  
 
71 Viewed at: https://policy.trade.ec.europa.eu/enforcement -and-protection/chief -trade -enforcement -
officer_en . WT/TPR/G/442 • European Union  
 
- 27 - 
 
  6.4.  On 13 October  2020, the European Commission launched the Access2Markets72 online portal 
to help in particular SMEs to export goods, services and procurement beyond the EU 's borders. It 
also facilitates trade for economic operators in third countries trading with the EU or wanting to do 
so. It does so by providing information on  product and country specific tariffs, taxes, import 
formalities, rules of origin, statistics or trade barriers. The portal responded to requests from 
stakeholders to explain EU trade agreements and their many advantages in detail. It serves both 
companies  that already trade internationally and those that are only starting to explore opportunities 
in foreign markets.  
6.5.  On 16  November  2020, the European Commission launched the Single Entry Point  (SEP)73 
as a first point of contact for EU-based stakeholders wi shing to launch complaints on potential trade 
barriers or breaches by trading partners of their sustainability commitments. The SEP aims to ensure 
effective coordination and follow -up to the trade -related complaints brought by EU stakeholders.  
6.6.  In February  2021, the EU adopted legislation to upgrade its trade enforcement rules, in 
particular to protect its interests and rights in the WTO and under bilateral trade agreements when 
the resolution of adjudicative dispute settlement is blocked despite the EU 's good faith effort to have 
dispute settlement procedures function .74 This came at a time when dispute settlement in the WTO 
was and still remains blocked despite the EU 's (together with a large number of other WTO members) 
good faith effort to restore a func tioning dispute settlement procedure. The revised Regulation 
enables the EU, in the case of a WTO dispute, to enforce its rights as upheld by a panel if obtaining 
a binding final ruling is not possible because the appeal of the other party to the dispute c annot be 
completed and that party does not agree to use interim appeal arbitration.  
6.7.  The EU continues to put increasing efforts into the implementation and enforcement of 
commitments made under bilateral trade agreements. On 27  October  2021, the first Annu al Report 
on the Implementation and Enforcement of EU Trade Agreements was published, following the 
appointment of the CTEO. The report provides an overview of the main activities to ensure effective 
implementation and enforcement of EU trade agreements an d arrangements. The second report was 
published on 11  October  2022.75 
6.2  Trade Defence  
6.8.  While the EU is one of the most open economies in the world, it also believes in fair trade. 
The EU has continued to stand against unfair and illegal practices and distortive state subsidies, 
aiming at ensuring a level playing field for its economic operators.  
6.9.  The European Commission is successfully implementing the changes to the EU 's basic anti -
dumping and anti -subsidy legislation introduced in December  2017 and Ju ne 2018 respectively . This 
was confirmed in a report of the European Court of Auditors issued in July  2020 publishing the 
findings of an audit of the EU 's application of the trade defence instruments.76 In 2020 and 2021, 
the European Commission implemented  a number of recommendations in that report which further 
strengthened the response to the challenges posed by unfairly traded imports, including the 
treatment of confidential data in investigations, increasing awareness of the instruments among 
stakeholde rs as well as improved monitoring of the effectiveness of measures.  
6.10.  In keeping with its commitment to be firm on unfair trade, the European Commission used its 
anti-subsidy legislation to tackle increasingly complex unfair subsidy arrangements of 
third countries, which were harming some EU manufacturing industries.  
6.11.  In response to the COVID -19 pandemic, new work practices were adopted in 2020 ensuring 
the European Commission completed investigations within legal time limits, while fully respecting 
the right s of interested parties and its legal obligations. While there is a gradual return to traditional 
 
72 Viewed at: Welcome home page | Access2Markets (europa.eu) . 
73 Viewed at : https://trade.ec.europa.eu/access -to-markets/en/content/single -entry -point-0. 
74 Regulation (EU) 2021/167, OJ L 49 , 12/2/2021 , p. 1.  
75 Viewed at: https://ec.europa.eu/transparency/documents -
register/detail?ref=COM(2022)730&lang=en .  
76 Viewed at: 
https://www.eca.europa.eu/Lists/ECADocuments/SR20_17/SR_trade_defence_instruments_EN.pdf .  WT/TPR/G/442 • European Union  
 
- 28 - 
 
  work practices, for some countries the new work practices remain in place due to continued travel 
restrictions.  
6.12.  In addition, and in response to the trade -related challenges affecting the steel industry, 
notably after the introduction of the US Section  232 tariffs on steel, the EU imposed a safeguard 
measure on imports of certain steel products in February 2019 .77 The objective of this measure was 
to protect th e Union steel industry notably from the negative effects that the trade diversion 
stemming from US Section  232 would cause, in particular in a context of increasing worldwide 
overcapacity and of an increase of trade defence and trade restrictive measures i n third countries.  
6.3  EU State aid control  
6.13.  Subsidies in the EU are regulated through State aid control managed by the 
European  Commission, and in a way that is fully coherent with the applicable WTO rules. The 
EU-level regime ensures that subsidies are autho rised according to uniform criteria, following an 
assessment of their necessity, proportionality and effects on trade and competition. As a result, any 
distortive effects of subsidies are minimised while maximising their positive effects for public policy 
objectives. In addition, subsidies granted at the EU level, while not subject to the State aid approval 
process, are designed to follow the same principles.  
6.14.  Transparency is a key feature of the EU State aid control. State aid decisions amounts, 
beneficiari es, objectives and aid instruments are collected and published centrally in the EU State 
aid scoreboard .78 Several EU State aid guidelines have been reviewed and updated in 2020 -2021. 
The periodical updates are intended to ensure that the guidelines contin ue to reflect economic and 
policy developments, such as the EU Green Deal. Specific temporary rules were in force in 2020 -2022 
to address the economic consequences of the COVID -19 outbreak. From 2022, there are temporary 
rules in place to enable Member Sta tes to support the economy in the context of Russia 's war of 
aggression against Ukraine.  
6.15.  A new element of subsidy control is the Foreign Subsidies Regulation  (EU) 2022/256079 
which will apply from 12  July 2023, six months after its entry into force. The n otification 
requirements for concentrations and public procurement procedures will apply from 
12 October  2023. The proposal aims to close a legislative gap and restore the level playing field in 
concentrations, public procurement and other market situations Until now, subsidies granted by 
non-EU governments to economic operators active in the EU went largely unchecked, while subsidies 
granted by EU Member States are subject to close scrutiny. The European Commission will have the 
power to investiga te financial contributions granted by public authorities of non -EU countries which 
benefit companies engaging in an economic activity in the EU and redress, if needed, their distortive 
effects .  
6.16.  Industrial policies, including increased subsidisation, have become more prominent around 
the world, including in the EU, to alleviate the impact of temporary crises such as the pandemic and 
to address more structural challenges such as the green transition. In the EU, the industrial policy 
tools include the Importa nt Projects of Common European Interest  (IPCEIs) that aim to 
encourage cross -border cooperation among enterprises in a given sector in research and 
development and in pre -commercial industrial deployment. IPCEI funding cannot be used for mass 
production or  commercial sales, and the public support is subject to State aid control.  
6.17.  State aid is prohibited from being conditioned by the origin of products or equipment, such 
as requirement for the beneficiary to purchase domestically -produced products. State aid  provisions 
also require a non -discriminatory provision of support, so that all undertakings are treated equally, 
independently of their origins. These characteristics aim to minimise negative spill -overs of the 
industrial policy, both within the EU single  market and on the global level playing field.  
 
77 Regulation (EU) 2019/159, OJ L 31 , 1/2/2019 , p. 27 (a provisional measure had been in place since 
July 2018 by Regulation (EU) 2018/1013, OJ L 81 , 18/7/2018 , p. 139).  
78 Viewed at:  https://competition -policy.ec.europa.eu/state -aid/scoreboard_en .  
79 Regulation (EU) 2022/2560 on fo reign subsidies distorting the internal market , OJ C 105, 4 /3/2022 , 
p. 87. WT/TPR/G/442 • European Union  
 
- 29 - 
 
  6.4  The EU 's public  procurement policy  
6.18.  The EU advocates for open international public procurement markets and has opened its public 
procurement market for many goods and services from third countries. Closed proc urement markets 
undermine competition and transparency, increase the costs of public goods and services for 
taxpayers in addition to the risk of corruption. By contrast, many EU companies are experiencing 
difficulties in getting access to third countries ' procurement markets. In response, the EU is taking 
action to ensure a level playing field and to increase opportunities for EU companies. The 
International Procurement Instrument80 entered into force on 29  August  2022. This new instrument 
confers the EU ad ditional opportunities to engage with third countries in order to remove barriers 
affecting access to public procurement markets outside the EU. It will be one of the key 
market -opening tools for public procurement.  
6.19.  The upcoming Foreign Subsidies Regulatio n (see Section  6.3) empowers the Commission to 
investigate distortive foreign subsidies and take appropriate measures, including in the field of public 
procurement. For public procurement procedures above high thresholds ( EUR 250 million  estimated 
value), foreign financial contributions above €4  million  must be systematically notified by the 
economic operators. In the case where an investigation shows the existence of distortive subsidies, 
award of the contract may be prohibited to the investigated economic  operator. The Commission 
can also investigate awarded contracts ex officio and take redressive measures, without cancelling 
the contracts.  
6.20.  In the review period, the Commission also adopted a number of guidance documents, 
clarifying rules and flexibilitie s in relation to the pandemic81, innovation procurement82, social 
procurement83, and sanctions against Russia84 (see section  7.2).  
6.21.  In terms of implementation of existing rules, Directive 2014/55/EU on electronic invoicing in 
public procurement, whose key element is the European Standard, reached its final milestone in 
April 2020. Starting from this point, all public authorities using public procurement above the EU 
thresholds should accept electronic invoices, which comply with the S tandard. The standard 
developed in Europe and the EU model for E -Invoicing has picked up interest in other parts of the 
world and is used in negotiations to help introduce digitalisation provisions in trade agreements.  
7  TRADE  POLICY RESPONSE TO CRISIS  
7.1  COVID -19 related temporary measures  
7.1.  A specific State aid Temporary Framework was adopted in March  2020 to support the economy 
in the context of the coronavirus outbreak. The temporary framework expired in June  2022, with 
some exceptions to ensure transition. Investment and solvency support measures may still be put 
in place until 31  December  2023. The conversion and restructuring options of debt instruments into 
other forms of aid continues until 30  June 2023.  
7.2.  In response to the pandemic the EU als o implemented temporary customs duty and value 
added tax relief85 on essential COVID -19 related health goods. It also responded to initial scarcity 
on the EU market of personal protective equipment with a temporary requirement making 
exportation subject to  an authorisation .86 This scheme was put in place as a temporary measure and 
struck the right balance between delivering on public health needs and securing open trade flows. 
According to the reports submitted by Member States, exporters requested more tha n 
1,300 authorisations falling under this export authorisation requirement. Some 95% of all 
 
80 Regulation (EU) 2022/1031, OJ L 173 , 30/6/2022 , p. 1. 
81 Commission Decision (EU),  OJ C 108I, 1/4/2020 , p. 1. 
82 Commission Notice (EU),  OJ C 267 , 6/7/2021 , p. 1. 
83 Commission Notice (EU),  OJ C 237 , 18/6/2021 , p. 1. 
84 Viewed at: https://finance.ec.europa.eu/system/files/2022 -08/faqs -sanctions -russia -public -
procurement_en_0.pdf . 
85 Commission Decision (EU) , OJ L 103I , 3/4/2020 , p. 1. 
86 Commission Implementing Regulation (EU) 2020/402 , OJ L 77I, 15/3/2020 , p. 1 https://eur -
lex.europa.eu/legal -content/EN/TXT/PDF/?uri=CELEX:32020R0402&from=GA  and; amended by Commission 
Implementing Regulation (EU) 2020/426 , OJ L 84I, 20/3/2020 , p. 1 https://eur -lex.europa.eu/legal -
content/EN/TXT/PDF/?uri=CELEX:32020R0426&from=EN  and; Commission Implementing Regulation 
(EU) 2020/568 , OJ L 129/7 , 24/4/2020 , p. 1. WT/TPR/G/442 • European Union  
 
- 30 - 
 
  applications have been approved. This equalled the exports of more than 13  million  protective 
masks, around 1  million  protective garments and more than 350 ,000 protective masks and visors .  
7.3.  To ensure that contractual deliveries of vaccines to those living in the EU could be fulfilled 
the EU implemented in early 2021 a temporary scheme making the exportation of vaccines subject 
to an authorisation87 in order to mitiga te the risks that exports would affect either the execution of 
Advance Purchase Agreements, signed by Member States, or the security of Union supplies of 
COVID -19 vaccines and their active substances, and to cater for the need for transparency of export 
deliveries and Union supplies. The EU has been the number one exporter of COVID -19-related 
vaccines in the world. Exporters requested authorisations for around 1.2  billion  COVID -19 vaccine 
doses. All exports, except one shipment of 250 ,000 doses, were author ised.  
7.4.  All measures have now expired and are no longer in force. Exports of COVID -19 vaccines and 
their active substances are still being monitored until 31  December  202388, however no 
authorisation is needed for these exports. It should also be noted that  during the duration of the 
measures the EU maintained exemptions for deliveries of vaccines to third countries, amongst others 
via COVAX. Some 3,450 authorisations covering 1.2  billion  doses and substances for production of 
another one  billion  doses were approved for export during the duration of the measures.  
7.2  Sanctions  
7.5.  The EU also adopts restrictive measures – 'sanctions ' – that are an essential tool in the EU 's 
common foreign and security policy (CFSP ) and through which the  EU can intervene where necessary 
to prevent conflict or respond to emerging or current crises. Some of these measures concern trade, 
with those against Russia being one example.  
7.6.  Since Russia 's recognition of the non -government -controlled areas of the Donetsk and Luhansk 
oblasts in Ukraine on 21  February  2022 and its unprovoked and unjustified military aggression 
against Ukraine on 24  February  2022, the  EU has imposed a series of new sanctions against Russia, 
Belarus and Ukraine non -government controlled areas. They add to existing measures imposed on 
Russia since 2014 following the annexation of Crimea and the non -implementation of the 
Minsk  agreements.  
7.7.  Sanctions include targeted restrictive measures (measures against individuals) and  economic 
sanctions, and are accompanied by diplomatic measures. The aim of the economic sanctions is to 
impose severe consequences on Russia for its actions and to effectively thwart Russian abilities to 
continue the aggression. The relevant trade measure s89 have been notified to the WTO .90 
7.8.  It is important to underline that the EU sanctions target goods, services and technology with 
the aim to reduce the war capacity of Russia, and do not target food and agricultural products, as 
food security and affordab ility are a key priority for the EU and its Member States, just as it is for 
our international partners. EU sanctions explicitly exclude food and foodstuffs (except alcoholic 
beverages, cigarettes), goods that are primarily for consumers and health/pharmac euticals. 
Moreover, there are no restrictions of any kind on nitrogen and phosphorus fertilisers, which account 
for 85% of the fertiliser market. The tariff rate quotas (TRQs) on potassium (potash) fertilisers imply 
that EU imports do not exceed average an nual EU imports from Russia 2017 -2021. There are no 
sanctions on Russian exports of food or fertilizer to global markets and no limitations stem from 
EU sanctions with respect to transport and transactions regarding food and fertilisers from Russia to 
third countries.  
7.9.  By way of derogation, the competent authorities of a Member State may authorise some of the 
activities  covered by sanctions  (i.e., imports, transport, services) if they have determined that it is 
necessary for humanitarian purposes. Among othe rs this may include goods for humanitarian 
purposes, health emergencies, the urgent prevention or mitigation of an event likely to have a 
 
87 Commission Implementing Regulation (EU) 2021/111 , OJ L 31I , 30/1/2021 . 
88 Commission Implementing Regulation  (EU) 2021/2071 , OJ L 421/52 , 26/11/2021 , 
http://data.europa.eu/eli/reg_impl/2021/2071/oj .  
89 Regulation (EU) No  833/2014, OJ L 229 , 31/7/2014 , p. 1; Regulation (EU) No 2021/821, OJ L 206 , 
11/6/2021 , p. 1. 
90 WTO Document, G/L/59/Ver.1.  WT/TPR/G/442 • European Union  
 
- 31 - 
 
  serious and significant impact on human health and safety or the environment, or as a response to 
natural disasters an d this may include goods for medical or pharmaceutical purposes.  
7.10.  Additionally, new provisions on procurement91 forbid awarding and maintaining already 
awarded contracts to Russian nationals, Russian companies, companies owned for more than 50% 
by Russian n ationals or companies  or steered by them and when such persons are involved as 
subsidiaries or subcontractors in contract implementation for more than 10 % of the contract value. 
The provision includes a list of exceptions Member States may decide to confe r to contracts of their 
public buyers. EU sanctions against Russia also include other measures with less direct links to trade.  
8  DEFENDING THE EU'S INTERESTS AND VALUES  
8.1.  The review period has been marked by growing tensions between major actors in international 
trade. The EU is committed to promoting approaches to reduce tensions and seeking solutions based 
on a modernised rules -based framework. At the same time, the EU has been developing autonomous 
instruments necessary to protect the EU 's essenti al interests and values – in full compliance with its 
international commitments.  
8.1  Investment  Screening  
8.2.  The EU framework for the screening of foreign direct investment (FDI) was established by 
Regulation (EU) 2019/452. It has been fully applicable since October  2020. The cooperation 
mechanism created by the regulation allows all Member States and the Commission to collectively 
assess and address potential threats to security and public order deriving from FDI in the EU. The 
EU cooperation mechanism comple ments screening mechanisms of Member States at national level.  
8.3.  The regulation applies to all sectors of the economy and is not subject to any thresholds 
concerning the value of the investment.  
8.4.  The review of and, when required, the adoption of measures pro hibiting or conditioning an 
investment within the scope of the regulation on grounds of security of public order is the ultimate 
responsibility of Member States. The Commission may address opinions recommending specific 
actions to the Member State where th e investment takes place, in particular when there is a risk 
that the investment affects security or public order in more than one Member State or projects and 
programmes of Union interest. The Commission reports annually on the implementation of the 
regulation.92 
8.2  Export  controls  
8.5.  The modernisation of the EU export control regime materialised with the entry into force of the 
updated EU Regulation 821/2021 (recast) on 9  September  2021.  
8.6.  The new Regulation represents a comprehensive system upgrade where all pr ovisions have 
been amended to enhance the efficiency and effectiveness of controls. This includes updated 
definitions and control parameters, harmonisation, simplification and digitalisation of licensing, 
enhanced information -sharing, and cooperation with third countries.  
8.7.  The new regulation introduces a basis for EU autonomous controls, allowing the EU to make its 
own decisions regarding human rights controls on cyber -surveillance technologies, and for a 
coordination of national controls on emerging technol ogies. In this sense, the new regulation 
establishes a human security dimension that allows for an EU mechanism for human rights end -use 
controls on cyber -surveillance exports. The mechanism builds on a mandatory and prescriptive 
consultation procedure res ulting in the publication of an EU watch list of items and destinations 
subject to control. The mechanism is supported by due diligence requirements for exporters to be 
developed in consultation with industry and civil society.  
 
91 Regulation (EU) 2022/576, OJ L 111 , 8/4/2022 , p. 1. 
92 Viewed at: https://policy.trade.ec.europa.eu/enforcement -and-protection/investment -screening_en .  WT/TPR/G/442 • European Union  
 
- 32 - 
 
  8.8.  In line with Article  26(1) o f the new regulation, on 15  September  2021, the Commission issued 
a recommendation on internal compliance programmes for controls of research involving dual -use 
items.93 The Commission reports annually on the implementation of the new Regulation .94 
8.3  Acting against  economic coercion  
8.9.  In December  2021, the European Commission proposed a new legal instrument95 on the 
protection of the EU and its Member States from economic coercion by third countries.  
8.10.  The aim of this instrument is to deter third countries from u sing economic coercion, and to 
dissuade them from continuing the economic coercion, if it occurs, by engaging with the third country 
concerned in various respects. As a last resort, the regulation would enable the Union to counteract 
the economic coercion.  Economic coercion refers to situations where a third country is seeking to 
pressure the Union or an EU Member State into making a particular policy choice by applying or 
threatening to apply measures affecting trade or investment against the Union or an E U Member 
State. Third countries may resort to coercion to bring about a change of policy in the EU in areas 
falling under domestic prerogatives. The rationale of the instrument, in terms of both standing 
against economic coercion and the permissibility of response measures as a last resort, lies in 
general international law which outlaws interventions in the internal or external affairs of other states 
and which allows countermeasures in response to internationally wrongful acts (rather than 
specifically in  the WTO  Agreement ). 
8.11.  The Commission proposal is currently before the EU co -legislators, for consideration and 
approval, within the ordinary legislative procedure. A decision on its adoption is expected in 2023.  
9  EXTERNAL  IMPACTS OF THE EU 'S INTERNAL POLICIES  
9.1  Digital Services and online platforms  
9.1.  Several legislative initiatives have been finalized in the review period:  
• The Regulation on European data governance and amending Regulation (EU) 2018/1724 
(Data Governance Act)96 seeks to increase tr ust in data sharing, strengthen mechanisms to 
increase data availability and overcome technical obstacles to the reuse of data.  
 
• The Regulation on contestable and fair markets in the digital sector (Digital Markets Act)97 
establishes a level playing field to foster innovation, growth, and competitiveness in 
particular for large online platforms as so -called "gatekeepers" in order to make sure that 
they behave fairly on the market. The Digital Markets Act will start to appl y on 2  May 2023.  
 
• The Regulation on a Single Market for Digital Services (Digital Services Act)98 concerns online 
intermediaries and platforms, such as, online marketplaces, social networks, 
content -sharing platforms, app stores, and online travel and acco mmodation platforms. It 
will create a safer digital space in which the fundamental rights of all users of digital services 
are protected. Together with the Digital Markets Act, its goal is to safeguard citizens and 
their fundamental rights online.  
 
• The Dir ective on better enforcement and modernisation of Union consumer protection rules 
(EU) 2019/2161 ("Modernisation Directive") amends  the existing EU consumer law 
directives. It strengthens  consumer protection in the Digital Single Market by, amongst 
others,  increasing transparency and prohibiting misleading practices as regards consumer 
reviews, ranking of search results, contracts concluded via online marketplaces and 
personalised pricing.  
 
 
93 Recommendation (EU) 2021/1700, OJ L 338 , 23/9/2021 , p. 1. 
94 Viewed a t: https://ec.europa.eu/commission/presscorner/detail/en/ip_22_5286 .  
95 European Commission, The protection of the Union and its Member States from economic coercion by 
third countries , COM/2021/775 final.  
96 Regulation (EU) 2022/868, OJ L 152 , 3/6/2022 , p. 1. 
97 Regulation (EU) 2022/1925, OJ L 265 , 12/10/2022 , p. 1. 
98 Regulation (EU)  2022/2065,  OJ L 277 , 27/10/2022 , p. 1. WT/TPR/G/442 • European Union  
 
- 33 - 
 
  9.2.  With the adoption of the Digital Markets Act and the Digital Services Act, the EU created the 
world´s first general  framework for regulating digital services and online platforms.  
9.3.  The Digital Services Act and the Digital Markets Act together set out a fir st comprehensive 
rulebook for online platforms applicable across the whole of the EU. They build on the EU 's 
Platform -to-Business Regulation, which started to apply during the review period, on 12  July 2020. 
The measures create a single set of rules for al l digital services within the EU 's single market, through 
harmonising 27, increasingly different, laws in EU Member States into coherent EU wide legal acts, 
leading to both cost and time savings. They also create a level playing field and ensure equal 
treatment for all companies. Further, the Digital Services Act and the Digital Markets Act address 
problems that are shared across the globe. Finally, the Digital Services Act creates a safer and more 
human -centric, innovative digital space in which the fundam ental rights of all users of digital services 
and consumers ' interests are protected. These acts represent a major step forward in improving the 
functioning of the EU 's Single Market to the benefit of enterprises and consumers from both EU 
Member States an d third countries.  
9.4.  Enforcement of rights have also been strengthened. The Digital Markets Act, the Digital 
Services Act and the General Data Protection Regulation (GDPR)99 have been included in Annex  I to 
Directive (EU) 2020/1828 on Representative Actions100 that will enter into application in June  2023. 
Accordingly, qualified entities designated by EU Member States pursuant to the latter directive will 
be able to bring legal actions before national courts or administrative authorities on behalf of groups 
of consumers to seek  injunctive measures  and redress measures  whenever traders infringe the 
provisions of the Digital Markets Act, the Digital Services Act or the GDPR that harm or may harm 
the collective interests of consumers.  
9.5.  On 4 June 2021, the Commissi on issued a modernised set of model contractual clauses101, 
called "standard contractual clauses " (SCCs), for international transfers of personal data, which 
facilitate transfers of personal data to controllers and processors outside the EEA. Under the GDPR , 
SCCs can be used by controllers or processors that are subject to the GDPR to transfer personal data 
to controllers or processors outside the EEA whose activities are not subject to the GDPR. SCCs can 
be incorporated (on a voluntary basis) by controllers  and processors into their contractual 
arrangements with other parties in order to demonstrate compliance with data protection 
requirements, as they contain specific data protection safeguards to ensure that personal data 
continues to benefit from a high l evel of protection when transferred outside the EEA. By adhering 
to the SCCs, data importers contractually commit to abide by the relevant data protection 
safeguards.  
9.6.  In addition to the rules already adopted, several legislative initiatives are currently under 
consideration by the co -legislators of the EU, including on cybersecurity requirements for 
products102, on semiconductor ecosystems103, on artificial intelligence104, a framework for 
European  Digital Identity105, on roaming106, on fair access to  and use of data107 and on AI Liability .108 
 
99 Regulation (EU) 2016/679, OJ L 119 , 4/5/2016 , p. 1. 
100 Directive (EU) 2020/1828, OJ L 409 , 4/12/2020 , p. 1. 
101 Viewed at:  https://ec.europa.eu/commission/presscorner/detail/en/ip_21_2847 .  
102 European Commission, Proposal for a Directive of the European Parliament and the Council on 
horizontal cybersecurity requirements for products with digital elements and amending Regulatio n, 
COM(2022)  454 final.  
103 Viewed at : https://digital -strategy.ec.europa.eu/en/library/european -chips-act-communication -
regulation -joint-undertaking -and-recommendation . 
104 European Commission, Proposal for a Regulation  of the European Parliament and the Council laying 
down rules on artificial intelligence (Artificial Intelligence Act) and amending  certain union legislative acts,  
COM/2021/206 final . 
105 European Commission, Proposal for a Regulation  of the European Parliament and the Council 
amending Regulation (EU) No 910/2014 as regards establishing a framework for a European Digital Identity, 
COM/2021/281 final.  
106 European Commission, Proposal for a Regulation  of the European Parliament and the Council on 
roaming on public mobile communications networks within the Union (recast), COM(2021) 85 final.  
107 European Commission, Proposal for a Regulation  of the European P arliament and the Council on 
harmonised rules on fair access to and use of data (Data Act), COM/2022/68 final.  
108 European Commission, Proposal for a Directive of the European Parliament and the Council on 
adapting non -contractual civil liability rules to a rtificial intelligence (AI Liability Directive) , COM(202 2) 496 final. WT/TPR/G/442 • European Union  
 
- 34 - 
 
  9.2  Single Market  for goods  
9.7.  In February  2022 the EU adopted a new Standardisation strategy, which outlines the EU 
approach to standards within the EU Single market as well as globally to support a resilient, green 
and digital EU Single market. The aim is to achieve a faster system, better targeted to address 
standardisation needs in strategic areas as well as to improve its governance and integrity. The 
Strategy also targets strengthening the link between standardisatio n and research and innovation, 
and promotes higher academic awareness on standards, thus enabling the next generation of 
standardisation experts.  
9.8.  The Strategy was accompanied by a technical amendment to the Standardisation regulation 
and two technical rep orts, the Annual Union Work Programme on Standardisation and a report to 
the European Parliament and the Council on the implementation of the Standardisation Regulation.  
9.9.  In the context of the digital transformation, the Commission proposed a regulation on 
machinery safety on 21  April 2021 to deal with the risks stemming from digitalisation, such as 
interconnectivity or machine learning, and bring legal certainty for economic operators and 
environmental benefits  by allowing digital instructions  and documentation . The co -legislators, the 
European Parliament and the Council, are discussing the proposal to reach a compromise in the 
upcoming months.  
9.10.  As part of a broader EU effort to reduce e -waste and to empower consumers to make more 
sustainable c hoices, a regulatory measure on common charging solution for mobile phones and 
similar electronic devices has been adopted in September  2022. The requirements of the 'common 
charging ' solution will apply to all handheld mobile phones, tablets, digital came ras, headphones, 
headsets, portable speakers, handheld videogame consoles, e -readers, earbuds, keyboards, mice, 
and portable navigation systems as of 2024. These requirements will also apply to laptops as 
of 2026.  
9.3  Single Market in services  
9.11.  During 2020 -2022, work continued to ensure an ambitious implementation of the EU services 
legislation, including the EU Services Directive (2006/123/EC), the Professional Qualifications 
Directive (2005/36/EC) and the Proportionality Test Directive ((EU) 2018/958). The 
European  Commission issued a number of reform recommendations to Member States and pointed 
to potential economic benefits that would stem from reducing regulatory and administrative barriers 
that hamper cross -border services trade and investment in the singl e market.  
9.12.  As regards transport services, Regulation (EC) 868/2004 on the protection against 
subsidization and unfair pricing practices was replaced by Regulation (EU) 2019/712 on safeguarding 
competition in air transport. This Regulation lays down rules on the conduct of investigations by the 
European Commission and on the adoption of redressive measures, relating to practices distorting 
competition between Union air carriers and third -country air carriers and causing, or threatening to 
cause, injur y to Union air carriers.  
9.13.  The EU has also signed aviation agreements with Armenia, Ukraine, Qatar, and ASEAN.  
9.14.  From January  2020 to October  2022, six legislative acts in road transport from the "Mobility 
Package  1"109 have been adopted, setting rules as regar ds the regulation of the market, the 
protection of workers and the charging of infrastructure. The package ensures a balance between 
the freedom of operators to provide cross -border services, free movement of goods, adequate 
working conditions and social p rotection for drivers. It also contributes to the decarbonisation of 
road transport sector.  
9.15.  As regards financial services, since 2019, the European Commission proposed and agreed 
with the co -legislators on a number of important pieces of financial services  legislation, in order to 
continue building a single market for capital, support the resilience of the financial system during 
 
109 Viewed at: https://transport.ec.europa.eu/transport -modes/road/mobility -package -i_en. WT/TPR/G/442 • European Union  
 
- 35 - 
 
  and its recovery from the COVID -19 crisis, and deliver on its action plans on sustainable and digital 
finance.  
9.16.  The Capital Marke ts Union (CMU) is essential for making the Economic and Monetary Union 
and the EU Member States ' economies more resilient, safeguard financial stability, strengthen the 
international role of the euro and create new opportunities for businesses and investor s across the 
Single Market. Further to the adoption of a renewed CMU Action Plan110 by the Commission in 
September  2020, the European Parliament and the Council are currently deliberating on various 
proposals to streamline the rules for listing on public ma rkets (MiFIR Review), offer a single point of 
access to public information about EU  companies and EU  investment products (ESAP), review the 
European Long -Term Investment Funds (ELTIFs) Regulation, and harmonise the rules around 
loan-originating funds (debt  funds), in order to facilitate lending to real economy (AIFMD Review).  
9.17.  Within the framework of the  European Green Deal, the Commission has also announced a 
renewed sustainable finance strategy in 2021. Following -up on that, the EU co -legislators have 
reached an agreement on the Commission 's proposals to establish a classification of sustainable 
economic activities (EU Taxonomy) and establish a framework for the disclosure of corporate 
sustainability information (CSDR). A legislative proposal for the creat ion of a European Green Bond 
Standard is still under discussion .  
9.18.  Supporting the EU 's ambition for a recovery that embraces the digital transition, the 
European  Commission also adopted a  digital finance package111 in September  2020, with the goal 
to create a competitive EU financial sector that gives consumers access to innovative financial 
products, while ensuring consumer protection and financial stability. In this area, the EU 
co-legislators reached an agreement to create new legislative frameworks regula ting the Markets in 
Crypto -Assets (MiCA) and digital operational resilience (DORA) by all firms.  
9.19.  Furthermore, EU co -legislators are currently discussing legislative proposals to scale up 
long-term investment and make the insurance and reinsurance sector m ore resilient (Solvency II), 
implement the final set of Basel III reforms for the banking prudential framework (CRR III/CRD VI), 
and strengthen the EU 's anti -money laundering and countering the financing of terrorism rules, 
including the creation of a new EU authority to fight money laundering (AML Package).  
9.4  Common agricultural  policy  
9.20.  During the review period, the Common Agricultural Policy (CAP) contin ued on the path 
towards market orientation and away from trade -distorting support measures. The new CAP is a 
modernised policy, with a strong emphasis on results and performance.  
9.21.  For the years under review (2021 and 2022 ), the transitional legislation was  put in place 
bridging the gap between the current CAP and the new legislation. On 2  December  2021, the 
agreement on the reform of the Common Agricultural Policy was formally adopted. The Common 
Agricultural Policy 2023 -2027, as well as the new legislation  started applying on 1st January  2023. 
It consists of three regulations: CAP Strategic Plan Regulation, CAP Horizontal Regulation, 
CAP Common Market Organisation Regulation. It is important to note that the regulations repeal all 
remaining export subsidy p rovisions, which means that the EU no longer has any legal base for 
granting any export subsidies in the agricultural sector.  
9.22.  The new policy, which became applicable on 1st January  2023, focuses on 10 specific 
objectives, linked to common EU goals for soci al, environmental, and economic sustainability in 
agriculture and rural areas. It will seek to ensure a more sustainable future for European farmers, 
provide more targeted support to smaller farms, and allow greater flexibility for EU countries to 
adapt me asures to local conditions. Agriculture and rural areas are central to the  European Green 
Deal, and the new CAP will be a key tool in reaching the ambitions of the  Farm to Fork  and 
biodiversity  strategies.  
 
110 Viewed  at: https://finance.ec.europa.eu/capital -markets -union -and-financial -markets/capital -
markets -union/cap ital-markets -union -2020-action -plan_en .  
111 Viewed at: Digital finance package (europa.eu) . WT/TPR/G/442 • European Union  
 
- 36 - 
 
  9.23.  Under the reformed policy, each EU Member State ha s designed a national  CAP Strategic 
plan112, combining funding for income support, rural development, and market measures. When 
designing their Strategic Plans, EU countries contribute to the ten  specific objectives113 through a 
toolbox of broad policy measu res provided by the EU level legislation, which can be shaped around 
national needs and capabilities.  
9.24.  The overall EU budget is governed by the "Multiannual Financial Framework " (MFF) that sets 
out the maximum expenditure per policy area for the EU. The MF F for the period 2021 to 2027 was 
agreed by the Council and the European Parliament on 17  December  2020. EUR 387 billion  in 
funding has been allocated to the CAP for the 2021 -27 period. This spending will come from two 
different funds: the  European Agricultural Guarantee Fund  (EAGF), which has been set at 
EUR 291.1  billion  (in current prices); and the  European Agricultural Fund for Rural Development  
(EAFRD), which will amount to EUR 95.5 billion . The budget for the EAFRD includes EUR 8 billion  
from NGEU to help rural areas implement the structural changes necessary to achieve the goals of 
the European Green Deal and the digital transition.  
9.25.  In the period under review, following the COVID -19 outbreak, the EU launched exceptional 
measures to support and  stabilise agricultural markets, including private storage aid, authorisation 
for self -organisation of producers/operators and flexible use of market support programmes. Also, 
the EU has taken several measures to support the farmers following the price vol atility, the increased 
prices of inputs, including fertilisers etc., due to Russia 's war  of aggression  against Ukraine: EU 
budget provided in 2022 EUR 500 million  in national allocations to directly support farmers most 
affected by higher input costs and t he closure of export markets. EU Member States could 
complement this support up to 200% with national funds. To address cash -flow difficulties faced by 
farmers, EU Member States were allowed to pay increased levels of CAP direct payments in advance.  
9.26.  The E U has granted an exceptional and temporary derogation to allow the production of crops 
on land set aside within the EU, while maintaining full greening payments for farmers . The EU has 
also proposed a new, self -standing Temporary Crisis Framework that woul d also cover farmers, 
fertiliser producers and the fisheries sector.  
9.27.  In the context of the revision of the EU geographical indications (GI) systems, the Commission 
adopted a proposal for a regulation  on GIs for wine, spirit drinks and agricultural products, and other 
quality schemes for agricultural products, with the entry into force expected for the beginning 
of 2024. The proposal aims to ensure an effective protection of GIs and to increase the uptake of 
GIs across the EU  in order  to benefit the rural economy and achieve a higher level of protection for 
GIs, especially online.114 
9.5  Customs and trade facilitation  
9.28.  Each year, the Customs Union facilitates the trade of more than EUR 3.5 trillion  worth of 
goods. Efficient customs clearance and controls are essential to allow trade to flow smoothly while 
also protecting EU citizens, businesses and the environment. The "EU Single Window Environment 
for Customs " (EU SWE -C)115 is designed to provide qu icker and more efficient sharing of electronic 
data between national customs administrations and EU regulatory authorities across policy domains .  
9.29.  EU SWE -C has two key pillars:  
• Government -to-government (G2G) digital cooperation will support the automated 
verification by customs of the non -customs formalities required for goods clearance, allowing 
 
112 Viewed at:  https://agriculture.ec.europa.eu/cap -my-country/cap -strategic -plans_en .  
113 Viewed at:  https://agriculture.ec.europa.eu/common -agricultural -policy/cap -overview/new -cap-
2023-27/key -policy -objectives -new-cap_en .  
114 To this end, a number of measures are proposed. To better valorise the GI pro ducts, the producers 
are encouraged to include in their product specifications social, environmental and economic sustainable 
undertakings that are going beyond the legal requirements. The increased protection  for GIs on the internet is 
addressed, specific ally against bad faith registrations, the use of GIs as ingredients  and the use of GIs in the 
domain names system. The proposal also empowers producers ' groups  to manage, enforce and develop their 
GIs by accessing anti -counterfeiting authorities and custom s in all EU countries. As regards the efficiency, 
shortening and simplification of the registration procedure is foreseen by merging different technical and 
procedural rules in a single GI registration procedure for EU and  non-EU applicants.  
115 Viewed at : https://taxation -customs.ec.europa.eu/eu -single -window -environment -customs_en . WT/TPR/G/442 • European Union  
 
- 37 - 
 
  partner competent authorities to properly monitor and control the quantities of authorised 
goods imported or exported at EU level. Full deployment and use by all E U Member States 
of this first pillar is planned by early 2025.  
 
• Business -to-government (B2G) digital cooperation will streamline clearance processes for 
traders when dealing with certain EU non -customs regulatory requirements by allowing them 
to provide da ta in one single portal in an individual Member State.  
 
9.30.  On 15  August  2019, Regulation  (EU) 2019/1239, establishing a European Maritime Single 
Window environment (EMSWe), entered into force with the objective of reducing the administrative 
burden for shipp ing companies, expediting maritime transport, and improving the interoperability of 
information flows. The new Regulation further harmonizes rules for submitting information when 
ships arrive at or depart from EU ports. It will be fully applied from 2025 a nd is expected to halve 
the time currently required for administrative formalities for port calls.  
9.31.  Regulation (EU) 2020/1056 of 15  July 2020 on electronic freight transport information (eFTI ) 
entered into force on 20  August  2020 with the aim of encouraging  the digitalisation of freight 
transport and logistics, reducing administrative costs, improving enforcement capabilities of 
competent authorities, and enhancing the efficiency and sustainability of transport. It establishes a 
legal framework for the elect ronic communication of regulatory information between economic 
operators and competent authorities in relation to the movement of goods within the EU. It shall 
apply from 21  August  2024, while the competent authorities shall accept regulatory information 
made available electronically by economic operators from 21  August  2025.  
9.32.  On 1 July 2021, the application of the VAT e -commerce package116 has introduced a number 
of amendments to the VAT rules governing the taxation of business -to-consumer cross -border e -
commerce activity in Europe and eliminated the de minimis  threshold for the import of goods with a 
value up -to 22€. Since then, an electro nic customs declaration is required for all goods imported 
into the EU, regardless of their value. To facilitate the release into free circulation of low value 
consignments which are not subject to import duty, Commission Delegated Regulation  (EU) 
2019/114 3 of 14  March  2019 introduced a specific customs declaration with a reduced dataset. In 
addition, to  help reduce the compliance burdens faced by traders of goods and services, the package 
extended the One Stop Shop (OSS) simplifications schemes for the col lection, declaration and 
payment of VAT, including for goods dispatched from outside the EU. The e -commerce package also 
introduced new liability for electronic interfaces, such as marketplaces and platforms, when they 
facilitate certain transactions by tr aders who sell via their platforms.  
9.33.  On 6 April 2022, the reform of the system of VAT rates was adopted. Member States are 
treated equally and given more flexibility to apply reduced, as well as zero VAT rates. The list of 
goods and services for which redu ced VAT rates are allowed has been updated and modernised .117 
 
__________  
 
116 Directive (EU) 2017/2455, OJ L 348 , 29/12/2017 , p. 7; Regulation (EU) 2017/2454, OJ L 348 , 
29/12/2017 , p. 1. 
117 To ensure equal treatment, existing derogations applied by some Member States are – insofar as 
compatible with agreed principles – opened to all Member States. The package also contains measures t o 
address possible future crises enabling Member States to respond swiftly to exceptional circumstances, like 
pandemics, humanitarian crises or natural disasters. The preferential treatment for environmentally harmful 
goods will be phased out. Reduced VAT rates or exemptions on fossil fuels and other goods with a similar 
impact on greenhouse gas emissions will cease to apply by 1  January  2030 and those on chemical fertilizers 
and chemical pesticides by 1  January  2032, giving small -scale farmers more time to  adapt. In addition, some 
environmentally friendly goods and services are added to the list for which reduced rates are allowed, such as 
solar panels, electric bicycles and waste recycling services.