RESTRICTED  
  
WT/TPR/S/442  
11 April 2023 
(23-2395) Page: 1/198 
Trade Policy Review Body   
 
  
TRADE POLICY REVIEW  
REPORT BY THE SECRETARIAT  
EUROPEAN UNION 
This report, prepared for the fifteenth Trade Policy Review of European Union, has been drawn up 
by the WTO Secretariat on its own responsibility. The Secretariat has, as required by the Agreement 
establishing the Trade Policy Review Mechanism (Annex 3 of the Marrakesh Agreement Establishing 
the World Trade Organization), sought clarification from European Union on its trade policies and 
practices.  
 
Any technical questions arising from this report may be addressed to Mark Koulen 
(tel. +41 22 739 52 24), Mombert Hoppe ( tel. +41 22 739 60 98), Denby Probst 
(tel. +41 22 739 58 47), and Ana Cristina Molina ( tel. +41 22 739 60 60). 
 
Document WT/TPR/G/442 contains the policy state ment submitted by European Union.  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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. This report was 
drafted in English.  
  WT/TPR/S/442  • European Union  
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  CONTENTS  
SUMMARY  ................................ ................................ ................................ ........................  9 
1   ECONOMIC ENVIRONMENT  ................................ ................................ ........................  14 
1.1   Main features of the economy  ................................ ................................ ....................  14 
1.2   Recent economic developments  ................................ ................................ ..................  14 
1.2.1   Fiscal developments  ................................ ................................ ...............................  17 
1.2.2   EU economic governance, policy direction, and reforms  ................................ ...............  18 
1.2.3   Monetary and exchange rate policies  ................................ ................................ ........  20 
1.2.4   Balance of payments, current account  ................................ ................................ ....... 21 
1.2.5   Employment trends, including gender  ................................ ................................ ....... 22 
1.3   Developments in trade and investment  ................................ ................................ ........  23 
1.3.1   Trends and patterns in merchandise and services trade (extra -EU trade)  .......................  23 
1.3.1.1    Trends in merchandise trade  ................................ ................................ .................  23 
1.3.1.2    Trends in services trade  ................................ ................................ .......................  26 
1.3.2   Trends and patterns in FDI (extra -EU) ................................ ................................ ...... 29 
2   TRADE AND INVESTMENT REGIMES  ................................ ................................ ...........  31 
2.1   General framework  ................................ ................................ ................................ ... 31 
2.2   Trade policy formulation and objectives  ................................ ................................ ....... 32 
2.3   Trade agreements and arrangements  ................................ ................................ ..........  35 
2.3.1   WTO ................................ ................................ ................................ ....................  35 
2.3.2   Regional and preferential agreements  ................................ ................................ ....... 36 
2.3.2.1    Reciprocal preferences  ................................ ................................ .........................  36 
2.3.2.1.1    New RTAs  ................................ ................................ ................................ ....... 38 
2.3.2.1.2    Updates of existing RTAs and ongoing negotiations  ................................ ...............  39 
2.3.2.1.3    RTA enforcement  ................................ ................................ ..............................  41 
2.3.2.2    Unilateral preferences  ................................ ................................ ..........................  41 
2.3.3   Other agreements and arrangements  ................................ ................................ ........  43 
2.4   Investment regime  ................................ ................................ ................................ ... 44 
2.4.1   Regulatory framework  ................................ ................................ ............................  44 
2.4.2   Other aspects of the European  Union's foreign investment regime  ................................ . 46 
3   TRADE POLICIES AND P RACTICES BY MEASURE  ................................ ........................  48 
3.1   Measures directly affecting imports  ................................ ................................ .............  48 
3.1.1   Customs procedures, valuation, and requirements  ................................ ......................  48 
3.1.1.1    Recent and future developments  ................................ ................................ ...........  49 
3.1.1.2    Legal framework and policies  ................................ ................................ ................  50 
3.1.1.3    Electronic systems  ................................ ................................ ..............................  52 
3.1.1.4    Trade facilitation  ................................ ................................ ................................ . 53 
3.1.1.5    Customs valuation  ................................ ................................ ...............................  55 
3.1.2   Rules of origin  ................................ ................................ ................................ ....... 56 WT/TPR/S/442  • European Union  
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  3.1.2.1    Non-preferential  ................................ ................................ ................................ . 56 
3.1.2.2    Preferential  ................................ ................................ ................................ ........  57 
3.1.3   Tariffs  ................................ ................................ ................................ ..................  60 
3.1.3.1    Applied rates  ................................ ................................ ................................ ...... 60 
3.1.3.2   Nomenclature, bound rates, and concessions  ................................ ..........................  63 
3.1.3.3    Tariff rate quotas  ................................ ................................ ................................  63 
3.1.3.4    Temporary rates, duty suspensions, and additional duties  ................................ .........  66 
3.1.3.5    Preferential rates  ................................ ................................ ................................  68 
3.1.4   Other charges affecting imports  ................................ ................................ ...............  69 
3.1.4.1    VAT ................................ ................................ ................................ ..................  70 
3.1.4.2    Excise  ................................ ................................ ................................ ...............  72 
3.1.5   Import prohibitions, restrictions, and licensing  ................................ ...........................  74 
3.1.5.1    Prohibitions and restrictions  ................................ ................................ ..................  74 
3.1.5.2    Import licensing  ................................ ................................ ................................ .. 77 
3.1.6   Anti-dumping, countervailing, and safeguard measures  ................................ ...............  79 
3.1.6.1    Anti-dumping and countervailing duties  ................................ ................................ .. 79 
3.1.6.1.1    Regulatory and policy developments  ................................ ................................ ... 80 
3.1.6.1.2    Trends in usage  ................................ ................................ ...............................  82 
3.1.6.2    Safeguards  ................................ ................................ ................................ ........  84 
3.1.7   Other measures affecting imports  ................................ ................................ ............  85 
3.1.7.1    Sanctions (on imports and exports)  ................................ ................................ ....... 85 
3.1.7.2    Other measures  ................................ ................................ ................................ .. 86 
3.2   Measures directly affecting exports  ................................ ................................ .............  86 
3.2.1   Customs procedures and requirements  ................................ ................................ ..... 86 
3.2.2   Taxes, charges, and levies  ................................ ................................ ......................  86 
3.2.3   Export prohibitions, restrictions, and licensing  ................................ ............................  87 
3.2.3.1    Prohibitions, restrictions, licensing  ................................ ................................ .........  87 
3.2.3.2    Export controls  ................................ ................................ ................................ ... 89 
3.2.4   Export support and promotion  ................................ ................................ .................  92 
3.2.5   Export finance, insurance, and guarantees  ................................ ................................  92 
3.3   Measures affecting production and trade  ................................ ................................ ...... 96 
3.3.1   Incentives  ................................ ................................ ................................ ............  96 
3.3.1.1    Subsidies at the EU level  ................................ ................................ ......................  96 
3.3.1.2    State aid  ................................ ................................ ................................ ............  99 
3.3.1.3    Taxation  ................................ ................................ ................................ ..........  102 
3.3.2   Standards and other technical requirements  ................................ ............................  103 
3.3.2.1    Standards  ................................ ................................ ................................ ........  103 
3.3.2.2    Technical requirements and European harmonised standards  ................................ ... 105 
3.3.2.3    Conformity system and market surveillance  ................................ ..........................  107 
3.3.3   Sanitary and phytosanitary requirements  ................................ ................................  108 WT/TPR/S/442  • European Union  
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  3.3.4   Competition policy  ................................ ................................ ...............................  113 
3.3.4.1    Competition policy during emergencies  ................................ ................................  113 
3.3.4.2    Anti-competitive agreements and abuse of a dominant position  ...............................  114 
3.3.4.3    Mergers and acquisitions  ................................ ................................ ....................  114 
3.3.4.4    Statistics on competition enforcement  ................................ ................................ .. 115 
3.3.4.5    Sector inquiries and reports  ................................ ................................ ................  115 
3.3.4.6    International cooperation  ................................ ................................ ...................  115 
3.3.5   State trading, state -owned enterprises, and privatization  ................................ ...........  116 
3.3.6   Government procureme nt ................................ ................................ .....................  117 
3.3.7   Intellectual property rights  ................................ ................................ ....................  120 
3.3.7.1    Economic relevance of IPRs  ................................ ................................ ................  121 
3.3.7.2    Copyright and related rights  ................................ ................................ ...............  123 
3.3.7.3    Industrial property  ................................ ................................ ............................  124 
3.3.7.3.1    Patents  ................................ ................................ ................................ .........  124 
3.3.7.3. 2   Plant variety rights  ................................ ................................ .........................  126 
3.3.7.3.3    Trademarks  ................................ ................................ ................................ ... 126 
3.3.7.3.4    Designs  ................................ ................................ ................................ ........  127 
3.3.7.3.5    Geographical indications  ................................ ................................ ..................  127 
3.3.7.3.6    Undisclosed information and access to data  ................................ ........................  128 
3.3.7.3.6.1    Trade secrets  ................................ ................................ ..............................  128 
3.3.7.3.6.2    Clinical trial data  ................................ ................................ .........................  128 
3.3.7.4    Enforcement  ................................ ................................ ................................ ..... 129 
3.3.7.4.1    Enforcement within the European  Union ................................ .............................  130 
3.3.7.4.2    Enforcement at the European  Union's external borders  ................................ ........  131 
3.3.7.4.3    Enforcement at the international level  ................................ ...............................  132 
4   TRADE POLICIES BY SECTOR  ................................ ................................ ...................  133  
4.1   Agriculture  ................................ ................................ ................................ ............  133 
4.1.1   Trade  ................................ ................................ ................................ .................  134 
4.1.2   Agricultural policy  ................................ ................................ ................................  134 
4.1.2.1    The new framework fo r domestic support from 2023  ................................ ..............  135 
4.1.2.2    CAP strategic plans  ................................ ................................ ...........................  137 
4.1.3   Domestic support  ................................ ................................ ................................ . 138 
4.1.3.1    Direct payments  ................................ ................................ ...............................  138 
4.1.3.2   Internal market support  ................................ ................................ .....................  143 
4.1.3.3    Rural development  ................................ ................................ ............................  147 
4.1.4   Export subsidies  ................................ ................................ ................................ .. 148 
4.1.5   Export restrictions  ................................ ................................ ...............................  148 
4.1.6   Market access  ................................ ................................ ................................ ..... 148 
4.1.7   Domestic support levels  ................................ ................................ ........................  150 
4.1.7.1    WTO notifications  ................................ ................................ ..............................  150 WT/TPR/S/442  • European Union  
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  4.1.7.2    OECD assessment  ................................ ................................ .............................  152 
4.2   Fisheries  ................................ ................................ ................................ ...............  152 
4.2.1   Fisheries policy  ................................ ................................ ................................ .... 153 
4.2.2   Domestic support  ................................ ................................ ................................ . 154 
4.2.3   Market access  ................................ ................................ ................................ ..... 156 
4.2.4   International agreements and related policies  ................................ ..........................  157 
4.3   Forestry  ................................ ................................ ................................ ................  157 
4.4   Energy  ................................ ................................ ................................ ..................  158 
4.4.1   Sustainable energy and climate  ................................ ................................ .............  158 
4.4.2   Production, co nsumption, and trade  ................................ ................................ ....... 160 
4.4.3   Regulation of the internal market  ................................ ................................ ...........  161 
4.4.4   Relations with third countries  ................................ ................................ ................  163 
4.4.5   Energy security and affordability  ................................ ................................ ............  163 
4.5   Services  ................................ ................................ ................................ ................  165 
4.5.1   Financial services  ................................ ................................ ................................ . 168 
4.5.1.1    Overview  ................................ ................................ ................................ .........  168 
4.5.1.2    Regulatory developments  ................................ ................................ ...................  170 
4.5.1.2.1    Banking Union  ................................ ................................ ...............................  170 
4.5.1.2.2    Insurance  ................................ ................................ ................................ ...... 171 
4.5.1.2.3    Capital Markets Union  ................................ ................................ .....................  172 
4.5.1.2.4    Sustainable and digital finance  ................................ ................................ .........  174 
4.5.2   Transport services  ................................ ................................ ...............................  175 
4.5.2.1    Road transport services  ................................ ................................ .....................  176 
4.5.2.2    Rail transport services  ................................ ................................ .......................  178 
4.5.2.3    Air transport services  ................................ ................................ .........................  179 
4.5.2.4    Maritime transport services and port services  ................................ ........................  180 
4.5.3   Telecommunications, postal, and delivery services  ................................ ....................  181 
4.5.3.1    Telecommunication services  ................................ ................................ ...............  181 
4.5.3.2    Postal and courier services  ................................ ................................ .................  184 
5   APPENDIX TABLES  ................................ ................................ ................................ .. 185  
 
CHARTS  
 
Chart 1.1 Contribution to GDP growth, 2018 -21 ................................ ................................ ... 15 
Chart 1.2 Energy imports ( extra-EU) ................................ ................................ ..................  17 
Chart 1.3  General government deficit/surplus as % of GDP  ................................ ....................  18 
Chart 1.4 Current account balance, 2020 -22 ................................ ................................ ........  21 
Chart 1.5 Direction of merchandise trade, 2018 and 2021  ................................ ......................  25 
Chart 1.6 Product composition of merchandise trade, by m ain HS sections, 2018 and  2021 ........  26 
Chart 1.7  Extra -EU FDI positions, by economic activity, 2019  ................................ .................  30 WT/TPR/S/442  • European Union  
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  Chart 2.1 An Open, Sustainable, and Assertive Trade Policy 2021 -30................................ ....... 32 
Chart 2.2 Main policy developments in trade and selected areas, 2019 -22 ................................  33 
Chart 2.3 European  Union's RTA network, as of December  2022 ................................ .............  37 
Chart 3.1 Non -preferential rules of origin  ................................ ................................ ............  57 
Chart 3.2 Tariff averages, 2022  ................................ ................................ .........................  60 
Chart 3.3 Overview of Anti -dumping and anti -subsidy activity, 2019 -21 ................................ ... 80 
Chart 3.4 Outcome of new investigations concluded, 2019 -21 ................................ ................  82 
Chart 3.5  New investigations initiated by country of export by region, 2019 -21 .........................  83 
Chart 3.6  Anti-dumping and anti -subsidy investigations initiated by product sector,  
2019-21 ................................ ................................ ................................ .........................  83 
Chart 3.7 Total state aid, 2015 -20 ................................ ................................ ....................  100 
Chart 3.8 State aid by EU member State, 2020  ................................ ................................ .. 101 
Chart 3.9 Indicators of IPR -intensive industries, January  2020-September  2022 .....................  122 
Chart 3.10 Breakdown of result by procedure, 2021  ................................ ............................  132 
Chart 4.1 Domestic support  in the European  Union 2011/12 -2020/21  ................................ .... 151 
 
TABLES  
 
Table 1.1 Selected economic indicators, 2018-21 ................................ ................................ .. 15 
Table 1.2 Extra -EU trade in services, by sector  ................................ ................................ ..... 27 
Table 1.3 Extra -EU trade in services, by partner  ................................ ................................ ... 28 
Table 3.1 Customs duties and taxes, 2019 -21 ................................ ................................ ...... 48 
Table 3.2 EU framework legislation on customs and main amendments 2020 -22 .......................  51 
Table 3.3 Overview and implementation of electronic systems under the UCC, 
December  2022 ................................ ................................ ................................ ...............  52 
Table 3.4 Overview of new preferential rules of origin  ................................ ...........................  58 
Table 3.5 Structure of MFN tariffs, 2022  ................................ ................................ ..............  61 
Table 3.6 MFN applied tariff summary, 2022  ................................ ................................ ........  62 
Table 3.7 Overview of EU TRQs, by type, 2022  ................................ ................................ ..... 64 
Table 3.8 Overview of WTO TRQs, 2022  ................................ ................................ ..............  66 
Table 3.9 Tariffs under preferential agree ments, 2022  ................................ ...........................  68 
Table 3.10 VAT rates applied in member States, 2022  ................................ ...........................  71 
Table 3.11 Prohibitions or restrictions on imports, 2022  ................................ .........................  75 
Table 3.12 Products subject to import licensing, 2022  ................................ ...........................  77 
Table 3.13 Overview of social and environmental standards use in TDI, 2019 -21 ......................  81 
Table 3.14 Main safegu ards regulations, 2022  ................................ ................................ ...... 84 
Table 3.15 Prohibitions, restrictions, or licensing on exports, 2022  ................................ ..........  87 
Table 3.16 Pandemic -related temporary export prohibitions, restrictions or licensing 
requirements, 2020 -22 ................................ ................................ ................................ ..... 89 
Table 3.17 Main legislation on export controls, 2022  ................................ .............................  90 
Table 3.18 Controlled dual -use exports, 2018 -20 ................................ ................................ .. 91 WT/TPR/S/442  • European Union  
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  Table 3.19 Network support for exporters, 2022 ................................ ................................ ... 92 
Table 3.20 Selected EU member State programmes specific to export guarantees or finance 
in response to the COVID -19 pandemic  ................................ ................................ ...............  93 
Table 3.21 EU instruments on export credits, financing, or guarantees  ................................ ..... 95 
Table 3.22 Official export credit support as reported pursuant to Regulation (EU)  1233/2011, 
largest contributors, 2019 -20 ................................ ................................ ............................  95 
Table 3.23 Export -credit statistics, as reported by the OECD, 2019 -20 ................................ ..... 96 
Table 3.24 Common Provision Regulation and European Structural and Investment  
Funds, 2022  ................................ ................................ ................................ ....................  97 
Table 3.25 Other selected support programs/funds, 2022  ................................ ......................  98 
Table 3.26 Taxes in the EU -27, 2019 -21 ................................ ................................ ...........  102 
Table 3.27 Anti -trust cases, investigations, decisions, and fi nes, 2019 -22 ..............................  115 
Table 3.28 Merger notifications and decisions, 2019 -22 ................................ .......................  115 
Table 3.29 Government procurement thresholds in effect from 1  January  2022 .......................  118 
Table 3.30 Contribution of IP industries, 2017 -19 average  ................................ ...................  121 
Table 4.1 Total prod uction value of agricultural products, 2017 -21 ................................ ........  133 
Table 4.2 Allocations for 2023 and beyond  ................................ ................................ .........  135 
Table 4.3 Net ceilings for direct payments, after transfers, 2015 -22 ................................ ...... 138 
Table 4.4 Member State decisions regarding implementation of direct payments in claim 
year 2022 ................................ ................................ ................................ .....................  139 
Table 4.5 Private storage aid, 2019 -22 ................................ ................................ ..............  144 
Table 4.6 Market s upport measures taken as a result of the COVID -19 pandemic  ....................  145 
Table 4.7 Summary of fishery production, 2015 -20 ................................ .............................  152 
Table 4.8 Trade in fish and fishery products, 2017 -21 ................................ .........................  153 
Table 4.9 Energy balances  ................................ ................................ ..............................  160 
Table 4.10 Telecom indicators, 2021  ................................ ................................ .................  182 
 
BOXES  
 
Box 3.1 Overview of possible future customs developments  ................................ ...................  50 
Box 3.2 Main preferential rules of origin elements as contained in EU preferential  
agreements  ................................ ................................ ................................ ....................  58 
Box 3.3 Main new legislation on TRQs, 2020 -22 ................................ ................................ ... 65 
Box 3.4 Main changes in alcohol excise duties, 2020 -22 ................................ ........................  74 
Box 3.5 Changes in EU licensing rules, 2020 -22 ................................ ................................ ... 79 
 
APPENDIX TA BLES  
 
Table A1.1 Selected economic indicators, 2018 -21 ................................ ..............................  185 
Table A1.2 Extra -EU-27 merchandise exports by HS section/chapter/subheading, 2018 -21 ....... 186 
Table A1.3 Extra -EU-27 merchandise imports by HS section/chapter/subheading, 2018 -21 ....... 187 
Table A1.4 Extra -EU-27 merchandise imports by origin, 2018 -21 ................................ ..........  188 WT/TPR/S/442  • European Union  
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  Table A1.5 Extra -EU-27 merchandise exports by destination, 2018 -21 ................................ ... 189 
Table A1.6 Main partners for flows of extra -EU-27 FDI, 2018 -21 ................................ ...........  190 
Table A1.7 Extra -EU-27 FDI positions, by major partner, EU, 2018 -21 ................................ ... 191 
Table A2.1 Involvement in WTO dispute settlement, 2019 -22 ................................ ...............  192 
Table A2.2 Most recent WTO notifications, December  2022 ................................ ..................  193 
Table A3.1 Minimum excise duties on EU harmonized products, 2022  ................................ .... 195 
Table A3.2 Standards in the European  Union, 2019 -22 ................................ ........................  196 
Table A4.1 OECD indicators for support to agriculture, 2017 -21 ................................ ............  197 
 
  WT/TPR/S/442  • European Union  
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  SUMMARY  
1. The European  Union, as a political  and economic union of 27  countries , allows most goods, 
services, capital, and persons to move freely within its territory.  The period under review was 
characterized by a major change in development and political goals and priorities led by the adoption 
of, inter alia, the European Green Deal , a Europe fit for the digital age , and a new political agenda 
to reinforc e the European  Union's global influence and leadership in the world. Policies and agendas 
under these strategies are expected to shape not only the political landscape but also impact many 
trade and investment policies. While many of these concrete measures are still a work in progress 
(e.g. the Carbon Border Adjustment Mechani sm, green taxation, and green government 
procurement), certain new measures have already been adopted (e.g.  the Digital Services Act (DSA) 
and the Digital Markets Act (DMA)). Furthermore, t hese strategies , as well as the impact of the 
COVID -19 pandemic and  the war in Ukraine, led to the review of various EU policies and practices, 
including  in the areas of  trade, agriculture, and energy . Temporary measures applying notably to 
exports and state aid, and also additional funding through the European  Union's bu dgets, were 
specific to the pandemic response. Another  notable development during the review period was the 
withdrawal of the United  Kingdom from the European  Union in early  2020.  
2. The EU economy had many years of stability and growth prior to the pandemic,  when GDP 
growth averaged 2.1% ; however, since then, there has been increased volatility and uncertainty  
and real GDP declined by 5.7% in 2020 . In 2021, a stron g recovery occurred with GDP  growth 
reaching  5.4%. Despite another shock in early  2022 due to the war in Ukraine, GDP growth remained 
strong. Reform  of the European  Union's economic governance framework  advanced during the 
review period  with a proposal to facilitate effective economic surveillance t hrough a new common 
framework , which among other things will have a medium -term focus and a more risk -based 
approach to surveillance with greater attention on high debt ratios . With respect to EU employment, 
despite a slight downturn in 2020 due to the pan demic , the subsequent increase in 2021 was 
significant  as employment rates in a majority of member States exceeded pre -pandemic levels  and 
unemployment reached an all -time low.  
3. In terms of external trade, the European  Union remain ed the world's top trader , with 
EUR 6.28 trillion traded in goods and services in 2021. International trade was the equivalent 
of 21.5% of EU GDP. The trade surplus in goods contracted significantly in 2021 to EUR 56.8 billion  
on account of a significant increase in the value of im ports largely due to higher cost of energy 
imports. For services trade, a fter a contraction in 2020, a recovery ensued  in 2021, with exports 
increasing by 16% and imports by 4% from 2020 levels. The stronger recovery of exports over 
imports led to a slight  widening of the services trade surplus  to EUR  122 billion in 2021 . China, 
Switzerland, the United  Kingdom, and the United  States were the European  Union's main trading 
partners. There were no major changes in the ranking of the European  Union's main tradi ng partners 
during the period under review.  
4. In February  2021, the European  Union  adopted a new trade strategy entitled An Open, 
Sustainable, and Assertive Trade Policy , which is articulated around the principles of open and fair 
trade but  also seeks to  achiev e an "open strategic autonomy". Under this approach, the 
European  Union prioritizes multilateral cooperation but intends to act autonomously if needed. To 
support the strategy's implementation, the Commission developed various proposals for regulati ons 
during the review period, some of which had been already approved, e.g.  a regulation regarding 
foreign subsidies and another on countermeasures to ensure enforcement of international trade 
agreements . 
5. The multilateral trading system remains  an integral  component of EU trade policy, and the 
reform  of the WTO  is one of the European  Union's priority actions . During the review period, the 
European  Union  continued to actively contribute to the WTO's core functions , including as one of the 
main donors for capacity-building and technical assistance  activities. The European  Union promote d 
discussions through joint proposals/initiatives on , inter alia, domestic regulation of trade in services, 
e-commerce, investment facilitation, transparency , trade and environme nt, trade and gender, and 
MSMEs. The establishment of the Multi -Party Interim Appeal Arbitration Arrangement was also an 
initiative led by the European  Union together with other WTO Members . The ratification process for  
the Agreement on Fisheries Subsidies  is ongoing . 
6. As concerns  regional and bilateral agreements , the European  Union had, as of 
December  2022, the largest network of RTAs in the world with 44 agreements in place. During the WT/TPR/S/442  • European Union  
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  review period, the European  Union signed and implemented  the Trade and  Cooperation Agreement 
with the United  Kingdom  following its withdrawal from the European  Union, and also concluded  the 
accession of the Solomon  Islands to the EU -Pacific States RTA. The European  Union was also 
engaged in negotiations for new RTAs (i.e.  with New  Zealand, Australia, and Indonesia) and to 
update or deepen existing ones (e.g.  Chile and Mexico). The European  Union sought to strengthen 
implementation and enforcement  by establishing a new inte rnal complaint mechanism – the 
Single -Entry Point , creating an office for trade enforcement and monitoring – and by enhancing the 
enforcement mechanism of the Chapters on Trade and Sustainable Development in its RTAs.  
7. The European  Union  also continues to  facilitate trade with developing countries mainly through 
its GSP scheme, which has three components (i.e.  standard GSP, the GSP+, and the Everything but 
Arms (EBA) arrangement ) and covered 66 economies as of December  2022. The GSP, except for its 
EBA compo nent, is expected to expire by  the end of 2023 and a proposed regulation for its renewal 
for the period  2024-34 is under consideration. The proposed regulation contains  the main 
characteristics of the  existing programme  while making some specific changes for beneficiaries to, 
inter alia, strengthen enforcement and support EU environmental objectives.  
8. Regarding f oreign investment , in October  2020, the European  Union implemented a common 
framework , which was adopted in 2019,  for the screening of FDI for reaso ns of security and public 
order . The framework  provides for a set of minimum requirements for the functioning of national 
screening mechanisms and for a cooperation mechanism to share information.  Of the transactions 
that were formally screened in 2021 and had a decision issued, the majority were authorized with 
or without conditions, and only 1 % of transactions were  blocked . In December  2020, the 
European  Union concluded an agreement in principle for a Comprehensive Agreement on Investment 
with China.  
9. In the area of customs, new rules on e -commerce removed the VAT de minimis  exemption on 
imports of low -value consignments. Facilitating this change, the Import One -Stop Shop (IOSS) was 
introduced to simplify the declaration and payment of VAT for di stance sales of these consignments. 
A number of IT systems for the facilitation of customs procedures continued to be implemented 
during the period and the remaining systems are expected to be operational by  2025. The Regulation 
on the EU Single Window Env ironment for Customs entered into force in 2022. Applied MFN tariffs  
have not changed significantly, and rates of duty remain substantially the same; the simple average 
tariff was 6.5%, but the agricultural sector continued to have rates on average three t imes higher 
compared to non -agricultural goods. The number of tariff lines with non-ad valorem  duties remained 
significant , at about 10% of all lines . Certain temporary measures on imports, e.g.  suspension of 
certain duties, were instituted to benefit Ukra ine in response to the war.  
10. The European  Union continued to be a significant user of anti -dumping measures and 
countervailing measures (which the European  Union refers to as anti -subsidy measures) and was an 
increasing target for these measures from third markets during the review period. As of 
December  2022, 178 anti -dumping and countervailing measures were in place. The sector most 
impacted during the review period was iron and steel in terms of new investigations. There were few 
changes in the trade reme dies framework, as the previous modernization exercise of 2017 -18 
continued to be implemented. The surveillance measures the European  Union  had in place on steel 
and aluminium products lapsed  but an ex post monitoring system was introduced. The safeguard 
measure on steel remained in place during the review period and it was prolonged and amended. 
An increasing number of sanctions, or restrictive measures, were put in place during the period.  
11. Several measures on exports continued to be maintained by the Euro pean Union, mainly due 
to various international conventions. Certain amendments were made to the Regulation on drug 
precursors and the Regulation on hazardous chemicals to amend the product coverage. There were 
also temporary export measures imposed by the  European  Union and most of the member States in 
response to the COVID -19 pandemic, although these were mainly in place for a very short duration. 
Through the State Aid Temporary Framework, flexibilities were added for Short -Term Export Credit 
insurance, t hus allowing public authorities to assume risks associated with exports to marketable 
risk countries. The European  Union was also exploring options for an EU strategy on export credits.  
12. At the EU level, subsidies are mostly granted to agriculture and regio nal development and are 
mainly financed by  shared management funds , whose composition was amended for the budget 
period 2021 -27. At the member State level, state aid (not related to COVID -19) continued to be 
directed to promote environmental protection and  energy savings.  In response to the COVID -19 WT/TPR/S/442  • European Union  
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  pandemic,  temporary programmes were put in place to direct additional funds to  the private sector, 
and to simplify  rules and provide flexibilities  for accessing funds , as well as for the provision of state 
aid. Member States also increased the amount of state aid  in response to the pandemic, which 
amounted to EUR  320 billion in 2020, up from EUR 135 billion in 2019 . For the period 2021 -27, 
additional funding will also be available through the newly established NextGenerationEU recovery 
programme for which the European  Union allocated EUR 806.9  billion . The European  Union is also 
reviewing v arious state aid guidelines and regulations, inclu ding the State Aid General Block 
Exemption Regulation  and the De minimis  regulation . In 2022, a revised framework on state aid for 
research, development, and innovation activities  was issued  and a Temporary Crisis Framework in 
response to the war in Ukrain e was adopted.  
13. In the area of t echnical barriers to trade (TBT), the European  Union implemented some 
legislative changes that  were adopted in 2019  to improve and strengthen the functioning  of its TBT 
regime , notably regarding the application of the princip le of mutual recognition, market surveillance, 
labelling , and online sales . During the review period, standardization gained more prominence. 
In 2022, a new European Standardization Strategy was issued wherein  standardization is identif ied 
as key strategic  tool to achiev e EU environmental, digital, and economic  objectives.  
14. As concerns s anitary and phytosanitary (SPS) m easures , the European  Union  completed the 
implementation of the Plant Health Law, the Animal Health Law, and  the Regulation on Official 
Controls , all adopted in previous years to simplify and harmonize its SPS regime. In March  2021, 
the European  Union also amended the General Food L aw to improve transparency and public 
participation in the risk assessment and approval procedures for products, and in January  2022 
started applying updated rules (adopted in 2018) on the manufacturing, trade, sale, and use of 
veterinary medicinal product s, including on the use of antimicrobials . In May  2020, the 
European  Union adopted the Farm to Fork Strategy , which, inter alia, identifies the areas of action 
to achieve a sustainable EU food system during  the period 2020 -24, including possible reforms on  
feed additives, pesticides, plant protection, and animal welfare , as well as the establishment of a 
new legislative framework for sustainable food systems . 
15. The European  Union's legal framework on government procurement remained broadly the 
same during the  review period. Expenditure on government procurement remained robust, 
amounting to EUR  2,388  billion  or about 13.7% of GDP . The European  Union adopted a regulation 
on foreign subsidies (i.e. subsidies by a third  country) , which will apply from July  2023,  to address 
situations where a company receiving foreign subsidies causes distortions to the internal market 
through, inter alia, its participation in EU public procurements, or the acquisition of an EU  company 
or assets affecting the market structure . For competition, a notification -based tool was introduced 
as part of this regulation to notify ex ante  financial contributions received from a non -EU government 
prior to concluding a concentration . A new Vertical Block Exemption Regulation and new Vertica l 
Guidelines aimed at allowing undertakings to self -assess conformity with competition laws were also 
introduced.  
16. Intellectual property rights (IPRs) remained of growing importance to the EU economy, both 
in terms of employment and contribution to GDP. Dev elopments in the area of IPRs during the period 
include the issuance of new Guidelines on EU trademarks and on registered Community designs, as 
well as the adoption of two package proposals for the modernization of design protection legislation. 
Regarding geographical indications, two proposals – one for a Regulation on craft and industrial 
products, and one for a Regulation on wine, spirit drinks, and agricultural products – were adopted, 
as were quality schemes for agricultural products.  
17. In agriculture, t he previous Common Agricultural Policy (CAP) continued to be applied on a 
transitional basis as the new CAP was approved and entered into force in January  2023. The new 
CAP brings together the agricultural and rural development policies of the European  Union, 
strengthening the focus on measures addressing climate and environmental concerns, and uses a 
more results -based approach. CAP Strategic Plans at the member State level will detail specific 
measures, based on identified needs and intervention strategie s. Overall funding under the CAP 
remains largely unchanged, and the E uropean Agriculture Guarantee Fund and European Agricultural 
Fund for Rural Development continue  to finance implementation. The European  Union did not grant 
export subsidies during the re view period, and the provision allowing for export refunds in 
exceptional circumstances has now been legally removed. There were no substantial changes 
regarding market access for agricultural products.  WT/TPR/S/442  • European Union  
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  18. The Common Fisheries Policy and its implementation me chanisms remain in place, but 
regulations regarding its funding were updated with the European Maritime, Fisheries and 
Aquaculture Fund replac ing the European Maritime and Fisheries Fund from 2021. While the type of 
support provided did not fundamentally c hange, some additional capacity -enhancing activities are 
no longer eligible for funding. The European  Union continues to implement policies to address IUU 
fishing both domestically and with international partners. The revision of the European Fisheries 
Control system remains pending. In 2021, the Commission adopted an EU Forest Strategy for 2030 
and in late 2022, the Council and the Parliament reached a provisional agreement on a regulation 
aiming to prevent deforestation and forest degradation, but its ado ption remains pending . 
19. The importance of energy and climate policies gained further impetus during the review period 
with the shift towards  renewable and low -carbon energy, improving energy security, and reducing 
emissions  to achiev e climate neutrality . The 2021  Fit-for-55 package  aims to align  these p olicies  
with the climate -related goals of the European Green Deal and the Climate Law , which includes 
target s for GHG emission reduction s. The package contains many  policy initiatives that focus on 
emissions r eduction through various channels from the demand - and supply -side, including 
complementing the Emissions Trading System with a Carbon  Border Adjustment Mechanism , or 
reforming energy taxation . Most recentl y, the REPowerEU plan aims to diversify the energy supply , 
save energy, and facilitate an increase in clean energy generation. The Plan includes faster 
permitting rules for renewable energy projects and supporting the development of renewable 
hydrogen . A number o f regulations estab lished minimum storage levels for natural gas, voluntary 
gas demand reduction targets, and a cap for market revenues from electricity generation in 2022.  
20. According to the OECD, the overall restrictiveness of EU member States' external services 
trade regime  remains relatively low. Developments during the period include the entry into force of 
adjustments to the regulatory framework for the posting of workers and the adoption of the DSA 
and the DMA in 2022. The DSA harmonizes the rules applicable to "intermed iary services" in the 
internal market with the objective of ensuring a transparent, safe, predictable , and trusted online 
environment.  It introduces due diligence requirements and systems for handling internal complaints, 
regulates online advertising, and exempts intermediary service providers from liability regarding 
content, except in some circumstances; it furthermore contains additional rules for very large online 
platforms and online search engines . Separately, the DMA contains provisions aimed at rest ricting 
anti-competitive practices of certain "gatekeepers", i.e.  undertakings that provide core platform 
services.  
21. The financial services regulation continued to focus on enhancing resilience and transparency. 
Regarding the Capital Markets Union, the prud ential regulation of investment firms was finalized 
in 2019, as efforts to integrate national capital markets continued with discussions of various 
proposals. A number of equivalence decisions regarding capital markets were taken during the 
review period. Regarding digital financial services, a regulation on digital operational resilience of 
financial entities was adopted, while efforts to regulate crypto -assets continue d. As a response to 
the COVID -19 pandemic, the European  Union  made certain changes to fi nancial sector regulation 
with the aim of facilitating continued access to capital and supporting economic recovery.  
22. The Commission considers that capital markets will have to play an important role in achieving 
the objectives of the European Green Deal. S ince 2020, the Taxonomy Regulation has defined which 
economic activities and investments qualify as sustainable or contributing to the low -carbon 
transition in this context, with an amended Sustainable Finance Disclosure Regulation aiming to limit 
"greenwa shing" of financial instruments. Discussions regarding rules for Green Bonds have 
advanced.  
23. During the review period, reforms in road transport services expanded certain rules to 
transport operators of small vehicles  and amended rules applying to  cabotage operations, working 
conditions and requirements for drivers, and the posting of drivers. In the area of rail  transport , 
reforms agreed under the fourth  EU Railway Package in 2016 were phased in, while for air transpo rt, 
the Commission approved a revised proposal to reform the "Single European Sky" , which also aim s 
to address carbon emission s. Several air transport agreements were concluded or signed , among 
them a comprehensive EU air transport agreement  with the Association of Southeast Asian Nations 
(ASEAN) . In the area of maritime transport, the reform affecting the provision of port services has 
been applied since 2019.  WT/TPR/S/442  • European Union  
- 13 - 
  24. Regarding telecommunications, the European Electronic Communications Code (EECC) 
entered into force in 2020 and continues to be transposed by some member States. The abolition of 
roaming charges for customers travelling occasionally within the European  Union was evaluated and 
extended until 2032, while newly established termination rate s for intra -EU calls are being phased 
in until 2024. Many member States implemented, or plan to implement, measures contained in a 
new toolbox to mitigate certain cybersecurity risks related to 5G, and some amended or implemented 
new laws addressing risks related to high -risk vendors. Complementary to these efforts, the new 
Directive on the Security of Network and Information Systems ( NIS 2 ) replaced an earlier Directive 
and will be transposed by member States by mid -October  2024.  
 WT/TPR/S/442  • European Union  
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  1  ECONOMIC ENVIRONMENT  
1.1  Main features of the economy1 
1.1.  The European  Union, as a political, economic, and monetary2 union of 27  countries, established 
a single market that allows most goods, services, capital, and persons to move freely within its 
territory. Harmonized regulations, elimination of internal customs barriers, a common agricultural 
policy, the euro currency, and undertaking multilateral trade liberalization as a group are just some 
of the common policies. Guiding its direction and policies on the economy and trade, the Treaty on 
European  Union provides  that the European  Union will pursue "balanced economic growth and price 
stability, a highly competitive social market economy, aiming at full employment and social progress, 
and a high level of protection and improvement of the quality of the environment"  (Article  3). 
1.2.  The European  Union, as a bloc, remains the world's largest trader in both goods and services.3 
Like other developed economies, the European  Union is heavily reliant on the services sector as the 
main component of its economy, accounting for 73% of gross value added (GVA). Growth in services 
trade has also increased in importance in recent years as internal and external barriers to services 
trade have fallen. The contribution of services as inputs to manufacturing and the digital 
transformatio n has increased the European  Union's reliance on services in recent years.4 
1.3.  EU external trade in goods is dominated by imports of primary products and exports of 
machinery and transport equipment. Statistics on global value chains also demonstrate that so urcing 
was most prevalent from one EU member States to another, thus further emphasizing the benefits 
of the single market.5  
1.4.  The EU economy has been particularly impacted by the combined effects of the COVID -19 
pandemic and by the war in Ukraine. Compare d to other large economies, the European  Union has 
been more deeply affected due to its reliance on energy imports, proximity to the conflict zone, and 
higher exposure from trade value chains and financial products. The EU member States to the east 
are inc reasingly more vulnerable due to their energy dependency, services exports, and asset 
exposure.6 
1.2  Recent economic developments  
1.5.  The EU economy had many years of stability and growth prior to the pandemic, whereby GDP 
growth averaged 2.1% and labour producti vity was regularly improving. During the review period, 
a number of events led to increased volatility and uncertainty. The COVID -19 pandemic resulted in 
the largest recession since the 2008 -09 financial crisis and real GDP declined by 5.7% in 2020 
(Chart  1.1, Table  1.1). However, in part due to lessons learned from the earlier crisis and swift 
measures put in place by the EU member States, the reopening in 2021 resulted in a stronger 
recovery and GDP rebounded to a 5.4% growth in 2021. Despite another shoc k in early  2022 due 
to the war in Ukraine, EU GDP has exhibited strong growth in 2022, estimated at 3.6%.  
1.6.  The 2020 pandemic -driven recession resulted in a large reduction in consumption expenditures 
due to closures and a decline in both imports and export s due to lower demand (Chart  1.1). 
Since  2020, pent up demand has driven the recovery and private consumption and investment; in 
particular, it continued to drive GDP growth throughout 2021.7 In early 2022, private consumption 
 
1 All data and references are to EU -27, unless otherwise indicated.  
2 As of 1  January  2023, 20 EU member States are members of the eurozone.  
3 In terms of both internal and external trade.  
4 National Board of Trade Sweden (2016), Report: The Servicification  of EU Manufacturing . Viewed at: 
https://www.kommerskollegium.se/en/publications/reports/2016/the -servicification -of-eu-manufacturing/ ; and 
European Commission (2021), Trade Policy Review: An Open, Sustainable and Assertive Trade Policy . 
Viewed  at: https://trade.ec.europa.eu/doclib/docs/2021/april/tradoc_159541.0270_EN_05.pdf .  
5 Eurostat, Global Value Chains . Viewed at: https://ec.europa.eu/eurostat/web/economic -
globalisation/globalisation -in-business -statistics/global -value -chains .  
6 European Commission (2022), European Economic Forecast, Spring 2022 . Viewed at: 
https://economy -finance.ec.europa.eu/document/download/e24bc7cf -ab4f-4a63-bfe2-
b49a56d6b4 67_en?filename=ip173_en.pdf .  
7 European Commission (2022), European Economic Forecast, Spring 2022 .  WT/TPR/S/442  • European Union  
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  decreased, in part due to higher inflation, and a build -up of inventories was registered. The EU 
economy demonstrated particular resilience with deceleration of growth in the latter part of  2022.  
1.7.  GDP growth varies consid erably among member States (Table  1.1). The downturn in 2020 
resulted in negative GDP growth for all member States except Ireland, where a 6.2% growth in GDP 
was achieved, mostly due to multinational enterprise (MNE) transactions. In  2021, all member 
State s' GDP had recovered but there were important variations ranging from 2.5% growth in 
Germany to 13.6% in Ireland. Germany's share in EU GDP was about 20% in 2021, followed by 
France, Italy, and Spain.8 While many pandemic -related restrictions were lifted in 2021, there were 
still some measures in place that created a drag on the EU economy. Furthermore, certain sectors, 
such as contact -intensive services (e.g.  hotels, recreation, and culture), were harder hit and were 
still lagging in the recovery compared  to other sectors. EU member States with higher dependence 
on contact -intensive services were expected to recover more slowly.9 Ireland continued to have high 
volatility in its GDP in 2022, in particular due to large MNE transactions.  
Chart 1.1 Contribution to GDP growth, 2018 -21 
(percentage point change on previous period)  
 
Source:  Eurostat, Main GDP Aggregates  (nama_10_gdp). Viewed at: 
https://ec.europa.eu/eurostat/data/database . 
Table 1.1 Selected economic indicators, 2018 -21 
 GDP at 
current 
market 
prices 
(2021)  Real GDP growth (%)  GDP per capita 
(2021)  Share in gross value added, % 
(2021)a 
(EUR  
billion)  2018  2019  2020  2021  EUR at 
current 
prices  PPSb Ag., 
forestry 
and 
fishing  Industryc Services  
EU-27 14,522  2.1 1.8 -5.7 5.4 32,430  32,425  1.8 25.1 73.1 
Austria  406 2.4 1.5 -6.5 4.6 45,370  39,285  1.4 28.9 69.8 
Belgium  502d 1.8 2.2 -5.4d 6.1d 43,340d 38,946d 0.7d 22.0d 77.2d 
Bulgaria  71 2.7 4.0 -4.0 7.6 10,330  18,723  5.0 23.8 71.2 
Croatia  58d 2.8 3.4 -8.6 13.1d 14,750d 22,638d 3.5d 23.8d 72.7d 
Cyprus  24d 5.6 5.5 -4.4 6.6d 26,680d 29,098d 1.9d 14.9d 83.2d 
Czech  Rep. 238 3.2 3.0 -5.5 3.5 22,270  29,498  2.0 33.3 64.7 
 
8 As measured in PPS terms.  
9 IMF (2022), 2021 Article  IV Consultation with Member Countries on Common Euro Area Policies . 
Viewed at: https://www.imf.org/en/Publications/CR/Issues/2022/02/07/Euro -Area-Policies -2021-Article -IV-
Consultation -with-Member -Countries -on-Common -Euro-Area-512879 .  
-15-10-5051015
2018 2019 2020 2021Consumption expenditure: Household and NPISH
Gross fixed capital formation
Other domestic demand
Exports of goods
Exports of services
Imports of goods
Imports of services
GDPChart 1.1 Contribution to GDP growth, percentage point change on previous period, 2018 -
21(Percentage point)
Eurostat, Main GDP Aggregates, (nama_10_gdp). 
Viewed at: https://ec.europa.eu/eurostat/data/database. Source:WT/TPR/S/442  • European Union  
- 16 - 
   GDP at 
current 
market 
prices 
(2021)  Real GDP growth (%)  GDP per capita 
(2021)  Share in gross value added, % 
(2021)a 
(EUR  
billion)  2018  2019  2020  2021  EUR at 
current 
prices  PPSb Ag., 
forestry 
and 
fishing  Industryc Services  
Denmark  337 2.0 1.5 -2.0 4.9 57,520  43,300  1.0 22.2 76.8 
Estonia  31 3.8 3.7 -0.6 8.0 22,580  27,564  2.3 26.4 71.3 
Finland  251 1.1 1.2 -2.2 3.0 45,360  36,486  2.6 28.4 69.0 
France  2,501  1.9 1.8d -7.8d 6.8d 36,660  33,734  1.9 18.8 79.4 
Germany  3,602d 1.0 1.1d -3.7d 2.6d 43,290d 38,968d 0.9d 29.6d 69.5d  
Greece  182d 1.7 1.9 -9.0d 8.4d 17,010d 20,728d 4.4d 17.5d 78.0d  
Hungary  154d 5.4 4.9 -4.5 7.1d 15,840d 24,471d 4.0d 28.7d 67.4d 
Ireland  426 8.5 5.4 6.2 13.6 84,940  71,989  1.1 40.1 58.8 
Italy 1,782  0.9 0.5 -9.0 6.7 30,150  30,750  2.2 25.1 72.8 
Latvia  34 4.0 2.6 -2.2 4.1 17,890  23,587  4.7 22.7 72.6 
Lithuania  56 4.0 4.6 0.0 6.0 20,000  28,750  3.7 28.3 68.0 
Luxembourg  72d 1.2 2.3 -0.8 5.1d 112,780d 88,415d 0.2d 12.4d 87.4d 
Malta  15 6.2 5.9 -8.3 10.3 28,310  32,056  0.5 14.1 85.5 
Netherlands  856d 2.4 2.0 -3.9 4.9d 48,840d 42,344d 1.7d 20.3d 78.0d 
Poland  575 5.9 4.4 -2.0 6.8 15,060  24,978  2.6 32.0 65.4 
Portugal  214d 2.8 2.7 -8.3 5.5d 20,840d 24,332d 2.5d 22.7d 74.8d 
Romania  240d 6.0 3.9 -3.7 5.1d 12,560d 23,625d 4.8d 30.8d 64.4d 
Slovak Rep.  99 4.0 2.5 -3.4 3.0 18,110  22,376  2.0 31.6 66.4 
Slovenia  52 4.5 3.5 -4.3 8.2 24,770  29,211  1.9 32.4 65.7 
Spain  1,207d 2.3 2.0 -11.3d 5.5d 25,500d 27,251d 2.9d 22.5d 74.6d 
Sweden  537 2.0 2.0 -2.2 5.1 51,560  40,096  1.5 24.3 74.2 
a 2020 instead of 2021 for EU -27 and Sweden.  
b In EUR, measured on the basis of purchasing power standards (PPS).  
c Including construction.  
d Provisional.  
Source:  Eurostat, GDP and Main Components  (nama _10_gdp), (nama _10_a64), ( nama _10_pc). Viewed  at: 
https://ec.europa.eu/eurostat/web/main/data/database . 
1.8.  The economic upturn in 2021 was aided by coordinated monetary and fiscal policy measures 
aimed at turning the recovery into sustained e conomic growth. On the other hand, global 
developments still had an important impact, i.e.  supply side constraints were still prevalent and 
affected commodity prices, energy in particular, leading to higher inflation, which reached 2.9%. In 
early 2022, the  war in Ukraine created further pressures on the supply side, including rising prices 
and greater uncertainty. Inflation reached a high of 11.1% in November  2022, mainly due to a sharp 
rise in energy prices, which reached a high of 42% as part of Harmonise d Index of Consumer 
Prices  (HICP).10 
1.9.  The European  Union's reliance on imported energy products also had a particular influence on 
several parts of its economy. Imports of higher -priced energy products affected the trade balance 
and the wider economy as the value of imported energy more than doubled since mid -2021 before 
falling slightly in fourth quarter 2022 (Chart  1.2). The composition of imports in value terms has 
changed; pre -pandemic, energy products accounted for about 15% of imports, whereas in 
second quarter  2022 it was over 22%, reflecting price developments. While the imported value of 
energy products has increased significantly since 2019, the volume remained relatively stable.11 
 
10 Eurostat (2022), "Annual Inflation Down to 10.1% in the Euro Area", 139/2022, 16  December. 
Viewed at: https://ec.europa.eu/eurostat/documents/2995521/15701156/2 -16122022 -AP-EN.pdf/4eaa941a -
8c7d-af89-37da-f29f1167c24c .  
11 Eurostat, EU Imports of Energy Products – Recent Developments . Viewed at: 
https://ec.europa.eu/eurostat/statistics -explained/index.php?title=EU_imports_of_energy_products_ -
_recent_developments .  WT/TPR/S/442  • European Union  
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  Chart 1.2 Energy i mports (extra -EU) 
(EUR billion)  
 
Note:  Energy imports refer to coal (HS  270111, HS  270112, HS  270119), crude petroleum (HS  2709), 
natural gas (HS  271111, HS  271121), and electrical energy (HS  271600).  
Source:  Eurostat, International Trade in Goods – Overv iew. Viewed at: 
https://ec.europa.eu/eurostat/web/international -trade -in-goods .  
1.2.1   Fiscal developments  
1.10.  Moving towards a deeper or strengthened fiscal integration has been a long -term undertaking 
of the European  Union and one that is still a work in progress. Certain EU fiscal rules have been in 
place since the early 1990s through the Maastricht  Treaty, i.e.  the requirements for member States 
to keep their government deficits below 3% of GDP and the debt -to-GDP ratio below 60%. 
Since  1997, the Stability and Growth Pact (SGP) has expanded upon this by monitoring and 
coordinating national fiscal and economic policies for deficit and debt criteria, so as to prevent 
excessive government deficits. As noted in previous Reviews, regulations in the so -called "Six  Pack" 
and "Two  Pack" further strengthened certain fiscal measures during the eurozone crisis, which have 
led to better coordination of economic policies and strengthened budget surve illance.  
1.11.  The changing economic environment in response to the pandemic and the war in Ukraine has 
had a profound impact on the fiscal landscape. Part of the pandemic response involved significant 
support measures (Section  3.3.1), but there has also been i ncreased coordination between EU and 
member State policies, not only among member States as was the case previously. Various supports 
at the EU level, combined with additional national support measures, have led to rising debt -to-GDP 
ratios, i.e.  around 90 %, which were last seen in the 2008 -09 financial crisis.  
1.12.  Government gross debt in the European  Union climbed steadily from about 80% of GDP in 
the first  quarter  of 2020 to its highest level of 90% in the first quarter of 2021 on account of the 
pandemic, an d thereafter declined steadily, but as of the third quarter of 2022 was 85% of GDP and 
had not yet reached pre -pandemic levels (Table  A1.1).12 There were also important divergences 
among the member States, ranging from 24.5% in Sweden to 206.3% in Greece i n 2020. Growing 
government deficits were the norm during the review period, a situation that deteriorated further 
in 2021 for most member States (Chart  1.3). Thus, many member States did not adhere to the 
government deficit reference of 3% of GDP and debt -to-GDP ratio below 60% or progressed towards 
it in 2021, although the Commission considered that a decision on whether to place member States 
 
12 Eurostat (2023), "Government Deb t Down to 93.0% of GDP in Euro Area", 12/2023, 23  January. 
Viewed at: https://ec.europa.eu/eurostat/documents/2995521/15725185/2 -23012023 -AP-EN.pdf/02f734a3 -
f3fe-df4d-db84-
f1671933a5c6#:~:text=At%20the%20end%20of%20the,from%2086.4%25%20to%2085.1%25 .  
010203040506070
2018-Jan
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2022-DecExtra-EU27
Extra-EU27 (excluding Russian Federation)
Russian FederationChart 1.[EU -27] Extra -EU energy imports
(EUR billion)
Note: Energy imports refer to coal (HS 270111, HS 270112, HS 270119),crude oil (HS 2709), 
natural gas (HS 271111, HS 271121), and electrical energy (HS 271600).
Eurostat, International trade in goods. Viewed at:https://ec.europa.eu/eurostat/web/international -trade-in-goods/data/database. Source: Price cap for 
crude oil
ata 
maximum 
price of USD 
60 per barrelWT/TPR/S/442  • European Union  
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  under the excessive deficit procedure should not be taken in view of the exceptional uncertainty, 
including for de signing a detailed path for fiscal policy  (Section  1.2.2).  
Chart 1.3 General government deficit/surplus as % of GDP  
 
a Simple average of four  years.  
Source:  Eurostat, General Government Deficit/Surplus (TEC00127) . Viewed at: 
https://ec.europa.eu/eurostat/web/main/data/database . 
1.2.2   EU economic governance, policy direction, and reforms  
1.13.  Reforming the European  Union's economic governance framework, i.e.  the promotion of 
sound fiscal policies and coordination of economic policies, advanced during the review period. The 
Commission launched a review process in February  2020, and a communication on proposed reform 
was issued in Nove mber 2022.13 The overall goal of the proposed reform is to facilitate effective 
economic surveillance through a new common framework. The Communication, in which discussions 
are ongoing among stakeholders, outlines an improved governance architecture and a number of 
other changes that will have an impact on key economic policy issues. The main elements are 
(i) national plans based on an expenditure rule as a single operational indicator; (ii)  more gradual 
adjustment supported by reforms and investment; (iii)  a focused and streamlined surveillance 
framework, including for the operation of enforcement procedures; and (iv)  a more risk -based 
surveillance framework, with adjustment paths that ensure that high debt ratios are on a plausibly 
and continuously declining path.  
1.14.  The 3% and 60% of GDP reference values of the Treaty are maintained; however, a 
medium -term focus and a more risk -based approach to surveillance, with greater attention on high 
debt ratios, are being introduced. Member States are responsible for proposing me dium-term fiscal 
structural plans that not only address fiscal matters but also reform and investment provisions. The 
move towards a risk -based surveillance framework is another new aspect that is expected to give a 
greater focus on highly indebted member States. Introduction of more transparent and effective 
enforcement, i.e.  enhanced sanctions through the effective use of financial sanctions, improved 
reputational sanctions, and the use of macroeconomic conditionality such as suspension of 
EU financing, a re other new elements. At the end of 2022, discussions were ongoing.  
1.15.  The European Semester14 continued its coordination and surveillance of economic and social 
policies throughout the review period. Periodic discussion and coordination of economic, social,  and 
budgetary plans of member States have allowed greater monitoring and identification of potential 
 
13 European Commission Communication COM(2022)  583 final.  
14 The European Semester is a framework for the coordination and surveillance of economic and social 
policies of EU member States.  
-10%-8%-6%-4%-2%0%2%4%6%EU-27BelgiumBulgariaCzech RepublicDenmarkGermanyEstoniaIrelandGreeceSpainFranceCroatiaItalyCyprusLatviaLithuaniaLuxembourgHungaryMaltaNetherlandsAustriaPolandPortugalRomaniaSloveniaSlovak RepublicFinlandSweden2018-21 2021Chart 1.[EU] General government deficit/surplus as % of GDP
Eurostat, General government deficit/surplus (TEC00127). Viewed at:
https://ec.europa.eu/eurostat/web/main/data/database.  Source: a
a Simple average of four years. aWT/TPR/S/442  • European Union  
- 19 - 
  macroeconomic imbalances. In response to the COVID -19 pandemic, the European  Semester was 
impacted by the activation of the escape clause of the SGP in Ma rch 2020, which allowed member 
States to temporarily deviate from the normal budgetary requirements. As of the end of  2022, these 
temporary deviations were still in place and would continue to apply in  2023, and be deactivated as 
of 2024. The European Seme ster has been adapted to work alongside other new instruments that 
were created as part of the pandemic response, i.e.  the Recovery and Resilience Facility's plans, 
during 2022. Moreover, in 2022, the European Semester also coordinated the response to the war 
in Ukraine and its impact on energy markets. As a consequence, recommendations were agreed for 
taking action in terms of energy and fiscal policy measures. The European Semester is expected to 
continue as the overarching framework but be adapted to the  emerging consensus following the 
economic governance review.  
1.16.  The European  Union has set out its common Policy Objectives and Priorities for 2020 -2024, 
which identify its political goals or top priorities.15 Several of these policy objectives have an impac t 
on the European  Union's economic policy direction, including ensuring a full recovery from the 
COVID -19 pandemic; prioritizing actions that accelerate the transition to a fairer, healthier, greener, 
and more digital society; and strengthening the economy  to make it more resilient and robust. As 
part of this policy direction, six broad strategic priorities have been identified, each with a number 
of plans, sub -components, strategies, or agendas that contribute to the overall objective:  
• An economy that work s for people – Ensuring social fairness and prosperity;  
• A Europe fit for the digital age – Empowering people with a new generation of 
technologies;  
• A stronger Europe in the world – Reinforcing responsible global leadership;  
• Promoting our European way of li fe – Protecting citizens and values;  
• A European Green Deal – Striving to be the first climate -neutral continent; and  
• A new push for European democracy – Nurturing, protecting and strengthening 
democracy.16 
1.17.  Many specific agendas under each strategy have al ready begun, while others are in various 
stages of implementation, and some have been completed. Those relating to the European  Union's 
economic policies are elaborated in this section, and others are taken up in the relevant parts of this 
report. One such  economic policy is the movement towards a circular economy. In March  2020, the 
European  Union issued a communication on the circular economy and its action plan, which sets out 
to mainstream the circular economy and make sustainable products, services, an d business models 
the norm.17 Through the action plan, the policy addresses a number of issues such as designing a 
sustainable product policy framework, improving waste prevention policies, and addressing key 
product value chains. The European Green Deal i ncludes a number of proposals for reducing 
greenhouse gas emissions through climate, energy, and transport policies (see also Section  4).18 
1.18.  Another initiative to be addressed as part of the strategy on "An economy that works for 
people" is a new framework for business taxation in the European  Union.19 In May  2021, a 
Communication on Business Taxation for the 21st Century was issued, outlining the European  Union's 
vision for a new business tax system based on fair and sustainable growth and effective taxatio n. 
One of the concrete steps taken thus far was a Commission Recommendation on the tax treatment 
 
15 European Commission (2020), Joint Conclusions of the European Parliament, the Council of the 
European  Union and the European  Commission on Policy Objectives and Priorities for 2020 -2024. Viewed at: 
https://commission.europa.eu/strategy -and-policy/strat egic-planning/joint -priorities -eu-institutions -2021-
2024_en .  
16 European Commission, 6 Commission Priorities for 2019 -24. Viewed at: 
https://commission.europa.eu/strategy -and-policy/priorities -2019-2024_en .  
17 European Commission Communication COM(2020)  98 final.  
18 A presentation to the Committee on Trade and Environment in October 2022 includes selected 
initiatives, i.e.  a proposal for a Carbon Border Adjustment Mechanism (CBAM), a proposal for a new regulation 
on waste shipments, and a green claims initiative.  
19 European Commission Communication COM (2021)  251 final.  WT/TPR/S/442  • European Union  
- 20 - 
  of losses during the COVID -19 crisis that particularly benefits SMEs, which have been less able to 
cope.20 Other legislative proposals on a number of business tax reform matters are expected to be 
forthcoming during 2023 -24.  
1.2.3   Monetary and exchange rate policies  
1.19.  The European Central Bank (ECB) and the national central banks of the euro area member 
States, which together form the Eurosystem, are responsible for mo netary policy for the euro area. 
As of 1  January  2023, 20 of the 27 EU member States were using the euro; Croatia joined on 
1 January  2023.21 The Governors of the central banks of EU member States outside the euro area 
take part in the ECB General Council,  which has advisory and coordination functions. The main aim 
of the ECB is price stability; it takes decisions to maintain a 2% inflation target in the eurozone.  
1.20.  In January  2020, the ECB began a review of its monetary strategy policy that was finalized in 
July 2021. This review made a number of changes from the previous strategy to enable the ECB to 
better adapt to structural changes in the economy, including adopting a symmetric 2% inflation 
target instead of the "below but close to 2%" inflation target wh ile confirming the medium -term 
orientation of monetary policy; modifying the HICP to have full inclusion of owner -occupied housing 
over time; and acknowledging that especially forceful or persistent monetary policy measures would 
be required when the econo my is close to the lower bound on interest rates.  
1.21.  In line with its mission, and due to rising inflation in 2022 in particular, the ECB raised interest 
rates in July, September, November, and December  2022 after not having raised them in 11  years.22 
Compare d to previous tightening cycles, the three key ECB interest rates23 have been increased by 
larger increments, i.e.  from 50 basis points to 75 basis points, and with higher frequency throughout 
the second half of 2022. At its latest meeting in December  2022, the ECB Governing Council signalled 
that interest rates would sti ll have to rise significantly and at a steady pace to ensure that inflation 
returns to the 2% target.  
1.22.  During the review period, the ECB continued to provide monetary accommodation with one 
of its long -standing non -standard monetary policy instruments, the asset purchase programme 
(APP). As a quantitative easing method, the APP has been modified regularly to adapt to the changing 
inflation outlook and achieve the appropriate monetary policy outcome. After being stopped in 
January  2019, the E CB resumed APP net purchases in November  2019 at a monthly pace of 
EUR 20 billion and added a EUR  120 billion envelope in 2020 in response to the pandemic. 
Thereafter, net purchases under the APP amounted to EUR  150 billion in the first half of 2022 before  
the programme was discontinued as of 1  July 2022.24 Total stock in APP bonds was EUR  3.3 trillion 
at the end of December  2022. To further bolster the response to the pandemic, the ECB created the 
pandemic emergency purchase programme (PEPP) in March  2020 as another APP but temporary 
until March  2022.25 The initial PEPP EUR  750 billion envelope was expanded several times to reach 
EUR 1,850  billion in total.  
1.23.  In 2020, the euro appreciated slightly against the US dollar and the Chinese renminbi while 
remaining  broadly stable relative to the Japanese yen and depreciating against the Swiss franc. After 
the euro strengthened against all major currencies in 2021, it weakened against most of them 
in 2022, with the exception of the Japanese yen.26 The ECB did not int ervene in the foreign exchange 
market during the period.  
 
20 Commission Recommendation (EU)  2021/801.  
21 EU member States that do not have the euro as their currency are Bulgaria, Czech  Republic, 
Denmark, Hungary, Poland, Romania, and Sweden.  
22 ECB, Key ECB Interest Rates . Viewed at: 
https://www.ecb.europa.eu/stats/policy_and_exchange_rates/key_ecb_interest_rates/html/index.en.html .  
23 These concern the deposit facility, the main re financing operations, and the marginal lending facility.  
24 ECB (2022), "Monetary Policy Decisions", 21  July. Viewed at: 
https://www.ecb.europa.eu/press/pr/dat e/2022/html/ecb.mp220721~53e5bdd317.en.html .  
25 As announced in July  2022, the principal payments from maturing securities purchased under 
the PEPP will be reinvested until at least the end of 2024.  
26 Information provided by the authorities.  WT/TPR/S/442  • European Union  
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  1.2.4   Balance of payments, current account  
1.24.  The European  Union has historically, for more than 10 years, had a positive current account 
balance; however, this changed in the second quarter of 2022 as it tur ned negative, which persisted 
for most of 2022 until the fourth quarter when it turned positive again (Chart  1.4). While trade in 
services and transfers of capital did not change significantly, it was the balance in trade in goods 
that had the most impact on the change in the current account in 2022. Driven mostly by high prices 
of imported energy, it was the large and growing deficit in energy products that influenced this trend 
the most. The Russian  Federation has been the single largest source of importe d crude petroleum 
and natural gas to the EU market in recent years, although in 2022, there was less concentration 
and a larger diversification among supplier countries.27 While energy imports from the 
Russian  Federation declined in quantity, they increase d in value (Section  1.3.1.1). The 
European  Union's bilateral current account deficit with the Russian  Federation reached 0.9% of GDP 
in the second quarter of  2022, the highest level historically.28 Title Transfer Facility (TTF) gas prices 
in the European  Union peaked in September -October  2022 and have since declined, thus there was 
an improvement in the current account balance by year end.  
Chart 1.4 Current account balance, 2020 -22 
(EUR billion)  
 
Note:  Season ally and calendar adjusted data.  
Source:  Eurostat, European  Union and Euro Area Balance of Payments – Monthly Data  (BPM6). 
[BOP_EU6_M__custom_4007267]. Viewed at: 
https://ec.europa.eu/eu rostat/web/main/data/database . 
 
27 Eurostat, EU Imports of Energy Products – Recent Developments . Viewed at: 
https://ec.europa.eu/eurostat/statistics -explained/index.ph p?title=EU_imports_of_energy_products_ -
_recent_developments .  
28 ECB, "Euro Area Linkages with Russia: Latest Insights from the Balance of Payments", ECB Economic 
Bulletin , Issue 7/2022. Viewed at: https://www.ecb.europa.eu/pub/economic -
bulletin/focus/2022/html/ecb.ebbox202207_08~4f1967995f.en.html ; and information provided by the 
autho rities.  
16.6 19.943.041.6
24.827.8
-4.4-2.4
-23.5
-35.619.132.5
11.323.037.1
25.2
1.97.4
-10.4
-26.8-28.3-5.34.1
-40-30-20-1001020304050
2020-01
2020-02
2020-03
2020-04
2020-05
2020-06
2020-07
2020-08
2020-09
2020-10
2020-11
2020-12
2021-01
2021-02
2021-03
2021-04
2021-05
2021-06
2021-07
2021-08
2021-09
2021-10
2021-11
2021-12
2022-01
2022-02
2022-03
2022-04
2022-05
2022-06
2022-07
2022-08
2022-09
2022-10
2022-11
2022-12Current account balance
Goods trade balanceChart 1.[EU -27] Current account balance, 2020 -22
(EUR billion)
Note:         Seasonally and calendar adjusted data.
Source:Eurostat, European Union and euro area balance of payments -monthly data (BPM6) [BOP_EU6_M__custom_4007267]. Viewed at:
https://ec.europa.eu/eurostat/web/main/data/database. -16.7WT/TPR/S/442  • European Union  
- 22 - 
  1.2.5   Employment trends, including gender  
1.25.  Comparable to the situation of other economic benchmarks, EU employment showed similar 
trends during the review period with a slight downturn in 2020 due to the pandemic, and a 
subsequent i mprovement in 2021 (Table  A1.1). The increase in 2021 was significant as the 
employment rates in a majority of member States (16 of 27) exceeded pre -pandemic levels and 
reached 73.1% of the working age population, the highest number in more than a decade.29 Data 
for 2022 so far indicate continuation of this trend, as the employment rate reached 74.7% in the 
third quarter of 2022.30 The unemployment rate dropped to 6% in November  2022, the lowest level 
since recording began in 2000. The economic recovery has  had an overall positive effect on 
employment with the EU labour market improving significantly. There are still significant variations 
among the member States with the lowest unemployment rate at 2.8% (Czech  Republic) and the 
highest at 14.8% (Spain) in 2 021, and total hours worked and hours per employee lagged, and thus 
had not yet reached pre -pandemic levels as of the end of 2021. Much of the growth was in public 
sector employment, i.e.  administration, education, health, and social work.  
1.26.  According to sev eral studies, EU policy response to the pandemic, in particular job retention 
schemes, at the EU and member State levels, has contributed favourably to the employment 
situation and the recovery of the labour market has been more responsive compared to earl ier 
recessions. A  2022 IMF report cites a mitigation factor of 2.5  percentage points in unemployment or 
4 million workers in  2020 in the eurozone, due to various job retention schemes, i.e.  short-term 
work, furlough, and wage subsidy schemes.31 While some of these schemes existed pre -pandemic, 
all EU  member States responded with new schemes or adjustments during the pandemic. Many 
schemes were temporary and some have already been lifted; however, others are permanent and 
may still act as a buffe r in the EU job market. At the beginning of the pandemic, an estimated 20% 
of the euro area workforce was covered by some type of job retention scheme; this had fallen to an 
estimated 1.6% as of end -2021. At end -2022 these job retention scheme supports ret urned to 
pre-crisis levels of about 0.3%.32 
1.27.  The importance of trade, in particular exports, in supporting EU employment is significant; 
in 2019, an estimated 38.1  million EU jobs were supported by extra -EU exports, i.e.  more than 18% 
of total EU employment .33 Furthermore, jobs supported by exports paid 12% higher wages compared 
to other jobs.34 However, there was a gender gap in the employment supported by exports, as 38% 
of the jobs were occupied by women and 62% by men, and women had a lower wage premium, 8%, 
compared to 11% for men.35  
 
29 Eurostat, Employment and Activity by Sex and Age – Annual Data . Viewed at: 
https://ec.europa.eu/eurostat/databrowser/view/lfsi_emp_a/default/table?lang=en .  
30 Eurostat, Employment and Activity by Sex and Age – Quarterly Data . Viewed at: 
https://ec.europa.eu/eurostat/databrowser/view/lfsi_emp_q/default/table?lang=en .  
31 IMF (2022), European Labor Markets and the COVID -19 Pandemic . Viewed at: 
https://www.imf.org/en/Publications/Departmental -Papers -Policy -Papers/Is sues/2022/03/02/European -Labor -
Markets -and-the-COVID -19-Pandemic -Fallout -and-the-Path-Ahead -512327 .  
32 ECB, Economic Bulletin , Issue  1, 2023; Issues  4 and 7, 2022; and Issue  2, 2021. Viewed at: 
https://www.ecb.europa.eu/pub/economic -bulletin/html/index.en.html .  
33 European Commission (2021), EU Exports to the World: Effects on Employment . Viewed at: 
https://op.europa.eu/en/publication -detail/ -/publication/39e902df -4371-11ec-89db-01aa75ed71a1/language -
en.  
34 European Commission (2021), Chief Economist Note: "More Important Than Ever: Employment 
Content of Ex tra-EU Exports". Viewed at: 
https://trade.ec.europa.eu/doclib/docs/2018/november/tradoc_157517.pdf .  
35 European Commission (2019), Chief Economist Note: "Female Particip ation in EU Exporting Activities: 
Jobs and Wages". Viewed at: https://trade.ec.europa.eu/doclib/docs/2019/september/tradoc_158372.pdf ; and 
"Gender Patterns of EU Export s: Jobs and Wage Differentials". Viewed at: 
https://www.researchgate.net/publication/361852945_gender_patterns_of_eu_exports_jobs_and_wage_differ
entials_1 .  WT/TPR/S/442  • European Union  
- 23 - 
  1.3  Developments in trade and investment  
1.3.1   Trends and patterns in merchandise and services trade (extra -EU trade)  
1.28.  In terms of external trade, the European  Union remains the world's top trader, with 
EUR 6.28 trillion traded in goods and services in 2021. The European  Union accounted for 16.6% of 
world exports, and 15.8 % of world imports (goods and services combined).36 International trade in 
goods and services was the equivalent of 21.5% of the European  Union's GDP, which was similar to 
world averages.37 This percentage had climbed slightly in recent years, reflecting t he higher growth 
in trade relative to its economy. Services comprised 31.2% of total exports, thus goods exports still 
dominated at nearly 70%, but the European  Union had a relatively higher percentage of services 
trade compared to other economies.38 
1.3.1.1   Trend s in merchandise trade  
1.29.  For the 10th consecutive year the European  Union registered an external trade surplus in 
goods although this level (EUR  56.8 billion) contracted significantly in 2021 compared to the prior 
two years in which the surplus was EUR  215.7  billion and EUR  191.1  billion, respectively. The 
contraction in 2021 was largely attributable to a significant rise in the value of imports, which 
increased 23.7%, compared to the growth in exports, which was about half that level (12.8%) 
(Tables  A1.2 and  A1.3).39 However, this rise was not necessarily due to a rise in the volume of 
imports, but rather the increase in the price of energy products contributed significantly to the higher 
value. Despite not rising as much as imports, EU exports reached a reco rd level of EUR  2.18 trillion 
in 2021. EU trade in goods is highly dominated by non -agricultural products, accounting for more 
than 90% of the value, for both imports and exports. During the last three -year period, agricultural 
goods accounted for about  9% of total merchandise trade.40 
1.30.  In recent years, the top main sources of EU imports were China, the United  States, the 
Russian  Federation, and Switzerland. Thus, with the exception of Switzerland, the three largest 
conducted trade through MFN conditions and  not preferential trade agreements. After its withdrawal 
from the European  Union (Brexit) and the transition period, the United  Kingdom was also one of the 
European  Union's top trading partners (Chart  1.5, Table  A1.4). Imported products from these major 
suppliers tended to be segregated or specialized, with very little overlap (e.g.  imports from China 
were concentrated in telecommunications equipment, computers, and electrical machinery). On the 
other hand, the second -largest supplier, the United  States, pr ovided mainly medicinal and 
pharmaceutical products, crude petroleum, and motors and engines. The vast majority of all imports 
from the Russian  Federation were energy products, i.e.  crude petroleum and natural gas.  
1.31.  The European  Union's main export markets in 2021 were the United  States, the 
United  Kingdom, and China (Table  A1.5). The share of EU exports to the United  States and China 
increased slightly over the period, whereas trade with the United  Kingdom declined, although 
pre-Brexit data may not be direc tly comparable. Increased exports to the United  States were mainly 
mineral fuels and machinery, and to China, mainly cars and vehicles.  
 
36 European Commission (2022), DG Trade Statistical Guide , August. Viewed at: 
https://op.europa.eu/en/publication -detail/ -/publication/d9ba7625 -2fe7-11ed-975d-01aa75ed71a1/language -
en/format -PDF/source -276859603 .  
37 Eurostat, World Trade in Goods and  Services – An Overview . Viewed at: 
https://ec.europa.eu/eurostat/statistics -explained/index.php?title=World_tra de_in_goods_and_services_ -
_an_overview&oldid=553988 .  
38 Eurostat, World Trade in Goods and Services – An Overview .  
39 Eurostat (2022), Key Figures on Europe, 2022 Edition . Viewed at: 
https://ec.europa.eu/eurostat/documents/3217494/14871939/KS -EI-22-001-EN-N.pdf/9ad193b2 -fb0e-7ef3-
2200-053f845df1be?t=1657630160989 .  
40 European Commission (2022), DG Trade Statisti cal Guide , August.  WT/TPR/S/442  • European Union  
- 24 - 
  1.32.  On account of the COVID -19 pandemic and the war in Ukraine, important shifts occurred. The 
most prevalent shift in term s of product composition of exports was an increase in chemical sector 
exports, mainly pharmaceuticals due to the pandemic, and a decline in transport equipment exports, 
both for vehicles and aircraft, although this initial downturn improved slightly in 20 21 (Chart  1.6). 
The composition of EU imports remained dominated by two categories: computer, electronic and 
optical products; and crude petroleum and natural gas.  
1.33.  EU trade in COVID -19-related products grew throughout the period.41 Between 2019 
and 2021, i mports of COVID -19-related goods increased by 12% and exports by 9%; the main 
trading partners were the United  States and Switzerland, both for imports and exports. The 
European  Union was a net exporter of medical consumables and diagnostic testing equipme nt, while 
it was a net importer of protective garments and sterilization products.  Medical consumables were 
mainly exported to Switzerland, the United  Kingdom, and China; protective garments were imported 
mostly from China.42 
1.34.  More recently, in 2022, trade with the Russian  Federation was noticeably impacted by the war 
in Ukraine and resulting sanctions and related measures. In 2021, the Russian  Federation was the 
European  Union's third -largest partner for imports, and the fifth largest for exports with a gro wing 
bilateral trade deficit. Based on partial year 2022 data (February -September), EU exports to the 
Russian  Federation have fallen significantly, from 4% to 1.8% of total extra -EU exports compared 
to the same period in 2021, with all product categories s howing significant declines except for 
vegetable products, which increased slightly.43 The most significant declines were precious stones 
and metals, including gold, which fell by over 70%; and computers, telephones/cell phones, motor 
vehicles and their pa rts, and aircraft, which declined the most in overall value terms.44 It is 
noteworthy that most of these categories had a relatively high incidence of sanctions applied 
compared to other categories. On the other hand, imports rose in value terms, due to hi gher energy 
prices, by 73% in 2021 over 2020, and then peaked in March  2022. Thereafter, there was a steady 
decline in imports from the Russian  Federation for the remainder of 2022; this in particular 
concerned declines for imported coal, natural gas, petr oleum oils, fertilizers, and iron and steel.45 
 
41 Eurostat, EU Trade in COVID -19 Related Products . Viewed at: 
https://ec.europa.eu/eurostat/statistics -explained/in dex.php?title=EU_trade_in_COVID -19_related_products .  
42 Eurostat, EU Trade in COVID -19 Related Products .  
43 Eurostat (2023), "EU Trade with Russia Declined Strongly", 25  January. Viewed at: 
https://ec.europa.eu/eurostat/web/products -eurostat -news/w/ddn -20230125 -
2#:~:text=Considering%20seasonally%20adjusted%20values%2C%20both ,from%204.0%25%20to%201.8%
25.  
44 Eurostat, International Trade in Goods . Viewed at: https://ec.europa.eu/eurostat/web/main/home .  
45 Eurostat (2023), "EU Trade with Russia Declined Strongly", 25  January.  WT/TPR/S/442  • European Union  
- 25 - 
  Chart 1.5 Direction of merchandise trade, 2018 and 2021  
 
Source:  WTO Secretariat calculations, based on Eurostat, International Trade in Goods . Viewed at: 
https://ec.europa.eu/eurostat/web/main/data/database . 
Chart 1.2  Direction of merchandise trade, 2018 and 2021
2018 2021
Exports (f.o.b.)
Middle East
5.7%
Americas 
25.7%Europe 
31.3%
Other Americas 
7.4%United Kingdom
13.0%Switzerland
7.2%Türkiye
3.6%Norway 
2.6%Other Europe 
4.8%China 10.2%
Japan 2.9%
Korea, Republic 
of 2.4%
Other Asia
10.4%
Total:   EUR 2,059.8 billion Total:  EUR 2,180.9 billion
Other
2.0%Middle East
4.5%
United States
11.2%Americas 
17.3%
Europe 
25.2%Japan 3.1%
Korea, Republic of 2.4%
India 2.0%
Other Americas 
6.1%
Switzerland
5.4%Türkiye
3.5%Norway 3.2%Other Europe 
2.9%Imports (c.i.f.)
Other Europe 
3.2%India 2.2%Korea, Republic of 2.6%Japan 2.9%
Other Americas 
6.0%Americas 
16.9%
Switzerland
5.9%Türkiye
3.7%Norway 3.5%Other
1.9%
United States
11.0%
Total:   EUR 1,912.2 billion Total:   EUR 2,124.1 billionEurope 
32.8%
Middle East
3.2%United States
17.0%Asia
25.0%
United States
18.3%
Source:  WTO Secretariat calculations, based on Eurostat, International trade in goods. Viewed at: 
https://ec.europa.eu/eurostat/web/main/data/database.China
17.9%
United Kingdom
10.3%Other Americas 
7.5%
Other Asia
10.0%Switzerland
6.6%Africa
7.0%
Türkiye
3.4%Korea, Republic 
of 2.1%
Other
1.1%Africa
6.7%
Other
1.1%
Africa
7.1%China 9.1%Middle East 
5.2%
Asia
40.3%Asia
35.4%Russian
Federation
4.1%
United Kingdom
6.9%Africa  6.7%Asia
25.9%
China
22.3%Americas 
24.5%
Europe
23.2%United Kingdom
15.5%
Russian
Federation
8.4%Other Asia
10.2%
Russian 
Federation
7.7%Japan 2.8%
Russian
Federation
4.0%
Norway 2.4%Other Europe 
4.9%Other Asia
10.9% WT/TPR/S/442  • European Union  
- 26 - 
  Chart 1.6 Product composition of merchandise trade, by main HS sections, 2018 
and 2021  
 
Source:  WTO Secretariat calculations, based on Eurostat, International Trade in Goods . Viewed at: 
https://ec.europa.eu/eurostat/web/main/data/database . 
1.3.1.2   Trends in services trade  
1.35.  The services sector continued to be the main component of the EU economy accounting for 
the largest share of GVA in 2021 (Table  1.1). After a contraction in 2020, EU service s trade recovered 
in 2021, with exports increasing by 16% and imports by 4% from 2020 levels. The slower recovery 
on imports can be attributed to the travel sector, which had not yet recovered to pre -pandemic 
levels in 2021. On the export side, travel serv ices had also not recovered, but other sectors such as 
transport services and telecommunications, computer, and information services exceeded historic 
levels and overcompensated for the lower level of travel services. The stronger recovery of exports 
over imports led to a slight widening of the services trade balance to EUR  122 billion in 2021, similar 
to the level in 2018 (Table  1.2). The European  Union remained the world's top trader of services 
Chart 1.[EU27]  Product composition of merchandise trade by main HS sections, 2018 and 2021
2018 2021
Precision 
equipment 
5.1%
Total:   EUR 2,059.8 billion Total:  EUR 2,180.9 billion  
Base metals 
& articles 
thereof
6.6%
Prepared food, 
beverages & 
tobacco  
2.5%Precision equipment 
3.7%
Prepared 
food, 
beverages & 
tobacco  
2.3%Precision 
equipment 
3.8%Petroleum & 
mineral
products 5.2%
Base metals &
articles thereof
6.9% 
Total:   EUR 1,912.2 billionTotal:   EUR 2,124.1 billion Other
18.0%
Source:  WTO Secretariat calculations, based on Eurostat, International trade in goods. Viewed at: 
https://ec.europa.eu/eurostat/web/main/data/database.Other 
9.7%Plastics & rubber
4.1%
Other
9.6%Transport 
equipment
6.8%Prepared food, 
beverages & 
tobacco  
4.5%Other
17.1%
Chemicals 
11.2%Transport
equipment
7.9%Plastics & rubber
4.3%
Vegetable 
products
2.7%Machinery;
electrical equipment
23.7% Machinery; 
electrical equipment
24.8% 
Plastics & rubber 
3.8% Plastics & rubber 
3.4% Petroleum & 
mineral products
21.9%Petroleum & 
mineral products
20.2%Precious stones & 
metals 2.8%Vegetable 
products
2.7%Prepared food, 
beverages & 
tobacco 
4.9%Exports (f.o.b.)
Imports (c.i.f.)Petroleum & mineral
products 5.9%
Chemicals
16.0% Chemicals
18.6%
Chemicals 
10.3%Base metals &
articles thereof
5.7%Base metals & 
articles thereof
5.9%
Precious 
stones 
& metals 2.1%Transport equipment
13.8%Transport 
equipment
16.2%
Machinery; 
electrical 
equipment
25.3% Machinery; 
electrical 
equipment  
24.3% 
Textiles & 
textile articles
5.5%Textiles & 
textile articles
5.0%Precision equipment 
5.0%WT/TPR/S/442  • European Union  
- 27 - 
  in 2021, accounting for about one  quarter of world imports a nd exports (24% and 25%, 
respectively).46 
1.36.  The main services sectors traded by the European  Union continued to be other business 
services (technical, professional, R&D, and other services); telecommunications, computer and 
information services; and transpor t services for both imports and exports (Table  1.2). However, 
charges for the use of intellectual property were a significant category for services imports.47 
Transport services, in particular air transport, were negatively impacted by the COVID -19 pandemi c 
in 2020 and recovered better than most sectors in 2021, especially on exports, which reached record 
levels. This was attributed to the growth of sea transport, i.e.  shipping, and a recovery of air 
transport. Another strong sector that had significant tra de growth during the period was computer 
services, which expanded and grew during the pandemic.  
1.37.  Both imports and exports of services, while spread across many countries, remain highly 
concentrated in the top three trading partners (the United  States, the U nited Kingdom, and 
Switzerland), which accounted for over 50% of extra -EU trade in services (both imports and exports) 
(Table  1.3). The United  States and the United  Kingdom were the principal trading partners for 
service exports in 2020 and 2021. Comparing  adjusted historical figures, albeit when the 
United  Kingdom was part of the European  Union, the services interlinkages between the 
United  Kingdom and the European  Union remain strong post -Brexit.  
1.38.  The European  Union reports experimental statistics on serv ices trade by mode of supply.48 
The latest available data (2018) indicates that the majority of services imports and exports, 
almost  60%, are conducted through mode  3, commercial presence. This was particularly the case 
for distribution and transport servi ces. Mode  1, cross -border supply, accounted for the next largest 
share, about  30%, where other business services (R&D, accounting, legal, and engineering services) 
and transport predominated. Luxembourg was the member State that used mode  1 the most for 
exports, mainly for the provision of financial services.  
Table 1.2 Extra -EU trade in services, by sector  
 
Value (EUR billion)  % of total  
2018  2019  2020  2021  2018  2019  2020  2021  
Trade balance  135.0  50.7 9.4 122.3  n.a. n.a. n.a. n.a. 
Services exports  994.7  1,071.9  919.1  1,067.1  100.0  100.0  100.0  100.0  
Manufacturing services on 
physical inputs owned by 
others  27.7 27.1 25.7 28.9 2.8 2.5 2.8 2.7 
Maintenance and repair 
services n.i.e.  17.6 20.7 18.2 18.0 1.8 1.9 2.0 1.7 
Transport  176.2  185.2  155.5  211.1  17.7 17.3 16.9 19.8 
Travel  157.6  164.6  54.4 64.4 15.8 15.4 5.9 6.0 
Construction  14.8 14.4 10.2 9.7 1.5 1.3 1.1 0.9 
Insurance and pension 
services  20.5 21.6 22.6 26.7 2.1 2.0 2.5 2.5 
Financial services  73.7 78.9 80.3 88.3 7.4 7.4 8.7 8.3 
Charges for the use of 
intellectual property n.i.e.  82.1 88.9 80.6 98.4 8.3 8.3 8.8 9.2 
Telecommunications, 
computer, and information 
services  149.5  174.8  186.3  220.8  15.0 16.3 20.3 20.7 
 Telecommunications 
services  17.6 16.2 14.5 14.4 1.8 1.5 1.6 1.3 
 Computer services  122.9  149.0  163.1  196.2  12.4 13.9 17.7 18.4 
 Information services  9.0 9.5 8.7 10.2 0.9 0.9 0.9 1.0 
Other business services  246.9  264.7  254.1  265.5  24.8 24.7 27.6 24.9 
 Research and 
development services  44.4 48.8 55.5 46.8 4.5 4.5 6.0 4.4 
 Professional and 
management consulting 
services  77.3 82.1 83.8 92.9 7.8 7.7 9.1 8.7 
 
46 WTO (2022), World Trade Statistical Review 2022 . Viewed at: 
https://www.wto.org/english/res_e/publications_e/wtsr_2022_e.htm .  
47 This mainly concerns transactions between Ireland and the United  States for intellectual property 
linked to multinationals. Information provided by the authorities.  
48 Eurostat, Services Trade Statistics by Modes of Supply . Viewed at: 
https://ec.europa.eu/eurostat/statistics -
explained/index.php?title=Services_trade_statistics_by_modes_of_supply .  WT/TPR/S/442  • European Union  
- 28 - 
   
Value (EUR billion)  % of total  
2018  2019  2020  2021  2018  2019  2020  2021  
 Technical, trade -
related, and other 
business services  125.3  133.8  114.9  125.7  12.6 12.5 12.5 11.8 
Personal, cultural, and 
recreational services  14.3 14.6 13.1 15.4 1.4 1.4 1.4 1.4 
Government goods and 
services n.i.e.  7.4 7.7 7.4 6.6 0.7 0.7 0.8 0.6 
Services not allocated  6.5 8.8 10.6 13.3 0.7 0.8 1.2 1.2 
Services imports  859.6  1,021.1  909.7  944.9  100.0  100.0  100.0  100.0  
Manufacturing services on 
physical inputs owned by 
others  17.0 17.3 18.7 20.2 2.0 1.7 2.1 2.1 
Maintenance and repair 
services n.i.e.  14.9 17.0 14.0 13.9 1.7 1.7 1.5 1.5 
Transport  139.8  144.9  127.9  166.1  16.3 14.2 14.1 17.6 
Travel  109.5  114.9  42.3 45.3 12.7 11.3 4.7 4.8 
Construction  8.3 7.1 5.9 5.9 1.0 0.7 0.6 0.6 
Insurance and pension 
services  19.5 20.3 21.1 25.6 2.3 2.0 2.3 2.7 
Financial services  59.5 63.5 70.9 82.7 6.9 6.2 7.8 8.8 
Charges for the use of 
intellectual property n.i.e.  126.8  144.2  138.4  170.9  14.8 14.1 15.2 18.1 
Telecommunications, 
computer, and information 
services  68.9 80.3 83.0 87.9 8.0 7.9 9.1 9.3 
 Telecommunications 
services  15.7 15.0 13.9 13.8 1.8 1.5 1.5 1.5 
 Computer services  48.2 59.9 63.8 67.5 5.6 5.9 7.0 7.1 
 Information services  5.0 5.4 5.2 6.5 0.6 0.5 0.6 0.7 
Other business services  277.7  392.9  374.6  314.6  32.3 38.5 41.2 33.3 
 Research and 
development services  75.1 175.6  159.4  81.8 8.7 17.2 17.5 8.7 
 Professional and 
management consulting 
services  88.0 94.5 109.7  121.5  10.2 9.2 12.1 12.9 
 Technical, trade -
related, and other 
business services  114.6  122.9  105.6  111.2  13.3 12.0 11.6 11.8 
Personal, cultural, and 
recreational services  13.5 13.4 9.3 9.6 1.6 1.3 1.0 1.0 
Government goods and 
services, n.i.e.  4.4 4.5 3.7 3.1 0.5 0.4 0.4 0.3 
Services not allocated  -0.2 0.7 -0.1 -0.8 0.0 0.1 0.0 -0.1 
n.a. Not applicable.  
Source:  Eurostat, International Trade in Services  (since 2010) (BPM6). Viewed at: 
https://ec.europa.eu/eurostat/data/database . 
Table 1.3 Extra -EU trade in services, by partner  
 
EUR billion  % of total  
2018  2019  2020  2021  2018  2019  2020  2021  
Services exports  994.7  1,071.9  919.1  1,067.1  100.0  100.0  100.0  100.0  
 United  States  187.9  208.4  184.8  237.8  18.9 19.4 20.1 22.3 
 United  Kingdom  209.8  221.2  185.6  204.5  21.1 20.6 20.2 19.2 
 Switzerland  109.1  114.2  104.7  115.4  11.0 10.7 11.4 10.8 
 China  48.1 53.2 47.4 59.1 4.8 5.0 5.2 5.5 
 Japan  27.9 30.8 27.3 31.0 2.8 2.9 3.0 2.9 
 Singapore  31.6 30.6 21.6 25.1 3.2 2.9 2.4 2.4 
 Russian  Federation  26.7 28.5 23.6 25.1 2.7 2.7 2.6 2.4 
 Norway  24.8 26.4 20.3 22.6 2.5 2.5 2.2 2.1 
 Hong Kong,  China  14.7 16.4 17.0 21.5 1.5 1.5 1.8 2.0 
 India 14.9 15.5 13.8 19.2 1.5 1.4 1.5 1.8 
 Australia  17.8 18.2 16.2 18.9 1.8 1.7 1.8 1.8 
 Canada  19.4 21.7 16.0 17.4 1.9 2.0 1.7 1.6 
 United  Arab Emirates  12.7 13.7 11.8 15.1 1.3 1.3 1.3 1.4 
 Korea,  Republic  of 12.4 13.7 11.8 13.4 1.2 1.3 1.3 1.3 
 Brazil  14.4 15.3 12.5 13.0 1.4 1.4 1.4 1.2 
 Türkiye  12.3 12.8 11.0 12.8 1.2 1.2 1.2 1.2 
 Mexico  12.8 13.8 10.5 11.5 1.3 1.3 1.1 1.1 
 Israel  7.7 9.5 7.5 9.8 0.8 0.9 0.8 0.9 
 Saudi  Arabia,  Kingdom of  11.4 10.9 8.7 9.3 1.1 1.0 1.0 0.9 
 South  Africa  7.0 7.7 6.9 7.9 0.7 0.7 0.8 0.7 WT/TPR/S/442  • European Union  
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EUR billion  % of total  
2018  2019  2020  2021  2018  2019  2020  2021  
Services imports  859.6  1,021.1  909.7  944.9  100.0  100.0  100.0  100.0  
 United  States  202.0  229.3  263.4  325.7  23.5 22.5 29.0 34.5 
 United  Kingdom  166.7  179.3  166.6  175.0  19.4 17.6 18.3 18.5 
 Switzerland  67.1 65.1 59.1 64.7 7.8 6.4 6.5 6.8 
 China  31.0 33.4 31.9 38.6 3.6 3.3 3.5 4.1 
 Singapore  23.1 26.4 28.9 32.4 2.7 2.6 3.2 3.4 
 India 16.2 18.1 17.7 20.7 1.9 1.8 1.9 2.2 
 Cayman Islands  20.4 23.6 12.3 17.7 2.4 2.3 1.3 1.9 
 Japan  14.8 16.2 12.9 15.4 1.7 1.6 1.4 1.6 
 Canada  15.0 14.3 12.4 13.7 1.7 1.4 1.4 1.4 
 Norway  13.8 15.1 11.8 13.3 1.6 1.5 1.3 1.4 
 Hong Kong,  China  10.6 11.6 11.3 12.8 1.2 1.1 1.2 1.4 
 Türkiye  12.9 14.1 7.9 11.4 1.5 1.4 0.9 1.2 
 United  Arab Emirates  11.9 11.9 9.5 11.0 1.4 1.2 1.0 1.2 
 Russian  Federation  12.7 12.8 8.9 10.6 1.5 1.3 1.0 1.1 
 Korea,  Republic  of 7.0 7.6 6.5 8.0 0.8 0.7 0.7 0.8 
 Marshall Islands  4.3 4.7 4.5 7.8 0.5 0.5 0.5 0.8 
 Australia  7.4 8.0 6.2 7.0 0.9 0.8 0.7 0.7 
 Israel  5.8 6.5 5.9 6.9 0.7 0.6 0.6 0.7 
 Chinese  Taipei  3.8 4.1 4.4 6.4 0.4 0.4 0.5 0.7 
 Bermuda  37.7 95.3 53.8 6.2 4.4 9.3 5.9 0.7 
a According to 2021 data.  
Source:  Eurostat, International Trade in Services  (since 2010) (BPM6).  
1.3.2   Trends and patterns in FDI (extra -EU) 
1.39.  The European  Union remained a top provider and source of FDI during the period and ranked 
first in the world in terms of outward stock and second in terms  of inward stock, although FDI flows 
remained largely below pre -pandemic levels in 2020 and 2021, particularly inward flows remained 
at low levels.49 The United  Kingdom remains a significant investor in the EU market, although now 
it is considered an exter nal source/destination after Brexit. The European  Union's trends in FDI over 
the review period mirrored world flows, which saw a significant downturn in FDI due to the pandemic 
in 2020, and a subsequent rebound or recovery in  2021. However, the European  Union's recovery 
lagged world levels, in part due to slower improvement of mergers and acquisitions.50 Preliminary 
figures for the first half of 2022 indicate a continued strong recovery in the first quarter, but a 
slowdown in the second.51 The upturn was la rgely driven by acquisition of equity stakes in existing 
companies and modest increases in greenfield projects.52 
1.40.  There were significant fluctuations in FDI flows with negative flows in 2018 turning positive 
in 2019 and a substantial increase in inflows in  2020, mainly attributed to the United  States 
(Table  A1.6). In 2021, there was a reversal in inflows in particular, a significant negative overall 
inflow amount attributed mainly to the United  States. On the other hand, outflows were lower 
in 2020 compared  to 2019, and this continued in 2021 with slightly lower outflows. The recovery in 
outflows was largely attributed to the  Netherlands and Germany, with the Netherlands moving from 
negative (disinvestment) in 2020 to significant positive (investment) in  2021.53 Despite EU FDI  levels 
not yet recovering to pre -pandemic levels, the annual number of investment transactions, 
i.e. mergers and acquisitions, and greenfield investments, has continually risen in recent years.54 
1.41.  In terms of partners, the United  States remained the Europe an Union's top partner for FDI 
stocks, accounting for 32.6% of total foreign investment in the European  Union, followed by the 
United  Kingdom (18.7%) and Switzerland (8.1%) in 2021 (Table  A1.7). FDI inflows by partner were 
more unpredictable, as they have changed significantly over the last three -year period. In 2020, the 
United  States, the United  Kingdom, and United  Arab Emirates were the top partner countries for 
inward investment but in 2021 there was a significant reversal, i.e. divestment with respect to the 
 
49 UNCTAD (2022), World Investment R eport 2022 . Viewed at: https://unctad.org/webflyer/world -
investment -report -2022. 
50 UNCTAD (2022), World Investment Report 2022 .  
51 OECD, FDI in Figures, October  2022. Viewed at: https://www.oecd.org/investment/investment -
policy/FDI -in-Figures -October -2022.pdf .  
52 Staff Working Document SWD(2022)  219 final.  
53 OECD, FDI in Figures, October  2022. 
54 European Commission Report  COM(2022)  433 final.  WT/TPR/S/442  • European Union  
- 30 - 
  United  States and the United  Kingdom, and Canada and the Cayman Islands were the most 
significant sources of positive inward investment flows (Table  A1.6).55 Certain offshore financial 
centres, e.g.  Bermuda, Cayman  Islands, Singapore, and Barbados, have also been significant 
destinations or sources of investment flows in recent years. Investments from China and Japan, 
while having improved in 2020 -21, have not yet recovered to historic levels and in the case of China 
have further deteriorated in 2021 . 
1.42.  In terms of sectors, manufacturing and financial and insurance activities were the main 
sectors for FDI in 2019; they each accounted for 25% of the total direct investment in the EU; other 
sectors accounted for relatively low levels, i.e.  mostly below 5% (Chart  1.7). 
Chart 1.7 Extra -EU FDI positions, by economic activity, 2019  
(% of all economic activities)  
 
Source:  Eurostat, Balance of Payments  (bop_fdi6_pos). Viewed at: 
https://ec.europa.eu/eurostat/web/main/data/database . 
 
 
 
 
55 Eurostat, EU Direct Investment Positions, Flows and Income, Breakdown by Partner 
Countries  (BPM6). Viewed at: 
https://ec.europa.eu/eurostat/databrowser/view/BOP_FDI6_GEO__custom_4053337/default/table?lang=en .  
0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50%Mining and quarrying
Manufacturing
Wholesale and retail trade; repair of motor vehicles and
motorcycles
Transportation and storage
Information and communication
Financial and insurance activities
Real estate activities
Professional, scientific and technical activities
Administrative and support service activities
Private real estate activities
Other activitiesDirect investment in the EU-27
EU-27 direct investment abroadChart 1.[EU -27] Extra -EU foreign direct investment positions, by economic activity, EU, 2019
Source: Eurostat. Balance of payments (bop_fdi6_pos). Viewed at: https://ec.europa.eu/eurostat/web/main/data/database.(% of all economic activities)WT/TPR/S/442  • European Union  
- 31 - 
  
  2  TRADE AND INVESTMENT REGIMES  
2.1  General framework  
2.1.  The general legal and institutional framework governing the functions of the European  Union, 
including with respect to its trade and investment policies did not change during the review period. 
In 2020, the United  Kingdom withdrew from the European  Union (Section  2.3.2).  
2.2.  The European  Union has the exclusive competence of the customs union and comm on 
commercial policy (i.e.  trade policy vis-à-vis non-EU countries) pursuant to the Treaty on the 
Functioning of the European  Union (TFEU).1 The common commercial policy comprises four  main 
areas: trade in goods and services, the commercial aspects of int ellectual property, foreign direct 
investment (FDI), and public procurement.2 The European  Union also has the exclusive competence 
to conclude international agreements with third countries in the area of trade, as it does in any other 
areas of exclusive c ompetence.3 The process for the conclusion of a trade agreement has not 
changed since the last Review.  
2.3.  The European  Union's main institutions are the European Council, the Council of the 
European  Union (commonly known as the Council), the European Parliam ent, and the European 
Commission, with the latter being the European  Union's main executive body. The European 
Commission is the entity responsible for initiating the process of adopting any new legislation 
(i.e. regulation, directive, or decision), either  through an ordinary legislative procedure by both the 
European Parliament and the Council, or a special legislative procedure in specific cases and when 
provided for in EU Treaties. As a complement to these EU legal acts, the Commission can adopt 
"delegat ed acts" and "implementing acts". These acts have their own adoption procedures.4 All EU 
legislation is publicly available on the EU Law website EUR -lex.5 
2.4.  During the review period, the European  Union embarked on a new development strategy under 
the European Green Deal (2019) with the aim of becoming a carbon -neutral economy by 2050. This 
target became binding in July  2021 with the adoption and entry into force of the Regulation 
establishing the framework for achieving climate neutrality (European Cli mate Law).6 In addition to 
the European Green Deal, the European  Union adopted a Digital Strategy (2020 and 2021) to 
maximize the benefits of technological progress, and a new political agenda (2019) to become 
"stronger in the world" by reinforcing its gl obal influence and leadership.7 These strategies, in 
particular the European Green Deal, imply significant changes and coordination across sectors and 
policy areas, and have led to the review of various EU policies including, inter alia, its agriculture, 
energy, industrial, and trade policies.  
 
1 The TFEU  defines the role and competences of the European  Union according to three main categories: 
(i) exclusive competences; (ii)  shared competences with its member States; and (iii)  supporting competences. 
Exclusive competence means that the European  Union is t he only one that can enact and adopt legally binding 
acts in these areas. Member States can do so only if empowered by the European  Union, or to implement 
EU legal acts. For more details, see WTO document WT/TPR/S/395/Rev.1, 7  July 2020, Section  2.1. 
2 European Commission, Making Trade Policy . Viewed at: https://policy.trade.ec.europa.eu/eu -trade -
relationships -country -and-region/making -trade -policy_en . 
3 TFEU, Article  3. The European  Union may also conclude international agreements outside areas of its 
exclusive competence (Article  216). For more details on the process to conclude trade agreements, see 
WTO document WT/TPR/S/395/Rev.1, 7  July 2020, Section  2.1. 
4 For more details, see WTO document WT/TPR/S/395/Rev.1, 7  July 2020, Section  2.1. 
5 The EUR -lex website can be viewed at: https://eur -lex.europa.eu/homepage.html . EUR -lex also 
publishes, inter alia , the documents used to prepare EU legislation (e.g.  Commission proposals), as well as EU 
case law . 
6 Regulation (EU)  2021/1119.  
7 European Commission (2019), Political Guidelines f or the Next European Commission 2019 -2024 by 
Ursula von der Leyen , 16 July. WT/TPR/S/442  • European Union  
- 32 - 
  2.5.  During this period, the European  Union also took steps to strengthen governance across 
member States and achieve an effective functioning of the Union.8 In 2019, it introduced a new 
mechanism, the European Rule of L aw, with a view to preventing rule of law problems in member 
States and enhance its ability to address them.9 The mechanism provides for an annual review of 
the rule of law in member States based on a dialogue process between EU  institutions, national 
authorities, and other stakeholders, and for the preparation of an annual report (Rule of Law Report, 
last published in July  2022) that serves as the basis for discussion. To complement this mechanism, 
the European  Union adopted a regulation in December  2020 (entry into force on 1  January  2021) 
on the rule of law conditionality that allows the European  Union to withhold funds from member 
States that have breached the rule of law in a way that affects, or seriously risks affecting, the 
EU budget or its financia l interests.10  
2.2  Trade policy formulation and objectives  
2.6.  The European Commission is in charge of formulating, coordinating, and implementing EU trade 
policy. During the review period, the European  Union updated its trade strategy (and objectives) 
and took v arious steps to support its implementation. The new policy – An Open, Sustainable, and 
Assertive Trade Policy11 – was published in February  2021 following a public consultation process.12 
The policy sets the European  Union's priorities until 2030 and repla ces the Trade for All Strategy 
that had been in place since 2015.  
Chart 2.1 An Open, Sustainable, and Assertive Trade Policy 2021 -30 
 
Source:  European Commission Communication COM(2021)  66 final.  
2.7.  The European  Union is a firm and long -standing advocate for open and fair trade and considers 
it as instrumental for economic prosperity.13 The new policy remains guided by these principles but 
follows a different approach regarding interactions with third cou ntries. Under this policy , the 
European  Union  intends to enhance its capacity to act autonomously, if needed, to pursue its interest 
 
8 These actions were based on the European Commission Communications COM(2019)  163 and 
COM(2019)  343. 
9 European  Commission, Rule of Law Mechanism . Viewed at: https://ec.europa.eu/info/policies/justice -
and-fundamental -rights/upholding -rule-law/rule -law/rule -law-mechanism_en .  
10 Regulation (EU, Euratom) 2020/2092. In March  2021, Poland and Hungary challenged the regulation 
in the Court of Justice of the European  Union (CJEU), but both appeals were dismissed in February  2022.  
11 European Commission Communication COM(2021)  66 final.  
12 European Commission (2 020), Trade Policy Review 2020: Summary of Contributions Received , 
1 December  2020.  
13 European Commission (2019), Political Guidelines for the Next European Commission 2019 -2024 by 
Ursula von der Leyen , 16 July.  
1. Support the recovery 
and transformation of the 
economy in line with the 
European  Union's green 
and digital objectives.  
2. Shape global rules for a 
more sustainable and 
fairer globalization.  
3. Increase the 
European  Union 's capacity 
to pursue its interests and 
enforce its rights, 
autonomously if needed.  
 
Three  
objectives  
 
 
 
 
 
 
 
Six areas of 
action  
1. Reforming the WTO and restoring its dispute settlement mechanism.  
2. Supporting the transition towards a greener economy and promoting value chains that are 
sustainable, and in line with EU standards.  
3. Sup porting the digitalisation of the economy and trade in services.  
4. Strengthening the European  Union's ability to shape world's regulations and increasing its 
collaboration with its partners, notably the United States.  
5. Deepening its relations with African and neighbouring countries.  
6. Strengthening the implementation and enforcement of EU trade agreements at the 
multilateral, regional and bilateral levels.  WT/TPR/S/442  • European Union  
- 33 - 
  in strategic areas. This guiding principle is referred to as "open strategic autonomy" and is further 
defined as the Europe an Union's intention of "cooperating multilaterally wherever [it] can" and 
"acting autonomously wherever [it] must".14 Through this new approach, the European  Union is 
seeking to, inter alia, address growing concerns regarding the EU dependency on third pa rties in 
certain areas deemed of strategic importance and the impact on its ability to take decisions, and to 
enforce third  parties' obligations under international agreements.15 The policy identifies three 
objectives for the medium term and six areas of a ction to achieve them (Chart  2.1). 
2.8.  Regarding the multilateral trading system, the new strategy reflects the key role that the WTO 
continues to play in EU trade policy. The strategy describes the reform of the WTO as one of the 
European Union's key priority  actions (objective No.  2 and area of action No.  1), and includes a 
dedicated Annex in this regard. It also stresses the importance for the European Union of taking a 
leading role in the development of trade rules in the WTO on, for example, fossil fuel su bsidies and 
digital trade, to advance its green and digital transitions.  
2.9.  To support the implementation of its new trade strategy, in 2021 the Commission submitted 
proposals for regulations to the Parliament and the Council (Chart  2.2), including measures t o 
counteract foreign practices considered as unfair or coercive.  
Chart 2.2 Main policy developments in trade and selected areas, 2019 -22 
 
 
Source:  WTO Secretariat based on EU communications and legislation.  
 
14 European Commission (2021), Fact Sheet: A n Open, Sustainable and Assertive Trade Policy – Open 
Strategic Autonomy . Viewed at : https://trade.ec.europa.eu/doclib/docs/2021/february/tradoc_159434.pdf .  
15 European Commission Communication COM(2021)  66 final.  
2020 2021 2022EU Green Deal 
(Dec2019)
A New Industrial
Strategy for Europe An Open, Sustainable 
and Assertive Trade 
Policy (Feb2021)
Shaping Europe's 
digital future
ANew CAPE
C B D
Feb. May Jul. Sept. Dec.EU external energy 
engagement in a 
changing world 2030 Digital Compass: 
the European way for the 
Digital Decade
Feb.Mar. Mar. MayUpdating the 2020 
New Industrial 
StrategyREPowerEU Plan
F
Dec.
Regulation (EU) 2022/256 0on foreign subsidies distorting the 
internal marketB COM(2021) 564 on establishing a CBAM
C COM(2021) 579 on the reform of the GSP scheme
D COM(2021) 775 on the introduction of an anti -coercion instrument ARegulation (EU) 2021/167 on the exercice of the Union’s rights
for the application and enforcement of international trade rules
EAdoption of New CAP for 2023 -27 through Regulations (EU) 
2021/2115, 2021/2116, and 2021/2117  Commission’s proposals for regulations EU Regulations adopted
FWT/TPR/S/442  • European Union  
- 34 - 
  2.10.  The proposed measures include:  
• an anti -coercion instrument to counteract economic coercion by third  countries through 
measures affecting trade or investment (area of action No.  6)16; 
• a mechanism to address foreign subsidies (i.e.  subsidies by a third country) that distort 
the internal market, in particular through government procurement and subsidized 
investments (area of action No.  6)17; 
• a Carbon Border Adjustment Mechanism (CBAM) for imports of certain goods 
(i.e. aluminium, cement, iron and steel, fertilizers, electricity, and hydrogen) (area of 
action No.  2)18; 
• the review of the generalized scheme of tariff preferences (area of action No.  2, 
Section  2.3.2.2)19; and  
• the ability to apply EU countermeasures to ensure the implementation and enfo rcement 
of international trade agreements (area of action No.  6). 
2.11.  As of January  2023, only the last proposal (the revision of the Enforcement Regulation) and 
the proposal on foreign subsidies had been enacted. The other proposed regulations were still unde r 
discussion with the Parliament and the Council.20 The regulation on foreign subsidies entered into 
force in January  2023 and will start applying on 12  July 2023 (Sections  2.4.1, 3.3.4, and  3.3.6).21 
The revision of the Enforcement Regulation entered into  force on 13  February  2021 and seeks to 
address the possible inability to enforce EU rights due to the absence of a final ruling resulting from 
the blockage of dispute settlement procedures at the multilateral or bilateral level. The regulation 
amends Regu lation (EU)  654/2014 to enable the European  Union to apply countermeasures 
(e.g. suspend tariff concessions) in these situations, and in particular when a third country breaches 
its obligations under a WTO  Agreement and the dispute settlement procedure is blocked because of 
the current inoperability of the Appellate  Body.22 
2.12.  In addition to the review of its trade policy, the Commission has updated its strategy in various 
areas to support the EU environmental and digital objectives, and adapt them to the most  recent 
geopolitical developments, notably the war in Ukraine. Some of these strategies have implications 
for trade, such as the new energy (Section  4.4) and industrial strategies. Under the updated 
industrial strategy of 2021, the European  Union seeks, inter alia, to reduce dependencies from 
third countries for its value chains in strategic areas by diversifying suppliers, substituting inputs, 
and pursuing international alliances.23 These dependencies have been identified in energy -intensive 
(e.g. raw mate rials and chemicals), health (e.g.  active pharmaceutical ingredients), and advanced 
technologies (e.g.  semiconductors, lithium batteries, and hydrogen) sectors. During the review 
period, the European  Union also updated its common agricultural policy (Secti on 4.1, Chart  2.2). 
 
16 European Commission Proposal  COM(2021)  775 final.  
17 European Commission Proposal  COM(2021)  223 final. This Regulation was adopted on 
14 December  2022.  
18 European Commission Proposal  COM(2021)  564 final. 
19 European Commission Proposal  COM(2021)  579 final. 
20 European Commission Proposal  COM(2019)  623 final. This Regulation was adopted on 
10 February  2021 and entered into force on 13  February  2021 (Regulation (EU)  2021/167).  
21 Regulation (EU)  2022/2560 . 
22 European Parliament (2022), Exercise of the Union's Rights for the Application and Enforcement of 
International Trade Rules , Legislative Train, 20  October.  
23 European Commission Communication  COM(2021)  350 final.  WT/TPR/S/442  • European Union  
- 35 - 
  2.3  Trade agreements and arrangements  
2.3.1   WTO  
2.13.  The WTO and multilateral cooperation are critical components of EU trade policy. The 
European  Union is a founding Member of the WTO24, and as the world's top trader, it plays a key 
role in the WTO's  work and functioning. During the review period, it continued to actively contribute 
to the WTO's core functions and the regular activities of committees, including as one of the main 
donors for capacity -building and technical assistance through various fu nds, notably the Aid -for-
Trade initiative.25 It promoted discussions and co -sponsored proposals/initiatives on, inter alia, 
domestic regulation of trade in services, e -commerce, investment facilitation, and transparency 
requirements in agriculture. More re cently, it also sought to advance discussions on trade and 
environment and co -sponsored initiatives on a fossil fuel subsidy reform, plastics pollution and 
environmentally sustainable plastics trade, and trade and environmental sustainability. It 
participa tes in the Informal Working Group on trade and gender and on MSMEs, and has 
co-sponsored ministerial declarations in both areas.26 
2.14.  In the area of negotiations, the European  Union was actively engaged in MC12. Its main focus 
areas were trade and health, WTO  reform, e -commerce, fisheries subsidies, food security, and 
trade-distorting policies in agriculture.27 The European  Union is also taking the necessary steps to 
ratify the Agreement on Fisheries Subsidies.28 
2.15.  The European  Union is closely involved in the d iscussions regarding the reform of the WTO 
and restoration of the functions of the Appellate  Body, which is one of its priorities. It has submitted 
joint proposals for improving WTO notification and transparency rules, and on Appellate  Body 
appointments an d functioning. In 2020, the European  Union also led, together with  18 other WTO 
Members, the initiative to establish the Multi -Party Interim Appeal Arbitration Arrangement (MPIA) 
to ensure the resolution of disputes pending the restoration of the Appellate  Body. Under the MPIA, 
panel reports in disputes where both parties are MPIA participants can be reviewed on appeal by 
independent arbitrators pursuant to Article  25 of the WTO's Dispute Settlement Understanding 
(DSU). As of December  2022, the MPIA covered  25 WTO Members (counting the European Union as 
one) and had dealt with one appeal.29 
2.16.  The European  Union is one of the most frequent users of the WTO dispute settlement 
mechanism.30 During the review period (October  2019-December  2022), it raised eight com plaints, 
and was a respondent in six  cases (Table  A2.1). In March  2021 and with a view to resolving the 
Airbus -Boeing dispute, the European  Union and United  States agreed to suspend for four  months all 
countermeasures on EU and US exports that were allowed  under the WTO Appellate  Body rulings 
of 2018 and 2019.31 In June  2021, both parties reached an Understanding on a Cooperative 
Framework for Large Civil Aircraft, under which they agreed to, inter alia, establish a working group 
to pursue discussions on this issue and expressed their intention to extend the susp ension of all 
countermeasures to five years.32 More recently, in January  2022, the European  Union and the 
United  States agreed to resort to arbitration pursuant to Article  25 of the DSU in the 2018 disputes 
regarding certain measures on steel and aluminium (DS548 against the United  States), and 
additi onal duties on certain products (DS559 against the European  Union). The pending disputes 
 
24 Each EU member State is also a WTO me mber.  
25 See e.g.  the latest Aid -for-Trade report: OECD/WTO (2022), Aid for Trade at a Glance 2022: 
Empowering Connected, Sustainable Trade . Other funds supported by EU member States include the 
WTO Global Trust Fund and the Trade Facilitation Agreement Fac ility.  
26 WTO documents WT/MIN(21)/4, 10  November  2021; and WT/MIN(21)/1, 27  October  2021.  
27 WTO document WT/MIN(22)/ST/22, 12  June 2022; and European Commission (2022), Annual Activity 
Report 2021 -Directorate -General for Trade , 1 April.  
28 European Commission Proposal  COM(2022)  582 final.  
29 In October  2022, Colombia initiated an MPIA arbitration under Article  25 of the DSU  with regard to 
the interpretation of certain issues under the Panel  Report in DS591, Colombia – Anti-Dumping Duties on 
Frozen Fries from Belgium, Germany and the Netherlands  (WTO  document WT/DS591/7, 10  October  2022). 
The arbitration award in these procee dings was circulated on 21  December  2022.  
30 As of December  2022, the European  Union has been involved in 201 dispute settlement cases, 110 as 
complainant and 91 as defendant. WTO,  Disputes by Member . Viewed at: 
https://www.wto.org/english/tratop_e/dispu_e/dispu_by_country_e.htm .  
31 European Commission (2021), Fact Sheet – EU-US Disputes on Large Civil Aircraft , and 
Understanding on a Cooperative Framework for Large Civil Air craft.  
32 In this regard, the Commission indicated that the suspension of countermeasures remained in force.  WT/TPR/S/442  • European Union  
- 36 - 
  before the panel were thereby terminated.33 The two  parties also requested to suspend the 
arbitrations indefinitely until further notice, allowing for a possible resum ption in the future. In that 
case, the arbitrations would resume at the point at which the panel proceedings were terminated. 
These developments followed the parties' announcement in October  2021 of the launch of 
discussions on a Global Arrangement on Sust ainable Steel and Aluminium to address the issue of 
overcapacity in these industries and facilitate the reduction of carbon emissions in their production 
processes.34 
2.17.  During the review period, the European  Union continued to promote and actively contribute  
to greater transparency in the WTO as reflected in its high number of notifications – nearly 1,000.35 
Approximately 40% of notifications relate to the SPS  Agreement (368) and one third relate to the 
TBT Agreement (301). Other notifications fell under the Agreement on Agriculture (41), the 
Anti-Dumping Agreement (38), and the Agreement on Subsidies and Countervailing Measures 
(41 related to subsidies and 26 related to countervailing measures). The most recent notifications 
submitted during this period are l isted in Table  A2.2.  
2.18.  The European  Union has accepted the Protocol amending the TRIPS  Agreement and the 
Agreement on Trade Facilitation. At the plurilateral level, it is party to the Agreement on Government 
Procurement, the Information Technology Agreement and its expansion, the Agreement  on Trade in 
Civil Aircraft, and the Agreement on Trade in Pharmaceutical Products of  1994.  
2.3.2   Regional and preferential agreements  
2.3.2.1   Reciprocal preferences  
2.19.  Free trade agreements, or regional trade agreements (RTAs) as they are r eferred to in 
the WTO, are a key component of the EU trade policy.36 With 44 RTAs currently in place, the 
European  Union has the largest network of RTAs in the world (Chart  2.3). This network covers 
76 economies, including some of the main EU trading partn ers (e.g.  Switzerland and the 
United  Kingdom)37, and accounted for about 44% of the European  Union's total merchandise trade 
in 2021.38 
2.20.  Under its RTAs, the European  Union has eliminated duties on 78.4% to 99.9% of its tariff 
lines, compared to 27% of tarif f lines under its MFN regime (Table  3.5). Yet, most of duty -free 
imports took place under the MFN regime. In 2021, about half (55%) of the E uropean  Union's total  
imports were duty -free on an MFN basis, and 15% of imports were duty -free by virtue of RTAs.39 In 
addition to trade in goods, EU RTAs include almost systematically (since 2010) provisions on the 
liberalization of trade in services and investment, as well as competition, e -commerce, government 
procurement, intellectual property, and sustainable deve lopment (i.e.  environment and labour).40 
 
33 WTO documents WT/DS548/19 -22 and WT/DS559/7 -10, 21  January  2022.  
34 European Commission (2021), Joint EU -US Statement on a Global Arrangement on S ustainable Steel 
and Aluminium Brussels , 31 October.  
35 During the review period, the European  Union submitted 927 notifications, including addenda and 
corrigenda for TBT - and SPS -related notifications.  
36 RTAs are defined at the WTO as trade agreements prov iding for reciprocal preferences among its 
parties.  
37 In 2020, the European  Union's top five trading partners for trade in goods and services were the 
United  States (18.4% of the total goods and services trade), the United  Kingdom (14.6%), China (12.3%), 
Switzerland (7.6%), and the Russian  Federation (3.7%). European Commission, Top Trading Partners . 
Viewed  at: https://trade.ec.europa.eu/doclib/docs/2006/september/tradoc _122530.pdf . 
38 WTO Secretariat calculations. Trade in goods with RTA partners include trade with Ceuta and Melilla, 
and exclude that with Armenia (whose RTA covers only trade in services).  
39 Calculations by the WTO Secretariat.  
40 All RTAs concluded since 2010 contain provisions in these areas, except for those involving African 
countries. About half of all RTAs concluded by the European  Union cover trade in services. WTO RTA database.  
Viewed at: https://rtais.wto.org/UI/publicPreDefRepByCountry.aspx . WT/TPR/S/442  • European Union  
- 37 - 
  Chart 2.3 European  Union's RTA network, as of December  2022  
 
Note:  Reference to Kosovo should be understood to be in the context of the United  Nations Security 
Council Resolution 1244 (1999).  
 ESAS = Eastern and Southern African States; SADC = Southern African Development Community.  
 For Europe and the Commonwealth of Independent States (CIS) region, RTAs with Norway, 
Liechtenstein, and Iceland are count ed separately.  
 The application of RTA with the Syrian  Arab Republic has been partially suspended since 2011 for 
trade in crude oil, petroleum products, gold, precious metals, and diamonds.  
Source:  WTO Secretariat based on the WTO RTA database. Viewed at: http://rtais.wto.org . 
2.21.  During the review period, the main development in this area was the signature and entry into 
force in 2021 of the Trade and Cooperation Agreement between the European  Union and the 
United  Kingdom. Other developments included the entry into force of RTAs that were concluded with 
Singapore and Viet  Nam, and the accession in May  2020 of the Solomon  Islands to the EU -Pacific 
States RTA. These four agreements (including the accession) wer e notified to the WTO in  2020 
and 2021. The European  Union further notified the accession of Comoros to the EU -Eastern and 
Southern  Africa States RTA, and the accession of Samoa to the EU -Pacific States RTA, whose 
provisional application had already begun.41 As of December  2022, the European  Union had notified 
virtually all of its trade agreements.42 
2.22.  The RTAs with Singapore (signed in October  2018) and Viet  Nam (signed in June  2019) 
entered into force on 21  November  2019 and 1 August  2020, respectively . Both agreements cover 
trade in goods and services. In these RTAs, the European  Union committed to liberalize about 99% 
of its tariff lines over a transition period ending in 2025 under the EU -Singapore RTA and 2027 under 
the EU -Viet Nam RTA. Both RTAs include  provisions on TBT, SPS, trade remedies, and intellectual 
property, as well as on issues not covered or with limited coverage under WTO  Agreements such as 
electronic commerce, competition, investment liberalization, government procurement, sustainable 
development (i.e.  environment and labour), and non -tariff barriers to trade and investment in the 
 
41 The EU -Samoa and EU -Comoros RTAs have been provisionally applied since December  2018 and 
February  2019, respectively.  
42 All RTAs in Chart  2.3 have been notified to the WTO, except for the EU -Kosovo RTA. Reference 
to Kosovo should be understood to be in th e context of the United Nations Security Council Resolution 1244 
(1999). WTO RTA database.  Viewed at: https://rtais.wto.org/UI/publicPreDefRepByCountry.aspx . 
Canada, Mexico
CARIFORUM (i.e. Antigua and Barbuda, Bahamas, Barbados, 
Belize ,Dominica, Dominican Republic, Grenada, Jamaica, 
Saint Kitts and Nevis, Saint Lucia, Saint Vincent and the 
Grenadines, Guyana, Suriname , Trinidad and Tobago)
Central America (i.e. Costa Rica, 
El Salvador, Guatemala, Honduras, 
Nicaragua, Panama )
Andean Countries (i.e. Colombia, Ecuador, Peru), 
ChileThe Americas 
(6 RTAs, 26 economies)
Africa & the Middle East 
(14 RTAs, 23 economies)The Europe & the CIS region 
(19 RTAs, 19 economies)
Asia Pacific 
(5 RTAs, 8 economies)Andorra, Faroe Islands, Iceland, 
Liechtenstein, Norway, San Marino, 
Switzerland, United Kingdom
Albania, Bosnia and Herzegovina, 
UNMIK/Kosovo*, North Macedonia, 
Montenegro, Serbia
Armenia, Georgia, Republic of Moldova, 
Türkiye , Ukraine
Japan, Republic of Korea 
Singapore, Viet Nam
Pacific States 
(i.e. Fiji, Papua New Guinea, Samoa, 
Solomon Islands)Algeria, Egypt, Tunisia, Morocco
Cameroon, Côte d'Ivoire, Ghana,
ESAS (i.e. Comoros, Madagascar, 
Mauritius, Seychelles, Zimbabwe),
SADC (i.e. Botswana, Eswatini, Lesotho, 
Mozambique, Namibia, South Africa) 
Israel, Jordan , Lebanon, Palestine, 
Syrian Arab RepublicWT/TPR/S/442  • European Union  
- 38 - 
  renewable energy sector. Both RTAs were considered in 2021 in the WTO Committee on RTAs and 
their factual presentations are publicly available in the WTO website.43 In both cases, the parties 
signed in parallel an agreement on investment protection but had not ratified it yet.  
2.3.2.1.1   New RTAs  
European  Union–United  Kingdom (2021)  
2.23.  The Trade and Cooperation Agreement with the United  Kingdom (EU -UK RTA) is the 
European  Union' s most recent RTA in force.44 The United  Kingdom ceased to be an EU member in 
early 2020, when the Withdrawal Agreement entered into force. The withdrawal was followed by a 
transition period ending on 31  December  2020, during which the parties negotiated t he new RTA to 
ensure the continuity of their trade relationship.45 The EU -UK RTA was signed on 30  December  2020 
and entered into force on 1  May 2021 but has been provisionally applied since the end of the 
transition period.  
2.24.  The EU -UK RTA covers trade in go ods and services but also includes, inter alia, provisions on 
competition, subsidies, labour, environment, state -owned enterprises, digital trade, energy and raw 
materials, investment liberalization, intellectual property, public procurement, SMEs, and 
sustainable development. In trade in goods, the Agreement provides for duty -free and quota -free 
access to all products originating in the European  Union and the United  Kingdom since its date of 
application. The Agreement provides for bilateral cumulation to m eet origin rules but not for 
cumulation with third countries. Moreover, imports from the United  Kingdom to the European  Union 
are subject to all customs formalities, including controls for SPS purposes. The Agreement reaffirms 
WTO commitments regarding the  use of trade remedies and has provisions on SPS and TBT, 
including specific TBT provisions on cars, chemicals, medicines, wine, and organic food, seeking to 
further facilitate trade for these products.  
2.25.  In trade in services, the European  Union made broader  commitments than in its GATS 
schedule, while maintaining sector -specific reservations, as well as exclusions for public and 
audiovisual services, and certain transport services. Moreover, UK services providers now have to 
comply with EU or individual memb er States' regulations. Regarding mode  4, the European  Union 
made some commitments regarding the movement of professionals for certain business purposes 
(e.g. intra-corporate transferees, contractual services suppliers, short -term business visitors). No 
commitments were made regarding the recognition of professional qualifications. However, the 
EU-UK RTA includes a framework with guidelines for the negotiation of future recognition 
arrangements (on a case -by-case basis and for specific professions). In digi tal trade, the Agreement 
prohibits the application of data localization requirements or mandatory disclosure of source code.46 
2.26.  The Agreement does not cover trade in goods between the European  Union and 
Northern  Ireland, which is regulated by the Protocol o n Ireland/Northern Ireland under the 
Withdrawal Agreement. Northern Ireland is part of the UK customs territory but, under the Protocol, 
a limited set of EU rules for goods applies to and in the United  Kingdom in respect of Northern Ireland 
to avoid a hard  border on the island of Ireland and safeguard the 1998 Good Friday 
(Belfast)  Agreement.47 
 
43 WTO documents WT/REG406/1 , 27 July 2021; and WT/REG402/1, 11  January  2021.  
44 Trade and Cooperation Agreement between the European  Union and the European Atomic Energy 
Community, of the one part, and the United  Kingdom of Great Britain and Northern Ireland, of the other part, 
30 April 2021. Viewed at: CELEX:22021A0430 .  
45 During the transition period, EU legislation continued to apply to and in the United  Kingdom.  
46 European Commiss ion (2020), EU-UK Trade and Cooperation Agreement: A New Relationship, with 
Big Changes .  
47 European Council Agreement on the withdrawal of the United  Kingdom of Great Britain and 
Northern  Ireland from the European  Union and the European Atomic Energy Comm unity, Protocol on 
Ireland/Northern Ireland. Further information on the Protocol on Ireland/Northern Ireland can be found at: 
https://commission.europa.eu/strategy -and-policy/relations -non-eu-countries/relations -united -kingdom/eu -uk-
withdrawal -agreement/protocol -ireland -and-northern -ireland_en .  WT/TPR/S/442  • European Union  
- 39 - 
  European  Union–Pacific States, accession of the Solomon  Islands (2020)  
2.27.  The Solomon  Islands acceded on 7  May 2020 to the Interim Partnership Agreement between 
the European  Union and the Pacific States (Fiji, Papua  New Guinea, and Samoa), which has applied 
on a provisional basis since 2009 for Papua  New Guinea, 2014 for Fiji, and 2018 for Samoa.48 For 
the Solomon  Islands, the Agreement started to be provisionally app lied 10 days after its accession. 
This RTA covers only trade in goods and provides for the elimination of duties on a reciprocal basis 
between the European  Union and the Solomon  Islands. Under the Agreement, the Solomon  Islands 
agreed to liberalize 80.5% o f its tariff lines over a transition period of 18  years ending in 203849, 
while the European  Union committed to provide  duty-free and quota -free market access for all 
goods, except arms, from the Solomon  Islands. Prior to the date of application of the Agr eement, 
the Solomon  Islands received such treatment under the EU Generalised System of Preferences (GSP) 
(see below). The RTA provides for bilateral cumulation, and for cumulation under certain conditions 
with African, Caribbean and Pacific (ACP) States50, and the Overseas Countries and Territories 
(OCTs); and it includes further flexibilities in the rules of origin for processed fishery products from 
the Pacific States. It also includes provisions on trade remedies, TBT, SPS, and dispute settlement.  
2.28.  In 202 0, the European  Union added the Solomon  Islands to the list of beneficiary countries 
under the Council's Market Access Regulation while the EU -Pacific States RTA entered formally into 
force (Section  2.3.2. 1). Under this regulation, the European  Union grant s duty -free and quota -free 
market access for all goods, except arms, to countries that had concluded the negotiations for an 
Economic Partnership Agreement (EPA) but had yet to sign or ratify the Agreement.51 
2.29.  The Solomon  Islands is a beneficiary of the EU GSP scheme (Everything but Arms (EBA) 
arrangement) but will graduate from LDC status in December  2024 and will therefore cease to be 
eligible after a transition period of three  years. In the meantime, the EBA will continue to apply in 
parallel to the RTA.52 
2.3.2.1.2   Updates of existing RTAs and ongoing negotiations  
2.30.  During the review period, the European  Union sought to update and deepen some of its 
existing agreements, notably those with Chile, Mexico, and Switzerland.  
2.31.  In December  2022, the European  Union concluded the negotiations with Chile to modernize 
their existing RTA . The new RTA includes, inter alia, a chapter on digital trade, trade and sustainable 
development, and energy and raw materials (the latter improving market access conditio ns to 
lithium for the European  Union).53 In April  2020, the European  Union and Mexico concluded technical 
negotiations for public procurement, which were the only ones pending following the conclusion 
in 2018 of the agreement in principle on the trade part  of the modernized EU -Mexico Global 
Agreement. In both cases, the final texts of the agreements are being reviewed. Once in force, these 
agreements are expected to replace those currently in place since 2003 for Chile and  2000 for 
Mexico.54 
2.32.  In January  2021, the European  Union also resumed discussions with Switzerland, one of its 
main trading partners, on the prospects of an Institutional Framework Agreement (IFA). The IFA 
intended to update and streamline the functioning of various legal instruments (i.e.  agreements on 
the free movement of persons, air and land transport, agricultural goods, and conformity 
 
48 WTO document WT/REG408/N/1, WT/REG409/N/1, 30  October  2020.  
49 Council Decision (EU) 2020/409; and information provided by the Commission.  
50 Cumulation may be also extended upon request to neighbouring developing countries (other than an 
ACP State) of a Pacific State.  
51 Regulation (EU ) 2016/1076.  
52 In the absence of the RTA, the Solomon  Islands would have ceased to be eligible for the EBA 
arrangement in 2024 and removed from the list of beneficiaries three years later. European Commission Joint 
Report  JOIN(2020)  3 final.  
53 The text of this agreement can be viewed at: https://policy.trade.ec.europa.eu/eu -trade -
relationships -country -and-region/countries -and-regions/chile/eu -chile-agreement/text -agreement_en . 
54 The text of the agreement in principle can be viewed at: https://policy.trade.ec.europa.eu/eu -trade -
relationships -country -and-region/countries -and-regions/mexico/eu -mexico -agreement/agreement -
principle_en .  WT/TPR/S/442  • European Union  
- 40 - 
  assessment) governing their trade relationship55 by providing, inter alia, for the establishment of a 
dispute settlement mechanism, the adoption of rules on state aid, and the alignment with current 
and future EU rules. The negotiations of the IFA were concluded in 2018 but the Agreement was not 
signed pending clarification of some issues raised by Switzerland. In May  2021, Switzerland decided 
to terminate the negotiations. As a result, the chapter on medical devices under the EU -Switzerland 
mutual recognition agreement (MRA) on conformity assessments was not updated, which led to the 
inoperability of the MRA provisions related to these goods.56 Since March  2022, the parties have 
been engaged in exploratory talks seeking to agree on a common approach to various institutional 
issues.57 
2.33.  During the review period, the European  Union also made some specific changes to its RTA 
with the Republic  of Moldova and advan ced discussions on the implementation of the RTA signed 
with Kenya. In January  2020, the European  Union and the Republic  of Moldova agreed to increase 
on a reciprocal basis the volume of some products subject to annual duty -free tariff rate quotas 
(TRQs) u nder the EU -Republic  of Moldova RTA. The European  Union increased the TRQs for grapes 
and plums from the Republic  of Moldova, and introduced a new TRQ for cherries, while the 
Republic  of Moldova agreed to gradually increase the volume of TRQs for EU export s of pork, poultry, 
dairy, and sugar.58 The European  Union also agreed to increase the volume for wheat, barley, maize, 
and cereal processed that would trigger a safeguard mechanism specific to processed and 
non-processed agricultural products. In 2022, th e European  Union further increased on a unilateral 
basis the quantities of the products from the Republic  of Moldova subject to TRQs under their RTA.  
2.34.  In February  2022, the European  Union and Kenya, a member of the East African Community 
(EAC), agreed to mo ve forward with the bilateral implementation of the RTA – or interim EPA – after 
a decision taken in February  2021 by the EAC59 allowed it to do so. Under this decision, EAC countries 
participating in the RTA negotiations (i.e.  Burundi, Kenya, Rwanda, Tanz ania, and Uganda) can 
engage individually with the European  Union with the view of implementing the EU -EAC RTA. The 
RTA between the European  Union and the EAC countries was concluded in 2014 but has not entered 
into force as the ratification threshold had not been reached yet. Currently, Kenya is the only EAC 
participating country that had signed and ratified it. Pending the entry into force of an EU -EAC RTA, 
the trade relationship between the European  Union and EAC countries is regulated by the EU GSP, 
particularly with regard to LDCs, and the Market Access Regulation for Kenya (Section  2.3.2.2).  
2.35.  The European  Union is also engaged in negotiations to deepen its agreement with the Eastern 
and Southern African States (Comoros, Madagascar, Mauritius, Seychelles , and Zimbabwe) and since 
October  2022 it has been negotiating with Japan on the addition of rules on cross -border data flows 
to their existing RTA. Moreover, the European  Union is seeking to modernize its agreements with 
Tunisia and Morocco.60 In 2020, An gola requested to join the EU -SADC RTA. The same year, 
Timor -Leste requested to accede to the EU -Pacific Islands RTA, and in 2022 Tuvalu and Niue did so 
too, thus joining Tonga in this procedure.  
2.36.  In addition, in June  2022, the European  Union concluded negotiations for an RTA with 
New Zealand61 and resumed those for an agreement with India. It also had ongoing negotiations for 
RTAs with Australia and Indonesia. Regarding the EU -Mercosur RTA, the Commission indicated that 
 
55 The trade relationship between the European  Union and Switzerland is mainly governed by the 
EU-Switzerland FTA of 1972 and seven sectoral agreements of 1999 (known as Bilateral Agreements  I), 
covering (i)  free movement of persons; (ii)  technical barriers to trade (i.e.  MRA); (iii)  government 
procurement; (iv)  trade in agricultural goods; (v)  scientific and technological cooperation; (vi)  air transport; 
and (vii)  land transport.  
56 European Commission (2021), "Notice to Stakeholders: Status of the EU -Switzerland Mutual 
Recognition Agreement (MRA) for Medical Devices ", 26 May. 
57 Information provided by the Commission.  
58 Decision No.  1/2020 of the EU -Republic  of Moldova Association Co mmittee in Trade Configuration, 
of 23 January  2020 concerning the update of Annex  XV (Elimination of customs duties) to the Association 
Agreement between the European  Union and the European Atomic Energy Community and their Member 
States, of the one part, and the Republic  of Moldova, of the other part.  
59 East African Community (2021), Communiqué of the 21st Ordinary Summit of the East African 
Community Heads of State , 27 February. Viewed at: https://www.eac.int/communique/1942 -
communiqu%C3%A9 -of-the-21st-ordinary -summit -of-the-east-african -community -heads -of-state.  
60 European Commission Communication COM(2021)  66 final . 
61 The text of the EU -New Zealand RTA can be viewed at: https://policy.trade.ec.europa .eu/eu -trade -
relationships -country -and-region/countries -and-regions/new -zealand/eu -new-zealand -agreement/text -
agreement_en .  WT/TPR/S/442  • European Union  
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  some technical work to finalize the agreement, including the text's legal revision, has been 
undertaken since June  2019, when the agreement was concluded at the political level.  
2.3.2.1.3   RTA enforcement  
2.37.  During the review period, the European  Union took various steps to strengthen the 
enforcement of commitments taken by its partners under its RTAs. At the institutional level, it 
created in July  2020 the position of Chief Trade Enforcement Officer (CTEO) within the Commission 
to monitor and enforce the implementation of RTAs and any other t rade agreements or arrangements 
(including at the multilateral level). In November  2020, it also established a new complaints 
mechanism, the Single -Entry Point, under which EU -based stakeholders can submit complaints 
regarding the non -compliance with commi tments on market access and sustainability (if any) taken 
under the WTO, RTAs, or the GSP scheme. This mechanism does not deal with complaints seeking 
the imposition of trade remedy measures, which are dealt with separately. In the area of monitoring 
and transparency, the Commission revamped in 2021 its annual report on the implementation of EU 
Trade Agreements to include enforcement actions, as well as information on trade and investment 
barriers faced by EU exporters. Prior to 2021, this information was p resented in the annual Trade 
and Investment Barriers Report, now superseded.  
2.38.  During this period, the Commission also reviewed and updated its 2018 action plan62 on the 
implementation and enforcement of the Chapters on Trade and Sustainable Development (TSD ) in 
EU RTAs.63 The new strategy was published in June  2022 and seeks to strengthen the role of 
TSD chapters and, more broadly, of EU RTAs in promoting "green and just economic growth".64 To 
this end, the strategy identifies the following policy priorities : (i) be more proactive in the 
cooperation with partners; (ii)  pursue a country -specific approach to identify TSD priorities; 
(iii) extend sustainability considerations to other chapters of trade agreements; (iv)  improve the 
monitoring of the implementatio n of TSD commitments; (v)  reinforce the role of civil society; and 
(vi) strengthen the enforcement of TSD commitments by, inter alia, extending the application of the 
RTA's dispute settlement mechanism to these provisions. These priorities are to be integr ated in 
ongoing and future negotiations. In this regard, the Commission indicate s that the forthcoming 
EU-New Zealand RTA is the first EU RTA that foresees the possibility of temporary sanctions 
(e.g. suspension of trade concessions) in case of non -complia nce with a ruling regarding the violation 
of core TSD commitments (i.e.  the ILO fundamental principles and rights at work, and the 
Paris Agreement on Climate Change).65 
2.39.  The European  Union had four ongoing bilateral disputes initiated under its RTAs with th e 
Republic  of Korea (consultations requested in 2018), Ukraine (January  2019), SADC (June  2019), 
and Algeria (2020). A panel report has been issued for each of these proceedings, except for the 
one under the EU -Algeria RTA.66 
2.3.2.2   Unilateral preferences  
2.40.  The European  Union facilitates trade with developing countries by granting them unilateral 
preferences under various schemes, the main one being its GSP. During the review period, the main 
developments in this area were the preparation of a new regulation for the GSP, the extension of 
the preferential arrangement for Western Balkans economies, and the update of the list of 
beneficiaries under some of the schemes.  
 
62 European Commission (2018), "Commissioner Malmström Unveils 15 -Point Plan to Make EU Trade 
and Sustainable Development Chapters M ore Effective", 27  February. Viewed at: 
https://policy.trade.ec.europa.eu/news/commiss ioner-malmstrom -unveils -15-point-plan-make -eu-trade -and-
sustainable -development -chapters -more-2018-02-27_en . 
63 The European  Union has included TSD -related provisions in all its RTAs since the EU -Republic  of Korea 
RTA, concluded in 2010 and in force since 2 011. Of these RTAs, 11 include a dedicated chapter on TSD (in 
chronological order): Republic  of Korea (signed in 2010), Central  America (2012), Colombia, Peru, and 
Ecuador  (2012), Canada (2016), Georgia (2014), the Republic  of Moldova (2014), Ukraine (2014 ), 
Japan  (2018), Singapore (2018), Viet  Nam (2019), and United  Kingdom (2020).  
64 European Commission Communication COM(2022)  409 final.  
65 EU-New Zealand RTA, Article  26.16.  
66 European Commission, Bilateral Disputes . Viewed at: https://policy.trade.ec.europa.eu/enforcement -
and-protection/dispute -settlement/bilateral -disputes_en . WT/TPR/S/442  • European Union  
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  2.41.  The GSP comprises three different preferential arrangements, the standard GSP, the GSP+, 
and th e EBA, each providing for distinct benefits and conditions depending on the country's level of 
development.67 Countries that no longer meet the eligibility conditions are removed from the list of 
beneficiaries, or may be subject to a temporary withdrawal o f preferences. In addition, the GSP 
legislation provides for a safeguard mechanism that allows the European  Union to reintroduce duties 
on imports from a GSP beneficiary.68 In accordance with these provisions, the European  Union 
suspended (until further no tice) in August  2020 the tariff preferences on selected products imported 
from Cambodia based on human rights concerns69, and in June  2022, it extended until 
December  2023 the suspension of preferences on certain products from India, Indonesia, and Kenya, 
which had become sufficiently competitive according to the product graduation criteria.70 This 
measure (in place since 2019) was set to expire in December  2022. In January  2022, the 
European  Union lifted the safeguard measure imposed in 2019 on imports of indica rice from 
Cambodia and Myanmar.71 
2.42.  In 2022, the list of GSP beneficiaries comprised 66 countries (down from 71 in 2019), of which 
the majority fell under the EBA arrangement.72 During the review period, the European  Union 
removed from this list Equat orial Guinea, Nauru, Samoa, Tonga (January  2021), and Armenia 
(January  2022) because they ceased to qualify for the GSP scheme following their graduation to a 
higher income status.73 Except for Samoa, these countries do not have an RTA in place for trade i n 
goods with the European  Union, and so following their graduation from the GSP scheme, their 
imports enter the EU market under the MFN regime. Other changes involved Uzbekistan, which in 
April 2021 transitioned from the standard GSP to the GSP+ scheme. Vi et Nam was expected to be 
removed in January  2023 from the list of beneficiaries of the standard GSP. After this date, its trade 
relationship with the European  Union will be exclusively regulated by their  RTA. 
2.43.  In September  2021, the Commission submitted to  the Parliament and the Council a proposal 
for a regulation for a new GSP scheme.74 The proposal seeks to renew the GSP scheme for the 
period  2024-34, which except for its EBA component, is set to expire on 31  December  2023 under 
the current GSP regulation  (Regulation (EU) 978/2012, in place since 2012). The proposed regulation 
maintains the main characteristics of the GSP scheme and its three components but seeks to make 
some specific changes to better reach the intended beneficiaries, and support EU envir onmental 
objectives. It proposes, inter alia, to (i)  lower the internal product graduation threshold for the 
standard GSP to ensure preferences are granted to those in greater need; (ii)  remove the economic 
vulnerability criterion under the GSP+ arrangemen t; (iii)  increase the number of ratified 
international conventions from 27 to 32 for the GSP+ (including the Paris Agreement); (iv)  extend 
the application of international conventions on environmental and good governance to all GSP 
beneficiaries (not only GSP+ as is currently the case); (v)  require an action plan for the 
implementation of the conventions under GSP+ to improve compliance; and (vi)  establish urgent 
procedures for the withdrawal of preferences in cases of grave violations of the GSP relevant 
conventions. The legislative process is ongoing, but it is expected that the Parliament and the Council 
will adopt the new regulation by late 2023. Once adopted, it will replace the existing one and the 
new GSP system would enter into force on 1  January  2024.75 
 
67 For more details on the eligibility conditions for the standar d GSP, the GSP+, and the EBA, see 
WTO document WT/TPR/S/395/Rev.1, 7  July 2020, Section  2.3.2.2.  
68 Regulation (EU)  978/2012, Article  22. 
69 Commission Delegated Regulation (EU)  2020/550.  
70 Commission Implementing Regulation (EU)  2022/1039.  
71 Commission Implementing Regulation (EU)  2019/67. The measure (i.e.  a specific duty) was 
introduced in January  2019 after an EU investigation concluded that  indica rice from these countries was being 
imported in volumes and at prices that were causing serious difficulties for EU industry.  
72 As of 1  January  2022, 47 countries were EBA beneficiaries (48 in 2019), 11 were standard 
GSP beneficiaries (15 in 2019), and 8 were GSP+ beneficiaries (8 in 2019).  
73 According to the GSP regulation, a country cannot qualify for the GSP if it has been classified by the 
World Bank as a high -income or an upper -middle -income country for three consecutive years (Regulation 
(EU) 978/2012, Article  4). These five countries wer e thus reclassified as upper -middle -income countries. 
Nauru, Samoa, and Tonga were removed from the standard GSP list of beneficiaries, Armenia from the 
GSP+  list, and Equatorial  Guinea from the EBA list.  
74 European Commission Proposal  COM(2021)  579 final.   
75 If the new regulation is not adopted, the standard GSP and the GSP+ arrangements will cease to 
apply on 1  January  2024.  WT/TPR/S/442  • European Union  
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  2.44.  In addition to its GSP scheme, the European  Union maintains a preferential arrangement for 
Western Balkans economies to support its policy of Stabilisation and Association Process in the 
region.76 Under this arrangement, the European  Union grants unil ateral preferences to Albania, 
Bosnia and Herzegovina, Kosovo77, Montenegro, North  Macedonia, and Serbia on a limited number 
of products, notably vegetables, fruit, and wine. This scheme was set to expire in 2020 but was 
extended until December  202578, and it complements the existing RTAs with these economies.  
2.45.  The European  Union also maintains a scheme of unilateral preferences for OCTs, under which 
all goods originating in OCTs are duty -free. OCTs are not part of the European  Union but benefit 
from an asso ciate status based on their linkages to three EU member States (i.e.  Denmark, France, 
and the Netherlands).79 The European  Union also continues to grant unilaterally duty -free, 
quota -free access to all imports, except arms, from ACP countries with which it had concluded 
negotiations of an EPA but for which signature and ratification are pending, even if in some cases 
the RTA is being applied on a provisional basis. This scheme is described in Regulation 
(EU) 2016/1076 (Market Access Regulation), and  currently covers 32 countries.80 During the review 
period, Comoros (2019) and the Solomon  Islands (2020) were included as beneficiaries.  
2.46.  In accordance with the WTO LDC services waiver, the European  Union has also notified 
additional commitments for LDCs c overing all modes of supply.81 The Commission indicate s that 
these commitments have been in force since 18  November  2018.  
2.3.3   Other agreements and arrangements  
2.47.  During the review period, the European  Union put in place trade arrangements of limited 
scope with t he United  States. It also signed partnership agreement s with Canada on raw materials 
and with Japan and the Republic of Korea on digital issues.  
2.48.  In August  2020, the European  Union and the United  States, its main trading partner, agreed 
to reduce duties on an MFN basis on a limited number of goods of mutual interest.82 Under this 
agreement, the European  Union would eliminate tariffs on the imports of live and frozen lobster 
products (i.e.  four tariff lines at the 8 -digit level) provided that the United  State s reduces duties 
(by half) on certain prepared fish meals, crystal glassware, surface preparations, propellant 
powders, cigarette lighters, and lighter parts (i.e.  six tariff lines at the 8 -digit level). The 
European  Union's commitments are also subject to  the United  States not introducing new measures 
against the European  Union that would undermine the objectives to "create more free, fair, and 
reciprocal transatlantic trade".83 These tariff reductions entered into force in December  2020.84 They 
were applied retroactively from August  2020 and will expire in July  2025.  
2.49.  In addition to this arrangement, the European  Union and the United  States established in 
June 2021 the EU -US Trade and Technology Council (TTC) to better coordinate their appro aches 
regarding trade, investment, and technology issues. The TTC comprises 10 working groups dealing 
with (i)  technology standards; (ii)  climate and clean technology; (iii)  secure supply chains 
(e.g. semi-conductors); (iv)  ICT security and competitiveness ; (v) data governance and technology 
platforms; (vi)  misuse of technology, threatening security and human rights; (vii)  cooperation on 
 
76 This policy was designed to shape the path for an eventual accession of these economies to the 
European  Union. In addition to this  preferential scheme, the policy includes the establishment of an FTA 
between these economies and with the European  Union.  
77 Reference to Kosovo should be understood to be in the context of the United Nations Security Council 
Resolution 1244 (1999).  
78 WTO document WT/L/1147, 13  July 2022; and Council Regulation (EC)  1215/2009.  
79 Council Decision (EU)  2021/1764.  
80 Regulation (EU)  2016/1076.  
81 WTO documents WT/L/847, 17  December  2011; WT/L/918, 6  December  2013; and S/C/N/840, 
18 November  2015. The LDC servic es waiver allows WTO Members to grant preferential treatment to services 
and services suppliers from LDCs.  
82 European Commission (2020), Joint Statement of the United  States and the European  Union on a 
Tariff Agreement , 21 August. Viewed at: 
https://ec.europa.eu/commission/presscorner/detail/fr/statement_20_1512 .  
83 European Commission (2020), Joint Statement of the United  States and the European  Union on a 
Tariff Agreem ent, 21 August.  
84 Regulation (EU)  2020/2131.  WT/TPR/S/442  • European Union  
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  export controls of dual -use items; (viii)  investment screening cooperation; (ix)  promoting SME 
access to and use of digit al technologies; and (x)  global trade challenges.85  
2.50.  The European  Union and Canada signed in June  2021 a strategic partnership on raw materials 
with a view to diversifying their suppliers and strengthening their supply chains. The partnership 
builds upon t he Bilateral Dialogues on Raw Materials that were established under the EU -Canada 
RTA.86 More recently, in August  2022, Canada and Germany signed a joint declaration of intent on 
establishing a Canada -Germany Hydrogen Alliance to facilitate the bilateral t rade of hydrogen, which 
provides, inter alia, that Canada will export hydrogen to Germany by  2025.87 
2.51.  The European  Union and Japan concluded in May  2022 a Digital Partnership to promote 
cooperation on issues of importance to the digital economy, such as art ificial intelligence, 
5G technologies, the semiconductor industry, and the facilitation of digital trade. In November  2022, 
the European  Union also entered into a Digital Partnership with the Republic  of Korea, and agreed 
on a set of non -binding Digital Tr ade Principles.88 The European  Union is also planning to conclude 
a Digital Partnership and an agreement on Digital Trade Principles with Singapore. The parties expect 
that these Digital Trade Principles will complement the WTO negotiations on e -commerce.  
2.4  Investment regime  
2.4.1   Regulatory framework  
2.52.  Foreign investment (as well as investment between EU member States) is governed by 
the TFEU and permitted in EU member States without restrictions based on the principles of freedom 
of establishment and free movement of capital (and payments), except when deem ed necessary for 
public policy, public security, health reasons, or other overriding reasons in the general interest, as 
recognized by CJEU jurisprudence.89 
2.53.  In accordance with these derogations, some EU member Sta tes maintain screening 
mechanisms, as well as other types of requirements, which led to different investment regimes 
across the European  Union.90 With a view of promoting consistency regarding FDI screening, the 
European  Union adopted in March  2019 a regul ation to establish a common framework for the 
screening of FDI for reasons of security and public order.91 The regulation started applying on 
11 October  2020, and it seeks, inter alia, to address concerns regarding FDI on assets deemed 
critical to EU inter ests.92 The regulation provides for a set of minimum requirements for the 
functioning of national screening mechanisms and for a cooperation mechanism to share 
information.93 The regulation also provides for guidelines to identify FDI that is likely to aff ect 
security or public order and therefore should be screened. The criteria refer to the effects that a 
transaction could have on, for instance, infrastructure, technologies, and the supply of inputs 
deemed as critical to EU economic activities.  
 
85 European Commission, Digital in the EU -US Trade and Technology Council . Viewed at: https://digital -
strategy.ec.europa.eu/en/policies/trade -and-technology -council .  
86 European Commission (2021), Comprehensive Economic and Trade Agreement (CETA) Meeting of the 
Bilateral Dialogue on Raw Materials – Joint Report , 15 July 2021. Viewed at: 
https://trade.ec.europa.eu/doclib/docs/2021/july/tradoc_159726.pdf . 
87 Government of Canada (2022), Joint Declaration of Intent between the Government of Canada and 
the Government of the Federal Republic of Germany on Establishing a Canada -Germany Hydrogen Alliance . 
Viewed at: https://www.nrcan.gc.ca/climate -change -adapting -impacts -and-reducing -emissions/ canadas -
green -future/the -hydrogen -strategy/joint -declaration -intent -between -the-government -canada -and-the-
government -the-federal/24607 .  
88 European Commission (2022), "EU and Korea Sign Digital Trade Principles", 30  November. Viewed 
at: https://policy.trade.ec.europa.eu/news/eu -and-korea -sign-digital -trade -principles -2022-11-30_en .  
89 TFEU, Articles 49, 52, 54, 63, and 65.  
90 European Parliament (2 018), Briefing – EU Framework for FDI Screening , European Parliamentary 
Research Service, January.  
91 The regulation does not apply to portfolio investments in line with EU competences. The 
European  Union has exclusive competence for FDI (Section  2.1), and  shared competence for other types of 
investments (i.e.  portfolio investments) and for investor -state dispute settlement.  
92 Regulation (EU)  2019/452.  
93 This framework for the screening of FDI was described in WTO document WT/TPR/S/395/Rev.1, 
7 July 2020.  WT/TPR/S/442  • European Union  
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  2.54.  Under the regulation, EU member States are not required to maintain, or amend, their 
screening mechanism for FDI, or adopt one. However, the Commission has stressed the importance 
of implementing one in line with the new EU framework and has strongly encouraged EU  member 
States to do so. It has done so, for instance, in its communication of March  2020 on the role of FDI 
screening during a public health crisis94, as well in its communication of April  2022, on FDI from the 
Russian  Federation and Belarus. In the latter,  the Commission calls upon EU  member States to 
ensure that such transactions are given particular attention, and further urged them to set up a 
comprehensive FDI screening mechanism.95 As of October  2022, 18  EU member States had an FDI 
screening mechanism in place, compared to 15 at the time of the previous Review (20 20), and 
7 were in the process of adopting one.96 
2.55.  Since 2020, the Commission has issued two reports on the implementation of the regulation. 
According to the most recent report, EU  member State s reported 1,563 requests for authorizations 
and ex officio  cases in 2021. Of these transactions, about 29% were formally screened and 71% 
were deemed ineligible or did not require formal screening. Of the transactions that were formally 
screened and had a  decision issued, the majority were authorized with (23%) or without 
conditions  (73%), and only 1% was blocked. Applications were concentrated in four  EU member 
States, which accounted for about 70% of them.97 
2.56.  In addition, the European  Union adopted in Dec ember  2022 a regulation to deal with the 
effects of foreign subsidies on the internal market (i.e. subsidies by a third  country) and ensure a 
level playing field for all companies/investors. The regulation seeks to identify and address situations 
where a c ompany receiving foreign subsidies causes distortions to the internal market through, 
inter alia, its participation in EU public procurements, or the acquisition of an EU company or assets 
affecting the market structure  (Sections  3.3.4 and 3.3. 6). The regulation entered into force on 
12 January  2023 and will apply from 12  July 2023.98 
2.57.  The European  Union has taken liberalization commitments on investment in about half of its 
RTAs (Section  2.3.2), as well as under its most  recent trade negotiations .99 These commitments 
cover both services and non -services sectors, and include market access and non -discrimination 
obligations, as well as other investment -related provisions such as the prohibition of performance 
requirements. In these RTAs, the European  Union has listed reservations notably with respect to the 
establishment and operation of investments. These reservations vary across EU member States and 
affect different sectors of activities (e.g.  agriculture, real estate, dis tribution, cultural, energy, and 
transportation).  
2.58.  The European  Union has started negotiating provisions on investment facilitation, either as 
part of wider trade agreements (e.g.  with countries of the Eastern and Southern Africa region) or as 
standalone sustainable investment facilitation agreements (e.g.  with Angola).100 The 
European  Union also participates in the WTO JSI on Investment Facilitation for Development.  
2.59.  At the EU level, the European  Union maintains a limit on foreign equity of 49% f or airline 
companies established within its territory.101 
 
94 European Commission Communication C /2020/1981 final.  
95 European Commission Communication  2022/C 151 I/01. In this communication, the European 
Commission calls on EU member States to, inter alia, systematically use their screening mechanisms to assess 
investments from the Russian  Federation and Belarus on the grounds of security and public order.  
96 European Commission Report  COM(2022)  433 final.  
97 European Commission (2022), Report from the Commission to the European Parliament and the 
Council : Second Annu al Report on the Screening of Foreign Direct Investments into the Union , 
COM(2022)  433; and its Accompanying document (Staff Working Document SWD(2022)  219 final ). 
98 Regulation (EU)  2022/2560.  
99 WTO RTA database. Viewed at: http://rtais.wto.org/UI/PublicMaintainRTAHome.aspx . 
100 Information provided by the Commission; and European Commission (2022), "EU and Angola 
Conclude First -ever Sustainable Investment Facilit ation Agreement", 18 November.  
101 Regulation (EC) 1008/2008.  WT/TPR/S/442  • European Union  
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  2.4.2   Other aspects of the European  Union's foreign investment regime  
2.60.  During the review period, the European  Union continued to work at the domestic, bilateral, 
and multilateral levels to promote a common and coherent approach towards investment protection 
and the negotiation of related agreements.  
2.61.  At the domestic level, and as of December  2022, all EU member States had formally 
terminated intra -EU bilateral investment treaties (BITs) to which they are part ies following the 2018 
CJEU ruling in Achmea  (Case  C-284/16). Under this ruling, provisions on investor -state arbitration 
in international agreements between EU member States are incompatible with the EU Treaties.102 
Three EU member States (Austria, Finland , and Sweden) formally terminated their intra -EU BITs 
with their counterparts on a bilateral basis, while the remaining 23 EU member States that were 
parties to intra -EU BITs signed in May  2020 an agreement to formally terminate them.103 The 
termination agr eement entered into force in August  2020 and has been ratified and implemented by 
all contracting parties. The last ratification took place in October  2022.  
2.62.  The European  Union continued to implement Regulation (EU) 1219/2012, in force since  2013, 
under whi ch EU member States may maintain BITs concluded prior to the Treaty of Lisbon in 2009104 
until they are replaced by investment agreements at the EU level. The Regulation also allows the 
Commission to authorize EU member States to negotiate with third  countr ies to amend existing BITs 
or conclude new ones under certain conditions. In 2020, the Commission published a report on the 
application of the Regulation (as provided in the latter), where it recommends continuing with the 
application of these flexibilitie s considering the slow progress in the negotiation of agreements at 
the EU level. Until 2022, EU  member  States had notified approximately  1,400 BITs signed with 
third countries105, 6 of which were signed during the 2019-21 period.106 During the same period, the 
Commission granted 13 authorizations: 10 to sign new agreements and  3 to amend existing ones.107 
2.63.  At the EU level, the European  Union has so far signed two investment protection agreements, 
one with Singapore (2018) and another w ith Viet  Nam (2019)108, as well as one RTA – the EU -Canada 
RTA (2016) – that includes provisions related to investment protection. These agreements have not 
yet entered into force, as they are awaiting ratification by all EU member States. The EU -Canada 
RTA has been applied provisionally since 2017, but its provisions on investment protection are 
exempt from provisional application. The European  Union recently concluded negotiations for trade 
agreements with Mexico and Chile (Section  2.3.2), which also inclu de investment protection 
provisions. These agreements await signature. Once in force, these 5 agreements will replace 
68 existing  BITs of member States.  
2.64.  The European  Union was also negotiating a Comprehensive Agreement on Investment with 
China, and an inve stment protection agreement with India and Indonesia. The negotiations for the 
agreement with India were launched in June  2022 and were to be conducted in parallel to those for 
an RTA.109 The negotiations with China were concluded in December  2020 with an a greement in 
principle110, which includes, inter alia, provisions on market access liberalization for EU and Chinese 
investors, state -owned enterprises, and transparency for state subsidies, as well as provisions 
prohibiting the forced transfer of technologi es. Under the Agreement, the parties committed to 
negotiate provisions on investment protection within two  years of its signature.  
 
102 CJEU (2018), Case  C-284/16, Slowakische Republik (Slovak  Republic) v Achmea BV.  
103 Agreement for the Termination of Bilateral Investment Treaties between the Member States of the 
European  Union,  25 May 2020. Viewed at: CELEX:22020A0529(01) .  
104 At which time the European  Union was given exclusive competence for FDI.  
105 European Commission Notices from Member States PUB/2022/546; and European Commission 
Report  COM(2020)  134 final.  
106 During this period, EU member States also signed two  Protocols to existing BITs.  
107 Information provided by the Commission.  
108 These agreement s were negotiated following the change in the European  Union's approach towards 
investment negotiations to favour standalone agreements (Section  2.1). 
109 European Commission (2022), "EU and India Kick -Start Ambitious Trade Agenda", 17  June. Viewed 
at: https://policy.trade.ec.europa.eu/news/eu -and-india-kick-start-ambitious -trade -agenda -2022-06-17_en .  
110 The text of the agreement in principle  can be viewed at: https://policy.trade.ec.europa.eu/eu -trade -
relationships -country -and-region/countries -and-regions/ china/eu -china -agreement_en .  WT/TPR/S/442  • European Union  
- 47 - 
  2.65.  At the multilateral level, the European  Union is participating in discussions under the 
UN Commission on International Trade Law (UNCITRAL) to reform the Investor -State Dispute 
Settlement (ISDS) mechanism and establish a Multilateral Investment Court. In the long term, the 
European  Union expects that this Court will replace the mechanisms for dispute resolution included 
in its t rade and investment agreements at the EU level, and is of potential application to all existing 
BITs at the member  State level.  The European  Union has also been engaged in the discussions to 
modernize the Energy Charter Treaty  (ECT) , notably its ISDS mecha nism. The ECT comprises 
53 signatories, including the European  Union and all of its member States except for Italy, and it 
provides for a multilateral framework to promote cooperation and facilitate commercial relations in 
the energy sector. In June  2022, the ECT parties reached an agreement in principle for a new ECT.111 
The text amending the ECT was to be adopted during the Energy Charter Conference  in 
November  2022, but its adoption was subsequently postponed.  Prior to the conference, some EU 
member States announced their intention to withdraw from the ECT as they considered its reform 
was not aligned enough with their environmental objectives.112 In 2021, the CJEU ruled that the ECT 
could not be used in intra -EU disputes. The Commission state s that it has recently proposed the 
conclusion of a subsequent agreement to EU  member States to address the risk of a conflict between 
the ECT and the EU Treaties.113 
2.66.  In the area of investment promotion, the European  Union (a nd its member States) continued 
to encourage investment in general and in selected sectors mainly through grants, and financial 
instruments (Section  3.3.1). Each EU member State has an Investment Promotion Agency, but there 
is no agency at the EU level. In  the area of taxation, EU average corporate income tax  rate (statutory 
top rates)  stood at 21.2% in 2022. In that year, the European  Union adopted a minimum effective 
corporate tax rate of  15% for multinationals with annual revenues exceeding EUR  750 million, which 
shall be implemented by December  2023 (Section  3.3.1.3). EU member States also maintain double 
taxation agreements with third countries.114 
 
111 European Commission (2022), "Agreement in Principle Reached on Modernised Energy Charter 
Treaty", 24  June. Viewed at: https://policy.trade.ec.europa.eu/news/agreement -principle -reached -modernised -
energy -charter -treaty -2022-06-24_en   
112 International Institute for Sustainable Development (2022), Energy Charter Treaty Withdrawal 
Announcements Reflect Reform Outcome is Insufficient for Climate Ambition , 7 November. Viewed at: 
https://www.iisd.org/press .  
113 European Commission Communication COM(2022)  523 final.  
114 European Commission, Treaties for the Avoidance of Double Taxation Concluded by Member States . 
Viewed at: https://taxation -customs.ec.europa.eu/treaties -avoidance -double -taxation -concluded -member -
states_en .  WT/TPR/S/442  • European Union  
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  3  TRADE POLICIES AND PRACTICES BY MEASURE  
3.1  Measures directly affecting imports  
3.1.1   Customs procedures, valuation, and requirements  
3.1.  The EU Customs Union is a unique structure as the Union has exclusive competence on customs 
legislation and legal acts, but it is the member States that implement the legislation, and operate 
and oversee the movement of goods into and out of the single market.1 The customs authorities of 
the 27  member States have their own officials, electronic systems, and working methods to allow 
the entry and import into the customs territory of the Union and the exit and export from this 
territory, of goods on a daily basis. Although they have national competences, there is increasing 
coordination and harmonization at the EU level, in particular through new electronic systems 
(Section  3.1.1.3). The European Council, the Eu ropean Parliament, and the European Commission 
all have roles in ensuring customs cooperation between and among the member States.  
3.2.  Customs duties are an important part of the EU budget, accounting for 8% of total revenues 
in 2021. Pursuant to the European  Union's system of own resources, customs revenues are shared 
between the member States and the Union. Previously, member States were allowed to keep 20% 
of the customs revenues they collected, but this was changed in the latest directive to 25% for the 
period 2021 -27, thus the Union receives the remaining 75%.2 Revenues from duties and taxes on 
imports, excluding VAT, have remained relatively constant during 2019 -21, although they dropped 
slightly in 2020 and amounted to EUR  78.8 billion in 2021, or about 0.5% of GDP (Table  3.1).3 
Table 3.1 Customs duties and taxes , 2019 -21 
(EUR billion, unless otherwise indicated)  
 2019  2020  2021  
Taxes and duties on imports, excluding VAT  77.5 72.7 78.8 
 Import duties  21.6 19.9 23.1 
 Taxes on imports, excluding VAT and import duties  55.8 52.8 55.7 
 Levies on imported agricultural products  0.3 0.3 0.2 
 Excise duties  55.5 52.5 55.4 
VATa 1,002.4  932.4  1,078.3  
a Includes all VAT on imports and national products.  
Source:  Eurostat, Main National Accounts Tax Aggregates  (gov_10a_taxag) . Viewed at: 
https://appsso.eurostat.e c.europa.eu/nui/show.do?dataset=gov_10a_taxag&lang=en . 
3.3.  Customs procedures, as outlined in the relevant EU legislation, provide that a customs 
declaration and/or a temporary storage declaration be filed when goods are brought into the customs 
territory of t he Union. Depending on the mode of transport, an entry summary declaration must be 
lodged at the customs office of first entry within a specific time limit before the goods are brought 
into the customs territory of the Union. An arrival notification must b e sent to inform the customs 
office of first entry that the vessel or aircraft has arrived. Thereafter, goods brought into the customs 
territory shall, from the time of their entry, be subject to customs supervision and may be subject 
to customs controls, before release of the goods. Where the placing of goods under a customs 
procedure gives rise to a customs debt, the release of the goods shall be conditional upon the 
payment of the amount of import duty corresponding to the customs debt or the provision o f a 
guarantee to cover that debt. Some costs are charged to the holder of the goods in case of special 
circumstances such as customs services performed outside normal working hours or premises, 
exceptional control measures, and the return, sampling, or des truction of goods.  
 
1 The EU customs territory includes the customs territory of the Union as defined in Article  4 of 
Regulation (EU)  952/2013. The United  Kingdom withdrew from the European  Union on the basis of the 
"Withdrawal Agreement"  (Section  2.3.2.1.1) .  
2 New sources of revenue contained therein include national contributions based on the amount of 
plastic packaging not recycled, and from 2023 possible revenues from the carbon border tax adjustment 
scheme and a digital lev y. Council Decision (EU, Euratom) 2020/2053.  
3 European Commission (2022), Taxation Trends in the European  Union . Viewed at: 
https://op.europa.eu /en/publication -detail/ -/publication/f85da28f -f5be-11ec-b976-01aa75ed71a1 . WT/TPR/S/442  • European Union  
- 49 - 
  3.4.  The European  Union has 52 agreements on customs cooperation and mutual assistance with 
87 other countries.4 During the review period, three new agreements entered into force with the 
Solomon  Islands, the United  Kingdom, and Viet  Nam. Th e agreement with the United  Kingdom was 
particularly important as it provides for an automatic exchange of information.  
3.1.1.1   Recent and future developments  
3.5.  New rules on e -commerce were implemented that contain procedures for the importation of 
low-value consig nments, including removal of the import VAT de minimis  exemption. As explained 
in the previous Report, the legal changes were implemented through Commission Delegated 
Regulation (EU) 2019/1143 in  2019 but were applied only as of 1  July 2021. Thus, low -value 
consignments, i.e.  those not exceeding EUR  22 that were previously imported free of VAT without 
specific formalities, are now subject to an electronic customs declaration. However, in part to address 
concerns about fraud, the VAT exemption was removed, e ffective 1  July 2021, thus VAT is now 
collected on all shipments, including low -value consignments.  
3.6.  To facilitate this change, the Import One -Stop Shop (IOSS) was introduced to simplify the 
declaration and payment of VAT for distance sales of low -value co nsignments dispatched from third 
territories and third countries.5 The IOSS can be used for imported goods not exceeding EUR  150 
and it requires the registration of an electronic interface established in the European  Union, or an 
EU-established intermedia ry. Where the IOSS cannot be used, the European  Union has introduced 
Special Arrangements that act as an alternative simplification. These Special Arrangements are 
tailored to postal operators and express carriers that complete declarations on behalf of cu stomers.  
3.7.  Pursuant to the European  Union's Import Control System  2 (ICS2) Release  2 (Table  3.3), the 
new customs pre -arrival security and safety programme, imported goods arriving by air as of 
1 March  2023 will be required to submit advance cargo informatio n to customs. Therefore, prior to 
the goods' loading and arrival, the economic operator is required to submit a complete entry 
summary declaration. During the period July  2022 to February  2023, conformance testing was 
undertaken to verify conformity of all  importers with the new system. Furthermore, Release  3 
of ICS2 is previewed for implementation on 1  March  2024 for goods imported via maritime and 
inland waterways, roads, and railways where the same pre -arrival information is to be submitted in 
advance.  
3.8.  In response to the COVID -19 pandemic, the European  Union put in place many measures to 
ease the burden on customs and further facilitate the flow of goods. In general, these were 
flexibilities introduced in 2020 using the existing framework and concern mat ters such as extension 
of time limits, use of digital signatures, longer periods to amend declarations, use of partial release 
of shipment provisions for personal protective equipment (PPE) , submission of proof of preferential 
origin (Section  3.1.2.2), use  of simplified declarations without prior authorization, alternative 
identification measures to sealing, and use of temporary admission procedures.6 
3.9.  More recently, as announced in July  2022, the European  Union launched a consultation process 
to reform the customs framework with a particular aim of creating a stronger framework to protect 
citizens and the single market.7 It invited businesses and other stakeholders to submit proposals 
until 14  September  2022, whereafter it is expected that a prop osal would be forthcoming in the 
first half of 2023.  
 
4 European Commission, Customs Cooperate . Viewed at: https:// taxation -
customs.ec.europa.eu/customs -4/eu-customs -union -facts-and-figures/customs -cooperate_en .  
5 During the first six months of its operation, the IOSS had 8,000 registered users and generated 
EUR 1.9 billion. European Commission (2022), "New VAT Rules for Online Purchases Brought €1.9  Billion in 
Revenues for Member States in Their First Six Months Alone", 15  March. Viewed at: https://taxation -
customs.ec.europa.eu/news/new -vat-rules-online -purchases -brought -eu19-billion -revenues -member -states -
their-first-six-months -2022-03-15_en .  
6 European Commission, Guidance on Customs Issues Related  to the COVID -19 Emergency . Viewed at: 
https://taxation -customs.ec.europa.eu/covid -19-customs -guidance -trade_en .  
7 European Commission (2022), "Commission Seeks Views  on Upcoming EU Customs Reform", 22  July. 
Viewed at: https://taxation -customs.ec.europa.eu/news/commission -seeks -views -upcoming -eu-customs -
reform -2022-07-22_en .  WT/TPR/S/442  • European Union  
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  3.10.  Regarding the EU's policy direction on customs, a strategic foresight document was issued 
in 2020, The Future of Customs in the EU  2040, in which possible future long -term visions were 
presented along w ith a number of scenarios (Box  3.1).8 According to the initiative, it was issued to 
stay updated with rapidly changing world developments so that the European  Union can adapt and 
anticipate future changes. The European  Union also commissioned a report cal led Putting More Union 
in the European Customs , with 10 recommendations, mainly to address how to manage electronic 
commerce and EU -wide risks.9  
Box 3.1 Overview of possible future customs developments  
Main insights and recommendations  
• To have a centralized, joint governance structure to operationally manage the Customs Union.  
• The stakeholders involved in the foresight process believe that harmonization o f member States' 
IT systems, or in the mid to longer term moving to one EU IT system, is crucial for the efficient 
functioning of EU Customs.  
• EU Customs will have to align with the developments in the trade sector and leverage technology to 
ensure its oper ations are effective. This will require substantial investment in equipment, 
infrastructure, research, and innovation.  
• The creation of a fully integrated IT Customs system, Smart Border Crossing, common EU 
Sanctions system, and the implementation of the Si ngle Window as well as the development of the 
next level Single Window.  
• The increased use of technology in the future will require enhanced skills and competencies for 
customs officers.  
• To drive international reforms, EU Customs would need to strengthen it s own governance to be 
able to speak with one voice and have a strong influence within international organizations.  
• The full and proper implementation of the UCC and the Customs Action Plan by 2025 will thus 
provide the foundation for further developing EU  Customs in the long  term.  
Main areas of challenge  
• Trade, business support, and protection  
• Data management and technology  
• Customs capacity and human resources  
• Climate change and the sustainable transition  
• Future of international relations and geopolitical conflicts  
• Customs' contribution to the European project  
• COVID -19 and similar future crisis with global impact  
• Customs governance  
Source:  Joint Research  Centre (JRC), The Future of Customs in the EU  2040.  
3.1.1.2   Legal framework and policies  
3.11.  The Euro pean Union's legal framework for customs remains the Union Customs Code (UCC) 
and its related Acts that were substantially implemented in May  2016 but with ongoing 
implementation in certain areas since that time. The previous Reviews provided detailed 
explanations of the UCC and its framework10, thus discussion here is limited to subsequent 
developments and ongoing implementation. During the review period, the main area of ongoing 
work under the UCC was to implement the electronic customs systems (Section  3.1.1.3), which was 
originally expected in 2020 but was extended until 2025 for a certain number of processes.  
3.12.  The UCC provides the overall legal framework for the European  Union's customs rules and 
procedures by combining EU legislation in one package and is expected to lead to greater harmonized 
application and simplicity. It is complemented by three subsidiary acts and a work programme 
(Table  3.2). There have been a number of amendments to the subsidiary acts for various purposes 
but the overall framework  has not changed.  
 
8 Joint Research Centre (JRC), The Future of Customs in the EU  2040. Viewed at: 
https://publications.jrc.ec.europa.eu/repository/bitstream/JRC121859/the_future_of_customs_in_the_eu_2040
_report_final2_online_1.pdf .  
9 Wise Persons Group on the Reform of the EU Customs Union (2022), Putting More Union in the 
European Customs: Ten Prop osals to Make the EU Customs Union Fit for a Geopolitical Europe . Viewed at: 
https://taxation -customs.ec.europa.eu/system/f iles/2022 -03/TAX -20-002-Future%20customs -
REPORT_BIS_v5%20%28WEB%29.pdf .  
10 WTO documents WT/TPR/S/395/Rev.1, 7  July 2020; and WT/TPR/S/357/Rev.1, 13  October  2017.  WT/TPR/S/442  • European Union  
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  Table 3.2 EU framework legislation on customs and main amendments 2020 -22 
Legislation  Overview  Legal reference  Main amendments 2020 -22 
Union Customs 
Code (UCC)  Main customs law  Regulation 
(EU) 952/2013  None 
UCC Delegated 
Act (UCC DA)  Supplementing 
non-essential 
elements of the 
UCC Commission 
Delegated 
Regulation 
(EU) 2015/2446  Definition of intrinsic value, express consignment, 
express carrier; formalities for military movements; 
amendments to the time limits for lodging entry 
summary declarations; facilitation for the import and 
export of human organs for transplants, entry 
summary declaration for IC S 2; amendments due to 
the United  Kingdom's withdrawal from the 
Europea n Union; harmonization of common data 
requirements for the exchange and storage of 
information in relation to customs declarations; 
declaration of certain low -value consignments; and 
amendments to non -preferential origin related rules  
UCC 
Transitional 
Delegated Act  Provides 
transitional 
measures until the 
IT systems are 
fully operational  Commission 
Delegated 
Regulation 
(EU) 2016/341  Amends definition of express consignments and rules 
regarding member States' obligations to report on the 
progress regarding IT developments  
UCC 
Implementing 
Act (UCC IA)  Ensures uniform 
implementation of 
the UCC and 
harmonized 
application by 
member States  Commission 
Implementing  
Regulation 
(EU) 2015/2447  Procedures for low -value consignments, issues related 
to the deployment of ICS  2, procedural rules for the 
movement of military goods, criterion for the status of 
authorized economic operator, consequential changes 
due to the United  Kingdom's withdrawal from the 
European  Union, harmonization of formats and codes 
for common dat a requirements  
UCC Work 
Programme  Development and 
deployment of the 
electronic systems  Commission 
Implementing 
Decision 
(EU) 2019/2151  None 
Regulation on 
the EU Single 
Window 
Environment 
for Customs  To establish the EU 
Single Window 
Environment for 
Customs and its 
components, the 
National Single 
Windows, the 
central EU Customs 
Single Window 
Certificates 
Exchange system 
(EU CSW -CERTEX) 
for the 
Government -to-
Government (G2G) 
and Business -to-
Government ( B2G) 
functionalities  Regulation 
(EU) 2022/2399  
 
Entry into force 
from 12/12/2022  None 
Source:  Compiled by the WTO Secretariat from the regulations listed.  
3.13.  During the early part of the review period, EU customs policy and direction were guided by 
the multiannual action programme Customs  2020 until 31  December  2020. It was geared towards 
computerization, facilitating trade, reducing costs, and improving the ha rmonized functions of 
Customs.11 With a budget of EUR  523 million over the period 2014 -20, it has been credited with 
improving risk management to enable more targeted customs controls, offering more support to 
customs authorities through training and compe tency standards, and developing 56  IT systems 
supporting businesses and national customs administrations.12 
3.14.  In March  2021, a new regulation on the Customs programme 2021 -27 (Regulation 
(EU) 2021/444) was approved by the Commission to continue the Customs p rogramme for greater 
cooperation and enhanced capacities. It repealed the earlier Regulation on Customs 2020 and was 
made retroactive to 1  January  2021 with a continuation until 31  December  2027. It has an overall 
expected budget of EUR  950 million and fou r specific objectives over the period: (i)  preparation and 
 
11 Regulation (EU) 1294/2013.  
12 Taxation and Customs Union, Customs  2020. Viewed at: https://taxation -
customs.ec.europa.eu/system/files/2022 -04/TAXUD -Infographic -CUSTOMS2020_1.pdf .  WT/TPR/S/442  • European Union  
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  uniform implementation of customs legislation and policy; (ii)  customs cooperation; 
(iii) administrative and IT capacity -building, including human competency and training, as well as 
the developmen t and operation of European electronic systems; and (iv)  innovation in the area of 
customs policy.13 
3.15.  The Regulation on the EU Single Window Environment for Customs (Regulation 
(EU) 2022/2399)  entered into force on 12  December  2022. The initiative has run s o far in pilot mode 
and the Regulation makes it mandatory for all EU member States to join the Government -to-
Government component of the initiative by early 2025, i.e.  the first phase. In the second phase, 
previewed for 2031, a Business -to-Government schem e is to be put in place.14 Further, the 
Regulation allows member States to develop their single window systems as they see fit so long as 
the basic EU functionalities are in place.  
3.1.1.3   Electronic systems  
3.16.  The European  Union's electronic IT systems for customs r emain one of the outstanding items 
of the UCC with ongoing implementation. Furthermore, the deadlines and expected 
operationalization of several systems have been delayed several times. The most recent decision 
setting out the revised target dates was esta blished in December  2019; it set target dates of 2020, 
2022, and 2025.15 Most of the 17  systems are to be developed at the trans -European level by the 
Commission but may involve certain member State updates as well (11), whereas 3 have a hybrid 
involvement  of both the Commission and member States, and 3 are to be developed exclusively by 
member  States.  
3.17.  As of December  2022, 6 of the 17 systems were fully implemented (Table  3.3). According to 
a Commission progress report, "the projects continue to be mostly o n track and feasible for 
completion in line with the planning" but "the challenges to meet the legal deadlines are situated 
primarily on the side of the Member  States".16 
Table 3.3 Overview and implementation of electronic systems under the UCC, 
December  2022  
Electronic system  Description  Deployment  Member State 
status  Start date  End date  
1. UCC Registered 
Exporter System (REX)  Registered exporters under GSP  01/01/2017  Implemented  Completed  
2. UCC Binding Tariff 
Information System 
(BTI) Alignment, monitoring and 
surveillance of binding tariff 
information  2017-19 01/12/2023  In progress  
3. UCC Customs 
Decisions  Processes for customs decisions, 
decision -making and decision 
management  02/10/2017  Imple mented  Completed  
4. Direct trader access to 
European Information 
Systems (UUM&DS)  Services for user -to-system 
interfaces  02/10/2017  Implemented  Completed  
5. UCC Authorised 
Economic Operators 
System (AEO) upgrade  Implements business processes 
related to AEO applications and 
authori zations  2018-19 Implemented  Completed  
6. UCC Economic 
Operator Registration 
and Identification 
System upgrade 
(EORI2)  Upgrade of the existing EORI  05/03/2018  Implemented  Completed  
7. UCC Surveillance  3 Upgrade of the existing 
Surveillance  2+ system  01/10/2018  Implemented  In progress  
8. UCC Proof of Union 
Status (PoUS)  New system to store, manage and 
retrieve the Proofs of Union Status  01/03/2024, 
02/06/2025  01/03/2024, 
02/06/2025  Not started  
9. UCC New 
Computerised Transit 
System (NCTS) 
upgrade  Upgrade existing NCTS to new UCC 
requirements  2021-2024 2023-2025 For phase 5, 
14 completed 
technical 
specifications  
 
13 Regulation (EU)  2021/444.  
14 European Commission, The EU Single Window Environment for Customs . Viewed at: https://taxation -
customs.ec.europa.eu/eu -single -window -environment -customs_en .  
15 Commis sion Implementing Decision (EU)  2019/2151 . 
16 European Commission Report COM(2021)  791 final.  WT/TPR/S/442  • European Union  
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  Electronic system  Description  Deployment  Member State 
status  Start date  End date  
10. UCC Automated Export 
System (AES)  System for exports and exit  01/03/2021  01/12/2023  27 planned to 
start operations 
during 2021 -23 
11. UCC Information 
Sheets (INF) for 
Special Procedures  Develop a new trans -European 
system to streamline INF data 
management  01/06/2020  Implemented  Completed  
12. UCC Special 
Procedures  Harmoni zes Special Procedures 
across the Union  01/03/2021,  
To be defined  01/12/2023,  
To be defined  Component 1, 
9 completed; 
component 2, 
14 completed  
13. UCC Notification of 
arrival, presentation 
notification and 
temporary storage  Further defines the processes for 
arrival, presentation, and temporary 
storage  To be defined  To be defined  3 components 
completed by 1, 6, 
and 4 member 
States  
14. UCC National Import 
Systems upgrade  Relates to all other processes of the 
import domain  To be defined  To be defined  15 completed 
technical 
specifications  
15. UCC Centralised 
Clearance for Import 
(CCI)  Centralised clearance for goods 
under a customs procedure  01/03/2022,  
02/10/2023  01/12/2023,  
02/06/2025  For phase 1, 8 
have completed  
16. UCC Guarantee 
Management (GUM)  Assurance of real time allocation 
and management of the guarantees 
across member States  02/10/2023, 
To be defined  02/06/2025, 
To be defined  7 have deployed  
17. UCC Import Control 
System (ICS  2) Strengthening the safety and 
security of supply chains  2021-2024 2021-2024 For release 1, 27 
started operations 
in October  2021 
Note:  "To be defined" is as mentioned in the Work Programme and is dependent upon the member States, 
national plans, or other processes and systems.  
Source : Commission Implementing Decision (EU)  2019/2151; and European Commission, UCC – Work 
Programme . Viewed at: https://taxation -customs.ec.europa.eu/cust oms-4/union -customs -code/ucc -
work-programme_en ; European Commission Report  COM(2021)  791 final;  and information provided 
by the authorities.  
3.1.1.4   Trade facilitation  
3.18.  EU member States ratified the WTO Agreement on Trade Facilitation Agreement (TFA ) in 2015 
and were parties to the TFA when it entered into force in 2017. The Commission and member States 
have been supportive of implementation and have provided grants, technical assistance, 
capacity -building, and other support to developing and LDC WTO  Members since the beginning and 
throughout the review period.17 The latest information on assistance and support submitted to the 
Committee on Trade Facilitation shows that the European  Union has supported 139  countries 
through bilateral or regional initi atives. Total budgeted spending was EUR  447 million on regional 
initiatives and EUR  368.4  million on single -country programmes.18 Notifications during the 2017-21 
period provide details on member State trade facilitation assistance.19  
3.19.  The European  Union joined the initiative of a group of Members pledging accelerated 
implementation of certain TFA provisions20 to support the global COVID -19 response. The 
European  Union was one of 25  Members committed to accelerated implementation and requ ested 
other Members to do the same.21 In another communication, the European  Union proposed that 
WTO Members share their experiences about reforms and changes made in response to the 
pandemic so that it could be compiled for discussion in the Committee.  
3.20.  Since implementation of the TFA, the European  Union has made notifications to the 
Committee with respect to Articles  1.4 (Publication of information), 10.4.3 (Single window), 
 
17 The European  Union also provides assistance on a regional basis and to non -WTO Members as well.  
18 WTO documents G/TFA/N/EU/2/Add.3 and Corr.1, 16  December  2021 and 3  February  2022. As 
reported therein, even though it may be an overestimate as some figures refer to a whole package including a 
TF component without a separate budget.  
19 WTO documents G/TFA/N/EU/2, 20  July 2017; G/TFA/N/EU/2/Add.1, 28  September  2018; 
G/TFA/N/EU/2/Add.2, 14  June 2019; and G/TFA/N/EU/2/Add.3, 16  December  2021.  
20 Articles 1, 7.1, 7.3, 7.8, 8, 10.1, 10.2, and 10.4 in the latest revision of the proposal.  
21 Based on latest revision, WTO document G/TFA/W/25/Rev.9, 8  April 2022.  WT/TPR/S/442  • European Union  
- 54 - 
  10.6.2  (Customs brokers), 12.2.2 (Exchange of information contact point), 22.1 (As sistance and 
support for capacity -building), and 22.2 (Contact points and information for providing assistance).22 
3.21.  EU provisions on various TFA elements are included in the UCC or its subsidiary legislation 
with varying degrees of developments and reforms ongoing (Section  3.1.1.3 for electronic 
systems/single window). With respect to advance rulings, the European  Union has had binding tariff 
information (BTI) in place for many years. BTIs are issued by member State customs authorities 
and are valid for thre e years. Information on BTIs is shared among member States and with the 
public through the European Binding Tariff Information (EBTI) database.23 A similar process is in 
place for the determination of origin through the Binding Origin Information (BOI) pro cedure 
although there is no electronic system and these are requested and issued in paper form. However, 
an IT system for the management of BOI and Binding Value Information (BVI) (see below) is planned 
to be developed and become operational by 2025. In 20 18, the Commission initiated exploratory 
consultations on the interests for BVI; it was followed by a feasibility study in 2020. It is expected 
that implementing regulations on establishing the BVI will be adopted in the second quarter of 2023, 
with the ai m of making the BVI system operational by 2025 once the IT management system for 
BOI and BVI becomes available.24  
3.22.  The EU Authorised Economic Operator (AEO) Programme has been in place for over a decade 
and it continued to operate with more than 18,100 val id authorizations in 2022. There remain 
two types of AEO, one for customs simplification programmes (AEOC) and another for security and 
safety (AEOS), with the possibility to have both AEOC and AEOS status. About half the authorizations 
are for AEOC (47%) and half for AEOC/AEOS combined (49%); only  4% are for AEOS.25 Once the 
AEO status is achieved, the benefits include fewer controls (both physical and document based 
controls), prior notification and priority treatment, and Customs simplifications. At pres ent, there is 
no mutual recognition with third countries for AEOC, but there is for AEOS. Mutual recognition 
covering the AEOS status has been concluded with China, Japan, Norway, Switzerland, the 
United  States, and most recently  the Republic of Moldova, w hich entered into force on 
1 November  2022. The mutual recognition decision with Canada was signed on 28  October  2022 but 
will only become operational once the automatic data exchange is established, which is expected 
for 2023. Negotiations are currently o ngoing with Türkiye and Singapore. These agreements only 
cover the AEO status for security and safety.  As part of its efforts to facilitate legitimate trade, the 
Commission plans further improvements of its trusted trader programme.26 For future agreements , 
the emphasis on monitoring the compliance with the respective programmes will be further 
enhanced , according to the Commission .  
3.23.  The European  Union's system of risk management has undergone further development during 
the review period (see Section  3.1.1. 5 on undervaluation). In January  2022, the European  Union's 
new risk management system, Customs Risk Management System (CRMS2), was launched through 
a new electronic interface. CRMS2 is part of the EU -wide common risk management framework and 
was put in pl ace to facilitate the exchange of risk -related information between customs 
administrations. It connects 660  customs offices and national centres and 2,680  customs officers 
and risk experts.27 The Commission has established common risk criteria and standard s for 
identifying high -risk goods, but has not made this publicly available. As part of the Commission's 
methodologies, there may be priority control areas established on the basis of the type of goods, 
traffic routes, means of transport, type of economic operators, and type of customs procedure.  
 
22 WTO document  symbol series G/TFA/N/EU/1 and G/TFA/N/EU/2, including addenda, revisions, etc.  
23 European Commission, European Binding Tariff Information (EBTI) . Viewed at: 
https://ec. europa.eu/taxation_customs/dds2/ebti/ebti_home.jsp?Lang=en .  
24 European Commission, Strategic Plan  2020-2024: DG Taxation and Customs Union . Viewed at: 
https://commission.europa.eu/system/files/2020 -10/taxud_sp_2020_2024_en.pdf .  
25 European Commission, What Is AEO?  Viewed at: https://taxation -customs.ec.europa.eu/customs -
4/aeo -authorised -economic -operator/what -aeo_en .  
26 European Commission, Strategic Plan  2020-2024: DG Taxation and Customs Union . 
27 Information provided by the authorities.  WT/TPR/S/442  • European Union  
- 55 - 
  3.1.1.5   Customs valuation  
3.24.  The EU customs valuation legislation did not undergo significant changes during the review 
period and the last substantial revisions were as a result of the implementation of the UCC and its 
related regulations in 2016.28 Thus, the main framework remains intact with the primary valuation 
method being the transaction value, followed by the other valuation methodologies applied in 
sequential order as per WTO and EU rules.29 However, there have been d evelopments in the 
guidance and practice for EU customs valuation.  
3.25.  In September  2020, the Commission published a new Guidance document on customs 
valuation that provides explanations (not legally binding) on the application of Articles  128, 136, 
and 347 of  the UCC IA.30 It clarifies the sale for export provisions under the transaction value and 
how payments for royalties and licence fees are to be taken into account for the customs value, 
among other things. This document was published in the European Union 's Compendium of customs 
valuation texts.31  
3.26.  The Compendium contains all guidance concluded by the European  Union's Customs Code 
Committee and the Customs Expert group – Customs Valuation Section, as well as summaries of 
the Court of Justice of the Europea n Union judgements relevant for customs valuation. The guidance 
texts in the Compendium are of an explanatory nature and are not legally binding. The aim of the 
Compendium is to support the member States' customs administrations and all interested parties in 
the uniform application of the EU customs valuation legislation. The Compendium is updated 
regularly, with the most recent version published in July  2022.32 
3.27.  Customs undervaluation remains an important issue that is addressed by the European  Union 
and it s member States. Ongoing evaluation and controls of the EU Budget in recent years have 
recognized that undervaluation fraud has impacted, and continues to impact, customs revenues. 
The European Anti -Fraud Office (OLAF) has investigated many customs underva luation cases in 
recent years, mainly concerning textiles and shoes imported from China and circulated and 
distributed through several member States. For example, a 2021 investigation case by OLAF 
involving undervaluation fraud of imports of textiles and f ootwear into the Netherlands and Belgium 
indicated that EUR  27 million was outstanding.33  
3.28.  In response to those findings, the Commission and member States have elaborated common 
financial risk criteria (FRC) to be applied by member States when controlling goods for release for 
free circulation. The decision establishing the FRC was adopted in 2018 and started to be 
implemented in 2019. One of the criteria aims at addressing the risk of undervaluation and includes 
the methodology and findings identified duri ng common actions and joint investigations. The purpose 
of the criteria is that they have to be applied by all the member States and they define a level of 
risk, which will guide the decision to carry out a control or not. It is thus a first attempt toward s a 
systematic common approach on risk -based controls covering the risk of undervaluation fixed in law 
(see also Section  3.1.1. 5). 
3.29.  Following previous exploratory work in 2018, the Commission plans to offer binding rulings 
on customs valuation, so -called BVI (Section  3.1.1.4).  
 
28 WTO document WT/TPR/S/357, 17  May 2017, Section  3.1.2.  
29 The transaction value of identical goods; transaction value of similar goods; deductive method; 
computed method; and fall -back method (UCC, Article  74). 
30 European Commission, UCC – Guidance Documents . Viewed at: https://taxation -
customs.ec.europa.eu/customs -4/union -customs -code/ucc -guidance -document s_en. 
31 For example, on the domestic sale principle.  
32 European Commission, Compendium of Customs Valuation Texts . Viewed at: https://tax ation-
customs.ec.europa.eu/system/files/2022 -07/2022%20EU%20Valuation%20Compendium%20EN.pdf .  
33 For a similar examination by OLAF in 2020, The OLAF Report  2020. Viewed at: https://anti -
fraud.ec.europa.eu/system/files/2021 -12/olaf_report_2020_en.pdf . OLAF, The OLAF Report  2021. Viewed at: 
https://anti -fraud.ec.europa.eu/syste m/files/2022 -09/olaf -report -2021_en.pdf .  WT/TPR/S/442  • European Union  
- 56 - 
  3.30.  On 24  June 2020, the European  Union notified the WTO of changes to its customs valuation 
legislation as implemented by the UCC on 1  May 2016. Pursuant to Article  22.2 of the Agreement 
on Implementation of Article  VII of GATT  1994, the notification indicate s that the customs valuation 
provisions are contained in Articles 69 -76 of the UCC; Articles 127 -146, Article  347, and 
Annexes  23-01 and  23-02 of the UCC IA; Article  71 of the UCC DA; and Article  6 of the UCC 
Transitional Delegated Act.34 
3.1.2   Rules of origin  
3.31.  Rules of origin are maintained by the European  Union for non -preferential and preferential 
trade. During the review period, there were changes to both preferential and non -preferential rules 
of origin. Like many other policy areas, certain aspects of rules of origin were impacted by the 
COVID -19 pandemic and the European  Union adjusted policy accordingly. As part of this response, 
the Commission put in place changes regarding certificates of proof of preferential origin, which were 
negatively impacted due to  the necessity to obtain signed, stamped, paper documents and submit 
them to Customs. The flexibilities put forth to alleviate this situation include (i)  acceptance of copies, 
either in paper or electronic form; (ii)  retrospective issuance of certificates;  and (iii)  greater use of 
approved exporter status. All flexibilities remain in place.  
3.1.2.1   Non-preferential  
3.32.  The European  Union's non -preferential rules of origin are set out in Articles 60 -61 of the UCC 
and further expanded upon in Articles  31-36 of the UCC D elegated Act (UCC DA), including 
Annex  22-01. Chart  3.1 outlines the rules and the process for determining origin. Essentially, the 
wholly obtained principle can be applied to certain goods when only one country/territory is involved 
in the production. Whe n more than one country/territory is involved, the origin is determined by the 
criterion of the last substantial transformation either through the primary/residual rules listed in 
Annex  22-01 for certain products of 37  HS chapters or alternatively through the general rules and 
major portion rule, serving as a residual rule. The UCC DA was amended four times during the review 
period with one amendment focusing on changes to non -preferential rules of origin.35 The 
amendments involved both technical adjustment s and more substantial elements, as follows:  
• Under the wholly obtained method, vegetables must be both grown and harvested in 
the respective country/territory;  
• When general rules are applied followed by the major portion rule, goods in 
HS Chapters  1-29 and  31-40 will be determined using weight and not value of the 
contributing goods;  
• Where the last transformation involves minimal operations, the major portion rule will 
apply, either using weight or value depending on HS chapter;  
• The amended definition of "e ssential spare parts" removed the reference to goods 
previously exported; and  
• Annex  22-01 was updated to incorporate the new HS22 nomenclature.  
3.33.  These amendments have not been notified to the Committee on Rules of Origin as of 
October  2022.  
 
34 WTO document G/VAL/N/1/EU/1, 30  June 2020.  
35 Commission Delegated Regulation (EU)  2021/1934.  WT/TPR/S/442  • European Union  
- 57 - 
  Chart 3.1 Non-preferential rules of origin  
 
Source:  Compiled by the WTO Secretariat from the UCC and UCC DA.  
3.1.2.2   Preferential  
3.34.  Preferential rules of origin are contained  in various of the European  Union's bilateral or 
regional a greements. In order to benefit from the preferential rates of duty, the imported goods 
must meet the specific rules of origin contained therein. Since the previous Review, the main 
developments were new FTAs or EPAs that entered into force with their own u nique rules of origin. 
The other long -standing agreements have not changed; thus their preferential rules of origin remain 
as outlined previously.36 The only exceptions were the agreements with Ukraine, Overseas  Countries 
and Territories (OCTs), and the un derlying Regional Convention on pan -Euro-Mediterranean 
preferential rules of origin (PEM Convention), which have been revised (see  below).37  
3.35.  Although the various agreements contain unique preferential rules of origin, there are a 
number of common elements  that the European  Union uses in most of its agreements (Box  3.2). It 
continues to use all the different types of list rules, but in recent FTAs these rules have been 
simplified and made more flexible, allowing more non -originating input to reflect new eco nomic 
realities and integration of industry with the global value chains, while ensuring that significant 
processing is conducted in a Party. Moreover, whenever relevant, there are alternative rules of origin 
to facilitate compliance with these rules for e conomic operators (Table  3.4). Rules on cumulation 
typically vary among the preferential agreements. The PEM Convention allows for diagonal 
cumulation. Thus, in addition to all agreements having bilateral cumulation on originating products, 
some have diago nal cumulation (e.g.  PEM area or in the case of the new EPAs). There has been a 
shift in recent years with respect to proof of origin, whereby older agreements typically require 
government forms (EUR -MED, EUR.1) that require a stamp or other approval by of ficials, to 
self-certification of origin documents. In parallel with the development of the REX system, which had 
initially been used for GSP origin processing , in recent FTAs the exporters need to be registered in 
 
36 WTO document WT/TPR/S/395/Rev.1, 7  July 2020, Table  3.2. 
37 The rules of origin for GSP  were amended slightly to reflect the new HS  nomenclature. The Annexes in 
the UCC DA were updated by Commission Delegated Regulation (EU)  2021/1934.  
WT/TPR/S/442  • European Union  
- 58 - 
  the REX system to be entitled to self -certify that their products are originating, e.g.  the 
United  Kingdom and OCTs.38 This is expected to be expanded to other agreements in the future.  
Box 3.2 Main preferential rules of origin elements as contained in EU preferential 
agreements  
List rules  − Wholly obtained requirement;  
− Change in tariff classification;  
− Value or weight limitation;  
− Specific working or processing;  
− Combination of one or more of the ab ove rules.  
Tolerance  Permits the use of non -originating materials up to a certain percentage or threshold:  
− General tolerance up to a percentage based on value or weight of the final product;  
− Specific tolerance rules apply to textiles and textile articles of HS Chapters  50 to 63. 
Minimal 
operations  A list of minimal operations is included that defines the working or processing regarded 
as insufficient to confer origin.  
Transport  Goods must be transported directly, i.e.  from one party's territory to another (with 
limited exceptions – old EU FTAs).  
Consignments can be split in a third party under customs control while retaining the 
originating status of a product, provided that the  product is not altered (non -alteration 
rule – recent EU FTAs).  
Cumulation  − Bilateral;  
− Diagonal;  
− Regional;  
− Extended;  
− Full. 
Territoriality  With limited exception, to obtain originating status, the working or processing on a 
good must be carried out without interruption in the territory of the European  Union or 
partner country covered by the preferential agreement.  
"No drawback" 
rule Prevention of refunding duties due to drawback. Most agreements prohibit drawback 
with some allowing partial drawback over a transition period.  
Proof of origin  − Government certificates (EUR.1, EUR -MED);  
− Self-certification (Approved Exporter, Registered Exporter (REX).  
Source:  Preferential Trade: Guidance on the Rules of Origin . Viewed at: https://taxation -
customs.ec.europa.eu/system/files/2022 -
08/Guidance%20Preferential%20Origin%20%28Helsinki%29%20J uly%202022%20.pdf .  
Table 3.4 Overview of new preferential rules of origin  
Partner  Summary  Reference  
Singapore  List rules: specific work or processing listed by HS chapter/subheading  
Cumulation: bilateral with ASEAN countries if applying a preferential 
agreement with the European  Union (some materials are excluded), and 
with ASEAN countries benefitting from the GSP (limited to some products)  
Tolerance: most of agriculturea, 10% of the weight, for non -ag, 10% of the 
value, except textilesb that have specific thresholds  
Non-originating materials not subject to drawback, or exemption from, 
customs duties  OJ, L 294, 
14/11/2019  
Viet Nam List rules: specific work or processing listed by HS chapter/subheading  
Cumulation: bilateral, with ASEAN countries if applying a preferential 
agreement with the European  Union (limited to squid and octopus), and for 
textile products (limited to products of Chapter 61 and 62) with fabrics 
originating in the Republic  of Korea.  
Tolerance: most of agriculturea, 10% of the weight, or of the value, for 
non-ag, 10% of the value, except textilesb that have specific thresholds  OJ L 186, 
12/06/2020  
United  Kingdom  List rules: product specific rules by HS chapter/subhe ading  
Cumulation: bilateral  
Tolerance: most of agriculturea, 15% of the weight, for non -ag, 10% of the 
value, except textilesb that have specific thresholds  OJ L 149, 
30/04/2021  
 
38 Some agreements allow a registered/approved exporter status in lieu of REX.  WT/TPR/S/442  • European Union  
- 59 - 
  Partner  Summary  Reference  
Ukraine  Replacing the rules of origin in the Association Agreement with the relevant 
parts of the PEM Convention  OJ L 20, 
23/01/2019  
Overseas 
Countries and 
Territories (OCT)  List rules: specific work or processing listed by HS chapter/subheading  
Cumulation: bilateral, EPA countries (materials and processing) except 
South -Africa, GSP countries (Everything but Arms (EBA) and standard GSP 
where duties are 0%) with some exceptions of products and materials  
Tolerance: most of agriculturea, 15% of the weight, for non -ag, 15% of the 
value, except textilesb that have specific thresho lds OJ L 355, 
07/10/2021  
ACP EPA  List rules: product specific rules by HS chapter/subheading, single 
transformation for textiles and clothing  
Cumulation: bilateral, diagonal between the parties of ACP EPA States, 
OCTs, South Africa (for duty -free, quota -free materials); origin quota with 
more flexible rule for tuna  
Tolerance: 15% in value  OJ C 69, 
22/02/2019  
OJ C 131, 
24/03/2022  
OJ C 211, 
30/05/2022  
OJ C 156, 
8/05/2020  
OJ C 407, 
12/11/2018  
OJ C 520, 
27/12/2021  
a Chapters  2 and 4 to 24 but excluding processed fish of Chapter  16. 
b Chapters  50-63. 
Source:  Compiled by the WTO Secretariat based on the relevant agreements.  
3.36.  In addition, the PEM Convention, which many of the EU FTAs use as a basis for origin 
determination, underwent changes during the review period. At present, the PEM covers 
23 Contracting Parties, mostly in the Euro-Mediterranean area, a nd harmonizes rules of origin to 
offer greater benefits, such as diagonal cumulation among its members. The PEM is an important 
part of the European  Union's origin framework, as more than 40% of its preferential trade is 
determined through PEM origin rules .39 The European  Union has led efforts to revise, modernize, 
and simplify the PEM for many years but full agreement of all the parties has not been achieved. As 
a result, in 2020, there was an initiative to proceed with a majority of the PEM parties to sta rt 
applying the new revised rules on a provisional basis while maintaining discussions to reach full 
agreement of all the parties.  
3.37.  This led to the so -called "Transitional rules of origin applicable in the PEM area" , which are 
being applied along with the P EM Convention rules. Overall, the transitional rules provide more 
flexibility and are less stringent, except for products containing sugar, the limitation of 
non-originating sugar is expressed in weight instead of value. The main changes include a move to 
full cumulation whereby several countries can contribute to the preferential origin criteria40; 
thresholds for non -originating materials (tolerance) were increased from 10% to 15%41; and the 
"direct transport" rule was relaxed. The transitional rules were adopted in respect of 21  parties on 
7 December  2020 with an expected target date for implementation of 1  September  2021. As of 
1 September 2021, eight parties had implemented the new rules and the European Economic Area 
(EEA) had accepted them thereafter w ith retrospective effect.42 Since that point in time, an additional 
five parties have adopted the changes.43 As of end -2022, the European  Union and 13 partners were 
applying the transitional rules and it was expected a number of others would apply it durin g 2023.  
3.38.  The Commission regularly publishes an overview or matrix of diagonal cumulation among the 
parties of the PEM, the latest one is from 2021.44 The transitional rules are applicable in parallel with 
the PEM Convention and a matrix on diagonal cumulati on in the framework of the transitional rules 
is also regularly published by the Commission.45 Due to the United  Kingdom's withdrawal from the 
 
39 European Commission, Guidan ce: Transitional PEM Rules of Origin , TAXUD/E4/AM/GD. Viewed at: 
https://ta xation -customs.ec.europa.eu/document/download/f8214b8d -2179-4600-8692-
a1aeb3ff9ab0_en?filename=PEM%20transitional%20RoO%20 -%20Guidance%20V1_25.08.2021.pdf .  
40 Special rules apply for textile products.  
41 Special rules apply for textile products.  
42 Albania, Faroe  Islands, Georgia, Iceland, Jordan, Palestine, Norway, and Switzerland.  
43 Kosovo*, Republic  of Moldova, North  Macedonia, Montenegro, and Serbia. *References to Kosovo 
shall be understood to be in the context of Security Council Resolution  1244 (1999).  
44 European Commission Notice PUB /2021/751.  
45 European Commission Notice PUB /2022/1286.  WT/TPR/S/442  • European Union  
- 60 - 
  European  Union (Brexit), the inclusion or exclusion of UK OCTs for diagonal cumulation with OCTs, 
GSP, and ACP EP A countries ceased as from 31  January  2020.46  
3.39.  Five notifications on preferential rules of origin were made to the Committee on Rules of Origin 
pursuant to paragraph  4 of Annex  II of the relevant Agreement during the review period. These 
concerned the FTAs  with Central American countries, Singapore, and Viet  Nam, and the EPAs with 
Pacific  States and Eastern and Southern Africa States.47 
3.1.3   Tariffs  
3.40.  The European  Union continued to apply tariffs on a majority of MFN trade, with an overall 
average applied rate of 6.5% (Chart  3.2). Bound rates were almost at the level of applied rates, 
i.e. 6.6%, thus very little binding overhang. However, t he overall tr ade-weighted average was 1.1%, 
around one sixth of the simple average, reflecting significant trade in products that are duty -free or 
have relatively lower duties. Compared to other WTO Members' tariff averages48, the European  Union 
ranked 28th overall (lowest to highest averages), and had the third -highest average of the 
four Members in the TPR three -year review cycle, behind the United  States and Japan, but ahead of 
China.49 
Chart 3.2 Tariff avera ges, 2022  
 
Note:  Trade weighted averages were estimated using 2021 import data at the 8 -digit level from 
Eurostat  database.  
Source:  WTO Secretariat calculations based on IDB and Eurostat database; and information provided by the 
authorities.  
3.1.3.1   Applied rate s 
3.41.  The applied tariff structure and profile have not changed significantly since the previous 
Review; the rates of duty remain substantially the same. The simple average tariff rate increased 
slightly from 6.3% to 6.5% on account of the changes in ad valore m equivalents (AVEs) calculated 
for the non -ad valorem  duties (Table  3.5). The number of non -ad valorem  duties remained 
 
46 European Commission Notice PUB /2022/220.  
47 WTO documents G/RO/N/201, 21  July 2020; G/RO/N/202, 22  July 2020; G/RO/N/211, 
4 February  2021; G/RO/N/219, 29  April 2021; and G/RO/N/222, 29  April 2021.  
48 Simple average of the ad valorem  or ad valorem  equivalent (AVE) HS six -digit duty averages.  
49 WTO, World Tariff Profiles  2022. Viewed at: 
https://www.wto.org/english/res_e/booksp_e/world_tariff_profiles22_e.pdf .  
6.6%6.5%
1.1%
0%2%4%6%8%
Bound
(simple average)Applied
(simple average)Trade weightedChart 3. [EU27] Tariff averages, 2022
Source: WTO Secretariat calculations based on IDB database and Eurostat database; and information provided by the authorities.Note: Trade weighted averages were estimated using 2021 import data at the 8 -digit level from Eurostat database.WT/TPR/S/442  • European Union  
- 61 - 
  significant at about 10% of all tariff lines, thus this had an impact on the overall averages.50 Other 
indices, such as the percentage o f duty -free lines (27%) and percentage of lines with tariff 
peaks  (6%), have been impacted by nomenclature changes, i.e.  the addition of more lines created 
statistical discrepancies, whereas the underlying situation has not essentially changed. The number 
of duty -free lines increased slightly in absolute terms due to the ongoing implementation of staged 
reductions pursuant to the ITA  II. The applied rates remained at or below the level of their 
WTO bindings for all products.51 
3.42.  In terms of sectors, high tari ffs remain prominent in the agricultural sector, in particular in 
the dairy, animal and animal products, and sugar and confectionery subsectors (Table  3.6). Tariff 
peaks, or extremely high tariffs exist in these subsectors as well as in the beverage, fruit  and 
vegetable, and other subsectors mainly due to high AVEs for products with specific or compound 
duties. Again, the highest tariffs result from the calculation of AVEs in nearly all cases and have led 
to a few outlying very high tariffs. On the other ha nd, many industrial sectors have very low tariff 
averages, i.e.  metals, wood, machinery, and petroleum; the exceptions are fish and fish products 
and clothing, which have averages above 10%. Significant differences exist in the overall tariff 
averages for agricultural versus non -agricultural products, as agricultural tariff averages are more 
than three times (14.9%) higher than non -agriculture tariffs (4.3%). The use of non -ad valorem  
tariffs, i.e.  specific, compound, mixed, agricultural components, additio nal duties, and entry prices, 
is prevalent in the agricultural sector.  
3.43.  In accordance with the EU policy on establishing a common organization of certain agricultural 
markets, the import duties on certain cereals are subject to change based on representativ e c.i.f. 
import prices. In April  2020, the Commission amended the import prices on cereals per the policy 
and respective procedures, and subsequently amended them several more times during the period 
from April to August  2020.52 On 26  August  2020, the meth odology for fixing the import duties 
resulted in zero import duties, subject to certain end -use and transport criteria, which remained in 
place for the rest of the review period.53 Import duty rates on husked rice were also adjusted during 
the review perio d. The European  Union changed the rates several times during the review period, 
the latest on 8  September  2022, pursuant to the agreement reached with the United  States as a 
result of EU enlargement and negotiations under Article   XXIV/XXVIII GATT  1994 o n a mechanism 
that adjusts the import duty based on parameters such as import reference levels.54  
Table 3.5 Structure of MFN tariffs, 2022  
(%)  
MFN applied  Final bound 
2022b 2019a 2022b 
1. Bound tariff lines (% of all tariff lines)  100.0  100.0  100.0  
2. Simple average tariff rate  6.3 6.5 6.6  
Agricultural products (WTO definition)  14.2 14.9 15.1  
Non-agricultural products (WTO definition)  4.2 4.3 4.4  
Agriculture, hunting, forestry and fishing (ISIC  1) 7.7 8.1 8.8  
Mining and quarrying (ISIC 2)  0.2 0.2 0.2  
Manufacturing (ISIC  3) 6.2 6.5 6.6 
3. Duty-free tariff lines (% of all tariff lines)  27.0 26.7 25.6 
4. Simple average rate of dutiable lines only  8.7 8.9 9.0 
5. WTO tariff quotas (% of all tariff lines)c 4.5 4.7 4.7 
6. Non-ad valorem  tariffs (% of all tariff lines)  10.7 10.5 10.6 
7. Non-ad valorem  tariffs with no AVEs (% of all tariff lines)  3.1 1.8 1.8 
8. Domestic tariff peaks (% of all tariff lines)d 5.5 5.9 6.2 
9. International tariff peaks (% of all tariff lines)e 8.5 9.3 9.5 
10. Overall standard deviation of applied rates  10.0 10.1 10.2 
11. Nuisance applied rates (% of all tariff lines)f 6.8 6.9 7.0 
 
50 Both in terms of higher AVEs for many products, and the ability to include more AVEs in the 
calculations compared to 2019 (due to better availability of data).  
51 Both the bo und and applied rates analysed were submitted by the European  Union in their IDB 
submission. An analysis with WTO certified bound rates was not possible, as the last bound schedule was in 
HS02 and reflects the EU25 schedule.  
52 Commission Implementing Regul ation (EU)  2020/573.  
53 Commission Implementing Regulation (EU)  2020/1221.  
54 The latest adjustment is contained in Commission Implementing Regulation (EU)  2022/1481.  WT/TPR/S/442  • European Union  
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MFN applied  Final bound 
2022b 2019a 2022b 
Number of lines  9,533  9,736  9,736   
Ad valorem  8,512  8,718  8,701   
 Duty-free lines  2,572  2,603  2,495   
Non-ad valorem  1,021  1,018  1,035   
 Specific  674 675 685  
 Compound  199 200 202  
 Mixed  64 64 62  
 Otherg 84 79 86 
a Ad valorem  equivalents (AVEs) were estimated based on 2018 import data (extra -EU-28) at 
the 8-digit tariff from Eurostat database. In case of unavailability, the ad valorem  part is used for 
compound and mixed rates. Duty rates under ITA Expansion (as of 1  July 2017) were taken into 
account in calculations.  
b AVEs were estimat ed based on 2021 import data (extra -EU-27) at the 8 -digit tariff from Eurostat 
database. In case of unavailability, the ad valorem  part is used for compound and mixed rates. Duty 
rates under ITA Expansion (as of 1  July 2022) were taken into account in calc ulations.  
c Information based on Official Journal of the European  Union L 385 (29  October  2021).  
d Domestic tariff peaks are defined as those exceeding three times the overall simple average applied 
rate. 
e International tariff peaks are defined as those exceeding 15%.  
f Nuisance rates are those greater than zero, but less than or equal to 2%.  
g Other includes Agricultural Components (EA), Additional Duties for Sugar (AD S/Z), Additional Duties 
for Flour (AD F/M), and Entry Prices (EP).  
Note:  All tariff ca lculations exclude in -quota lines. Year 2019 and 2022 tariff schedules are based on HS17 
and HS22, respectively. Both the bound and applied rates analysed here were submitted by the 
European  Union in their IDB submission. An analysis with WTO certified bou nd rates was not 
possible, as the last bound schedule was in HS02 and reflects the EU25 schedule.  
Source:  WTO Secretariat  calculations based on IDB and Eurostat database.  
Table 3.6 MFN applied tariff summary, 2022  
 
Number  
of lines  Average  
(%) Range (%)  
MFN applied  Duty 
free 
(%) Non-ad 
valorem  
(%) 
Total  9,736  6.5 0-149 26.7 10.5 
HS 01 -24 2,539  14.7 0-149 15.1 37.8 
HS 25 -97 7,197  3.7 0-40.3 30.8 0.8 
WTO agricultural products  2,126  14.9 0-149 18.9 46.2 
 Animals and products thereof  354 22.0 0-101.5  15.0 68.6 
 Dairy products  153 35.8 1.5-148.6  0.0 99.3 
 Fruit, vegetables, and plants  515 12.7 0-112.9  11.8 15.5 
 Coffee and tea  47 11.4 0-18.7 14.9 51.1 
 Cereals and preparations  227 16.5 0-75.9 8.8 79.7 
 Oils seeds, fats, oil and their products  183 5.2 0-39.6 34.4 7.1 
 Sugars and confectionery  44 24.0 0-98.1 4.5 88.6 
 Beverages, spirits and tobacco  337 13.1 0-149 16.6 57.6 
 Cotton  6 0.0 0.0 100.0  0.0 
 Other agricultural products, n.e.s.  260 6.2 0-124.2  51.2 21.9 
WTO non -agricultural products  7,610  4.3 0-26 28.9 0.5 
 Fish and fishery products  530 11.7 0-26 8.3 0.0 
 Minerals and metals  1,454  2.0 0-12 50.1 0.7 
 Chemicals and photographic supplies  1,351  4.4 0-17.3 25.2 0.3 
 Wood, pulp, paper and furniture  495 1.4 0-10.5 72.1 0.0 
 Textiles  847 6.6 0-12 2.0 0.1 
 Clothing  333 11.6 6.3-12 0.0 0.0 
 Leather, rubber, footwear and travel goods  259 5.0 0-17 22.0 0.0 
 Non-electric machinery  904 1.9 0-9.7 23.2 0.0 
 Electric machinery  478 2.1 0-14 37.4 0.0 
 Transport equipment  322 6.0 0-22 10.6 0.0 
 Non-agricultural products, n.e.s.  591 2.1 0-9.5 36.5 3.4 
 Petroleum  46 2.5 0-4.7 39.1 0.0 
By HS chapter       
 01  Live animals and products  965 17.5 0-148.6  11.5 39.7 
 02  Vegetable products  560 9.1 0-111.4  27.0 26.8 
 03  Fats and oils  137 6.9 0-39.6 17.5 8.8 
 04  Prepared food, beverages and tobacco  877 16.4 0-149 11.1 47.3 
 05  Mineral products  230 0.8 0-8 73.0 1.3 
 06  Chemicals and products thereof  1,262  4.4 0-40.3 26.2 2.1 
 07  Plastics, rubber, and articles thereof  303 4.6 0-6.5 21.5 0.0 
 08  Raw hides and skins, leather, and its products  130 3.1 0-9.7 34.6 0.0 
 09  Wood and articles of wood  266 2.4 0-10 50.0 0.0 
 10  Pulp of wood, paper and paperboard  194 0.0 0.0 100.0  0.0 
 11  Textiles and textile articles  1,143  8.0 0-12 3.5 0.1 WT/TPR/S/442  • European Union  
- 63 - 
   
Number  
of lines  Average  
(%) Range (%)  
MFN applied  Duty 
free 
(%) Non-ad 
valorem  
(%) 
 12  Footwear, headgear, etc.  106 8.2 0-17 1.9 0.0 
 13  Articles of stone, plaster, cement  242 4.0 0-12 14.0 2.9 
 14  Precious stones and metals, pearls  58 0.6 0-4 81.0 0.0 
 15  Base metals and articles thereof  960 1.9 0-10 51.6 0.0 
 16  Machinery, electrical equipment, etc.  1,394  1.9 0-14 29.6 0.0 
 17  Transport equipment  338 5.9 0-22 10.7 0.0 
 18  Precision equipment  295 1.7 0-6.7 46.1 6.8 
 19  Arms and ammunition  22 2.2 0-3.2 18.2 0.0 
 20  Miscellaneous manufactured articles  235 2.6 0-10.5 25.1 0.0 
 21  Works of art, etc.  19 0.0 0.0 100.0  0.0 
Note:  Calculations  are based on national tariff line level (8 -digit), excluding in -quota rates and including 
AVEs. The tariff schedules are based on HS22 nomenclature, consisting of 9,738  tariff lines (at the 
8-digit tariff line level). AVEs were estimated based on 2021 imp ort data (extra -EU-27) at the 8 -digit 
tariff. In case of unavailability, the ad valorem  part is used for compound and mixed rates.  
Source:  WTO Secretariat calculations based on IDB and Eurostat database.  
3.1.3.2   Nomenclature, bound rates, and concessions  
3.44.  During th e review period the European  Union regularly updated its tariff nomenclature, 
i.e. Combined Nomenclature (CN), and made substantial amendments to implement the WCO's 
HS22 changes on 1  January  2022.55 This update of the CN also incorporated the gradual reduction 
of duty rates under the ITA Expansion Agreement, included requirements for statistics and 
commercial policy, and amended classifications of certain pharmaceutical substances. As of 
end-2022 the  European  Union was under waiver for HS07, HS12, HS17, and HS22 changes to its 
schedule.  
3.45.  Furthermore, as a consequence  of Brexit, the European  Union and the United  Kingdom had 
initiated Article  XXVIII negotiations in 2018 to modify their respective schedu les with respect to the 
concessions on tariff rate quotas (TRQs) for agricultural (Part  I, Section  I-B) and non -agricultural 
products (Part  I, Section  II).56 There was agreement between them to apportion the TRQs, as 
outlined in Annex  I of the European  Union's submission, according to the respective trade flows 
during a representative three -year period. As at December 2022, the negotiations were still 
underway with one Member and the proposed amendments to the schedule had not been finalized, 
nor certified , pending  a reservation .57 The European  Union's Schedule CLXXV (draft) has also 
undergone Article  XXIV:6 negotiations in earlier years as a result of enlargement; the last 
two renegotiations from 2006 and 2013 have been concluded but not yet certified.58 Thus, the latest 
EU bound s chedule is from 2016 and updated in the HS02 nomenclature.59 
3.1.3.3   Tariff rate quotas  
3.46.  There were changes to EU TRQ system during the review period, in part due to Brexit with 
the subsequent reallocation of quota volumes between the United  Kingdom and the Europea n Union, 
which was implemented after the end of the transition period, but also due to new initiatives taken, 
to improve the smooth management of TRQs, reduce speculation, and improve the ability to detect 
violations. EU TRQs continue to be used in three b road areas for different policy reasons: WTO TRQs, 
preferential TRQs, and autonomous TRQs (Section  3.1.3.4) (Table  3.7).60 
 
55 Commission Implementing Regulation (EU)  2021/1832.  
56 WTO document G/SECRET/42, 24  July 2018 and addenda; and G/SECRET/44, 21  December  2018.  
57 WTO document G/L/1385, 19  March  2021 and addenda have extended the six -month negotiating 
timeline until 1  July 2023.  
58 WTO documents G/MA/W/123/Rev.9, 18  March  2022;  and G/MA/TAR/RS/506, 17  October  2017 and 
addenda. The latter proposed rectifications and modifications contain the changes to the EU Schedule on 
export subsidies, ITA Expansion, and Article  XXVIII outcome on poultry, in addition to the enlargement 
outcome s. 
59 WTO document WT/Let/1220, 14  December  2016.  
60 The European  Union also administers a TRQ pursuant to a bilateral agreement with the 
Russian  Federation for the importation of certain spruce and pine wood. The TRQ is in response to an export 
quota from t he Russian  Federation that offers lower duties for exports to the European  Union pursuant to the 
Russian  Federation's WTO  Accession Protocol.  WT/TPR/S/442  • European Union  
- 64 - 
  Table 3.7 Overview of EU TRQs, by type, 2022  
 WTO  
(Agriculture and non -Ag) Autonomous  Preferential  
Main elements  Implementing WTO 
concessions  Temporary access under quota 
at lower duty rates to meet 
insufficient supply by EU 
industry and to ensure 
adequate fishery products for 
the processing industry  Providing preferential 
access from FTA or other 
preferential agreement 
partners subject to origin 
criteria  
Number of quota 
categories  
(or partners)  124 agriculturea 
18 non -agriculturea 158 48 partners  
Overseen by  DG TAXUD and DG AGRI  DG TAXUD and DG MARE  DG TAXUD  
Main legislation  Regulation (EU) 1308/2013;  
Council Regulation (EC) 
32/2000; Commission 
Delegated Regulation (EU) 
2020/760 and Commission 
Implementing Regulation 
2020/761 (for licence 
management); Commission 
Delegated Regulation (EU) 
2020/1987 and Commission 
Implementing R egulation 
2020/1988 for FCFS;  
Commission Delegated 
Regulation (EU) 2016/1237 
and Commission 
Implementing Regulation 
2016/1239  Council Regulations (EU) 
2021/2283 and (EU) 
2020/1706  Respective bilateral or 
regional agreement  
Allocation 
method  First come, fi rst served and 
country allocation through 
licences  First come, first served  Allocated to the partner 
country  
a Although one was not open or used.  
Source:  Compiled by the WTO Secretariat in part from TARIC  database and WTO document G/AG/N/EU/76, 
15 March  2022.  
3.47.  EU TRQs are established per the regulation on the establishment of a common organization 
of markets in agricultural products from 2013, Regulation (EU) 1308/2013. It continues to provide 
the basic man date and stipulates rules for tariff quota management and administration. However, it 
has recently been supplemented by four new regulations that replace or amend many of the TRQ 
management provisions for agricultural TRQs subject to licences and the "firs t come, first served" 
allocation method (Box  3.3). In some instances, the new management rules simply consolidate and 
reference previous rules in one place, but new provisions were also established, e.g.  for the lodging 
of securities; managing over -demande d quotas; and facilitating new importers, in particular SMEs, 
to establish a new electronic system and transfer rights. Thus, taken in their entirety, the combined 
changes represent some of the most significant developments in TRQ administration in many 
years.61 
3.48.  The new rules also establish the Licence Operator Registration and Identification (LORI) 
electronic system, which requires prior compulsory registration for operators that wish to apply for 
a licence for certain TRQs that are deemed highly sensitive  and/or highly demanded. At present, the 
LORI system is mainly applicable to poultry and poultry products, as well as to garlic. By 
registering  operators in advance in the electronic system, it is expected that this would improve 
TRQ management by reducing  speculation, discouraging circumvention, and promoting 
more efficient  allocation. At the request of the Commission, member States gave their feedback on 
the practical effects of the introduction of LORI, highlighting in several cases a reduction in the 
number of applicants, which seems related to the reduction of speculative applicants. The list 
of TRQs subject  to LORI registration may be expanded by implementing Regulations amending 
 
61 Furthermore, the most significant change of the licence regime for certain agricultural products was 
the change from a licensing management system to a first  come, first  served system for 21 TRQs, enacted by 
Commission Delegated Regulation 2020/1987 and Commission Implementing Regulation 2020/1988. See also 
WTO document G/AG/N/EU/72, 7  February  2022.  WT/TPR/S/442  • European Union  
- 65 - 
  Commission  Implementing Regulation (EU) 2020/761. In this sense, an amend ment to make 
two poultry TRQs subject to LORI registration was recently implemented in January  2023.   
Box 3.3 Main new legislation on TRQs, 2020 -22 
Legislation  Overview  
TRQ management  
Commission Delegated 
Regulation (EU) 2020/760  Specific rules for transferability of a quota; rules for proof of minimum 
experience in that trade; for sensitive and high in demand quotas, a 
reference quantity for maximum quantities can be established with rules and 
proof for the reference quantity; rules on export licences; prior application 
and registration for high demand quotas in a dedicated electronic system; 
lodging and release of securities; setting up the LORI electronic system, etc.  
Commission Implementing 
Regulation (EU) 2020/761, 
as amended  Sets out conditions for the administration of import tariff quotas subject to 
licences including quota periods, quantities, securities to be lodged, issuance 
and validity of licences, etc.  
 
There have been eight amendments; some amend concessions as a result of 
WTO Article  XXVIII negotiation outcomes, while others are technical 
corrections.  
Commission Delegated 
Regulation (EU) 2020/1987  Consolidates and simplifies EU rules governing management of TRQs subject 
to the first -come, first -served allocation method regarding the lodging and 
release of securities.  
Commission Implementing 
Regulation (EU) 2020/1988  Sets out conditions for the administration of import tariff quotas subject to 
the first -come, first -served allocation method including quota periods, 
requirements for processing, end -use and quality, proce dures to lodge a 
security, etc.  
Brexit  related  
Regulation (EU) 2019/216  Provides the basic rules for the apportionment of WTO TRQs  following the 
withdrawal of the United  Kingdom from the Union.  
 
The 2022 amendment adjusts the high -quality beef TRQ for Paraguay.  
Commission Implementing 
Regulation (EU) 2019/386  Implementation of the TRQs apportioned in Regulation (EU) 2019/216.  
 
The 2020 amendment adjusts implementation for those quotas where the 
quota period commences before and straddles the implementation of the 
new apportioned TRQs.  
Autonomous  
Council Regulation (EU) 
2020/1706  Provides for autonomous tariff quotas for certain fishery products under 
33 quota categories for the period 2021 -23. 
Council Regulation (EU) 
2021/2283  Provides for autonomous tariff quotas where there is insufficient EU 
production.  
Preferential  
Regulation 2020/2172  Extends or slightly amends the preferential access given through tariff 
quotas provided to the countries/territories under the Stabilisation and 
Association process until 31  December  2025.  
Source:  Compiled by the WTO Secretariat based on information from the Regulations.  
3.49.  As a result of the United  Kingdom's withdrawal from the European  Union in February  2020 
and the applicable transition period up until end December  2020, the European Union's TRQs applied 
likewise to the United  Kingdom as if it was still a memb er of the European  Union during that time. 
Thereafter, on 1  January  2021, both parties  implemented their agreed apportionment of TRQs.62 
The European  Union's applied regime for WTO TRQs remains largely unchanged in structure 
and continued to mirror its bou nd commitments, although a majority of the quantities were 
reduced.63 The apportionment involved a range of percentage allocations from 0% to 100%, but the 
 
62 Commission Im plementing Regulation (EU)  2019/386.  
63 For details, including new quantities, of the proposed new apportioned TRQs in the EU schedule, see 
European Commission, Brexit TRQ Apportionment . Viewed at: WT/TPR/S/442  • European Union  
- 66 - 
  average was 78% retained by the European  Union, and about 30% of all TRQ groupings kept the 
full EU  allocation.64 As a result of the agreement with the United  Kingdom and proposed amendments 
to its schedule, the European  Union excludes goods originating in the United  Kingdom from all of its 
existing WTO TRQs. The WTO process to finalize the TRQ volumes i n the schedule remained ongoing 
as of December  2022.  
3.50.  The European  Union's WTO TRQs are in two categories: (i)  agricultural, per schedule  I-B and 
the Agreement on Agriculture; and (ii)  other, for certain non -agricultural products (Table  3.8). There 
have bee n no significant changes, except as outlined above, and the number of quota categories 
and products subject to TRQs has not substantially changed since the previous review period.65 
There are 18  product categories for non -agricultural TRQs that mostly impa ct the fish sector, but 
there are also some on metals, glassware, textiles, and wood. Agricultural TRQs are quite diverse 
and are used for a wide range of agricultural goods from basic commodities to processed foods and 
beverages. The use of TRQs has not s hown any particular trends, as about 30% of agricultural TRQs 
are fully utilized, comparable to the previous Review, and about 25% have not been used at all 
(i.e. 0% fill rate); the overall average fill rate was 39%.  
Table 3.8 Overview of WTO TRQs, 2022  
  
Agriculture  
Number of quota categories  124a 
Main products covered  Meat, dairy, cereals, fruits, vegetables, 
processed ag products  
Percentage allocated by licences vs. first -come, first -served  35% vs 65%  
Average fill rate  39% 
Percentage of lines with 100% fill  29% 
Percentage of lines with 0% fill  25% 
Non-agriculture  
Number of quota categories  18a 
Main products covered  Fish, fish products  
Average fill rate  51.5%  
Percentage of lines with 100% fill  41% 
Percentage of lines with 0% fill  41% 
a Although one was not open or used.  
Note:  Quota fill rates are for calendar or marketing year  2021.  
Source:  TARIC  database; and WTO document G/AG/N/EU/76, 15  March  2022.  
3.1.3.4   Temporary rates, duty suspensions, and additional duties  
3.51.  The European  Union has regularly and consistently offered temporary duty suspensions or 
lower tariff rates on certain products as part of its trade policy in recent decades. Generally, these 
take two broad forms: (i)  quantitative measures implemented through autonomous TRQs 
(Section  3.1.3.3); and (ii)  temporary suspension of MFN customs duties. Furthermore, the 
European  Union has taken a number of other initiatives to temporarily reduce duties in response to 
unprecedented crises during the review period.  
3.52.  The EU policy on the regularized temporary duty suspensions for the benefit of EU industry is 
directed by a 1999 communication on procedures and  guiding principles, as last updated by a 2011 
communication on procedures and guiding policy principles, which sets out that temporary 
suspensions are an exception to the general rule and that they should be non -discriminatory and 
 
https://agriculture.ec.europa.eu/document/download/4b2651cc -d034-4d60-9cce-
e2eb02d54b0d_en?filename=trq -apportionment_en.pdf . Similar information for the WTO process was 
circulated in WTO document G/SECRET/42 and its addenda. The Article  XXVIII negotiations have not been 
concluded, thus the changes are not yet approved, nor certified, and thus remain restricted, although the 
European  Union has implemented them.  
64 Analysis of the EU TRQ apportionment document. Viewed at: 
https://agriculture.ec.europa.eu/document/download/4b2651cc -d034-4d60-9cce-
e2eb02d54b0d_en?filename=trq -apportionment_en.pdf .  
65 Table  A3.1 of WTO document WT/TPR/S/395/Rev.1, 7  July 2020 is indicative in terms of products 
covered and rates, although most quota quantities have changed due to apportionment.  WT/TPR/S/442  • European Union  
- 67 - 
  open to all enterprises.66 Furthermore, the policy generally excludes the consideration of finished 
goods intended for sale to consumers and states that the specific interests of SMEs will be given 
special attention.  
3.53.  Two Regulations in place since 2013 had been amended biannually.67 They remained in place 
during the review period until they were replaced, in December  2021, by two  new Regulations 
structured in a similar fashion, i.e.  one covering the suspension of duties and the other autonomous 
tariff quotas.68 The Regul ation on duty suspensions covers 2,330  products with 98% having a zero 
rate of duty; the majority are in the chemicals sector. For autonomous TRQs, there are 123  quota 
categories with 98% having a zero  rate of duty, and the majority are in the chemicals se ctor.  
3.54.  The suspensions and TRQs became effective on 1  January  2022, but both were subsequently 
amended in June 2022 with changes coming into force as of 1  July 2022.69 For autonomous TRQs, 
the Commission added five new quota orders, closed three existing o rders, and amended the existing 
description of two orders. As for the duty suspensions, the amendments added 55 new product 
categories, deleted 8 suspensions, and amended the existing product description and/or 
classification for 18 product categories.  
3.55.  Temporary import customs duty and VAT relief was sought by certain member States in order 
to combat the COVID -19 pandemic, and the Commission responded with a decision in April  2020 to 
allow this relief on imports of certain goods70 needed to combat the pande mic during the period 
30 January  2020 to 31  July 2020. The Decision was subsequently amended several times, upon 
request of certain member States to extend the deadline continuously until 31  December  2022.71 
The member States that requested the application  of the Decision should fulfil reporting obligations 
related to the goods imported. Italy implemented duty and VAT waiver within the context of the 
aforementioned Decisions from January  2020.  
3.56.  In response to the war in Ukraine, the Commission passed a deci sion in July  2022, retroactive 
to 24  February  2022, to allow duty -free and VAT -free imports of certain goods destined to help 
Ukrainians. The goods, although not definitively listed, include those provided free of charge to 
benefit persons fleeing the war in Ukraine (e.g.  food, blankets, generators, and tents) imported by 
state organi zations (public bodies) or charitable /philanthropic organizations approved by member 
State authorities.72 The Decision was in place until 31  December  2022 and applie d to 18 mem ber 
States for the alleviation of customs duties.73 In December  2022, 10 member States requested for 
its extension. The Commission examines member State requests and studies the possibility for a 
new Decision granting duty relief and VAT exemption on goods  to be distributed or made available 
free of charge to persons fleeing the war in Ukraine and to persons in need in Ukraine.  
3.57.  Another regulation adopted during the period was to benefit Ukraine.74 In May  2022, a 
regulation was passed on temporary measures t hat further liberalized trade and provided other 
concessions to Ukraine; it entered into force on 4  June 2022 and is set to expire on 5  June 2023. 
Pursuant to the European  Union's Association Agreement with Ukraine, additional concessions were 
made on (i)  removal of import duties on industrial products; (ii)  suspension of the entry price system 
on fruit and vegetables; (iii)  the suspension of TRQs and products subject to them enter duty -free; 
(iv) relief from anti -dumping duties; and (v)  temporary suspensio n of the European  Union's 
 
66 European Commis sion Communications 98/C 128/02 and 2011/C 363/02  concerning autonomous 
tariff suspensions and quotas.  
67 Council Regulation (EU) 2019/998; and Council Regulation (EU) 2019/999.  
68 Council Regulation (EU) 2021/2278; and Council Regulation (EU) 2021/2283.  
69 Council Regulation (EU) 2022/972; and Council Regulation (EU) 2022/1008.  
70 The indicative list of goods covered includes medical devices, medical consumables, masks, protective 
clothing, soap, disinfectant, test kits, medicines, vaccines, and laboratory a rticles. For a detailed listing see 
"COVID -19 – Indicative List of Products Eligible to be Imported Duty – VAT Free". Viewed at: https://taxation -
customs.ec.europa.eu/system/files/2022 -01/EU%20Indicative%20List%20Decision%20Covid19 -
C2020_491%20 -%2011%20Jan%202022%20.pdf .  
71 Commission Decision (EU) 2022/1511.  
72 Commission Decision  (EU) 2022/1108.  
73 Duty-free imports apply only to Austria, Croatia, the Czech  Republic, Estonia, Finland, France, Greece, 
Hungary, Ireland, Italy, Lithuania, Luxembourg, Malta, the Netherlands, Poland, Romania, Slovak  Republic, 
and Slovenia.  
74 Regulation  (EU) 2022/870.  WT/TPR/S/442  • European Union  
- 68 - 
  safeguard regulation. Ukraine is thus exempt from the existing steel safeguard measures that have 
been in place since 2018/2019.  
3.58.  As a result of the agreement concluded in November  2020 between the United  States and the 
European  Union regarding tariffs on certain products, the European  Union temporarily eliminated 
duties, on an MFN basis, for four  CN lines of fresh and frozen lobster during the period 1  August  2020 
to 31  July 2025.75 Other duty suspension measures or special import tariff regimes elaborated in 
previous reports, i.e.  on certain parts and components for aircraft and for fixing representative prices 
for poultry meat, egg products, and egg albumin remained in force without any significant 
amendments.76 
3.59.  In July  2022, the Commission proposed to suspend tariffs on inputs for nitrogen fertilizers 
until 31  December  2024. Thereafter, in December  2022, t he Council adopted measures on certain 
nitrogen fertili zer inputs77, which have been applied since 17 December  2022.78 The duties on these 
products are initially suspended for a period of six months, i.e.  until 17  June 2023, and will be 
evaluated by 17  May 2023 with a view to possible extension.   
3.1.3.5   Preferential rates  
3.60.  The European  Union's preferential tari ff rates are a result of the reciprocal and unilateral 
agreements that it has with partners giving lower or preferential duties. Since the previous Review, 
new agreements have entered into force with the United  Kingdom and Viet  Nam (Section  2)79, thus 
the scope and number of preferential tariffs have increased. The agreement with the United  Kingdom 
is comprehensive, resulting in 100% duty -free lines for all products. The agreement with Viet  Nam 
has 84% duty -free lines, although it is still early in implemen tation, thus preferential tariff rates are 
still being phased in. However, the overall averages on tariff rates and percentages of duty -free lines 
remain largely unchanged.80 On average, 89% of total tariff lines are duty -free as a result of the 
agreements , but there is a significant difference between agricultural (70%) and non -agricultural 
products (94%). In general, there is less coverage of agricultural products and higher rates applied 
when covered under the agreements. This is most pronounced in the F TAs with Algeria, 
Ceuta -Melilla, Faroe  Islands, Liechtenstein, Norway, Switzerland, Syrian  Arab Republic, and Tunisia, 
where the coverage of agricultural duty -free tariff lines is very low, i.e.  less than 40%, and/or 
significant tariff rates remain on agri cultural goods when covered (Table  3.9). 
Table 3.9 Tariffs under preferential agreements, 2022  
  
Simple average tariff rate (%)  Duty -free lines as a percentage of 
total tariff lines (includes MFN 
duty-free lines) (%)  
Overall  WTO agri.  WTO 
non-agri. Overall  WTO agri.  WTO 
non-agri. 
MFN 6.5 14.9 4.3 26.7 18.9 28.9 
Algeria  2.7 12.9 0.0 84.5 29.4 99.9 
Andorra  0.0 0.2 0.0 98.8 94.6 100.0  
Canadaa 0.4 1.7 0.0 96.9 88.6 99.3 
Central  Americaa 1.2 5.9 0.0 93.6 70.9 99.9 
Ceuta -Melilla  2.8 13.0 0.0 84.9 31.0 99.9 
Chile 2.1 9.9 0.0 90.0 55.2 99.8 
EU-Colombia -Peru-Ecuador        
 Colombiaa 1.0 5.0 0.0 94.6 75.4 100.0  
 Ecuador  1.0 4.8 0.0 94.0 73.0 99.8 
 Perua 0.7 3.5 0.0 95.7 80.5 99.9 
 
75 Regulation (EU) 2020/2131.  
76 Council Regulation (EU) 2018/581; and Commission Implementing Regulation (EU) 2022/2467 . 
77 The conventional rates of duty on these items (CN 2814 10 00, 3102 10 10, and 3102 10 90) are 
autonomously suspended  except for Belarus and the Russian Federation.  
78 Council Regulation (EU) 2022/2465.  
79 The FTA with Singapore entered into force in late 2019 and it was not possible to be included in the 
detailed tariff analysis of the previous Review.  
80 The statistics g enerally note a slight deterioration when in fact nearly nothing has changed. This is a 
result of a slight increase in AVEs as noted in Section  3.1.3.1 and changes in nomenclature that have adjusted 
the number of lines relative to the number of duty -free lines. WT/TPR/S/442  • European Union  
- 69 - 
    
Simple average tariff rate (%)  Duty -free lines as a percentage of 
total tariff lines (includes MFN 
duty-free lines) (%)  
Overall  WTO agri.  WTO 
non-agri. Overall  WTO agri.  WTO 
non-agri. 
EFTA       
 Icelandb 1.5 5.9 0.2 90.2 73.8 94.8 
 Liechtensteinb 2.7 11.7 0.3 82.0 38.0 94.3 
 Norwayb 2.7 12.0 0.3 81.9 39.0 93.9 
 Switzerland  3.0 11.0 0.8 82.1 39.6 93.9 
Egypt  0.2 0.7 0.0 99.0 95.9 99.8 
EPAc 0.0 0.1 0.0 98.9 95.8 99.8 
Faroe  Islands  3.5 14.5 0.5 79.6 21.6 95.8 
Georgia  0.0 0.2 0.0 98.8 94.5 100.0  
Israel  0.6 2.6 0.1 95.6 81.1 99.6 
Japana 0.3 0.4 0.3 95.6 95.9 95.5 
Jordan  0.7 0.2 0.8 94.0 95.1 93.7 
Korea,  Republic  ofa 0.1 0.3 0.0 99.5 97.6 100.0  
Lebanon  0.2 1.1 0.0 97.2 87.4 100.0  
Mexico  2.0 9.2 0.0 90.7 58.1 99.8 
Moldova , Republic ofa 0.0 0.2 0.0 98.8 94.4 100.0  
Morocco  0.1 0.5 0.0 98.5 93.2 100.0  
Overseas Countries and 
Territories  0.1 0.6 0.0 98.7 94.0 100.0  
Palestine  0.0 0.1 0.0 98.8 94.6 100.0  
San Marino  0.0 0.0 0.0 99.9 99.9 99.9 
Singapore  1.6 5.0 0.7 79.5 58.6 85.3 
South  Africa  0.8 3.8 0.0 94.6 77.3 99.4 
Syrian Arab Republic  3.6 14.0 0.8 78.4 24.1 93.6 
Tunisia  2.7 12.7 0.0 84.5 29.6 99.8 
Türkiye  1.8 8.8 0.0 90.5 56.8 99.9 
Ukrainea 1.1 4.8 0.0 93.1 77.2 97.5 
United Kingdom  0.0 0.0 0.0 100.0  100.0  100.0  
Viet Nam 1.1 2.7 0.6 84.1 78.6 85.7 
Western Balkanse       
 Albania  0.4 1.3 0.1 97.2 91.3 98.8 
 Bosnia and Herzegovina  0.4 1.3 0.1 97.2 91.3 98.8 
 Kosovod, e 0.3 1.3 0.0 97.8 91.3 99.7 
 Montenegro  0.4 1.3 0.1 97.2 91.4 98.8 
 North  Macedonia, Rep.  of 0.3 1.3 0.0 97.7 91.3 99.5 
 Serbia  0.4 1.3 0.1 97.3 91.3 98.9 
GSP 4.3 13.2 1.9 57.6 24.7 66.7 
 Indiaf 4.9 13.2 2.7 48.7 24.7 55.4 
 Indonesiaf 4.4 13.4 2.0 56.1 23.6 65.2 
 Kenyaf 4.3 13.2 1.9 57.5 24.5 66.7 
GSP+  2.1 9.7 0.0 89.2 54.4 99.0 
LDC (EBA)g 0.0 0.0 0.0 99.8 100.0  99.8 
a The tariff phase -out period is not yet over.  
b For Iceland, Liechtenstein, and Norway, the lowest rate contained in either the EEA or bilateral 
agreement was used for the calculations.  
c Includes CARIFORUM, Central Africa, Eastern and Southern African States  (ESAS) , Pacific, Southern 
African Development Community  (SADC ), and West Africa EPAs.  
d References to Kosovo shall be understood to be in the  context of Security Council 
Resolution  1244 (1999).  
e For Albania, Bosnia and Herzegovina, Kosovo*, Montenegro, North  Macedonia, and Serbia, the 
lowest rate contained in either the West Balkan FTA or bilateral agreement was used for the 
calculations. *Ref erences to Kosovo shall be understood to be in the context of Security Council 
Resolution  1244 (1999).  
f Sector graduations from the Standard GSP are taken into account.  
g Exceptions to duty -free treatment under EBA for Cambodia and Myanmar on rice were in  effect 
during January  2019 to January  2022 and have since expired. The exception to duty -free treatment 
for sugar cane from Cambodia has been in effect since August  2020.  
Note:  All tariff calculations exclude in -quota lines. If no preferential rate was ap plied, the corresponding 
MFN rate was used for the calculations. In the case of unavailability, the ad valorem  part was used 
for compound and mixed rates. 0.0 refers to >0 and <0.05; 100.0 refers to >99.55 and <100. For 
Ukraine, the rates do not include te mporary measures.  
Source:  WTO Secretariat calculations, based on the IDB and the Eurostat database.  
3.1.4   Other charges affecting imports  
3.61.  The main other charges on imports in the European  Union are value added tax (VAT) and 
excise duties that are collected at the border. While these remain the main indirect taxes, with a WT/TPR/S/442  • European Union  
- 70 - 
  common system at the level of the Union, member States may apply other indirect taxes that are 
charged on imports, although these are rather limited.81 
3.1.4.1   VAT 
3.62.  The collection of VAT, on both imported and national products, amounted to EUR  1.1 trillion, 
or 7.4% of EU's combined GDP in 2021; it remained an important source of reven ue, i.e. about 10% 
of total EU revenues.82 There was a slight decline of VAT revenues in 2020, otherwise they remained 
at about EUR  1 trillion during 2019 -21 (Table  3.1).83 The Commission has undertaken extensive 
reforms and policy initiatives on VAT in re cent years and there have also been additional temporary 
modifications as a result of the pandemic.  
3.63.  The main legislation is the EU VAT Directive, which provides the basic framework or common 
system for VAT, but it is the member States that set the rates an d collect VAT within its parameters. 
Rates on standard VAT varied slightly among member States with the lowest rate at 17% 
(Luxembourg ) and the highest at 27% (Hungary), but reduced rates of VAT were more variable 
(Table  3.10). Rates are allowed to go abov e, with no maximum, but must remain at or above the 
minimum levels; special limitations apply for the application of reduced and super reduced rates.  
3.64.  The EU VAT Directive has undergone various modifications in recent years with an intentional 
shift of pay ment collection from the member State of the supplier to the member State of the 
consumer. This in part removes some distortions or incentives with respect to establishing presence 
in lower tax jurisdictions and has allowed greater diversity and flexibilit y in VAT rates through recent 
amendments. The most significant changes were implemented in April  2022 and include 
(i) expanding the list whereby reduced VAT rates may apply; (ii)  removing the possibility to apply 
lower VAT to goods and services deemed detr imental to the environment (by 2030 or 203284); and 
(iii) expanding the application of derogations and exemptions to all member States.85 A number of 
VAT border facilitation measures were also implemented during the period in response to the 
e-commerce pac kage. The removal of the VAT exemption on low -value consignments was 
implemented in July  2021 along with the establishment of the IOSS and Special Arrangements 
systems for their collection (Section  3.1.1.1).  
3.65.  In response to the pandemic, an EU decision allo wed certain member States to temporarily 
suspend VAT, as well as customs duties, on certain imports (Section  3.1.3.4). In addition to this 
measure, the response on VAT has been broader and extends beyond import relief for certain goods. 
A Council Directive  from December  2020 allowed member States to apply reduced VAT on certain 
diagnostic medical devices or services that applied to intra -Community and domestic supplies.86 
Further, many member States granted other temporary relief from VAT such as rate reduc tions, 
easing of payment terms, deferment, and temporary exemptions.87 Similar special provisions have 
also been implemented to address the impact of the war in Ukraine and grant relief from VAT and 
customs duties under certain conditions (Section  3.1.3.4) .  
3.66.  The Commission has undertaken a number of initiatives to address VAT fraud, in particular as 
it relates to e -commerce, during the review period. Two  directives from February  2020 promote 
cooperation between member State tax authorities, require informat ion from payment service 
providers, and establish electronic standard forms for data transmission in order to make 
improvements in the detection of e -commerce VAT fraud.88 Importantly, they establish the Central 
Electronic System of Payment information (CESOP), which is a centralized database to store the 
 
81 For example, there are taxes on imports of fertilizers levied by Sweden, luxury items by Greece, and 
coal by the Netherlands. For a complete list, see European Commission, Taxes in Europe Database. Viewed at: 
https://ec.europa.eu/taxation_customs/tedb/taxSearch.html .  
82 European Commission, Customs Duties Mean Revenue . Viewed at: https://taxation -
customs.ec.europa.eu/customs -4/eu-customs -union -facts-and-figures/customs -duties -mean -revenue_en .  
83 Eurostat, Main National Accounts Tax Aggregates  (gov_10a_taxag) . Viewed at: 
https://ec.europa.eu/eurostat/databrowser/view/gov_10a_taxag/default/table?lang=en . 
84 1 January  2030 for fossil fuels, other goods with a similar impact on greenhouse gas emissions, such 
as peat, and wood used as firewood; 1  January  2032 for chemical pesticides and chemical fertilisers.  
85 Council Directive (EU) 2022/542.  
86 Council Directi ve (EU) 2020/2020.  
87 OECD, "Country Tax Measures during the COVID -19 Pandemic". Viewed at: 
https://www.oecd.org/tax/covid -19-tax-policy -and-other -measures.xlsm .  
88 Counci l Directive (EU) 2020/284 ; and  Council Regulation (EU) 2020/283.  WT/TPR/S/442  • European Union  
- 71 - 
  required information and make it available to member State authorities. According to the 
Commission , the transmission of  data must start on 1  January  2024.  
3.67.  Another recent development is the VAT in the Digital Age initiative.89 The Commission 
launched a process of modernizing VAT, in particular on reporting and e -invoicing, VAT treatment of 
the platform economy, and single EU VAT registration. A public consultation period commenced in 
January  2022 and a proposal was adopted in December  2022.90  
3.68.  According to the European  Union 's Action Plan for Fair and Simple Taxation Supporting the 
Recovery Strategy, other reforms of VAT in clude updating the rules on financial services and 
insurance and amending the special arrangements for travel agents and tour operators 
during  2022-23.91 A public consultation on the review of financial and insurance services took place 
from February to Ma y 2021. A study has been launched to assess the functioning of the travel agent 
scheme, the VAT rules for passenger transport and the exemption for goods purchased by non -EU 
travellers. The study is expected to be concluded in the first quarter of 2023.  
Table 3.10 VAT rates applied in member States, 2022  
(%) 
Member state  Super reduced  Reduced  Standard  Parking rate  Temporary  
Austria  .. 10 / 13  20 13 5b 
Belgium  .. 6 / 12  21 12  
Bulgaria  .. 9 20 .. .. 
Croatia  .. 5 / 13  25 .. .. 
Cyprus  .. 5 / 9 19 .. .. 
Czech  Republic  .. 10 / 15  21 .. .. 
Denmark  .. .. 25 .. .. 
Estonia  - 9 20 .. .. 
Finland  .. 10 /14  24 .. .. 
France  2.1 5.5 / 10  20 .. .. 
Germany  .. 7 19 .. .. 
Greece  .. 6 / 13  24 .. .. 
Hungary  .. 5 / 18  27 .. .. 
Ireland  4.8 9 / 13.5  23 13.5 21a 
Italy 4 5 / 10  22 .. .. 
Latvia  .. 5 / 12  21 .. .. 
Lithuania  .. 5 / 9 21 .. .. 
Luxembourg  3 8 17 14  
Malta  .. 5 / 7 18 .. .. 
Netherlands  .. 9 21 .. .. 
Poland  .. 5 / 8 23 .. .. 
Portugal  .. 6 / 13  23 13  
Romania  .. 5 / 9 19 .. .. 
Slovak  Republic  .. 10 20 .. .. 
Slovenia  .. 5 / 9.5  22 .. .. 
Spain  4 10 21 .. .. 
Sweden  .. 6 / 12  25 .. .. 
.. Not available . 
a For the period 9  September  2020 to 28  February  2021.  
b For the period 1  July 2020 to 31  December  2021.  
Source:  "VAT rates applied in the Member States of the European  Union, Situation at 1st January  2021". 
Viewed at: https://taxation -customs.ec.europa.eu/document/download/231d5d92 -160f-4a7f-a104-
5a87aba97735_en?filename=vat_rates_en.xls ; and "VAT rules and rates". Viewed at: 
https://europa.eu/youreurope/business/taxation/vat/vat -rules-rates/index_en.htm#shortcut -5.  
 
89 European Commission (2022), "Commission Launches Call for Feedback on Plans to Bring the EU's 
VAT Rules into the Digital Age", 21  January. Viewed at: https://taxation -
customs.ec.europa.eu/news/commission -launches -call-feedback -plans -bring-eus-vat-rules-digital -age-2022-
01-21_en . 
90 European Commissi on, VAT in the Digital Age . Viewed at: https://taxation -
customs.ec.europa.eu/taxation -1/value -added -tax-vat/vat -digital -age_en .  
91 European Commission C ommunication COM(2020)  312 final.  WT/TPR/S/442  • European Union  
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  3.1.4.2   Excise  
3.69.  Excise duties continued to be applied on a number of goods in the European  Union. Revenues 
from excise were EUR  55.4 billion in 2021, or 0.4% of GDP, with Germany accounting for about half 
of the excise duties collected.92 There were several developments during the review period, with the 
majority pertaining to the excise duty structures on alcohol and alco holic beverages and the 
modernization of the excise Directive on the general arrangements of excise duties. The Commission 
also launched a number of initiatives or reviews on the existing excise duty legislation.  
3.70.  Since 1992, the European  Union has common h orizontal rules on excise duties for three 
categories of goods: alcohol, tobacco, and energy products. For these goods, harmonized minimum 
rates are set by the Commission, but member States may add or charge additional rates above 
these levels. For the maj ority of products subject to the horizontal rules, there have only been minor 
changes in rates since the previous Review (Table  A3.1). Details on member State excise duties, 
including those that go beyond the EU harmonized excise duty rates, can be accesse d at the Taxes 
in Europe Database ( https://ec.europa.eu/taxation_customs/tedb/taxSearch.html ).  
3.71.  Certain member States also charge excise duties on products other than the common 
horizontal products, e.g.  on coffee, non -alcoholic beverages, chemicals, mobile telephony, cement, 
and automobiles. This information has not changed significantly since it was reported in the previous 
Review93 and updated information can also be found in the T axes in Europe Database. Also, a number 
of, mostly temporary, adjustments to excise duty rates were made by certain member States as 
part of the pandemic response.94 
3.72.  Council Directive 2008/118/EC on the general arrangements for excise duty is set to be 
replaced by the new Council Directive (EU)  2020/262 (recast) as of 13  February  2023. The main 
novelty brought about by the new Directive is the extension of the use of the computerised system 
to the movements of excise goods that have been released for con sumption in the territory of one 
member State and are moved to the territory of another member State in order to be delivered 
there for commercial purposes. The use of the computerized system will simplify the monitoring of 
such movements and ensure the pr oper functioning of the internal market. Currently the system is 
used only for the movement of excise goods under duty suspension. The new Directive is aimed at 
modernizing rules and improving fair competition; it furthermore clarifies territorial applicat ion, as 
well as stipulates general rules for suspension of duty and rules for movement when under 
suspension, rules when excise goods are moved between member States, conditions for tax 
warehousing, and formalities for exported goods. Since inception, the Directive has been amended 
once in 2022 to allow member States to exempt from payment of excise duty excise goods supplied 
in tax -free shops situated in the French terminal of the Channel Tunnel.95 
3.73.  A related decision from January  2020 covers improvements t o the Excise Movement and 
Control System (EMCS), a computerized system for the surveillance of goods subject to excise 
duties.96 The new decision extends the existing system to cover the movement of excise goods that 
have already been released for consumpt ion in the territory of one member State and are moved to 
the territory of another member State in order to be delivered for commercial purposes. The EMCS 
system is a shared undertaking between the Union and member States, including costs, and has 
both com mon and national specifications. The system allows for the exchange of information on the 
movement of excise goods and assists the authorities carrying out the necessary verifications. Work 
on the enhancement of the system is ongoing and it will take effec t from 13  February  2023. Further 
modifications of the system are foreseen, with an alignment of EMCS functionalities with the UCC 
Automated Export System (AES) planned for February  2024.  
 
92 Eurostat, Main National Accounts Tax Aggregates  (gov_10a_taxag) .  
93 WTO document WT/TPR/S/395/Rev.1, 7  July 2020, Table  A3.2.  
94 For example, Estonia reduced the rates on electricity and natural gas; Hungary exempted disinfectant 
without denaturing for holders of a tax warehouse permit; Germany enhanced provisions for deferring tax 
payments and reducing prepayments; and Poland intr oduced a temporary tax waiver on certain tobacco excise 
products. OECD, "Country Tax Measures during the COVID -19 Pandemic". Viewed at: 
https://www.oecd.org/tax/covid -19-tax-policy -and-other -measures.xlsm .  
95 Council Directive (EU) 2022/543.  
96 Decision (EU) 2020/263.  WT/TPR/S/442  • European Union  
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  3.74.  In its Action Plan for Fair and Simple Taxation Supporting the Recov ery Strategy, the 
Commission proposed an e -commerce package for excise duties, as currently the existing regulatory 
aspects and high costs prohibit distance selling of excisable goods.97 A new project group on intra -EU 
distance selling of excise goods was launched to explore solutions for the simplification of current 
procedures while limiting fraud.  
3.75.  Minimum excise duty rates on alcohol products remain in place for all EU member States, 
although many apply rates at higher level, often with significant v ariation between them.98 These 
minimum rates have not been updated since 1992, thus the Commission launched a public 
consultation process in April  2022 in the context of the evaluation of Council Directive 92/84/EEC.99 
Based on the feedback and consultatio ns with member States, the Commission is expected to 
prepare an evaluation report in the second quarter  of 2023. Although rates have not yet been 
adjusted, the Commission made other changes in the structure and categories for excise duties on 
alcohol and a lcoholic beverages in July  2020; these were mainly in support of small independent 
producers (Box  3.4).100 
3.76.  With respect to tobacco products, the Commission published an evaluation of the existing 
Council Directive on tobacco excise duties (Tobacco Taxation Directive)101 in February  2020. The 
Evaluation Report indicated that the current rules do not fully achieve their objectives in relation to 
the proper functioning of the internal market and at the same time a high level of health protection 
and that they ar e not able to cope with market developments and the impact of the entry into the 
market of new products. On 2  June 2020, the Council adopted a set of conclusions on the review of 
the Tobacco Taxation Directive based on the findings from the evaluation. The  Council invited the 
Commission to submit a legislative proposal for the revision of the Directive on the basis of an impact 
assessment. In light of this, the Commission is currently finalizing an assessment on the revision of 
the Directive and plans to pr esent a legislative proposal in 2023.102 
3.77.  The European  Union launched a review of the Energy Tax Directive in 2021 in order to better 
align energy taxation with energy and climate policies and this included proposals that would amend 
certain aspects related to energy excise duties  (Section  4.4.1) . Public consultation and feedback has 
been finalized and a proposal for a revised directive has been circulated. As of end -2022, discussions 
were ongoing among member States in the Council with a view to agreeing to a compromise 
proposal.  
3.78.  Member States have recently made adjustments in terms of energy excise taxes in response 
to the energy crisis and pursuant to the EU Communication on "Security of supply and affordable 
energy prices". A number of proposals are contai ned in the Communication, among them a 
recommendation to lower taxes as one way to alleviate the high cost of energy.103 According to 
one study, as of October  2022, 12  member States have reduced excise duties on petrol to a level 
lower than what it was a ye ar ago; a similar situation occurred with respect to the excise duty on 
diesel fuel.104 One member State, Hungary, has lowered the excise duty on petrol below the 
minimum rate.105 
 
97 European Commission Communication COM(2020)  312 final.  
98 According to the European  Union's Annual Report on Taxation, 2022, excise duties on alcohol vary 
significantly, e.g. from EUR  0 on still wine (15 member States) to EUR  4.24 per litre in Ireland. Viewed at: 
https://op.europa.eu/en/publication -detail/ -/publication/22508340 -1149-11ed-8fa0-01aa75ed71a1/language -
en/format -PDF/source -262413960 .  
99 European Commission, "Excise duty on alcohol and alcoholic beverages – evaluation of excise duty 
rates and tax stru ctures". Viewed at: https:// ec.europa.eu/info/law/better -regulation/have -your-
say/initiatives/13249 -Excise -duty-on-alcohol -and-alcoholic -beverages -evaluation -of-excise -duty-rates-and-tax-
structures_en .  
100 Council Directive (EU) 2020/1151.  
101 Council Directive 2011/64/EU.  
102 Staff Work ing Document SWD(2020)  33 final.  
103 European Commission Communication COM(2022)  138 final.  
104 Bruegel, National Fiscal Policy Responses to the Energy Crisis . Viewed at: 
https://www.bruegel.org/dataset/national -policies -shield -consumers -rising -energy -prices .  
105 ACEA, "Excise duties on petrol, by EU country". Viewed at: https://www.acea.auto/figure/excise -
duties -petrol -by-eu-country -1000-litres/ ; and CEE Legal Matters (2022), "Hungarian Government Cuts Excise 
Duty on Fuel", 24  March. Viewed at: https://ceelegalmatters.com/hungary/19571 -hungarian -government -cuts-
excise -duty-on-fuel.  WT/TPR/S/442  • European Union  
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  Box 3.4 Main changes in alcohol e xcise duties, 2020 -22 
− Exception for excise below the minimum level for low -strength beer is 
maintained but at a higher threshold of 3.5% vol;  
− Reference for beer of hectolitre/degrees Plato for the determination of excise is 
further refined to include measu rement after added ingredients. A grace period 
until 31  December  2030 is allowed for member States that did not take this 
into consideration as of 29  July 2020;  
− Reduced rates of excise duty for small independent producers of beer is also 
extended to small independent producers of wine and other fermented 
beverages (i.e. produced from fruit). A higher threshold for the reduced rates 
applies to the wine sector in Malta;  
− The terms "sparkling wine" and "other sparking fermented beverages" are 
more clearly defin ed and updated in HS(CN) codes;  
− A reduced rate for ethyl alcohol produced from fruit may be applied;  
− Certain exemptions from harmonized excise duty for products used in the 
manufacture of food supplements; and  
− Clarification of the conditions for mutual recognition of partially denatured 
alcohol to ensure uniform application of the exemption.  Council Directive 
(EU) 2020/1151  
Certification and self -certification of independent small producers of alcoholic 
beverages  Commission 
Implementing 
Regulatio n 
(EU) 2021/2266  
Exception for Portugal, may apply a reduced rate of excise duty on certain 
products produced in the autonomous regions of Madeira and of the Azores until 
31 December  2027 Council Decision 
(EU) 2020/1790  
Exception for France, may apply a reduced rate of indirect taxes on 'traditional' 
rum produced in Guadeloupe, French Guiana, Martinique and Réunion until 
31 December  2027 Council Decision 
(EU) 2020/1791  
Source:  Compiled by the WTO Secretariat from the instruments listed in Table.  
3.1.5   Import prohibitions, restrictions, and licensing  
3.1.5.1   Prohibitions and restrictions  
3.79.  Certain goods are prohibited or restricted when imported into the European  Union due to 
various regulations, but the majority emanate from international conventions desig ned to track or 
protect the movement of goods, i.e.  hazardous chemicals, protected plant and animal species, 
wastes, etc. There were 15 categories of such goods in 2022, most of which had been notified by 
the European  Union as quantitative restrictions (Ta ble 3.11). There has not been any substantial 
changes as the same categories of products have had prohibitions or restrictions for many years 
although there were minor amendments for product coverage, technical adjustments, etc. Further, 
a number of prohib itions or restrictions were imposed as sanctions in the context of the war in 
Ukraine (Section  3.1.7.1).  
3.80.  In 2020 and 2021, amendments were introduced to the Regulation on goods used for capital 
punishment, torture, or other cruel, inhuman or degrading trea tment or punishment, with a view to 
updating the competent authorities and the applicable destination countries. The Regulation on 
hazardous chemicals and the Regulation on wastes were amended to change the product coverage 
in their annexes, and the Regula tion implementing the Kimberley Process certification scheme for 
diamonds was amended three times to update the participants and competent authorities and to 
reflect the United Kingdom's withdrawal from the European  Union.  
3.81.  As noted in the previous Review,  the EU Directive on single -use plastics was approved in 2019 
with varying dates for implementation.106 Member States had to transpose most of the measures by 
3 July 2021 including the prohibition to place certain single -use plastics on the market.107 The 
Commission is monitoring the implementation of these measures. The Directive puts extended 
responsibilities on importers of certain goods, as well as producers, requiring them to cover the cost 
 
106 Directive (EU) 2019/904. This Directive was complemented by five  subsequent regulations or 
decisions to aid implementation and monito ring, e.g.  on calculating and verifying waste.  
107 This includes products such as cutlery, straws, and food and beverage containers.  WT/TPR/S/442  • European Union  
- 75 - 
  of litter clean -up and awareness programmes. The Commission has started preparing guidelines on 
the implementation of the costs of litter clean -up. 
3.82.  The Conflict Minerals Regulation (tin, tungsten, tantalum , or gold) entered into force on 
1 January  2021 and aims to curb the illicit trade in certain minerals that can fin ance armed 
conflict.108 It requires importers of these minerals from designated areas to conduct due diligence 
on their supply chains. This requires them to follow a five -step framework as designated by the 
OECD that includes risk assessment, audit, and rep orting. The Regulation is enforced by member 
States through ex post checks. In case of non -compliance, member States have different measures 
at their disposal, such as reminders and administrative fines, to address this.  
3.83.  Imports of bananas from certain La tin American countries continued to be subject to a Banana 
Stabilisation Mechanism (BSM) until 31  December  2019 when the mechanism expired. Since its 
expiry, the final fixed customs duty level of EUR  75/tonne has been maintained.  
Table 3.11 Prohibitions or restrictions on imports, 2022  
Product  Measure  Number of 
CN lines  Rationale  Legislation  
Registration, 
Evaluation, 
Authorisation and 
Restriction of 
Chemicals (REACH)  Restriction  76 To ensure a high 
level of protection of 
human health and 
the environment  Regulation 
(EC) 1907/2006  
Substances that 
deplete the ozone 
layer Prohibition/restriction  100 Montreal Protocol  Regulation 
(EC) 1005/2009; 
Commission Regulation 
(EU) 2017/605  
Certain hazardous 
chemicals  Prohibition/restriction  .. Rotterdam 
Convention on the 
Prior Informed 
Consent Procedure 
for Certain Hazardous 
Chemicals and 
Pesticides in 
International Trade, 
Stockholm 
Convention on 
Persistent Organic 
Pollutants  Regulation 
(EU) 649/2012; 
Commission Delegated  
Regulation 
(EU) 2022/643  
Persistent organic 
pollutants  Prohibition/restriction  .. Stockholm 
Convention on 
Persistent Organic 
Pollutants  Regulation 
(EU) 2019/1021  
Cultural goods  Prohibition  .. To protect against 
the trafficking of such 
materials  Regulation 
(EU) 2019/880; 
Commission 
Implementing 
Regulation 
(EU) 2021/1079  
Certain animal and 
plant species  Prohibition/restriction  693 CITES  Council Regulation 
(EC) 338/97, 
Commission Regulation 
(EU) 2019/2117, 
Regulation 
(EU) 2019/1010  
Fluorinated 
greenhouse gases, 
their mixtures and 
concerned products 
and equipment  Prohibition/restriction  268 Montreal Protocol  Regulation 
(EU) 517/2014  
 
108 Regulation (EU) 2017/821.  WT/TPR/S/442  • European Union  
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  Product  Measure  Number of 
CN lines  Rationale  Legislation  
Invasive alien species 
(IAS)  Prohibition/restriction  21 To prevent negative 
consequences to the 
environment  Regulation (EU) 
1143/2014; 
Regulation  (EU) 
2016/1141; and 
Commission 
Implementing 
Regulation (EU) 
2017/1263  
Mercury, mercury 
compounds, and 
mercury waste  Prohibition/restriction  5 Minamata Convention 
on Mercury  Regulation 
(EU) 2017/852  
Certain goods which 
could be used for 
capital punishment, 
torture or other cruel, 
inhuman or degrading 
treatment or 
punishment  Prohibition/restriction  36 Protection of human  
life or health, 
protection of public 
morals  Regulation 
(EU) 2019/125; 
Commission Delegated 
Regulation 
(EU) 2020/621; 
Commission Delegated 
Regulation 
(EU) 2021/139  
Wastes  Prohibition/restriction  718 Basel Convention for 
the Control of 
Transboundary 
Moveme nts of 
Hazardous Waste and 
their Disposal  
OECD Decision on the 
control of 
transboundary 
movements of wastes 
destined for recovery 
operations  Regulation 
(EC) 1013/2006 and 
amendments  
Rough diamonds  Prohibition/restriction  3 Kimberley Process 
certification scheme 
for rough diamonds  Council Regulation 
(EC) 2368/2002  
Cat and dog fur  Prohibition  170 Harmonizes at the 
Union level national 
bans concerning the 
import to and export 
from the Union of cat 
and dog fur, and 
products containing 
such fur i n order to 
eliminate obstacles to 
the functioning of the 
internal market and 
to restore consumer 
confidence in the fact 
that the fur products 
which consumers buy 
do not contain cat 
and dog fur  Regulation 1523/2007  
Seal products  Prohibition/restriction  128 .. Commission 
Implementing 
Regulation 
(EU) 2015/1850  
Fish of vessels from 
Cambodia, Comoros, 
and Saint  Vincent and 
the Grenadines  Prohibition  419 EU Regulation to fight 
against Illegal, 
Unregulated and 
Unreported (IUU) 
fishing  Council Regulation (EC) 
1005/2008; Council 
Implementing Decision 
of 24 March  2014; 
Council Implementing 
Decision (EU) 
2017/1332; Council 
Implementing Decision 
(EU) 2017/1333; and 
Council Implementing 
Decision (EU) 
2016/1818  
.. Not available.  
Source:  WTO document G/MA/QR/N/EU/6, 7  October  2022; and TARIC database.  WT/TPR/S/442  • European Union  
- 77 - 
  3.1.5.2   Import licensing  
3.84.  The European  Union continued to impose import licences on 10  categories of products, mainly 
for the administration of TRQs or quota regimes (2), surveillance regimes (2), or to monitor or 
control certain imports (6). The overall framework and the products subject to licensing did 
not change during the review period although the surveillance mechanisms that were in place on 
iron & steel and aluminium since 2016 lapsed i n May  2020. They were replaced by a monitoring 
system that is described as an ex post system based on actual import data that are reported 
monthly.109 Retrospective Union surveillance  was also adopted for imports of bioethanol in 
November  2020.110 Although the regulation later expired, imports of bioethanol continued to be 
informally monitored.  
3.85.  The European  Union has different licensing regulations in place with respect to each 
(Table  3.12). The regulations have, for the most part, not changed subs tantially except for the TRQ 
and licensing regime for certain agricultural products.111 The licensing regime for timber, i.e.  Forest 
Law Enforcement Governance and Trade (FLEGT), remains operational only for Indonesia, although 
the European  Union continues to negotiate additional Voluntary Partnership Agreements with other 
countries.  
3.86.  The Integrated System for Managing Exports and Import Licences, or Système Intégré de 
Gestion de Licences (SIGL), provides a system of licensing for certain EU imports, i.e.  aluminium, 
steel, textiles, and wood. However, due to the expiry of surveillance of aluminium and steel, it ceased 
to cover these products as of 15  May 2020. According to its mandate, it facilitates the prior 
surveillance documents and licences and allows im porters to obtain quota fill levels.  
Table 3.12 Products subject to import licensing, 2022  
Product  Regime  Automatic/  
non-
automatic  Legislation  
Textiles  Autonomous regime 
governing imports from 
the Democratic 
People's Republic of 
Korea; outward 
processing traffic 
arrangements; 
surveillance regime  Non-
automatic  Regulation (EU) 2015/936; 
Commission Implementing 
Regulation (EU)  2016/2148; 
and Council Regulation 
(EU) 2017/1509  
The European  Union maintains 
licensing requirements only for  
rice; hemp seeds for sowing, 
raw hemp, hemp seeds not for 
sowing; and ethyl alcohol of 
agricultural origin.  
 
However, when it comes to the 
management of agricultural 
TRQs, the European  Union 
manages them through a 
licensing system for cereals and 
rice; sugar; milk and milk 
products; beef and veal; 
pigmeat; poultry meat; eggs 
and products in the egg sector 
and egg albumin; garlic; 
preserved mushrooms; ethyl 
alcohol from agricultural origin; 
and he mp.  To monitor trade flows 
and administer TRQs  Non-
automatic  Commission Delegated 
Regulation (EU) 2016/1237; 
Commission Implementing 
Regulation (EU) 2016/1239; 
Commission Delegated 
Regulation (EU) 2020/760; and 
Commission Implementing 
Regulation (EU) 2020 /761 
Fluorinated gases including 
hydrofluorocarbons (HFCS)  Licensing and quota 
system  Non-
automatic  Regulation (EU)  517/2014; and 
Commission Implementing 
Regulation (EU)  2019/661  
 
109 Steel and aluminium monitoring. Viewed at: https://webgate.ec.europa.eu/siglbo/post -surveillance .  
110 Commission Implementing Regulation (EU) 2020/1628.  
111 A change from licensing management system to a first  come, first  served system for 21 TRQs.  WT/TPR/S/442  • European Union  
- 78 - 
  Product  Regime  Automatic/  
non-
automatic  Legislation  
Ozone -depleting substances 
(ODS) (controlled substances)  To control prohibited or 
restricted ODS goods  Non-
automatic  Regulation (EC)  1005/2009  
Rough diamonds  To implement the 
Kimberley Process 
Certification Scheme  Non-
automatic  Council Regulation 
(EC) 2368/2002  
Waste shipment  To control the import 
of waste and 
hazardous waste 
pursuant to the Basel 
Convention  Automatic  Regulation (EC)  1013/2006  
Timber and timber products  To ensure that only 
legally harvested 
timber, and products 
made thereof, is 
exported to the 
European  Union from 
countries operating the 
FLEGT l icensing 
scheme  Automatic  Council Regulation  2173/2005; 
and Commission Regulation 
(EC) 1024/2008  
Endangered species (CITES)  To control imports of 
endangered species 
listed in CITES  Non-
automatic  Council Regulation (EC)  338/97; 
Commission Regulation 
(EC) 865/2006; Commission 
Implementing Regulation 
(EU) 792/2012; and 
Commission Implementing 
Regulation (EU) 2017/1915  
Bluefin tuna (catch 
documentation)  To regulate stocks of 
bluefin tuna, improve 
the quality and 
reliability of statistical 
data, and prevent, 
deter, and eliminate 
illegal fishing  Non-
automatic  Regulation (EU)  640/2010 and 
Regulation (EU)  2017/2107   
Drug precursors  To monitor trade and 
authorize imports of 
drug precursors  Automatic  Commission Delegated 
Regulation (EU) 2016/1443; 
and Com mission Delegated 
Regulation (EU) 2018/729  
Source:  WTO documents G/LIC/N/3/EU/11, 27  September  2022; G/MA/QR/N/EU/6, 7  October  2022, and 
TARIC database.  
3.87.  The European  Union has regularly made notifications to the Committee on Import Licensing 
during the review period. There were three annual replies to the questionnaire on import licensing 
procedures and six  notifications of changes of regulations or procedures on import licensing.112 The 
notifications on changes to regulations on import licensing larg ely overlap with the TRQ allocation 
and administration text, thus, have been identified and discussed in Section  3.1.3.3. These changes 
all pertain to licences used to control quantitative measures or TRQs on agricultural imports 
(Box 3.5).  
 
112 WTO documents G/LIC/N/3/EU/9, G/LIC/N/3/EU/10, G/LIC/N/3/EU/11, G/LIC/N/2/EU/13, 
G/LIC/N/2/EU/14, G/LIC/N/2/EU/15, G/LIC/N/2/EU/16, G/LIC/N/2/EU/17, and G/LIC/N/2/EU/18.  WT/TPR/S/442  • European Union  
- 79 - 
  Box 3.5 Changes in EU licensing rules, 2020 -22 
Commission Delegated Regulation (EU) 2020/760 of 17  December  2019 supplementing Regulation (EU) 
1308/2013 of the European Parliament and of the Council as regards the rules for t he administration of 
import and export tariff quotas subject to licences and supplementing Regulation (EU) 1306/2013 of the 
European Parliament and of the Council as regards the lodging of securities in the administration of tariff 
quotas  
Commission Imple menting Regulation (EU) 2020/761 of 17  December  2019 laying down rules for the 
application of Regulations (EU) 1306/2013, (EU) 1308/2013 and (EU) 510/2014 of the European  Parliament 
and of the Council as regards the management system of tariff quotas with licences  
Commission Implementing Regulation (EU) 2019/386 of 11  March  2019 laying down rules with regard to the 
apportionment of tariff rate quotas for certain agricultural products included in the WTO schedule of the 
Union following the withdrawal of the United  Kingdom from the Union and with regard to import licences 
issued and import rights allocated under those tariff rate quotas  
Commission Implementing Regulation (EU) 2021/760 of 7  May 2021 amending Implementing Regulations 
(EU) 2020 /761 and (EU) 2020/1988 as regards the management system of some tariff quotas with licences 
and repealing Implementing Regulation (EU) 2020/991  
Commission Implementing Regulation (EU) 2021/254 of 18  February  2021 amending Implementing 
Regulations (EU) 20 20/761 and (EU) 2020/1988 and Regulations (EC) No.  218/2007 and (EC) 1518/2007 as 
regards imports of products originating in the United Kingdom and excluding those products from the tariff 
quotas with ongoing quota periods  
Commission Implementing Regulati on (EU) 2021/1406 of 26  August  2021 amending Implementing 
Regulation (EU) 2020/761 and applicable to certain import tariff quotas for poultry meat and amending 
Implementing Regulation (EU) 2020/761 with regard to the quantities of cheese available for expo rt licences 
to the USA  
Commission Implementing Regulation (EU) 2021/1401 of 25  August  2021 amending Implementing 
Regulations (EU) 2020/761 and (EU) 2020/1988 as regards the quantities that may be imported under 
certain tariff quotas  
Source:  EU notifications on import licensing.  
3.1.6   Anti-dumping, countervailing, and safeguard measures  
3.1.6.1   Anti-dumping and countervailing duties  
3.88.  The European  Union continued to be a significant user of trade remedies during the review 
period as new investigations of anti -dumping (AD) and anti -subsidy (AS)113 measures continued 
unabated despite the challenges of the COVID -19 pandemic (Chart  3.3). However, while the 
pandemic did not have an impact on the pace of investigations, there were other impacts. One 
impact was on ver ifications due to travel restrictions, whereby the Commission changed to verifying 
company data by remote cross -checking by videoconference in lieu of on -site visits. Another effect 
was the use of suspension provision during the pandemic, reportedly to add ress supply chain 
disruptions in one case. Nevertheless, trade remedies, or trade defence instruments  (TDIs) as the 
European  Union refers to them, continued to be an important trade policy tool. At the end of 2022, 
there were 178  AD and AS measures in plac e that supported 440,706 direct jobs.114  
3.89.  Modernization of the European  Union's TDIs has occurred in recent years and was examined 
in the last two Reviews. However, since 2018 there have been few changes and the Commission has 
proceeded with operationalizin g all the elements from that earlier initiative. The Commission's work 
on trade remedies during the review period focused on carrying out investigations and implementing 
the legislative changes from 2017 and 2018, utilizing new tools due to the pandemic an d 
implementing recommendations from the European Court of Auditors' (ECA) audit on TDIs in 2020.  
 
113 The European  Union refers to countervailing measures as anti -subsidy measures, thus this 
terminology will be used throughout the section.  
114 European Commission Report  COM(2022)  470 final.  WT/TPR/S/442  • European Union  
- 80 - 
  Chart 3.3 Overview of Anti -dumping and anti -subsidy activity, 2019 -21 
(Number)  
 
Source:  Annual Reports from the  Commission to the European Parliament and the Council on the EU's 
Anti-Dumping, Anti -Subsidy and Safeguard activities (2019 -21) and accompanying Staff  Working 
Documents  SWD(2020) 71 final , SWD(2021) 234 final , and SWD(2022)  294 final .  
3.1.6.1.1   Regulatory and poli cy developments  
3.90.  The European  Union's main trade remedy legislation for anti -dumping and countervailing 
measures, known as the "basic anti -dumping Regulation" and the "basic anti -subsidy Regulation", 
have not substantially changed since the significant amen dments of 2017 and 2018, as outlined in 
the previous Review.115 There has only been a small amendment to each due to a clause in the 2018 
amendments that required the Commission to review the pre -disclosure period up until June  2020 
with a view to changing the length of time. Thus, a Regulation was issued on 4  June 2020 making 
amendments to Articles 19 and 29, respectively, of the two basic Regulations to establish a 
pre-disclosure period of four weeks where the Commission announces whether it will impose 
provisional AD and AS  duties.116  
3.91.  The inclusion of social and env ironmental standards in the 2017/18 amendments was a novel 
development whereby the Commission can take these into account when selecting an appropriate 
representative country to construct a non -distorted normal value and when calculating an injury 
margin. The provisions were used, albeit not extensively thus far, during the review period 
(Table  3.13). This was because other issues were decisive and hence the need to take social and 
environmental standards into account did not arise, e.g.  undertakings refuse d for other reasons, or 
data available for only one suitable representative country. The most used provision is the 
incorporation of the cost of compliance with environmental and labour provisions when establishing 
the injury margin; thus far, these mostly  result from the additional compliance costs with the 
EU Emissions Trading System (ETS).  
 
115 Regulation (EU) 2016/1036; and Regulation (EU) 2016/1037.  
116 Comm ission Delegated Regulation (EU) 2020/1173.  
16 15 142328 302430
18
020406080
2019 2020 2021New investigations initiated Review investigations initiated New judicial casesChart 3.[eu]  Overview of Anti -dumping and anti -subsidy activity, 2019 -21
Number
To be added by DP. Source:WT/TPR/S/442  • European Union  
- 81 - 
  Table 3.13 Overview of social and environmental standards use in TDI, 2019 -21 
(No. of cases, except as otherwise indica ted) 
 2019  2020  2021  
Selection of an appropriate representative country, 
investigation  n.p. n.p. n.p. 
Selection of an appropriate representative country, 
expiry review  1 n.p. n.p. 
Cost of compliance with environmental agreements 
and labour conventions incorporated  1 2 5 
Additional costs added for future compliance of EU 
producers (% or EUR  per quantity)  3.7%  EUR 6-EUR 10 
per tonne; 
EUR 1.5-EUR 6 
per tonne  n.p. 
Undertaking offers  n.p. n.p. n.p. 
n.p. Not provided.  
Source:  European Commission Report COM(2020) 164 final , and Staff Working Documents SWD(2021) 234 
final and SWD(2022) 294 final .  
3.92.  The ECA  conducted an audit of the Commission's TDI activities during 2016 -19 and issued its 
report with recommendations in July  2020. The overall conclusion was positive and noted that the 
procedures were followed and there was successful execution of the relevan t regulations and 
policies. Nevertheless, a number of improvements were recommended regarding the confidentiality 
status of documents, as well as to raise greater awareness to stakeholders, improve guidance on 
competition aspects, improve monitoring and ev aluation, launch more self -initiated investigations, 
and use criteria to respond to measures by third countries.117 By end -2022, the Commission had 
addressed and implemented the recommendations and will continue to raise awareness of the TDIs 
among industry . An evaluation of the effectiveness of the TDIs, as called for by the ECA, is 
programmed for 2025.  
3.93.  Another element that was emphasized as part of EU policy during the review period was 
addressing fraud and circumvention through improved trade enforcement . To address some of these 
issues, the Commission continued to include a special monitoring clause in regulations imposing 
measures, in particular for those with a high risk of circumvention. Special monitoring has become 
more common, and by end -2021 there  were 54 TDI measures subject to such monitoring.118 The 
Commission has also carried out anti -circumvention and anti -absorption investigations in recent 
years to address these growing problems. It also closely monitors  price undertakings to ensure they 
are complied with properly.  
3.94.  In terms of policy direction, the European  Union has increasingly focused its efforts in recent 
years on addressing what it considers complicated or opaque subsidy practices in third countries.119 
In 2020, for the first time, the Co mmission imposed countervailing duties on goods produced in one 
country that received financial support, i.e.  subsidies, from another country, so called cross -border 
financial support. Also in March 2022, the Commission countervailed preferential financing  provided 
by China to Indonesia, as part of a complex subsidy arrangement designed for export of stainless 
steel cold -rolled flat products to the European  Union. To further address this issue and as part of its 
efforts to reform the WTO, the European  Union  issued a concept paper and made other proposals to 
improve the multilateral trading system in which a few of these relate specifically to trade remedies, 
including the need to address the most trade -distorting types of subsidies and to improve coverage 
of the activities of SOEs, in particular how subsidy rules apply.120  
 
117 ECA (2020), Trade Defence Instruments: System for Protecting EU Businesses from Dumped and 
Subsidized Imports Functions Well , Special Report  17. Viewed at: https://op.europa.eu/webpub/eca/special -
reports/trade -defence -instruments -17-2020/en/ .  
118 European Commission Report  COM(2022)  470 final.  
119 European Commission Report  COM(2021)  496 final.  
120 European Commis sion (2021), Reforming the WTO: Towards a Sustainable and Effective Multilateral 
Trading System . Viewed at: 
https://trade.ec.europa.eu/doclib/docs/2021/april/tra doc_159544.1329_EN_02.pdf .  WT/TPR/S/442  • European Union  
- 82 - 
  3.1.6.1.2   Trends in usage  
3.95.  Since the inception of the WTO, the European  Union has been one of the top users of AD and 
AS measures121, ranking third overall in AD since 1995, and second for AS. During t he last three -year 
period, the European  Union ranked fifth among WTO Members as a user of AD and third in AS, thus 
ranking slightly lower relative to other Members due both to lower usage by the European  Union and 
a higher number of initiations by other WT O Members.122 The European  Union has also been an 
increasing target for trade defence measures from third -country users. It has responded by taking 
a role in defending EU industries that have been the target of such investigations through various 
tools used  such as registering as an interested party, diplomatic response, raising the matter in the 
respective WTO  Committee, or possibly filing a case before the DSB.  
3.96.  In 2020, despite the implications brought on by the COVID -19 pandemic, the use of EU TDIs 
remain ed resilient, and usage remained similar as in 2019. In 2021, there was one fewer initiation, 
but essentially the European  Union's use of TDI remained stable over the period. At the end of 2022, 
the European  Union had 153  AD measures and 25 AS measures in force.123 
3.97.  During the last three -year period, there has been a trend towards a greater percentage of 
definitive duties or undertakings imposed.124 In 2019, 58% of investigations resulted in duties or 
undertakings and this gradually increased to 92% in 2021 (C hart 3.4). There was only one 
termination out of 13 cases in 2021.  
Chart 3.4 Outcome of new investigations concluded, 2019 -21 
(Number)  
 
Source:  Annual Reports from the Commission to the European Parliament and the Council on the EU's 
Anti-Dumping, Anti -Subsidy and Safeguard activities (2019 -21) and accompanying Staff Working 
Documents  SWD(2020) 71 final , SWD(2021) 234 final , and SWD(2022)  294 final .   
3.98.  Concerning new investigations initiated by cou ntry or region of export, the Asian region 
continued to be the dominant source of potentially dumped or subsided goods based on the number 
of new investigations filed (Chart  3.5). This has been a consistent trend for many years, and reflects 
that China has  accounted for the vast majority of cases. Since 2020 there has been some growth in 
cases against European countries, i.e.  three cases each in 2020 and 2021 concerning the 
Russian  Federation and Türkiye.  
 
121 Measured both in terms of number of investigations initiated and measures imposed.  
122 WTO Statistics on Anti -dumping. Viewed at: 
https://www .wto.org/english/tratop_e/adp_e/AD_InitiationsByRepMem.xlsx .  
123 Staff Working Document SWD(2022)  294 final.  
124 As reported in the annual reports.  
75
Imposition of definitive duties or undertakings Terminations115Chart 3.  Outcome of new investigations concluded, 2019 -21
Number
Source:2020 2019
To be added by DP.1212021WT/TPR/S/442  • European Union  
- 83 - 
  Chart 3.5 New investigations initiated by country of export by region, 2019 -21 
(Number of measures)  
 
a Non-EU European countries include the Russian  Federation and Türkiye.  
Source:  Annual Reports from the Commission to the European Parliament and the Council on the EU's 
Anti-Dumping, Anti -Subsidy and Safeguard activities (2019 -21) and accompanying Staff Working 
Documents  SWD(2020) 71 final, SWD(2021) 234 final , and SWD(2022) 294 final .  
3.99.  Consistent with the global situation on measures applied to the ir on and steel sector, as well 
as references to overcapacity, the sector has been the most impacted by trade remedies over the 
period (see also Section  3.1.6. 1), although the number of cases is less than in the previous Review 
and demonstrates some stabiliza tion (Chart  3.6).125  
Chart 3.6 Anti-dumping and anti -subsidy investigations initiated by product sector, 
2019 -21 
(Number of investigations initiated)  
 
Source:  Annual Reports from the Commission to the European Parliament and the Council on the EU's 
Anti-Dumping, Anti -Subsidy and Safeguard activities (2019 -21) and accompanying Staff Working 
Documents  SWD(2020) 71 final, SWD(2021) 234 final, and SWD(2022) 294 final .  
 
125 WTO document WT/TPR/S/395/Rev.1, 7  July 2020, Chart  3.4. 
4
1 1111
1093 31
1
024681012141618Chart 3.[eu]  New investigations initiated by country of export by region, 2019 -21
Number of measures
Middle East Africa Americas Europe Asia
a Non-EU European countries includes : Bosnia and Herzegovina, North Macedonia, Russian Federation, Turkey, and Ukraine.
Source: Annual Reports from the Commission to the European Parliament and the Council on the EU's Anti -Dumping, Anti -Subsidy and 
Safeguard activities (2019 -21) and accompanying Commission Staff Working Documents. Viewed at:
https://eur -lex.europa.eu/legal -content/EL/TXT/?uri=CELEX:52020SC0071
https://eur -lex.europa.eu/legal -content/HR/ALL/?uri=CELEX:52021SC0234
https://eur -lex.europa.eu/legal -content/EN/ALL/?uri=CELEX: 52022SC0294.a2019 2020 2021
123276
6741
41
1
024681012141618
2019 2020 2021
Chemical and allied products Electronics Iron and steel
Other Other mechanical engineering Other metals
Wood and paperChart 3.  Anti -dumping and anti -subsidy investigations initiated by product sector, 2019 -21
Number of investigations initiated
Annual Reports from the Commission to the European Parliament and the Council on the EU's Anti -Dumping, Anti -Subsidy 
and Safeguard activities (2019 -21) and accompanying Commission Staff Working Documents. Viewed at:
https://eur -lex.europa.eu/legal -content/EL/TXT/?uri=CELEX:52020SC0071
https://eur -lex.europa.eu/legal -content/HR/ALL/?uri=CELEX:52021SC0234
https://eur -lex.europa.eu/legal -content/EN/ALL/?uri=CELEX: 52022SC0294.Source:WT/TPR/S/442  • European Union  
- 84 - 
  3.1.6.2   Safeguards  
3.100.   The European  Union has had sporadic, albeit little, use of safeguard measures. It has 
imposed only six  safeguard measures since inception, the last one in 2018 (which remains in place). 
Prior to that, the previous case was in 2010.126 As noted in the previous Review, the safeguard 
measure from  2018 remains in place on certain steel products with provisional measures applied 
since 2018 and definitive measures since 2019.127 On the other hand, the surveillance measures the 
European  Union had in place on steel and aluminium products since  2016 and 2018, respectively, 
have lapsed as of 15  May 2020 and have been replaced by a new ex post monitoring system 
(Section  3.1.5.2).128 The safeguard measures under GSP (Everything but Arms (EBA)) that applied 
bilaterally to Cambodia and Myanmar on indi ca rice also lapsed as of 18  January  2022 (Section  2).  
3.101.   The EU framework for safeguards comprises two basic safeguard regulations, one for 
WTO Members and the other for non -Members (Table  3.14). There is also a regulation specific to 
textile products and a nother for bilateral safeguards in preferential trade agreements. These main 
rules have not changed for many years. The European  Union's basic safeguard regulation, which 
incorporates provisions of the WTO Agreement on Safeguards, is a codified version fro m 2015 but 
the main elements have been in place since the commencement of the WTO.  
Table 3.14 Main safeguards regulations, 2022  
Legal instrument  Description  
Regulation (EU) 2015/478  Basic safeguard regulation (excludes textile products)  
Regulation (EU) 2015/755  Basic safeguard regulation applying to certain 
non-WTO Members (excludes textile products)  
Regulation (EU) 2019/287  Governs bilateral safeguards in preferential 
agreements  – Japan, Singapore, and Viet  Nam  
Regulation (EU) 2015/936  Safeguards for textile products  
Source:  Compiled by the WTO Secretariat from the regulations listed.  
3.102.   The safeguard measure on steel remained in place during the review period although it was 
examined for prolongation in January  2021 on request of several EU member States. The remedy in 
place at that time was the imposition of TRQs, with an increase of the  quota volume by 3% annually, 
and an out -of-quota duty rate of 25% on 26  steel product categories. The review showed that the 
industry continued to decline or worsen, losses ensued, and the safeguard measures remained in 
place for three years. The review r esulted in keeping the measures in place, with an annual TRQ 
growth rate of 3%, for an additional three  years, i.e. until 30  June 2024, but to also conduct an 
additional investigation that could terminate the measures after two  years, i.e.  by 30  June 2023.129 
3.103.   Thereafter, in March  2022, the Commission adjusted the TRQ volumes to take into account 
an import ban on steel that was put in place on products  from Belarus and the Russian  Federation 
as a result of sanctions.130 The quota allocations to these countries  were reallocated to other 
suppliers subject to the safeguard measure.131 Further, in April  2022, the Commission made further 
examinations to incorporate certain EPA countries within the scope of the safeguard measure as 
they were previously excluded due to  provisions of the EPA. This resulted in one EPA country, 
South  Africa, being brought under the safeguard measure for three  steel product categories as from 
1 May 2022.132 Other adjustments were made to the country coverage in December  2020 for the 
United  Kingdom in response to Brexit and in May  2022 as Ukraine was temporarily removed from 
the safeguard measure (Section  3.1.3.4).133 
 
126 WTO, Safeguard Initiations by Reporting Member . Viewed at: 
https://www.wto.org/english/tratop_e/safeg_e/S G_InitiationsByRepMember.pdf .  
127 Commission Implementing Regulation (EU) 2019/159.  
128 European Commission, Steel and Aluminium Monitoring . Viewed at: 
https://webgate.ec.europa.eu/siglbo/ post-surveillance .  
129 Commission Implementing Regulation (EU) 2021/1029.  
130 Council Regulation (EU) 2022/355 ; and  Council Regulation (EU) 2022/428.  
131 Commission Implementing Regulation (EU) 2022/434.  
132 Commission Implementing Regulation (EU) 2022/664.  
133 Commission Implementing Regulation (EU) 2020/2037; and Regulation (EU) 2022/870.  WT/TPR/S/442  • European Union  
- 85 - 
  3.104.   Another amendment to the steel safeguard measures regulation was made in July  2022 as 
a result of a review investigation. The Co mmission consulted with interested parties and made the 
following adjustments: (i)  for two product categories, the quota was globali zed and country -specific 
allocations removed; (ii)  access to any residual quota in the fourth quarter was adjusted to preven t 
crowding out; (iii)  modification of developing countries subject to the measure (by product 
category); and (iv)  increase in liberalization by adjusting the annual TRQ growth rate from 3% 
to 4%.134 
3.105.   After adjudication of the steel safeguard in the DSB, on 2 4 August  2022 the European  Union 
informed interested parties of planned implementation of the measures.135 It was the Commission's 
intention to amend or supplement the steel safeguard regulation (Commission Implementing 
Regulation (EU) 2019/159) based on su bmissions and input from interested parties. On 
13 January  2023, the Commission published Commission Implementing Regulation (EU) 2023/104 
whereby it implemented the panel report.  
3.106.   During the review period, the European  Union continued to use the special s afeguard 
provisions for agricultural products (Section  4.1).  
3.1.7   Other measures affecting imports  
3.1.7.1   Sanctions (on imports and exports)  
3.107.   The use of sanctions, or restrictive measures, by the European  Union as one of the tools to 
pursue the objectives of the EU Co mmon Foreign and Security Policy (CFSP) and/or to implement 
UN Security Council Resolutions continued during the review period. Under the CFSP, the 
European  Union can adopt autonomous EU sanctions, additional measures to UN sanctions (thus 
creating  mixed s anctions regime), and transpose binding UN  measures into EU legislation. 
European  Union restrictive measures are taken towards governments, entities, groups or 
organizations, or individuals in a targeted manner to avert or minimize the impact on those not 
responsible for the sanctioned behaviour or policies. The imposition of EU sanctions is directed by 
the "guidelines on the implementation and evaluation of restrictive measures".136 The 
implementation of EU sanctions is a national responsibility, and violat ions of sanctions and their 
penalties have traditionally been subject to various member State rules. However, in 
November  2022 the EU Council added the violation of sanctions to the list of "EU crimes" and in 
December 2022 the Commission proposed a new ins trument (Directive) containing minimum rules 
concerning the definition of criminal offences and penalties for the violation of EU restrictive 
measures, thus moving towards the harmonized enforcement of restrictive measures.  
3.108.   There has been a significant increase in the number of sanctions regimes, restrictive 
measures, and legal instruments put in place, largely as a result of the war in Ukraine. Thus, the 
majority of new measures impact trade and the movement of persons or capital to/from Bel arus, 
the Russian  Federation, and the territories outside the government's control. As the war has carried 
on, the number and scope of the restrictive measures have increased significantly. Not only do 
measures include the more traditional actions like fre ezing assets, travel bans, import/export 
prohibitions or restrictions, and arms embargoes, but they have been expanded to include 
prohibiting access to export credits and guarantees, air space, port facilities, and services and 
technology.137 
 
134 Commission Implementing Regulation (EU) 2022/978.  
135 European Commission Notice 2022/C  320/21.  
136 European Council (2018), Guidelines on Implementation and Evaluation of Re strictive Measures 
(Sanctions) in the Framework of the EU Common Foreign and Security Policy . Viewed at: 
https://data.consilium.europa.eu/doc/document/ST -5664-2018-INIT/ en/pdf .  
137 EU Sanctions Map. Viewed at: https://sanctionsmap.eu/#/main . WT/TPR/S/442  • European Union  
- 86 - 
  3.109.   As the measure s are constantly changing in response to various situations, the EU Sanctions 
Map provides the current situation with respect to each sanction regime.138 The data.europa.eu 
website provides a consolidated list of persons, groups, and entities subject to fin ancial sanctions.139  
3.1.7.2   Other measures  
3.110.   As noted in the previous Review, the European  Union has applied additional duties on certain 
products originating in the United  States since June  2018 following consultations that did not reach 
a satisfactory solution pu rsuant to the Agreement on Safeguards.140 The matter was subsequently 
brought to the DSU by the United  States.141 The two  regulations implementing these measures 
remain in place but  the rebalancing measures are currently suspended from 1  January  2022 until 
31 December 2023.142  
3.2  Measures directly affecting exports  
3.2.1   Customs procedures and requirements  
3.111.   The EU customs procedures for export, i.e. for goods taken out of the customs territory of 
the Union, are contained in the UCC Title  VIII and expanded upon in the U CC DA Title  VIII and the 
UCC IA. When goods leave that customs territory, a pre -departure declaration must be lodged within 
a specific time limit. The pre -departure declaration shall take the form of a customs declaration or 
a re-export declaration or an e xit summary declaration to be lodged at the customs office of exit as 
specified in the customs legislation. The pre -departure declaration is submitted electronically 
through the AES. In the member States where the AES has not yet been implemented, the 
pre-departure declaration is submitted electronically through the Export Control System (ECS) until 
they gradually implement the AES by the final deployment date (1  December  2023).  Once the 
pre-departure declaration is accepted and the goods are presented to the competent customs 
authority, they may be subject to customs controls before they are released for export. Certain 
charges or refunds may also be applicable.  
3.112.   The last formal legislative a mendment to the export procedures since the previous Review 
was as a consequence of Brexit. It concerns the time limits specified for lodging exit summary 
declarations, which, since the end of the transition period, also apply for cargo movements between 
the EU customs territory and any port in the North  Sea. These modifications were introduced to 
adapt to the post -Brexit situation for the United  Kingdom, Northern  Ireland, the Channel Islands, 
and the Isle of Man as they are outside the EU customs territory  since the end of the transition 
period.143 
3.113.   As noted in Section  3.1.1.3, the European  Union is still in the process of implementing 
electronic systems to facilitate trade as specified by the UCC. One of the projects of the UCC Work 
Programme is the UCC AES.  The two components of the project are the "Trans -European AES" and 
the "National Export System upgrade". They were scheduled for initial deployment in March  2021 
with an end date of December  2023. At that time, it is expected there would be fully automate d 
export procedures and exit formalities.  
3.2.2   Taxes, charges, and levies  
3.114.   The European  Union does not currently impose any taxes, charges, or levies on exports, 
except for certain services.  
 
138 EU Sanctions Map.  
139 Dataset: Consolidated List of Persons, Groups and Entities Subject to EU  Financial Sanctions. 
Viewed  at: https://data.europa.eu/data/datasets/consolidated -list-of-persons -groups -and-entities -subject -to-
eu-financial -sanctions?locale=en .  
140 Commission Implementing Regulation (EU)  2018/724; and Commission Implementing Regulation 
(EU) 2018/886.  
141 WTO DS559.  
142 Joint EU -US Statement on a Global Arrangement on Sustainable Steel and Aluminium.  
143 Commission Delegated Regulation (EU)  2020/2191.  WT/TPR/S/442  • European Union  
- 87 - 
  3.2.3   Export prohibitions, restrictions, and licensing  
3.2.3.1   Prohibitions, restri ctions, licensing  
3.115.   The European  Union maintains 16  categories of goods where export measures are imposed 
on a regular basis, mostly maintained due to various international conventions established for 
conservation or protection reasons. The main development during the period was the imposition of 
many temporary restraints and surveillance measures, the majority of which were in respect of 
goods related to the COVID -19 pandemic. There were also amendments of CITES coverage, revision 
of dual -use export controls  (see below), and a significant increase in the imposition of restrictions 
due to bilateral sanctions (Section  3.1.7).  
3.116.   Export restrictions, prohibitions, and licensing requirements mainly impact the chemicals 
and fishery sectors where numerous internationa l conventions often dictate measures for the 
protection of human, plant, or animals, e.g. the Montreal Protocol, CITES, and the Rotterdam 
Convention. The fishery measures are mostly certificates or licences for conservation of fish stocks. 
All the measures  have been in place for many years, and most were notified during the period as 
quantitative restrictions (Table  3.15).  
3.117.   Changes to the existing export measures during the review period were mainly minor 
updates. With respect to the Regulation on drug precu rsors, amended in 2020 and 2022, new 
chemicals were added to its coverage; a similar update was made to the Regulation on hazardous 
chemicals, where there were amendments to the annexes on product coverage; the Regulation 
pertaining to goods that could be used for capital punishment was amended twice with respect to 
the competent authorities and to the applicable destination countries; the annexes to the Regulation 
on wastes were amended to include certain plastics' wastes as a result of the Basel Conventio n 
amendments; and the Regulation relating to diamonds per the Kimberley Process was amended 
three times to update the participants and competent authorities and to make adjustments due to 
Brexit.  
3.118.   In response to the COVID -19 pandemic, the European  Union an d most of the member States 
imposed various types of temporary export measures during the review period (Table  3.16). The 
vast majority have since expired, and most were in place for a very short duration in the first half 
of 2020. However, as at October  2022, the European  Union still had export surveillance measures 
in place on COVID -19 vaccines and their active ingredients until end -2023. The measures by the 
European  Union and member States were mostly prohibitions for medicinal products, PPE, medical 
equipment, and disinfectants. Some measures have been notified to the WTO.  
3.119.   Additionally, the European  Union maintains export quotas to help administer import quotas 
opened to EU exporters in third markets as a result of international agreements. Two export qu otas 
exist, established through bilateral agreements and administered through export licences by the 
European  Union: one for cheese exported to the United   States, and one for milk powders exported 
to the Dominican  Republic as a result of the EPA with the CARIFORUM States.144 
Table 3.15 Prohibitions, restrictions, or licensing on exports, 2022  
Product  Measure  Number of 
CN lines  Rationale  Legislation  
Hops Export 
certificate  2 .. Regulation (EU) 1308/2013  
Drug precursors  Prohibition/  
restriction  67 .. Council Regulation 
(EC) 111/2005 and 
amendments  
Cat and dog fur  Prohibition  170 Harmonizes at the Union level 
national bans concerning the import 
to and export from the Union of cat 
and dog fur, and products containing 
such fur in order to eliminate 
obstacles to the functioning of the 
internal market and to restore 
consumer confidence in the fact that 
the fur products which consumers 
buy do not contain cat and dog fur  Regulation (EC)  1523/200 7 
 
144 Commission Implementing Regulation (EU)  2020/761.  WT/TPR/S/442  • European Union  
- 88 - 
  Product  Measure  Number of 
CN lines  Rationale  Legislation  
Substances that 
deplete the 
ozone layer  Prohibition/  
restriction  91 Montreal Protocol  Regulation (EC) 1005/2009 
and Commission Regulation 
(EU) 2017/605  
Certain 
hazardous 
chemicals  Prohibition/  
restriction  140 Rotterdam Convention on the Prior 
Informed Consent Procedure for 
Certain Hazardous Chemicals and 
Pesticides in International Trade  
 
Stockholm Convention on Persistent 
Organic Pollutants  Regulation (EU) 649/2012; 
and Commission Delegated 
Regulation (EU)  2022/643  
Fluorinated 
greenhouse 
gases, their 
mixtures and 
concerned 
products and 
equipment  Prohibition/  
licensing  .. Montreal Protocol on Substances 
that Deplete the Ozone Layer, as 
last amended and adjusted  Regulation (EU) 517/2014  
Certain animal 
and plant 
species  Prohibition/  
restriction/  
licensing  633 CITES  Council Regulation 
(EC) 338/97; Commission 
Regulation (EU) 2019/2117; 
and Regulation 
(EU) 2019/1010  
Mercury, 
mercury 
compounds, and 
mercury waste  Prohibited  38 Minamata Convention on Mercury  Regulation (EU)  2017/852  
Certain goods 
which could be 
used for capital 
punishment, 
torture or other 
cruel, inhuman 
or degrading 
treatment or 
punishment  Prohibition/  
restriction  68 Protection of human life or health, 
protection of public morals  Regulation (EU) 2019/125; 
Commission Delegated 
Regulation (EU)  2020/ 621; 
Commission Delegated 
Regulation (EU)  2021/139  
Wastes  Prohibition/  
restriction  717 Basel Convention for the Control of 
Transboundary Movements of 
Hazardous Waste and their Disposal  
 
OECD Decision on the control of 
transboundary movements of wastes 
destined for recovery operations  Regulation (EC)  1013/2006 
and its amendments  
Rough diamonds  Prohibition/  
licensing  3 Kimberley Process certification 
scheme for rough diamonds  Council Regulation 
(EC) 2368/2002  
Certain cultural 
goods  Restriction  68 Protection of treasures of artistic, 
historic or archaeological value  Council Regulation (EC) 
116/2009  
Bluefin tuna 
(catch 
documentation)  Licensing  5 International Convention for the 
Conservation of Atlantic Tunas 
(ICCAT)  Regulation (EU) 640/2010; 
and Regulation (EU) 
2017/2107  
Dissostichus  
spp. (catch 
documentation)  Licensing  6 Commission for the Conservation of 
Antarctic Marine Living Resources 
(CCAMLR)  Council Regulation (EC) 
1368/2006  
Fishery products 
as defined in the 
Regulation 
(catch 
certificate)  Licensing  419 EU Regulation to fight against 
Illegal, Unregulated and Unreported 
(IUU) fishing  Council Regulation (EC) 
1005/2008; Council 
Implementing Decision (EU) 
2014/170; Council 
Implementing Decision (EU) 
2017/1332; Council 
Implementing Decision (EU) 
2017/1333; and Council 
Implementing Decision (EU) 
2016/1818  
Fish of vessels 
from Cambodia, 
Comoros, and 
Saint Vincent 
and the 
Grenadines  Prohibition  359 EU Regulati on to fight against 
Illegal, Unregulated and Unreported 
(IUU) fishing  Council Regulation (EC) 
1005/2008; Council 
Implementing Decision (EU) 
2014/170; Council 
Implementing Decision (EU) 
2017/1332; Council 
Implementing Decision (EU) 
2017/1333; and Council 
Implementing Decision (EU) 
2016/1818  
.. Not available.  
Source:  WTO document G/MA/QR/N/EU/6, 7  October  2022; and TARIC database.  WT/TPR/S/442  • European Union  
- 89 - 
  Table 3.16 Pandemic -related temporary export prohibitions, restrictions or licensing 
requirements, 2020 -22 
Measure  Description  Applicable 
by Start date  End date  References  
Non-automatic 
licensing  Vaccines 
against SARS -
related 
coronaviruses 
and their 
active 
substances  EU 30 January  2021 31 December  2021 Commission Implementing 
Regulations 
(EU) 2021/1728, 
(EU) 2021/521, 
(EU) 2021/111, 
(EU) 2021/442, 
(EU) 2021/734, 
(EU) 2021/1071, 
(EU) 2021/1728  
Export 
surveillance  Vaccines 
against SARS -
related 
coronaviruses 
and their 
active 
substances  EU 1 January  2022 31 December  2023 Commission Implementing 
Regulation (EU) 
2021/2071  
Export 
authorization 
required or 
prohibited  Personal 
Protective  
Equipment 
(PPE)  EU 14 March  2020 26 April 2020 Commission Implem enting 
Regulation (EU) 2020/402, 
and amendment  
Note:  Certain member State measures can also be identified in the sources listed.  
Source:  References listed in the table; WTO documents G/MA/QR/N/EU/5, 7  October  2020, including 
addenda, and G/MA/QR/N/EU/4, 28  September  2018, including addenda; ITC Market Access Map, 
temporary COVID measures; and TARIC database.  
3.2.3.2   Export controls  
3.120.   The European  Union maintains export control measures, including on dual -use goods and 
technologies, pursuant to its regulations, which are based on the underlying international 
conventions, i.e.  multilateral export control regimes.145 Member States also may have legislation on 
export controls that go beyond the EU harmonized rules. The main developments over the period 
were the adoption of the new modernized export control regulation, updates to the EU Control List, 
and the treatment o f the United  Kingdom as a consequence of Brexit.  
3.121.   Controls on exports of dual -use goods, i.e.  those with both civil and military purposes, are 
imposed on goods if they are listed in the EU Control List. The List has about 1,884  items covering 
a variety of sectors including metals, chemicals, electronics, and machinery, and is structured into 
10 main categories: 0 -Nuclear materials, facilities and equipment; 1 -Special materials and related 
equipment; 2 -Materials processing; 3 -Electronics; 4 -Computers; 5 -Telecommunications and 
information security; 6 -Sensors and lasers; 7 -Navigation and avionics; 8 -Marine; and 9 -Aerospace 
and propulsion.146 Inclusion in the List means an authorization is required for the export of the 
dual-use item. Certain non -listed items may  also be subject to the same authorizations under 
specified conditions.147 The European  Union maintains four types of authorizations that may be used 
to export: EU General Export Authorisations (EUGEAs)148, National General Export Authorisations 
 
145 These include the UN Security Council Resolution  1540, the Nuclear Non-Proliferation Treaty, the 
Chemical Weapons Convention, the Biological Weapons Convention, the Australia Group, the 
Wassenaar  Arrangement, the Nuclear Suppliers Group, and the Missile Technology Control Regime.  
146 It also applies to certain services.  
147 This is when the exporter has been informed that the product will be used in the development of 
weapons, explosives, or missiles; for a military end -use; or as parts and components of military items. It also 
applies to cyber -surveillance items if they are i ntended for repression, violation of human rights, or contradict 
international humanitarian law.  
148 EUGEAs are provided for in the dual -use export control regulation whereby certain destinations are 
allowed more simplified procedures for authorizations due to lower risks. The Annex specifies the various 
EUGEAs and the applicable dual -use items including any conditions. Union General Export Authorisation 
No. EU001, for example, is the most extensive covering the entire EU Control List for exports to Australia , 
Canada, Iceland, Japan, Liechtenstein, New  Zealand, Norway, Switzerland, the United  Kingdom, and the 
United  States.  WT/TPR/S/442  • European Union  
- 90 - 
  (NGEAs), glo bal licences149, and individual licences. However, the vast majority of goods are 
exported under individual licences, i.e.  granted to one exporter in respect of a single consignment.  
3.122.   The modernization  of the EU export control regime commenced in 2016 and r esulted in a 
new regulation on dual -use export controls (Regulation (EU)  2021/821), which entered into force in 
September  2021 and replaced the previous regulation (Council Regulation (EC)  428/2009) on the 
same subject (Table  3.17). The previous regulation  was amended several times and according to 
the Commission needed to be recast in the interest of clarity, effectiveness, and efficiency. According 
to the Commission , the new regulation takes into account the European  Union's international 
obligations and commitments on dual -use goods and makes other improvements. Among the new 
elements are strengthened guidance to exporters, in particular SMEs; stakeholder Internal 
Compliance Programmes (ICP) requirements; enhanced member state coordination and effective 
enforcement in response to threats; updated definitions; simplified licensing procedures; shorter 
licence validity of two  years; provisions on capacity -building and training; and the introduction of a 
novel "human security" dimension in response to cyber -surveillance technologies.  
3.123.   Prior to the entry into force of the new export control legislation, Council Regulation 
(EC) 428/2009 was updated in December  2020 to incorporate a revised EU Control List, which was 
subsequently incorporated into the new regulatio n. The 2020 modifications introduced new controls 
on certain cyber -surveillance technologies, sub -orbital craft, and certain chemicals.  
3.124.   In October  2021 amendments were made to the new regulation to again update its Annex  I 
on the EU Control List.150 The ame ndments were in response to the underlying dual -use controls put 
in place by the Australia Group, the Missile Technology Control Regime, the Nuclear Suppliers Group, 
the Wassenaar Arrangement, and the Chemical Weapons Convention. Consequential changes were  
made to Annex  IV as a result of the Annex  I amendments.  
3.125.   In March  2019, the European  Union adopted Regulation (EU)  2019/496, which amended the 
old export control regulation to provide for transitional measures on dual -use controls for the 
United  Kingdom d ue to its pending withdrawal from the Union, as a so -called "contingency plan". 
Thereafter, once a withdrawal agreement was reached and pending the expiry of the transition 
period, the European  Union took additional steps to maintain continuity on export c ontrols vis-à-vis 
the United  Kingdom as it was an important destination for EU dual -use goods and was likewise a 
party to the underlying international agreements. Regulation (EU)  2020/2171 was approved in 
December  2020 to add the United  Kingdom to the list  of countries in Union General Export 
Authorisation No.  EU001, which allows simplified controls to low -risk destinations and avoids 
unnecessary procedures. Furthermore, special practices were put in place between UK and EU 
authorities to take into account the unique situation that persists with respect to the export of 
dual-use items from Northern Ireland. The two  regulations were transitional in nature and have been 
superseded by the new regulation on dual -use export controls, which continues to treat the 
United  Kingdom as a one of the countries included under Union General Export 
Authorisation  No. EU001.  
Table 3.17 Main legislation on export controls, 2022  
Legal instrumenta Description  
Regulation (EU)  2021/821  Establishes the new EU rules for the control of exports, brokering, 
technical assistance, transit and transfer of dual -use items, replacing 
the 2009 regulation  
Commission Delegated 
Regulation (EU)  2022/1  Updates the common list of dual -use items in Annex  I to incorporate 
changes made in 2020 by international non -proliferation regimes  
 
149 This is in respect of one exporter that exports a type or category of dual -use items to one or more 
specified end  users.  
150 Commission De legated Regulation (EU)  2022/1.  WT/TPR/S/442  • European Union  
- 91 - 
  Legal instrumenta Description  
Commission Delegated 
Regulation (EU)  2022/699  Removes the Russian  Federation from the scope or destination of certain 
export authorization lists  
Regulation (EU)  258/2012  Implements the UN Firearms Protocol that aims to combat the illicit 
manufacture and  trafficking of firearms, their parts and components  
a A number of other regulations were adopted on export control during the review period, but they 
relate to the war in Ukraine and the European  Union's Common Foreign and Security Policy (CFSP) 
response (Section  3.1.7).  
Source:  Compiled by the WTO Secretaria t from the respective regulation.  
3.126.   In addition to the EU measures, member States may impose additional controls due to public 
security or human rights concerns. Certain member States have adopted additional measures 
and the European  Union regularly publishe s an information note in the Official Journal in conformity 
with Articles  4, 6, 7, 9, 11, 12, 22, and 23 of Regulation (EU)  2021/821. The latest notice from 
February  2022 indicates:  
• 8 member States have legislation that either fully or partially extend aut horization 
requirements to non -listed dual -use items;  
• 14 member States extended authorization for brokering services to non -listed dual -use 
items;  
• 15 member States extended the possibility of transit prohibitions, either fully or 
partially, to non -listed  dual-use items;  
• 11 member States implemented additional controls on non -listed goods for reasons of 
public security, terrorism, etc.;  
• 9 member States took additional measures on intra -EU transfer controls; and  
• 8 member States issued or modified national g eneral export authorizations.151 
3.127.   Dual-use related exports accounted  for about 2% -3% of EU total exports during 
the review  period. In  2020, the latest figures available, these exports accounted for 2.7% of total 
intra- and extra -EU exports, or EUR  128 billion. During the period 2018 -20, there was a decline in 
both applications and authorizations due to Brexit and the lack of UK data since 2019 (Table  3.18). 
Regarding markets, there was no change in trade patterns for products subject to export controls 
as the  main destinations remained the United  States, China, and Switzerland. As of  2022, there 
were 1,373  CN lines where the European  Union required authorizations for export of dual -use 
controlled goods.152 
Table 3.18 Controlled dual -use exports, 2018 -20 
 2018  2019  2020  
Dual-use related trade (exports)  
Value (EUR  billion)  164 119 128 
% of total trade  3.0 2.3 2.7 
Controlled export volume (number)  
Applications (with notifications)  44,599  36,002  40,112  
Authorizations  28,186  22,066  20,876  
Denials  791 603 559 
Controlled export value (EUR  billion)  
Applications  50.7 40 38.4 
Authorizations  41.5 31.5 31 
 
151 Information Note PUB/2021/944.  
152 Information obtained from TARIC database.  WT/TPR/S/442  • European Union  
- 92 - 
   2018  2019  2020  
Top three destinations  of dual -use 
related trade (exports)  United  States; China; 
Switzerland  United  States; China; 
Switzerland  China; United  States; 
Switzerland  
Top three licence types by volume (%)  Individual licences 
(74%);  
EUGEAs (14%); 
NGEAs (3%)  Individual licences 
(73%);  
EUGEAs (17%); 
NGEAs (4%)  Individual licen ces 
(61%);  
EUGEAs  (31%); 
NGEAs (3%)  
Note:  Does not include services or intangible technology transfers.  
 EUGEAs: EU General Export Authorisations.  
 NGEAs: National General Export Authorisations.  
Source:  European Commission Communications COM(2021)  42 final , COM(2021)  716 final , and 
COM(2022)  434 final.  
3.2.4   Export support and promotion  
3.128.   There have not been significant changes in the European  Union's support and promotion for 
exports since the previous Review. The European  Union provides basic information and tool s like 
information on tariffs, barriers, and procedures through its Access2markets portal 
(https://trade.ec.europa.eu/access -to-markets/en/home ), while the member States operate export 
promotion authorities at the national or sub -national level. Many of these are also active in related 
activities such as investment promotion. The export promotion authorities have not changed 
significantly and remain as reported in the previous Review.153 The Access2markets portal also 
provides tutorials, statistics, company stories, and information specific to SMEs. It has recently been 
expanded to also cover sectors and the Single -Entry Point mechanism for solving market access 
barriers for EU exporters. Ad ditionally, the European  Union supports certain networks or desks aimed 
at giving support to exporters (Table  3.19); they provide advice and support in their respective area 
or region to businesses.  
Table 3.19 Network support for exporters, 2022  
Network support  Webpage  
Enterprise Europe Network  http://een.ec.europa.eu/   
European IPR desk  https://www.iprhelpdesk.eu/   
IPR SME Helpdesks in China, Latin America and South East Asia  http://www.ipr -hub.eu/   
EU Asia Business Link (EALink) – Resource Library  http://www.ealink.eu/   
EU SME Centre  http://www.eusmecentre.org.cn/   
EU Japan Centre  http://www.eu -japan.eu/   
EU Gateway – Business Avenues  https://www.eu -gateway.eu   
European ASEAN Business Centre (EABC)  http://www.eabc -thailand.eu/   
EU-Indonesia business network (EIBN)  http://www.eibn.org/   
EU-Viet Nam Business Network (EVBN)  http://evbn.org/   
ELAN Program (European and Latin American Business Services 
and Innovation Network)  http://www.elanbiz.org/   
Source:  European Commission, REA, Support for Exporters . Viewed at: 
https://ec.europa.eu/chafea/agri /en/enter -new-markets/support -for-exporters .  
3.2.5   Export finance, insurance, and guarantees  
3.129.   Most EU member States maintain at least one officially supported Export Credit Agency154, 
with the exception of Cyprus, Ireland155, and Malta. The agencies, some operatin g as branches of 
private companies under a public mandate and others largely as government -administered agencies, 
remain largely the same as reported in the previous Review although in some cases their role has 
changed or expanded.156 Some member States hav e specific regulatory requirements for Export 
Credit Agencies while other mainly operate under EU and international guidelines or best practices. 
 
153 WTO document WT/TPR/S/395/Rev.1, 7  July 2020, Table  3.11; and European Commission, Exporter 
Enquiries . Viewed at: https://policy.trade.ec.europa.eu/contacts/exporter -enquiries_en .  
154 Export Credit Agency within the meaning of Regulation (EU) 1233/2011.  
155 Ireland has a Credit Guarantee Scheme applicable only to SMEs.  Department of Business, Enterprise, 
and Innovation, Ireland, Credit Guarantee Scheme: Information Booklet . Viewed at: 
https://enterprise.gov.ie/en/ publications/publication -files/sme -cgs-information -booklet.pdf . 
156 WTO document WT/TPR/S/395/Rev.1, 7  July 2020, Table  A3.3; and OECD, Official Export Credit 
Agencies . Viewed at: https://www.oecd.org/trade/topics/export -credits/documents/links -of-official -export -
credit -agencies.pdf .  WT/TPR/S/442  • European Union  
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  The products and offerings among the various Export Credit Agencies also vary, sometimes reflecting 
a sector al approach or national interests.  
3.130.   As in previous times of uncertainty, such as the 2008 -09 financial crisis, the COVID -19 
pandemic has also caused renewed interest in the role of Export Credit Agencies and their potential 
need to fill a gap in financing in uncertain times. The European  Union's Export Credit Agencies were 
no exception, with requests from member States to have a more secure method of export guarantees 
during the pandemic and improve liquidity. Further, according to a survey by the OECD, there was 
also a particular interest in providing export financing support to SMEs, as they were especially 
vulnerable.  
3.131.   In response to the pandemic, the Commission took various initiatives with respect to export 
finance, insurance, and guarantees. Through the first amendment on 3 April 2020 of the State Aid 
Temporary Framework, which was initially adopted on 19  March  2020, the Commission added 
flexibility for member States by temporarily removing all countries from the list of marketable risk 
countries set out in the Annex of the Short -Term Export Credit insurance communication 
(STEC  Communication)157, thereby allowing public authorities to assume all commercial and political 
risks associated with exports to such countries. Such exemption was in force between 3  April 2020 
until the end of 2020 initially and was subsequently extended until 31  March  2022.158 Certain 
member States also took initiatives during the pandemic to facilitate export finance (Table  3.20).  
3.132.   As part of its trade policy, the European  Union expres sed that it would "explore options for 
an EU strategy for export credits". In March  2022, the Council approved a framework for officially 
supported export credits that considers designing a comprehensive EU strategy on public finance for 
exports and discus sing the creation of a potential EU export credit facility.159 To this end, the 
European Commission has launched a Feasibility Study on the options for an EU strategy for export 
credits as well as an exploratory exercise for the enhanced coordination of EU financial tools, with 
initial outcomes to be expected in the course of 2023.  
Table 3.20 Selected EU member State programmes specific to export guarantees or 
finance in response to the COVID -19 pandemic  
Country/Export 
Credit Agency  Programmes  Start date  End date  
Germany (Euler 
Hermes)  Platform State guarantee of trade credit insurers; 
Enhanced short -term insurance to cover more countries  30/03/2020  31/12/2020  
France (Bpifrance)  State guarantee to banks on corporate loan portfolios; 
Cap Francexport reinsurance of trade credit insurers; 
Enhanced short -term insurance to cover mo re countries  12/04/2020  31/12/2020  
Italy (SACE)  Reinsurance of trade credit insurers; Business Financing; 
Plan for the Promotion of Made in Italy  13/08/2020  31/12/2020  
Czech  Republic (EGAP)  Additional financing for export guarantees to large 
companies  .. .. 
.. Not available.  
Source:  European Commission (2020), "State Aid: Commission Approves €2 Billion Italian Guarantee 
Scheme to Support Trade Credit Insurance Market in the Context of the Coronavirus Outbreak" , 
13 August. Viewed at: 
https://ec.europa.eu/commission/presscorner/api/files/document/print/en/ip_20_1478/IP_20_1478
_EN.pdf ; and "State Ai d: Commission Approves €10  Billion French Guarantee Scheme to Support 
Domestic Credit Insurance Market in Coronavirus Outbreak" . Viewed at: 
https://ec.europa.eu/commission/presscorner/api/files/document/print/en/ip_20_650/IP_20_650_E
N.pdf ; "Demand for Federal Guarantees" . Viewed at: 
https://www .exportkreditgarantien.de/en/news/pressemitteilung -bmwk/escape -clause.html ; 
Government of France, Support Plan for French Exporters . Viewed at: 
https://ww w.economie.gouv.fr/files/files/PDF/2020/Support_plan_for_French_exports.pdf ; and 
Government of the Czech Republic (2022), "Measures Adopted by the Czech Government against the 
Coronavirus", 9 February. Viewed at: https://www.vlada.cz/en/media -centrum/aktualne/measures -
adopted -by-the-czech -government -against -coronavirus -180545/ .  
 
157 Formally known as the "Communication from the Commission to the Member States on the application 
of Articl es 107 and 108 of the TFEU to short -term export credit".  
158 European Commission Communications C(2020)  2215, point  17; C(2020)  7127, point  32; 
C(2021)  564, point  36; and C(2021)  8442, point  62. 
159 European Council (2022), "Council Conclusions on Export Credi ts", 7101/22. Viewed at: 
https://data.consilium.europa.eu/doc/document/ST -7101-2022-INIT/en/pdf .  WT/TPR/S/442  • European Union  
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  3.133.   As noted in the previous Review, officially suppo rted export credits and financing are issued 
through public bodies, or publicly administered entities, in member States although the 
European  Union maintains overarching instruments or rules providing a level playing field or certain 
common parameters (Tab le 3.21). It also directs policy and represents the interests of the 
European  Union in international bodies, typically through the coordinating body established by the 
Council known as the Export Credits Group. The European  Union's basic legal framework on  the 
subject matter has not changed significantly, although there have been some developments.  
3.134.   One of the cornerstones of the export credit framework is the Arrangement on Officially 
Supported Export Credits, as administered by the OECD, and incorporated into EU law through 
Regulation (EU)  1233/2011, including amendments. Although described as a "gentleman's 
agreement"160 among the parties161, the Arrangement is binding on member States through the 
above -mentioned Regulation. The Arrangement's main elements include limitations on financing 
terms and conditions and on the use of tied aid. Recent amendments to the Arrangement on 
1 January  2022 concerned (i)  new restrictions on export credit and tied aid support for coal -fired 
power plants; (ii)  removal  of the Coal -Fired Sector Understanding (CFSU); and (iii)  extension of the 
sunset clause from 31  December  2021 to 31  December  2027. As of end -February  2023, Commission 
Delegated Regulation (EU)  2022/262, implementing the amendments, entered into force.  
3.135.   Discussions at the OECD on export credits have also led to the sharing of good practice, 
sector understandings, arrangements, or recommendations, which are also non -binding except when 
incorporated into EU regulations. The sector al understandings cover ships,  nuclear power plants, 
civil aircraft, renewable energy, climate change mitigation and adaptation, water projects, and rail 
infrastructure. Prior to the latest amendments of the Arrangement, there was a Coal -Fired Electricity 
Generation Sector Understandin g but now this has been incorporated as a prohibition in the 
Arrangement and as part of the Commission Delegated Regulation noted above, thus Export Credit 
Agencies cannot provide support for the export of new coal -fired electricity generation plants or 
parts thereof. This change reportedly does not change existing practice for EU Export Credit Agencies 
as they have followed the Understanding since 2016 and have not provided credits for such exports 
since that time.162 
3.136.   In line with its policy initiatives suc h as the European Green Deal and commitments under 
the Paris  Agreement, the European  Union has increased its environmental dimension in many areas, 
including export credits. The OECD Recommendation on Common Approaches for Officially 
Supported Export Credi ts and Environmental and Social Due Diligence requires identification of 
potential environmental impacts and to follow certain guidelines when screening export credit 
applications so as to not have a negative impact on the environment. All 20 EU Export Cre dit 
Agencies reporting under Regulation (EU) 1233/2011 have reported compliance with this 
Recommendation. Furthermore, some member States have gone beyond OECD Recommendations 
or Understandings to require a higher level of scrutiny for environmental impact  or have joined 
the E3F (the Export Finance for Future) coalition. Nine  EU member States are signatories to the E3F 
and have pledged their support to end official trade and export finance for thermal coal -related 
infrastructures and review ways to phase ou t similar measures for the fossil -fuel sector.163 
3.137.   With respect to short -term export credit insurances, i.e. with a maximum risk period of less 
than two  years, the 2012 STEC Communication164 continued to be applied throughout the review 
period (its period of application was extended in 2018165 and 2020166) and until 31  December  2021, 
 
160 OECD. "Arrangement and Sector Understandings". Viewed at: 
https://www.oecd.org/trade/topics/export -credits/arrangement -and-sector -
understandings/#:~:text=Arrangement%20on%20Officially%20Supported%20Export,Kingdom%20and%20th
e%20United%20States .  
161 Australia, Canada, the European  Union, Japan, the Republic  of Korea, New  Zealand, Norway, 
Switzerland, Türkiye, the United  Kingdom, and the United  States.  
162 European Commission Annual Review  COM(2022)  115 final.  
163 The signatories are Belgium, Denmark, Finland, France, Germany, Italy, Netherlands, Spain, 
Sweden, a nd the United  Kingdom. EKN, The Export Finance for Future "E3F" . Viewed at: 
https://www.ekn.se/en/what -we-do/sustainability/climate/e3f/ ; and Statement of Principles, Export Finan ce 
for the Future . Viewed at: https://credendo.com/sites/default/files/media/files/2022 -
07/Statement%20of%20principles%20E3F.pdf .  
164 European  Commission Communication 2012/C 392/01.  
165 European Commission Communication C/2018/8535.  
166 European Commission Communication C/2020/4355.  WT/TPR/S/442  • European Union  
- 95 - 
  but it was replaced and amended by a new communication (the 2021 STEC Communication167) at 
the end of 2021 following a review. The 2021 STEC Communication preserves the main elements of 
the previous communications on the subject, i.e.  it ensures that state involvement in export credits 
does not distort the market and creates a level playing  field among the member State entities, but 
makes slight adjustments such as modifying the eligibility criteria for SMEs, which in certain 
circumstances may benefit from state insurance. While under the 2012  STEC Communication, this 
possibility existed wit h regard to SMEs with an annual export turnover up to EUR  2 million, in 
the 2021 STEC Communication the threshold has been increased to  EUR 2.5 million.  
Table 3.21 EU instruments on export credits, financing,  or guarantees  
Instrument  Description  
Regulation (EU) 1233/2011, as amended  Applies the OECD's Arrangement on Officially Supported 
Export Credits to member States (official export supports 
with repayment terms of 2  years or more) and requires 
annual repor ting of export -credit activities  
Council Directive 98/29/EC  Rules on export credits involving a total risk period of 
two years or more  
European Commission Communication 
C/2021/8705  Rules on export credits with a maximum period of less 
than two years  
Council Decision 2006/789/EC  Establishes norms on duration of credits, percentage of 
local expenditure, etc.  
Council Decision 82/854/EEC  Specific rules on subcontracts when there are parties 
other than member States  
Source:  Compiled by the WTO Secretariat from the respective EU instrument.  
3.138.   Data on EU export credits are to be provided to the Commission pursuant to Regulation 
(EU) 1233/2011 and are reported and published annually, although there have been gaps in data in 
recent  years. Reporting for 2020 is the most comprehensive to date, in part due to a new reporting 
template and also as a result of an improved dialogue with member States. In 2020, there were 
20 EU member States that reported officially supported export credits  per the definition in Regulation 
(EU) 1233/2011, i.e.  with repayment period of two  years or more, with a total pure cover of 
EUR 362 trillion and official financing support of EUR  85 billion (Table  3.22). The OECD also reports 
on certain export credit sta tistics, although on a different basis, thus figures are not directly 
comparable but demonstrate similar trends (Table  3.23). Germany, Italy, and France were the 
largest users of export credits during 2019 -20. While there were some yearly fluctuations, the  use 
of export credits did not change substantially during the period 2019 -20. However, when examining 
data over a longer period, some of the most significant users, e.g.  France and Germany, have shown 
declines in export credits in recent years.168  
Table 3.22 Official export credit support as reported pursuant to Regulation 
(EU)  1233/2011, largest contributors, 2019 -20 
(EUR million)  
Member State  In the form of pure cover  In the form of official financing 
suppor t 
2019  2020  2019  2020  
Germany  87,914  85,022  18,183  14,768  
France  59,174  59,635  12,626  12,648  
Italy 58,859  58,991  36,801  37,317  
Denmark  n.p. 46,833  1,264  n.p. 
Sweden  27,573  32,010  7,286  6,904  
Finland  25,489  n.p. 7,165  7,561  
 Total EU  .. 361,585  .. 85,226  
.. Not available.  
n.p. Not provided.  
Source:  European Commission Annual Reviews  COM(2021)  395 final and COM(2022)  115 final; and 
information provided by the authorities.   
 
167 European Commission Communication C/2021/8705.  
168 OECD, Export Credit Statistics – Trends and Cashflow . Viewed at : 
https://www.oecd.org/trade/topics/export -credits/documents/Table%20I -
V%20for%20web%202020%20data(E).pdf . WT/TPR/S/442  • European Union  
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  Table 3.23 Export -credit statistics, as reported by the OECD, 2019 -20 
(SDR million)  
 Net operating cash flow 
for all types, all 
maturities  Net operating cash flow for 
insurance/guarantee 
products  Net operating cash flow 
for direct lending products  
2019  2020  2019  2020  2019  2020  
Austria  89.8 118.0  102.2  130.8  0 0 
Belgium  36.5 26.7 51.2 48.6 0.4 0.4 
Czech  Republic  -64.4 -54.7 -124.5  -82.2 77.7 43.5 
Denmark  127.2  230.6  121.9  231.4  28.0 24.0 
Estonia  0.2 0.7 0.2 0.7 n.p. n.p. 
Finland  106.7  162.8  115.4  172.7  n.p. n.p. 
France  434.5  262.0  434.5  262.0  0 0 
Germany  518.7  413.2  591.7  486.4  n.p. n.p. 
Greece  -0.1 -0.6 1.0 0.9 n.p. n.p. 
Hungary  99.6 -2.3 99.0 2.1 17.6 7.9 
Italy 321.7  342.5  393.0  414.1  n.p. n.p. 
Latvia  -0.2 -0.1 0 0.2 n.p. n.p. 
Lithuania  0 0.1 0 0.1 n.p. n.p. 
Luxembourg  0 -27.7 1.6 -25.1 n.p. n.p. 
Netherlands  6.2 55.6 15.6 66.0 n.p. n.p. 
Poland  12.8 23.5 14.8 25.7 n.p. n.p. 
Portugal  26.9 19.7 27.9 20.6 n.p. n.p. 
Slovak  Republic  8.4 -7.4 -1.1 -7.2 13.9 4.5 
Slovenia  2.2 1.3 3.9 3.2 n.p. n.p. 
Spain  231.4  55.7 240.5  63.4 n.p. n.p. 
Sweden  -21.0 247.2  -1.3 266.5  n.p. n.p. 
n.p. Not provided.  
Source:  OECD, Export Credit Statistics – Trends and Cashflow . Viewed at: 
https://www.oecd.org/trade/topics/export -credits/statistics/ ; and 
https://www.oecd.org/trade/topics/export -credits/documents/Table%20I -
V%20for%20web%202020%20data(E).pdf .  
3.3  Measures affecting production and trade  
3.3.1   Incentives  
3.139.   Subsidies are granted at the EU level as well as at the member State level through state aid 
to promote business activities and achieve EU policy objectives in various areas.169 The 
European  Union notifies both categories of subsidies on a regular basis to  the WTO in accordance 
with Article  25.1 of the Agreement on Subsidies and Countervailing Measures and Article  XVI:1 of 
the GATT  1994. The most recent notification providing information on subsidies at the EU level was 
submitted in July  2021 and was follow ed by 27  addenda, each referring to an EU member State.170 
3.140.   During the review period and in response to the COVID -19 pandemic, the European  Union 
implemented specific initiatives to support businesses to mitigate the negative effects of the 
pandemic (e.g.  Coronavirus Response Investment Initiatives) and also provided further flexibilities 
regarding state aid to facilitate access to liquidity and other support measures (e.g.  loans and 
guarantees) for eligible beneficiaries (i.e.  Temporary Framework for State A id). Some state aid rules 
and guidelines are also undergoing review.  
3.3.1.1   Subsidies at the EU level  
3.141.   At the EU level, subsidies are mostly granted to agriculture and regional development mainly 
through long -established shared management funds known as European Structural and Investment 
Funds (ESIF s)171, most of which are referred to as Common Provision Regulation Funds (CPRF s) 
 
169 These policy objectives have been described in previous Reviews.  
170 WTO documents G/SCM/N/372/EU, 16  July 2021, and addenda.  
171 Regulation (EU) 1303/2013. For a detailed description of these funds, see WTO document 
WT/TPR/S/395/Rev.1, 7  July 2020, Section  3.3.1.  WT/TPR/S/442  • European Union  
- 97 - 
  under the 2021 -27 EU budget, as per the new regulation that governs them.172 These funds are 
managed by both the European Commission and national authorities in member States, with the 
latter overseeing the implementation of the programme. Subsidies are granted mainly through 
six shared management funds (i.e.  CPRFs and ESIF): (i)  the European Regional Development Fund; 
(ii) the European Agricultural Fund for Rural Development; (iii)  the European Social Fund Plus 
(ESF+) (previously known as the European Social Fund, see below); (iv)  the European Maritime, 
Fisheries and Aquaculture F und (previously known as the European Maritime and Fisheries Fund, 
see below); (v)  the Cohesion Fund; and since 2021, (vi)  the Just Transition Fund (Table  3.24). 
Compared to the previous EU budget (2014 -20), the European Union modified the composition of 
some of these funds. It established the Just Transition Fund to provide support to the private sector 
to mitigate the effects of climate change and economic diversification173, and also consolidated two 
existing funds, the European Social Fund and the Youth Employment Initiative, into one fund, the 
ESF+174, and also expanded the coverage of the former European Maritime and Fisheries Fund to 
include aquaculture activities and renamed it accordingly.  
3.142.   For the period 2014 -20, the amount approved for the ESIF s was EUR 740 billion175, of which 
the European Regional Development Fund (42%) and the European Agricultural Fund for Rural 
Development (27%) accounted for the largest shares. For the ongoing budget period 2021 -27, the 
mentioned six shared management funds were  allocated EUR  494 billion. Moreover, under the 
budget period 2021 -27, the European  Union established the NextGenerationEU (NGEU) programme 
to support the economic recovery following the COVID -19 pandemic. The amount allocated to the 
NGEU is EUR  806.9  billion (in current prices) for the period 2021 -27, most of which are destined for 
the Recovery and Resilience Facility (RRF) – its main instrument (see below) – and the remaining 
for complementing other funds (e.g.  European Agricultural Fund for Rural Develop ment).176 
3.143.   Support measures under these funds can take the form of grants or direct payments, and 
financial instruments such as loans, guarantees, and equity.  
Table 3.24 Common Provision Regulation and European Structural and Investment 
Funds, 2022  
Fund  Main form of assistance  Focus  Budget planned 
2021 -27 
(EUR  billion, 
current prices)  
European Regional Development 
Fund Grants and financial instruments 
(loans, guarantees for loans, and 
equity participation)  Innovation, 
digitalization, and 
green technologies  226 
Cohesion Fund  Grants and financial instruments  Environment and 
Transport  48 
European Social Fund Plus  Grants and financial instruments  Skills and social 
inclusion  99.3 
European Agricultural Fund for 
Rural Development  Grants (for farmers) and 
financial instruments  Rural development  87.4a 
(plus 8.1  billion 
from NGEU)  
 
172 The European Agricultural Fund for Rural Development, an ESIF, is not considered as part of the 
Common  Provision Regul ation Funds. The funds that are considered as Common Provision Regulation Funds are 
those that are covered by a common set of regulations under the Common Provision Regulation 
(Regulation  (EU) 2021/1060), established in 2021, which covers eight funds.  
173 Regulation (EU) 2021/1056.  
174 In addition to the European Social Fund and the Youth Employment Initiative, the ESF+ also 
comprises the Fund for European Aid to the most Deprived, and the European Programme for Employment and 
Social Innovation. Both were clas sified separately in the EU budget for the period 2014 -20. 
175 European Commission Cohesion Open Data Platform, 2014-2020 ESIF Overview. Viewed at : 
https://cohesiondata.ec.europa.eu/overview/14 -20. The ESIF amount covers the European Regional 
Development Fund, Cohesion Fund, European Social Fund, European Agricultural Fund for Rural Development, 
European Maritime and Fisheries Fund, and Youth Employment Initiative.   
176 European Commission (2021),  The EU's 2021 -2027 Long -term Budget and NextGenerationEU: Facts 
and Figures , April.  WT/TPR/S/442  • European Union  
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  Fund  Main form of assistance  Focus  Budget planned 
2021 -27 
(EUR  billion, 
current prices)  
European Maritime, Fisheries and 
Aquaculture Fund  Grants allocated based on calls 
for proposals and for tendering  Fisheries and 
aquaculture  6.1 
Just Transition Fund  Grants and financial instruments  Transition to a 
climate -neutral 
economy  8.5a 
(plus 10.9  billion 
from NGEU)  
a Excluding funding from NGEU.  
Source:  Figures as published in The EU's 2021 -2027 Long -term Budget and NextGenerationEU: Facts and 
Figures. Figures are before transfers.  
3.144.   In the agricultural sector, in addition to the European Agricultural Fund for Rural 
Development, support continues to be financed by the European Agriculture Guarantee Fund (EAGF) 
(Section  4.1), which is the main source of support for this sector.  
3.145.   In April  2020, the European Commission put into force the Coronavirus Response 
Investment Initia tive (CRII) to direct EUR  37 billion under the ESIFs to mitigate the immediate 
negative economic effects of the COVID -19 pandemic.177 This initiative was complemented by the 
CRII+, adopted the same month, to further simplify and provide flexibilities to the  access of these 
funds.178 Flexibilities, some of which temporary, were also adopted for agriculture, to support, for 
example, the wine, fruit and vegetables, and dairy sectors.179 In addition, in December  2020, the 
European  Union adopted the Recovery Assist ance for Cohesion and the Territories of Europe initiative 
know as REACT -EU, which extends crisis -repair measures delivered through the CRII and CRII+ 
initiatives.180 The REACT -EU funds amount to about EUR  50 billion (current prices) (from the NGEU) 
and are  available as a complement to the 2014 -20 allocations for the European Regional 
Development Fund and European Social Fund.181 Funds are to be used until end -2023 and are 
intended to support projects that foster economic recovery and the green and digital tr ansitions.  
3.146.   In addition to these funds, the European  Union maintains several other funds intended to 
support entrepreneurs and businesses activities in general and in various areas such as research 
and innovation, climate and digital transition, and recove ry and resilience, which were given further 
importance (or are new) under the budget 2021 -27 in accordance with EU environmental and digital 
objectives (Table  3.25).182 
Table 3.25 Other selected support program s/funds, 2022  
Programme/Fund  Main form of assistance  Focus  Budget planned 
2021 -27  
(EUR  billion, 
current prices)  
InvestEU fund  Guarantees, equity participation, and 
capacity -building  Recovery and 
resilience  4.4a 
(plus 6.1  billion 
from NGEU) 
European Agricultural 
Guarantee Fund  Direct payments, and other market 
measures (e.g.  establishment of 
minimum prices and storage subsidies)  Agriculture  291.1  
Horizon Europe  Grants  Research and 
technology  90.1a 
(plus 5.4  billion 
from NGEU)  
Connecting Europe Facility  Grants allocated based on calls for 
proposals and for tendering  Transport, energy, 
digital 
infrastructure  33.7 
Digital Europe Programme  Grants allocated based on calls for 
proposals and for tendering  Digital technology  8.4 
 
177 Regulation (EU) 2020/460.  
178 Regulation (EU) 2020/558.  
179 WTO document G/SCM/N/372/EU, 16  July 2021.  
180 Regulation (EU) 2020/2221.  
181 Regulation (EU) 2020/2221.  
182 European C ommission (2021), The EU's 2021 -2027 Long -Term Budget and NextGenerationEU: Facts 
and Figures , April.  WT/TPR/S/442  • European Union  
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  Programme/Fund  Main form of assistance  Focus  Budget planned 
2021 -27  
(EUR  billion, 
current prices)  
Creative Europe programme  Grants allocated based on calls for 
proposals and for tendering  Cultural and audio -
visual sectors  2.5 
European Atomic Energy 
Community Research and 
training programme  Grants  Research and 
innovation  2 
a Excluding funding from NGEU.  
Source:  WTO document G/SCM/N/372/EU, 16  July 2021; The EU's 2021 -2027 Long -term Budget and 
NextGenerationEU: Facts and Figures ; and information provided by the Commission.  
3.147.   In the area of energy, total subsidies (at the EU and member State levels) for all types of 
energy (fossil fuels, nuclear, and renewables) rose between 2020 and 2021 from EUR  173 billion to 
EUR 184 billion, which was mostly due to an increase in energy demand as economic activities be gan 
to recover according to a recent report by the European Commission.183 The report further estimates 
an increase in the amount of such subsidies reflecting the rise in energy prices.  
3.3.1.2   State aid  
3.148.   State aid is governed by the Treaty on the Functioning of the  European Union (TFEU) 
(Articles  107-109), as well as various regulations and guidelines of general and sectoral application 
adopted to a large extent following the State Aid Modernisation (SAM) reform of 2012 to 2014.184 
State aid is in general prohibited under the TFEU, and allowed only under certain conditions subject 
to prior notification to and approval by the European  Commission. Only approved state aid can be 
implemented. To be approved, state aid must comply with certain criteria to ensure it is comp atible 
with the functioning of the internal market.185 Certain categories of state aid are exempted from the 
requirements of prior notification if they meet the conditions under Commission Regulation 
(EU) 651/2014, known as the State Aid General Block Exemp tion Regulation (GBER) , or Commission 
Regulation (EU) 1407/2013 , known as the De minimis  regulation.186 Both regulations were to expire 
in December  2020 and have been extended until December  2023.187 
3.149.   Currently, various state aid guidelines and regulations, including the GBER and the 
De minimis  regulation, are undergoing review to be updated. The adoption of these two legal 
instruments is expected during 2023, according to the Commission. The review was  launched 
following the completion of an evaluation – the "fitness check"  – of the SAM reform launched by the 
Commission in 2019.188 This assessment found that some specific changes to these exemptions are 
needed to integrate the objectives of the European Green Deal and the European Industrial and 
Digital Strategies.  
3.150.   The review of the GBER was launched in March  2021, and a proposal is currently being 
prepared by the Commission to ensure that public funding contributes to the achievement of 
EU current objec tives. Pending the completion of its review, the current GBER was amended in 2021 
to, inter alia, expand its coverage to include state aid granted for projects funded by certain 
EU-managed programmes (e.g.  InvestEU Fund, Horizon  Europe) (Table  3.25) and st ate aid 
measures designed to support the green and digital transition, and that also contribute to the 
economic recovery from the effects of the COVID -19 pandemic (e.g.  aid for energy -efficiency 
projects in buildings, 4G and 5G mobile networks, and digital  connectivity infrastructure).189 These 
new categories of state aid are exempted from the prior notification and approval procedure, and 
can be directly implemented by EU member States and be reported ex post.  
 
183 European Commission Report  COM(2022)  642. 
184 For a list of legislation and guidelines, see WTO document WT/TPR/S/317/Rev.1, 21  October  2015.  
185 For a list  of these criteria, see WTO document WT/TPR/S/395/Rev.1, 7  July 2020, Section  3.3.1.  
186 Under the De minimis  rule, State aid to companies not exceeding EUR  200,000 over a three -year 
period is exempted from the notification requirement.  
187 Commission Regulation (EU) 2020/972.  
188 European Commission, State Aid Modernisation.  Viewed at: https://competition -
policy.ec.europa.eu/state -aid/legislation/modernisation/fitness -check_en .  
189 Commission Regulation (EU) 2021/1237.  WT/TPR/S/442  • European Union  
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  3.151.   In October  2022, the European Commission also published a revised framework regarding 
state aid for research, development, and innovation (RDI) activities.190 This new RDI framework 
simplifies and updates the existing rules, in place since 2014, and aligns them to the current 
EU objectives, notably tho se under the European Green Deal and the Industrial and Digital Strategies 
(Section  2). Thus, for example, the communication amends the definition of RDI activities eligible 
for support to include activities with respect to digital technologies and related  to digitalization. In 
addition, the 2022 RDI framework seeks to enhance the coordination between the funding provided 
at the EU and the member State levels.  
3.152.   During the review period, state aid more than doubled to support businesses to mitigate the 
effect s of the COVID -19 pandemic compared to previous years. According to the most recent data 
available, EU member States spent EUR  320 billion in state aid in 2020 (or 2.4% of EU GDP in that 
year), up from EUR  135 billion in 2019 (Chart  3.7). About 57% of tota l state aid was provided in 
response to the COVID -19 pandemic.191 
Chart 3.7 Total state aid, 2015 -20 
(EUR billion)  (%) 
 
Source:  European Commission, State Aid Scoreboard 2021 . Viewed at: https://competition -
policy.ec.europa.eu/state -aid/scoreboard_en . The data exclude state aid related to railways, services 
of general economic interest, and crisis aid to the fina ncial sector, which are subject to limited 
reporting obligations on member States.  
3.153.   The amount of state aid was to a large extent positively correlated to the size of the 
economies of EU member States, with Germany (EUR  114.9  billion spent in state aid in 2020), 
France (EUR  53.5 billion), and Italy (EUR  36.8 billion) leading the group. Together, these 
three  EU member States accounted for about two thirds of the total state aid spent in the 
European  Union in  2020. They were also, together with Poland, those that granted the largest 
amount (in absolute terms) of COVID -19-related state aid in that year (Chart  3.8). According to the 
European Commission, COVID -19-related aid spent by EU member States was to a large extent 
positively correlated to the economic dam age they experienced.192 
3.154.   Non-COVID state aid increased by about 2.5% between 2019 and 2020, totalling 
137.5  billion in 2020, and continued to be mainly directed to promote environmental protection and 
energy savings. In that year, state aid based on environ mental considerations accounted for about 
half (EUR  68.7 billion) of the total non -COVID state aid, and was the main aid objective for the 
majority of EU member States. Other areas supported through state aid were RDI, regional 
 
190 European Commission Communication COM(20 22) 138 final.  
191 The United  Kingdom has been excluded from all calculations on state aid.  
192 European Commission (2022), State Aid Scoreboard 2021 Report , September.  
0.00.51.01.52.02.5
050100150200250300350
2015 2016 2017 2018 2019 2020State aid, excl. COVID-19-related (EUR billion)
COVID-19-related state aid (EUR billion)
Total state aid (% of current GDP)Chart 3.[ ]   State aid , 2015 -20
(EUR billion) (%)
Source:  Commission online information. Viewed at:  https://competition -policy.ec.europa.eu/state -aid/scoreboard_en [January 202 3].WT/TPR/S/442  • European Union  
- 101 - 
  development, culture, and ag riculture, forestry, and rural areas.193 State aid spent on agriculture 
(only) amounted to about EUR  5.6 billion in 2020.  
Chart 3.8 State aid by EU member State, 2020  
(EUR million)  
 
Source:  European Commission , State Aid Scoreboard 2021 . Viewed at: https://competition -
policy.ec.europa.eu/state -aid/scoreboard_en . The data exclude state aid related to railways, services 
of general eco nomic interest, and crisis aid to the financial sector, which are subject to limited 
reporting obligations on member States.  
3.155.   In terms of support measures, most of the state aid granted during the review period 
continued to be in the form of direct grants ( 23% of total aid in 2020) and a combination of grants 
and loans at subsidized rates (20%). They were followed by loan guarantees and tax advantages, 
whose use declined in favour of the former compared to previous years.194  
3.156.   In addition to their general stat e aid measures, EU member States maintain a 
long-established aid framework for the rail sector to support its transport services obligations, 
pension system, and infrastructure. Aid to this sector increased sharply between 2019 and 2020, 
going from EUR  49.4 billion to EUR  58.3 billion, driven by an increase in the support granted to the 
sector services obligations and its pension system.195 
3.157.   Some EU member States also implemented state aid measures for the financial sector, under 
a framework that was establis hed following the 2008 financial and economic crisis and has been 
prolonged since. Aid under this programme has steadily declined since 2011, and this trend 
continued during the review period. Aid disbursed to this sector by EU member States decreased 
from about EUR  85 billion in  2019 to EUR  63 billion in 2020.  
3.158.   In March  2020, the European  Union adopted the State Aid Temporary Framework to facilitate 
access to state aid to mitigate the economic effects of the COVID -19 pandemic. The framework set 
the conditi ons for granting COVID -19-related state aid in accordance with TFEU state aid rules.196 It 
was discontinued in June  2020, except for the provisions regarding the implementation of 
investment and solvency support measures, which will be maintained until Dece mber 2023. In 
 
193 European Commission (2022), State Aid Scoreboard 2021 Report , September.  
194 WTO Secretari at calculations based on State Aid Scoreboard data available in Eurostat. In 2020, the 
category "other aid instruments (non -repayable)" accounted for 16% of the total state aid but was driven by 
an aid scheme implemented by one single EU member State.  
195 WTO Secretariat calculations based on State Aid Scoreboard data available in Eurostat. Totals do not 
include figures for the United  Kingdom.  
196 European Commission, State Aid Temporary Framework.  Viewed at: https://competition -
policy.ec.europa.eu/state -aid/coronavirus/temporary -framework_fr . 
020,00040,00060,00080,000100,000120,000
COVID-19-related state aid Other state aidChart 3.[ ] State aid, 2020
(EUR million)
Source:  Commission online information. Viewed at:  https://competition -policy.ec.europa.eu/state -aid/scoreboard_en [January 202 3].WT/TPR/S/442  • European Union  
- 102 - 
  March  2022, the European Commission also adopted a Temporary Crisis Framework in response to 
the war in Ukraine to provide flexibility in the use of state aid. The framework has been amended 
twice since its adoption and will be in place until  December  2023.197  
3.159.   In 2021, the European  Union established the RRF under the NextGenerationEU programme. 
The RRF was allocated EUR  723.8 billion (in current prices) for the period 2021 -27, and can be used 
to finance projects provided applicable state -aid rules are complied with.198 
3.3.1.3   Taxation  
3.160.   Tax policies are defined and implemented by EU member States, against the backdrop of 
the EU Treaties but the European  Union also exercises shared competence in this area, as such 
policies may affect trade in goods and services within the internal market.199 During the review 
period, tax revenue (in absolute terms) declined for the first time since the 2009 financial crisis due 
to the contraction of economic activities following the COVID -19 pandemic, and the introduction  of 
tax measures to support businesses' liquidity.200 According to the European Commission, all 
EU member States implemented such measures in response to the COVID -19 pandemic, which 
included temporary tax reliefs and reductions (e.g.  VAT), as well as tax c uts and deferrals 
(e.g. corporate  and income taxes). Tax revenue decreased by about 5% in 2020 but recovered 
in 2021 by 11%, exceeding pre -pandemic values. The main sources of tax revenue remained the 
personal income tax and the  VAT, which amounted to EUR  1,423  billion and EUR  1,078  billion 
in 2021, respectively. Revenue from corporate taxes totalled EUR  422 billion (Table  3.26).  
Table 3.26 Taxes in the EU -27, 2019 -21 
(EUR billion)  
 
2019  2020  2021  % of 
GDP in 
2021 
Total tax receipts  3,773  3,589  3,992  27.5 
a. Taxes on production and imports  1,916  1,801  2,009  13.8 
 i. Taxes on products:  1,569  1,458  1,645  11.3 
 - Value added type taxes (VAT)  1,002  932 1,078  7.4 
 - Taxes and duties on imports excluding VAT  77 73 79 0.5 
  Import duties  22 20 23 0.2 
 Taxes on imports excluding VAT and import 
duties  56 53 56 0.4 
 - Taxes on products, except VAT and import taxes  489 453 487 3.4 
 ii. Other taxes on production  347 342 364 2.5 
b. Current taxes on income, wealth, etc.  1,819  1,751  1,937  13.3 
 i. Taxes on income  1,740  1,676  1,863  12.8 
 of which:      
 - Taxes on individual or household income 
(including holding gains)  1,350  1,332  1,423  9.8 
 - Taxes on the income or profits of corporations 
(including holding gains)  372 327 422 2.9 
 ii. Other current taxes  79 75 74 0.5 
c. Capital taxes  37 37 46 0.3 
Note:  Includes taxes on production and imports collected by the institutions and bodies of the 
European  Union, mainly in the context of the customs union. Social contributions are excluded.  
Source:  Eurostat, Government Statistics (gov_10a_taxag _custom_4524569) . Viewed at: 
https://ec.europa.eu/eurostat/web/main/data/database . 
3.161.   The main priorities of the European  Union in this area remain: ensuring the good functioning 
of the internal market, as w ell as fair competition and non -discrimination in tax application.201 The 
European  Union maintains a common legal framework for the application of the VAT but its collection 
 
197 European Commission, Temporary Crisis Framework.  Viewed at: https://competition -
policy.ec.europa.eu/state -aid/ukraine_en . 
198 Regulation (EU) 2021/241.  
199 The European  Union exercises shared competence for indirect taxes and to a certain extent for direct 
taxes (TFEU, Article  113; and information provided by the Commission).  
200 European Commission (2021, 2022), Annual Report on Taxation 2021, Review of Taxat ion Policies in 
the EU Member States , May; and Annual Report on Taxation 2022, Tax Policies in the European  Union , June.  
201 European Commission, Taxation . Viewed at: https://european -union.europa.eu/priorities -and-
actions/actions -topic/taxation_en . WT/TPR/S/442  • European Union  
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  and rates' determination remain the responsibility of EU member States (Section  3.1.4). In the area 
of direct taxation, the common legal framework is still very much under development, and both 
personal and corporate income tax regimes still vary significantly across EU  member States. 
However, the European  Union has adopted some directiv es establishing common standards in this 
area dealing with double taxation, exchange of information, and corporate tax avoidance.202  
3.162.   During the review period, corporate income tax  rates (statutory top rates)  varied between 
10% (Bulgaria) and 35% (Malta), a nd the EU average continued its downward trend and declined 
slightly to 21.2% in 2022 from 21.9% in 2019. Effective average rates were even lower (19% 
in 2021, latest estimate).203 Such decline was mainly due to reductions in the top rates implemented 
by Belgium, France, and Greece. According to OECD estimates (including almost 120 economies), 
the world average (statutory) corporate income tax rate was 20% in  2022.204 
3.163.   In December  2022, the European  Union took an important step towards levelling the playing 
field in corporate taxation and adopted Council Directive (EU) 2022/2523, which seeks to ensure 
that multinationals operating in its territory are subject to a minimum effective cor porate tax rate 
of 15%. This rate is expected to apply to multinationals with annual revenues (from both domestic 
and international activities) exceeding EUR  750 million.205 EU member States shall implement this 
directive by December  2023, except for some p rovisions that will begin to apply later, in 
December  2024. As of January  2023, four EU member States had corporate tax rates lower 
than 15%: Bulgaria (10%), Hungary (10.8%), Ireland (12.5%), and Cyprus (12.5%). This Directive 
is based on the OECD initiati ve for a world minimum corporate tax rate, which has been agreed so 
far by almost 140  economies and is part a broader package of measures on international taxation.206  
3.164.   In May  2021, the European Commission published a communication entitled "Business 
Taxati on for the 21st Century" that identifies actions and priorities to achieve a comprehensive and 
modern business tax system.207 The communication proposes inter alia the development of an EU 
common legal framework (i.e.  EU single rulebook) for corporate tax.  As part of the European Green 
Deal (Section  2), the European  Union is also promoting the development of green taxation, which 
includes taxes on energy, transport, pollution and resources.208 
3.3.2   Standards and other technical requirements  
3.3.2.1   Standards  
3.165.   The functioning of the TBT regime in the European  Union is based on the principles of 
harmonization and mutual recognition, which have been instrumental to ensure the free movement 
of goods within the internal market.  
3.166.   Standards are developed at the EU and  member State levels, but the vast majority is done 
at the EU level, according to the Commission. The functioning of the EU standardization system is 
decentralized and mostly market -driven but regulated at the EU level. Its legal and institutional 
framewor k is articulated around four main pieces of legislation, each of which regulates one specific 
 
202 Council Directive (EU) 2016/1164.  
203 European Commission (2022), Taxation trends in the European  Union – Data for the EU Member 
States, Iceland, Norway: 2022 edition , June.  
204 OECD (2022), Corporate Tax Statistics , Fourth Edition.  
205 Shipping companies are exempted from this framework, as well as governmental entities, 
international organizations, pension funds, and non -profit organi zations.  
206 European Council (2022), "International Taxation: Council Reaches Agreement on a Minimum Lev el 
of Taxation for Largest Corporations", 12  December. Viewed at: 
https://www.consilium.europa.eu/en/press/press -releases/2022/12/12/international -taxation -council -reaches -
agreement -on-a-minimum -level-of-taxation -for-largest -corporations/ ; and OECD, Members of the OECD/G20 
Inclusive Framework on BEPS Joining the Statement  on a Two -Pillar Solution to Address the Tax Challenges 
Arising from the Digitalisation of the Econom y. Viewed at: https://www.oecd.org/tax/beps/oecd -g20-inclusive -
framework -members -joining -statement -on-two-pillar-solution -to-address -tax-challenges -arising -from-
digitalisation -october -2021.pdf . 
207 European Commission Communication COM(2021)  251 final.  
208 European Commission, Green Taxation . Viewed at: https://taxation -customs.ec.europa.eu/green -
taxation -0_en.  WT/TPR/S/442  • European Union  
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  aspect of the system.209 Three are the basis for the EU "New Legislative Framework" (NLF)210, 
covering (i)  standards' harmonization across the European  Union (Decis ion 768/2008/EC); (ii)  the 
application of the mutual recognition principle for goods not regulated at the EU level (Regulation 
(EU) 2019/515); and (iii)  accreditation and market surveillance (Regulation (EC) 765/2008). The 
other covers  the institutional an d procedural aspects of standardization (Regulation 
(EU) 1025/2012). These pieces of legislation were not subject to any significant change during the 
review period, except for Regulation (EU) 2019/515.  
3.167.   Regulation (EU) 2019/515 (adopted in March  2019) ent ered into force in April  2020 and 
replaced Regulation (EC) 764/2008, in place since 2010. The new regulation seeks to streamline the 
application of mutual recognition for goods that are already being lawfully sold in another EU member 
State by improving co ntrol procedures and transparency. It provides, for instance, for a specific 
procedure to assess whether a good can be sold in an EU member State based on the principle of 
mutual recognition, and for the establishment of a product contact point in each EU member State 
to provide information to economic actors on the application of this principle.211 In addition, in 
July 2021, the European Union started implementing Regulation (EU) 2019/1020 (see below) to 
enhance its current regime regarding, notably market surveillance, labelling and online sales. In 
June 2022, the Commission also issued the new version of the Blue Guide, which is a comprehensive 
manual for the application of rules governing the EU standardization and conformance system.212 
Pursuant to the Ag reement on the European Economic Area (EEA), these rules also apply to Iceland, 
Liechtenstein, and Norway.  
3.168.   During the review period, the European  Union identified standardization as a key strategic 
tool to achieve its objectives under the European Green De al, as well as under its new digital, 
industrial, and trade strategies (Section  2.1). To complement these strategies (and as provided in 
its Industrial Strategy), the European  Union launched in February  2022 a new strategy on 
standardization entitled "Sett ing global standards in support of a resilient, green and digital EU single 
market".213 Under this new strategy, the European  Union identifies six areas of action for the short, 
medium, and long term: (i)  address standardization existing needs in strategic areas and anticipate 
new ones; (ii)  improve governance and ensure inclusive participation in the European 
standardization system; (iii)  strengthen the role of the European  Union in shaping international 
standards; (iv)  support innovation to identify new st andardization needs; (v)  promote the training 
of the future generation of standardization experts; and (vi)  ensure the EU standardization system 
is aligned with EU policy objectives and values. In addition, during the review period the 
European  Union conti nued its work in promoting the development of environmental (e.g.  hydrogen, 
critical raw materials in batteries) and digital standards (e.g.  artificial intelligence, cybersecurity, 
and chips).214 
3.169.   The development of European standards is entrusted to three p rivate standardization 
organizations: the European Committee for Standardisation (CEN), the European Committee for 
Electrotechnical Standardisation (CENELEC), and the European Telecommunications Standards 
Institute (ETSI). These European standardization or ganizations (ESOs) are the only entities 
authorized to develop European standards. The members of CEN and CENELEC are the national 
standardization bodies (for CEN) and national electrotechnical committees (for CENELEC) of all 
EU member States, the United  Kingdom, North  Macedonia, Serbia, Türkiye, Iceland, Norway, and 
Switzerland. For ETSI, its members comprise entities from the private and public sectors, including 
national standardization bodies. However, due to the structure of the membership, national 
standardization bodies have a limited role in the decision -making process when developing a 
European standard.215 In order to address this issue, the Commission published in February  2022 
 
209 These legislations are complemente d by, inter alia, the TFEU (Articles  34-36) and CJEU 
jurisprudence.  
210 For more details on the NLF and its three legal instruments, see WTO document 
WT/TPR/S/395/Rev.1, 7  July 2020, Section  3.3.2.  
211 For more details on this legal instrument, see WTO docume nt WT/TPR/S/395/Rev.1, 7  July 2020, 
Section  3.3.2.  
212 European Commission Notice C/2022/3637.  
213 European Commission Communication COM(2022)  31 final.  
214 European Commission Communication COM(2019)  486 final ; European Commission Notices  
C/2020/8860 and C/2022 /546.  
215 European Commission Report  COM(2022)  30 final.  WT/TPR/S/442  • European Union  
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  (in parallel to its new strategy on standardization) a proposal to amen d the governance structure of 
ESOs.216 In addition of standards, ESOs produce other technical deliverables.217 
3.170.   The process for developing a new European standard starts with a proposal to an ESO made 
by any stakeholders, in general an industry association, o r the Commission.218 European standards 
mandated by the Commission are known as European harmonised standards (see below). Standards 
approved by an ESO are published as a European standard, and each EU member State (through 
their ESOs) must adopt it as a na tional standard and withdraw any conflicting national standard to 
ensure coherence across the European  Union. The ESOs also conduct a review process every 
five years to assess whether any specific standard shall be withdrawn, reconfirmed, or revised.219 In 
2022, the development of a standard (up to its publication) took approximately 31  months.220 
Compliance with European standards, including European harmonised standards, is voluntary.  
3.171.   In 2022, the CEN and CENELEC issued 1,626 new European standards, of whic h 48% 
(or 791) were identical to international standards. In total, in that year, the CEN and CENELEC 
catalogues contained 24,169 European standards (up from  22,773 in 2019), of which almost half 
(45% or 11,026  European standards) were identical to interna tional standards (Table  A1.2).221 CEN 
is the main developer of European standards.  
3.172.   When no European standards are available, national standardization bodies may adopt 
national standards without going through the ESOs. EU member States must inform the Commission 
of any draft standard before its adoption to assess compatibility with EU legislation.222 
3.3.2.2   Technical requirements and European harmonised standards  
3.173.   Technical requirements are developed in parallel to standards at the EU and member State 
levels, bu t most of the regulatory activity takes place at the EU level, according to the Commission. 
For goods regulated at the EU level, technical requirements are established through EU legislation 
(i.e. regulations or directives). EU technical legislation is des igned according to two long -established 
approaches: the "new approach" (integrated into the NLF) and the "old approach".223 Under the "new 
approach", the scope of the legislation is limited to the "essential" requirements (i.e.  minimum 
requirements based in  general on health, safety, and performance reasons) of a product, while under 
the "old approach" the legislation includes all specific technical requirements. The European  Union 
has developed directives for 27 product categories based on the "new approach " and for some 
700 individual products based on the "old approach"224; together they cover most manufacturing 
goods. The "old approach" is used for, inter alia, vehicles, chemicals, pharmaceuticals, and 
cosmetics, while the coverage of the legislation under  the "new approach" includes construction 
products, electrical and electronic products, medical devices, machinery, and toys. All imported and 
domestically produced goods must comply with the corresponding requirements to be sold in the EU 
market. Manufact urers are responsible for demonstrating that their products comply with these 
requirements through the conformity assessment procedure provided in the EU legislation. These 
procedures vary with the product and may require the involvement of a third party.  
 
216 European Commission Proposal  COM(2022)  32 final.   
217 Regulation (EU) 1025/2012 defines a European standardization deliverable as a technical 
specification adopted by an ESO, other than European stand ards, and with which compliance is voluntary.  
218 Requests, other than those by the Commission, are channelled through the national standardization 
bodies (for CEN), the national committees (for CENELEC), or directly by private stakeholders (for ETSI) of the 
EU member State concerned. If the request is accepted, standards are drafted by a technical committee, and 
subject to public consultation of 12  weeks, with the possibility of an extension of 4  weeks.  
219 CEN/C ENELEC , European Standards . Viewed at: https://www.cencenelec.eu/european -
standardization/european -standards/ .  
220 CEN/C ENELEC , CEN/C ENELEC  in Figures . Viewed at: 
https://www.cencenelec.eu/stats/CEN_CENELEC_in_figures_quarter.htm .  
221 Information provided by the Commission.  
222 Directive (EU) 2015/1535, Article  5. 
223 For a detailed description of the two approaches, see WTO document WT/TPR /S/395/Rev.1, 
7 July 2020.  
224 Legislation based on the "new approach" focuses on essential requirements and leaves the technical 
specifications to European harmonised standards. European Commission Notice C/2022/3637.  WT/TPR/S/442  • European Union  
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  3.174.   Manufacturers can use European harmonised standards as a tool for compliance. European 
harmonised standards are developed broadly in the same way as other European standards225, but 
are designed to support the implementation of EU legislation under the "new  approach"226, and as 
such are based on a product's essential requirements. After a European harmonised standard is 
published by the ESO, the Commission will publish it as an Implementing Act in the Official Journal 
of the European Union (OJEU) if it meets the terms of the standardization request. In 2022, 
about  13% of all European standards were published as harmonized ones (Table  A3.2), and it took 
on average close to 16  months between the ESOs' approval of the request for a European 
harmonised stand ard and its publication in the OJEU.227 
3.175.   Manufacturers that decide to use European harmonised standards published in the OJEU are 
granted the presumption of conformity with the essential requirements in the EU legislation and in 
most cases allowed to use a s elf-certification procedure.228 If the product complies with these 
requirements, manufacturers can issue an EU declaration of conformity whereby they declare the 
product meets the essential requirements in accordance with EU legislation and can affix the CE  
marking229 in the product. Manufacturers not using such European harmonised standards must in 
certain cases show compliance with the product requirements by having recourse to a conformity 
assessment conducted by a third  party.  
3.176.   The CE mark is mandatory for  the 27 product categories covered by the "new approach" 
legislation and for which a European harmonised standard exists. Since July  2021, certain products 
subject to CE marking and listed in Article  4 of Regulation (EU) 2019/1020, including those sold 
online, must also have a label containing, inter alia, the contact details of a responsible economic 
operator within the European  Union for customs and market surveillance purposes.230  
3.177.   In addition, labelling and other marking requirements may apply to certain  non-food 
products, regardless of whether they are subject to the CE mark.231 These requirements apply 
equally to both imported and locally produced goods based on health, safety, or environmental 
considerations, and include energy rating labels, safety lab els for toys and chemicals substances, 
and markings for waste from electrical and electronic equipment (WEEE) for electrical appliances. 
Labelling requirements also apply to textiles, footwear, and cosmetics.232 Since July  2021, plastic 
cups and certain san itary and tobacco products are also subject to a single -use plastic marking based 
on waste management and environmental grounds.233  
3.178.   The European  Union also maintains a standardized packaging regime for tobacco. Under this 
regime, all tobacco products must be sold in  plain packaging with a health warning (including 
pictures) covering at least 65% of the front of the package, and the entire back .234 
3.179.   For goods not regulated at the EU level, EU member States can develop and establish 
national technical requireme nts. The free movement of these goods is ensured by the application of 
the mutual recognition principle. Under this principle, any product that is (lawfully) sold in one 
EU member State can be sold in another. These products have also to comply with the sa fety 
requirements of the General Product Safety Directive (GPSD) 2001/95/EC.235 In June  2021, the 
European  Union issued a proposal for a new GPSD regulation to update and modernize the existing 
one by, inter alia, extending the application of market surveil lance provisions to goods regulated at 
the EU level (i.e.  covered by European harmonised standards) to create one single regime for all 
 
225 Contrary to other European standards , European harmonised standards must also be assessed by an 
independent group of experts to check compliance with the Commission standardization mandate.  
226 The "old approach" does not use standards.  
227 Information provided by the Commission.  
228 In this regard, the Commission indicates that these cases are described in the relevant 
NLF legislation.  
229 Where CE stands for "conformité européenne".  
230 Regulation (EU) 2019/1020, Article  4. 
231 Food products have their own labelling system (Section  3.3.3 ). 
232 Your Europe, Labels and Markings . Viewed at: https://europa.eu/youreurope/business/product -
requirements/labels -markings/index_en.htm ; and Regulatio n (EC)  1223/2009.  
233 Commission Implementing Regulation (EU) 2020/2151.  
234 Directive 2014/40/EU.  
235 Some provisions of this directive may also apply to products regulated at the EU level when certain 
aspects of product safety are not covered by EU legislation  (Directive 2001/95/EC, Article  1). WT/TPR/S/442  • European Union  
- 107 - 
  non-food goods (i.e.  EU regulated and non -regulated goods). The proposed regulation would also 
cover new technology -related products and products sold online.236  
3.180.   At the EU level, the Directorate -General for Internal Market, Industry, Entrepreneurship 
and SMEs within the European Commission is the EU National Notification Authority and Enquiry 
Point under the TBT  Agreement.237 From 1  October  2019 to 31  December  2022, the European  Union 
made 261 new regular TBT notifications (and 40 revisions and corrigenda). These measures covered, 
inter alia, food, chemicals, pesticides, fertilizers, electrical and electronic equipment, cosme tics, 
vehicles, and construction materials, and were mostly based on health, safety, and environmental 
considerations. One notification refers to the adoption of emergency technical regulations involving 
chemical substances.238  
3.181.   The European  Union is one of  the most frequent users of the TBT specific trade concerns 
(STC) system. It has raised so far the largest numbers of STCs after the United  States and it is 
followed by Canada and China. It is also the main WTO Member subject to STCs, followed by China, 
the United  States, and India. During the review period, WTO Members raised 41 new STCs related 
to EU TBT measures, as well as 14 other recurrent concerns raised for the first time prior to 
October  2019 (e.g.  labelling requirements for wine, and maximum resid ue levels (MRLs) for 
pesticides). The European  Union raised 78 STCs on TBT measures against other WTO members in 
the TBT  Committee.239  
3.3.2.3   Conformity system and market surveillance  
3.182.   The European  Union maintains a uniform framework for accreditation that is supported by 
the European Co -operation for Accreditation (EA). The EA comprises 49 members, which include the 
national accreditation bodies of all EU member States.240 The EA provides technical assistance to the 
Commission and manages a peer evaluation syst em to assess its members' compliance with all 
EA relevant requirements to ensure the equivalence of accreditation services across the 
European  Union. The EA is also responsible for implementing the EA multilateral agreement of 
mutual recognition (EA MLA).  
3.183.   Under the EU accreditation framework, each EU member State must have only one 
accreditation body, which must be a member of the EA and have passed EA peer evaluations. 
National accreditation bodies must conduct their activities in accordance with the prin ciple of 
non-competition.241 Based on this principle, they cannot provide accreditation services across the 
border (with some exceptions), and conformity assessment entities can only request accreditation 
to the national accreditation body of the EU member State where they are located.242 National 
accreditation bodies of all EU member States are signatories to the EA MLA, and therefore once a 
conformity assessment entity has been accredited in one EU member State its accreditation is 
recognized as equivalent in all EU member States and any other EA MLA signatory.  
3.184.   The EA MLA is recognized by the International Accreditation Forum (IAF) and International 
Laboratory Accreditation Cooperation (ILAC). Based on these arrangements, certain accreditations 
services deli vered by EA MLA signatories are recognized by the signatories to the ILAC and IAF 
mutual recognition arrangements.  
3.185.   In the area of metrology, the European system of measurements follows the international 
system of units. At the EU level, the European Association of National Metrology Institutes 
coordinates the metrological activities of its members, and the European Coo peration in Legal 
Metrology promotes cooperation among national authorities in this area. In both cases, members 
are the corresponding national authorities/bodies in EU member States and EFTA countries.  
 
236 European Commission Proposal  COM(2021)  346 final.  
237 WTO document G/TBT/ENQ/38/Rev.1, 8  July 2011.  
238 WTO SPS and TBT Platform. Viewed at: https://epingalert.org/ . 
239 WTO Trade Concerns Database. Viewed at: https://tradeconcerns.wto.org/en .  
240 Some of the other members are Tunisia, Algeria, Egypt, Türkiye, Israel, and Georgia.  
241 Regulation (EC) 765/2008. Last amended in 2019 by Regulation (EU) 2019/1020. This amendment 
entered fully into force on 16  July 2021.  
242 Regulation (EC) 765/2008, Articles  6 and 7.  WT/TPR/S/442  • European Union  
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  3.186.   To complement its conformity system, the European  Union maintains a common framework 
of market surveillance for non -food products in circulation in the EU market (i.e.  products that have 
been already introduced in the EU market). Under this framework, market surveillance activities are 
conducted by EU membe r States to identify non -compliant goods so that they can be recalled or 
withdrawn from the EU market. For imported goods, controls are conducted at the border in 
collaboration with customs authorities, and if a product is found non -compliant with EU legis lation it 
is not released into circulation.243 To support market surveillance activities, the European  Union 
maintains an alert system – the Safety Gate (previously known as the Rapid Alert System 
(RAPEX))  – through which national authorities share informat ion and issue notifications on 
dangerous non -food products offered in the EU market. In 2021, Safety Gate received about 
2,000  notifications involving mainly vehicles (26%), toys (20%), electrical appliances and equipment 
(9%), jewellery (9%), and protecti ve equipment (8%). In April  2021, the European  Union introduced 
a new surveillance tool, the "e -surveillance web crawler", to detect online offers of dangerous goods 
reported in the Safety Gate system.244 
3.187.   In July  2021, the European  Union also started to imp lement Regulation (EU) 2019/1020, 
which was adopted in June  2019 to strengthen the EU market surveillance mechanism. The new 
regulation amends some existing aspects of the existing system but has also some new features. 
The regulation introduces, for insta nce, provisions for goods sold online, additional labelling 
requirements, and control procedures for imported goods. It also establishes a Union Product 
Compliance Network as a forum to coordinate and cooperate on market surveillance issues between 
EU memb er States and the Commission. The regulation applies to all non -food products regulated 
at the EU level.  
3.188.   In the area of international regulatory cooperation, the European  Union has mutual 
recognition agreements (MRAs) for the acceptance of conformity asses sment results with seven 
countries: Australia, Canada, Israel, Japan, New  Zealand, Switzerland, and the United  States.245 
These MRAs cover conformity assessments for selected products such as electrical and electronic 
equipment, telecommunication equipment,  and toys.246 In some cases, these MRAs also provide for 
the mutual recognition of compliance with respect to the use of goods manufacturing or laboratory 
practices. During the review period, the European  Union did not conclude any new MRAs and 
announced th at the mutual recognition provisions for medical devices under the MRA with 
Switzerland ceased to apply on 26  May 2021 (Section  2.3).247 
3.189.   In addition to these MRAs, the European  Union has an Agreement on Conformity Assessment 
and Acceptance of Industrial Pro ducts (ACAAs) with Israel.248 The ACAA provides for the alignment 
of Israel's relevant legislation to that of the European  Union for good manufacturing practices for 
pharmaceutical products.249 The European  Union intends to conclude further ACAAs with candid ate 
countries for EU membership, potential candidate countries, and EU neighbouring countries. 
Since  2019, preparations to start negotiations have been ongoing for an ACAA with Ukraine.  
3.3.3   Sanitary and phytosanitary requirements  
3.190.   The large majority of SPS legi slation in the European  Union is coordinated and developed at 
the EU level. This legislation is vast and comprehensive in its coverage of food safety, and animal 
 
243 European Commission Notice C/2022/3637.  
244 European Commission (2022), Safety Gate 2021 Re sults, February.  
245 European Commission Notice C/2022/3637. These MRAs are standalone agreements except in the 
case of Canada, for which the agreement takes the form of a Protocol under the European  Union -Canada RTA.  
246 European Commission, Mutual Recogniti on Agreements. Viewed at: https://single -market -
economy.ec.europa.eu/single -market/goods/international -aspec ts-single -market/mutual -recognition -
agreements_en . 
247 European Commission (2021), Notice to Stakeholders: Status of the EU -Switzerland Mutual 
Recognition Agreement (MRA) for Medical Devices , 26 May. 
248 The ACAA with Israel takes the form of a protocol under the European  Union -Israel RTA.  
249 The Commission indicates that the provisions for the mutual recognition of conformity assessment 
results under the ACAA are not operational.  WT/TPR/S/442  • European Union  
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  and plant health, and has been gradually reformed since 2013 to simplify it and build a system  that 
covers the entire food chain.250  
3.191.   The EU SPS legal framework comprises legislation of general application, as well as of 
product - and issue -specific, for food safety, and animal and plant health. The main SPS regulations 
of general application are (i)  Regulation (EC)  178/2002 (General Food Law); (ii)  Regulation 
(EU) 2016/429 (Animal Health Law); (iii)  Regulation (EU) 2016/2031 (Plant Health Law); and 
(iv) Regulation (EU)  2017/625 on Official Controls.251 During the review period, and as part of the 
reform process, the European  Union completed the implementation of the Plant Health Law, the 
Animal Health Law, and the Regulation on Official Controls, all three adopted during the 
period  2016-19.  
3.192.   The Animal Health Law (adopted in 2016) became fully applicab le in April  2021 and deals 
with the prevention and control of transmissible animal diseases. The Law details the requirements 
for the entry of animals and animal products to the European  Union. The Regulation on Official 
Controls (adopted in 2017) started to be applied in December  2019 and became fully operational in 
April 2022 to create a single framework for all official controls along the food and feed chain. The 
Plant Health Law also started to be applied in December  2019, except for a few provisions th at 
became operational in January  2021. The Regulation modernizes the plant health regime to better 
detect pests at an early stage and prevent their spreading.252 The General Food Law regulates the 
entire food chain to ensure the safety of food and feed. In March  2021, the General Food Law was 
amended through the entry into application of Regulation (EU) 2019/1381253 (Transparency 
Regulation) to improve transparency and public participation in food risk assessment and approval 
procedures of products. The Regul ation (adopted in June  2019) provides for public access to 
scientific studies submitted to the European Food Safety Authority by the applicant during the 
process of risk assessment and for public consultations during the approval process when such 
authoriz ation is required.  
3.193.   These regulations are complemented by other EU legal instruments containing requirements 
to be applied throughout the European  Union and covering, inter alia, food and feed hygiene, 
labelling, food contact materials and packaging, food and feed additives, genetically modified 
organisms (GMOs), organic food, and residues of pharmacologically active substances (used in 
veterinary medicines), pesticides, and contaminants.  
3.194.   Moreover, in May  2020 the Commission adopted the Farm to Fork Strateg y to support the 
ongoing reform process and the EU sustainability objectives.254 The Strategy is considered a key 
component of the European Green Deal and has some implications for the EU SPS regime. The 
Strategy identifies the areas of action to achieve a sustainable EU food system and comprises an 
action plan for the period 2020 -24 that provides for, inter alia, the reform of the legislation on feed 
additives, pesticides, food contact materials, plant protection, animal welfare, and marketing 
standards for agricultural and fishery (including aquaculture) products. As part of this action plan, 
the Commission is also expected to propose new legislation to extend the scope of the requirement 
on origin labelling, introduce a standardi zed mandatory front-of-pack nutrition labelling, and 
establish a sustainable food labelling framework to inform consumers about the sustainability 
aspects of food products. This strategy also sets EU targets for reducing the use of chemical 
pesticides (and their risk), antimicrobials, and fertilisers by 2030255, and foresees to integrate 
environmental considerations in the assessment requests for import tolerances for pesticides not 
approved in the European  Union . As announced in the Strategy, the Commission plans to pres ent a 
new legislative framework for sustainable food systems in 2023 to, inter alia, incorporate 
 
250 European Commission (2013), "Smarter Rules for Safer Food: Commission Proposes L andmark 
Package to Modernise, Simplify and Strengthen the Agri -food Chain in Europe", 6  May. Viewed at: 
https://ec.europa.eu/commission/presscorner/detail/en/MEMO_13_398 .  
251 For a description of these legal instruments, see WTO document WT/TPR/S/395/Rev.1, 7  July 2020, 
Section  3.3.3.  
252 European Commission (2017), Ensuring Food Is Safe – The Veterinary and Phytosanitary System of 
the European  Union Explained . 
253 With the excepti on of some institutional provisions, which became applicable in July  2022.  
254 European Commission Communication COM(2020)  381 final.  
255 Under the Strategy, the European  Union intends to reduce by 50% the use and risk of chemical 
pesticides by 2030, by 50% the use of more hazardous pesticides, by 20% the use of fertilisers by 2030, and 
by 50% sales in the EU market of antimicrobials for fa rmed animals and in aquaculture by 2030.  WT/TPR/S/442  • European Union  
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  sustainability in all food -related policies, as well as a proposal for the setting of EU -level targets for 
food waste reduction.  
3.195.   At the institutional level, th ere have been no significant changes since the previous Review. 
The European  Commission, through its Directorate -General for Health and Food Safety (DG  SANTE), 
is responsible for the formulation of SPS -related policies and for monitoring their application and 
enforcement in EU member States. DG SANTE is also the National Notification Authority and Enquiry 
Point under the SPS  Agreement. EU member States have also notified an enquiry point.256  
3.196.   Three EU agencies continue to support the work of the Commission i n this area: (i)  the 
European Food Safety Authority (EFSA); (ii)  the European Medicines Agency (EMA); and (iii)  the 
European Chemicals Agency. The EFSA is the EU agency responsible for providing independent 
advice to the Commission regarding food safety ba sed on scientific evidence. The EMA is the 
EU agency responsible for evaluating the applications for marketing authorizations for certain human 
and veterinary medicines regulated at the EU level to be sold in the European  Union and for making 
a recommendat ion to the Commission, which is ultimately responsible for their approval.257 The 
EMA also has monitoring and advisory functions . The European Chemicals Agency is the EU agency 
responsible for providing scientific/technical support to the Commission regardi ng the development 
of EU legislation on chemicals, as well as for preparing the corresponding implementing legislation.  
3.197.   The European  Union applies SPS -related requirements for the entry into the European  Union 
of animals, germinal products, products of animal origin, animal by -products, composite products, 
food and feed of non -animal origin, and plants. Requirements vary depending on the animal/product 
based on their risk for human, animal, and plant health, and have remained broadly the same  for 
most of these goods since the previous Review. In general, these goods must be accompanied by a 
health or phytosanitary certificates to enter the EU market and are subject to control upon their 
arrival at an EU border control post. In addition, some p roducts are required to originate from 
third countries, which are approved by the Commission, and, in some cases, from an approved 
establishment to be sold in the EU market. Prior to their import, businesses must also pre -notify the 
border control post of first arrival into the European  Union by submitting through the 
European  Union's Trade Control and Expert System (TRACES) a "common health entry document", 
which will include the references of the corresponding health or phytosanitary certificate. Border 
controls are planned based on this registration. Consignments are allowed to enter the 
European  Union subject to satisfactory documentary, identity, and physical checks (when required). 
The European  Union participates in the International Plant Protection C onvention (IPPC) ePhyto 
platform for electronic phytosanitary certification, which facilitates the electronic exchange of 
SPS-related documentation between participating countries.  
3.198.   Based on animal and public health grounds, most animals, products of anima l origin 
(intended for human consumption), animal by -products, non -shelf-stable composite products, and 
certain shelf -stable composite products (i.e.  products containing processed products of animal origin 
and plant origin) require a health certificate to enter the European  Union, and for their subsequent 
circulation within its territory.258 The import of meat is also subject to additional documentary 
requirements. Since April  2021, the entry into the European  Union of certain shelf -stable composite 
products  must be accompanied by a private attestation, which must be prepared and signed by the 
importer confirming that the consignment complies with all applicable requirements. Imports to the 
EU market of animals and products of animal origin must originate fro m a registered or approved 
establishment by the European  Union, as required. Composite products are also subject to specific 
rules in this regard.259 The European  Union maintains labelling requirements in relation to animal 
welfare (i.e.  animal farming cond itions) for table eggs. This is the only product subject to such 
requirement at the EU level.260  
3.199.   Regarding veterinary medicines, the European  Union started applying in January  2022 
Regulation (EU) 2019/6, which was adopted in 2018. The Regulation updates t he rules on the 
 
256 WTO documents G/SPS/ENQ/26 and G/SPS/NNA/16, 11  March  2011.  
257 EMA, Authorization of Medicines . Viewed at: https://www.ema.europa.eu/en/about -us/what -we-
do/authorisation -medicines .  
258 Regulation (EU) 2016/429, Article  229. 
259 European Commission, EU Entry Conditions for Compos ite Products . Viewed at: 
https://food.ec.europa.eu/horizontal -topics/international -affairs/eu -entry -conditions/composite -products_en .  
260 European Commission, Animal Welfare Labelling . Viewed at: 
https://food.ec.europa.eu/animals/animal -welfare/other -aspects -animal -welfare/animal -welfare -labelling_en . WT/TPR/S/442  • European Union  
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  manufacturing, trade, sale, and use of veterinary medicinal products and includes provisions to 
stimulate innovation in this area and regulate the use of antimicrobials. In this regard, both importers 
and domestic business are, for instance , subject to a prohibition on the use of antimicrobial medicinal 
products in animals to promote growth or increase yield. The Commission indicates that this 
provision is not yet operational.  
3.200.   Based on plant health grounds, the importation of plants for plan ting (including certain 
seeds), cut flowers, most fruits and vegetables, and certain plant products (e.g.  wood) requires a 
phytosanitary certificate issued by the relevant official plant health authority of the exporting or 
re-exporting country. Since Dece mber 2019 with the implementation of the Plant Health Law, this 
requirement, as well as that for a plant passport (see below), was further harmonized and 
extended  to all plants intended for planting. A phytosanitary certificate is also now required for use d 
agricultural or forestry machineries and vehicles (imported from all countries except Switzerland). 
Five fruits (bananas, coconuts, durians, dates, and pineapples) are currently exempted from a 
phytosanitary certificate.261 Once in the EU market, all plan ts for planting and certain seeds, fruits, 
and wood products have their phytosanitary certificate replaced by a plant passport, which is 
required to allow these goods to move within the European  Union.262 The Plant Health Law also 
harmonizes the format of t he plant passport. The European  Union prohibits the entry of certain 
plants and plants products to guarantee the phytosanitary protection in its territory; for those posing 
a "high risk" of contamination with an EU quarantine pest the prohibition is applie d on a provisional 
basis pending a risk assessment.263  
3.201.   For pesticides, only products containing active substances complying with the criteria under 
Regulation (EC) 1107/2009 can be sold in the EU market or be used on food or feed of plant and 
animal origin . In this regard, the Commission indicates that MRLs are based on good agricultural 
practices following an EFSA risk assessment. If a risk is identified, the MRL application is rejected, 
and the levels are set at technical zero.264 In the absence of a speci fic MRL, a default level applies. 
Importers (or any other stakeholder) may request an "import tolerance" for substances not in the 
list of EU -approved substances, as well as for approved ones.265 If EFSA concludes that the import 
tolerance is safe for consu mers and does not present an environmental concern, the import tolerance 
can be granted. Certain contaminants in food and feed are also subject to maximum levels for several 
categories of products such cereals, infant food, lettuce, and milk .266 Maximum lev els for 
contaminants and residues of pesticides are updated regularly. In 2021, the Commission adopted 
4 regulations amending the maximum levels for certain contaminants, and 22  regulations amending 
those for residues of certain pesticides.267  
3.202.   GMOs for cul tivation, and for food and feed use are authorized at the EU level subject the 
Commission's approval, but EU member States may prohibit or restrict GMOs for cultivation under 
certain conditions.268 During the review period, the legal framework for the approval of GMOs was 
not subject to any change. In 2022, the European  Union authorized six GMO crops (two maize, 
two soybeans, one oilseed rape, and one cotton) and renewed one authorization (cotton), all used 
for food and animal feed.269 In total, 19 new authorizations for GMO crops were issued between  2020 
and end -2022 and another 7 were renewed, all for food and animal feed. Authorizations are valid 
for 10  years.  
 
261 Commission Implementing Regulation (EU) 2019/2072, Annex  XII, Part  C. 
262 Regulation (EU) 2016/2031, Annexes  XIII and XIV.  
263 Regulation (EU) 2016/2031, Articles  40 and 42.  
264 The Commission further indicate that MRLs are regularly set to harmonize the EU legislation with 
international standards set by the WHO/FAO Codex Committee on Pesticide Residues (CCPR). Codex MRLs are 
integrated into EU legislation provided that levels are sufficiently substantiated by data and are sa fe for 
consumers.  
265 Regulation (EC) 396/2005, Article  3. 
266 Commission Regulation (EC) 1881/2006.  
267 Information provided by the Commission, and European Commission, EU Legislation on MRLs and 
Contaminants . Viewed at: https://food.ec.europa.eu/plants/pesticides/maximum -residue -levels/eu -legislation -
mrls_en ; and https://food.ec.europa.eu/safety/chemical -safety/contaminants/legislation_en .  
268 European Commission, GMO Authorisations for Cultivation . Viewed at: 
https://food.ec.europa.eu/plants/genetically -modified -organisms/gmo -authorisation/gmo -authorisations -
cultivation_en .  
269 Information provided by the Commission.  WT/TPR/S/442  • European Union  
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  3.203.   The European  Union requires specific l abelling for all food products (imported or locally 
produced) to be sold in the EU market, including products sold online. Label requirements are 
described in Regulation (EU) 1169/2011, and include information about the ingredients and their 
content, aller gens, and in some cases the food's country of origin or place of provenance (e.g.  fresh, 
chilled, frozen meat of swine, sheep, goats, and poultry). Certain food products are subject to 
additional labelling requirements for safety and transparency reasons, and include GMOs, food for 
infants and young children, fishery products, beef, and wine and spirits. The European  Union also 
applies requirements for the materials used in food packaging (i.e.  materials intended to come into 
contact with food).  
3.204.   EU member S tates are responsible for the enforcement of EU SPS legislation, including 
import controls at the borders, and their performance in this regard is audited by the Commission 
through DG  SANTE. Competent authorities in EU member States shall conduct checks up on the 
arrival at the first EU border control post (BCP) on the consignments of animals, products of animal 
origin, and plants and plant products. Since December  2019 when Regulation (EU)  2017/625 
became applicable, all checks regardless of the type of goo d have been channelled through the BCP 
at EU entry points, and controls procedures have been harmonized across regulated goods.270 Import 
controls and their frequency are based on risk analysis, and in certain cases they may be applied 
temporarily or at a p redefined frequency to goods from certain countries. Currently the 
European  Union applies temporary border controls, subject to periodical review, to certain food and 
feed of non -animal origin (e.g.  peanuts, tea, peppers) from 24 countries, and controls at  a reduced 
frequency to 68 products (e.g.  cut flowers from certain African and Latin American countries).271 
3.205.   In the area of market surveillance, the European  Union maintains the Rapid Alert System for 
Food and Feed (RASFF) through which EU member States can  share information on any product in 
the EU internal market or at the border that may pose a threat to public health. In 2021, 
4,607  notifications were submitted to RASFF with pesticide residues being the most reported issue 
(1,231 notifications), followed  by pathogenic microorganisms (mainly Salmonella) 
(863 notifications). Of the total notifications, 32% involved products that were blocked and rejected 
at the EU border for presenting a serious risk to public health.272 In addition to RASFF, the 
European  Union has two other alert systems: the Animal Disease Information System (ADIS) to 
share information on outbreaks of infectious animal diseases; and the European  Union System for 
Plant Health Interceptions (EUROPHYT) to share information on the interceptions  of harmful 
organisms in imported plants and plant products.  
3.206.   At the WTO, the European  Union contributes significantly to the work of the WTO SPS 
Committee and transparency, through the submission of notifications. From  1 October  2019 to 
31 December  2022, t he European  Union made 257 new SPS -related notifications (and 111 addenda, 
corrigenda, and revisions). The majority (about 86%) of measures were notified based exclusively 
on food safety grounds. Eleven notifications during this period referred to the adop tion of emergency 
SPS measures for animal or plant health reasons.273 During the same period, the European  Union 
raised 26 STCs on SPS measures applied by other WTO Members, and WTO Members raised 32 STCs 
on SPS measures applied by the European  Union, of wh ich almost half were related to MRLs of 
pesticides or maximum limits of contaminants. Five concerns regarding EU measures had already 
been raised prior to October  2019, of which some referred to MRLs for certain chemicals, endocrine 
disruptors, and pharmac ologically active substances (used in veterinary medicines). As of 
December  2022, the European  Union (and the United  States) had raised the largest number of STC 
concerns in the area of SPS, followed by Brazil and Canada. The European  Union was also the ma in 
respondent of STCs, followed by the United  States and China.274 
3.207.   In the area of international cooperation, the European  Union is member of the IPPC, and 
Codex Alimentarius. All EU member States are also members of the Codex Alimentarius, the IPPC, 
 
270 Regulation (EU) 2017/625, Articles  47-55 and 61.  
271 Commission Implemen ting Regulation (EU) 2019/1793, Annex  I; and European Commission (2020), 
Notification of Reduced Plant Health Checks for Certain Products (Commission Regulation (EC) 1756/2004), 
Period 1  January to 31  December  2021, 18 December.  
272 European Commission (2021 ), Alert and Cooperation Network – 2021 Annual Report . 
273 WTO SPS and TBT Platform. Viewed at: https://epingalert.org/ . 
274 WTO Trade Concerns Database. Viewed at: https://tradeconcerns.wto.org/en . As of December  2022, 
the European  Union and United  States had raised 156 and 157 SPS STCs, respectively.  WT/TPR/S/442  • European Union  
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  and the  World Organization on Animal Health (WOAH), where the Commission is responsible for 
coordinating the position of all EU member States.  
3.208.   In February  2022, the European  Union and the United  States agreed to mutually recognize 
as equivalent the SPS standards in relation to the production and sale of bivalve molluscs 
(e.g. mussels, clams, oysters, and scallops). The agreement applies to two US states and two EU 
member States, and according to the Commission, it will allow the two countries to resume b ilateral 
trade in these products after 11  years.275 
3.3.4   Competition policy  
3.209.   The European Commission is in the process of undertaking an extensive review of existing 
legislation and regulation on competition. Its Communication on Competition Policy calls for stro ng 
and effective competition policy and highlights the role it can play in achieving targets related to 
green, digital, and resilient single market.276 
3.210.   In December  2020, the Commission presented two drafts related to digitization of markets 
and services – the Digital Services Act (DSA)277 and the Digital Markets Act (DMA)278 (described in 
Section  4.5). The DMA  contain s provisions aimed at restricting anti -competitive practices, although 
the proposed legislation is considered not to be part of competition polic y, per se .  
3.211.   A new Regulation (2022/2560) on foreign subsidies distorting the internal market, adopted 
in November  2022279, aims at ensuring a level playing field and confers upon the Commission the 
power to investigate sources of financial means granted by non-EU governments to undertakings 
active in the territory of the Union. In the competition area, the Regulation introduces a 
notification -based tool under which undertakings have to notify ex ante the financial contributions 
received from a non -EU governm ent prior to concluding a concentration (mergers, acquisitions, joint 
ventures,  etc).280 
3.212.   The Commission also adopted a new Vertical Block Exemption Regulation as well as new 
Vertical Guidelines aimed at allowing undertakings to self -assess the conformity of  their actions with 
competition laws, especially considering the digitization of marketplaces.281 
3.213.   On 8 December  2022, the European Commission adopted two regulations extending the 
period of validity of the horizontal block exemption regulations on research and development and 
on specialization agreements (together, HBERs). The HBERs were due to expire on 
31 December  2022 and the Commission prolonged them until 30  June 2023 to avoid legal 
uncertainty pending adoption of new texts of the regulations and new gu idelines in the first  half 
of 2023.  
3.3.4.1   Competition policy during emergencies  
3.214.   The Commission has acknowledged the exceptional emergency created by the COVID -19 
pandemic and the need for business cooperation to deliver critical products and services. To this 
end, the European Competition Network (ECN) published a statement announcing that they would 
not actively intervene against "temporary and necessary" measures put in place to overcome the 
 
275 Commission Implementing Regulation (EU) 2022/158.  
276 European Commiss ion Communication COM(2021)  713 final.  
277 European Commission Proposal  COM(2020)  825 final.  
278 Regulation (EU) 2022/1925 of the European Parliament and of the Council on contestable and fair 
markets in digital sector and amending Directives (EU) 2019/1937 and (EU) 2020/1828 (Digital Markets Act). 
Viewed at: https://data.consilium.europa.eu/doc/document/PE -17-2022-INIT/en/pdf .  
279 European Council (2022), "Council Gives Final  Approval to Tackling Distortive Foreign Subsidies on 
the Internal Market", 28  November. Viewed at: https://www.consilium.europa.eu/en/press/press -
releases/2022/11/28/council -gives-final-approval -to-tackling -distortive -foreign -subsidies -on-the-internal -
market/ . 
280 Notification requirements apply only when the acquired company, one of the merging parties or the 
joint venture generates an EU turnover of at least EUR  500 million, and the transaction involves parties 
granted foreign financial contributions from any number of non -EU countries of at least EUR  50 million in the 
previous three  years. Regulation (EU) 2022/2560.  
281 Commission Regulation (EU) 2022/720; and European Commission Communication C/2022/4238, 
2022/C 248/01.  WT/TPR/S/442  • European Union  
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  crisis and noted that such measures most probably would not amount to violations of competition 
norms under Article  101 of the TFEU.282 In October  2022, in light of the improved public health 
situation the Commission withdrew the Temporary Framework setting out the main criteria that the 
Commission would use when assessing co operation of businesses helping to alleviate the 
consequences of the pandemic.283 At the same time, the Commission adopted a Revised Informal 
Guidance Notice explaining how businesses can seek informal guidance from the Commission on the 
application of comp etition provisions.284 
3.215.   Regarding the war in Ukraine, the ECN published a statement announcing that it will not 
intervene when specific and targeted actions are taken to mitigate the disruptions created by the 
war.285 Nevertheless, the ECN noted the need to s ustain market prices, especially for products of an 
essential nature.  
3.3.4.2   Anti-competitive agreements and abuse of a dominant position  
3.216.   Competition enforcement action of the Commission and national competition authorities 
relating to anti -competitive agreements  and abuse of a dominant position continues to be based on 
Articles  101 and 102 of the TFEU and Council Regulation (EC) 1/2003, as well as sector -specific 
rules. Most cases are investigated or submitted by the competition authorities of the member States. 
The Commission opened infringement proceedings against 22 member States in  2021 for not 
incorporating into national law the so -called ECN+ Directive further strengthening the role of national 
competition authorities in enforcing EU competition law.286 Curre ntly, 23 member States have fully 
transposed the ECN+ Directive, 2 have partially transposed it, and 2 have not yet adopted any 
implementing measure.  
3.217.   The Commission has upgraded the "eLeniency" tool used to submit leniency applications 
online. The revised  tool allows parties to be easily notified of, and have access to, information and 
documents relevant to leniency proceedings. Confidentiality and security are guaranteed as only 
pre-authorized users on a case -by-case basis will have access to the document s online.287 
3.3.4.3   Mergers and acquisitions  
3.218.   Merger control is still based on Council Regulation (EC) 139/2004 of 20  January  2004. The 
Commission is, however, working on simplifying the procedure for specific categories of cases, 
through amendments in the Merger Implementing Regulation288, its Annexes containing, inter alia, 
the notification forms and the Notice on Simplified Procedure.289,290 The adoption and entry into force 
of these revised legal texts is expected for 2023. The Commission also published new  Guidance on 
the application of the referral mechanism set out in Article  22 of the Merger Regulation to certain 
categories of cases.291 It is now explicitly clarified that the Commission will encourage and accept 
referrals of some categories of cases even though these are not notifiable based on the legislation 
of the referring member State in case the criteria of Article  22 of the Merger Regulation are met.  
 
282 European Competition Network, Antitrust: Joint Statement by the European Competition Network 
(ECN) on Application of Competition Law during the Corona Crisis . Viewed at: 
https://ec.europa.eu/competition/ecn/202003_joint -statement_ecn_corona -crisis.pdf .  
283 European Commiss ion Communication C/2020/3200.  
284 European Commission Notice C /2022/6925 final.   
285 European Competition Network, Antitrust: Joint Statement by the European Competition Network 
(ECN) on the Application of Competition Law in the Context of the War in Ukraine . Viewed at: 
https://competition -policy.ec.europa.eu/system/files/2022 -03/202203_joint -statement_ecn_ukraine -war.pdf .  
286 Directiv e (EU) 2019/1.   
287 European Commission (2022), "Antitrust: Commission Upgrades eLeniency Tool to Grant Companies 
Online Access to Leniency and Settlement Documents", 30  September. Viewed at: 
https://ec.europa.eu/commission/presscorner/detail/en/ip_22_5845 . 
288 Commission Regulation (EC) 802/2004, p.  1 as amended by Commission Regulations 
(EC) 1033/2008 and (EU) 1269/2013.  
289 European Commission Notice 2013/C 366/04.  
290 European Comm ission  Communication ( Annex  1) C(2022)  2918 final.  
291 European Commission Communication C /2021/1959 final.  WT/TPR/S/442  • European Union  
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  3.3.4.4   Statistics on competition enforcement  
3.219.   Tables  3.27 and 3.28 provide relevant statistics on competiti on enforcement in the 
European  Union. Anti -trust investigations have remained relatively constant over the period 2019 -21 
and the majority of cases concerned anti -competitive agreements. Merger notifications have likewise 
remained relatively steady during 2019-22 with some fluctuations during 2020 -21 and the majority 
of cases were cleared, i.e. compatible, in the Phase I investigation.  
Table 3.27 Anti-trust cases, investigations, decisions, and fines, 2019 -22 
 Note  2019  2020  2021  2022  
Commission investigations   19 12 18  
National competition authority 
(NCA) investigations   119 126 127 .. 
Submitted by NCAs   82 84 83 .. 
A. 101  Anti-competitive 
agreements  69.51%  73.81%  72.29%  .. 
A. 102  Abuse of dominant 
position  23.17%  20.24%  22.89%  .. 
A. 101/102  Combined  7.32%  5.95%  4.82%  .. 
Commission       
Cartel cases decided  Number  5 3 10 1 
Fines imposed (not adjusted for 
Court judgements)  EUR million  1,485  288 1,746  31 
.. Not available.  
 Up to 12  July 2022.  
Source:  European Commission, European Competition Network, Statistics . Viewed at: https://competition -
policy.ec.europa.eu/european -compe tition-network/statistics_en ; and Cartel  Statistics . Viewed at : 
https://competition -policy.ec.europa.eu/cartels/statistics_en . 
Table 3.28 Merger notifications and decisions, 2019 -22 
 2019  2020  2021  2022  
Notified cases  382 361 405 371 
 Withdrawn  12 9 12 12 
Phase I decisions      
 Out of scope  0 1 0 0 
 Compatible  343 334 384 354 
 Compatible with remedies  10 13 7 10 
Phase II decisions      
 Compatible  0 1 0 0 
 Compatible with remedies  6 3 4 2 
 Prohibited  3 0 0 2 
Source:  DG Competition, Mergers Cases Statistics . Viewed at:  https://competition -
policy.ec.europa.eu/mergers/statistics_en . 
3.3.4.5   Sector inquiries and reports  
3.220.   Another relevant development relates to specific sector inquiries carried out by the 
Commission.292 These inquiries help the Commission to decide whether formal investigation 
procedures should be launched. During the review period, the Commission finalized its inquiry into 
the sector of Internet of Things (IoT) for consumer -related products an d services in the 
European  Union. The published report highlighted several competition -related issues.293  
3.3.4.6   International cooperation  
3.221.   The European  Union cooperates with the competition authorities of different countries at 
both bilateral and multilateral lev els with the aim of enforcing EU competition rules at a global level, 
bearing in mind the increased number of cross -border mergers and acquisitions and global cartel 
 
292 European Commission, Antitrust: Ex Officio Investigations and Sector Inquiries . Viewed at: 
https://competition -policy.ec.europa.eu/antitrust/sector -inquiries_en . 
293 European Commission Report  COM(2022)  19 final.  WT/TPR/S/442  • European Union  
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  arrangements.294 The European  Union signs regional trade agreements containing competition policy 
chapters as well as bilateral cooperation agreements with competition authorities of third countries. 
During the review period, the European  Union and the United  Kingdom concluded, as part of their 
Trade and Cooperation Agreement, a competition chap ter that lists anti -competitive practices that 
respective competition law provisions should address and envisages cooperation between the 
relevant competition authorities.295 Moreover, the Terms of Reference of the EU -China Competition 
Policy Dialogue, appr oved in April  2019296, were the basis for the adoption of two  guidelines on the 
cooperation for the investigation of merger297 and anti -monopoly cases.298 Together with the 
United  States' competition authorities, DG Competition also launched a Joint Technology 
Competition Policy Dialogue in the context of the EU -US Trade and Technology Council. The 
published  joint statement reaffirms the intention to cooper ate in the competition policy area, 
including on enforcement issues in general and in technological sector specifically.299 At the 
multilateral level, the European  Union cooperates with, inter alia, the OECD, the International 
Competition Network (ICN), and  UNCTAD.  
3.3.5   State trading, state -owned enterprises, and privatization  
3.222.   The European  Union has notified to the WTO two state trading enterprises within the 
meaning of Article  XVII of the GATT  1994 and the Understanding on its interpretation.300 The 
two entities are Systembolaget AB (Sweden) and Alko Oy (Finland), and have exclusive rights for 
the retail sale of alcoholic beverages in their domestic markets. Since 2019, Systembolaget has also 
the exclusive right for the retail sale of non -beverage alcoholic prepar ations. The most recent 
notifications (2020  and 2022) cover the period 2019 -21 and include data on the trading activities of 
these entities since 2014. Both entities are engaged in import activities.  
3.223.   As indicated at the time of the previous Review, SOEs ar e an important component of the 
EU economy, but their number and contribution in terms of output and employment differ greatly 
across EU member States.301 Their number range approximately from very few dozens to hundreds 
of enterprises when considering owne rship (majority and minority) by central governments. In 
certain EU member States, subcentral governments are also (majority and minority) shareholders 
of enterprises, which can raise the number of entities with state participation to more than 1,000. 
Consolidated and comparable data at the EU level in this area remain limited (see below), and the 
most recent estimates publicly available were presented in the previous Review. In this regard, the 
Commission indicated that it is planning to undertake work on SOEs by EU member States and sector 
this year. SOEs operate in general on a commercial basis to achieve commercial and/or social 
objectives, and in most EU member States, their operations are primarily concentrated in the 
transport, energy, and utility sec tors.302 Some of these SOEs, in particular those in the energy sector, 
also conduct businesses outside the European  Union.  
 
294 The list of all of the European  Union's bilateral arrangements with third countries can be viewed at: 
https://competition -policy.ec.europa.eu/international/bilateral -relations_en . 
295 Trade and Cooperation Agreement between the European  Union and the European Atomic Energy 
Community, of the one part, and the United  Kingdom of Great Britain and Northern Ireland, of the other part, 
Articles  358-362. 
296 Terms of Reference of the EU -China Competition Policy Dialogue between on the one side the 
Directorate -General for Compe tition of the European Commission and on the other side the State 
Administration for Market Regulation of the People's Republic of China . Viewed at: 
http:/ /ec.europa.eu/competition/international/bilateral/agreement_tor_china_2019.pdf . 
297 Practical Guidance for Cooperation on Reviewing Merger Cases between Directorate -General for 
Competition and of European Commission and State Administration for Market Regula tion of P.R. of China . 
Viewed at: https://competition -policy.ec.europa.eu/system/files/2021 -06/practical_guidance_merger.pdf . 
298 Practical Guidance fo r Cooperation on Investigating Anti -Monopoly Cases between 
Directorate -General for Competition and of European Commission and State Administration for Market 
Regulation of P.R. of China . Viewed at: https://competition -policy.ec.europa.eu/system/files/2021 -
06/practical_guidance_antimonopoly.pdf . 
299 EU-U.S. Joint Technology Competition Policy Dialogue (2021), Inaugural Joint Statement between 
the Eu ropean Commission, the United  States Department of Justice Antitrust Division and the United  States 
Federal Trade Commission . Viewed at: https://competition -policy.ec.europa.eu/system/files/2021 -12/EU -
US_Joint_Dialogue_Statement_12.6.21_1.pdf .  
300 WTO documents G/STR/N/18/EU, 6  July 2020, and G/STR/N/19/EU, 30  June 2022. At the time of the 
previous Review, the European  Union had notified these two entities, as well as third entity that operates in the 
United  Kingdom.  
301 WTO document WT/TPR/S/395/Rev.1, 7  July 2020, Section  3.3.5.  
302 WTO documents WT/TPR/S/395/Rev.1, 7  July 2020; and WT/TPR/S/357/Rev.1, 13  October  2017.  WT/TPR/S/442  • European Union  
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  3.224.   According to the Commission, there were no significant changes in this area. The 
European  Union does not maintain a common legal frame work specific to SOEs operations and 
governance. SOEs are regulated at the national level by EU member States but are subject to the 
EU rules on non -discrimination, competition, and state aid.303  
3.225.   At the EU level, public undertakings, as they are referred t o in the TFEU, are also subject to 
some specific reporting obligations, notably regarding the establishment of a separate account 
system and the recording of some specific financial information to ensure transparency with respect 
to public funds.304 EU memb er States are also required to publish data on contingent liabilities of 
public corporations owned by central governments, as well as on information on their participation 
in them as part of their budgetary frameworks.305 Other consolidated and comparable i nformation 
on SOEs, notably on their number and activities at the EU level remains limited. This information is 
in general  – though not always – made available on an individual basis by EU member States. 
According to the OECD, as of 2021, most EU member St ates published annual reports on their SOE 
activities.306 These reports, when available (in general online), vary in their format and coverage, 
which limit their comparability. In addition, these reports are published in the national language of 
the corresp onding EU member State and do not always have an English version.307  
3.226.   Privatization plans are defined at the member State level and based on, inter alia, fiscal, 
efficiency, or public interest considerations.308 During the review period, two member States had 
privatization plans. In general, EU member States were focusing on the implementation of measures 
to improve good governance.309  
3.3.6   Government procurement  
3.227.   Based on the most recent data available, in 2020, total  general government procurement 
expenditure on works, goods, and services in the European  Union (excluding utilities) amounted to 
EUR 2,388  billion (above and below government procurement thresholds), or about 13.7% of 
GDP.310 The total value of government procurement in the European  Union for 2020 as published on 
Tenders Electronic Daily (TED), the online platform used for the publication of procurement -related 
information at the EU level, which includes defence and utilities (above government procurement 
thresholds), was about EUR  800.54  billion, 3% more than in 2019.  
3.228.   According to the latest available data, in 2016 -19, 25.7% of procurement below 
EUR 200 million was cross -border (direct and indirect) and 74.2% of contracts in value were 
awarded to domestic suppliers.311 For contracts over EUR  200 million, 32.6% of procurement was 
 
303 TFEU, Article  106. Undertakings providing services of general economic interest or being 
revenue -producing monopolies may be exempted from these rules if their appli cation obstruct the 
undertaking's performance.  
304 Commission Directive  2006/111/EC.  
305 Council Directive 2011/85/EU. Contingent liability data can be found in Eurostat: 
https://ec.europa.eu/eurostat/web/government -finance -statistics/contingent -liabilities . There are no similar 
consolidated data for the information on government participation in public and private corporations by 
individual member. In this re gard, some information can be found on national websites as reported in 
https://ec. europa.eu/eurostat/documents/1015035/16029960/_Listing -of-national -
websites_January+2023.pdf/3b5cf635 -c441-2ed0-abda-0209c4b1efc9?t=1675176370739 .  
306 OECD (2021), Ownership and Governance of State -Owned Enterprises: A Compendium of National 
Practices 2021 ; and WTO document WT/TPR/S/395/Rev.1, 7  July 2020, Table  A3.4.  
307 Some examples include the reports published by Sweden ( Annual Report for State -Owned 
Enterprises  2021. Viewed at: https://www.government.se/reports/2022/09/annual -report -for-state-owned -
enterprises -2021/ ), France ( Government Shareholding Agency (APE) Annual Report 2021 -2022). Viewed at: 
https://www.economie.gouv.fr/files/files/directions_services/agence -participations -etat/Documents/Rapports -
de-l-Etat-actionnaire/2022/RapportEtatactionnaire2022ENGL.pdf?v=1673271827 ), and Lithuania ( SOEs 
Activity Report 2020/2021 . Viewed at: https://governa nce.lt/wp -content/uploads/2022/11/VKC -VVI-Metine -
Ataskaita_2022_LT_WEB_NEW.pdf ).  
308 OECD (2018), Privatisation and the Broadening of Ownership of State -Owned Enterprises .  
309 Information provided by the Commission.  
310 Public Procurement Indicators 2018.  Viewed at: https://ec.europa.eu/docsroom/documents/48156  
and information provided by the Commission . 
311 The term "domestic" refers to cases where the supplier is based in the same country as the proc uring 
entity and is not an affiliate of a foreign company (i.e.  it is domestically owned).  WT/TPR/S/442  • European Union  
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  cross-border (direct and indirect312) and domestic suppliers were awarded 67.4% of the contracts in 
value.313 
3.229.   Based on 2021 data, resort to single sourcing varied across the European  Union from 28% 
of the number of procurement procedures in Cyprus to 1% in Greece.314 Procurement procedures 
where only a single bidder submitted a bid varied from 50% of the number of procurement 
procedures in Poland to 9% in Malta. The data show heavy relia nce on the lowest price as the sole 
award criterion: in Bulgaria, Cyprus, Czech  Republic, Estonia, Greece, Lithuania, Malta, Romania, 
Slovak  Republic, and Sweden, more than  80% of the number of procedures were awarded based on 
the lowest price criterion.  
Legislation and its implementation  
3.230.   The European  Union is a Party to the WTO  Agreement on Government Procurement, adopted 
through Council Decision 2014/115/EU, and its member States are covered by the GPA  2012.  
3.231.   The EU government procurement framework remai ned unchanged during the review period 
and is composed  of three directives that are known as the "2014 Directives": the Classical Directive, 
the Concessions Directive, and the Utilities Directive (water, energy, transport, and postal 
services).315 
3.232.   All procu rement carried out in the European  Union above specified thresholds must comply 
with the requirements of the EU Directives on procurement that implement corresponding 
EU obligations under the GPA  2012. The applicable thresholds were updated with effect fro m 
1 January  2022 (Table  3.29).316 For government procurement below the thresholds, national rules 
apply.  
Table 3.29 Government procurement thresholds in effect from 1  January  2022  
Directive  Type  Threshold in EUR 
Concessions Directive  
 All works or services concessions  5,382,000  
Classical Directive (contracts for public works, public supply and public service)  
Central 
government 
authorities  Works contracts, subsidized works contracts  5,382,000  
All contracts concerning social and other specific services listed 
in Annex  XIV 750,000  
All subsidized services  215,000  
All other service contracts and all design contests  140,000  
All supplies contracts awarded by contracting authorities not 
operating in the field of defence  140,000  
Supplies contracts awarded by contracting authorities 
operating in the field of defence  Annex  III products 
140,000  
Other products  
215,000  
 
312 In case of indirect cross -border procurement, the firm awarded the contract is "an affiliate of a 
foreign company residing in the country which launches the tende r". See Z. Kutlina -Dimitrova and C.  Lakatos, 
"Determinants of Direct Cross -Border Public Procurement in EU member States", Chief Economist Notes , 
Issue  2, July 2014. Viewed at: https://trade.ec.europa.eu/doclib/docs/2014/july/tradoc_152700.pdf .  
313 For more detailed data, see European Commission (2021), Study on the Measurement of 
Cross -Border Penetration in the EU Public Procurement Market . Viewed at: 
https://op.europa.eu/en/publication -detail/ -/publication/c7fcd46a -b84d-11eb-8aca-01aa75ed71a1/language -
en/fo rmat-PDF/source -210260521 .  
314 Single Market Scoreboard. Viewed at: https://single -market -scoreboard.ec.europa.eu/business -
framework -conditions/public -procurement_en . 
315 Directive 2014/24/EU,  Directive 2014/23/EU,  and Directive 2014/25/EU, respectively.  Other related 
EU Directives include (i)  Directive 2009/81/EC on defence and sensitive security procurement; (ii)  the 
Remedies Directive for the utilities sector (Council Directive 92/13/EEC) and the Remedies Directi ve for the 
public sector (Council Directive 89/665/EEC), as modified by Directive 2007/66/EC; and 
(iii) Directive  2014/55/EU on electronic invoicing in public procurement.  
316 See also the corresponding notification of thresholds in national currencies conta ined in 
WTO document GPA/THR/EU/3, 20  December  2021.  WT/TPR/S/442  • European Union  
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  Directive  Type  Threshold in EUR 
Subcentral 
contracting 
authorities  Works contracts, subsidized works contracts  5,382,000  
All services concerning social and other specific services listed 
in Annex  XIV 750,000  
All other service contracts, all design contests, subsidized 
service contracts, all supplies contracts  215,000  
Defence Directive  
 Works contracts  
All supplies and services contracts  5,382,000  
431,000  
Utilities (Sectors) Directive  
 Works contracts  5,382,000  
 All services concerning social and other specific services listed 
in Annex  XVII 1,000,000  
 All other services contracts, all design contests, all supplies 
contracts  431,000  
Source:  European Commission, Thresholds . Viewed at: https://ec.europa.eu/growth/single -market/public -
procurement/legal -rules-and-implementation/thresholds_en .  
3.233.   Use of the TED platform is m andatory for public contracts at or above specific thresholds. 
For public contracts below these thresholds, procuring entities can, but are not required to, publish 
relevant information on TED. Standard forms (eForms), developed for the publication of noti ces 
related to planning, tendering, limited tendering with pre -notification, contract award, contract 
modification, and change or cancellation of contract notices317, are expected to become mandatory 
from October  2023.  
3.234.   In 2020, the Commission issued a Guida nce on the participation of third -country bidders and 
goods in the EU procurement markets seeking to establish a more balanced approach given that, 
according to its assessment, a substantial portion of the world's government procurement market is 
closed to  EU suppliers.318 In this context, a new EU International Procurement Instrument (IPI)319, 
aimed at strengthening the international negotiating position of the European  Union in the area of 
government procurement and introducing limitations to participation in EU tenders for suppliers from 
non-EU countries that have adopted measures restricting access of EU suppliers to their government 
procurement market, was adopted and entered into force in 2022.  
3.235.   The IPI empowers the Commission to conduct investigations in to third -country procurement 
measures with the aim of determining whether such measures create access barriers for EU suppliers 
of goods or services in third -country government procurement markets. Depending on the results 
of the investigation and followin g consultations with the third country, the Commission can impose 
measures to limit access to the EU public procurement market for suppliers from the third  country. 
Specifically, IPI measures can take the form of an exclusion of third -country tenderers fro m the 
relevant EU government procurement procedure, or a score adjustment penalty that is applied to a 
tender submitted by a supplier of the targeted third country. IPI measures apply to EU procurement 
of works and concessions equal to or over EUR  15 million (net of VAT) and to goods and services 
equal to or over EUR  5 million (net of VAT). EU procuring entities can be exempted from application 
of the IPI only if the bids from a third country subject to IPI measures meet the tender requirements 
or the exemp tion is justified by an overriding public interest reason. If the relevant third country is 
a Party to the GPA  2012 or has a bilateral agreement with the European  Union, and the procurement 
is covered, the issue is to be resolved through the mechanisms con tained in these agreements.  
3.236.   Regulation (EU) 2022/2560 to address distortions caused by foreign subsidies in the single 
market was adopted in 2022. One of the tools under the Regulation concerns EU government 
procurement procedures with an estimated value o f over EUR  250 million. In such cases, suppliers 
participating in tenders will be required to notify to the Commission all foreign financial contributions 
that they received in the past three years above EUR  4 million per third country.320 If, after 
investi gation, the Commission finds that the supplier has received foreign subsidies distorting the 
single market, it may prohibit the award of a contract to that supplier unless the latter proposes 
 
317 Commission Implementing Regulation (EU) 2019 /1780.  
318 The Guidance can be viewed at: https://op.europa.eu/en/publication -detail/ -/publication/c3f90a8b -
4bc5-11ea-8aa5-01aa75ed71a1/language -en/format -PDF.  
319 Regulation (EU) 2022/1031.  
320 Regulation (EU) 2022/2560.  WT/TPR/S/442  • European Union  
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  commitments fully remedying the distortion caused. Fines might a lso be imposed in case of 
non-compliance, supply of incorrect or misleading information, failure to notify, or circumvention.321  
3.237.   The Commission published an updated Notice providing guidance on innovation procurement 
which, though legally non -binding, sugg ests a step -by-step approach to procurement of innovation 
from needs assessment to contract performance, including good practice cases.322  
3.238.   The Commission has developed new voluntary green public procurement (GPP) criteria for 
several sectors, including for  computers, smartphones, and road transport, to facilitate the uptake 
of such criteria in tender documentation.323 Though envisaged by the Circular Economy Action 
Plan324, no mandatory GPP criteria have been introduced so far. Other new projects related to green 
government procurement include the Farm to Fork Strategy (sustainable food systems)325, Level(s) 
(sustainable building)326, and Renovation Wave (renovation of buildings).327 
3.239.   Regarding the use of social criteria in government procurement, the European  Union has 
published good practice cases328 and a guideline on inclusion of social considerations, and has 
adopted a Directive on accessibility criteria for products and services.329 
3.240.   In response to the COVID -19 pandemic, the Commission published a gu ideline on existing 
flexibilities and options for emergency procurement under the Directives, such as the reduction of 
deadlines in case of open and restricted procedures, and recourse to direct award procedures.330 
The EU Joint Procurement Agreement, set u p to procure medicines to fight health emergencies, was 
extensively used during the pandemic, resulting in 12 joint procurement procedures and more than 
200 contracts with a total value of EUR  13 billion.331 The Commission in 2022 also proposed a new 
draft Single Market Emergency Instrument under which, where the Commission has launched a 
procurement procedure on behalf of two or more member States in an emergency situation, member 
States' procuring entities cannot organize procurement procedures for goods a nd services already 
being procured by the Commission.332 
3.241.   As part of its fifth package of sanctions against the Russian Federation, the European  Union 
in 2022 decided to prohibit the participation of Russian nationals and entities in procurement 
procedures i n the European  Union.333 
3.3.7   Intellectual property rights  
3.242.   Intellectual property rights (IPRs) continue to play a key role for EU business to maintain its 
competitiveness and play a vital part in the European  Union's economy.334 For the European  Union, 
IPRs repre sent an important factor underpinning both the response to the COVID -19 pandemic and 
its recovery and resilience -building efforts, in particular as they play a key role in incentivizing the 
 
321 For more details on the process of review and decisions the Commission might take, see Chapter  4 of 
the Regulation (EU) 2022/2560.  
322 European Commission Notice C(2021)  4320 final.  
323 The list of adopte d EU GPP criteria can be viewed at: 
https://ec.europa.eu/environment/gpp/eu_gpp_criteria_en.htm . GPP criteria for the procurement of road 
transport and office buildings are current ly being developed.  
324 European Commission Communication COM(2020)  98 final.  
325 The details of the project can be viewed at: https://ec.europa.eu/food/horizontal -topics/farm -fork-
strategy_en .  
326 The details of the project can be viewed at: https://ec.europa.eu/environment/levels_en . 
327 The details of the project can be viewed at: https://energy.ec.europa.eu/topics/energy -
efficiency/energy -efficient -buildings/renovation -wave_en . 
328 All 71 cases can be viewed at: https://ec.europa.eu/info/making -socially -responsible -procurement -
work-71-good-practice -cases_en . 
329 Directive (EU) 2019/882.  
330 European Commission Communication 2020/C 108 I/01.  
331 European Co mmission, Preparedness and Response Planning . Viewed at: 
https://ec.europa.eu/health/health -security -and-infectious -diseases/preparedness -and-response_en .  
332 European Commission Proposal  COM(2022)  459 final.  
333 Council Regulation (EU) 2022/576 . This Regulation allows certain exceptions in Article  5k(2), e.g.  for 
contracts related to the procurement of natural gas  and oil , cooperation in space programmes and fuel supply, 
and retreatment and safety of civi l nuclear capabilities . 
334 ECA (2022), EU Intellectual Property Rights . Viewed at: 
https://www.eca.europa.eu/Lists/ECADocuments/SR22_06/SR_EU -IPR_EN.pdf .  WT/TPR/S/442  • European Union  
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  knowledge -based and innovation -driven activities necessary for pos t-pandemic green and digital 
transitions.335 
3.3.7.1   Economic relevance of IPRs  
3.243.   The ever -growing economic importance of IPRs, both in terms of employment and 
contribution to GDP, was confirmed in a joint report by the European Patent Office (EPO) and the 
European  Union Intellectual Property Office (EUIPO), released in October  2022.336 Table  3.30 shows 
that 357  IPR-intensive industries generate almost  47% of the total economic activity (GDP) of the 
European  Union, worth EUR  6.4 trillion. Furthermore, they pr ovide almost 30% of total 
EU employment. The trademark -intensive industry made by far the biggest contribution both to 
employment and the European  Union's GDP, followed by the design - and patent -intensive industries. 
For the first time, the report also inc luded data, as subsets of patent - and trademark -intensive 
industries, on climate change mitigation technology (CCMT) industries, which contribute 14% of 
EU GDP and 9.3% of employment with a significant positive trade balance.  
Table 3.30 Contribution of IP industries, 2017 -19 average   
Share of total 
direct 
employment  
(%) 
Share of total 
direct and 
indirect 
employment (%)  
Share of total 
GDP 
(%) 
Average wage 
premium 
compared to non -
IPR-intensive 
industries  
(%) 
Exports  
(EUR  million)  
Imports  
(EUR  million)  
Trade balance  
(EUR  million)  
All IPR  29.7 39.4 47.1 40.7 2,701,959  2,408,212  223,826  
Copyright  6.2 8.2 6.9 49.3 229,082  249,340  -20,258  
Patent  11 17.4 17.4 65 1,559,811  1,341,864  217,947  
Plant variety  0.9 1.2 1.4 n.a. 43,248  50,743  -7,495  
Trade mark  21.1 28.9 38.5 40.4 1,547,270  1,551,618  -4,348  
Geographical 
indications (GI)  n.a. n.a. 0.1 n.a. 13,126  1,769  11,357  
Design  12.9 19.4 15.5 34.4 1,232,068  1,014,158  217,910  
CCMT  and green  9.3 n.a. 14 n.a. n.a. n.a. 36,539  
n.a. Not applicable.  
Source:  EPO/EUIPO (2022), IPR-intensive Industries and Economic Performance in the 
European  Union  – Industry -Level Analysis Report , 4th edition.  
3.244.   A further joint report by the EPO and the EUIPO released in February  2021 analysed 
firm-level data based on IPR ownership rather than industry -level data.337 It showed that firms that 
own IPRs have on average 20% higher revenue per employee than firms that do not, and that they 
pay on average 19% higher wages. It furthermore confirms that the positive effects of IPR ownership 
are amplified in the case of SMEs. SMEs that own IPRs have a 68% higher revenue per employee 
than SMEs that do not own any IPRs. Furth ermore, firms active in the information and 
communication, manufacturing, and other services sectors are the most likely to own IPRs.  
 
 
335 European Commi ssion Communication COM(2020)  760 final.  
336 EPO/EUIPO (2022), IPR-intensive Industries and Economic Performance in the European  Union – 
Industry -Level Analysis Report , 4th edition. Viewed at:  
https://documents.epo.org/projects/babylon/eponet.nsf/0/33DCE530D888258BC12 588D7004539D1/$File/ipr -
intensive_industries_and_economic_performance_in_the_EU_2022_en.pdf ; and EUIPO (2022), IPR Intensity 
and Industrial Dynamics . Viewed at: https://euipo.europa.eu/tunnel -
web/secure/webdav/guest/document_library/observatory/documents/reports/2022_IPR_intensity_and_dynami
cs_report/2022_IPR _intensity_and_dynamics_FullR_en.pdf . 
337 EPO/EUIPO (2021), Intellectual Property Rights and Firm Performance in the European  Union – 
Firm-level Analysis Report . Viewed at: https://euipo.europa.eu/tunnel -
web/secure/webdav/guest/document_library/observatory/documents/reports/IPContributionStudy/I PR_firm_pe
rformance_in_EU/2021_IP_Rights_and_firm_performance_in_the_EU_en.pdf .  WT/TPR/S/442  • European Union  
- 122 - 
  Chart 3.9 Indicators of IPR -intensive industries, January  2020 -September  2022  
(base 2019 = 100)  
 
Note:  IPR: intellectual property rights; TM: trademarks; DES: designs; PAT: patents; and CR: copyright.  
Source:  EUIPO (2022), Economic Performance of IPR Indicators:  September  2022 Update . 
3.245.   As regards the economic performance of IPR -intensive industries during the COVID -19 crisis, 
studies by the EUIPO show a sharp decline followed by swift recovery, with copyright -intensive 
industries showing the most resilience and outputs beyond pre -crisis levels in the first  half of 2022 
(Chart  3.9).338 
3.246.   In November  2020, the Commission adopted the Communication "Making the most of the 
EU's innovative potential – An intellectual property action plan to support the European  Union's 
recovery and resilience" (20 20 IP Action Plan).339 The Action Plan presents proposals for specific 
measures in five key areas: (i)  the protection of IPRs; (ii)  the uptake and use of IPRs especially by 
SMEs; (iii)  the facilitation of licensing and sharing of IPRs; (iv)  the enforcement of IPRs; and (v)  the 
fight against counterfeiting and piracy. These measures and initiatives are discussed in more detail 
in the relevant sections.  
3.247.   During the review period, the European  Union contributed actively to discussions and work 
in the TRIPS Counc il. In particular, it made important contributions to COVID -19-related agenda 
items, including a Proposal for a Waiver from Certain Provisions of the TRIPS  Agreement for the 
Prevention, Containment and Treatment of COVID -19 and IP Measures in the Context o f 
COVID -19.340 In the context of the former discussions, the European  Union contributed a proposal 
and participated actively in the negotiations among a small group of Members. The European  Union 
also submitted comprehensive reports on its technical coopera tion activities under Article  67 of the 
TRIPS  Agreement and on incentives provided to the private sector to transfer technology to LDCs 
under Article  66.2, and it co -sponsored contributions to TRIPS Council discussions relating to, 
inter alia, making MSMEs  competitive, IP for investment/financing/funding, public -private 
collaborations in innovation, and women and intellectual property.  
 
338 EUIPO (2022), Economic Performance of IPR Indicators: June  2022 Update ; and various 
updates  – March  2022, December  2021, September  2021, June  2021, and March  2021; and Econo mic Impact 
of COVID -19 Crisis in IPR -intensive Industries . Viewed at: 
https://euipo.europa.eu/t unnel -web/secure/webdav/guest/document_library/observatory/documents/reports/2
021_Economic_Impact_COVID19/2021_Economic_impact_of_COVID19_crisis_in_IPR_intensive_industries_stu
dy_FullR_en.pdf . 
339 European Commission Communication COM(2020)  760 final.  
340 See minutes of the WTO TRIPS Council, WTO  documents IP/C/M/93 -104. 
5060708090100110120130140
2020/01
2020/02
2020/03
2020/04
2020/05
2020/06
2020/07
2020/08
2020/09
2020/10
2020/11
2020/12
2021/01
2021/02
2021/03
2021/04
2021/05
2021/06
2021/07
2021/08
2021/09
2021/10
2021/11
2021/12
2022/01
2022/02
2022/03
2022/04
2022/05
2022/06
2022/07
2022/08
2022/09IPR-intensive TM-intensive DES-intensive PAT-intensive CR-intensiveChart 3.x Indicators of IPR -intensive industries in the EU 
Source: Economic performance of IPR indicators 2022 edition, September 2022 update.WT/TPR/S/442  • European Union  
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  3.248.   The European  Union is an observer to the World Intellectual Property Organization (WIPO), 
and its member States are also WI PO member States. On 26  November  2019, the European  Union 
deposited its instrument of accession to the Geneva Act of the Lisbon Agreement on Appellations of 
Origin and Geographical Indications (Geneva Act), adopted at Geneva on 20  May 2015. The Geneva 
Act entered into force on 26  February  2020.341 The European  Union and its member States342 are 
contracting parties to the International Union for the Protection of New Varieties of Plants (UPOV).  
3.3.7.2   Copyright and related rights  
3.249.   The European  Union's legal framework (acquis ) for copyright and neighbouring rights is 
shaped by a set of 13 directives and 2 regulations.343 The overarching objective of approximating 
the standards of protection is to harmonize the essential rights of authors, performers, producers, 
and broad casters in order to create a sound basis for the free movement of protected creative works 
and services, offering access to these works within the internal market.  
3.250.   Digital technologies have a strong impact on the development of the copyright -intensive 
industry. On 9  March  2021, the European Commission presented a vision and avenues for Europe's 
digital transformation by 2030, including a Digital Compass strategy that includes Digital Businesses 
as a focus. In the area of copyright, important legislative ste ps have been taken to create a single 
market for copyright -protected digital works.344 In June  2021, the deadline for the implementation 
of two recent directives expired: (i)  the Directive on Copyright in the Digital Single Market 
(Directive  (EU) 2019/790);  and (ii)  the Directive on Television and Radio Programmes (Directive 
(EU) 2019/789). Implementing acts were notified by a majority of member States.345 The 
Commission also published several reports with a focus on the online/digital environment.346 
3.251.   As part of its 2020 IP Action Plan, the Commission provided guidance on Article  17 of 
Directive  2019/790.347 Article  17 provides that online content -sharing service providers need to 
obtain an authorization from right holders for the content uploaded on their websi te. If no 
authorization is granted, they need to take steps to avoid unauthorized uploads. The guidance 
provides practical indications on the main provisions of Article  17, helping market players to better 
comply with national legislations in their impleme ntation.   
3.252.   The Commission also made available two studies mapping the challenges and opportunities 
for cultural and creative sectors in the digital decade and a study on copyright and new 
technologies.348  
3.253.   The Commission also published a report on the availability of copyright -protected works in 
accessible formats for persons with disabilities, beyond Directive (EU) 2017/1564 implementing the 
WIPO Marrakesh Treaty.349 It found a diverse landscape for the availability of accessible formats for 
persons wit h disabilities not covered by the Directive and concluded that while it will continue to 
 
341 For an overview of the status of the European  Union's participation in individual WIPO treaties, see 
WTO document WT/TPR/S/395/Rev.1, 7  July 2020, Table  3.31. See also Lisbon Notification s No. 42 and 
No. 43. Viewed at: https://www.wipo.int/treaties/en/notifications/lisbon/treaty_lisbon_42.html  and 
https://www.wipo.int/treaties/en/notifications/lisbon/treaty_lisbon_43.html . Regulation (EU) 2019/1753 
implements the Geneva Act.  
342 Except Cyprus, Greece, Luxembourg, and Malta.  
343 For an overview of relevant EU legis lation, see https://digital -
strategy.ec.europa.eu/en/policies/copyright -legislation . 
344 For a description of the main measures taken under these Directives and other leg islative measures, 
see WTO document WT/TPR/S/395/Rev.1, 7  July 2020.  
345 Directive (EU) 2019/790 and Directive (EU) 2019/789.  
346 Viewed at: https://digital -strategy.ec.europa.eu/en/library/reports -collective -management -and-
extended -licensing ; and https://digital -strategy.ec.europa.eu/en/news/commission -publishes -staff-working -
document -reporting -cross-border -portability -online -content . 
347 European Commission Communication COM(2021)  288 final.  
348 European Commission (2022), "Commission Publishes Two Studies to Map the Challenges and 
Opportunities for Cultural and Creative Sectors in the Digital Decade", 16  March. Viewed at: https://digital -
strategy.ec.europa.eu/en/news/commission -publishes -two-studies -map-challenges -and-opportun ities-cultural -
and-creative -sectors . 
349 European Commission (2022), Report on the Availability of Copyright Protected Works for Persons 
with Disabilities . Viewed at: https://digital -strategy.ec.europa.eu/en/library/report -availability -copyright -
protected -works -persons -disabilities . WT/TPR/S/442  • European Union  
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  monitor the effect of recent EU legislation on availability, the Commission does not plan to introduce 
changes to the scope of the Directive.  
3.254.   The 2020 IP Action Plan a ffirms that the Commission will continue to be actively involved in 
WIPO negotiations with the objective of reaching an agreement on a new treaty that ensures 
international protection for broadcasting organizations, and work towards securing the 
European  Union's ratification of the WIPO Beijing Treaty (signed by the European  Union in 2013), 
which grants international protection to audiovisual performances.  
3.3.7.3   Industrial property  
3.3.7.3.1   Patents  
3.255.   Currently, technical inventions can be protected in Europe either by nati onal patents, granted 
by the competent national IP authorities in EU countries (National Patent Offices (NPOs)) or by 
European patents granted centrally by the EPO.350 The granted European patent is a "bundle" of 
individual national patents. Reforms are und er way in order to create a unitary patent that provides 
uniform patent protection across participating EU member States. The "unitary patent system" is 
expected to be launched in June  2023 (see details below).  
3.256.   The EPO remains among the top five offices th at accounted for a combined share of 85.1% 
of global patent applications in 2020.351 In 2021, the EPO granted 108,799  patents, and received a 
new record high of 188,600 applications. While a decrease of patent grants was registered 
during  the pandemic in 20 20 (-3%) and 2021 ( -18.6%), patent applications remained almost stable 
in 2020 ( -0.6%) and grew by 4.5% in 2021.352 Most patent applications were in the fields of medical 
technology, digital communications, and computer technology, with ICT -related fields a ccounting for 
over 31% of all applications to the EPO. In 2021, patent applications at the EPO in the field of 
pharmaceuticals grew by 6.9%.353 
3.257.   Regulation (EU) 1257/2012 , as part of the unitary patent package, allows right holders to 
receive unitary patent protection in up to 25 EU member States, based on a single application.354 
Currently, all EU member States except Croatia and Spain participate in this enhanced cooperation. 
It will apply from the date of entry into force of the international Agreement on t he Unified Patent 
Court (UPC Agreement). Pending ratification by Germany, the UPC Agreement is currently expected 
to enter into force on 1  June 2023, initially covering 17 EU member States.355 This would end a 
transition period under the Protocol on the Pro visional Application of the UPC Agreement, which was 
put in place from 19  January  2022 onwards as a preparatory step towards full application of all 
elements of the package.356 As of June  2023, the UPC would start receiving cases. The 2020 IP 
 
350 European Commission, Patent Protection in the EU . Viewed at: https://single -market -
economy.ec.europa.eu/industry/strategy/intell ectual -property/patent -protection -
eu_en#:~:text=Currently%2C%20(technical)%20inventions%20can,by%20the%20European%20Patent%20O
ffice%20.   
351 WIPO (2021), World Intellectual Property Indicators 2021 . Viewed at: 
https://tind.wipo.int/record/44461 . 
352 EPO, Statistics and Trends  (status: 21  January  2019). Viewed at: https://www.epo.org/about -
us/annual -reports -statistics/statistics.html#granted . 
353 EPO, Insight into Vaccine Technologies . Viewed at: https://www.epo.org/about -us/annual -reports -
statistics/statistics/2021/insight -into-vaccines.html .  
354 European Commission, The Unitary Patent System . Viewed at:  https://single -market -
economy.ec.europa.eu/industry/strategy/intellectual -property/patent -protection -eu/unitary -paten t-system_en . 
Regulation (EU) 1257/2012; Council Regulation (EU) 1260/2012, which deals with applicable translation 
arrangements ; and WTO documents WT/TPR/S/284/Rev.2, 28  November  2013, paras.  3.257 -3.267; and 
WT/TPR/S/357/Rev.1, 13  October 2017, paras.  3.270-3.274.  
355 The text of the Agreement on a Unified Patent Court can be accessed at: 
OJ:C:2013:175:0001:0040:EN:PDF . As of November  2022, 16  EU countries  have ratified the UPCA, with 
Germany completing its domestic procedures. European Council, Agreement on a Unified Patent Court (UPC) . 
Viewed at: https://www.consilium.europa.eu/en/documents -publications/treaties -
agreements/agreement/?id=2013001 ; and European Commission, The Unitary Patent System . Viewed at: 
https://single -market -economy.ec.europa.eu/industry/strategy/intellectual -property/patent -protection -
eu/unitary -patent -system_en .  
356 Unified Patent Court (2022), "Austria Closes the Loop – the Prot ocol on Provisional Application of the 
UPC Agreement Has Entered into Force", 19  January. Viewed at: https://www.unified -patent -
court.org/news/austria -closes -loop-protocol -provisional -application -upc-agreement -has-entered -force.  WT/TPR/S/442  • European Union  
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  Action Plan al so tasks the Commission to support a rapid roll -out of the unitary patent system, to 
create a one -stop shop for patent protection and enforcement across the European  Union.  
3.258.   As part of its Digital Single Market Strategy and 2020 IP Action Plan, the Commissi on 
continues to attach importance to removing unnecessary barriers in the market for the licensing of 
standard essential patents (SEPs). Based on its 2017 Communication to the Institutions on Setting 
out the EU approach to Standard Essential Patents, the C ommission currently strives to improve 
transparency and predictability in SEP licensing by encouraging industry -led initiatives in the most 
affected sectors.357 In support of such efforts, the Commission published several studies including 
(i) a Pilot study  for assessment of Standard Essential Patents; (ii)  a Landscape study of potentially 
essential patents disclosed to the European Telecommunications Standards Institute (ETSI); (iii)  a 
study on "Making the rules: The governance of Standard Development Organ isations and their 
policies on Intellectual Property Rights"; and (iv)  a study on the relationship between open source 
software and standard setting.358 
3.259.   Regarding biotechnological inventions, in July  2017, the Administrative Council of the EPO 
adopted a dec ision amending relevant rules of the Implementing Regulations to the European Patent 
Convention (EPC).359 The amended rules clarify, inter alia, that "under Article  53(b) EPC, European 
patents shall not be granted in respect of plants or animals exclusively  obtained by means of an 
essentially biological process" (Rule  28(2)). In the review period, the EPO's Enlarged Board of Appeal 
confirmed that, in light of the agreement between and practice of the 38 Contracting States of the 
EPC (which all exclude the pa tentability of plants or animals exclusively obtained by means of an 
essentially biological process), under the Convention, these products should be considered excluded 
from patentability.360 
Supplementary protection certificates  
3.260.   The EU legal framework offe rs supplementary protection certificates (SPCs) for medicinal 
products (Regulation (EC)  469/2009) and plant -protection products (Regulation (EC)  1610/96) as a 
sui generis  form of protection that only applies after expiry of the basic patent.361 They are 
considered by the European  Union as legally distinct from patent protection, including international 
obligations in this regard, and accordingly as potentially subject to wider exceptions than patent 
rights as such. According to information provided by the Co mmission, between 25 and 81 SPC 
applications were filed annually per member State and more than 26,000 national SPCs have been 
granted since 1993. The regulations create binding rules at the EU level, while other areas are 
subject to the applicable nationa l legislation of the EU member States. While no "unitary SPC" existed  
as of end -2022, optimizing the supplementary protection certificates system to make it more 
transparent and efficient is one of the goals, and a related Call for Evidence was published i n 
March  2022.362 
3.261.   In the review period, the Commission completed an evaluation of the existing regulations.363 
It found that while SPCs  seem to fulfil their purpose generally, the fact that they are nationally 
administered and managed undermine the effectiveness and efficiency of the SPC system as it 
created legal uncertainty, red tape, and extra costs for businesses, especially SMEs. The  evaluation 
also describes the overall transparency of the SPC system as suboptimal, especially in a cross -border 
 
357 European Commission Communication COM(2017)  712 final.  
358 European Commission, Standard Essential Patents , Viewed at: https://single -market -
economy.ec.europa.eu/industry/strategy/intellectual -property/patent -protection -eu/standard -essential -
patents_en . 
359 EPO, Decision of the Administrative Council of 29  June 2017 amending Rules  27 and 28 of the 
Implementing Regulations to the European Patent Convention (CA/D 6/17).  Viewed at: 
https://www.epo.org/law -practice/legal -texts/official -journal/2017/07/a56.html . 
360 See Case Number: G  3/19 – Referral pursuant to Art.  112(1)(b) EPC by the president of the 
European  Patent Office – "Article  164(2) EPC / Pepper". Viewed at: 
https://documents.epo.org/projects/babylon/eponet.nsf/0/09D15FA10C1A3 A55C125856C0057B988/$File/Refe
rral%20under%20Art.%20112(1)(b)%20EPC_G%2003 -19.pdf . 
361 WTO document WT/TPR/S/357/Rev.1, 13  October  2017, paras.  3.282 -3.287.  
362 European Commission, Medicinal & Plant Protection Products – Single Procedure for the Granting of 
SPCs. Viewed at: https://ec.europa.eu/info/law/better -regulation/have -your-say/initiatives/13353 -Medicinal -&-
plant-protection -products -single -procedure -for-the-granting -of-SPCs_en . 
363 Staff Working Document SWD(2020)  292 final . WT/TPR/S/442  • European Union  
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  perspective. In this regard, the Commission published a new study on the options for a unified SPCs 
system in Europe.364  
3.3.7.3.2   Plant variety rights  
3.262.   Plant varieties can be protected either under national plant variety right systems or as a 
Community Plant Variety Right (CPVR).365 National plant variety rights or patents cannot coexist 
with CPVRs; when a CPVR  is granted, the corresponding national title becomes ineffective as long 
as the CPVR is in force. As regards the latter, Council Regulation (EC) 2100/94 on CPVRs established 
a separate regime that provides for a unitary right to exploit a plant variety wi th effect across the 
European  Union via a single application to the Community Plant Variety Office (CPVO). The term of 
protection is 25  years, and 30  years in the case of potato, vine, and tree varieties, as well as for 
varieties of the species Asparagus o fficinalis L. and of the species groups flower bulbs, woody small 
fruits, and woody ornamentals.366 
3.263.   CPVRs are granted and administered by the CPVO. On 28  September  2022, 30,433 titles 
were in force, with 2,978 titles granted in 2020 and 2,860 in 2021, which  represented a slight 
decrease as compared to a record number of 3,188 in 2019.367 Just under half of the titles in force 
were for ornamental crops (13,483), followed by agricultural (9,255) and vegetable (5,395) crops, 
while the fruit sector ranked last, w ith only 2,300 titles.  
3.3.7.3.3   Trademarks  
3.264.   Trademarks can be registered in the European  Union either under national trademark 
systems or under the EU trademark system, which provides the right holder with EU -wide protection 
by means of a single registration at the EUIPO.368 New Guidelines on EU trade marks and on 
registered Community designs entered into force on 31  March  2022.369 Since the European  Union's 
adherence to the Madrid Protocol in  2004, international registration of a trademark at WIPO is also 
available to  persons seeking protection in any country that is a signatory to the Madrid Protocol.  
3.265.   In 2021, the EUIPO received 197,898 European  Union trade  mark (EUTM) applications, 
which shows a steady increase over time (167,700 applications in 2020 and 160,377  applications 
in 2019).370 Direct applications amounted to 165,922 in 2021, and applications for international 
registrations to 31,976, equivalent to 16.2% of the total number of applications. In terms of 
processing, as in previous years, the number of EUTMs exa mined, registered, and published reported 
steady increases over the reporting period, with a marked increase (around 16% on average) 
in 2021.  
3.266.   A EUIPO report on Green EU trade marks shows a trend towards use of terms that can be 
said to be related to the pr otection of the environment and sustainability in trademark registration, 
with an increasing share of such filings by non -EU owners. It also shows that SMEs play an important 
role in bringing "green" goods and services to the marketplace.371 
 
364 European Commission (2022), Study on the Options for a Unified Supplementary Protection 
Certificates (SPC s) System in Europe . Viewed at: https://data.europa.eu/doi/10.2873/63550 . 
365 WTO document WT/TPR/S/357/Rev.1, 13  October  2017, paras.  3.285 -3.290.  
366 Regulation (EU) 2021/1873.  
367 CPVO, Statistics . Viewed at: https://cpvo.europa.eu/en/statistics .  
368 WTO documents WT/TPR/S/357/Rev .1, 13  October  2017, p.  119 et seq., and WT/TPR/S/395/Rev.1, 
7 July 2020. 
369 See Decision No.  EX-22-1 and https://guidelines.euipo.europa.eu/1935303/1950066/trade -mark-
guidelines/1 -introduction .  
370 EUIPO, Consolidated Annual Activity Report 2021 . Viewed at: https://euipo.europa.eu/tunnel -
web/secure/webdav/guest/document_library/contentPdfs/about_euipo/a nnual_report/annual_activity_report_2
021_en.pdf . The 2020 and 2019 Reports are available at: https://euipo.europa.eu/ohimportal/en/annual -
report . 
371 EUIPO (2021), Green EU Trade Marks . View ed at: https://euipo.europa.eu/tunnel -
web/secure/webdav/guest/document_library/observatory/documents/reports/2021_Green_EU_trade_marks/2
021_Green_EU_trade_marks_FullR_en.pdf .  WT/TPR/S/442  • European Union  
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  3.267.   A 2021 EUIPO re port on licensing activities by SMEs finds that the average estimated 
revenue for all SME owners of EUTMs licensing out their EUTMs during the period 2013 -17 is 
EUR 64,924 per year, corresponding to 5.7% of the average turnover for all SMEs in the 
European  Union.372 
3.3.7.3.4   Designs  
3.268.   Designs can be protected in the European  Union either under national design protection 
systems or under EU community design legislation.373 The latter offers protection as an EUIPO 
registered Community design (RCD) valid for five years and  renewable for up to 25 years, or as 
unregistered Community design (UCD) right for a non -extendable period of three years from the 
date on which the design was first made available to the public within the European  Union.374 
In 2021, a total of 115,563 RCD filings were received, which included 100,975 direct filings and 
14,588  international designs via the WIPO Hague System. An increase of 4.18% was reported in the 
number of examined RCDs, reaching 103,904 designs.375 
3.269.   On 28  November  2022, the Commission adopt ed two (package) proposals to modernize its 
legislation on design protection.376 Based on the 2020 IP Action Plan, they are designed to simplify 
and streamline the procedure for the EU -wide registration of a design, harmonize procedures, and 
ensure compleme ntarity with national design systems, and allow reproducing original designs for 
repair purposes of complex products.377 
3.3.7.3.5   Geographical indications  
3.270.   While the harmonization of GI protection within the European  Union is advanced with regard 
to agricultural products, protection for non -agricultural product GIs is currently only available at the 
national level in a number of member States.378 On 13  April 2022, the Commission adopted 
a proposal for a Regulation on  GIs for craft and industrial products. The proposal aims to enable 
producers to protect GIs for those products and their traditional know -how in Europe and beyond.  
3.271.   Protection for agricultural produ cts at the EU  level can be obtained in one of the following 
ways: as a protected designation of origin (PDO) or a protected GI (PGI) for wines and agricultural 
products and foodstuffs, or as a GI for spirit drinks.379 On 31  March  2022, the Commission adopte d 
a proposal for a Regulation on GIs for wine, spirit drinks and agricultural products, and quality 
schemes for agricultural products. The proposal aims to increase the uptake of GIs across the 
European  Union in order to benefit the rural economy and achie ve a higher level of protection for 
the registered names, especially online.  
 
372 EUIPO (2021), Licensing Activities by SMEs: Evidence from EU Trade Mark Owners . Viewe d at: 
https://euipo.europa.eu/tunnel -
web/secure/webdav/guest/document_library/observatory/documents/reports/2019_Licensing_activities_by_SM
Es_evidence_from_EU_trade_mark_owners/2019_Licensing_activities_by_SMEs_evidence_from_EU_trade_ma
rk_owner s_Full_en.pdf . 
373 Harmonized through Directive 98/71/EC; Council Regulation (EC) 6/2002 ; Commission Regulation 
(EC) 2245/2002; and Commission Regulation (EC) 2246/2002.  
374 EUIPO, Designs in the European  Union . Viewed at: https://euipo.europa.eu/ohimportal/en/designs -
in-the-european -union .  
375 EUIPO, Consolidated Annual Activity Report 2021 . Viewed at: https://euipo.europa.eu/tunnel -
web/secure/webdav/guest/document_library/contentPdfs/about_euipo/annual_report/annual_activity_report_2
021_en.pdf . 
376 European Commission Proposals COM(2022)  666 final and COM(2022)  667 final.  
377 European Commission (2022), "Intellectual Property: New Rules Will Make Industrial Designs 
Quicker, Cheaper and More Predictable", 29  November. Viewed at: 
https://ec.europa.eu/commission/presscorner/detail/en/ip_22_7216 . 
378 For an overview of EU member States' GI protection and enforcement systems, see EUIPO (2017), 
Protection and Control of Geographical Indications for Agric ultural Products in the EU Member States . Viewed 
at: https://euipo.europa.eu/tunnel -
web/secure/webdav/guest/document_library/observatory/documents/reports/Enforcement_of_GIs/EUIPO_Geo
graphical_Indications_full_report_en.pdf . GIs for non -agricultural products may also be protected as collective 
EU trademarks,  and under unfair competition laws.  
379 WTO documents WT/TPR/S/357/Rev.1, 13  October 2017, paras.  3.302 -3.315, and IP/C/M/86/Add.1, 
12 September 2017, para.  6. WT/TPR/S/442  • European Union  
- 128 - 
  3.272.   As regards GIs of products of non -EU origin, they may be protected in the European  Union 
through direct application, listing in FTAs or entering in the Geneva Act Register. In the  former, the 
application may be sent either directly, or through the authorities of the country where the 
geographical area is located, to the Commission. No  fees are to be paid for applications from 
third countries. GIs applied for and entered in the Union registers may be consulted on eAmbrosia 
(the official database of EU GI registers), while both EU and non -EU GIs protected under agreements 
can be consulted  on the GIview portal.380 Of the 5,117 GIs, PGIs, and PDOs protected in the 
European  Union, 1,904  originate in non -EU countries, of which 1,679  are protected under 
agreements.  
3.273.   Given the importance of GIs for the European  Union's external trade, the Commissi on has 
sought to include a comprehensive section on GI protection for agricultural products in the more 
recent generation of FTAs. As a consequence, a large number of EU and third -country GIs are now 
protected through bilateral and regional agreements. For example, the EU -New Zealand Trade 
Agreement has been concluded and, once entered into force, it will protect the full list of EU wines 
and spirits (close to 2,000  names) and 163 of the most renowned EU food GIs. In return, 23 wines 
and spirits from New  Zealand will be protected in the European  Union. The Agreement also foresees 
the opportunity to add more GIs in the future.  
3.3.7.3.6   Undisclosed information and access to data  
3.3.7.3.6.1   Trade secrets  
3.274.   Trade secrets are protected under the Directive on the Protection of Undisclo sed Know -How 
and Business Information (Trade Secrets) Against Their Unlawful Acquisition, Use and Disclosure 
(the Trade Secrets Directive). The 2020 IP Action Plan tasks the Commission to promote data access 
and sharing, while safeguarding legitimate inter ests, via clarification of certain key provisions of the 
Trade Secrets Directive ( 2016/943) and a review of the Database Directive (96/9/EC).  
3.275.   In February  2022, the Commission proposed new rules on who can use and access data 
generated in the European  Union  across all economic sectors, in the form of a Data Act.381 Among 
other things, the aim is to ensure respect for trade secrets in the context of data sharing between 
businesses, public sector bodies, or consumers. According to the proposal, trade secrets sh all only 
be disclosed if all necessary measures are taken to preserve their confidentiality. The proposal does 
not affect the legal protection of trade secrets and clarifies that the Database Directive sui generis  
protection does not apply to databases con taining data generated by a connected product or related 
service . The Commission has published a study on the legal protection of trade secrets in the context 
of the data economy.382 
3.3.7.3.6.2   Clinical trial data  
3.276.   The EU legal framework on the protection of clinical t rial data provides for a regime of 
exclusivity periods of eight plus two plus one years, during which generic manufacturers cannot rely 
on the data submitted by the originator company to the regulatory authorities to obtain marketing 
approval, nor market t he generic product.383 
3.277.   The Clinical Trials Regulation (Regulation (EU) 536/2014) (CTR) became applicable on 
31 January  2022. It repealed the Clinical Trials Directive (Directive 2001/20/EC) and related 
implementing legislation in the EU member States.  
 
380 European Commission, eAmbrosia . Viewed at:  https://ec.europa.eu/info/e -ambrosia -database . 
GIview. Viewed at:  https://www.tmdn.org/giview/ .  
381 European Commission, Data Act: Proposal for a Regulation on Harmonised Rules on Fair Access to 
and Use of Data . Viewed at:  https://digital -strategy.ec.europa.eu/en/library/data -act-proposal -regulation -
harmonised -rules-fair-access -and-use-data.  
382 European Commission (2022), Study on the Legal Protection of Trade Secrets in the Context of the 
Data Economy: Final Report . Viewed at: https://op.europa.eu/en/publication -detail/ -/publication/c0335fd8 -
33db-11ed-8b77-01aa75ed71a1/language -en/format -PDF/source -273349880 .  
383 Directive 2004/27/EC. See also WTO document WT/TPR/S/357/Rev.1, 13 October  2017, 
paras.  3.330 -3.334.  WT/TPR/S/442  • European Union  
- 129 - 
  3.278.   In line with its updated policy on publication of clinical data for medicinal products for human 
use, since 1  January  2015, the European Medicines Agency (EMA) publishes clinical trial data 
submitted by pharmaceutical companies to support their requests for mar keting authorization; these 
are assessed by the Committee for Human Medicinal Products.384 On 5  December  2018, the 
Agency  suspended the publication of clinical trial data  as a result of the implementation of the  EMA's 
business continuity plan  and it remains  suspended as at end -2022 because of the COVID -19 
pandemic. The EMA is, however, publishing clinical trial data for COVID -19 medicines in line with its 
exceptional transparency measures for COVID -19 treatments and vaccines.385 For the latter, the 
EMA publis hes clinical trial data submitted to the Agency as part of any regulatory procedure as 
these products follow rapid review procedures and can be subject to early access mechanisms. As a 
result, companies submit clinical trial data on a regular basis and wit hin different types of regulatory 
procedures.  
3.3.7.4   Enforcement  
3.279.   The European Observatory on Infringements of IPRs (Observatory) has among its principal 
tasks to collect and monitor information regarding counterfeiting and piracy in the European  Union's 
internal market, as well as to foster collaboration through a network of public and private sector 
actors.386 In order to provide evidence and data required for EU  policymakers to take informed 
decisions, the Observatory hosts several important information resources  regarding IPR 
enforcement, in particular the EUIPO -administered Enforcement Database as the single platform 
covering IPR  enforcement matters.387 
3.280.   In the reporting period, the EUIPO carried out a number of studies highlighting the risks 
deriving from, and th e economic impact of, counterfeiting and piracy in the European  Union. Notably, 
the joint EUIPO/OECD 2022 study on dangerous fakes quantitatively assesses the scope and trends 
of trade in counterfeit products that pose health, safety, and environmental thr eats.388 It finds that 
apparel products, automotive spare parts, optical and medical apparatuses, and pharmaceuticals 
are the most frequently occurring dangerous fakes. Postal parcels, driven by the rising popularity of 
e-commerce, were identified as the mo st common method of shipping dangerous fakes, thereby 
significantly complicating screening and detection processes and lowering the risk of detection and 
penalties.  
3.281.   These findings are confirmed by other studies, such as the EUROPOL/EUIPO 2022 Intellectual 
Crime Threat Assessment, which finds that counterfeit and pirated goods worth EUR  119 billion were 
imported into the European  Union in 2019, representing up to 5.8% of EU imports.389 It also points 
out that the COVID -19 pandemic has presented new risks for the distribution of substandard and 
counterfeit goods, including in pharmaceuticals.390 It draws on the findings reported in a 2021 
OECD/EUIPO study that analyses customs seizures in  2017-19 and identifies both the product 
categories most vulnerable to counterfeiting and main trade routes and transport methods (small 
parcels in seizure numbers and marine shipping in value).391 More specific reports address, inter alia, 
 
384 For policy on publication and comparison with the CTR, see relevant sections of EMA, Clinical Data 
Publication . Viewed at: https://www.ema.europa.eu/en/human -regulatory/marketing -authorisation/clinical -
data-publication . For an overview of information included in clinical test data, see WTO document 
WT/TPR/S/395/Rev.1, 7  July 2020.  
385 EMA, Transparency: Excepti onal Measures for COVID -19 Medicines . Viewed at:  
https://www.ema.europa.eu/en/human -regulatory/overview/public -health -threats/coronavirus -disease -covid-
19/treatments -vaccines/transparency -exceptional -measures -covid-19-medicines .  
386 WTO document WT/TPR/S/357/Rev.1, 13  October  2017, para.  3.343.  
387 The database can be accessed at: https://euipo.europa.eu/ohimportal/da/web/observatory/ ip-
enforcement -portal -home -page. 
388 OECD and EUIPO (2022), Dangerous Fakes: Trade in Counterfeit Goods that Pose Health, Safety and 
Environmental Risks . Viewed at: https:// www.oecd -ilibrary.org/governance/dangerous -fakes_117e352b -en.  
389 EUIPO and EUROPOL (2022) , Intellectual Property Crime Threat Assessment 2022 . Viewed at: 
https://euipo.europa.eu/tunnel -
web/secure/webdav/guest/document_library/observatory/documents/reports/2022_IP_Crime_Threat_Assessm
ent/IP_Crime_Threat_Assessment_20 22_FullR_en.pdf . 
390 OECD and EUIPO (2020), Trade in Counterfeit Pharmaceutical Products . Viewed at: 
https://doi.org/10.1787/a7c7e054 -en.  
391 OECD and EUIPO (2021), Global Trade in Fakes: A Worrying Threat . Viewed at: 
https://euipo.europa.eu/tunnel -
web/secure/webdav/gu est/document_library/observatory/documents/reports/2021_EUIPO_OECD_Report_Fake
s/2021_EUIPO_OECD_Trate_Fakes_Study_FullR_en.pdf .  WT/TPR/S/442  • European Union  
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  the transport methods most subject to misuse and identify best practices for transport and logistics 
services in preventing the use of their services for IP -infringing activities.392 
3.282.   Enforcement of IPRs in the dig ital environment remained a topic of particular interest in the 
reporting period. EUIPO publications addressed topics related to the misuse of e -commerce 
platforms, including related business models through vendor accounts; social media; online 
copyright i nfringement in the music, film, and TV sectors; domain names and cybersquatting; 
advertisement on IPR -infringing websites; online payments; and novel technologies such as AI and 
automated content recognition including with regard to their use in fighting I PR infringement.  
3.283.   Best practices in IPR enforcement are presented in a 2021 EUIPO report.393 To make case 
law more accessible, the EUIPO also publishes information on cases related to IP law enforcement, 
through an online database and reports including with regard to online IPR infringement and dynamic 
blocking injunctions.394 
3.284.   Importantly, the IP Enforcement Portal as the EU platform to manage customs applications 
for action (AFA) and deal with IPR enforcement matters permits all right holders, enforcers, and the 
Commission and its third -country delegations to enter information related to IPR enforcement.395 
3.3.7.4.1   Enforcement within the European  Union  
3.285.   During the review period, enforcement of IPRs, both in traditional commerce and online, 
continued to be framed by Dire ctive 2004/48/EC on the Enforcement of IPRs (IPRED) and 
Directive  2001/29/EC.396 
3.286.   Following the publication of the updated Guidance Communication clarifying the provisions 
of the IPRED as part of an overall comprehensive package of measures to further improv e the 
application and enforcement of IPR (the "enforcement package")397 in the previous review period, 
the Commission continued its work on enforcement through the activities of the Observatory, the 
preparation of the EU Toolbox against Counterfeiting as an nounced in the 2020 IP Action Plan and 
by further expanding public -private sector MoUs on online advertising and IPR and the sale of 
counterfeit goods on the Internet.398 
3.287.   The reports covering 2020 and 2021 examine the detentions of IPR -infringing goods in t he 
EU internal market. The number of detained items increased from approximately 46  million items 
 
392 OECD and EUIPO (2021 ), Misuse of Containerized Maritime Shipping in the Global Trade of 
Counterfeits . Viewed at: https://euipo.europa.eu/tunnel -
web/secure/webdav/guest/document_library/observatory/documents/reports/Misuse_of_Containerised_Maritim
e_Shipping/Misuse_of_Containerised_Maritime_Shipping_en.pdf . EUIPO (2022), Transport and 
Logistics  – Discussion Paper: Chal lenges and Good Practices for Transport and Logistics Services to Prevent the 
Use of Their Services for IP -infringing Activities . Viewed at: https://euipo.europa.eu/tunnel -
web/secure/webdav/guest/document_library/observatory/documents/reports/2022_Transport&Logistics_Discu
ssion_Paper/2022_Transpo rt&Logistics_Discussion_Paper_FullR_en.pdf .  
393 EUIPO (2021), Interagency Cooperation at National and International Level: An Assessment of Good 
Practices for Improving IPR Enforcement . Viewed at: https://euipo.europa.eu /tunnel --
web/secure/webdav/guest/document_library/observatory/documents/reports/2021_Interagency_Cooperation/
2021_Interagency_Cooperation_at_National_and_International_Level_An_assessment_of_good_practices_for_i
mproving_IPR_enforcement_study_FullR_en.pdf .  
394 EUIPO, Case-Law. Viewed at: https://euipo.europa.eu/ohimportal/da/web/observatory/case -law. 
Gives access to recent case -law, eSearch Case Law, and reports and studies.  
395 EUIPO, IP Enforcement Portal . Viewed at:  
https://euipo.europa.eu/ohimportal/da/web/observatory/ip -enforcement -portal -home -page.  
396 WTO documents WT/TPR/S/317/Rev.1, para.  3.307, Table  3.23; and WT/TPR/S/357/Rev.1, 
13 October  2017, para.  3.339 et seq.  
397 European Commission, Intellectual Property . Viewed at: 
https://ec.europa.eu/growth/industry/intellectual -property_en#enforcement_package ; and WTO document 
WT/TPR/S/395/Rev.1, paras.  3.377 and 3.378.  
398 European Commission, Memorandum of Understanding on Online Advertising and IPR . Viewed at:  
https://single -market -economy.ec.europa.eu/industr y/strategy/intellectual -property/enforcement -intellectual -
property -rights/memorandum -understanding -online -advertising -and-ipr_en ; and Memorandum of 
Understanding on the Sale of Counterfeit Goods on the Internet . Viewed at: https://single -market -
economy.ec.europa.eu/industry/strategy/intellectual -property/enforc ement -intellectual -property -
rights/memorandum -understanding -sale-counterfeit -goods -internet_en .  WT/TPR/S/442  • European Union  
- 131 - 
  in 2020 to around 53  million in 2021, with a nearly stable value at around EUR  1.3 billion.399 In 2021, 
over 99% of those seizures were made in six  member Stat es (France, Hungary, Italy, the 
Netherlands, Portugal, and Spain) and more than 93% of seizures reportedly concerned 
counterfeit/trademark infringing goods, followed by copyright (6.5%) infringing goods. Top product 
categories included textiles and clothin g, as well as audio/video apparatus.  
3.3.7.4.2   Enforcement at the European  Union's external borders  
3.288.   IPR e nforcement at the European  Union's external borders is governed by Regulation 
(EU) 608/2013, and Commission Implementing Regulation (EU)  1352/2013 as amended by 
Commission Implementing Regulation (EU) 2020/2035.400 The enforcement of IPRs by customs 
continues to be a priority for the Commission and for member States. At the external border of the 
European  Union, customs authorities may suspend the release of, or de tain, goods that are 
suspected of infringing, or are found to have infringed, IPRs. In most cases, customs authorities act 
upon applications from right holders. However, they may also act ex officio  if they have sufficient 
grounds for suspecting that goods  infringe an IPR. In such cases, they will notify the 
detention/suspension to the importer within one working day, and to the right holder on the same 
day or promptly thereafter. The right holder must submit an application for action within four working 
days of receiving the notification. If no application is submitted within this period, the goods are 
released.  
3.289.   The European Commission's annual reports provide statistical information and data about 
customs interventions that support the analysis of IPR infr ingements occurring in the 
European  Union. According to the latest report, in nearly 70,000 cases, IPR -infringing goods were 
detained by customs in  2018 and 2020, with a marked temporary increase to around 90,000 cases 
in 2019 and nearly 75,000 cases recor ded in 2021.401 These represented just under 27  million 
articles in 2018 and 2020 and approximately 40  million in 2019 and nearly 42  million in  2021. 
3.290.   In terms of number of counterfeit articles, detentions in sea traffic still stand for the majority 
of all d etained articles, while an increase can also be noted in air, express courier and post. In terms 
of provenance, China remains the main source (70%) of suspected IPR -infringing goods detained by 
EU customs, and which were subsequently not released. With reg ard to value of detained goods, 
China is at the top of the list, followed by Hong  Kong,  China and Türkiye, as in previous years.  
3.291.   Top categories of detained articles in 2021 included packaging materials (with a marked 
increase to 70%, mainly for cigarette p ackaging, as compared to 23% in 2020 for perfumes and 
juices), while mobile phone accessories moved up to 2nd place and toys to 3rd place (occupied in  2020 
by foodstuffs and clothing). As in previous years, the majority of the articles (i.e.  almost 98% in 
number of articles and over 92% in value in 2021, as compared to 62% in numbers, and 71% in 
value in 2020) detained by customs in 2021 and 2020 were suspected of infringing an EUTM, 
international trademark, or national trademark.  
3.292.   The majority of detentions  resulted in the destruction of goods, and under 4% of detained 
goods are later found to be genuine or non -infringing. The results by procedure in 2021 are shown 
in Chart  3.10. 
 
399 European Commission and EUIPO (2021), EU Enforcement of Intellectual Property Rights: Results at 
the EU Border and in the EU Internal Market 2020 . Viewed at:  https://e uipo.europa.eu/tunnel -
web/secure/webdav/guest/document_library/observatory/documents/reports/2021_EU_enforcement_intellectu
al_property_rights/2021_EU_enforcement_intellectual_property_rights%20_FullR_en.pdf ; and (2022), 
EU Enforcement of Intellectual Prope rty Rights: Results at the EU Border and in the EU Internal Market 2021 . 
Viewed at: https://euipo.europa.eu/tunnel -
web/secure/webdav/guest/document_library/observatory/documents/reports/2022_EU_enforcement_of_IPRs_
2021/2022_EU_enforcement_of_IPRs_results_2021_FullR_en.pdf .  
400 For a more detailed descriptio n of older regulations, see WTO document WT/TPR/S/317/Rev.1, 
13 October  2017, paras.  3.304 -3.305. For an overview of the main provisions relating to border measures, see 
also ibid., Table  3.23. Commission Implementing Regulation (EU) 2020/2035 .  
401 European Commission and EUIPO (2022), EU Enforcement of Intellectual Property Rights: Results at 
the EU Border and in the EU Internal Market 2021 . EUIPO (2021), EU Enforcement of Intellectual Property 
Rights: Overall Results of Detentions, 2019 . Viewed at:  https://euipo.europa.eu/tunnel -
web/secure/we bdav/guest/document_library/observatory/documents/reports/2021_Enforcement_IP_Detencion
s/2021_Report_on_overall_EU_detentions_during_2019_FullR_en.pdf . WT/TPR/S/442  • European Union  
- 132 - 
  Chart 3.10 Breakdown of result by procedure, 2021  
 
Source:  European  Commission (2022), EU Enforcement of Intellectual Property Rights: Results at the 
EU Border and in the EU Internal Market 2021 .  
3.3.7.4.3   Enforcement at the international level  
3.293.   The European  Union's current strategy to enforce IPR s in non -EU countries has been in place 
since 2014.402 In the review period, the Commission published its updated Counterfeit and Piracy 
Watch List.403 The Watch List reflects the result s of stakeholder consultations. It presents a 
non-exhaustive list of examples of reported third -country online marketplaces or service providers 
which allegedly engage in, facilitate or benefit from counterfeiting and piracy. The aim is to 
encourage the op erators and owners, as well as the responsible local enforcement authorities and 
governments, to take the necessary actions and measures to reduce and/or prevent any IPR 
infringements, and to raise consumer awareness. Furthermore, a general analysis can be  found in 
the Commission's 2021 report on the protection and enforcement of IPRs in third countries.404 
3.294.   The European  Union also aims to include, in its RTAs with third  countries, comprehensive 
IPR chapters offering similar levels of IPR protection and enfor cement to those existing in the 
European  Union, taking into account the level of development of the countries concerned. It engages 
in several active discussions on IP with other countries. The Commission finances and steers several 
technical cooperation p rogrammes, aimed at strengthening IPR protection and enforcement in 
third countries. In general, the EUIPO is entrusted with the technical implementation of those 
cooperation programmes.  
 
402 WTO document WT/TPR/S/357/Rev.1, 13  October  2017, para.  3.354 et seq.  
403 European Commission (2022), Counterfeit and Piracy Watch List . Viewed at: 
https://circabc.europa.eu/ui/group/d0803128 -7d62-40ee-8349-c43ee92745aa/library/b36f701d -2850-4768-
9b3e-e487140e11e5/details?download=true .  
404 European Commission (2021), Report on the Protection and Enforcement of Intellectual Property 
Rights in Third Countries . Viewed at: https://trade.ec.europa.eu/doclib/docs/2021/april/tradoc_159553.pdf .  
Destruction of goods
54.3%Small consignment 
destruction 28.9%No action undertaken
7.1%National criminal procedure 4.2%Court case initiated 2.6%Genuine 
goods 2.2%
Non-infringing situation 0.57%
Settlement out of court
0.06%Chart 3.  Breakdown of result by procedure 2021
Source: European Commission, EU enforcement of intellectual property rights: results at the EU border and in the EU internal market 
2021.WT/TPR/S/442  • European Union  
- 133 - 
  4  TRADE POLICIES BY SECTOR  
4.1  Agriculture  
4.1.  The agricultura l sector continues to play an important role in the European  Union in terms of 
employment, trade, and policy support. Crop and animal production (including hunting) accounted 
for 1.6% of EU gross value added and the manufacturing of food products, beverage s, and tobacco 
products accounted for an additional 2.1% of gross value added in  2020, not including other parts 
of the value chain such as wholesale, retail, or catering.1 The total production value of agricultural 
products increased from EUR  378 billion  in 2019 to EUR  401 billion in 2021. The share of crops in 
total production increased from 56.7% to 60.2%, driven by increases in wheat and maize production 
values, while the production value of live animals remained broadly stable and that of animal 
produ cts increased marginally, with both declining as a share of total production (Table  4.1). 
Table 4.1 Total production value of agricultural products, 2017 -21 
(EUR million at producer prices)   
2017  2018  2019  2020  2021  
All products  364,466  367,766  377,504  373,466  401,034  
Crops  206,802  214,660  219,931  217,715  241,594  
 Cereals (including seeds)  42,654  44,682  47,233  46,986  63,271  
 Wheat and spelt  20,809  21,005  22,638  22,029  31,239  
 Barley  7,370  8,032  8,460  8,252  10,158  
 Grain maize  9,840  11,076  10,946  11,182  15,669  
 Industrial crops  20,372  18,829  17,844  18,276  24,068  
 Oil seeds and oleaginous fruits 
(including seeds)  11,355  10,237  9,649  10,463  15,372  
 Sugar beet  3,450  2,733  2,746  2,532  2,130  
 Forage plants  22,407  22,320  24,926  24,521  24,929  
 Fodder maize  5,164  4,983  5,942  6,061  .. 
 Vegetables and horticultural products  53,349  53,320  57,240  57,114  60,529  
 Fresh vegetables  32,661  32,747  35,557  35,291  36,895  
 Plants and flowers  20,687  20,573  21,683  21,823  23,634  
 Potatoes (including seeds)  10,589  11,953  14,636  12,422  11,979  
 Fruits  26,808  29,262  27,131  30,043  28,902  
 Fresh fruit  15,708  17,795  17,032  18,740  17,818  
 Citrus fruits  4,147  4,144  3,807  4,437  4,366  
 Grapes  3,154  3,494  3,123  3,062  2,960  
 Olives  2,660  2,630  1,992  2,442  2,426  
 Wine 21,644  27,392  23,452  22,700  20,626  
 Olive oil  6,699  4,652  5,154  3,480  4,989  
 Other crop products  2,280  2,249  2,315  2,173  2,302  
Live animals and animal products  157,664  153,106  157,573  155,751  159,440  
Live animals  91,217  87,638  92,101  90,561  90,836  
 Cattle  27,707  27,207  26,231  25,927  27,784  
 Pigs 37,608  34,101  39,267  38,721  35,589  
 Poultry  18,999  19,571  19,874  19,286  19,959  
Animal products  66,447  65,469  65,473  65,190  68,604  
 Milk 54,014  53,074  53,697  53,798  57,351  
 Eggs 9,580  9,535  9,272  9,105  9,272  
.. Not available.  
Source:  Eurostat, Economic Accounts for Agriculture – Values at Current Prices  (aact_eaa01). Viewed at: 
https://appsso.eurostat.ec.europa.eu/nui/show.do?dataset=aact_eaa01&lang=en . 
4.2.  The share of the agricultural sector in total employment continued to decline and stood a t just 
above 4% in 2020. However, the 2020 share of employment in agriculture varied from around 1% 
in a number of member States to 22.8% in Romania.2 Income of farmers compared to wages in the 
rest of the economy stood at 47% in 20203, while total facto r productivity in the agricultural sector 
continued its trend increase. Labour productivity continues to vary strongly across member States 
(from less than EUR  6,000 per full -time equivalent worker in Romania to more than EUR  70,000 in 
the Netherlands) in 2019, and remained much higher in the food industry compared to agricultural 
 
1 Eurostat, National Accounts Aggregates by Industry  (nama_10_a64); and National Accounts 
Employment Data by Industry  (nama_10_a64_e). Viewe d at: https://ec.europa.eu/eurostat/data/database . 
2 Eurostat (2020), Agriculture, Forestry and Fishery Statistics – 2020 edition . Viewed at: 
https://ec.europa.eu/eurostat/web/products -statistical -books/ -/ks-fk-20-001. 
3 European Commission, CAP Indicators – Jobs and Growth in Rural Areas . Viewed at: 
https://agridata.ec.europa.eu/extensions/DashboardIndicators/JobsGrowth.html .  WT/TPR/S/442  • European Union  
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  producers.4 The food industry sector accounted for an additional 2.4% of total employment, a figure 
that has remained relatively stable, thereby increasing its share in total agr i-food sector employment 
over the previous decade.5 During the review period, the number of organic producers and the area 
under organic farming continued to increase.6 
4.3.  In 2022, Europe faced very dry weather conditions, and according to the European Drought 
Observatory, as of early September 33% of EU ter ritory was in "warning" condition (experiencing a 
soil moisture deficit) while 26% were in "alert" (vegetation stress following soil moisture and 
vegetation deficit).7 According to the Global Drought Observatory, the most impacted crops were 
maize, soybea ns, and sunflowers.  
4.1.1   Trade  
4.4.  Since the previous Review, the trade surplus in agricultural products (WTO definition) of the 
EU-27 increased as exports grew faster than imports. The share of agricultural exports in total 
exports increased from 8% in 2018 to 9% in 2021, as the value of exports increased to 
EUR 196.1  billion. The leading destination for agricultural exports in 2021 was the United  Kingdom, 
and the most important export products were wine, pigmeat, and spirits. Other major export items 
included cert ain food preparations, bakers' wares, malt extract, wheat, cheese, and chocolate.  
4.5.  Over the same period, the share of agricultural imports in total imports remained broadly 
constant and stood at 6.1% in 2021, valued at EUR  129.7  billion. Main origins were B razil and the 
United  Kingdom followed by the United  States, being dominated by coffee, soybeans and their oil 
cakes, and palm oil. Other major items included certain fruits, nuts, and cocoa beans.  
4.6.  Following Brexit, the relative importance of agricultural t rade in total trade has increased as 
the share of agricultural exports in total exports was 7% for the EU -28 as compared to 8% for the 
EU-27, in 2018, and the share of agricultural imports in total imports was 5.9% for the EU -28 
compared to 6.1% for the EU -27, in 2018. The composition of trade did not fundamentally change 
except for the importance of spirits in agricultural exports, which declined significantly.  
4.1.2   Agricultural policy  
4.7.  While the recent reform of the Common Agricultural Policy (CAP) for the peri od following 2020, 
mentioned in the previous Review, was finalized in 2021, it has been only fully applied as from 
1 January  2023. Until the end of 2022, the former framework continued to apply largely unchanged 
in a transitional manner based on Regulation  (EU) 2020/2220, and its structure as well as measures 
implemented during the review period are described in Section  4.1.3.  
4.8.  The new CAP brings together the support via direct payments, internal market support, and 
that under the rural development scheme, i ncorporating the sustainability objectives of the European 
Green Deal , the Farm  to Fork Strategy referenced therein, and the Biodiversity Strategy  2030. It 
aims to "ensure a sustainable future for European farmers, provide more targeted support to smaller 
farms, and allow greater flexibility for member States in adapting the measures to local conditions", 
according to the Council.8 
4.9.  The reform (i)  significantly increases the focus on measures aiming to address challenges 
relating to the climate, the environ ment, and animal welfare (including a strengthened system of 
conditionality for direct payments); (ii)  introduces implementation and administrative changes; 
(iii) makes adjustments to various measures; and (iv)  introduces a new concept of social 
 
4 European Commission, CAP Indicators – Productivity . Viewed at: 
https://agridata.ec.europa.eu/extensions/DashboardIndicators/Productivity.html .  
5 European Commission, CAP Indicators – Jobs and Growth in Rural Areas . 
6 European Commission, CAP Indica tors – Organic Production . Viewed at: 
https://agridata.ec.europa.eu/extensions/DashboardIndicators/OrganicProduction.html .  
7 European Commission (2022), Drought in Europe August  2022 – GDO Analytical Report . Viewed at: 
https://edo.jrc.ec.europa.eu/documents/news/GDO -EDODroughtNews202208_Europe.pdf .  
8 European Cou ncil (2021), "Council Adopts Fairer, Greener and More Performance -Based Farming Policy 
for 2023 -2027", 2  December. Viewed at: https://www.consilium.europa.eu/en/press/press -
releases/2021/12/02/council -adopts -fairer -greener -and-more-performance -based -farming -policy -for-2023-
2027/ . WT/TPR/S/442  • European Union  
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  conditiona lity. Importantly, it introduces new CAP strategic plans (CSPs), by member State, 
combining the planning for all measures under the new framework (Section  4.1.2.2 ). Nevertheless, 
while increasing the focus on sustainability and finetuning the framework of support overall, it 
remains unchanged in terms of the level and composition of support it provides.  
4.10.  The new CAP uses a more results -based approach compared to the previous policy, measuring 
overall progress towards defined targets as well as the 10 key obj ectives contained in the new CAP, 
and linking funding eligibility to results . While the 10 key objectives contained in the new CAP are 
in principle unchanged from the 9 objectives and 1 cross -cutting objective of the previous CAP, they 
play a more importan t role than previously, according to the Commission. Focusing on social, 
environmental, and economic goals, they are to (i)  ensure a fair income for farmers; (ii)  increase 
competitiveness; (iii)  improve the position of farmers in the food chain; (iv)  take action on climate 
change; (v)  foster environmental care; (vi)  preserve landscapes and biodiversity; (vii)  support 
generational renewal; (viii)  facilitate vibrant rural areas; (ix)  protect food and health quality; and 
(x) foster knowledge and innovation.  
4.11.  The revised CAP for the period 2023 -27 is spelled out in three new regulations. The first, 
Regulation (EU)  2021/2115, outlines the areas of , and mechanisms for , support to agriculture and 
establishes a requirement for member States to prepare CSPs based on a n analysis of strengths and 
weaknesses, setting out targets, conditions, and the allocation of resources to achieve them. 
Schemes supporting rural development are incorporated into the same regulation.9 The second, 
Regulation (EU)  2021/2116, revised the r ules for the financing, management, and monitoring of the 
CAP, linking funding to results ("outputs" outlined in the CSPs), rather than compliance.10 The third, 
Regulation (EU)  2021/2117, amended the framework for the common market organization, quality 
schemes, geographic indications for wine products, and measures for agriculture in outermost 
regions.11  
4.12.  The European Agriculture Guarantee Fund (EAGF) continues to finance direct payments and 
market measures (Pillar  1), and the European Agricultural Fund fo r Rural Development (EAFRD) 
continues to finance the EU contribution to support rural development (Pillar  2). The pre -allocated 
total indicative financial allocations entered by member States in their CSPs under both pillars for 
the period 2023 -27 amount t o approximately EUR  52 billion per year, slightly lower compared to the 
previous period (Table  4.2 and Section  4.1.3) . Member States will be able to use their CSPs to plan 
the transfer of up to 25% of the allocation for direct payments to those for rural d evelopment, or 
vice versa, and in certain cases even higher percentages.  
Table 4.2 Allocations for 2023 and beyond  
(EUR million)  
Calendar year  2023  2024  2025  2026  2027 and 
subsequent 
years  
Direct payments Article  87(1) 
1st para. 38,608.2  38,715.1  38,821.9  38,928.8  38,928.8  
 of which: Cotton Article  87(1) 
2nd para 246.4  246.4  246.4  246.4  246.4  
Wine Article  88(1)  1,061.0  1,061.0  1,061.0  1,061.0  1,061.0  
Apiculture Article  88(2)  60 60 60 60 60 
Hops Article  88(3)  2.2 2.2 2.2 2.2 2.2 
Olive oil and table olives 
Article  88(4)  45.8 45.8 45.8 45.8 45.8 
Rural development Article  89(3)  12,108.9  12,108.9  12,108.9  12,108.9  12,108.9  
Total  51,886.1  51,993  52,099.8  52,206.7  52,206.7  
Source:  Regulation (EU)  2021/2115, various Annexes.  
4.1.2.1   The new framework for domestic support from 2023  
4.13.  Support provided as direct payments under the new CAP remains the main income support 
tool, but the measures funded differ slightly from those under the previous s ystem. Direct payments 
 
9 Regulation (EU)  2021/2115.  
10 Regulation (EU)  2021/2116.  
11 Regulation (EU)  2021/2117.  WT/TPR/S/442  • European Union  
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  are available for (i)  basic income  support; (ii)  complementary redistributive income support12; 
(iii) complementary income support for  young farmers13; and (iv)  schemes for the climate, the 
environment, and animal welfare ("eco -schem es"). In addition, there are direct payments for 
coupled income support14 and a crop -specific payment for cotton.15 Member States can continue to 
establish optional payment schemes for small farmers, outlined in their strategic plans, replacing all 
other d irect payments.16 
4.14.  The new CAP introduces certain changes regarding the eligibility for payments, with many 
details to be defined in national CSPs under a common framework. The new CAP strengthens 
requirements for compliance with basic standards for good ag riculture and environmental conditions. 
It adds the requirements in place for obtaining the "greening payments" under the old CAP to the 
former rules on "cross -compliance" to receive any direct payments, referring to these augmented 
rules as "conditionalit y" for receiving direct payments.17 Member States then define additional 
criteria for farmers to receive payments under the "eco -schemes", with a similar mechanism in place 
regarding rural development. According to the Commission, this new "green architect ure" provides 
more opportunities to reward farmers willing to provide public goods. The new Regulation 
(EU) 2021/2115 also introduces mechanisms for compliance with social conditionality (relating to 
working and employment conditions or employer obligations). Member States have been given 
additional time to establish them by January  2025.18 The failure to comply with these two type s of 
conditionalities by farmers and other beneficiaries will allow for the application of administrative 
penalties.  
4.15.  Under basic income support, external and internal convergence of payments continues19 with 
member States able to cap basic income support at a maximum of EUR  100,000 compared to 
EUR 150,000 under the previous CAP. Member States having granted Transitional N ational Aid (TNA) 
between 2015 -22 (Section  4.1.3.1) will be eligible to continue doing so with maximum amounts 
declin ing from 50% of the initial amounts in 2023 to 30% in 2027.20 
4.16.  Member States will have to allocate at least 25% of total allocations for dir ect payments to 
"eco-schemes".21 Regulation (EU) 2021/2115 spells out that member States are to define such 
voluntary schemes covering at least two objectives spelled out in Article  31, which would go beyond 
Good Agricultural and Environmental Conditions ( GAECs), conditions set by Union or national law, 
or other conditionality already contained in the Regulation. Farmers committing to adhere to 
agricultural practices defined in these schemes related to climate and the environment, public and 
plant health, a nd animal welfare would then be eligible for a payment on all eligible hectares.  
4.17.  Under the new CAP, support to specific agricultural sectors was transferred from 
Regulation  1308/2013 to Regulation  2021/2015, and related measures ("interventions" in the 
language of the new regulation) will have to be included in the CSPs. Regulation  (EU) 2021/2115 
outlines the allowed types of measures to support certain sectors in Chapter  III of Title  III and makes 
certain adjustments to the lists of previously allowed meas ures, in particular adding types of 
measures linked to the environment, animal welfare, or climate objectives. It also introduces 
changes to assistance limits, inter alia, in the fruit and vegetable, olive oil and table olive, or hops 
sectors, and foresees  measures in "other sectors" that were not covered under the aid schemes 
 
12 Member States will have to allocate at least 10% of allocations for direct payments, with certain 
flexibilities in place when redistribution needs are addressed by different means (Articles  29 and 98).  
13 This scheme is very similar to the Young Farmers Scheme under the previous CAP, but member 
States can now set an upper age limit between 35 and 40 in their CSPs, compared to a previous limit of 40.  
14 The scheme broadly continues the scheme of identical na me under the previous CAP, with unchanged 
thresholds in place, and products eligible to receive coupled income support slightly changed from those 
eligible under Regulation  1307/2013, expanding eligibility of support to table olives.  
15 As before, Bulgaria , Greece, Portugal, and Spain are eligible to use this scheme, but currently no 
production is taking place in Portugal.  
16 Regulation  (EU) 2021/2115, Article  28. 
17 Regulation  (EU) 2021/2115, Article  12. 
18 Regulation  (EU) 2021/2115, Article  14. 
19 Member Stat es will set a maximum value for all payment entitlements (or for differentiated types of 
"territories" within a member State) and ensure that all such payments achieve at least 85% of that amount, 
by 2026.  
20 Regulation (EU) 2021/2115, Article  147. 
21 This share can be lower if allocations under the regional (rural) development programmes exceed the 
minimum allocation to environmental and climate objectives (35%).  WT/TPR/S/442  • European Union  
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  listed in the previous regulation.22 Between 2023 and 2027, allocations to the wine, apiculture, and 
hops, as well as olive oil and table olives sectors have been set at EUR  1.17 billion per year 
(Table  4.2).23 Some of the support to specific agricultural sectors, such as private storage and public 
interventions, school schemes, or exceptional measures, continues to be regulated by 
Regulation  1308/2013, with those interventions or meas ures not included in national  CSPs.  
4.18.  As part of the CAP reforms, the reserve for crises in the agricultural sector will be replaced by 
a new "agricultural reserve" in 2023, established in the EAGF. The amount of the agricultural reserve 
will be EUR  450 million at the beginning of each year and be used "to provide additional support for 
the agricultural sector for the purposes of market management or stabilization and to respond 
promptly in the case of crises affecting the agricultural production or distribut ion".24 Resources not 
committed will be carried forward to the subsequent year.  
4.19.  Support for rural development previously regulated in Regulation (EU) 1305/2013 is fully 
incorporated into the revised framework and described in Regulation (EU) 2021/2115, wit h member 
States having to spell out planned measures in their CSPs instead of rural development programmes 
(RDPs). Support may cover a number of additional or restructured areas, including, inter alia, 
(i) voluntary management commitments beneficial for th e environment, climate, and animal 
welfare; (ii)  support for on -farm investments; (iii)  support to young and new farmers; (iv)  support 
to farmers facing natural or other area -specific constraints or disadvantages resulting from certain 
mandatory requiremen ts (consolidating the schemes previously part of direct payments and those 
under rural development);25 (v) risk management; or (vi)  knowledge dissemination (Chapter  IV). 
At least 30% of funding for each RDP must be dedicated to measures relevant for the en vironment 
and climate change.26 Generally, according to the Commission, support will be more closely linked 
to environmental and climate objectives of the European  Union. For the period  2023-27, the annual 
foreseen contribution from the EU budget amounts t o EUR  12.1 billion (Table  4.2).27 
4.1.2.2   CAP strategic plans  
4.20.  CSPs covering the period 2023 -27 require approval by the Commission prior to starting CAP 
implementation as of 2023. Within the framework set by Regulation 2021/2115, strategic plans 
cover all CAP -funded activities a member State intends to implement and that will be funded from 
the EAGF and the EAFRD, i.e.  direct payments, support to specific agricultural sectors, and support 
for rural development.28 By the end of 2022, all 28 CSPs had been finalized and published.29 
4.21.  Within a framework set by the new Regulatio n, the CSPs define certain terms30 at the 
member  State level (e.g.  agricultural activity, agricultural area, eligible hectare, active farmer, 
young farmer, and new farmer) and spell out in detail the assessment of needs, the intervention 
strategy (covering  the 10  key objectives), specific measures ("interventions" in the language of the 
new CAP), target and financial plans, the governance system, and some additional elements.31 Some 
of these terms were previously defined at the EU level and based on the fin al CSPs; there were no 
significant changes in eligibility criteria in member States compared to the previous framework, 
according to the Commission. In their CSPs, member States also have to define the two conditionality 
 
22 Commission Delegated Regulation 2022/126 defines additional requirements for certain types of 
measures.  
23 According to Regulation (EU) 2021/2115, Article  88, member States retain certain flexibilities to shift 
some of these allocations to the category of direct payments, or vice versa, via their CSPs.  
24 Regulation (EU) 2021/21 16, Article  16. 
25 Regulation (EU) 2021/2115, Articles  71, 72, and 154. Designations made under Article  32 of 
Regulation  (EU) 1305/2013 will continue to apply regarding payments for areas facing natural and other 
specific constrains.  
26 European Commission, Rural Development . Viewed at: https://agriculture.ec.europa.eu/common -
agricultural -policy/rural -development_en . 
27 Member States can allocate up to 3% of their allocation to the InvestEU fund (Article  81).  
28 Strategic plans do not cover interventions related to cotton.  
29 There is one CSP per member State except for Belgium where there are two for its regions of Flanders 
and Wallonia. European Commission, CAP Str ategic Plans by Country . Viewed at: 
https://agriculture.ec.europa.eu/cap -my-country/cap -strategic -plans -country_en .  
30 Regulation  (EU) 2021/2115, Article  4. 
31 Regulation  (EU) 2021/2115, Chapter  II. WT/TPR/S/442  • European Union  
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  systems (regarding the environment,  public and plant health, and animal welfare, as well as 
regarding working and employment conditions or employer obligations).  
4.1.3   Domestic support  
4.22.  This section outlines the level and composition of domestic support under the CAP in place 
during the review per iod (including during the transition period 2021 -22 based on Regulation 
(EU) 2020/2220 laying out the transitional provisions). Domestic support in the European  Union 
comprises direct payments, internal market support, and support for rural development.  
4.1.3.1   Direct payments  
4.23.  Until 2020 as well as during the transition period (i.e.  2021 and 2022), Regulation 1307/2013 
continued to establish the rules for direct payments to farmers. The national ceilings for the transition 
period are spelled out in Regulation  (EU) 2020/2220. Regulation 1307/2013 was repealed with the 
application of the new CAP from the beginning of 2023.  
4.24.  Member States continued to be able to transfer funding between the EAGF (for direct 
payments) and the EAFRD (for RDPs) until 2020 and during the tr ansition period. Over the 
period  2020-22, eight member States transferred funding from under the EAFRD to the EAGF32, and 
eight vice versa.33 In the context of the COVID -19 pandemic, six  member States were permitted to 
review and adjust the amounts and dec isions in this regard.34 Table  4.3 provides an overview of net 
ceilings for direct payments by member State.  
Table 4.3 Net ceilings for direct payments, after transfers , 2015 -22 
(EUR million)  
 2015  2016  2017  2018  2019  2020  2021  2022  
Austria  693.1  692.4  691.8  691.7  691.7  691.7  677.6  677.6  
Belgium  523.7  509.8  502.1  489.0  481.9  505.3  494.9  472.0  
Bulgaria  720.9  788.8  789.6  791.0  792.5  867.1  789.3  799.0  
Croatia  183.7  202.9  241.1  279.4  317.6  348.3  365.0  403.2  
Cyprus  50.8 50.2 49.7 49.1 48.6 48.6 47.6 47.6 
Czech  Republic  840.1  839.3  838.5  856.7  856.7  871.8  847.1  847.1  
Denmark  870.2  852.2  834.3  826.3  818.3  818.1  801.3  782.3  
Estonia  114.4  114.5  123.7  133.9  143.9  169.4  190.7  193.6  
Finland  523.3  523.4  523.5  524.1  524.6  524.6  515.7  517.5  
France  7,302.1  7,270.7  7,239.0  6,900.8  6,877.2  6,877.2  6,736.4  6,726.4  
Germany  4,912.8  4,880.5  4,848.1  4,820.3  4,792.6  4,717.3  4,620.8  4,522.4  
Greece  2,109.8  2,087.0  2,064.1  2,043.3  2,022.4  2,022.5  1,981.1  1,980.2  
Hungary  1,276.7  1,275.5  1,274.1  1,274.0  1,273.9  1,301.4  1,275.5  1,275.5  
Ireland  1,214.8  1,213.3  1,211.8  1,211.4  1,211.0  1,211.1  1,186.3  1,186.3  
Italy 3,897.1  3,847.3  3,797.2  3,750.0  3,702.4  3,698.3  3,622.5  3,623.1  
Latvia  181.0  205.7  230.3  255.0  279.8  302.5  313.8  318.9  
Lithuania  417.9  442.5  467.1  475.3  483.3  517.0  570.0  578.5  
Luxembourg  33.6 33.5 33.5 33.5 33.4 35.3 33.4 33.4 
Malta  5.2 5.2 5.2 5.2 5.2 5.2 5.2 5.2 
Netherlands  749.2  736.8  724.3  682.5  670.8  660.8  661.3  609.7  
Poland  3,359.2  3,375.7  3,392.0  3,411.2  3,430.2  3,375.7  3,345.3  3,376.7  
Portugal  565.9  574.0  582.1  590.8  599.4  684.5  681.0  685.6  
Romania  1,600.0  1,772.5  1,801.3  1,872.8  1,903.2  1,903.2  1,891.8  1,919.4  
Slovak Republic  435.5  438.6  441.8  445.2  448.7  392.6  415.3  394.5  
Slovenia  138.0  137.0  136.0  135.1  134.3  134.3  131.5  131.5  
Spain  4,902.3  4,911.3  4,926.3  4,939.7  4,953.1  4,953.8  4,859.1  4,856.0  
Sweden  696.8  697.2  697.6  698.7  699.7  699.8  685.7  685.9  
United  Kingdom  3,170.7  3,177.3  3,183.6  3,192.2  3,201.4  n.a. n.a. n.a. 
Total  41,489  41,655  41,650  41,378  41,398  38,337  37,745  37,649  
n.a Not applicable.  
Source:  Regulation (EU) 1307/2013, as last amended by Regulation  2022/42 of 8  November  2021.  
 
32 Bulgaria, Croatia, Luxembourg, Hungary, Malta, Poland, Portugal, and Slovak  Republic . 
33 Belgium, Czech  Republic, Denmark, Germany, Greece, France, Latvia, and the Netherlands, as well as 
the United  Kingdom prior to its withdrawal from the European  Union.  
34 Commission Delegated Regulation (EU) 2020/1314. These countries were Belgium, Bulgaria, 
Denmark, Croatia, Luxembourg, and Portugal.  WT/TPR/S/442  • European Union  
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  4.25.  Eligibility criteria for direct payments did not change during the review period. To be eligible 
for payments, farmers must be "active farmers", with certain minimum requirements in place. 
Following changes described in the previous Review, the option of defining certain activities that 
would not automatically grant eligibility (a negative list) unless farmers prove that their operations 
were not marginal was used by eight member States in 2021, using varying criteria and means of 
verification. Farmers are excluded from these restrictions if they received direct payments below 
certain thresholds in the previous year (ranging from EUR  0 to EUR  5,000).35 All direct payment 
programmes, except the Small Farmers Scheme, continued to be subject to cross -compliance 
described in previous reviews.  
4.26.  Direct payments amounted to EUR  37.9 billion in financial year 2021 (for claims made 
in 2020), out of which decoupled payments accounted for approximately 88%, benefitting 6  million 
farms. As the number of direct payment beneficiaries continued its gradual trend decrease ( -1.1% 
in 2021), the avera ge amount per beneficiary continued to increase. In 2021, roughly 75% of 
beneficiaries received less than EUR  5,000, and 0.5% of beneficiaries received more than 
EUR 100,000 (accounting for 16.4% of total payments). Overall, around 80% of farmers receive 
20% of payments, reflecting the uneven distribution of agricultural land.36 
4.27.  According to the CAP indicators, the share of direct support payments in agricultural factor 
income in 2020 stood on average at 23.3% but varied from 7% in Malta to 49% in Estonia.37 
4.28.  As a response to the COVID -19 pandemic, the Commission introduced certain  derogations 
from some rules for checks relating to direct payments, rural development, and certain market 
measures in 2020, and put similar measures in place in 2021 and 2022.38 Commission Implementing 
Regulation (EU)  2020/531 allowed for higher advances for CAP payments.  
Table 4.4 Member State decisions regarding implementation of direct payments in claim 
year 2022  
 
BPS/ 
SAPSa, 
b Redistributiveb Reduction of  
paymentsc Young 
Farm-
ersb Voluntary coupled supportd 
Sectors  
Belgium 
(Wallonia)  41.8%  9.6%  First 30 
entitlements 
– EUR 124  None 1.9%  16.8%  Beef, milk, sheep meat  
Belgium 
(Flanders)  n.a.  Capping at 
EUR 150,000  Beef 
Bulgaria  47.8%  7.0%  First 30  ha – 
EUR 70  5% reduction 
over 
EUR 150,000, 
capping at 
EUR 300,000; 
DDS 0.3%  15.0%  Beef, fruit and 
vegetables, milk, protein, 
sheep meat  
Czech  
Republic  54.8%  n.a. n.a. 5% reduction 
over EUR  150,000  0.2%  15.0%  Beef, fruit and 
vegetables, hops, milk, 
protein, sheep meat, 
starch potato, sugar beet  
Denmark  63.4%  n.a. n.a. 5% reduction 
over EUR  150,000  1.9%  4.2%  Beef 
Germany  62.0%  7.0%  First 30  ha – 
EUR 50, next 
16 ha – 
EUR 30  None 1.0%  n.a. n.a. 
Estonia  65.8%  n.a. n.a. 5% reduction 
over 
EUR 150,000; 
DDS 0.7%  3.5%  Fruit and vegetables, 
milk, sheep meat  
 
35 European Commission (2021), Direct Payments 2015 -2021 – Decisions taken by Member States: 
State of Play as from June  2021. 
36 European Commission (2021), Direct Payments to Agricultural Producers – Graphs and Figures – 
Financial Year  2020. 
37 European Commission, CAP Indicators – Farming Income Support . Viewed at: 
https://agridata.ec.europa.eu/extensions/DashboardIndicators/FarmIncome.html .  
38 Commission Implementing Regulations (EU)  2020/532, (EU)  2021/725, and (EU)  2022/1216.  WT/TPR/S/442  • European Union  
- 140 - 
   
BPS/ 
SAPSa, 
b Redistributiveb Reduction of  
paymentsc Young 
Farm-
ersb Voluntary coupled supportd 
Sectors  
Ireland  67.8%  n.a. n.a. Capping at 
EUR 150,000  2.0%  0.3%  Protein  
Greece  58.1%  n.a. n.a. Capping at 
EUR 150,000; 
DDS 2.0%  9.9%  Beef, cereals, fruit and 
vegetables, nuts, protein, 
rice, seeds, sheep meat, 
silkworms, sugar beet  
Spain  56.1%  n.a. n.a. 5% reduction 
over 
EUR 150,000; 
DDS 2.0%  12.0%  Beef, fruit and 
vegetables, grain 
legumes, milk, nuts, 
protein, rice, sheep meat, 
sugar beet  
France  44.0%  10.0%  First 52 
entitlements 
– EUR 50  None 1.0%  15.0%  Beef, cereals, fruit and 
vegetables, hemp, hops, 
milk, protein, rice, seeds, 
sheep meat, starch potato  
Croatia  43.0%  10.0%  First 20 
entitlements 
– EUR 68 None 2.0%  15.0%  Beef, fruit and 
vegetables, milk, protein, 
sheep meat, sugar beet  
Italy 55.1%  n.a. n.a. 50% reduction 
over 
EUR 150,000; 
capping at 
EUR 500,000; 
DDS 2.0%  12.9%  Beef, cereals, fruit and 
vegetables, milk, olive oil, 
protein crops, rice, sheep 
meat, sugar beet  
Cyprus  61.0%  n.a. n.a. 5% reduction 
over EUR  150,000  1.0%  8.0%  Fruit and vegetables, milk  
Latvia  54.9%  n.a. n.a. 5% reduction 
over 
EUR 150,000; 
DDS 1.2%  14.3%  Beef, cereals, fruit and 
vegetables, milk, 
oilseeds, protein, seeds, 
sheep meat, starch potato  
Lithuania  38.8%  15.0%  First 30  ha – 
EUR 72  None  1.3%  15.0%  Beef, cereals, fruit and 
vegetables, milk, protein, 
seeds, sheep meat, sugar 
beet 
Luxembourg  68.0%  n.a. n.a. 5% reduction 
over 
EUR 150,000; 
DDS 1.5%  0.5%  Protein  
Hungary  54.6%  n.a. n.a. 5% reduction 
over 
EUR 150,000; 
capping at 
EUR 176,000, 0.4%  15.0%  Beef, fruit and 
vegetables, milk, protein, 
rice, sheep meat, sugar 
beet 
Malta  12.4%  n.a. n.a. 5% reduction 
over EUR  150,000  0.0%  57.2%  Beef, fruit and 
vegetables, milk, sheep 
meat 
Netherlands  67.5%  n.a. n.a. 5% reduction 
over EUR  150,000  2.0%  0.5%  Beef, sheep meat  
Austria  65.9%  n.a. n.a. Capping at 
EUR 150,000; 
DDS 2.0%  2.1%  Beef, sheep meat  
Poland  45.7%  8.3%  First 3  ha – 
EUR 0, next 
27 ha – 
EUR 40  Capping at 
EUR 150,000  1.0%  15.0%  Beef, flax, fruit and 
vegetables, hemp, hops, 
milk, protein, sheep 
meat, starch potato, 
sugar beet  
Portugal  37.0%  11.4%  First 10  ha – 
EUR 120 5% reduction 
over 
EUR 150,000, 
capping at 
EUR 300,000; 
DDS 2.0%  19.6%  Beef, fruit and 
vegetables, milk, rice, 
sheep meat  
Romania  48.9%  5.6%  First 5  ha – 
EUR 5, next 
25 ha – 
EUR 48 None 1.1%  14.4%  Beef, fruit and 
vegetables, grain 
legumes, hemp, hops, 
milk, protein, rice, seeds, 
sheep meat, silkworms, 
sugar beet  
Slovenia  54.2%  n.a. n.a. 5% reduction 
over 
EUR 150,000; 
DDS 1.5%  13.0%  Beef, cereals, fruit and 
vegetables, milk, sheep 
meat WT/TPR/S/442  • European Union  
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BPS/ 
SAPSa, 
b Redistributiveb Reduction of  
paymentsc Young 
Farm-
ersb Voluntary coupled supportd 
Sectors  
Slovak  
Republic  51.9%  2.7%  First 5  ha – 
EUR 60, next 
10 ha – 
EUR 45, next 
13 ha – 
EUR 30 5% reduction 
over EUR  150,000  0.4%  15.0%  Beef, fruit and 
vegetables, hops, milk, 
protein, sheep meat, 
sugar beet  
Finland  49.4%  n.a. n.a. 5% reduction 
over EUR  150,000  1.0%  19.6%  Beef, cereals, fruit and 
vegetables, milk, protein, 
sheep meat, starch 
potato, sugar beet  
Sweden  55.0%  n.a. n.a. 5% reduction 
over EUR  150,000  2.0%  13.0%  Beef 
n.a. Not applicable.  
a BPS = Basic Payment Scheme; SAPS = Single Area Payment Scheme.  
b % for BPS/SAPS, redistributive, young farmer payment, and voluntary coupled support refers to 
percentage of national direct payments ceiling for claim year  2021.  
c Reductions of payments are a percentage applying to the total amount of the basic payments 
(BPS or SAPS). Member States may also deduct the amounts of salaries actually paid for agriculture: 
DDS = deductions f or salaries apply. Capping refers to a 100% reduction at a given value.  
d Beef refers to beef and veal, protein refers to protein crops, milk refers to milk and milk products, 
and sheep meat refers to sheep and goat meat.  
Note:  30% of each national ceiling  is reserved for greening, therefore, percentage allocations add up to 
70% (marginal differences due to rounding) in all cases except Denmark and Slovenia, which 
allocate some of Pillar I to areas with natural constraints (0.4% of the national ceiling in D enmark 
and 1.6% in Slovenia).  
Source:  European  Commission (2021), Direct Payments 2015 -2021 – Decisions taken by Member States: 
State of Play as from June  2021, and information provided by the Commission.  
4.29.  Until 2020 and during the transitional period, dire ct payments continued to be organized by 
the seven schemes described below as a to g. As can be seen in Table  4.4, decisions taken by 
member States result in noticeable variation in overall allocation by scheme.  
a) Basic payment scheme and single area payment scheme  
4.30.  During the review period, member States continued to apply either the basic payment scheme 
(BPS, 17  Members, 5  choosing the option of regionalizing the scheme39) or the Single Area Payment 
Scheme (SAPS, 10  Members). For beneficiaries, eligib ility for these schemes remained a precondition 
for additional payments under all direct payment schemes. It continues to remain the most important 
of the direct payment schemes, accounting for between 39% and 69% of total direct payments (with 
the excepti on of Malta, see subpoint  g) (Table  4.4). 
4.31.  Among the member States applying the SAPS, nine40 member States implemented 
EUR 260 million of TNA41 in claim year  2020, complementing direct payments with payments from 
national sources (85% of the total as decoup led direct payments). The provisions for the transition 
period in 2021 and 2022 continue to limit the maximum amounts payable as TNA to 50% of the 
amounts payable in 2013 (initial amounts).  
b) Greening payment  
4.32.  Until 2020 and during the transition period, m ember States still had to allocate 30% of their 
national ceilings annually for direct payments for "agricultural practices beneficial for the climate 
and the environment" (greening).42 These funds were disbursed to farmers entitled to a payment 
under the B PS or the SAPS and which observed, on all their eligible hectares, either certain specific 
 
39 European Commission (2021), Direct Payments 2015 -2021 – Decisions taken by Member States: 
State of Play as from June  2021. Viewed at: https://agr iculture.ec.europa.eu/system/files/2021 -
07/simplementation -decisions -ms-2021_en_0.pdf . Until its withdrawal from the European  Union in 2020, the 
United  Kingdom also had regionalized its scheme.  
40 All of the member States applying SAPS, except Latvia.  
41 TNA ultimately is a remnant of recent EU accession processes where additional national payments 
were permitted to avoid abrupt decreases in overall available support in accession countries.  
42 Regulation (EU) 1307/2013, Articles  43-47. WT/TPR/S/442  • European Union  
- 142 - 
  practices or "equivalent practices" (in seven member States during 2020). The specific practices 
related to crop diversification, maintenance of existing permanent g rassland, and having an 
ecological focus area (EFA)43 on at least 5% of arable land for holdings with more than 15  ha of 
arable land.  
4.33.  During this transition period, certain previously existing exemptions to these practices 
continued to apply for participan ts in the small farmer scheme and farmers with a large proportion 
of permanent grassland, while farmers meeting requirements for organic production are entitled 
ipso facto to this payment. The seven member States and regions opting for the use of equivalen t 
practices used a mix of approaches (based on measures and certification schemes) and applied them 
variedly to the three practices.44 
4.34.  As a response to the war in Ukraine and with the objective of ensuring food security, the 
Commission introduced, for the year 2022, certain flexibilities regarding the treatment of fallow land, 
even where it had been grazed or harvested for production purpose or had been cultivated.45 
c) Young Farmers Scheme  
4.35.  The Young Farmers Scheme continued to apply until 2020 and during t he transition period, 
providing additional payments to farmers aged 40 or below and who are setting up for the first  time 
(or recently have set up) an agricultural holding. Seven member States and two regions applied 
additional eligibility criteria relatin g to certain skills and training. Member States can grant these 
payments for between 25 and 90  hectares per farmer, at a value of between 25% and 50% of a 
reference payment per hectare.46 
4.36.  The ceiling for the scheme is set at 2% of the direct payments envel ope, and member States 
have to notify the percentage allocated to the scheme. For 2021, the notified percentages ranged 
from less than 1% in six member States to the maximum of 2% in nine member States. Overall, 
the estimated allocations for the scheme in 2021 were 1.4% of total direct payments (an increase 
from the estimated 1.2% in 2018, 2019, and 2020) ( Table  4.4).47 
d) Redistributive payments and reduction of payments  
4.37.  Regulation (EU) 1307/2013 foresees an optional redistributive payment of up to 30% of 
national ceilings, and this continued to apply until 2020 and during the transition period. This scheme 
allows for an additional payment for a certain number of hectares per farm, resulting in smaller 
farms receiving a relatively larger payment per hect are. For the claim year 2022, 10  member States 
applied the redistributive payment scheme to a varying number of hectares ( see Table  4.4), with a 
number of member States increasing payments as compared to claim year  2018.48 
4.38.  At the same time, 22  member States or regions applied one or multiple tranches of 
reduction  of payments for the parts of payments exceeding EUR  150,000, with the reductions being 
reallocated to the EAFRD. Member States using more than 5% of their annual ce iling for the 
redistributive payment are eligible not to impose such reduction of payments ( Table  4.4). 
e) Payments for areas with natural constraints  
4.39.  As was the case during the previous Review, member States have the option to reserve up 
to 5% of their na tional ceiling for support to areas with natural constraints in addition to support 
 
43 The types of EFAs are  defined in Regulation 1307/2013, Article  46, complemented by Commission 
Delegated Regulation (EU) 639/2014 (as amended).  
44 European Commission (2021), Direct Payments 2015 -2021 – Decisions taken by Member States: 
State of Play as from June  2021. 
45 Commission Implementing Decision (EU) 2022/484.  
46 Regulation (EU) 1307/2013 (as amended), Articles  50 and 51.  
47 European Commission (2021), Direct Payments 2015 -2021 – Decisions taken by Member States: 
State of Play as from June  2021. 
48 Regions in the Uni ted Kingdom also applied this scheme until the withdrawal of the United  Kingdom 
from the European  Union. For 2018 values, see WTO document WT/TPR/S/395/Rev.1, 7  July 2020.  WT/TPR/S/442  • European Union  
- 143 - 
  provided under the RDPs. The criteria for designation of such areas remained unchanged. Only 
two member States have decided to use this option ( Note to Table  4.4). 
f) Small  Farmers Scheme  
4.40.  The Small Farmers Scheme is an optional scheme, replacing, when used, all other direct 
payments for its beneficiaries. Fifteen member States applied the Small Farmers Scheme in 2020 
and 2021, using varying methods of allocation. Amounts of support provided range from EUR  500 
to EUR  1,250 per farmer.49 
g) Voluntary coupled support (VCS) and payments for cotton  
4.41.  All member States , except  Germany , apply the VCS scheme, a production -limiting scheme 
applying annual payments based on fixed areas an d yields or on a fixed number of animals.50 On 
average, member States allocate around 11% of their national ceiling to this scheme, with a number 
of member States reviewing this allocation during the review period as permitted following changes 
outlined in  the previous Review. However, the levels of support allocated to the scheme have not 
changed fundamentally from the previous Review, with 10  member States still allocating the 
maximum percentage allowed (13%), three having received a Commission approval t o exceed this 
maximum, and Malta using a derogation allowing member States to use up to EUR  3 million for the 
scheme, resulting in 57.2% of its national envelope being allocated to the scheme in 2022. As 
in 2021, 11  member States made use of the option to apply an additional top -up of up to 2% for 
protein crops to increase their VCS ceiling of 13% (+2%) in 2022 ( Table  4.4).51 
4.42.  According to the Commission, the annual budget remained around EUR  4.2 billion per year 
allocated via 260  measures, and the most supp orted sectors in 2021 were the three  animal -related 
sectors, with more than 70% of support provided under this scheme going to beef and veal (38.8%), 
dairy products (21.4%), and sheep and goat meat (12.8%), followed by protein crops, fruit and 
vegetables, and sugar beet.52 Among the 21  sectors covered by VCS, no support was allocated by 
any member State to short rotation coppice, cane and chicory, and dried fodder.  
4.43.  In addition to the VCS scheme, the European  Union continued to provide payments for cotton 
in Bulgaria, Greece, and Spain. Payments are limited to a maximum base area and are calculated 
using a fixed yield and reference amounts ( lower in 2021 and 2022, compared to 2020).53 
4.1.3.2   Internal market support  
4.44.  The previous system for internal market support mea sures defined in Regulation 
(EU) 1308/2013 (and related implementing acts) continued to apply in substance and was extended 
for the transition period, although Regulation  (EU) 2021/2117 already introduced a number of 
changes from December  2021. These inclu de, inter alia, (i) an extension of some intervention 
periods and an increase in information transparency regarding such interventions; (ii)  adjustments 
to measures affecting olive oil and table olives; (iii)  an extension to the scheme of authorizations fo r 
vine plantings until 2045 as well as changes to the way authorizations are issued for areas of 
protected designation of origin or a protected geographical indication; (iv)  a number of marketing 
requirements; (v)  some rules regarding producer organization s; (vi)  the regulation of supply of 
agricultural products with a protected designation of origin or protected geographical indication; 
(vii) an extension of market support measures to address plant pests; and (viii)  the establishment 
 
49 For additional information, see European Commission (2021), Direct Payments 2015 -2021 – Decisions 
taken by Member States: State of Play as from June  2021, Table  A.4. 
50 Regulation 1307/2013, Article  52.  
51 European Commission (2021), Direct Payments 2015 -2021 – Decisions taken by Member States: 
State of Play as from June  2021. 
52 European Commission (2022), Voluntary Coupled Support – Member States' Support Decisions 
Applicable for Claim Year  2022, Informative Note, May. The note contains additional informat ion regarding 
support for individual sectors.  
53 The reference amounts declined , in EUR/ha, for Bulgaria from 649.15 to 636.13, for Greece from 
234.18 to 229.37, for Portugal from 228.00 to 223.32, and for Spain from 362.15 to 354.73. See 
Regulation  1307/2 013, Article  58. WT/TPR/S/442  • European Union  
- 144 - 
  of a single formal leg al framework for the setting up and operation of Union market observatories.54 
In addition, the transitional regulation (Regulation (EU)  2020/2220) introduced the option for 
producing member States to define marketing rules for olive oils.  
4.45.  As a result, sup port to specific agricultural sectors continued to be provided during the review 
period via (i)  market interventions and support for private storage; (ii)  aid schemes for a number of 
specific agricultural sectors55; (iii) marketing standards and rules for certain products as well as rules 
for certain producer organizations and interbranch organizations; and (iv)  exceptional measures.  
4.46.  The reserve for crises in the agricultural sector, established in Regulation  1306/2013, was not 
used in  2020 or 2021 but was activated  in 2022 for the first time since its introduction as part of the 
response to the war in Ukraine (see below).  
Market interventions and support for private storage  
4.47.  Council Regulation  (EU) 1370/2013 determines measures on fixing certain aids and ref unds 
related to the common organization of the markets in agricultural products. It defines reference 
thresholds for a number of sectors56 as well as related public intervention prices to be used when 
public intervention in a specific sector is opened. It defines quantitative limitations per public 
intervention period (defined in Regulation  1308/2013), with limitations for 2020 and 2021 set at 
3 million  tonnes of common wheat, 50,000  tonnes of butter, and 109,000  tonnes of skimmed milk 
powder (SMP). Except in certain circumstances, public intervention is usually carried out by 
tendering with the intervention prices acting as maximum price.  
4.48.  As a response to the COVID -19 pandemic, intervention purchases were opened for butter (for 
the first time since 2009) and SMP (the first time since 2018). There were no public intervention 
purchases for animal products in 2020, 2021, and 2022.57 
4.49.  Temporary private storage aid (PSA) w as also opened for butter, SMP, cheese, certain bovine 
meat, and sheep and goat meat58 during 2020 in response to the COVID -19 pandemic. Such storage 
was supported for periods of between two and six  months depending on the product, with uptake 
varying (Tab le 4.5). Initially estimated at around EUR  80 million, total interventions ultimately 
amounted to less than EUR  30 million, according to notifications made by the European  Union. 
In 2022, the Commission opened PSA for pigmeat.59 
Table 4.5 Private storage aid, 2019 -22 
 Reference 
price  
EUR/tonne  Aid for 
storage 2019 
(tonnes)  Aid for 
storage 2020 
(tonnes)  Aid for 
storage 2021 
(tonnes)  Aid for 
storage 2022 
(tonnes)  
White sugar  404.40  0 0 0 0 
Olive oil  n.a. 21,279  192,166  0 0 
 Extra virgin  1,779.00  None Included    
 Virgin  1,710.00  Included  Included    
 Lampante (2  degrees)  1,524.00  Included  Included    
Flax fibre  0 0 0 0 0 
Table  olives (since 2022)  n.a. n.a. n.a. n.a. 0 
Beef and veal  2,224.00  0 1,959  0 0 
Butter  246.39  0 65,019  0 0 
 
54 There are currently six  observatories in place for milk, meat, sugar, crops, fruits and vegetables, and 
wine. Viewed at: https:/ /agriculture.ec.europa.eu/data -and-analysis/markets/overviews/market -
observatories_en .  
55 They cover olive oil and table olives, fruits and vegetables, wine and vine plantings, apiculture, and 
hops.  
56 Cereals, paddy, sugar, beef and veal, milk and milk pro ducts, pigmeat, and olive oil.  
57 In 2019, 102,571  tonnes of SMP from previous intervention purchases were sold. Milk Observatory, 
Intervention Reports 2016 -2020. Viewed at: https://agriculture.ec.europa.eu/data -and-
analysis/markets/overviews/market -observatories/milk_en . 
58 Commission Implementing Regulations (EU) 2020/597; (EU) 2020/598; (EU) 2020/591; 
(EU) 2020/596 (repealed by Commission Imple menting Regulation (EU) 2020/1028 of 15 July 2020); and 
(EU) 2020/595 (repealed by Commission Implementing Regulation (EU) 2020/1029 of 15 July 2020), 
respectively.  
59 Commission Implementing Regulation (EU) 2022/470.  WT/TPR/S/442  • European Union  
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   Reference 
price  
EUR/tonne  Aid for 
storage 2019 
(tonnes)  Aid for 
storage 2020 
(tonnes)  Aid for 
storage 2021 
(tonnes)  Aid for 
storage 2022 
(tonnes)  
Cheese  n.a. 0 43,669  0 0 
Skimmed milk powder  169.80  0 18,300  0 0 
Pig meat  1,509.39  0 0 0 46,491  
Sheep and goat meat  n.a. 0 15 0 0 
n.a. Not applicable.  
Note:  Data for 2019 and 2020 include the United  Kingdom.  
Source:  Reference prices from Council Regulation (EU) 1370/2013; data for 2020 from 
European  Commission, Private Storage Scheme . Viewed at: 
https://circabc.europa.eu/sd/a/aacdfe67 -6e5e-4f84-8f3a-b61b10f38d42/PSA -covid19.pdf ; 
DG Agriculture and Rural Development, Private Storage Aid for Olive Oil . Viewed at: 
https://agriculture.ec.europa.eu/farming/crop -productions -and-plant-based -products/olive -oil/psa -
olive-oil_en ; and market observatories.  
Aid schemes for specific agricultural sectors  
4.50.  Support in the European  Union via operational programmes in the fruits and vegetables sector 
in 2020 stood at EUR  1.7 billion, an increase of 11% compared to the average for the 
period  2015-19, primarily directed to investments, quality schemes, and environmental measures.60 
4.51.  Under the temp orary exceptional adjustment aid to farmers in the beef and veal sector based 
on Regulation 2019/1132 described in the previous Review, the European  Union made 
EUR 49.4 million available to Ireland, allowing Ireland to grant financial support to beef farme rs 
affected by market disturbance.  
4.52.  Support to the apiculture sector, co -funding national apiculture programmes at 50%, 
continued to the tune of EUR  40 million in 2020, and of EUR  60 million from 2021.  
4.53.  In response to the COVID -19 pandemic, the European  Union also adopted a number of 
derogations from provisions of Regulation 1308/2013 and flexibilities in the implementation of 
existing market support programmes (Table  4.6). In addition, member States established a large 
number of support schemes targeted at t he economy at large (and covering the agricultural sector) 
or the agricultural sector itself, of varying size, in the context of the temporary state aid framework 
in response to COVID -19 (Section  3.3.1).61 In 2020, total state aid expenditure to agricultur e, 
fisheries, and aquaculture amounted to approximately EUR  6.3 billion for the EU -27 and the 
United  Kingdom, a slight increase compared to earlier years.62 
Table 4.6 Market support measures taken as a result of the COVID -19 pandemic  
Date  Act Description  
30 April 2020 Commission Delegated 
Regulation (EU) 2020/592, 
amended three times in 2020 
and 2021  Derogations from certain provisions of Regulation 1308/2013 to 
addre ss the market disturbance in the fruit and vegetables and wine 
sectors  
30 April 2020 Commission Implementing 
Regulation (EU) 2020/593  Authorizing agreements and decisions on market stabilization 
measures in the potatoes sector (derogation from certain 
competition rules under Article  222 of Regulation 1308/2013 for 
six months)  
30 April 2020 Commission Implementing 
Regulation (EU) 2020/594  Authorizing agreements and decisions on market stabilization 
measures in the live trees and other plants, bu lbs, roots and the 
like, cut flowers and ornamental foliage sector (derogation from 
certain competition rules under Article  222 of Regulation 1308/2013 
for six  months)  
30 April 2020 Commission Implementing 
Regulation (EU) 2020/599  Authorizing agreements a nd decisions on the planning of production 
in the milk and milk products sector (derogation from certain 
competition rules under Article  222 of Regulation 1308/2013 for 
six months)  
 
60 European Commission (2020), 2020 Annu al Reports – Fruit and Vegetables Operational Programmes . 
Viewed at: https://agriculture.ec.europa.eu/farming/crop -productions -and-plant-based -products/fruit -and-
vegetables/sector -reports_en .  
61 WTO documents G/AG/GEN/159, 4  June 2020; and five  addenda during 2020 and 2021.  
62 European Commission (2022), State Aid Scoreboard 2021 . Viewed at: https://competition -
policy.ec.europa.eu/system/files/2022 -09/state_aid_scoreboard_note_2021.pdf . WT/TPR/S/442  • European Union  
- 146 - 
  Date  Act Description  
30 April 2020 Commission Implementing 
Regulation (EU) 2020/600, 
amended in 2021  Derogations regarding implementation of support measures in the 
sectors of fruit and vegetables, wine, olive oil and table olives, 
apiculture, and for the school scheme.  
30 April 2020 Commission Implementing 
Regulation (EU) 2020/601  Deroga tions regarding the validity of vine planting authorizations 
and the grubbing up in case of anticipated replanting  
4 May 2020 Commission Delegated 
Regulation (EU) 2020/884, 
amended in 2021  Derogations regarding implementation of support measures in the 
fruit and vegetables sector and the wine sector  
6 July 2020 Commission Implementing 
Regulation (EU) 2020/975  Authorizing agreements and decisions on market stabilization 
measures in the wine sector (derogation from certain competition 
rules under Article  222 of Regulation 1308/2013 for six  months)  
Source:  Compiled by the WTO Secretariat.  
Response to the war in Ukraine  
4.54.  As a response to market disturbances resulting from the war in Ukraine, the Commission 
allocated EUR  500 million (EUR  350 million of which from the reserve for crises in the agricultural 
sector). Aiming to improve food security, member States were allowed to support farmers pursuing 
either (i)  circular economy, (ii)  nutrient management, (iii)  efficient use of resources, or 
(iv) environmental and climate -friendly production methods, with payments to be made by 
30 September  2022. They were also authorized to allocate up to EUR  1 billion from national sources 
for these interventions.63 
4.55.  Another Delegated Regulation from July  2022 raised t he share of union financing in 
operational programmes of producer organizations to 70% (from 50%), and temporarily allowed for 
such programmes to spend more than one third on crisis prevention and management measures.64 
Other  
4.56.  Additional programmes affectin g supply and demand for agricultural goods in the Union 
continue to apply. They include (i)  the School Scheme described in previous Reviews (estimated at 
EUR 241 million (EU funds as well as public and private national funds) for the 2020 -21 school year, 
among which EUR  121 million for the supply/distribution of fruits and vegetables, and 
EUR 111 million for the supply/distribution of school milk65); (ii)  certain domestic food aid under the 
Fund for European Aid to the Most Deprived (FEAD), which was increased in response to the 
COVID -19 pandemic; (iii)  the Programmes of Options Specifically Relating to Remoteness and 
Insularity (POSEI programmes, EUR  279 million from the EAGF for the marketing year 2019/2020, 
of which EUR  127 million went to the banan as sector)66; and (iv)  funds available to support 
information provision and promotion measures for agricultural products in the internal market and 
in third  countries (as outlined in Regulation (EU) 1144/2014), which stood at around EUR  200 million 
per yea r67, allocated from the general budget of the Union.68 
4.57.  The new basic Regulation (EU) 2018/848 on organic production and labelling described in the 
previous Review has applied since the beginning of 2022, one year later than initially anticipated. 
The Commi ssion published a regulation containing lists of authorized products and substances for, 
inter alia, (i) plant protection products; (ii)  fertilizers, soil conditioners and nutrients; (iii)  certain 
feed material; (iv)  feed additives and processing aids; (v)  products for cleaning and disinfection; 
(vi) various food additives, other processing aids, or ingredients; and (vii)  products and substances 
 
63 Commission Delegated Regulation (EU) 2022/467.  
64 Commission Delegated Regul ation (EU) 2022/1225.  
65 European Commission (2021), School Scheme Monitoring Report Summary – 2020/21 School Year . 
Viewed at: https://agriculture.ec.europa.eu/common -agricultural -policy/market -measures/school -fruit-
vegetables -and-milk-scheme/school -scheme -explained_en .  
66 European Commission (2021), Report from the Commission to the European Parliament and the 
Council on the Implementation of the Scheme of Specific Measures for Agriculture in Favour of the Outermost 
Regions of  the Union (POSEI), COM(2021)  765. Cross -compliance under the CAP applies.  
67 European Commission – Agriculture and Rural Development, "Promotion of EU farm products". 
Viewed  at: https://agriculture.ec.europa.eu/common -agricultural -policy/market -measures/promotion -eu-farm-
products_en .  
68 The EU contribution co -finances between 70% and 80% of such programmes (up to 90% in certain 
circumsta nces). Since 2020, the duration of support to such promotion measures in the wine sector are no 
longer limited to five  years.  WT/TPR/S/442  • European Union  
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  for use in organic production of wine.69 The Regulation allows for certain flexibilities regarding the 
temporary authorization of using non -organic or non -authorized substances in organic production in 
third countries.70 The expiry of recognized equivalence of a third country already  established under 
the repealed Council Regulation (EC) 834/2007 has been extended to the end of 2026.  
4.58.  In April  2019, Directive (EU) 2019/633 on unfair trading practices in business -to-busines s 
relationships in the agricultural and food supply chain was adopted. This Directive prohibits certain 
unfair trading practices used by buyers in the agriculture sector, inter alia, those relating to late 
payments, late order cancellations, unilateral cha nges in conditions, or acts of commercial 
retaliation.71 This is completed by an additional set of practices that are prohibited only if they have 
not been unambiguously agreed between buyer and seller beforehand.  
4.1.3.3   Rural development  
4.59.  While Regulation (EU) 13 05/2013 was replaced by the new Regulation (EU) 2021/2115 from 
January  2023, it continued to apply in the transition period largely unchanged (as during 
the 2014-20 period previously described), with some additional elements to ensure a smooth 
transition t o the revised CAP. Regarding the implementation of existing RDPs, Regulation 
(EU) 1305/2013 will also continue to apply until the end of 2025.  
4.60.  RDPs continued to be implemented at the member State  level based on national RDPs that 
need to incorporate at lea st four of the six  European Focus Areas and be based on measures defined 
in Annex  VI of the Regulation. While regional development aims to support sustainable rural 
development throughout the European  Union, interventions also directly affect the agricultu ral 
sector. Programmes are approved by the Commission. In total, there were 114 approved RDPs at 
the end of 2021, with 20 national programmes and 7 member States with 2 or more regional 
programmes. From  2023, RDPs will instead be outlined in the CSPs.  
4.61.  RDPs are co -funded from national resources and the EAFRD. For the period 2014 -22, total 
planned support was EUR  200 billion, of which EUR  136 billion from EU funds and the remainder 
from national budgets. In response to the COVID -19 pandemic, the NextGeneratio nEU (NGEU) 
budget (Section  3.3.1.1) co -funded rural development activities in 2021 and 2022 for 
EUR 8.1 billion.72 As a result, the total EU funding envelope for rural development stood at 
EUR 17.7 billion in 2021 and EUR  18.4 billion in 2022, higher than EUR 14.7 billion in 2019 
and 2020.73 
4.62.  Over the period 2014 to FY2020/22, the bulk of the EU funding envelope was allocated to 
restoring, preserving, and enhancing biodiversity (46.3%), followed by farm viability and 
competitiveness (21.1%, comprising suppor t for improving economic performance of all farms and 
the entry of adequately skilled farmers), social inclusion (14.1%), food chain organization (9.8%), 
and resource efficiency as well as supporting the shift towards a low -carbon and climate -resilient 
economy (6.1%).74 In practice, actual spending had reached between 47% (in Malta) and 91% 
(Luxembourg) of planned expenditures at the beginning of January  2023.75 State aid is also provided 
to certain agricultural activities, including some insurance of agric ultural activities in some member 
States.  
4.63.  In response to COVID -19, Regulation (EU) 2020/872 allowed for the provision of exceptional 
temporary EAFRD support to farmers and SMEs particularly affected by the COVID -19 crisis in 2020, 
not exceeding EUR  7,000  per farmer and EUR  50,000  per SME. Total exceptional temporary support 
 
69 Commission Implementing Regulation (EU) 2021/1165.  
70 Regulation (EU) 2018/848, Articles 25 and 45. For additional information, see also European 
Commission, Legislation for the Organics Sector . Viewed at: https://agriculture.ec.europa.eu/farming/organic -
farming/legislation_en .  
71 Directive (EU)  2019/633.  
72 European Commission (2021), The EU's 2021 -2027 Long -Term Budget and NextGenerationEU – Facts 
and Figures .  
73 Allocations in 2019 and 2020 also include approximately EUR  750 per year for the United  Kingdom.  
74 EU Commission; Regulation (EU) 1305 /2013; and European Structural and Investment Funds, Data, 
"2014 -2020: EAFRD Allocation by Focus Area (EU Planned Financing)". Viewed at: 
https:// cohesiondata.ec.europa.eu/2014 -2020/ESIF -2014-2020-FINANCES -PLANNED -DETAILS/e4v6 -qrrq. 
75 European Structural and Investment Funds, Data. Viewed at: 
https://cohesiondata.ec.europa.eu/fun ds/eafrd#top .  WT/TPR/S/442  • European Union  
- 148 - 
  was limited to 2% of the total EAFRD contribution to RDPs and amounted to EUR  616 million 
in FY2021 (support for 2020) and EUR  12 million in FY2022 (for 2021).  
4.64.  In 2022, Regulation (EU) 2 022/1033 also allowed for the provision of exceptional temporary 
support to farmers and SMEs engaged in processing, marketing, or developing agricultural products, 
and affected by the impact of the war in Ukraine. Such support would be paid out in a lump s um, 
during 2023, of not exceeding EUR  15,000 per farmer and EUR  100,000 per SME for activities 
contributing to food security or addressing market imbalances, and would have to support 
beneficiaries to pursuing goals related to (i)  a circular economy, (ii)  nutrient management, (iii)  the 
efficient use of resources, or (iv)  environmental and climate -friendly production methods.76 This 
support complements similar exceptional measures against market disturbances. Total exceptional 
temporary support cannot exceed  5% of total EAFRD contributions to RDPs for 2021 -22. 
4.1.4   Export subsidies  
4.65.  According to the most recent notifications, the European  Union did not grant export subsidies 
during the review period. Since 2021, the provision for export refunds in exceptional circu mstances, 
whose ceiling had been set to zero since 2013, has also been legally removed from Regulation (EU) 
1308/2013.77 The process of certifying the European  Union's revised schedule including elimination 
of annual export subsidies commitment levels purs uant to the December  2015 Nairobi Ministerial 
Conference Decision on export competition, mentioned in the previous Review, remains pending.78 
4.66.  No programmes for financing the export of agricultural products exist at the EU level, but 
most member States oper ate some programmes for general export financing that may cover 
agricultural products  (Section  3.2.5) .79 According to the European  Union's ES:1  notifications, it also 
did not provide food aid in kind during marketing years  2018/19 and 2020/21.  
4.1.5   Export restr ictions  
4.67.  As a response to disruptions in grain supplies resulting from the war in Ukraine, Hungary 
introduced export restrictions of cereals for food security reasons in March  2022, extending them 
multiple times before repealing them as of 20  January  2023.80 For any export (including to the 
European  Union) of certain grains, soybeans , and sunflower seeds, exporters had to submit a 
request indicating volume and prices for the Minister for Agriculture  to approve or reject the request, 
exercising a "right of fi rst refusal at market price" in case of danger to the public supply or food 
security. The restriction did not affect humanitarian aid and transit cargo. No request was rejected.  
4.1.6   Market access  
4.68.  During the review period, market access for imports of agricultu ral products (WTO definition) 
into the European  Union remained broadly unchanged even though in figures it slightly deteriorated 
as the average applied MFN tariff increased from 14.2% in 2019 to 14.9% in 2022. These increases 
result from compositional chan ges in trade flows following the United Kingdom's withdrawal from 
the European Union and the fact that certain trade flows considered intra -EU at the time of the 
previous Report are now considered extra -EU, allowing the estimation of AVEs. This increases 
average tariffs without an actual increase in tariff rates. In 2019, the share of non -ad valorem  tariff 
lines with no AVEs stood at 3.1%, declining to 1.8% in 2022. For agricultural products, this 
development is even more pronounced, as including trade flow s with the United  Kingdom to estimate 
non-ad valorem  AVEs reduced the share of agricultural non -ad valorem  tariff lines with no AVEs  from 
13.9% to 7.9%. Affected products are primarily animals and products thereof as well as dairy 
products.  
4.69.  Overall, applied (and bound) tariffs remain more than three times as high for agriculture 
products compared to non -agricultural products, have a hi gher variance and higher maximum tariffs, 
and have a lower proportion of duty -free lines and a much higher proportion of non -ad valorem  
 
76 Regulation (EU) 2022/1033.  
77 Removed by Regulation (EU) 2021/2117, Article  1(56).  
78 WTO document G/MA/TAR/RS/506/Add.3, 12  July 2019.  
79 The Commission indicated that all such export financing is done in compliance with the 
Nairobi  Decision on Export Competition.  
80 WTO document G/AG/N/EU/77/Rev.3/Add.1, 14  February  2023.  WT/TPR/S/442  • European Union  
- 149 - 
  duties ( Section  3.1.3). All exports of agricultural products from LDCs can enter duty - and quota -
free, and those from ma ny other developing countries can often enter duty -free or at reduced tariffs 
(Section  3.1.3). 
4.70.  Non-ad valorem  duties can be complex and include specific, mixed, and compound duties; 
certain products continue to be subject to duties based on agricultural components81; other products 
are subject to tariffs based on flour or sugar contained in them82; and some tarif fs for alcoholic 
beverages differ based on category. Some seasonal tariffs are in place that also include mixed duties. 
Tariffs based on entry prices may be applied, as outlined in Commission Implementing Regulation 
(EU) 2017/892, to certain fruits and veg etables when the import price (monitored with standard 
import values published on a Commission website)83 is below the corresponding level of entry price 
for the same product in a given period.  
4.71.  Commission Regulation (EU) 642/2010 allows for tariffs for som e cereals to be adjusted based 
on import prices. Varying import duties in particular for rye, maize, and grain sorghum were in place 
during 2020, but since 27  August  2020, they have been reset to zero.84 While tariffs on sorghum 
were imposed, Commission Delegated Regulation (EU) 2020/1274 introduced a flat -rate reduction 
of 100% for such imports into Spain from third countries  for 2020 in line with Co mmission Regulation 
(EC) 1296/2008. Since January  2021, duty -free TRQs for imports of sorghum and maize into Spain 
and of maize into Portugal have instead been introduced by Commission Delegated Regulation 
(EU) 2020/760.  
4.72.  Following the United  Kingdom's with drawal from the European  Union and as from 
January  2021, all TRQs have been apportioned based on recent import shares under such quotas as 
outlined in the previous Review.85 Other than that, there were no significant changes to agricultural 
TRQs in place, while changes were introduced to their administration ( Section  3.1.3.3). Overall, 
124 WTO TRQs (for marketing years, calendar years, or seasonal) remain in place with a small 
number of TRQs proposed for removal. Forty -one of these have country -specific all ocations. Imports 
from the United  Kingdom are generally excluded from the  TRQs. In addition, 4 autonomous TRQs 
(ATQs) for agricultural products remain in place, covering 16 tariff lines, a slight change from the 
end of 2019.86 Information on the allocation  of TRQs managed on first come, first served basis is 
published online in near -real time on the website of DG  TAXUD, whereas information on the 
allocation of the TRQs managed by licences is published on a monthly basis on the Agri-data portal .87 
According to the Commission, 21 TRQs previously managed by licences are now managed on a first 
come, first served basis.  
4.73.  The European  Union continues to use agricultural special safeguards for certain products 
according to its schedule of commitments. During the rev iew period, the European  Union invoked 
the price -based special safeguard for six lines of poultry and egg products: three  lines in marketing 
year 2019/20, four in 2020/21, and one in 2021/22.88 The volume -based mechanism was not 
invoked, but as in previous  years the system was made operational to calculate figures for the trigger 
volumes for 18  tariff lines (corresponding to 15  products) in the fruit and vegetables sector, which 
were published in Commission Implementing Regulations. Where imports exceed the se trigger 
values, additional import duties may be imposed for these products. Until 2021, the Commission 
defined consistent trigger volumes for certain additional import duties on certain fruits and 
vegetables based on imports expressed as a percentage of  the corresponding domestic consumption. 
 
81 Regulation (EU) 510/2014.  
82 Council Regulation (EEC) 2658/87.  
83 European Commission, Fruit and Vegetables (Various) Statistics . Viewed at: 
https://agriculture.ec.europa.eu/data -and-analysis/markets/overviews/market -observatories/fruit -and-
vegetables/fruit -and-vegetables -various -statistics_en .  
84 Commission Implementing Regulations (EU) 2020/573, 2020/615, 2020/864, 2020/959, 2020/1192, 
2020/1 218, and 2020/1221.  
85 WTO document WT/TPR/S/395/Rev.1, 7  July 2020, Section  3.1.3.3.  
86 Council Regulation (EU) 2021/2283 repealed Council Regulation (EU) 1388/2013, which had been 
amended three times during the review period, but not with regard to agricul tural products. Council Regulation 
(EU) 2021/2283 was subsequently amended, last by Council Regulation (EU) 2022/2563.  
87 European Commission, Tariff Quota Consultation. Viewed at: 
https://ec.europa.eu/taxation_customs/dds2/taric/quota_consultation.jsp ; and Trade and Quotas . Viewed at: 
https://agridata.ec.europa.eu/extensions/DataPortal/trade.h tml.  
88 WTO documents G/AG/N/EU/62, 24  July 2020; G/AG/N/EU/70, 23  July 2021; and G/AG/N/EU/80, 
26 July 2022.  WT/TPR/S/442  • European Union  
- 150 - 
  As from 2022, the Commission can alternatively calculate the triggering volumes on the basis of 
average imports if the consumption data are not used.89 
4.1.7   Domestic support levels  
4.1.7.1   WTO notifications  
4.74.  The European  Union ha s submitted DS:1  notifications covering domestic support until 
marketing year  2019/20, and the last notification still includes information for the United  Kingdom. 
Measures of support provided as a response to the COVID -19 pandemic are therefore already 
reflected regarding marketing year  2019/20. The notified Total Current AMS stood at EUR  5.3 billion 
for marketing year  2019/20, compared to EUR  6.9 billion for marketing year  2016/17, well below 
the European  Union's total AMS commitment level. The Commission  indicated it would notify the 
modified Total AMS commitment level following the withdrawal of the United  Kingdom from the 
European  Union as part of its DS:1 notification for marketing year  2020/21.  
4.75.  Notified levels of support remained broadly unchanged bet ween 2013 and 2019 overall. 
However, compared to the latest available information during the previous Review for marketing 
year 2016/17, Green Box support increased by more than EUR  6 billion, primarily driven by 
increases for structural adjustment assista nce provided through resource retirement programmes 
as well as through investment aids, while Amber Box support declined by around EUR  1.6 billion (by 
around EUR  0.4 billion including de minimis ) and Blue Box support remained unchanged (Chart  4.1). 
4.76.  Between  marketing year  2017/18 and 2019/20, noticeable increases in Amber Box support 
affecting wine, fruits and vegetables, sugar, and beef can be observed, while Amber Box support for 
SMP, a sector that received significant support in 2017/18 ceased nearly comp letely as the 
quantitative limit for interventions was set to zero temporarily.90 As support to structural adjustment, 
environment and regional assistance increased between 2016/17 and 2019/20, the composition of 
Green Box support shifted towards this cate gory during the review period, while payments for relief 
from natural disasters saw a temporary increase in 2018/19.  
4.77.  The European  Union notified the transitional measures for the implementation of the CAP in 
WTO document G/AG/N/EU/66 on 9  February  2021. Th e Commission expects to submit a 
DS:2 notification for the new CAP during the first  quarter of 2023.  
 
89 Regulation (EU) 2021/2117, Article  182. 
90 WTO document WT/TPR/S/395/Rev.1, 7  July 2020.  WT/TPR/S/442  • European Union  
- 151 - 
  Chart 4.1 Domestic support in the European  Union 2011/12 -2020/21  
 
Note:  Information provided by the European  Union covers the United  Kingdom until 31  December  2020.  
Source:  WTO notifications.  
01020304050607080
2011/12
2012/13
2013/14
2014/15
2015/16
2016/17
2017/18
2018/19
2019/20
2020/21Green Box Blue Box
Current total AMS de minimis total
012345678
2011/12
2012/13
2013/14
2014/15
2015/16
2016/17
2017/18
2018/19
2019/20
2020/21Fruit and vegetables Cereals
Dairy Other
0123456
 2011/12
 2012/13
 2013/14
 2014/15
 2015/16
 2016/17
 2017/18
 2018/19
 2019/20
2020/21Crops
Beef
Dairy
Sheep and goats
OtherBlue Box
01020304050607080
 2011/12
 2012/13
 2013/14
 2014/15
 2015/16
 2016/17
 2017/18
 2018/19
 2019/20
2020/21Other
Decoupled income support and SAPS
Structural adjustment, environment and regional assistance
General servicesGreen BoxChart 4.[domestic support] Domestic support in the EU 2011/12 -2020/21
(EUR billion)
Green, Blue and Amber Boxes 
(including de minimis) Amber box 
(excluding de minimis)
Source: WTO notifications.Information provided by the European Union covers the United Kingdom unitl 31 December 
2020.Note:WT/TPR/S/442  • European Union  
- 152 - 
  4.1.7.2   OECD assessment  
4.78.  According to the OECD91, the total support estimate (TSE) (transfers to the agricultural sector 
in general) for the EU -28 remained broadly constant in nominal terms between 2018 and 2020, 
increasing marginally from 0.64% of GDP to 0.66% of GDP. For the EU -27, it is estimated to stand 
at 0.67% of GDP in 2021, compared to an OECD average of 0.61%. This corresponds to more 
than 40% of the sector  value added. The OECD estimates overall support to agriculture in terms of 
market outcomes, by estimating the total effective transfers to producers as a result of market price 
interventions (including trade restrictions), subsidies, and direct payments, and taking stock of 
general services provided by the Government. These estimates are therefore not directly comparable 
with domestic support notified to the WTO.  
4.79.  Between 2017 and 2020, the Producer Support Estimate (PSE) (capturing gross transfers 
from con sumers and taxpayers to agricultural producers) increased in nominal terms and as a share 
of total gross farm receipts from 18.9% to 19.3%, continuing to consolidate following its long -term 
decline from 39% in 1986/88 to 34% in 1995/97 and to 19% in 2013/1 5. The percentage PSE for 
the EU -27 in 2021 is estimated at 17.6%, compared to an OECD average of 15.9%.  
4.80.  Market price support (OECD definition) remained roughly constant at around 4% 
between  2017 and 2020 (EU -28) and is estimated to be 2.7% in 2021 (EU -27). Estimates for Single 
Commodity Transfers (SCTs) (transfers to specific commodities) increased until 2018 and declined 
afterwards. For 2021, and the EU -27, SCTs are estimated at 4.0% of the value of production at farm 
gate. According to OECD estimates, th e nominal coefficient of protection generally declined over the 
review period and varies across sectors partly resulting from international price effects. The sectors 
with the highest nominal coefficients of protection in 2021 were poultry meat, rice, and beef and 
veal (Table  A4.1). 
4.2  Fisheries  
4.81.  Wild fisheries production fluctuated around 4.6  million  tonnes between 2015 and 2018 but 
fell to around 4  million  tonnes in 2019 and 2020, driven by declines in catch of herrings, sardines, 
and anchovies, which remaine d the biggest contributor to catch overall. Other important fish caught 
in the Atlantic  Ocean were cods, hakes, and haddocks, as well as other miscellaneous pelagic fish. 
Catch in the Indian and Pacific Oceans was dominated by tunas, bonitos, and billfishe s. The 
production of aquaculture remained roughly constant at around 1.1  million  tonnes (Table  4.7). 
Table 4.7 Summary of fishery production, 2015 -20 
(thousands of tonnes)  
 2015  2016  2017  2018  2019  2020  
Landings  4,180.3  3,765.1  4,654.5  4,100.7  3,669.3  3,548.4  
of which:  
 Bivalves and other molluscs and 
aquatic invertebrates  177.6  187.6  172.0  200.7  180.2  148.8  
 Crustaceans  113.5  109.6  110.1  135.8  112.0  103.9  
 Flatfish  171.0  161.9  145.8  137.0  135.0  123.9  
 Groundfish  945.8  680.4  1,532.4  961.3  776.1  835.3  
 Blue whiting  355.3  300.8  426.1  461.5  361.1  325.4  
 Other marine fish  297.2  285.7  295.2  245.6  282.6  286.6  
 Small pelagics  2,027.0  1,852.5  1,917.7  1,895.9  1,678.0  1,610.9  
 Herring  655.0  654.4  696.5  740.8  597.7  547.1  
 Sprat (=Brisling)  530.2  456.9  405.2  431.1  402.0  393.1  
 Tuna and tuna -like species  322.4  331.5  339.7  385.5  359.1  299.9  
Aquaculture  1,131.3  1,146.0  1,229.5  1,134.8  1,126.7  1,088.4  
of which:  
 Bivalves and other molluscs and 
aquatic invertebrates  647.0  626.8  694.4  607.7  585.9  531.7  
 Mussel Mytilus spp  443.5  450.7  461.4  458.3  453.5  406.9  
 Freshwater fish  107.7  110.0  110.6  101.4  108.9  110.5  
 Other marine fish  159.0  174.8  185.8  190.0  190.8  192.7  
 Salmonids  190.4  205.0  204.3  194.9  204.8  208.2  
Source:  EUMOFA, Data. Viewed at: https://www.eumofa.eu/data . 
 
91 OECD, Agricultural Policy Monitoring and Evaluation – Country Data . Viewed at: 
https://www.oecd.org/agriculture/topics/agricultural -policy -monitoring -and-evaluation/ .  WT/TPR/S/442  • European Union  
- 153 - 
  4.82.  The European  Union remains a net importer of fish and fishery products as exports (primarily 
of fish) oscillated around EUR 6.5 billion between 2017 and 2021, while imports oscillated around 
EUR 25 billion (Table  4.8). Imports originated primarily in Norway, accounting for more than 
one quarter, while the largest export destination were the United  Kingdom and the United  States. 
Table 4.8 Trade in fish and fishery products, 2017 -21 
(EUR million)  
Product description  2017  2018  2019  2020  2021  
Trade balance  -18,771  -18,930  -19,337  -17,484  -19,361  
Total fish and fishery exports  6,440.5  6,737.5  6,874.4  6,513.6  6,312.9  
(% of total exports)  0.32 0.33 0.32 0.34 0.29 
Fish 3,624  3,821  3,802  3,455  3,073  
Crustaceans, molluscs  771 841 887 759 890 
Fish and fishery products  1,414  1,437  1,505  1,535  1,583  
Other  632 639 681 765 766 
Total fish and fishery imports  25,212  25,667  26,211  23,997  25,674  
(% of total imports)  1.42 1.34 1.35 1.40 1.21 
Fish 13,123  13,295  14,030  12,937  13,427  
 HS 030214 Atlantic salmon (Salmo salar) and 
Danube salmon (Hucho hucho), fresh or chilled  4,759  4,948  5,063  4,592  5,180  
Crustaceans, molluscs  6,829  6,725  6,369  5,578  7,001  
 HS 030617 Other shrimps and prawns, frozen  2,909  2,782  2,646  2,497  3,079  
 HS 030743 Cuttle fish and squid, frozen  1,714  1,682  1,625  1,368  1,548  
Fish and fishery products  3,986  4,230  4,316  4,095  3,873  
 HS 160414 Tunas, skipjack and bonito 
(Sarda  spp.), whole or in pieces, but not minced  1,915  1,985  1,993  1,941  1,773  
Other  1,274  1,417  1,496  1,387  1,373  
Note:  Fish and fishery products: HS  03, HS 0508, HS  0511191, HS  150410, HS  150420, HS  1603-05, and 
HS 230120. Each category refers to fish (HS  0301-0304); crustaceans, molluscs (HS  0306-0308); 
processed fish and fishery products (HS  1603-1605 and HS  230120); and other (HS  0305, 050800, 
051191, 1 50410, and 150420).  
Source:  WTO Secretariat calculations, based on Eurostat, International Trade in Goods . Viewed at: 
https://ec.europa.eu/eurostat/web/international -trade -in-goods/data/database . 
4.2.1   Fisheries policy  
4.83.  While there have been no major changes to the Common Fisheries Policy (CFP) since the 
previous Review, regulations regarding the main funding vehicle for domestic support were revised 
(Section  4.2.2). The CFP aims to restore and maintain fish stocks at sustainable levels by 2020 and 
it also applies to aquaculture. According to the Commission92, fisheries in the European  Union have 
become more sustainable but fisheries resources require further protection. According to the  FAO, 
most of the commercially important fish stocks in the Mediterranean and the Black Sea continue to 
be overfished, while around 27% of assessed fish stocks in the Northeast Atlantic were fished at 
biologically unsustainable levels in 2019.93 A Commission study on the implementation of the CFP 
was expected to be published by the end of 2022. The EU Common M arket Organisation for fishery 
and aquaculture products, which spells out rules for the marketing of fishery and aquaculture 
products, was amended as a response to COVID -19 (Section  4.2.2).  
4.84.  Overall, the conservation of marine biological resources and conclusion of international 
agreements remain the exclusive competence of the European  Union, while the implementation of 
other fisheries policies and implementation of EU rules fall under shared competence. Regarding 
aquaculture, the CFP foresees a system  of strategic policy coordination in the European  Union.  
4.85.  The European  Union manages fish stocks in accordance with the principle of maximum 
sustainable yield and the annual establishment of total allowable catches (TACs) under multi -annual 
management plans .94 All catches of regulated species (regarding size or TACs) have to be landed in 
Union ports and counted against the quotas, with the use of caught undersized fish regulated as well 
(landing obligation). The latest agreement on fishing rights in the Atla ntic, the North Sea, the 
Mediterranean, and the Black Sea for 2022 sets limits for over 200  commercial fish stocks, and that 
 
92 European Commission Communication COM (2021)  279.  
93 FAO (2022), The State of World Fisheries and Aquaculture 2022: Towards Blue Transformation . 
94 European Parliament, EU Fisheries Management . Viewed at: 
https://www.europarl.europa.eu/factsheets/en/sheet/115/eu -fisheries -management .  WT/TPR/S/442  • European Union  
- 154 - 
  for the Baltic Sea for 10 fish stocks. Technical regulations to ensure targeted fishing and avoid 
undesired catches are spelled out  in Regulation  (EU) 2019/1241.  
4.86.  The proposal to revise the European Fisheries Control System to address deficiencies 
identified in a regulatory fitness and performance programme (REFIT) evaluation, and mentioned in 
the previous Review, has not yet been appr oved by the Parliament and Council.95 Aiming to prevent, 
deter, and eliminate illegal, unreported, and unregulated (IUU) fishing, including the marketing of 
fish and fish products so obtained, the EU IUU regulation applies to all vessels, landings, or 
transhipments, as well as trade in fish and fish products.96 The regulation establishing the European 
Fisheries Control Agency and the SMEFF regulation97 complement the system aimed at ensuring 
compliance with the rules of the CFP.  
4.87.  Changes regarding environmen tal sustainability in the overall policy framework of the 
European  Union also affect the fisheries sector. The European Green Deal calls for a sustainable blue 
economy98, and the Farm  to Fork Strategy refers to sustainable fish and seafood production. In  2021, 
the Commission adopted new guidelines for a more sustainable and competitive EU aquaculture, 
reflecting priorities of the European Green Deal and the Farm  to Fork Strategy.99  
4.2.2   Domestic support  
4.88.  The European  Union (including its member States) remains o ne of the largest providers of 
fishery subsidies, estimated to having provided USD  3.8 billion of subsidies in 2018, or around 11% 
of global subsidies.100 Of these, USD  2 billion were estimated to be capacity -enhancing, including 
fuel subsidies. A separate paper estimated the revenue forgone in terms of fuel taxes not collected 
due to fuel tax exemptions (see below) at EUR  1.1 billion in 2018 (around USD  1.3 billion).101 The 
European Commission pointed out that relevant rules do not allow capacity -enhancing s upport with 
limited exceptions (see below) and that it does not consider tax exemptions as subsidies.  
4.89.  Since 2021, support to fisheries and aquaculture is co -funded via the European Maritime, 
Fisheries and Aquaculture Fund (EMFAF), which replaced the Europe an Maritime and Fisheries Fund 
(EMFF).102 The EMFF continues to support activities under its 2014 -20 operational programmes until 
the end of 2023. For the period  2021-27, the EMFAF has a budget of EUR  6.1 billion, supporting the 
CFP, the maritime policy, an d the agenda for ocean governance. EMFAF provides funding to national 
programmes approved by the Commission and co -funded by member States, with such programmes 
providing on average up to 50% of eligible costs (with those percentages varying between 40% 
and 100% for various eligible activities). These programmes can also include support for the 
aquaculture sector in line with the multi -annual national strategic plans to develop the sector.  
4.90.  EMFAF priorities support (i)  sustainable fisheries and conservation  of aquatic biological 
resources; (ii)  sustainable aquaculture, processing, and marketing of fishery and aquaculture 
products; (iii)  a sustainable blue economy and fishing and aquaculture communities; and 
(iv) strengthening international ocean governance a nd sustainable management.103 Funds are also 
foreseen for the sustainable development of the outermost regions.104 These priorities differ in 
structure, but not fundamentally in substance, from the six priorities spelled out under the EMFF. In 
addition to th e implementation of national programmes by national authorities, an estimated 13% 
 
95 European Commission Proposal  COM/2018/368 final.  
96 Council Regulation (EC) 1005/2008, with the annexed list of products excluded from the definition of 
"fishery products" amended in  2022.  
97 Regulation (EU) 2017/2403.  
98 In 2021, the Commission adopted a new approach for developing a sustainable blue econo my, 
replacing the 2012 Blue Growth Strategy (European Commission Communication COM(2021)  240).  
99 European Commission (2021), "European Green Deal: Commission Adopts Strategic Guidelines for 
Sustainable and Competitive EU Aquaculture", 17  May. Viewed at: 
https://ec.europa.eu/commission/presscorner/detail/en/ip_21_1554 . 
100 Sumaila, Ebrahim, Schuhbauer, et al. (2019), "Updated Estimates and Analysis of Global Fisheries 
Subsidies", Marine Policy , Vol.  109. 
101 Carvalho, N. and Guillen , J. (2021), "Economic Impact of Eliminating the Fuel Tax Exemption in the 
EU Fishing Fleet", Sustainability , Vol.  13. 
102 Regulation (EU) 2021/1139.  
103 To achieve these goals, focus areas include sector ren ewal, small -scale coastal fisheries, the 
elimination of overcapacity, aquaculture, the protection of marine biodiversity and ecosystems, and an efficient 
market for fisheries products.  
104 Regulation (EU) 2021/1139, Chapter  VI. WT/TPR/S/442  • European Union  
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  of funds are directly managed by the Commission for technical and administrative assistance, 
including for market intelligence.  
4.91.  The type of support provided under the EMFAF h as not fundamentally changed from the 
support provided under the EMFF although the new regulation is differently structured. The reform 
aimed to simplify the delivery of the fund by increasing flexibility of implementing measures. A 
general condition for e ligibility continues to be a legal entity established in a member State (with 
narrow exceptions), and vessels having to be EU vessels (and having to remain EU vessels for 
five years after receiving support).105 
4.92.  As a result, the EMFAF regulation spells out, for each of the four  priorities, specific objectives 
and conditions for which support can be granted. At the same time, the EMFAF regulation contains 
an extended list of activities that are not eligible for funding, including a number of 
capacity -enhancing  measures such as support to increase fishing capacity, the construction of new 
ports or auction halls, market interventions to support fish prices, or direct restocking. Certain 
exceptions to supporting the investment in fishing vessels, or the (temporary ) cessation of fishing 
activities, remain foreseen where they contribute to sustainable fishing, energy efficiency, or 
promoting the adjustment of fishing capacity, with support to these activities not exceeding 15% of 
the total Union support.106 
4.93.  At least 1 5% of Union financial support has to be allocated to fostering efficient fisheries 
control and enforcement, including fighting against IUU fishing, as well as reliable data for 
knowledge -based decision -making.  
4.94.  Based on approved national programmes and acco rding to the Commission, slightly more 
than 50% of funds under shared management (87% of the EUR  6.1 billion) are allocated to priority  1 
(sustainable fisheries and aquatic biological resources) and an additional third to priority  2 
(sustainable aquacultur e, processing, and marketing) for the period 2021 -27. Detailed data to 
compare these commitments with data for the period 2014 -20 were not yet available.  
4.95.  For the period 2014 -21, total support planned under the EMFF by member States amounted 
to EUR  7.8 billion, of which EUR  5.7 billion from the EMFF itself and EUR  2.2 billion from national 
sources.107 By the end of 2021, EUR  4.9 billion of EMFF funding had been committed, corresponding 
to 87.0% of the total EMFF funding available (under shared management), wi th support related to 
data collection, processing of fisheries and aquaculture products, productive investments in 
aquaculture, investments in control, implementation of local development strategies, and support 
for fishing ports accounting for nearly 58.8 % of all commitments.108 The Commission expects all 
EMFF funds to be committed by the end of 2023.  
4.96.  As a response to the COVID -19 pandemic, certain measures were put in place to allow for 
more flexibilities regarding support for the temporary cessation of fishing activities, regarding 
COVID -19-related economic losses for aquaculture producers and processing enterprises and in the 
outermost regions, and adjustments to national operational programmes.109 Producer organizations 
were also again allowed to temporarily receive support to manage storage for fishery products, and 
this mechanism has for the first time been made available to aquaculture products under certain 
conditions. Such storage aid had earl ier expired on 1  January  2019. No additional changes were 
made to the Regulation on Common Market Organization for fishery and aquaculture products.110 
4.97.  As a response to the war in Ukraine, similar flexibilities were introduced regarding support to 
mitigate the impact of market disruptions or the temporary cessation of fishing activities, as they 
relate to the war.111 
 
105 Regulation (EU) 2021/1139, A rticles  15 and 61.  
106 Regulation (EU) 2021/1139, Articles  5 and 17 -21. 
107 Cohesion Open Data Platform, European Maritime and Fisheries Fund (EMFF) . Viewed at: 
https://cohesiondata.ec.europa.eu/funds/emff/14 -20#finance -implementation . 
108 European Commission (2022), EMFF Implementation Report 2021 . Viewed at: https://oceans -and-
fisheries.ec.europa.eu/system/files/2022 -11/EMFF -Implementation -report -2021_en.pdf .  
109 Regulation (EU) 2020/560.  
110 Regulation (EU) 13 79/2013.  
111 Regulation (EU) 2022/1278.  WT/TPR/S/442  • European Union  
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  4.98.  Outside this framework but aligned to it, member States are allowed to provide certain state 
aid to the fisheries and aquaculture sector in cert ain situations ( Section  3.3.1). Member  States can 
provide state aid for certain types of subsidies covered by the fisheries State Aid Guidelines112, the 
Fishery and Aquaculture Block Exemption113, or where they are considered de minimis  aid (not 
exceeding EU R 30,000 per beneficiary over any period of three fiscal years with a defined national 
cap per member State).114 These exclude subsidies not eligible under the EMFF regulation. They can 
also grant exemptions on indirect taxes of energy products used for inl and water navigation 
(including inland fishing) and aquaculture. State aid to the fisheries and aquaculture sector 
amounted to around EUR  49 million in 2019, broadly unchanged from 2014, but were significantly 
lower in 2020 with EUR  33.6 million.115 
4.99.  The 201 5 guidelines for such support are being revised to align to the EMFAF and were 
expected to be adopted in early 2023. A new block exemption regulation replaced the expiring one 
in early 2023116, while the regulation on de minimis  aid was extended to the end of 2023 pending a 
more substantial review.  
4.100.   Under the Energy Taxation Directive (ETD), energy products used for navigation in 
Community waters (including inland fishing) are exempt from taxation.117 The Commission has 
proposed a revision of the ETD that woul d introduce a minimum tax rate and eliminate the current 
mandatory exemptions (Section  4.4.1).118 A study estimated the revenue forgone in terms of fuel 
taxes not collected due to fuel tax exemptions at EUR  1.1 billion in 2018.119 No recent official 
estimate  on total fuel tax exemptions in the European  Union was available.  
4.2.3   Market access  
4.101.   MFN tariffs on fish and fishery products (WTO definition) remain broadly unchanged and 
relatively high at 11.7% on average (ranging from 0% to 26%) compared to 6.5% for all pr oducts, 
albeit lower than the average for agricultural products (14.9%). Around 8.3% of tariff lines are duty 
free, compared to 26.7% overall. Nine tariff lines are subject to seasonal tariff rates. There have 
been little changes to preferential tariffs fo r fish and fishery products nor regarding TRQs described 
in the previous Review ( Section  3.1.3). In 2021, there were 12 TRQs for fish and fish products, and 
some of the 9 tariff lines with seasonal tariff rates also fell under a WTO TRQ. T here were also 
39 autonomous tariff quotas in place at the end of 2022 (up from 28 in 2019 -20) 
(Section  3.1.3.3).120 Of the total import value of fish and fishery products, 55.2% enter under 
preferential tariffs.  
4.102.   In addition to general food -safety requirements ( Section  3.3.3) and related sanitary 
documentation, fish and fishery products can only be imported from approved countries121 and 
approved establishments.122 Moreover, in line with the IUU regulation, imports must be accompanied 
by a catch certificate validat ed by the flag state of the fishing vessel, demonstrating that fisheries 
products stem from legal sources. Use of a related IT system in place since 2019 remains voluntary 
but is foreseen to become mandatory as part of the revision of the European Fisherie s Control 
System (Section  4.2.1).  
 
112 European Commission Communication 2015/C 217/01.  
113 Commission Regulation (EU) 1388/2014.  
114 Commission Regulation (EU) 717/2014.  
115 European Commission (2022), State Aid Scoreboard Note  2021. Viewed at: https://competition -
policy.ec.europa.eu/system/files/2022 -09/state_aid_scoreboard_note_2021.pdf .  
116 Commission Regulation (EU) 2022 /2473.  
117 Council Directive 2003/96/EC.  
118 European Commission Proposal  COM(2021)  563, p.  15. 
119 Carvalho, N. and Guillen , J. (2021), "Economic Impact of Eliminating the Fuel Tax Exemption in the 
EU Fishing Fleet", Sustainability , Vol.  13. 
120 Council Regulatio n (EU) 2020/1706. Last amended from 1  November  2022.  
121 Commission Implementing Regulation (EU) 2021/405  includes an updated list .  
122 European Commission, Integrated Management System for Official Controls – Establishment Lists . 
Viewed at: https://webgate.ec.europa.eu/tracesnt/directory/publication/establishment/index#!/ .  WT/TPR/S/442  • European Union  
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  4.2.4   International agreements and related policies  
4.103.   The large majority of EU catches continue to take place in EU waters, with the SMEFF 
regulation continuing to provide a system of authorizing and monitoring the fishing by EU v essels 
outside EU waters. All EU vessels fishing outside EU waters must be authorized by their flag member 
State to do so.  
4.104.   The European  Union is a signatory to the United Nations Convention on the Law of the Sea; 
the UN Fish Stocks Agreement; the Agreement  on Port State Measures to Prevent, Deter and 
Eliminate Illegal, Unreported and Unregulated Fishing; and the Agreement to Promote Compliance 
with International Conservation and Management Measures by Fishing Vessels on the High Seas. It 
is also a member of  5 Regional Fisheries Management Organizations (RFMOs) managing highly 
migratory fish stocks, 13 RFMOs managing other fish stocks (2 more compared to the previous 
Review), and 2 RFMOs of only advisory status.123 
4.105.   In addition to the domestic EU IUU regulation  (Section  4.2.1) and related regulations 
affecting market access (Section  4.2.3), the European  Union also continues to cooperate 
internationally to address IUU fishing. Regardless of the location of fishing, EU fishing vessels must 
carry an International M aritime Organization (IMO) identification number and those greater than 
12 metres (15 metres for certain vessels operating only nationally or locally) have to employ a 
satellite -based vessel monitoring system providing data on vessel location.124 The 
European  Commission has put forward a proposal125 to ratify the WTO  Agreement on 
Fisheries  Subsidies.  
4.106.   There have been some changes to the bilateral agreements between the European  Union 
and third  countries. An agreement with the United  Kingdom has been  added under the Northern 
Agreements following the United  Kingdom's withdrawal from the European  Union, while among the 
Sustainable Fisheries Partnership Agreements (SFPAs), the fisheries agreements with Liberia 
(in 2020) became dormant, and others were re newed or reactivated. A new implementing Protocol 
with Mauritius, and a new Agreement and implementing Protocol with Madagascar are under 
adoption procedures.126 A significant share of funding under the EMFAF provides support to 
third countries under the SF PAs and funds contributions to RFMOs.  
4.3  Forestry  
4.107.   Forest policy is not explicitly mentioned in the EU treaties, but a number of shared 
competences, such as climate, environment, rural development, and disaster prevention, relate to 
forests, meaning that withi n these areas, forests and forestry do not fall within the exclusive 
competence of member States. As key initiative under the European Green Deal, the Commission 
published an EU  Forest Strategy for 2030 in 2021.127 The new strategy presents six  areas of 
intervention covering sustainable forest use; protecting, restoring, and enlarging EU forests128; 
monitoring; research and innovation; forest governance; and the enforcement of existing 
regulations.  
4.108.   Support to the forestry sector, focusing on the environmental  dimension, has been provided 
under the RDPs and will be covered from 2023 under the CAP strategic plans (Section  4.1.2.2), while 
Horizon Europe provides support to research and innovation activities relevant for forestry.  
4.109.   Imports of timber and timber prod ucts into the European  Union are regulated by the EU 
Timber Regulation (EUTR) based on due diligence requirements for operators to prevent illegal 
 
123 European Commission, Regional Fisheries Management Organisations (RFMOs) . Viewed a t: 
https://oceans -and-fisheries.ec.europa.eu/fisheries/international -agreements/regional -fisheries -management -
organisations -rfmos_en .  
124 Council Regulation (EC) 1224/2009, Article  9. This also applies to third  country fishing vessels 
greater than 12  m operating in Community waters.  
125 European Commission Proposal  COM(2022)  582.  
126 European Commission, Sustainable F isheries Partnership Agreements (SFPAs) . Viewed at: 
https://oceans -and-fisheries.ec.europa.eu/fisheries/inter national -agreements/sustainable -fisheries -
partnership -agreements -sfpas_en .  
127 European Commission Communication COM(2021)  572.  
128 It includes a roadmap for the planting of 3  billion additional trees, as pledged in the EU biodiversity 
strategy.  WT/TPR/S/442  • European Union  
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  timber to be placed on the market, applicable to domestic and imported products. According to the 
Forest Law Enforcement, Governance & Trade (FLEGT) regulation129, imports of forest products from 
partner countries that voluntarily have become a FLEGT partner country (currently only Indonesia) 
require a FLEGT licence based on a nationally established verification s ystem. To avoid administrative 
duplication, under the Timber Regulation such licences are considered as demonstrating compliance 
with national legal requirements and therefore sufficient for due diligence purposes under the EUTR.  
4.110.   Going beyond these regulat ions affecting trade in illegally cut timber, the European 
Parliament and the Council, in December  2022, reached a provisional agreement on a regulation 
proposed by the Commission in 2021, aiming to prevent deforestation and forest degradation 
associated w ith commodities and products placed on or exported from the EU market. It focuses on 
creating a level playing field, minimizing the use of products from supply chains associated with 
deforestation or forest degradation, and increasing demand for "deforesta tion-free" products.130 The 
proposed regulation would cover wood as well as products such as cocoa, coffee, oil palm, cattle, or 
soya grown on former forest areas that were deforested after December  2020.  
4.111.   Replacing and repealing the EUTR, the proposed new r egulation builds on both the EUTR 
and FLEGT regulations, which both underwent a fitness check evaluation in 2020. The proposed 
regulation would require products to be (i)  "deforestation -free" (produced on land that was not 
subject to deforestation or fores t degradation after 31  December  2020); (ii)  produced in compliance 
with national laws ("legality"); and (iii)  accompanied by due diligence statements. It would therefore 
build on and strengthen the existing due diligence and monitoring systems contained in  the EUTR 
regarding the legal status of timber but adding the requirement of products being 
"deforestation -free". Wood covered by a FLEGT licence would continue to be considered as having 
met the legality requirement.  
4.4  Energy  
4.4.1   Sustainable energy and climate  
4.112.   The European  Union continues its efforts of sustainable economic transformation as initially 
spelled out in the first EU Strategy for Sustainable Development in 2001, and most recently 
deepened in the European Green Deal and the Climate Law as well as the REPowerEU Plan. The key 
objectives of the European energy policy consist of completing the internal market while ensuring a 
fundamental shift towards an energy -efficient, cost -effective, and reliable system based on 
renewable and low -carbon energy, improvi ng energy security, reducing emissions, and ultimately 
achieving climate neutrality by 2050.  
4.113.   A 2022 report by the European Environmental Agency found that the European  Union had 
on average achieved its three targets for 2020 (i)  of reducing greenhouse gas (GHG) emissions 
compared to the 1990 levels by 20% (they declined by 31.9%); (ii)  at least 20% of gross energy 
consumption being from renewable sources (actually 22.1%); and (iii)  a 20% reduction in primary 
and final energy consumption compared to a baseli ne (an actual reduction for both of more 
than 23.5% in  2020).131 At member State level, however, achievements of these targets varied. 
While these achievements partially reflect the significant impacts of the COVID -19 pandemic on the 
economy and therefore e nergy use in 2020, they also hold for 2021, using preliminary data.132 
4.114.   In 2021, the European Commission published the Fit -for-55 package, aiming to ensure 
EU policies align with the climate -related goals of the European Green Deal and the Climate Law, 
which  includes an intermediate target of 55% GHG emission reduction by 2030 and becoming 
climate -neutral by 2050 (Section  1).133 The package contains the Fit -for-55 communication as well 
as 16 energy - and climate -related legislative proposals that are currently in various stages of 
 
129 Council Re gulation (EC) 2173/2005.  
130 European Commission Proposal COM(2021)  706, p.  9.  
131 These targets had been set by the European Council (2007), 8/9  March  2007: Presidency 
Conclusions, 7224/1/07 REV 1. Viewed at: 
https://www.consilium.europa.eu/u eDocs/cms_Data/docs/pressData/en/ec/93135.pdf .  
132 European Environmental Agency (2022), Trends and Projections in Europe 2022 , EEA 
Report  10/2022.  
133 European Commission, Delivering the European Green Deal . Viewed at: 
https://ec.europa.eu/info/strategy/priorities -2019-2024/european -green -deal/delivering -european -green -
deal_en . WT/TPR/S/442  • European Union  
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  discussion. The proposals relating to energy primarily focus on emission reductions through multiple 
channels such as, inter alia, phasing out coal, accelerating the roll -out of renewables, increasing 
energy efficiency, and decarbonizi ng gas across various industries. The package also includes 
proposals to increase and broaden targets for emissions reductions; revise the Emissions Trading 
System, including expanding it to other sectors and complementing it with the Carbon Border 
Adjustm ent Mechanism; and establish a Social Climate Fund to cushion the impact of the introduction 
of the emissions trading in the building and road transport sectors on the vulnerable. Member States 
will be required to update their national energy and climate p lans134 by 2023 and  2024, and to 
publish a national Social Climate Plan.  
4.115.   An important element of the transition to more sustainable energy use relates to efforts to 
increase energy efficiency, which the European Green Deal stresses as one of the priorities.  
Amendments to the Energy Efficiency Directive (Directive 2012/27/EU) in 2018 increased the 
ambition of the improvement target to at least 32.5% by 2030 (relative to modelling projections 
for 2030).135 As part of the Fit -for-55-package in 2021, the Commission proposed a new Energy 
Efficiency Directive136 that would establish a more ambitious target for 2030 based on a 2020 
baseline projection, according to the Commission (the REPowerEU Plan upped this ta rget further 
(Section  4.4.5)). If adopted as proposed, a separate reform of the current Energy Taxation Directive 
(ETD) would, inter alia, set minimum excise duty rates for energy products based on their energy 
content and environmental performance and eli minate the current mandatory excise duty 
exemptions for fuels used for waterborne navigation, including fishing (Section  4.2.2).137 
4.116.   In the revised Renewable Energy Directive, the European  Union has also established a target 
for a renewable energy share of at least 32% of gross final consumption by 2030.138 The Directive 
also establishes a minimum share per member State, applicable since 2021. In 2021, the 
Commission proposed to increase this target to 40%139, with the REPowerEU Plan proposing to 
increase this  target further ( Section  4.4.5) . At the same time, the biodiversity strategy aims to limit 
the use of whole trees, food, or feed crops for energy.140 In mid -2022, based on a Commission 
Delegated Regulation, labelling of investments in gas and nuclear power plants, subject to strict 
conditions, was included in the EU taxonomy for sustainable activities (Section  4.5.1.2.4 ) that favour 
the transition to a carbon -neutral economy with effect from January  2023.141 At the end of 2022, 
the Council agreed to faster pe rmit-granting processes for renewables (Section  4.4.5).  
4.117.   The Horizon Europe programme for research and innovation replaced the Horizon 2020 
framework (Section  3.3.1.1 ) and continues to promote energy and climate -related research. The 
programme allocates app roximately EUR  15.1 billion for research and development in the areas of 
climate, energy, and mobility for the period 2021 -27. Around EUR  7 billion are dedicated to energy, 
but research funded in other areas would potentially also be relevant to the energy  sector.  
4.118.   In February  2022, the Commission adopted new Guidelines on State Aid for climate, 
environmental protection and energy142 as spelled out in the European Green Deal to facilitate 
achieving the Deal's objectives, specifying 14 potentially compatible t ypes of specific aid measures. 
On 20  July 2022, the Commission also amended the state aid Temporary Crisis Framework 
(Section  3.3.1.2 ) to include measures aimed at accelerating the roll -out of renewable energy and 
some aimed at decarbonizing industrial processes, as outlined in the REPowerEU Plan. Detailed data 
on state aid provided to the energy transition were not yet available. In 20 20, the total state aid 
expenditure for environmental protection including energy savings amounted to nearly 
EUR 80 billion.143 
 
134 These plans were first prepared based on a requirement i n Regulation (EU) 2018/1999, Article  3. 
135 Directive (EU) 2018/2002.  
136 European Commission Proposal COM(2021)  558. 
137 European Commission Proposal  COM(2021)  563.  
138 Directive (EU) 2018/2001.  
139 European Commission Proposal  COM(2021)  557.  
140 European Commission Communication COM(2020)  380, p.  10. 
141 Commission Delegated Regulation (EU) 2022/1214. The Taxonomy Regulation (Regulation 
(EU) 2020/852) and delegated regulations outline which economic activities and investments qualify as 
contributin g to a low -carbon transition.  
142 European Commission Communication C /2022/481. 
143 European Commission (2022), State Aid Scoreboard 2021 . Viewed at: https://competition -
policy.ec.europa.eu/system/files/2022 -09/state_aid_scoreboard_note_2021.pdf . WT/TPR/S/442  • European Union  
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  4.4.2   Production, consumption, and trade  
4.119.   The European  Union's import dependency on energy remains high and stood at 57.5% 
in 2020144 with net imports significantly larger than primary production as measured in 
thousand  tonnes of oil equivalent (ktoe) (Table  4.9). 
4.120.   During the review period, the composition of primary energy production continued to shift 
towards renewables, which accounted fo r 41% of total primary energy production in 2021 (up 
from 35% in 2018) (Table  4.9), while the share of energy generated from all fossil fuels declined. It 
was too early to identify trends in changes of the composition following the war in Ukraine.  
Renewabl e energy sources accounted for 38% of the electricity produced in 2020 (up from  33% 
in 2018), making it the largest power source of electricity for the first time. Nuclear energy 
accounted for roughly one  quarter of the electricity produced.145 
4.121.   In terms of final energy consumption, oil and petroleum products continued to account for 
the largest share despite a small decline, while the share of electricity remained broadly constant at 
around 23% and the share of gas in energy consumption increased marginally to 22.6% in 2021. 
The share of renewables and biofuels increased from 10.8% in 2018 to 11.7% in 2021, continuing 
its upward trend (Table  4.9). Overall, the share of renewable energy in gross final consumption of 
energy reached 22.1% in 2020 and 21.8% in 20 21.146 
Table 4.9 Energy balances  
(% unless otherwise indicated)   
2015  2016  2017  2018  2019  2020  2021  
Primary production (ktoe)  657,243  641,422  639,862  636,626  617,634  572,924  595,730  
 Solid fossil fuels  20.4 19.4 19.2 18.2 16.2 14.6 15.3 
 Peat and peat products  0.3 0.2 0.3 0.5 0.3 0.1 0.1 
 Oil shale and oil sands  0.5 0.6 0.7 0.7 0.5 0.4 0.4 
 Natural gas  11.0 11.1 10.4 9.3 8.4 7.2 6.4 
 Oil and petroleum products 
(excluding biofuel portion)  4.3 3.9 3.9 3.9 3.7 3.7 3.1 
 Renewables and biofuels  30.5 31.7 32.9 34.5 36.8 40.7 40.9 
 Hydro  4.4 4.6 4.0 4.6 4.5 5.2 5.0 
 Geothermal  1.0 1.0 1.1 1.1 1.1 1.2 1.1 
 Wind 3.4 3.6 4.2 4.3 5.1 6.0 5.6 
 Solar thermal  0.7 0.7 0.7 0.7 0.8 0.8 0.8 
 Solar photovoltaic  1.2 1.3 1.4 1.5 1.6 2.1 2.3 
 Ambient heat (heat 
pumps)  0.9 1.1 1.7 1.8 2.0 2.3 2.5 
 Bioenergy  18.8 19.4 19.9 20.5 21.7 23.1 23.6 
 Non-renewable waste  1.9 2.1 2.1 2.1 2.2 2.4 2.3 
 Nuclear heat  31.0 30.7 30.5 30.7 31.8 30.6 31.3 
Net imports (ktoe)  834,496  843,368  882,210  886,434  908,008  792,350  811,827  
 Solid fossil fuels  11.5 10.9 10.7 10.4 8.2 6.3 7.5 
 Natural gas  26.4 28.1 30.1 30.5 33.1 34.5 35.0 
 Oil and petroleum products 
(excluding biofuel portion)  61.7 60.4 58.7 58.3 58.1 58.1 56.5 
 Renewables and biofuels  0.4 0.5 0.5 0.6 0.6 0.8 0.9 
 Non-renewable waste  0.0 0.1 0.1 0.1 0.1 0.1 0.1 
Final consumption (ktoe)  908,986  927,276  940,180  942,191  937,524  885,118  940,091  
 Solid fossil fuels  2.6 2.6 2.5 2.4 2.1 2.2 2.0 
 Manufactured gases  0.5 0.5 0.5 0.5 0.5 0.5 0.5 
 Natural gas  21.2 21.6 21.5 21.4 21.2 21.9 22.6 
 Oil and petroleum products 
(excluding biofuel portion)  37.2 37.0 36.7 36.5 36.9 35.0 34.8 
 Renewables and biofuels  9.9 9.8 10.3 10.8 11.1 11.7 11.7 
 Non-renewable waste  0.4 0.4 0.4 0.5 0.5 0.6 0.5 
 Electricity  23.2 23.0 22.9 22.9 22.7 23.2 22.7 
 Heat 5.0 5.1 5.0 4.9 4.9 5.0 5.0 
Source:  Eurostat, Energy  (data cut -off 16  January  2023). Viewed at: 
https://ec.europa.eu/eurostat/databrowser/view/nrg_bal_c/default/table?lang=en . 
 
144 Eurostat, From Where Do We Import Energy?  Viewe d at: 
https://ec.europa.eu/eurostat/cache/infographs/energy/bloc -2c.html .  
145 Eurostat, Complete Energy Balances , Variable NRG_BAL_C. Viewed at: 
https://ec.europa.eu/eurostat/databrowser/view/NRG_BAL_C/ .  
146 Eurostat, Renewable Energy Statistics . Viewed at: https://ec.europa.eu/eurostat/statistics -
explained/index.php?title=Renewable_energy_statistics .  WT/TPR/S/442  • European Union  
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  4.122.   According to the Commission communication Save Gas for a Safe Winter147, the geographic 
composition of EU gas imports shifted significantly during 2022, as imports of liquified natural gas 
(LNG) and certain pipeline gas increased. LNG imports during the first half of 2022 were 24.3  billion 
cubic metres (bcm) higher compared to the same period a year earlier (of which 3  bcm from the 
Russian  Federation), while pipeline imports from the Russian  Federation fell by 28  bcm as those 
from other sources increased by 14  bcm. By the third quarter of 2022, the composition of total gas 
imports ( pipeline and LNG) had changed significantly from the third quarter of 2021, with the share 
of imports from the Russian  Federation having declined from 43% to 16% and the share of LNG 
imports having increased from 18% to 39% over the same period.148 Initiati ves to foster further 
LNG imports are under way  (Section  4.4.4) . 
4.123.   As from 5  December  2022, the European  Union no longer allowed the import of seaborne 
crude oil from the Russian  Federation, while the import of refined petroleum products from the 
Russian  Federation has been prohibited (with limited exceptions) since 5  February  2023.149 Since 
5 December  2022, transporting such oil as well as insuring vessels carrying such crude oil by 
European firms are also prohibited unless the purchase price of the oil is below a maximum price set 
by the Commission in line with G7 Price Cap Coalition decisions first taken on 2  December  2022.150 
4.124.   Imports of electricity, crude oil, and natural gas (gaseous and liquified) from outside the 
European  Union are duty free, while there are some tariffs on certain petroleum oils.  
4.4.3   Regulation of the internal market  
4.125.   The Treaty on the Functioning of the EU (TFEU) continues to provide the basis for the division 
of competence between the Union and its member States (Section  2). In the area of energy, this 
competence is shared.151 A key policy remains the completion of an Energy Union, aiming to increase 
energy security, sustainability, and competitiveness, whose five dimensions remain in place to 
(i) improve security of energy supply through diversification and cooperation among EU member 
States; (ii)  complete the internal  energy market; (iii)  boost energy efficiency and reduce 
dependency on imports; (iv)  decarbonize the economy; (v)  and promote research and innovation in 
low-carbon and clean energy technologies, to support the energy transition and improve 
competitiveness.152 
4.126.   While the main EU framework for energy in the areas of electricity and gas has remained 
broadly unchanged from the time of the previous Review, some developments regarding its 
implementation have taken place. The electricity market continues to be regul ated by 
Regulation  (EU) 2019/943 and Directive 2019/944, both described in the previous Review153, while 
the gas market is regulated by Directive 2009/73/EC, as amended, and Regulation (EC) 715/2009. 
Regulation 715/2009 was amended to introduce mandatory ce rtification of gas storage operators 
in 2022 (Section  4.4.5). In addition, Regulation (EU) 2019/941 put in place a mechanism for 
member States to cooperate and prevent, prepare for, and manage potential electricity crises.154 
The European  Union Agency for t he Cooperation of Energy Regulators (ACER) continues to work 
towards the integration and completion of the internal markets for electricity and natural gas.155 The 
role that ACER will play in the future hydrogen and decarbonized gas markets remains under 
discussion, according to the Commission.  
4.127.   Transmission System Operators (TSOs) for electricity and gas are certified by national 
regulatory authorities to ensure compliance with certain conditions including the unbundling 
obligation and independence of the tr ansmission and TSOs under the Gas and Electricity Directives. 
 
147 European Commission Communication COM(2022)  360.  
148 Market Observatory for Energy (2022), Quarterly Report on European Gas Market – Q3-2022. 
Viewed at: https://energy.ec.europa.eu/data -and-analysis/market -analysis_en .  
149 Council Regulation (EU) 2022/879. Certain exceptions apply to Bulgaria, Croatia, and the 
Czech  Republic. 
150 Regulation (EU) 833/2014, Article  3n (as amended).  
151 For a short overview, see WTO document WT/TPR/S/395/Rev.1, 7  July 2020, Section  4.2. 
152 European Commission Communication COM(2015)  80. Also see WTO document 
WT/TPR/S/395/Rev.1, Section  4.2. 
153 WTO document WT/TPR/S/395/Rev.1, 7  July 2020, Section  4.2. 
154 Regulation (EU) 2019/941. It is based on European Commission Proposal COM(2016)  862 mentioned 
in the previous Review.  
155 Regulation (EU) 2019/942.  WT/TPR/S/442  • European Union  
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  TSOs from third countries also undergo scrutiny, with national regulatory authorities having to take 
into consideration an opinion of the European Commission regarding compliance with the unbund ling 
conditions before formal certification at member State  level. The Commission opinion considers, 
inter alia, whether certification would put at risk the energy supply in the European  Union.156 
European rules are in place to ensure non -discriminatory net work access (including for gas storage) 
as well as congestion management, with national regulatory authorities establishing certain terms 
and conditions or procedures. National regulatory authorities also establish transmission or 
distribution tariffs (and /or their methodologies).157 
4.128.   TSOs in the European  Union are organized in the European Network of Transmission System 
Operators for Electricity (ENTSO -E)158 and the European Network of Transmission System Operators 
for Gas (ENTSOG)159, which promote cooperatio n among TSOs, provide technical inputs into the 
drafting of network codes (i.e.  binding Commission regulations), and undertake other coordinating 
functions such as forecasting. Since 2019, gas pipelines entering or leaving the European  Union 
must also comp ly with national rules in line with the amended Gas Directive, aiming to ensure fair 
and open access and avoiding any abuse of a dominant position.160 
4.129.   According to the European Green Deal, energy infrastructure is a key enabler for the energy 
transition and  in 2022 a revised Trans -European Networks for Energy (TEN -E) regulation was 
published, aiming to reflect expected necessary changes to the energy system resulting from 
objectives spelled out in the European  Green Deal.161 The TEN -E links the energy infrast ructure of 
EU member States and the regulation identifies 11  priority corridors that would connect currently 
isolated areas, strengthen existing cross -border connections, and support integrating renewable 
energy. According to the revised regulation, the ca tegories of energy networks include those for 
electricity, gas, hydrogen, electrolyser facilities, and carbon dioxide, a change from those identified 
in the previous regulation.162 As under the previous regulation, projects of common interest will be 
identi fied, but these will be complemented with projects of mutual interest, linked to energy 
networks in third countries. The Connecting Europe Facility for energy foresees the provision of 
EUR 5.8 billion for investments into the energy infrastructure that con tribute to the achievement of 
projects of common interest and those of mutual interest, as well as "cross -border projects in the 
field of renewable energy"163, over the period 2021 -27.164 Regarding the connection of electricity 
networks, an electricity inter connection target165 of 15% by 2030 (as measured by the indicators 
spelled out in Regulation (EU) 2018/1999) is in place for each member State.  
4.130.   To establish a new regulatory framework for competitive decarbonized gas markets, the 
Commission adopted proposals for a new Gas Market and Hydrogen Directive and Regulation to 
recast the current Directive and Regulation for the gas market to also include renewable gas and 
hydrogen.166 These efforts are linked to the Hydrogen Strategy, which contributes to the  European 
Green Deal and builds on the new Industrial Strategy as well as the European  Union's recovery plan 
(Section  3.3.1.1 ) by ensuring hydrogen can play a role in decarbonizing the economy. Outlining the 
need for international cooperation, the strategy  aims to establish a regulatory framework and to 
incentivize supply and demand in "lead markets", while also establishing infrastructure with 
non-discriminatory access to make widespread use of hydrogen feasible, for example in transport.  
4.131.   In light of energ y prices that were rising even before the war in Ukraine, the European 
Commission approved a toolbox of measures in October  2021. It includes measures that allow 
 
156 Directive (EU) 2019/944, Article  53, and Directive 2009/73/EC, Article  11. 
157 Directive (EU) 2019/944, Article  59, and Directive 2009/73/EC, Article  41. 
158 ENTSO -E. Viewed at: https://www.entsoe.eu . TSOs from non -EU mem ber States also participate in 
ETNSO -E. 
159 ENTSOG. Viewed at: https://www.entsog.eu . 
160 Directive 2009/73/EC, Article  34. Amended by Directive (EU) 2019/692.  
161 Regulation (EU) 2022/869.  
162 The previous regulation also in cluded a category of oil, and did not include those for hydrogen and 
electrolyser facilities.  
163 Regulation (EU) 2021/1153, Article  7. 
164 European Commission, About the Connecting Europe Facility . Viewed at: 
https://cinea.ec.europa.eu/programmes/connecting -europe -facility/about -connecting -europe -facility_en#cef -
energy . 
165 Defined as the ratio of cross -border capacity to installed generation capacity. European Commission, 
Electricity Interconnection Targets . Viewed at: https://energy.ec.europa.eu/topics/infrastructure/electricity -
interconnection -targets_en . 
166 European Commission Proposals  COM(2021)  803 and COM(2021)  804. WT/TPR/S/442  • European Union  
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  member States to provide certain income support (and tax reductions) to vulnerable households 
(and protecting them from disconnections), as well as support to companies in line with state aid 
rules. It also puts emphasis on the application of competition rules, and foresees reviewing the 
electricity market system in general, where currently the mar ginal unit cost of additional electricity 
generated (i.e.  from gas) sets electricity prices, a mechanism that had led to extensive discussions 
regarding how to deal with windfall profits for other electricity producers. The toolbox also already 
outlines pl ans to improve the security of supply via energy storage and purchasing of gas reserves.167 
4.132.   During 2021 and 2022, member States made use of the measures contained in the toolbox 
to varying degrees, including following the start of the war in Ukraine and the  resulting disruptions 
in energy markets. Such measures included support to the most vulnerable households (and at times 
firms) (Section  4.4.5).  
4.133.   Overall, energy subsidies were broadly stable between 2019 and 2020 where they reached 
EUR 173 billion, but inc reased in 2021 according to preliminary data, as energy subsidies for 
renewable sources of energy increased, as did subsidies for "all energies" (either not allocatable or 
related to energy efficiency). More than half of total energy subsidies in 2020 were  for energy 
production (including transmission and storage), and about one  third for all types of energy demand. 
Income and price support for renewable energies (mostly feed -in tariffs and premiums) and tax 
expenditures for fossil fuels accounted for 41% a nd 20% of total subsidies in 2020.168 During 2022, 
15 member States reduced VAT rates on gas, electricity, or transport fuels.169 
4.4.4   Relations with third countries  
4.134.   The European  Union published a Communication on the EU External Energy Engagement  in 
a Changing W orld170, linking various objectives. To strengthen energy security and resilience, it aims 
to diversify the EU's gas supply (as well as other energy) away from the Russian  Federation, develop 
renewable hydrogen trade, and prioritize energy savings and effic iency. It also spells out the 
objective of leading the global green and just energy transition, including by promoting renewable 
technologies and efficiency abroad with funding from the Global Gateway initiative, and to develop 
raw material value chain par tnerships with third  countries to ensure diversity of supply of critical 
raw materials. It also foresees support to Ukraine and other countries regarding the effects of the 
war in Ukraine.  
4.135.   All EU member States (except Italy) are members of the Energy Chart er Treaty. The adoption 
of amendments to the Treaty planned for November  2022 was postponed ( Section  2.4.2). 
4.4.5   Energy security and affordability  
4.136.   As a response to the war in Ukraine, the European  Union undertook important policy changes 
to ensure energy security at affordable prices. To save energy, facilitate the increase in the 
generation of clean energy, and diversify the origin or energy imports /supplies, the Commission 
published the REPowerEU Plan in May  2022.171 Some of the Plan's short -term measures include 
setting certain targets for gas storage prior to the winter months, establishing a platform for common 
gas purchases, accelerating renewabl e energy projects172, and encouraging citizens to use less 
energy. Over the longer term, it makes available significant resources (close to EUR  300 billion) 
under the Recovery and Resilience Fund for investments and policy reforms (including for faster 
approval of renewable energy projects), proposed to increase the target for the use of renewable 
energy173, and foresees efforts to improve the regulatory framework for, and production of, 
 
167 European Commission Communication COM(2021)  660. 
168 European Commission Report  COM(2022)  642. 
169 Europ ean Commission (2022), Study on Energy Subsidies and Other Government Interventions in 
the European  Union  – 2022 edition, p.  52.  
170 European Commission Joint Communication JOIN(2022)  23. 
171 European Commission Communication COM(2022)  230. 
172 The framework to accelerate the deployment of renewable energy was adopted in late 
December  2022 with Council Regulation (EU) 2022/2577.  
173 The Council confirmed that it maintained a target of 40% as part  of its general approach in late 
December  2022. Council of the EU, "REPowerEU: Council Agrees on Accelerated Permitting Rules for 
Renewables", 19  December. Viewed at: https://www.consilium.europa.eu/en/press/press -
releases/2022/12/19/repowereu -council -agrees -on-accelerated -permitting -rules-for-renewables/ .  WT/TPR/S/442  • European Union  
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  hydrogen.174 REPowerEU also proposes to increase the revised target for e nergy efficiency under the 
Energy Efficiency Directive from 9% to 13% (Section  4.4.1).  
4.137.   Regulation (EU) 2022/1032 established minimum storage levels for natural gas in gas 
storage facilities by amending Regulation (EU) 2017/1938 concerning measures to safeg uard the 
security of gas supply.175 It also introduced mandatory certification of storage system operators 
considering the risk to the security of energy supply in the Union (in terms of ownership, supply or 
commercial relationships, or rights and obligatio ns relating to agreements with third  countries), by 
amending Regulation (EC) 715/2009.  
4.138.   Council Regulation (EU) 2022/1369 established a voluntary gas demand reduction of 15% 
for the period 1  August  2022 to 31  March  2023, but also introduced the possibility of making this 
reduction mandatory in case the Commission declares a Union alert.176 Member States are allowed 
to choose appropriate measures, ensuring that they do not unduly distort competition and 
functioning of the internal gas market, do not affect ene rgy security of another member State, and 
protect consumers.177 
4.139.   Similarly, Council Regulation (EU) 2022/1854 establishes best endeavour targets of reducing 
total monthly electricity consumption by 10% compared to the preceding five  years on a rolling basis 
(while allowing for demand increases resulting from substitution from gas and fossil fuels towards 
electricity). It also sets binding targets for electricity reduction of 5% during peak hours, with 
member States allowed to define such peak hours and to cho ose appropriate measures to achieve 
such reduction as long as certain conditions related to competition in the electricity market and 
non-discrimination are met.  
4.140.   The Regulation also establishes a cap for market revenues from electricity generation at 
EUR 180 per MWh of electricity produced. Member States are given certain discretion as to whether 
to apply such caps to small producers (with installed capacity of up to 1  MWh), or only to 90% of 
market revenues exceeding the cap. Revenues from the implementati on of this cap are to be used 
to compensate final electricity customers in a targeted manner. The Regulation also sets the 
framework for member States to establish a temporary tax (solidarity contribution) on profits in the 
crude petroleum, natural gas, co al, and refinery sectors.178 
4.141.   During  2022, some member States took additional temporary measures and introduced a 
cap on gas prices or on the increase of gas prices for consumers. In December  2022, the Council 
adopted Council Regulation (EU) 2022/2578179, establishing a market correction mechanism from 
15 February  2023, which would be activated if, for three working days, the front -month price on the 
Title Transfer Facility (TTF) exceeds EUR  180 per MWh and is EUR  35 higher than a reference price 
for LNG on gl obal markets. This Regulation complements another regulation establishing a 
mechanism for joint purchases of gas, the more efficient use of pipelines, further defining the rules 
for implementing the solidarity mechanism among member States for the allocati on of gas foreseen 
by Regulation (EU) 2017/1938, and initiatives to address price volatility. Under that Regulation, 
member States will have to bring 15% of their gas storage filling obligation under EU demand 
aggregation and joint purchasing.180 A tool to operationalize this obligation is being put in place 
according to the Commission.  
4.142.   Following the energy market upheavals resulting from the war in Ukraine, some member 
States also intervened in national markets (e.g.  where operators were overburd ened by operating 
losses resulting from low -cost delivery obligations in the wake of significantly increasing energy spot 
 
174 European Commission, REPowerEU: Affordable, S ecure and Sustainable Energy for Europe . Viewed 
at: https://ec.europa.eu/info/strategy/priorities -2019-2024/european -green -deal/repowereu -affordable -
secure -and-sustainable -energy -europe_en .  
175 Gas storage facilities had to be filled to at least 80% by 1  November  2022, and to 90% by each 
1 November from 2023. Member States without underground storage facilit ies are required to make 
arrangements in neighbouring countries to store at least 15% of the average annual gas consumption over the 
preceding five  years.  
176 Flexibilities apply to certain member States as outlined in the Regulation.  
177 Council Regulation (E U) 2022/1369.  
178 Council Regulation (EU) 2022/1854.  
179 Council Regulation (EU) 2022/2578.  
180 Council Regulation (EU) 2022/2576, Article  10. WT/TPR/S/442  • European Union  
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  prices as long -term supply from Gazprom was interrupted).181 In addition, the European  Markets 
and Securities Authority (ESMA) proposed  temporary amendments to the rules regarding collateral 
in the trading of energy derivatives to avoid the emergence of a liquidity crunch.182 Some member 
States also took measures with respect to strategic infrastructure owned by Gazprom.  
4.143.   SOEs continue to p lay an important (if not increasing) role in the European  Union's energy 
sector ( Section  3.3.5). 
4.144.   In recent FTAs and to varying degrees, the European  Union covered trade in raw materials 
and energy goods for the climate transition, included disciplines to r emove tariffs and/or non -tariff 
barriers to trade and investment in renewable energy generation, or put in place a framework for 
(regulatory) cooperation.183 According to the Commission, further alignments of the Energy and Raw 
Materials chapter towards the  objectives of the European Green Deal continue.  
4.5  Services  
4.145.   Services dominate the European  Union economy, accounting for roughly 70% of GDP and a 
similar share of its employment.184 Efforts to integrate services markets in the European  Union 
continue, and a r ecent study by the European Commission found that overall, for 13 service sectors 
among those covered by the Services Directive185, restrictions declined between 2006 and  2017. 
However, it pointed out that progress in removing restrictions has remained limi ted overall and that 
the Single Market for services remains fragmented.186 
4.146.   Different authorization schemes remained the most prevalent barriers in place, and for the 
majority of sectors, such schemes had declined little by 2017, although a relatively consis tent 
improvement in the availability of electronic procedures was identified. The study found it 
noteworthy to highlight the large diversity of regulatory approaches across sectors and member 
States, which seems to offer scope for learning and further regu latory simplification.187 
4.147.   A separate assessment reviewed restrictions in seven professional services sectors in more 
detail. It confirmed these findings and indicated that in some professions, some member States had 
actually increased regulatory restriction s. It also updated previous reform recommendations to 
increase competitiveness of the Single Market for services, recommendations that are 
complementary to actions identified in the Industrial Strategy such as a harmonized regulation of 
key business servic es (Section  2.2).188 
4.148.   The fragmentation of the services sector has wider economic effects as services play an 
important role as inputs into other sectors of the economy with manufactured products increasingly 
offered jointly with services.189 For example in 2 015, the share of services -related employment 
in manufacturing was estimated to range from 26% in the Slovak  Republic to 59% in Germany and 
60% in Luxembourg.190 The impact of reforms in the services sector implemented between 2006 
 
181 Prominent cases are the energy utility companies of Uniper in Germany and Electricité de France.  
182 ESMA, Final Repor t – Emergency Measures on Collateral Requirements – Draft Regulatory Technical 
Standards Amending Commission Delegated Regulation (RTS) 153/2013 . 
183 European Commission, Sustainable Development in EU Trade Agreements . Viewed at: 
https://policy.trade.ec.europa.eu/development -and-sustainability/sustainable -development/sustainable -
development -eu-trade -agreements _en.  
184 European Commission, Internal Market, Industry, Entrepreneurship and SMEs . Viewed at: 
https://ec.europa.eu/growth/single -market/single -market -services_en . 
185 Directi ve 2006/123/EC.  
186 European Commission (2021), Mapping and Assessment of Legal and Administrative Barriers in the 
Services Sector – Summary Report . Viewed at: https://op.europa.eu/en/publication -detail/ -
/publication/6d8d8858 -a756-11eb-9585-01aa75ed71a1/language -en. 
187 European Commission (2021), Mapping and Assessment of Legal and Administrative Barriers in the 
Services Sector – Summary Report . 
188 European Commission Communication COM(2021)  385. The analysis covers architects, civil 
engineers, accountants and tax advisers, lawyers, patent/trademark agents, real estate agents, and tourist 
guides.  
189 Joint Research Centre (2022), A General Equilibrium Analysis of the Economic Impact of the 
Post-2006 EU Regulation in the Services Sector , JRC Working Papers on Territorial Modelling and 
Analysis  03/2022.  
190 Copenhagen Economics (2018), Making EU Trade in Services Work for All – Enhancing I nnovation 
and Competitiveness Throughout the EU Economy , p. 44. WT/TPR/S/442  • European Union  
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  and 2017 are estimated to  increase GDP beyond trend growth and in real terms by a 
cumulative  2.7% in 2027. Ambitious additional reforms after 2017 could potentially increase GDP 
by an additional 2.5% on top of that increase, while less ambitious reforms could lead to lower 
additio nal increases of 1.1%.191 Overall, services in the European  Union are reported to remain 
relatively more expensive compared to other economies.192 
4.149.   The overall restrictiveness in EU member States to services trade with non -EU Members 
remains relatively low ac cording to the OECD Services Trade Restrictiveness Index (STRI), and it 
continues to differ across member States as well as across services sectors. At the same time, 
restrictions among the members of the European Economic Area (the EU member States, plus 
Iceland, Liechtenstein, and Norway) remain significantly lower than those vis-à-vis the rest of the 
world.193 
4.150.   The European  Union participates in the Joint Statement Initiative (JSI) on Services Domestic 
Regulation and to reflect commitments made, it submitt ed its pre -finalization schedule of specific 
commitments, which was approved by a Council Decision on 25  November  2022.194 
Regulatory developments  
4.151.   As part of a digital services package proposed by the Commission to establish a single market 
for digital services, the Digital Services Act (DSA) entered into force on 16  November  2022, 
complementing the Digital Markets Act, which entered into force on 1  November.195 The DSA  
harmonizes the rules applicable to "intermediary services" in the internal market with the objective 
of ensuring a transparent, safe, predictable, and trusted online environment. Except in certain 
circumstances, intermediary services are exempt from liabi lity as for content hosted on their 
platforms. The DSA prohibits EU member States from forcing intermediary services to monitor 
third-party content while introducing due diligence obligations regarding transparency for such 
services. Under the DSA, very la rge online platforms (VLOPs) and very large online search engines 
(VLOSEs), will be subject to special rules (see below) and will be directly supervised at the EU level, 
by the European Commission, with national "digital service coordinators" responsible f or enforcing 
the DSA in respect of other intermediary services. The Act also establishes an advisory European 
Board for Digital Services composed of national digital services coordinators and foresees 
establishing rules on penalties.196 
4.152.   The DSA introduces d ue diligence requirements for all intermediary service providers, 
including establishing points of contact, and certain reporting requirements to national competent 
authorities. They are also required to spell out scope, terms, and conditions applying to p ossible 
content restrictions up -front and enforce them in a non -arbitrary way, observing fundamental 
rights.197 The DSA also introduces additional requirements for hosting services, including online 
platforms, to establish a mechanism for allowing to easily  report, and then address, illegal content, 
as well as notification requirements in case of suspected criminal offences. It requires online 
platforms to establish an internal complaint -handling system for decisions regarding content 
moderation as well as a ccess to information or the service, and to report on such complaints. 
Enterprises classified as micro and small are exempt from many of these rules applying to services 
or platforms, unless they are designated as VLOPs (see below).  
4.153.   With a view to empower users, counter disinformation, and protect minors, the DSA also 
regulates online advertisements, ensuring they are clearly marked, and gives users the opportunity 
to understand and change targeting parameters. It also bans certain types of targeted ads on online 
platforms. The DSA likewise requires online platforms to allow consumers to conclude distance 
 
191 Joint Research Centre (2022), A General Equilibrium Analysis of the Economic Impact of the 
Post-2006 EU Regulation in the Services Sector , JRC Working Papers on Territorial Modelling and 
Analysis 03/2022.  
192 Copenhagen Economics (2018), Making the EU Trade in Services Work for All – Enhancing Innovation 
and Competitiveness throughout the EU Economy , p. 38. 
193 OECD (2022), OECD Services Trade Restrictiveness Index: Policy Trends up to 2022 , pp. 17-18. 
194 Council Decision (EU) 2022/2384.  
195 Regulation (EU) 2022/2065.  
196 Regulation (EU) 2022/2065, Article  52. 
197 Regulation (EU) 2022/2065, Article  14. WT/TPR/S/442  • European Union  
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  contracts to collect and protect certain data of traders and consumers, and to ensure relevant 
product information is easily accessible.  
4.154.   The DSA contains a dditional rules for VLOPs or VLOSEs, due to the large reach of such 
entities (DSA, Section  5). Such entities are defined as those having more than 45  million monthly 
active recipients in the Union and need to be designated as such (Article  33). These entit ies are 
required to assess the risks (and establish mitigation systems) emanating from their service 
provision (including concerning recommendation systems, content moderation, advertising, and 
data-related practices) regarding the dissemination of illegal  content, negative effects on 
fundamental rights, electoral processes, civic discourse, and public security, and negative effects 
relating to gender -based violence or the protection of public health and minors. The DSA also 
establishes a mechanism for the Commission to require additional interventions of specific service 
providers in response to a crisis (Article  36), an article introduced in the context of the war in Ukraine 
and related manipulation of online information, but holding relevance also in simi lar crises. VLOPs 
and VLOSEs are required to allow their users to choose a recommendation system not based on 
profiling and to transparently present certain information regarding advertising for public scrutiny. 
They are required to establish a separate "c ompliance function", are subject to an audit requirement 
at their own expense regarding the Regulation's obligations, and have to pay a supervisory fee 
(Article  43) to the Commission, which also has the powers to impose fines of up to 6% of the annual 
worldwide turnover of the provider of the relevant VLOPs or VLOSEs.  
4.155.   The DSA entered into force on 16  November  2022 and will be directly applicable across the 
European Union from 17  February  2024. The special rules for VLOPs or VLOSEs apply earlier, 
four months  after their designation as such by the Commission, with the Commission expected to 
designate the first  such platforms and/or search engines during 2023. All online platforms had to 
publicly report on their user numbers in the Union by 17  February  2023.  
4.156.   Some implementing regulations regarding investigation and enforcement by the 
Commission, the right to be heard (for VLOPs or VLOSEs), and information disclosure under the DSA 
as well as delegated acts are expected to be proposed by the Commission in the cour se of 2023.198 
4.157.   In anticipation of the DSA entering into force, the Commission and a number of large 
platforms, search engines, and other players agreed on a "strengthened Code of Practice on 
Disinformation" in June  2022, updating an earlier code from 2018. The objective of this code is for 
the signatories to limit the amount of reproduced disinformation, including by addressing 
manipulative behaviour, and in particular to stop monetization of such content being shared, as well 
as to increase the transparency  regarding political advertising.199 
4.158.   Separately from the DSA, the Digital Markets Act (DMA) concerns "gatekeepers", 
i.e. undertakings that provide core platform services (e.g.  search engines, social networks, and 
advertising systems) and (i)  have a consider able impact on the internal market; (ii)  whose core 
platforms are used by business users to reach end users; and (iii)  have a well -established position 
in their operations (or are expected to have such a position in the near future). The DMA entered 
into f orce on 1  November  2022 and will start applying from 1  May 2023. The DMA contains 
provisions aimed at restricting anti -competitive practices, although the proposed legislation is 
considered not to be part of competition policy ( Section  3.3.4). 
4.159.   To facilitat e the temporary movement of health professionals in response to the COVID -19 
pandemic, the Commission issued in May  2020 a Communication regarding the application of 
Directive 2005/36/EC (regarding the recognition of professional qualifications) to health 
professionals. The Commission also issued a recommendation in April  2022 to help facilitate 
professional recognition, and the exercise of regulated professions, for people having fled from 
Ukraine as a result of the war.200 Both cases foresee employing prof essionals with a different status 
 
198 European Commission, Have Your Say – Digital Services Act – Implementing Regulation . Viewed at: 
https://ec.europa.eu/info/law/better -regulation/have -your-say/initiatives/13565 -Digital -Services -Act-
implementing -regulation_en .  
199 European Commission, The 2022 Code of Practice on Disinformation . Viewed at: https://digital -
strategy.ec.europa.eu/en/policies/c ode-practice -disinformation . 
200 Commission Recommendation (EU) 2022/554.  WT/TPR/S/442  • European Union  
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  than that of a full professional where such professionals do not meet training requirements outlined 
in Directive 2005/36/EC.  
4.160.   In 2020, the adjustments to the regulatory environment for the posting of workers reported 
in the previous Review entered into force.201 The reform aimed at protecting workers regarding 
working conditions as well as health and safety, and expanded the coverage of Directive 96/71/EC 
to also include the posting of workers under certain temporary employm ent or placement agency 
arrangements. It also introduced a requirement for workers posted in another member State for 
more than 12  months (a period that can be extended to 18  months) to have access to the same 
legal terms and conditions of employment as th ose under national employment contracts. These 
time frames apply to a specific position (i.e.  "the same task at the same place"), rather than a 
particular employee holding a post.  
4.161.   In April  2021, as no agreement was reached by the co -legislator, the Commiss ion withdrew 
a 2017 proposal for a "services e -card" that aimed to facilitate the provision of services in other 
member States and to ensure even treatment between domestic and foreign service providers.202 
The proposal for a notification and consultation p rocedure for draft legislation regarding authorization 
schemes and requirements related to services, outlined in the 2015 plan to improve the single 
market203, was withdrawn at the same time.  
4.5.1   Financial services  
4.5.1.1   Overview  
4.162.   Financial services accounted for 4.5%  of gross value added  in 202 1, although the sector's 
importance varied among member States from less than 3% to more than 25% . While the number 
of credit institutions continued to decline (in particular small ones), total bank assets in the EU -27 
increased  from EUR  30 trillion at the end of 2018 to EUR  35 trillion at the end of 2021, representing 
242.6% of GDP.204 Total assets of the insurance sector (for the European Economic Area) increased 
from EUR  8.9 trillion in 2018 to EUR  10.7 trillion in 2020205 as Gr oss Written Premiums as a share 
of GDP varied from 0.7% in Romania to 6.4% in Malta.206 Other financial institutions, often called 
shadow banks, accounted for 22% of liabilities of the euro area financial sector.207 Although generally 
increasing, the size of  non-bank lending remained low as a share of total bank lending.208 
4.163.   Financial integration in the European market continued to increase during the review period. 
According to the 2022 European Financial Stability and Integration Review209, quantity and 
price-based indicators of financial integration dipped strongly at the outset of the COVID -19 
pandemic but recovered swiftly and exceeded pre -pandemic levels by the end of 2020. However, 
both indicators still have not reached the levels from prior to the g lobal financial crisis. The share of 
assets held by the largest five credit institutions increased in the majority for member States 
between 2018 and 2020, when it ranged from around 30% to more than 95%.210 
4.164.   Holdings of cross -border equity and debt also con tinued to increase during the review period, 
as did cross -border FDI and portfolio investments. European investors continue to exhibit a bias 
towards investing in their "home" member State as opposed to other member States, but that bias 
 
201 Directive (EU) 2018/957.  
202 European Commission Notice  PUB/2021/261.  
203 European Commission Communication COM(2015)  550. 
204 Eurostat, Financial Balance Sheets – Annual Data . Viewed at: 
https://ec.europa.eu/eurostat/databrowser/view/NASA_10_F_BS__custom_3816788/default/table?lang=en .  
205 EIOPA, Insurance Statistics . Viewed at: https://www.eiopa.europa.eu/tools -and-data/statistics -and-
risk-dashboards/insurance -statistics_en .  
206 EIOPA (2022), European Insu rance Overview 2022 . Viewed at: 
https://www.eiopa.europa.eu/document -library/report/european -insurance -overview -2022_en . 
207 ECB, Euro Area Economic and F inancial Developments by Institutional Sector: Second Quarter 
of 2022. Viewed at: 
https://www.ecb.europa.eu/press/pr/stats/ffi/html/ecb.eaefd_full2022 q2~37a1e8c575.en.html .  
208 EBA (2022 ), Final Report on Response to the Nonbank Lending Request from the CfA on Digital 
Finance , EBA/Rep/2022.  
209 Staff Working Document  SWD(2022)  93 final/2 .  
210 ECB (2022), Financial Integration and Structure in the Euro Area  – Statistical Annex , p. 41. 
Viewed  at: https://www.ecb.europa.eu/pub/pdf/fie/ecb.fie202204_annex~b0778eef8f.en.pdf . WT/TPR/S/442  • European Union  
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  declined during th e review period, especially for euro area countries. Data indicate that this home 
bias differs widely across member States, is lower for euro area countries as compared to other 
member States, and that it is generally higher for equity investments as compa red to debt 
investments. The comparable home bias for investment in the European  Union (as compared to 
outside the European  Union) is generally much stronger according to this analysis.  
4.165.   Financial services are regulated at the EU level, with Directives and Regulations 
complemented by additional rules or guidelines issued by the Commission, the European Supervisory 
Authorities (ESAs), and national authorities. The three ESAs are the European Banking Authority 
(EBA), the European Insurance and Occupational Pen sions Authority (EIOPA), and the European 
Securities and Markets Authority (ESMA).211 The ESAs are tasked with developing and implementing 
a consistent regulatory framework in their relevant areas of competency, although ESMA also has 
some direct supervisory functions.212 Still, some observers consider that a general review to regulate 
financial services according to the risks they pose (rather than by type of instrument) would be 
required to establish a more efficient and consistent regulatory framework.213 
4.166.   The European Systemic Risk Board at the ECB, together with the ESAs, is tasked to pre vent 
and mitigate systemic risks to ensure stability of the overall financial system.214 The Anti -Money 
Laundering and Countering the Financing of Terrorism (AML/CTF) Legislative Package currently 
under discussion proposes to establish an Authority for AML/ CTF that would directly supervise some 
entities while collaborating with national authorities on others.215 In September  2022, the European 
Systemic Risk Board issued a warning that risks to financial stability have increased, calling for 
prudent risk manag ement practices across all financial sectors.216 
4.167.   Overall, according to the ECB, the banking sector remained financially sound at the end of 
2021. Capital Adequacy Ratios remained well above the minimum and varied across banks, member 
State, and types of len ders, with the average Tier -1 ratio at 16.0% at the end of the third quarter 
of 2022 for banks in member States participating in the Single Supervisory Mechanism (SSM) 
(Section  4.5.1.2.1). For those banks, Non -Performing Loans (NPL) ratios continued to dec line and 
stood at 1.8% in Q3 -2022.217 More detailed information for institutions directly supervised by the 
ECB indicate that NPL ratios differed across member States and types of lenders.218 The net -stable 
funding ratio for those institutions stood at 127.1  in Q3-2022. Return on assets and equity for banks 
in member States participating in the SSM stood on average higher at the end of 2021 compared to 
early 2019, having recovered from low values in 2020, with wide variance across member States 
and types of l enders.  
4.168.   The ECB's first climate stress test estimated potential losses of around EUR  70 billion to the 
banks included in the assessment, in case of a disorderly transition to a low -carbon economy. It 
stressed that this assessment likely understated actual climate -related risks due to a variety of 
factors. It also found that most banks do not yet sufficiently consider climate risks in credit risk 
assessment or stress tests.219 
4.169.   At the end of 2021, reinsurance and insurance companies overall were well capitaliz ed, and 
although Solvency Capital Requirement (SCR) ratios varied significantly across companies, insurance 
types, and countries, they remained well above the regulatory minimum of 100% with a median  SCR 
 
211 Regulation (EU)  2019/2175 amended certain pow ers and tasks, governance structure, and budgetary 
processes of ESAs via the three ESA regulations: Regulations (EU) 1093/2010, (EU) 1094/2010, and 
(EU) 1095/2010.  
212 ESMA supervises credit rating agencies, trade repositories, and securitization repositori es, as well as 
certain data reporting services providers, benchmark administrators, and third -country central counterparties. 
ESMA, Supervision and Convergence . Viewed at: https://www.esma. europa.eu/supervision/supervision .  
213 Navid, K. (2022), "How Many Single Rulebooks? The EU's Patchwork Approach to Ensuring 
Regulatory Consistency in the Area of Investment Management", European Business Organization Law Review , 
Vol. 23, pp.  347-390.  
214 European Commission Report  COM(2022)  228 final.  
215 European Commission Proposal  COM(2021)  420. 
216 ESRB, Warning on Vulnerabilities in the Union Financial System, September  22. ESRB(2022/7).  
217 ECB, Publication – Banking Supervision . Viewed at: https://sdw.ecb.europa.eu/ . 
218 ECB, Supervisory Banking Statistics – Selected Supervisory Indicators . Viewed at: 
https://sdw.ecb.europa.eu/reports.do?node=1000006518 . 
219 ECB (2022), "Banks Must Sharpen Their Focus on Climate Risk, ECB Supervisory Stress Te st Shows", 
8 July. Viewed at: 
https://www.bankingsupervision.europa.eu/press/pr/date/2022/html/ssm.pr220708~565c38d18a.en.html .  WT/TPR/S/442  • European Union  
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  ratio of more than 150% for all member States.220 Profitability in 2021 also was comparable to that 
in 2019 and higher than in 2018, following a dip in 2020. Likewise, gross written premiums in 2021 
were higher than in 2019.  
4.170.   Following the start of the war in Ukraine, the European  Union prohibited all transa ctions with 
the Central Bank of the Russian Federation related to the management of the Bank's reserves and 
assets221 and froze the assets of a number of commercial banks.222 It also banned 10  Russian and 
4 Belarusian banks from making or receiving internati onal payments using SWIFT.223 
4.5.1.2   Regulatory developments  
4.5.1.2.1   Banking Union  
4.171.   Bulgaria and Croatia joined the Banking Union on 10  July 2020. Two of its pillars (the SSM 
and the Single Resolution Mechanism (SRM)) remain in place, while limited progress was made 
regard ing its third pillar (a common system for deposit protection).224 Meanwhile, harmonized 
deposit protection schemes continue to operate at member State level.225 
4.172.   Under the SSM , banks in the euro area (as well as Bulgaria and Croatia, which opted to do 
so in 2020) are ultimately supervised by the ECB, based on guidelines and recommendations 
prepared by the EBA and the Joint Committee of the ESAs. The ECB directly supervises 
113 Significant Banks226, holding almost 82% of banking assets in participating countries, while 
smaller banks are regulated by national authorities in close cooperation with the ECB.227 Banking 
licences for all credit institutions established in the member Stat es participating in the SSM are 
issued in line with harmonized prudential requirements (regarding capital, liquidity, internal risk 
management, and governance) by national competent authorities in close cooperation with the ECB, 
with licensed institutions able to operate throughout the Union. Regulatory approaches to licensing 
third-country bank branches differ across EU member States, using approaches treating them like 
subsidiaries, like branches, or using a mix of these approaches.228 
4.173.   An essential part of  the SRM is the Single Resolution Fund (SRF), established under the 
control of the Single Resolution Board (SRB). It is funded from banks' contributions, which stood at 
EUR 66 billion in July  2022, with the target size of 1% of covered deposits to be reach ed by 2023.229 
To further strengthen the SRM, the Eurogroup members agreed in late 2020 to accelerate the 
establishment of a common backstop to the SRF in the form of a credit line from the European 
Stability Mechanisms' (ESM) to replace the Direct Recapita lisation Instrument.230 In 2022, the SRB 
decided to undertake resolution actions regarding two subsidiaries of Sberbank Europe AG, which 
 
220 EIOPA (2022) , Financial Stability Report June  2022.  
221 Council of the European  Union (2022), "Russia's Military Aggression against Ukraine: Council 
Imposes Sanctions on 26 Persons and One Entity", 28  February. Viewed at: 
https://www.consilium.europa.eu/en/press/press -releases/2022/02/28/russia -s-military -aggression -against -
ukraine -council -imposes -sanctions -on-26-persons -and-one-entity/ .  
222 Council Implementing Regulation (EU) 2022/581.  
223 European Council, EU Sanctions against Russia Explained . Viewed at: 
https://www.consilium.europa.eu/en/policies/sanctions/restrictive -measures -against -russia -over-
ukraine/ sanctions -against -russia -explained/ .  
224 For a more detailed description, see WTO document WT/TPR/S/395/Rev.1, 7  July 2020.  
225 Directive 2014/49/EU.  
226 As of 1  November  2022. The SSM regulation spells out criteria for banks to be classified as 
"significant" that relate to size, economic importance, cross -border activities, and direct public financial 
assistance. ECB, List of Supervised Entities . Viewed at: 
https://www.bankingsupervision.europa.eu/ecb/pub/pdf/ssm.listofsupervisedentities202212.en.pdf?7dce5c762
0d8f5efc8b801e9e0cc1497 .  
227 ECB, Single Supervisory Mechanism . Viewed at: 
https://www.bankingsupervision.europa.eu/about/thessm/html/index.en.html .  
228 For additional information, see European Banking Authority (2021), Report on the Treatment o f 
Incoming Third Country Branches , EBA/REP/2021/20. Viewed at: 
https://www.eba.europa.eu /sites/default/documents/files/document_library/Publications/Reports/2021/101566
4/Report%20on%20third%20country%20branches.pdf .  
229 Single Resolution Board, Single Resolution Fund . Viewed at: https://www.srb.europa.eu/en/single -
resolution -fund.  
230 Eurogroup (2020), "Statement of the Eurogroup in Inclusive Format on the ESM Reform and the 
Early Introduction of the Backstop to the Single Resolution Fund", 30  November.  WT/TPR/S/442  • European Union  
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  were sold to other banking groups while it decided that no resolution was necessary for the European 
headquarters of Sbe rbank.231 
4.174.   Efforts to enhance the resilience of the banking sector also continued. The single rulebook 
for the banking sector was expanded and some of its contents updated during the review period, 
including changes to the Anti Money Laundering Directive (AM LD)232 and Wire Transfer Regulation 
(WTR).233 The revised regulatory framework for investment firms (IFR and IFD) entered into 
application in June  2021 (Section  4.5.1.2.3). The revised Capital Requirements Regulation (CRR)234, 
Capital Requirements Directive ( CRD)235 and the Bank Recovery and Resolution Directive (BRRD)236, 
described in the previous Review, also were transposed by member States and started to be applied.  
4.175.   As a response to the COVID -19 pandemic, the European  Union adopted Regulation 
(EU) 2020/873, amending the CRR to facilitate lending while ensuring resilience. For example, it 
allowed credit institutions to favourably treat unrealized gains or losses on debt of public institutions 
until the end of 2020, or to align the minimum coverage requirements  for NPL guaranteed by public 
institutions with those guaranteed by official export credit agencies. In December  2020, the 
Commission also adopted an NPL action plan focused on reducing risks237, which also aims to further 
develop secondary markets for dist ressed assets and reform the European  Union's corporate 
insolvency and debt recovery legislation (Section  4.5.1.2.3).  
4.176.   To finalize the implementation of the Basel  III agreement, two new regulatory proposals 
were adopted by the Commission in October  2021, pr oposing to amend the CRR and CRD.238 
4.5.1.2.2   Insurance  
4.177.   The insurance sector continues to be primarily regulated by the Solvency II Directive and its 
Delegated Regulation, containing risk -based prudential regulations, with companies supervised by 
national supervisor y authorities where they are established. For the supervision of insurance 
undertakings as part of a group established in a non -EU State, as well as for reinsurance companies, 
a procedure for assessing regulatory equivalence and supervisory cooperation is in place.239 The 
Directive also contains rules on reorganizing and winding up insurance companies (Title  IV). 
4.178.   While the framework has not undergone major changes during the review period, 
Directive  (EU) 2019/2177240 amended the Solvency  II Directive by introducing a requirement for 
national competent authorities to notify to the EIOPA newly establishing insurance operators with 
relevant operations in other member States, as well as cases of deteriorating financial co nditions or 
increasing risks facing cross -border providers of insurance services. In the latter case, the 
amendments also introduced a right of EIOPA to establish collaboration platforms to strengthen the 
exchange of information and to enhance collaboratio n. 
4.179.   Looking forward, two Commission proposals aim to strengthen the framework by 
(i) introducing more risk -sensitivity and proportionality, in particular the new category of low -risk 
profile undertakings, improving the approach to supervision (including for  groups and cross -border), 
and including macro -prudential and climate -related tools241; and (ii)  establishing a framework for 
 
231 Single Resolution Board , Cases . Viewed at: https://www.srb.europa.eu/en/cases .  
232 Directive (EU) 2015/849 amended by Directive (EU) 2019/2177.  
233 Regulation (EU) 2015/847 amended by Regulation (EU) 2019/2175.  
234 Regulation (EU) 57 5/2013 reviewed through CRR  II or Regulation (EU) 2019/876.  
235 Directive 2013/36/EU (CRD  IV) reviewed through CRD  V or Directive (EU) 2019/878.  
236 Directive 2014/59/EU reviewed through BRRD  II or Directive (EU) 2019/879.  
237 European Commission Communication C OM(2020)  822. 
238 European Commission Proposals  COM(2021)  665 regarding global systemically important institution , 
and COM(2021)  664 regarding requirements for credit risk, credit valuation adjustment risk, operational risk, 
market risk, and the output floor .  
239 There were no changes to these equivalence decisions during the review period. EIOPA, International 
Relations and Equivalence . Viewed at: https://www.eiopa.europa.eu/browse/regulation -and-
policy/international -relations -and-equivalence_en#Equivalence .  
240 Directive (EU) 2019/2177.  
241 European Commission Proposal COM(2021)  581. As spelled out in t he Strategy for Financing the 
Transition to a Sustainable Economy, this proposal would require insurers to identify material exposure to 
climate change risks and assess potential business impacts and task EIOPA to assess the possibility to 
introduce a dedicat ed prudential treatment of such risks . WT/TPR/S/442  • European Union  
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  the recovery and resolution of insurance and reinsurance undertakings.242 A general compromise 
regarding updated rules for insurance  companies was adopted by the Council in 2022243 and both 
proposals are currently being discussed in the European Parliament.  
4.5.1.2.3   Capital Markets Union  
4.180.   Complementing the Banking Union, regulatory efforts to integrate capital markets also 
continued during the review period. A number of Regulations and Directives were amended in 
substance, in particular the Benchmark Regulation (regarding "third -country benchmarks", the 
supervision of critical benchmarks, and regarding climate -related benchmarks); the Markets in  
Financial Instruments Regulation (MiFIR)244; and the Directive regarding undertakings for collective 
investment in transferable securities.245 
4.181.   As part of these changes, amendments to the Markets in Financial Instruments Directive  II 
(MiFID  II)246 and the Pro spectus Regulation (temporarily introducing a "recovery prospectus" until 
the end of 2022247) aimed to reduce the costs of obtaining capital and were included in a Capital 
Markets Recovery Package248 adopted by the European  Union in early 2021. The Package w as 
designed to allow capital markets play a stronger role in supporting economic recovery from the 
COVID -19 pandemic and also included the amendments to the securitization framework mentioned 
below.  
4.182.   The new 2020 Capital Markets Union (CMU) Action Plan249 outlines further changes and aims 
to (i) facilitate access to finance; (ii)  increase the security of savings and long -term investments; 
and (iii)  integrate national capital markets into a genuine single market.  
4.183.   To facilitate access to finance under the first  objective of the CMU Action Plan, the 
Commission, for example, adopted a proposal for a European Single Access Point in November  2021 
that would make all financial and sustainability -related information that companies are required to 
publish, as well as i nformation on investment products, available to investors250, and included the 
dimension of access to finance in its review of the prudential regulatory framework for banks and 
insurance companies.251 It made proposals to amend fund rules for European Long -term Investment 
Funds252 and alternative investment funds253 and is aiming to scale -up the securitization market in 
the European  Union, having amended and supplemented the Securitization Regulation in 2021.254 
Furthermore, in December  2022, the Commission adop ted a proposal for a Directive aiming to 
streamline the listing process (including for SMEs) and enhance visibility of listed companies.255 
 
242 European Commission Proposal  COM(2021)  582.  
243 European Council (2022), "Solvency  II: Council Agrees Its Position on Updated Rules for Insurance 
Companies", 17  June. Viewed at: https://www.consilium.europa.eu/en/press/press -
releases/2022/06/17/solvency -ii-council -agrees -its-position -on-updated -rules-for-insurance -companies/ .  
244 Provisions pertaining to the operational requirements for data reporting service providers (DRSPs) 
and the competences of competent authorities with respect to DRSPs were transferred from MiFID  II 
(Directive  2014/65/EU) to the MiFIR  (Regulation (EU)  600/2014) in late 2019.  
245 Directive (EU) 2019/1160.  
246 Directive 2014/65/EU amended by Directive (EU) 2021/338.  
247 Regulation (EU) 2017/1129.  
248 European Council (2021), "Capital Markets Recovery Package: Council Adopts First Set of Measu res 
to Help Companies Access Funding", 15  February. Viewed at: 
https: //www.consilium.europa.eu/en/press/press -releases/2021/02/15/capital -markets -recovery -package -
council -adopts -first-set-of-measures -to-help-companies -access -funding/ .  
249 European Commission Communication COM(2020)  590. 
250 Package description. Viewed at: https://ec.europa.eu/info/publications/211125 -capital -markets -
union -package_en . 
251 In particular, the Commission intends to ensure that the prudential frameworks for banks and 
insurance companies does not hamper long -term equity investments by the institutions within the scope of 
these frameworks.  
252 European Commission Proposal  COM(2021)  722 final.  
253 European Commission Proposal  COM(2021)  721 final.  
254 Part of the Capital Markets Recovery Package and as response to COVID -19, Regulation 
(EU) 2017/2402 was amended by , inter alia , certain regulatory obstacles to securitisation of non -performing 
exposures.  
255 European Commission Proposal  COM(2022) 760. WT/TPR/S/442  • European Union  
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  4.184.   Efforts to improve financial literacy, data disclosure, and transparency of pension schemes 
contribute to the second objective of the CMU Action Plan and making the European  Union "an even 
safer place for individuals to save and invest long -term", according to the Commission.256 
4.185.   Regarding the third  objective of the CMU Action Plan, i.e.  integrating national capital 
market s, the Plan calls for the establishment of an "enhanced" Single Rule Book for EU capital 
markets. In addition, the Commission is developing a Directive to tackle burdensome withholding 
tax procedures, to make them simpler and faster and thus support cross -border investment.257 In 
addition, major discrepancies in national substantive insolvency laws (for corporate insolvency) of 
member States continue to pose a challenge to the establishment of a well -functioning CMU, and 
affect recovery rates of loans.258 In December  2022, the Commission adopted a legislative proposal 
to harmonize targeted aspects of the corporate insolvency framework as well as procedures to make 
it easier and faster for cross -border investors to recover value.259 This pillar also includes the  
Commission working towards enhancing the efficiency of cross -border settlement services by 
reviewing the Central Securities Depositories Regulation.260 To establish a comprehensive post -trade 
"consolidated tape" for ETFs, bonds, and derivatives, the Commis sion proposed to amend the 
Markets in Financial Instruments Regulation.261  
4.186.   Prior to the adoption of the current CMU Action Plan, the reforms to the prudential regulation 
of investment firms mentioned in the previous Review were finalized in late 2019.262 While the largest 
systemic investment firms continue to be authorized and regulated as banks (and are subject to the 
same capital, liquidity, and risk management rules), a more tailored prudential framework (including 
requirements) applies to the other inves tment firms in a way that is proportionate to their size, 
nature, complexity, risk profile, and business model. While smaller investment firms that qualify as 
"small and non -interconnected" can be exempted from certain requirements, other firms are subject  
to capital requirements mirroring the risk they pose to clients, markets, and the firm itself. 
Medium -sized or large firms that offer "bank -like" services and could still pose risks to financial 
stability could also remain subject to the banking rules wit hout having to be authorized as banks, 
possibly at their supervisor's request.  
4.187.   The common rules on the issue and supervision of covered bonds mentioned in the previous 
Review were also finalized with the issuance of Regulation (EU) 2019/2160 and Directive 
(EU) 2019/2162 and have been applied from 8  July 2022 with the Commission required to report on 
its implementation by 2025. The Commission will also report in 2024 on whether and how a 
regulatory equivalence regime could be introduced for third -country cre dit institutions issuing 
covered bonds.  
4.188.   In addition, reporting requirements for securities financing transactions entered into force 
in 2020 after Reporting Technical Standards under the Regulation on Transparency of Securities 
 
256 European Commission, Capital Markets Union 2020 Action Plan . Viewed at: 
https://finance.ec.europa.eu/capital -markets -union -and-financial -markets/capital -markets -union/capital -
markets -union -2020-action -plan_en . 
257 European Commission, Withholding Taxes – New EU System to Avoid Double Taxation . Viewed at: 
https://ec.europa.eu/info/law/ better -regulation/have -your-say/initiatives/13031 -Withholding -taxes -new-EU-
system -to-avoid -double -taxation_en .  
258 EBA (2020), Report on the Benchmarking of National Loan Enforcement Frameworks , 
EBA/Rep/2020/29. Viewed at: 
https://www.eba.europa.eu/sites/default/documents/files/document_library/About%20Us/Missions%20and%2
0tasks/Call%20for%20Advice/2020/Report%20on%20the%20benchmarking%20of%20national%20loan%20e
nforcement%20frameworks/962022 /Report%20on%20the%20benchmarking%20of%20national%20loan%20e
nforcement%20frameworks.pdf . 
259 European Commission Proposal  COM(2022)  702. 
260 According to the Commission, the proposed changes will ensure more proportionate and effective 
rules to reduce complian ce costs and regulatory burdens for Central Securities Depositories, as well as facilitate 
their ability to offer a broader range of services cross -border, while improving their cross -border supervision. 
European Commission Proposal  COM(2022)  120.  
261 Regul ation (EU) 600/2014; European Commission Proposals  COM(2021)  726 and COM(2021)  727. 
262 Regulation (EU) 2019/2033 (Investment Firms Regulation (IFR)) and Directive (EU) 2019/2034 
(Investment Firms Directive (IFD)), applying to firms authorized and supervised  under Directive 2014/65/EU 
(generally known as Markets in Financial Instruments Directive  2 (MiFID  II)). Coordination of regulation of 
investment firms is done by EBA and ESMA, with firms supervised by national competent authorities.  WT/TPR/S/442  • European Union  
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  Financing Transactions (SFTR)263 were adopted in 2019.264 According to  the Strategy on Supervisory 
Data in EU Financial Services, efforts are under way to encourage regulatory data sharing and reuse 
to limit the reporting burden while improving the effective use of regulatory supervision.265 
4.189.   During the review period, a number  of new regulatory equivalence decisions regarding 
capital markets were taken in the areas of auditing (South  Africa and China), the classification of 
certain exposures to calculate capital requirements (Bosnia, North  Macedonia, Serbia, and the 
Republic  of Korea), central securities depositories (the United  Kingdom, temporarily until 
June 2021), and over -the-counter (OTC) derivatives (regarding markets (the United  States), legal, 
supervisory, and enforcement arrangements (Australia; Brazil; Canada; Hong Kon g, China; the 
United  States; and Singapore), and central counterparties (the United  States, and the 
United  Kingdom (temporarily, until 2025)).  
4.5.1.2.4   Sustainable and digital finance  
4.190.   The Commission considers that financial markets will have to contribute to achiev ing the 
objectives of the European Green Deal, requiring incorporating sustainability risks and impacts into 
their operations. The 2018 Sustainable Finance Action Plan spelled out key activities to reorient 
capital flows towards sustainable investments, ma nage financial risks related to environmental 
issues, and increase related transparency266, with the Strategy for Financing the Transition to a 
Sustainable Economy building on and complementing it since July  2021.267 In 2020, the Commission 
published a Digit al Finance Strategy for the EU until 2024268, recognizing the role that digital finance 
can play in improving access to finance, supporting economic recovery, and mobilizing funding in 
support of the European Green Deal and Industrial Strategy.  
4.191.   In 2019 the Benchmark Regulation was amended to also include climate -related 
benchmarks269 (see above) and a Sustainable Finance Disclosure Regulation (SFDR), applying to 
both financial market participants and investment products, was approved in 2019 aiming to limit 
"greenwashing" of financial investments.270 Six additional Commission Delegated Acts (contained in 
the so -called April  2021 package) expanded requirements for financial firms that include assessing 
sustainability risks, or considering clients' sustain ability preferences.  
4.192.   A key element of these efforts is the ability to define what economic activities and 
investments qualify as sustainable or contributing to a low -carbon transition, and can be used by 
companies and investment firms to determine the "gre enness" of their operations or investments. 
The Taxonomy Regulation271, which entered into force in 2020, defines six specific environmental 
objectives: (i)  climate change mitigation; (ii)  climate change adaptation; (iii)  the sustainable use 
and protection of water and marine resources; (iv)  the transition to a circular economy; (v)  pollution 
prevention and control; and (vi)  the protection and restoration of biodiversity and ecosystems. The 
Regulation sets out criteria for an activity to be classified as sig nificantly contributing (and not 
significantly harming) these objectives, and also amended the SFDR. In 2021, it was complemented 
by Commission Delegated Regulations establishing the technical screening criteria for determining 
the conditions under which a n economic activity qualifies as contributing substantially to two of the 
six objectives: climate change mitigation and climate change adaptation (applicable since 
early 2022)272, and another one defining what and how to disclose.273 According to the Strateg y for 
Financing the Transition to a Sustainable Economy, the Commission plans to develop another 
Taxonomy Delegated Act covering the remaining four environmental objectives.  
 
263 For additional info rmation on the SFTR, see WTO document WT/TPR/S/357/Rev.1, 7  July 2020.  
264 Commission Implementing Regulation (EU) 2019/363.  
265 European Commission Communication COM(2021)  798. EBA (2021), Final Report on a Feasibility 
Study of an Integrated Reporting System  Under Article  430c CRR , EBA/REP/2021/38.  
266 European Commission Communication COM(2018)  097 final.  
267 European Commission Communication COM(2021)  390 final.  
268 European Commission Communication COM(2020)  591 final.  
269 Regulation (EU) 2019/2089.  
270 Regulation (EU) 2019/2088.  
271 Regulation (EU) 2020/852.  
272 Commission Delegated Regulation (EU) 2021/2139.  
273 Commission Delegated Regulation (EU) 2021/2178.  WT/TPR/S/442  • European Union  
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  4.193.   In April  2022, the Council agreed to a Commission proposal to establish clear rule s for 
environmentally sustainable bonds (green bonds)274, pending discussions with Parliament. The 
Commission also aims to clarify the operations of Environmental, Social and Governance (ESG) 
rating providers and transparency on the characteristics and meth odology of ESG ratings, and is 
planning to propose legislation during 2023 based on an impact assessment. In June  2022, the 
European Parliament and Council agreed to a Commission proposal for a Corporate Sustainability 
Reporting Directive (CSRD) introducin g obligations for companies to report on European 
Sustainability Reporting Standards.275 
4.194.   The Digital Finance Strategy builds on the 2018 Fintech Action Plan276 and has 
four objectives: (i)  tackle fragmentation in the Digital Single Market; (ii)  ensure the re gulatory 
framework facilitates digital innovation; (iii)  establish a common financial data space to promote 
data-driven innovation; and (iv)  address other risks by ensuring a level regulatory playing field for 
existing and new financial services.  
4.195.   To tackle  fragmentation and remove barriers to the cross -border provision of digital financial 
services, the Commission aims to introduce passporting in key areas relevant to digital finance. This 
includes the Crowdfunding Regulation mentioned in the 2018 Fintech A ction Plan that entered into 
force in 2020.277 It also foresees establishing trusted digital identities for all residents in the 
European  Union. Key elements of facilitating digital innovation include efforts to regulate 
crypto -asset markets (MICA)278 or rev iewing the prudential treatment of intangible assets such as 
software. Creating a common financial data space will include automated real -time access to 
regulated financial information, the use of technology for reporting and supervision (using 
Regulatory Technology and Supervisory Technology), and developing an open finance framework 
that will include a review of the Payment Services Directive as spelled out under the Commission's 
Retail Payments Strategy.279 Addressing other related challenges and risks, t he Commission also 
aims to ensure the regulatory framework for digital finance contributes to protecting consumers and 
ensuring financial stability, using the "same activity, same risk, same rules" principle. In this area, 
Regulation (EU) 2022/2554 on digi tal operational resilience (DORA) applying to all financial entities 
was adopted in December  2022280, complementing ongoing efforts to improve cybersecurity.281 
4.5.2   Transport services  
4.196.   Economic activities of transportation and storage accounted for 4.9% of gross value added 
in 2021, and 5.3% of total employment, broadly unchanged from before the review period.282 
In 2021, transport services accounted for 19.8% of services exports, and 17.6% of services imports 
(Section  1.3.1.2 ). 
4.197.   The market for transport servi ces in the European  Union is generally open but certain 
restrictions remain in place. Restrictions to trade in transport services vary significantly across 
member States but are on average slightly lower than those in other OECD countries, and they 
increas ed marginally between 2018 and 2021, in many instances related to horizontal policy 
changes.283 Intra-European Economic Area (EEA) services trade restrictiveness for transport services 
is consistently significantly lower than that for trade with third  count ries. The regulatory 
restrictiveness for non -EU FDI in transport services (as well as its three sub -components: air, 
 
274 Proposal fo r a Regulation of the European Parliament and of the Council on European Green Bonds 
COM(2021)  391. The proposed regulation would see ESMA supervise external reviewers of green bonds.  
275 European Commission Communication COM(2021)  189. 
276 European Commission Communication COM(2018)  109. The Action Plan contributes to building a 
Capital Markets Union and a Digital Single Market.  
277 Regulation (EU) 2020/1503.  
278 European Commission Proposal  COM(2020)  593. The proposed MICA regulation would see the EBA 
supervise issuers of significant asset -referenced tokens and of significant e -money tokens. A second proposal 
(COM(2021)  0422) aims to allow for the tracing of cry pto-asset transfers.  
279 European Commission Communication COM(2020)  592.  
280 Regulation (EU) 2022/2554. The DORA regulation foresees one of the ESAs supervise each critical 
ICT third -party service provider.  
281 The Commission is currently reviewing Directive (EU) 2016/1148.  
282 Eurostat, National Accounts Aggregates by Industry (nama_10_a64); and National Accounts 
Employment Data by Industry (nama_10_a64_e ). Viewed at: https://ec.europa.eu/eurostat/data/database . 
283 OECD, Services Trade Restrictiveness Index . WT/TPR/S/442  • European Union  
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  surface, and maritime transport services) was in 2019 lower for all EU member States compared to 
the corresponding average restrictiveness of third -country FDI in non -EU OECD Members.284 
4.198.   During the review period, notable reforms took place in the road transport services sector, 
while in the area of rail transport services, the reforms agreed under the fourth EU Railway Package 
in 2016 were pha sed in. In 2020, the Commission approved a revised proposal to reform the "Single 
European Sky". The proposed reforms of the EU Emission Trading System (ETS) in the context of 
the Fit -for-55 package (Section  4.4.1) would extend the system to maritime trans port, increase the 
ambition of reduction targets for aviation, and introduce a self -standing ETS for road transport. As 
a response to the COVID -19 pandemic, a number of (temporary) measures were introduced.  
4.199.   The development of infrastructure for the provisi on of transport services also continues. The 
Trans -European Transport Network (TEN -T) defines major transport corridors and infrastructure, 
divided into a "core" and "comprehensive" network for efficient intra -European transport and 
connecting the network to neighbouring countries.285 Policies to support the completion of the core 
network by 2030 (and the comprehensive network by 2050) by closing gaps and addressing 
bottlenecks, are under way. In 2019, the TEN -T regulation was amended to include network 
connections in Armenia, Azerbaijan, Belarus, the Republic  of Moldova, and Ukraine. Following a 
review of the TEN -T policy in 2019, the Commission proposed a revised TEN -T regulation in 2021 
(amended in 2022) that, inter alia, reflects policy developments regar ding emissions (the European 
Green Deal and the Climate Law) or sustainable mobility (Sustainable and Smart Mobility Strategy); 
includes measures related to interoperability, accessibility, urban nodes, and climate resilience; and 
puts additional emphasis on user services.286 According to the Commission, it is expected to be 
adopted towards the end of 2023. For the budget period 2021 -27, the Connecting Europe Facility, 
originally established in 2013, is one of the main programmes providing funding to build, develop, 
modernize, and complete the various trans -European networks, including transport networks.287 In 
addition, the Global Gateway initiative aims to mobilize up to EUR  300 billion between 2021 
and 2027 for investments in infrastructure projects, includ ing transport, incorporating key objectives 
of EU cross -cutting policies including those related to good governance and the environment.288 
4.5.2.1   Road transport services  
4.200.   The road transport sector continues to dominate overall intra -EU transport services, moving 
around 77% of goods transported by land in 2020289, or around 20% of the total value of all external 
trade.290 It remains dominated by MSMEs291, and nearly two thirds of road transport in the 
European  Union is national. To operate, a transport service company needs to obtain a "community 
license", allowing it to operate freely within the Union, with intra -EU cross -border transport services 
fully liberalized and certain restrictions to cabotage in "host" member States (i.e.  transport within a 
member Stat e that is not the State of registration of a company) continuing to apply.  
4.201.   Road transport services between EU member and non -member States continue to be mostly 
regulated by bilateral agreements, as well as the European Conference of Ministers of Transport  
(ECMT) agreement for service providers from third countries. Based on the European Economic Area 
(EEA) Agreement with Norway, Iceland, and Liechtenstein, the EU acquis  regarding road transport 
 
284 OECD, FDI Regulatory Restrictiveness Index . Viewed at: 
https://stats.oecd.org/Index.aspx?datasetcode=FDIINDEX# . The only exception is the regulatory 
restrictiveness for FDI in surface transport services in Sweden, which is higher compared to the non -EU OECD 
average.  
285 Regulation (EU) 1315/2013.  
286 European Commission Proposal  COM(2021)  812, as well as Amended Proposal COM(2022)  384. 
287 Regulation (EU) 2021/1153.  
288 European Commission Joint Communication JOIN(2021) 30. The Global Gateway initiat ive aims to 
build sustainable infrastructure in the priority areas of digital, climate and energy, transport, health, and 
education and research.  
289 Eurostat, Freight Transport Statistics – Modal Split. Viewed at: 
https://ec.europa.eu/eurostat/statistics -explained/index.php?title=Freight_transport_statistics_ -_modal_split . 
290 Eurostat, International Trade in Goods by Mode of Transport . Viewed at: 
https://ec.europa.eu/eurostat/statistics -
explained/index.php?title=International_trade_in_goods_by_mo de_of_transport .  
291 Eurostat, F5 Sectoral Analysis of Employment by Enterprise Size Class, Transportation and Storage 
(NACE Section  H), EU, 2019 . Viewed at: https://ec.europa.eu/eurostat/statistics -
explained/index.php?title=File:F5_Sectoral_analysis_of_employment_by_enterprise_size_class,_Transportation
_and_storage_(NACE_Section_H),_EU,_2019.png .  WT/TPR/S/442  • European Union  
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  (including recent changes) also applies there. The Land Transp ort Agreement between the 
European  Union and Switzerland provides the framework for bilateral road transport relations. After 
the United  Kingdom's withdrawal from the European  Union, following an international transport 
operation, UK service providers are allowed to undertake two operations (among which one national 
cabotage operation) within the European  Union before returning to the United  Kingdom.292 On 
28 June 2022, the European  Union signed road transport agreements with Ukraine and the 
Republic  of Moldova, allowing Ukrainian, Moldovan, and EU hauliers to transit through and operate 
between each other's territories, without the need for permits for these operations.  
4.202.   Generally, bilateral agreements cover bilateral transport quotas as well as bilateral tra nsit 
quotas with third countries, and some agreements could potentially cover domestic cabotage, 
meaning that potential transport by non -EU carriers from a third  country to an EU member State via 
other EU member States, or between two EU member States, wou ld have to be covered by multiple 
bilateral agreements, or "multilateral" quotas under the ECM T.293 Depending on the nationality of 
drivers and their destinations, visa requirements also apply.  
4.203.   The 2017 Opinion 2/15 of the Court of Justice of the European  Union (CJEU) clarified that 
the commitments relating to road transport and linked auxiliary services under the EU -Singapore 
FTA fall under exclusive competence of the Union, as they may affect or alter common EU rules.294 
According to the Commission, there a re no plans to replace such provisions in bilateral agreements 
between EU member States and third countries with EU -wide agreements.  
4.204.   As a major reform during the review period, a set of acts approved in 2020 changed 
regulations for (i)  internal market acce ss295; (ii) working conditions and requirements for drivers296; 
and (iii)  the posting of drivers297 (i.e. drivers carrying out their work in the territory of a member 
State other than the State in which they normally work298). 
4.205.   The regulation affecting market access expands some of the applicable rules also to smaller 
motor vehicles with a permissible load exceeding 2.5  tonnes (previously 3.5  tonnes), as the use of 
such vehicles had significantly increased, according to the Commission. While certain fina ncial 
requirements remain more flexible for such smaller undertakings (i.e.  those with permissible load of 
vehicles between 2.5 and 3.5  tonnes), rules for operator licensing (obtaining a community licence) 
and access to the profession fully apply. At the s ame time, the reform removed the possibility for 
member States to introduce additional requirements for road transport operators, thereby 
harmonizing requirements across the Union.  
4.206.   The regulation also clarified rules regarding cabotage, introducing a minim um time of four 
days between two  cabotage operations in the same member State. Following the reform, transport 
service companies are still allowed to undertake three cabotage operations in any member State, 
within seven days following the completion of an international (i.e.  cross-border) transport 
operation. Where a vehicle enters a member State empty, only one cabotage operation is permitted 
within three  days.299 
4.207.   To ensure a more coherent application of these rules, the reform also aims to address the 
use of letterbox companies, by setting harmonized requirements for vehicles and drivers to return 
to their place of establishment in specified intervals.  
 
292 Trade and Cooperation Agreement between the European  Union and the European Atomic Energy 
Community, of the one part, and the United  Kingdom of Great Britain and Northern Ireland, of the other part, 
Article  462. 
293 In 2018, the share of intra -EU transport using a multilateral quota was estimated to be 21.8% for 
carriers from the Western Balkans and Türkiye, and 14.2% for carriers from Commonwealth of Independent 
States countries. International Transport Forum (2 020), Report on European Road Freight Transport Markets 
and ECMT Multilateral Quota Perspectives – Update 2019/2020 . Viewed at: https://www.itf -
oecd.org/sites/default/files /docs/tr20201_final.pdf .  
294 CJEU, Opinion 2/15 of the Court (Full Court), 16  May 2017. Viewed at: https://eur -
lex.europa.eu/legal -content/EN/TXT/?uri=CELEX%3A62 015CV0002%2801%29 . 
295 Regulation (EU) 2020/1055.  
296 Regulation (EU) 2020/1054.  
297 Directive (EU) 2020/1057.  
298 Directive 96/71/EC, Article  2. 
299 Regulation (EC) 1072/2009, Article  8. WT/TPR/S/442  • European Union  
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  4.208.   The proposed reform of the ETS that forms part of the Fit -for-55 package could introduce a 
self-standing e missions trading system for fuel distribution for the road transport sector by 2025, 
managed by fuel distributors as regulated entities.300 
4.5.2.2   Rail transport services  
4.209.   Rail transport is seen as a cornerstone for greening the European  Union and making 
transport systems more sustainable.301 "Europe's Rail Joint Undertaking" is among the activities 
established under the European research funding programme Horizon Europe (Section  3.3.1.1 ) and 
funded from the EU budget with up to EUR  600 million until 2027. In additio n to the general 
objectives of Horizon Europe (addressing climate change, sustainable development, and EU 
competitiveness), the undertaking contributes to achieving a Single European Railway Area that 
would be more attractive and integrated into the wider mobility system, and to support the 
development of a strong and globally competitive European rail industry.302 The proposed revised 
TEN-T regulation would also aim to integrate the rail freight corridors303 into the European transport 
corridors.  
4.210.   There are n o foreign ownership limits for investment in the rail transport sector in place in 
EU member States, although some member States limit the proportion of shares foreign investors 
can acquire in publicly controlled firms.304 State -owned enterprises continue t o play an important 
role in the railway sector ( Section  3.3.5). A bilateral agreement with Switzerland regulates 
international rail traffic for passengers and goods.  
4.211.   Following the adoption of the fourth EU Railway Package in 2016 that was described in an 
earlier Review305, some of its provisions were phased in during the review period, with the provisions 
regarding the competitive award of public rail service contracts being phased in until the end of  2023. 
The reform aimed at reducing the cost of intra -European rail operations. Directive (EU)  2016/797 
and Regulation(EU)  2016/796 continue to regulate technical aspects.  
4.212.   The overarching framework to establish a single European railway area continues to be 
provided by Directive 2012/34/EU, as amended by Directiv e (EU) 2016/2370. In terms of market 
organization, all member States with an operational rail network transposed the Directive during the 
review period. Under the framework, member States can choose among organizational models that 
ensure the independence of infrastructure managers and railway operators. In addition, there are 
also provisions in place aimed at ensuring equitable and non -discriminatory access to infrastructure, 
or those aimed at avoiding various conflicts of interest. Following access alloca tions, the trading of 
infrastructure capacity is prohibited.306 
4.213.   National licensing authorities continue to issue operating licences to operators established 
in their jurisdictions, which are then valid EU -wide.307 A number of requirements relating to good 
repute, financial fitness, and professional competence apply. According to the Commission's 
seventh  Rail Market Monitoring report, the market share in freight services of competitors to the 
incumbents increased from an average of 34% in 2015 to 42% in 2018, with the share being more 
than 30% in more than half of the member States, while that in passenger services increased 
from 8% to 10%.308 While information was not available for all member States, the share of freight 
transport carried by the incumbent range d from less than 40% in Romania to 100% in a number of 
member States, and from 0% to 100% regarding passenger traffic.309 Overall, there were 
 
300 European Parliament, Briefing: Review of the EU ETS "Fit for 55" Package . Viewed at: 
https://www.europarl.europa.eu/RegData/etudes/BRIE/2022/698890/EPRS_BRI(2022)698890_EN.pdf .  
301 The Sustainable and Smart Mobility Strategy t argets rail freight traffic to double its market share 
by 2050.  
302 Council Regulation (EU) 2021/2085, Part  Two, Title  V. 
303 Regulation (EU) 913/2010.  
304 OECD, Services Trade Restrictiveness Index . 
305 WTO document WT/TPR/S/357/Rev.1, 13  October  2017.  
306 Directiv e 2012/34/EU, Article  38. 
307 Directive 2012/34/EU, Articles  16 and 23.  
308 European Commission Report  COM(2021)  5. 
309 Staff Working Document SWD(2021)  1. WT/TPR/S/442  • European Union  
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  1,196  valid licences for rail transport services at the beginning of 2023, the largest number of which 
were in Germany.310 
4.214.   The Platform of Rail Infrastructure Managers in Europe (PRIME) acts as European Network 
of Infrastructure Managers, foreseen in Directive 2012/34/EU to facilitate the provision of efficient 
and effective rail services within the Union, with all main infrastructure managers participating. The 
group regularly publishes data to allow infrastructure managers operational benchmarking in annual 
reports.  
4.215.   Following the reforms under the fourth package, the European  Union Agency for Railways 
(ERA) has bec ome the European certifying and authorizing authority.  Since 2019, it has issued safety 
certificates that are in principle  valid EU -wide, and has issued authorizations for placing vehicles on 
the market. The ERA is a system design authority for the roll -out of the signalling for the harmonized 
deployment of the European Rail Traffic Management System (ERTMS), which would allow for a more 
efficient use of the European rail network. The roll -out, continues but is delayed in parts.311 To 
establish a more integr ated and competitive transport market, Commission Delegated Regulation 
(EU) 2017/1926 determined certain requirements for making available information regarding 
trajectories and static fares across all member States in a manner that would be electronically  
accessible and processable. Information on basic routes and services (along the Trans -European 
Transport Network) has to be provided since December  2019, simple fare information since 
December  2020, and more detailed fare information since December  2021, with information to other 
parts of the Union transport network to be covered from late 2023. These data are needed to build 
and develop information services (trip/journey planners) and are used by public and private 
organizations that develop such services . Efforts to further develop multimodal ticketing are under 
way.312 
4.5.2.3   Air transport services  
4.216.   Regulation (EC) 1008/2008 continues to set the framework for aviation services in the 
European  Union, and the cap of foreign ownership of airlines at 49% remains in place. No restrictions 
on the operation of intra -EU routes are in place for EU carriers, while traffic with third countries 
continues to be regulated by a large number of air transport agreements of individual EU member 
States with third countri es and by EU comprehensive air transport agreements (CATAs) with key 
partners.313 EU CATAs provide for liberalization of direct connectivity and create a level playing field, 
covering fair competition, as well as social and environmental matters. A CATA wit h ASEAN was 
concluded in June  2021, also covering fifth freedom rights314, while the European Common Aviation 
Area Agreement (ECAAA), which entered into force in 2017, provides for full traffic liberalization.  
4.217.   There are no EU -wide restrictions regarding the  investment in and management of airports, 
but state ownership remains important both in some major airports as well as smaller and regional 
airports.315 Access by carriers to EU air transport services is in principle non -discriminatory, but 
following the a doption of Regulation (EU)  2019/712, the Commission has a tool to assess practices 
distorting competition adopted by third  countries or third -country entities, and to impose certain 
(proportionate) financial or operational redress measures in line with its  international obligations.  
4.218.   As a response to the COVID -19 pandemic, Regulation (EC) 1008/2008 was amended in 2020 
to also temporarily regulate ground -handling services at Union airports, allowing member States 
 
310 European  Union Agency for Railways, ERADIS  – European Railway Agency Database of 
Interoperability and Safety . Viewed at: https://eradis.era.europa.eu/safety_docs/licences/statistics_rp.aspx . 
311 International Railwa y Journal  (2020), "Will ERTMS Ever Reach Critical Mass in Europe?", February. 
Viewed at: https://www.era.europa.eu/content/will -ertms -ever-reach -critical -mass-europe_en .  
312 Proposal for a Regulation of the European Parliament and of the Council addressing market 
challenges hampering the development of Multimodal Digital Mobility Services (MDMS). Viewed at: 
https://op.europa.eu/en/publication -detail/ -/publication/17e3e2f2 -2c4c-11ec-bd8e-01aa75ed71a1 . 
313 For an overview of EU -wide agreements, see European Commission, Status of Aviation Relations by 
Country . Viewed at: https://transport.ec.europa.eu/transport -modes/air/international -aviation/status -aviation -
relations -country_en .  
314 European Commission, Questions and Answers on the EU -ASEAN Comprehensive Air Transport 
Agreement . Viewed at: https://ec.europa.eu/commission/presscorner/detail/en/QANDA_22_6125 . 
315 Airports Council International (2016), The Ownership of Europe's Airports . Viewed at: 
https://www.aeroport.fr/uploads/d ocuments/ACI%20EUROPE%20Report_The%20Ownership%20of%20Europe
s%20Airports%202016.pdf .  WT/TPR/S/442  • European Union  
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  temporarily to select ground -handling service providers for limited contracts using a simplified 
procedure.316 These rules represent a derogation from Council Directive 96/67/EC, which aims to 
ensure competition for ground -handling services at airports, including for foreign service providers 
from thir d countries with reciprocal access. The changes also included a temporary easing of rules 
(subsequently extended) for maintaining operating licences by Union carriers potentially in financial 
difficulties as a result of the pandemic, as long as they are ex pected to recover sound financial 
conditions and that safety is not at risk. They also allowed member States to temporarily refuse, 
limit, or impose conditions on the exercise of traffic rights in the context of the pandemic. 
Amendments to the EU regulatio n on the allocation of slots at airports introduced flexibilities for 
airlines, allowing them to retain such slots without at least filling them at 80%, aimed to avoid the 
operation of empty flights.317 
4.219.   In late 2020, the Commission adopted a package of prop osals that include regulations on 
the implementation of the Single European Sky ("SES2+") as well as aviation safety replacing an 
earlier proposal from 2013 that had not advanced because of some diverging views among some 
member States.318 According to the Commission, the revised package aims to achieve the same 
objectives as the earlier proposal but reflects recent developments in terms of policy and technology 
changes, including carbon neutrality targets emanating from the Paris Agreement and the European 
Green Deal. In particular, it aims to allow for the more flexible provision of air navigation services 
to help cut aviation emissions by defragmenting the European airspace and allowing for more 
efficient routing. It would also require air navigation servi ce providers to draft and submit 
performance plans for en  route air navigation services to the European  Union Aviation Safety 
Agency. As a result, the package therefore also suggests amendments to the 2018 air safety 
regulation, which had replaced earlier regulations.319 
4.220.   As part of the Fit -for-55 package, other initiatives could also affect the air transport sector 
in particular. The ReFuelEU Aviation proposal would require fuel suppliers to supply aviation fuel 
containing a minimum share of sustainable avia tion fuel on the EU market, and limit tankering by 
aircraft operators by requiring to uplift fuel at EU airports for departing flights.320 A second  proposal 
forms part of the proposed reform of the EU ETS and would increase the ambition for emission 
reducti ons in the aviation sector, and implement ICAO's Carbon Offsetting and Reduction Scheme 
for International Aviation.321 Moreover, the revision of the ETD (Section  4.4), if approved as 
proposed, would remove the mandatory excise duty exemption of jet fuel use d in intra -EU flights.322 
4.5.2.4   Maritime transport services and port services  
4.221.   Maritime transport continues to be the means of transport for around 74% of extra -EU 
trade323 in volume in 2021. The Sustainable and Smart Mobility Strategy targets transport by inland 
waterways and short sea shipping to increase its market share by 50% by 2050, while short sea 
shipping also plays an important role in efforts to reduce GHG emissions, and initiatives to promote 
such short sea shipping are in place.  
4.222.   No major reforms were un dertaken during the review period, but the reform affecting the 
provision of port services described in a previous Review324 has been applied since 2019 to the more 
than 300 maritime ports that are classified as pertaining to the (core and comprehensive) TE N-T in 
the regulation. According to Regulation (EU)  2017/352, rules on the provision of port services apply 
to bunkering, mooring, collection of ship -generated waste and cargo residues, and towage, while 
those on financial transparency in addition apply to  cargo -handling, passenger services, and 
pilotage. It also states that the only conditions member States may apply to the provision of such 
services are minimum requirements, limitations on the number of providers, public service 
 
316 Regulation (EU) 2020/696. The rules regarding ground -handling services were later extended to the 
end of 2021.  
317 Regulation (EU) 2020/459; and subsequent amendments to Council Regulation (EEC) 95/93.  
318 European Commission Proposal  COM(2020)  577 and Amended Proposal COM(2020)  579 replaced 
Proposal COM(2013)  410. 
319 Regulation (EU) 2018/1139.  
320 European Commission Proposal  COM(2021)  561.  
321 European Commission Proposal  COM(2021)  552. 
322 European Commission Proposal  COM(2021)  563. 
323 European Commission, Transportation During the Pandemic . Viewed at: 
https://ec.europa.eu/info/live -work-travel -eu/coronavirus -response/transportation -during -pandemic_en .  
324 WTO document WT/TPR/S/357/Rev.1, 13  October  2017.  WT/TPR/S/442  • European Union  
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  obligations, or restrictio ns related to the port operator providing such services (as "internal 
operator"). Member States may decide by national law not to impose any of the conditions on one 
or more categories of port services.  
4.223.   There are no restrictions on market access for mariti me transport services in the 
European  Union other than those on domestic cabotage and on the general regulations regarding 
safety and the environment that apply to all vessels. Member States are responsible for determining 
the conditions according to which  vessels can be registered under their national flag. Nationality, 
residency and other requirements may apply. In some member States, foreign -flagged 
(non-EU-flagged) ships are fully or partially excluded from cabotage.325 
4.224.   The European  Union has signed a bi lateral agreement on maritime transport with China, 
allowing for multiple stops in either party, but not allowing for domestic cabotage of cargo (within 
an EU member State), covering the supply of services as well as commercial presence relating to 
the pro vision of international maritime cargo transport and logistic services. It was amended in 2019 
to reflect the accession of Croatia.326 
4.225.   In 2017, the Commission included support to maritime and inland ports in the "General Block 
Exemption Regulation", allowing member States to implement state aid measures regarding port 
infrastructure, access infrastructure, or dredging without prior Commission approval as long as 
certain conditions are met.327 
4.226.   If approved, the proposed reform of the ETD cou ld eliminate the tax exemptions for fuels 
used for intra -EU waterborne navigation, while the proposed reform of the ETS that forms part of 
the Fit -for-55 package could phase in, until 2026, the inclusion of emissions from large ships (of 
5,000  GT and more)  into the system, possibly covering 100% of emissions from intra -EU voyages 
and emissions while at berth328, and 50% of emissions from voyages between the European  Union 
and third  countries.  
4.5.3   Telecommunications, postal, and delivery services  
4.227.   Telecommunication, postal, and delivery services remain an important element of the 
EU economy, with delivery services expanding strongly during the COVID -19 pandemic. 
Telecommunication services accounted for 1.2% of gross value added (0.4% of employment),  while 
postal and courier activities accounted for 0.4% of gross value added (0.8% of employment) 
in 2020.329 According to the OECD, restrictions in the courier and telecommunications sectors in EU 
member States remain generally limited and changed only mar ginally during the review period.330 
4.5.3.1   Telecommunication services  
4.228.   Penetration rates for mobile telephony remained high while that of mobile broadband 
Internet access continued to increase although it varied across member States (Table  4.10). 
In 2021, the shar e of households with Internet access stood at 92%, according to Eurostat (ranging 
from 84% to 99% among member States), a significant increase from the 84% reached in 2016.  
4.229.   In all member States, competition remains strong, with at least three operators pro viding 
mobile phone services. While not consistently available for all member States for early 2021, data 
on market shares of operators (as at early 2021) indicated only limited market concentration.331 
 
325 OECD, Services Trade Restrictiveness Index . 
326 Agreement on maritime transport  between the European Community and its Member States, of the 
one part, and the government of the People's  Republic  of China, of the other part.  
327 Commission Regulation (EU) 651/2014.  
328 JRC Technical Report (2022), Quantifying Emissions in the European M aritime Sector . Viewed at: 
https://publications.jrc.ec.europa.eu/repository/bitstream/JRC128870/JRC128870_01.pdf . Of the GHG 
emissions of the maritime sec tor (of ships exceeding GT of 5,000 either destined to or leaving from an 
EU port), 7% of emissions occur in ports.  
329 Eurostat, National Accounts Aggregates by Industry  (nama_10_a64); and National Accounts 
Employment Data by Industry  (nama_10_a64_e). Viewed at: https://ec.europa.eu/eurostat/data/database . 
330 OECD, Services Trade Restrictiveness Index . 
331 Body of European Regulators for Electronic Communications, Termination Rat es at European 
Level – January 2021 , BoR (21) 71. Viewed at: WT/TPR/S/442  • European Union  
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  Data from the ITU indicate that prices are overall com petitive with representative data -only mobile 
broadband baskets and the fixed broadband basket affordable to most households.332 
Table 4.10 Telecom indicators, 2021  
 
EU-27 (simple 
average of 
member States)  Top performer  Bottom 
performer  
Fixed -telephone subscriptions per 100  inhabitants  28.3 58.6 3.7 
Mobile -cellular subscriptions per 100  inhabitants  123.3  149.1  101.1  
Active mobile broadband subscriptions per 
100 inhabitants  113.4  197.4  76.5 
Fixed broadband subscriptions per 100 inhabitants  35.8 47.5 23.0 
Subscriptions with at least equal to or above 
10 Mbit/s subscriptions (%)  94.7 99.9 77.8 
Households with Internet access (%)  92 99 84 
Note:  If no 2021 data are available, the latest available data are used: France and Luxembourg for all ITU 
indicators (2020  data); Netherlands for "active mobile -broadband subscriptions per 100  inhabitants" 
(2020  data); and Lithuania for "equal to or above 10  Mbit/s subscriptions per 100  inhabitants 
above  10" (2019 data).  
Source:  ITU World Telecommunication/ICT Indicators (WTI) Database  2022, July  2022 edition.  
4.230.   The European  Union's 2016 5G Action Plan aimed for each member State to have fully 
commercial 5G servic es in at least one major city by the end of 2020. As of October  2021, only 
two member States had not achieved this goal, but 5G services had been rolled out in all member 
States by early 2022. At the end of October  2022, the allocation of "pioneer" spectru m bands for 
the use of 5G in EU  member States had progressed well, although unevenly.333 Citing industry 
estimates, a  2022 report by the European Court of Auditors estimates that by 2025, 35% of all 
mobile connections will be based on 5G, lower as compared to developed economies in North America 
and Asia, and meaning the European  Union could miss its target of achieving uninterrupted 5G 
coverage in all urban areas by 2025.334 
Regulatory framework and developments  
4.231.   The European Electronic Communications Code (E ECC)335 described in the previous 
Review336 entered into force at the end of 2020 and has since remained unchanged. At the beginning 
of April  2022, the Commission referred 10  member States to the CJEU for failure to fully transpose 
and communicate the transp osition. Since then, the infringement against two of them was closed, 
because they fulfilled these obligations.337 Separately, the Commission referred Hungary to the CJEU 
for failure to comply with the content of the EECC rules in July  2022.338 
4.232.   The EECC cont inues to provide for the determination and specific regulation of operators 
with significant market power (Chapters  III and IV of Title  II of Part  II), regulates the sharing of 
active and passive infrastructure as well as radio spectrum, regulates number p ortability for mobile 
and fixed lines (but not between them), and regulates universal access to Internet and voice 
 
https://www.berec .europa.eu/sites/default/files/files/document_register_store/2021/6/BoR_(21)_71_BEREC_R
eport_on_TRRs_at_European_level_Jan2021_P2_2021_clean.pdf .  
332 ITU (2021), Measuring Digital Development – ICT Price Trends 2020 .  
333 European Commission (2022), 5G Observ atory – Quarterly Report  17 – October  2022. Viewed at: 
https://5gobservatory.eu/wp -content/uploads/2022/10/QR -17-Final-v3-CLEAN.pdf . Among the three bands 
with har monized frequencies at the EU level, 25  member States had allocated the 3.6  GHz band, 21 the 
700 MHz band, and 8 the 26  MHz band (the latter partially due to limited demand).  
334 European Court of Auditors (2022), 5G Roll -out in the EU: Delays in Deployment of Networks with 
Security Issues Remaining Unresolved . Viewed at: 
https://www.eca.europa.eu/Lists/ECADocuments/SR22_03/SR_Security -5G-networks_EN.pdf .  
335 Directive (EU) 2018/1972.  
336 WTO document WT/TPR/S/395/Rev.1, 7  July 2020, Section  4.4.4.2.  
337 European Commission (2022), "EU Electronic Communications Code: Commission Refers 10  Member 
States to the Court of Justice of the EU", 6  April. Viewed at: https://digital -strategy.ec.europa.eu/en/news/eu -
electronic -communications -code-commission -refers -10-member -states -court-justice -eu.  
338 European  Commission (2022), "Media Freedom: The Commission Refers Hungary to the Court for 
Failure to Comply with EU Electronic Communications Rules", 15  July. Viewed at: https://digital -
strategy.ec.europa.eu/en/news/media -freedom -commission -refers -hungary -court-failure -comply -eu-electronic -
communications -rules.  WT/TPR/S/442  • European Union  
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  communication services. Regulation (EU) 2015/2120 also includes provisions on net neutrality. 
Issues of unjustified geo -blocking continue to be regulated in Regulation  (EU) 2018/302.339 
Independent National Regulatory Authorities (NRA) supervise service providers based on a general 
authorization regime340, monitor the market, and auction numbering resources and radio spectrum.  
4.233.   As spelled out in the previous Review, number -based and number -independent interpersonal 
communications services are regulated differently, with the former subject to more stringent 
regulatory obligations.341 The Body of European Regulators for Electronic Communications (BER EC) 
plays a coordinating and advisory role to the Commission and NRAs. As outlined in the previous 
Review, the EECC also requires NRAs to harmonize the authorization of radio spectrum use, with 
particular emphasis regarding the allocation of 5G bands, and requires a minimum duration of 
15 years for the allocation of spectrum.  
4.234.   NRAs are also required to map the reach of broadband networks by 2023 and regularly 
thereafter, and, in case areas without sufficient coverage are identified, undertake efforts to achi eve 
such coverage (Articles  22 and  29). 
4.235.   Complementing the EECC, a delegated Commission Regulation in late 2020 established 
maximum mobile and fixed voice termination rates for intra -EU calls that are being phased in until 
the beginning of 2024.342 The Commi ssion also revised the recommended list of markets subject to 
ex ante regulation, reducing it to only the market for wholesale local access provided at a fixed 
location and the market for wholesale dedicated connectivity.343 
4.236.   An evaluation of the 2017 abolit ion of roaming charges for customers travelling occasionally 
within the European  Union found significant positive effects for consumers.344 As the underlying 
competition dynamics in the sector have not changed and the abolition was set to expire in 
mid-2022, the rules have been extended until 2032.345 In addition, the chapeau  of Regulation  (EU) 
2022/612 tasks the Commission to review the retail price caps for international calls in the 
European  Union (while not roaming) established in Regulation (EU) 2015/212 0 and currently in place 
until 14  May 2024, and to assess whether further revisions in these caps are warranted.  
Cybersecurity  
4.237.   Around the time of approval of the EU Cybersecurity Act in 2019, expanding the mandate of 
the EU Agency for Cybersecurity346, the Commission also published Commission Recommendation 
(EU) 2019/534 regarding assessing cybersecurity risks of 5G networks and identifying possible 
measures to mitigate them. Following this recommendation and based on national risk assessments 
undertaken  by member States, the member States' Cooperation Group on Network and Information 
Security published a coordinated risk assessment347 and developed a Toolbox of strategic and 
technical measures, as well as supporting actions to mitigate such risks.348 
4.238.   Based  on the Toolbox, in mid -2020 nearly all member States were implementing (or planned 
to implement) measures to restrict access by high -risk suppliers, and most member States were 
implementing (or planning to implement) measures to (i)  control the use of man aged service 
 
339 For additional information, see WTO document WT/TPR/S/395/Rev.1, 7  July 2020, Section  4.4.3.2.3.  
340 Beyond the general authorization, NRAs can require providers of electronic communications networks 
or services to submit a simple notification (EECC, Articl e 12). A recent assessment by BEREC found that 
differences in notification requirements continued to persist. See BEREC (2021), Opinion on the national 
implementation and functioning of the general authorization, and on their impact on the functioning of t he 
internal market, pursuant to article  122, para.  3 EECC, BoR  (21) 178. 
341 WTO document WT/TPR/S/395/Rev.1, 7  June 2020, Section  4.4.4.2.  
342 Commission Delegated Regulation (EU) 2021/654.  
343 European Commission (2020), "Commission Updated the Recommendation on Relevant Markets", 
21 December. Viewed at: https://digital -strategy.ec.europa.eu/en/news/commission -updated -
recommendation -relevant -markets . 
344 European Commission, Inception Impact Assessment under the Initiative for Reviewing and 
Prolonging the Roaming Regulation , Ares (2020)2005722.  
345 Regulation (EU)  2022/612.  
346 WTO document WT/TPR/S/395/Rev.1, 7  June 2020, Section  4.4.5.1.1.  
347 NIS Cooperati on Group (2019), EU Coordinated Risk Assessment of the Cybersecurity of 5G 
Networks . The Cooperation Group also published an assessment of open RAN cybersecurity in 2022.  
348 NIS Cooperation Group (2020), Cybersecurity of 5G Networks: EU Toolbox of Risk Miti gating 
Measures . WT/TPR/S/442  • European Union  
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  suppliers and equipment suppliers' 3rd line support; and (ii)  limit dependence on (a group of) 
individual suppliers.349 According to the Commission, a second progress report on the Toolbox's 
implementation is being prepared. At the end of 2021,  13 member States had approved new, or 
amended existing, laws addressing risks related to high -risk vendors.350 While such policies aim to 
limit certain risks, they can also potentially increase the costs of replacing (older) and expanding 
(new) networks du e to more limited competition when excluding large global providers.351 
4.239.   In January  2023, the 2016 Directive on the security of network and information systems 
(NIS Directive)352 was replaced by the NIS  2 Directive.353 Member States will have 21  months to 
transpose the Directive into national law by mid -October  2024. The new Directive also requires 
medium and large entities from other critical sectors, such as communications or digital services, 
waste water and waste management, manufacturing of critical produc ts (including medical devices), 
or public administration, to take enhanced cybersecurity risk management measures, and 
strengthen existing reporting requirements.354 It further foresees the establishment of a framework 
for cybersecurity crisis management at  national and European levels. The proposal also replaces the 
EECC provisions on the security of public electronic communication networks and publicly available 
electronic communications, including the notification of security incidents.355 
4.240.   The newly approv ed Digital Services Act establishes rules for a transparent, safe, 
predictable, and trusted online environment (Section  4.5), while other Directives regulate 
infringements of copyright and related rights applicable to certain online transmissions and in th e 
Digital Single Market ( Section  3.3.7.2). 
4.5.3.2   Postal and courier services  
4.241.   Following the entry into force of the Regulation on cross -border parcel delivery services 
described in the previous Review aimed at reducing barriers to the delivery of cross -border onl ine 
sales within the European  Union356, the Commission published a report on its application.357 The 
Regulation covers single -piece retail delivery rates (as opposed to bulk -item negotiated rates), which 
account for less than 10% of the market. The report found that the Regulation had increased 
transparency regarding operators and tariffs, while also  pointing out remaining challenges with the 
current transparency tools. According to the analysis, NRAs had not used their sanctioning powers 
for infringements of the Regulation.  
4.242.   International online retail platforms entered the parcel delivery market in s ome 
member  States, according to the report mentioned above. Following the elimination of the 
exemption from import VAT on small parcels valued below EUR  22 in 2021, inbound packet and 
parcel flow from outside the European  Union decreased in most member Sta tes (Section  3.1.1.1 ).358 
The Commission expects the elimination of exemption from import VAT to incentivize consumers to 
shop more within the European  Union. It could also impact the structure of delivery services as 
foreign companies having used individua l parcels in the past could either rely on the Import One -Stop 
Shop or increase customs clearance in bulk coupled with the use of delivery services linked to online 
retail platforms or other local fulfilment service providers ( Section  3.1.1.1 ). 
 
349 NIS Coordination Group (2020), Report on Member States' Progress in Implementing the EU Toolbox 
on 5G Cybersecurity , July.  
350 European Court of Auditors (2022), 5G Roll -out in the EU: Delays in Deployment of Networks with 
Security Issues Remaining Unresolved , p. 41. 
351 The 2020 progress report recommends defining implementation plans and/or transition periods for 
operators already using equipment of high -risk suppliers (p.  42). 
352 Directive (EU) 2016/1148.  
353 Directive (EU) 2022/2555.  
354 European Commission (2022), "Commission Welcomes Political Agreement on New Rules on 
Cybersecurity of Network and Information Systems", 13  May. Viewed at: 
https://ec.europa.eu/com mission/presscorner/detail/en/ip_22_2985 . Two  annexes of the proposal list sectors 
in which the proposed Directive applies to certain public of private essential entities.  
355 Currently contained in Directive (EU) 2018/1972, Articles  41 and  42. 
356 Regulation (EU) 2018/644. See also WTO document WT/TPR/S/395/Rev.1, 7  June 2020, 
Section  4.4.3.2.4.  
357 European Commission Report  COM(2021)  675 final.  
358 European Commission (2022), Main Developments in the Postal Sector (2017 -2021) . Viewed at: 
https://data.europa.eu/doi/10.2873/432068 .   
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5  APPENDIX TABLES  
Table A1. 1 Selected economic indicators, 2018 -21 
 
Inflation rate (HICP – annual 
average rate of change), %  Unemployment rate, from 15 to 
74 years (% of labour force)  General government gross debt  
(% of GDP)  General government 
deficit/surplus (% of GDP)  Current account balance  
(% of GDP)a 
2018  2019  2020  2021  2018  2019  2020  2021  2018  2019  2020  2021  2018  2019  2020  2021  2018  2019  2020  2021  
EU-27 1.8 1.4 0.7 2.9 7.4 6.8 7.2 7.0 79.7 77.5 89.8 87.9 -0.4 -0.5 -6.7 -4.6 2.7 2.4 2.0 2.4 
Austria  2.1 1.5 1.4 2.8 5.2 4.8 6.0 6.2 74.1 70.6 82.9 82.3 0.2 0.6 -8.0 -5.9 0.9 2.4 3.0 0.4 
Belgium  2.3 1.2 0.4 3.2 6.0 5.5 5.8 6.3 99.9 97.6 112.0  109.2  -0.9 -1.9 -9.0 -5.6 -0.9 0.1 1.1 0.4 
Bulgaria  2.6 2.5 1.2 2.8 6.2 5.2 6.1 5.3 22.1 20.0 24.5 23.9 1.7 2.1 -3.8 -3.9 0.9 1.9 0.0 -0.5 
Croatia  1.6 0.8 0.0 2.7 8.5 6.6 7.5 7.6 73.2 71.0 87.0 78.4 -0.1 0.2 -7.3 -2.6 1.7 2.8 -0.5 3.1 
Cyprus  0.8 0.5 -1.1 2.3 8.4 7.1 7.6 7.5 98.1 90.4 113.5  101.0  -3.6 1.3 -5.8 -1.7 -4.0 -5.6 -10.1 -6.8 
Czech Rep.  2.0 2.6 3.3 3.3 2.2 2.0 2.6 2.8 32.1 30.0 37.7 42.0 0.9 0.3 -5.8 -5.1 0.4 0.3 2.0 -0.8 
Denmark  0.7 0.7 0.3 1.9 5.1 5.0 5.6 5.1 34.0 33.7 42.2 36.6 0.8 4.1 0.2 3.6 7.3 8.5 7.9 9.0 
Estonia  3.4 2.3 -0.6 4.5 5.4 4.5 6.9 6.2 8.2 8.5 18.5 17.6 -0.6 0.1 -5.5 -2.4 0.9 2.4 -1.0 -1.8 
Finland  1.2 1.1 0.4 2.1 7.5 6.8 7.7 7.7 64.9 64.9 74.8 72.4 -0.9 -0.9 -5.5 -2.7 -1.8 -0.3 0.6 0.4 
France  2.1 1.3 0.5 2.1 9.0 8.4 8.0 7.9b 97.8 97.4 115.0  112.8  -2.3 -3.1 -9.0 -6.5 -0.8 0.5 -1.8 0.4 
Germany  1.9 1.4 0.4 3.2 3.2 3.0 3.7b 3.6 61.3 58.9 68.0 68.6 1.9 1.5 -4.3 -3.7 8.0 7.6 7.0 7.4 
Greece  0.8 0.5 -1.3 0.6 19.7 17.9 17.6 14.7 186.4  180.6  206.3  194.5  0.9 1.1 -9.9 -7.5 -2.9 -1.5 -6.6 -6.8 
Hungary  2.9 3.4 3.4 5.2 3.6 3.3 4.1 4.1 69.1 65.3 79.3 76.8 -2.1 -2.0 -7.5 -7.1 0.2 -0.8 -1.1 -4.0 
Ireland  0.7 0.9 -0.5 2.4 5.8 5.0 5.9 6.2 63.0 57.0 58.4 55.4 0.1 0.5 -5.0 -1.7 5.2 -19.8 -6.8 14.2 
Italy 1.2 0.6 -0.1 1.9 10.6 9.9 9.3 9.5 134.4  134.1  154.9  150.3  -2.2 -1.5 -9.5 -7.2 2.6 3.3 3.9 3.1 
Latvia  2.6 2.7 0.1 3.2 7.4 6.3 8.1 7.6 37.0 36.5 42.0 43.6 -0.8 -0.6 -4.3 -7.0 -0.1 -0.6 2.6 -4.2 
Lithuania  2.5 2.2 1.1 4.6 6.2 6.3 8.5 7.1 33.7 35.8 46.3 43.7 0.5 0.5 -7.0 -1.0 0.3 3.5 7.3 1.1 
Luxembourg  2.0 1.6 0.0 3.5 5.6 5.6 6.8 5.3 20.9 22.4 24.5 24.5 3.0 2.2 -3.4 0.8 3.7 3.4 4.6 4.7 
Malta  1.7 1.5 0.8 0.7 3.7 3.6 4.4 3.4 43.7 40.7 53.3 56.3 2.1 0.6 -9.4 -7.8 6.4 4.9 4.6 4.3 
Netherlands  1.6 2.7 1.1 2.8 4.9 4.4 4.9 4.2 52.4 48.5 54.7 52.4 1.5 1.8 -3.7 -2.6 9.3 6.9 5.1 7.2 
Poland  1.2 2.1 3.7 5.2 3.9 3.3 3.2 3.4 48.7 45.7 57.2 53.8 -0.2 -0.7 -6.9 -1.8 -1.9 -0.2 2.5 -1.4 
Portugal  1.2 0.3 -0.1 0.9 7.2 6.7 7.0 6.6 121.5  116.6  134.9  125.5  -0.3 0.1 -5.8 -2.9 0.6 0.4 -1.0 -1.2 
Romania  4.1 3.9 2.3 4.1 5.3 4.9 6.1 5.6 34.5 35.1 46.9 48.9 -2.8 -4.3 -9.2 -7.1 -4.6 -4.9 -4.9 -7.2 
Slovak Rep.  2.5 2.8 2.0 2.8 6.5 5.7 6.7 6.8 49.4 48.0 58.9 62.2 -1.0 -1.2 -5.4 -5.5 -2.2 -3.3 0.6 -2.5 
Slovenia  1.9 1.7 -0.3 2.0 5.1 4.4 5.0 4.8 70.3 65.4 79.6 74.5 0.7 0.6 -7.7 -4.7 6.0 5.9 7.6 3.8 
Spain  1.7 0.8 -0.3 3.0 15.3 14.1 15.5 14.8b 100.4  98.2 120.4  118.3  -2.6 -3.1 -10.1 -6.9 1.9 2.1 0.6 1.0 
Sweden  2.0 1.7 0.7 2.7 6.5b 7.0 8.5 8.8 39.2 35.2 39.5 36.3 0.8 0.6 -2.8 -0.1 2.6 5.4 6.0 6.3 
a EU-27 data refer to EU -27 trade with the extra -EU countries. Each member State's data refer to its trade with all other countries (including other EU member States).  
b Break in time series.  
Source:  Eurostat, HICP – Inflation Rate  (TEC00118); Unemployment by Sex and Age – Annual Data  (UNE_RT_A_Custom_3969915); General Government Gross Debt  
(SDG_17_40); General Government Deficit/Surplus  (TEC00127); and Main Balance of Payments and International Investment Position Items as Share of GDP  (BPM6) 
[BOP_GDP6_Q_custom_3970014]. Viewed at: https://ec.europa.eu/eurostat/web/main/data/database . WT/TPR/S/442  • European Union  
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  Table A1. 2 Extra -EU-27 merchandise exports by HS section/chapter/subheading, 
2018 -21 
HS Section/HS chapters/ subheadings  2018  2019  2020  2021  
Total exports (EUR  billion)  2,059.8  2,132.0  1,933.0  2,180.9   
(% of total)  
1-Live animals and products  1.8 2.0 2.2 2.0 
2-Vegetable products  1.6 1.7 2.0 1.8 
3-Fats and oils  0.3 0.3 0.4 0.4 
4-Prepared food, beverages and tobacco  4.5 4.6 5.0 4.9 
5-Mineral products  5.9 5.2 3.7 5.2 
 HS 27 Mineral fuels  5.5 4.9 3.3 4.8 
 HS 2710 Petroleum oils and oils obtained from bituminous 
minerals (excl. crude)  4.2 3.7 2.5 3.4 
6-Chemicals and products thereof  16.0 17.1 19.1 18.6 
 HS 30 Pharmaceutical products  8.1 9.2 10.6 10.4 
 HS 3004 Medicaments consisting of mixed or unmixed 
products for therapeutic or prophylactic use  5.0 5.6 6.5 5.5 
 HS 3002 Human blood; animal blood prepared for 
therapeutic, prophylactic or diagnostic uses;  2.5 3.0 3.6 4.4 
 HS 29 Organic chemicals  2.7 2.6 2.9 2.6 
 HS 38 Miscellaneous chemical products  1.5 1.5 1.7 1.7 
 HS 33 Essential oils and resinoids; perfumery, cosmetic or 
toilet preparations  1.5 1.6 1.4 1.4 
7-Plastics, rubber, and articles thereof  4.1 3.9 4.1 4.3 
 HS 39 Plastics and articles thereof  3.2 3.1 3.3 3.4 
8-Raw hides and skins, leather, and its products  0.9 1.0 0.9 1.0 
9-Wood and articles of wood  0.9 0.8 0.9 1.1 
10-Pulp of wood, paper and paperboard  1.7 1.6 1.6 1.6 
11-Textiles and textile articles  2.8 2.9 2.7 2.7 
12-Footwear, headgear, etc.  0.7 0.7 0.7 0.7 
13-Articles of stone, plaster, cement  1.2 1.1 1.1 1.2 
14-Precious stones and metals, pearls  1.9 2.1 2.3 2.3 
15-Base metals and articles thereof  5.9 5.6 5.4 5.7 
 HS 73 Articles of iron or steel  1.8 1.8 1.7 1.6 
 HS 72 Iron and steel  1.5 1.4 1.3 1.6 
16-Machinery, electrical equipment, etc.  25.3 25.2 25.2 24.3 
 HS 84 Machinery and mechanical appliances; parts thereof  16.4 16.4 16.0 15.5 
 HS 8411 Turbojets, turbopropellers and other gas 
turbines  1.4 1.6 1.2 1.0 
 HS 8486 Machines and apparatus of a kind used solely or 
principally for the manufacture of semiconductor boules or 
wafers  0.7 0.7 0.8 0.9 
 HS 8471 Automatic data -processing machines and units 
thereof  1.0 1.0 1.1 0.9 
 HS 85 Electrical machinery and equipment and parts 
thereof  8.9 8.8 9.2 8.9 
 HS 8542 Electronic integrated circuits; parts thereof  0.9 1.0 1.1 1.2 
 HS 8517 Telephone sets, incl. telephones for cellular 
networks or for other wireless networks  1.2 1.1 1.2 1.0 
 HS 8536 Electrical apparatus for switching or protecting 
electrical circuits, or for making connections to or in 
electrical circuits,  0.7 0.6 0.7 0.7 
17-Transport equipment  16.2 15.7 14.1 13.8 
 HS 87 Vehicles  11.5 11.0 10.5 10.1 
 HS 88 Aircraft, spacecraft, and parts thereof  3.4 3.5 2.4 2.3 
18-Precision equipment  5.0 5.2 5.2 5.1 
 HS 90 Optical, photographic, cinematographic, measuring, 
checking, precision, medical or surgical instruments and 
apparatus  4.8 5.0 5.0 4.9 
19-Arms and ammunition  0.2 0.1 0.2 0.2 
20-Miscellaneous manufactured articles  1.9 1.8 1.9 1.9 
21-Works of art, etc.  0.1 0.1 0.1 0.2 
HS 99 Other  1.1 1.1 1.0 1.0 
Source:  Eurostat, International Trade in Goods . Viewed at: https://ec.europa.eu/eurostat/web/international -
trade -in-goods/data/database . 
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  Table A1. 3 Extra -EU-27 merchandise imports by HS section/ chapter/subheading, 
2018 -21 
HS Section/HS chapters/HS subheadings  2018  2019  2020  2021  
Total imports (EUR  billion)  1,912.1  1,940.9  1,717.3  2,124.1   
(% of total)  
1-Live animals and products  1.6 1.6 1.6 1.4 
2-Vegetable products  2.7 2.8 3.2 2.7 
 HS 08 Edible fruit and nuts; peel of citrus fruit or melons  1.0 1.0 1.2 0.9 
 HS 12 Oil seeds and oleaginous fruits  0.5 0.6 0.7 0.6 
3-Fats and oils  0.5 0.5 0.7 0.7 
4-Prepared food, beverages and tobacco  2.5 2.5 2.7 2.3 
5-Mineral products  21.9 20.1 14.4 20.2 
 HS 27 Mineral fuels  20.5 18.7 12.9 18.4 
 HS 2709 Petroleum oils and oils obtained from 
bituminous minerals, crude  11.8 10.9 7.3 9.1 
 HS 2711 Petroleum gas and other gaseous 
hydrocarbons  2.5 2.2 1.6 3.4 
6-Chemicals and products thereof  10.3 10.7 12.2 11.2 
 HS 30 Pharmaceutical products  3.9 4.2 4.9 4.3 
 HS 29 Organic chemicals  3.1 3.2 3.5 3.3 
 HS 38 Miscellaneous chemical products  1.0 1.1 1.4 1.4 
7-Plastics, rubber, and articles thereof  3.4 3.4 3.6 3.8 
 HS 39 Plastics and articles thereof  2.5 2.5 2.6 2.7 
8-Raw hides and skins, leather, and its products  0.8 0.8 0.6 0.6 
9-Wood and articles of wood  0.6 0.6 0.6 0.7 
10-Pulp of wood, paper and paperboard  0.9 0.9 0.8 0.8 
11-Textiles and textile articles  5.5 5.6 6.7 5.0 
 HS 61 Articles of apparel and clothing accessories, knitted or 
crocheted  2.0 2.0 2.0 1.8 
 HS 62 Articles of apparel and clothing accessories, not knitted 
or crocheted  2.0 2.1 2.0 1.6 
12-Footwear, headgear, etc.  1.2 1.3 1.2 1.0 
13-Articles of stone, plaster, cement  0.8 0.8 0.8 0.8 
14-Precious stones and metals, pearls  2.1 2.1 2.7 2.8 
15-Base metals and articles thereof  6.6 6.1 5.8 6.9 
 HS 72 Iron and steel  2.0 1.7 1.5 2.2 
 HS 73 Articles of iron or steel  1.3 1.3 1.4 1.4 
 HS 76 Aluminium and articles thereof  1.3 1.2 1.1 1.3 
16-Machinery, electrical equipment, etc.  23.7 24.6 26.6 24.8 
 HS 85 Electrical machinery and equipment and parts thereof  12.3 12.8 14.3 13.4 
 HS 8517 Telephone sets, incl. telephones for cellular 
networks or for other wireless network  3.6 3.6 4.1 3.3 
 HS 8542 Electronic integrated circuits; parts thereof  1.3 1.5 1.6 1.7 
 HS 84 Machinery and mechanical appliances; parts thereof  11.4 11.7 12.3 11.4 
 HS 8471 Automatic data -processing machines and units 
thereof  2.5 2.5 3.1 2.9 
 HS 8411 Turbojets, turbopropellers and other gas 
turbines  1.5 1.7 1.3 1.2 
17-Transport equipment  7.9 8.3 7.6 6.8 
 HS 87 Vehicles  5.5 5.9 5.6 4.9 
 HS 88 Aircraft, spacecraft, and parts thereof  1.9 1.9 1.4 1.3 
18-Precision equipment  3.7 3.9 4.3 3.8 
 HS 90 Optical, photographic, cinematographic, measuring, 
checking, precision, medical or surgical instruments and 
apparatus  3.4 3.6 4.0 3.5 
19-Arms and ammunition  0.0 0.0 0.1 0.1 
20-Miscellaneous manufactured articles  2.3 2.4 2.6 2.7 
 HS 94 Furniture; bedding, mattresses, mattress supports, 
cushions and similar stuffed furnishings  1.2 1.3 1.4 1.5 
21-Works of art, etc.  0.1 0.1 0.2 0.1 
HS 99 Other  0.9 0.9 0.8 0.8 
Source:  Eurostat, International Trade in Goods . Viewed at: https://ec.europa.eu/eurostat/web/international -
trade -in-goods/data/database . 
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  Table A1. 4 Extra-EU-27 merchandise imports by origin, 2018 -21 
  2018  2019  2020  2021  
Total imports (EUR  billion)  1,912.1  1,940.9  1,717.3  2,124.1   
(% of total)  
Americas  17.3 18.1 17.9 16.9 
 United  States  11.2 12.1 11.8 11.0 
 Other America  6.1 6.0 6.1 6.0 
 Brazil  1.5 1.4 1.5 1.6 
 Canada  1.0 1.1 1.2 1.1 
 Mexico  1.2 1.3 1.2 1.1 
Europe  25.2 25.0 25.3 23.2 
 EFTA 8.7 8.6 9.0 9.6 
 Switzerland  5.4 5.7 6.4 5.9 
 Norway  3.2 2.8 2.5 3.5 
 Other Europe  16.5 16.4 16.3 13.6 
 United  Kingdom  10.3 10.0 9.8 6.9 
 Türkiye  3.5 3.6 3.6 3.7 
 Ukraine  0.9 1.0 1.0 1.1 
Commonwealth of Independent States (CIS)a 10.5 9.4 7.0 9.6 
 Russian  Federation  8.4 7.5 5.5 7.7 
Africa  7.1 7.0 5.9 6.7 
Middle East  4.5 3.9 2.9 3.2 
Asia 35.4 36.6 40.9 40.3 
 China  17.9 18.7 22.4 22.3 
 Japan  3.1 3.2 3.2 2.9 
 Other Asia  14.4 14.6 15.3 15.0 
 Korea, Republic of  2.4 2.4 2.6 2.6 
 India 2.0 2.0 1.9 2.2 
 Viet Nam 1.7 1.8 2.0 1.8 
 Chinese  Taipei  1.4 1.4 1.5 1.7 
 Malaysia  1.1 1.2 1.4 1.4 
 Thailand  1.0 1.0 1.0 1.0 
Other  0.0 0.0 0.0 0.0 
a Commonwealth of Independent States, including certain associate and former member States.  
Source:  Eurostat, International Trade in Goods . Viewed at: https://ec.europa.eu/eurostat/web/international -
trade -in-goods/data/database . 
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  Table A1. 5 Extra -EU-27 merchandise exports by destination , 2018 -21 
 
2018  2019  2020  2021  
Total exports (EUR  billion)  2,059.8  2,132.0  1,933.0  2,180.9   
(% of total)  
Americas  24.5 25.5 25.1 25.7 
 United  States  17.0 18.0 18.3 18.3 
 Other America  7.5 7.4 6.8 7.4 
 Mexico  1.8 1.8 1.6 1.7 
 Canada  1.7 1.8 1.7 1.7 
 Brazil  1.5 1.5 1.4 1.5 
Europe  32.8 32.2 32.2 31.3 
 EFTA 9.2 9.5 10.1 10.0 
 Switzerland  6.6 6.9 7.4 7.2 
 Norway  2.4 2.4 2.5 2.6 
 Other Europe  23.6 22.7 22.1 21.3 
 United  Kingdom  15.5 15.0 14.4 13.0 
 Türkiye  3.4 3.2 3.6 3.6 
 Ukraine  1.0 1.1 1.2 1.3 
Commonwealth of Independent States (CIS)a 5.1 5.2 5.2 5.2 
 Russian  Federation  4.0 4.1 4.1 4.1 
Africa  7.0 6.8 6.5 6.7 
Middle East  5.7 5.5 5.3 5.2 
 United  Arab Emirates  1.4 1.4 1.3 1.4 
Asia 25.0 24.8 25.7 25.9 
 China  9.1 9.3 10.5 10.2 
 Japan  2.8 2.9 2.9 2.9 
 Other Asia  13.1 12.6 12.4 12.8 
 Korea,  Republic  of 2.1 2.0 2.3 2.4 
 India 1.9 1.8 1.7 1.9 
 Australia  1.5 1.4 1.5 1.5 
 Chinese  Taipei  1.0 1.1 1.2 1.3 
Other  0.0 0.0 0.0 0.0 
a Commonwealth of Independent States, including certain associate and former member States.  
Source:  Eurostat, International Trade in Goods . Viewed at: https://ec.europa.eu/eurostat/web/international -
trade-in-goods/data/database .   
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Table A1. 6 Main partners for flows of extra -EU-27 FDI, 2018 -21 
(EUR million)   
Inward  Outward  
2018  2019  2020  2021  2018  2019  2020  2021  
Extra -EU-27 -223,767.1  102,571.0  237,287.8  -244,572.3  -209,146.3  164,337.4  22,659.1  17,247.9  
 Bahamas  -6,806.7  4,760.7  6,302.1  -15,173.0  -3,215.4  -7,430.7  -10,653.7  -3,886.6  
 Barbados  -1,111.1  -8,424.6  16,250.9  1,735.1  -3,222.5  -523.0  9,218.1  -10,840.6  
 Bermuda  -152,681.1  -19,563.1  -27,505.3  17,408.7  -56,084.9  -32,091.2  -11,029.1  -64,155.0  
 Brazil  -42,636.7  -10,720.8  -3,481.6  -475.5  748.9  12,254.2  -13,445.3  15,591.8  
 British  Virgin  Islands  -5,228.3  55,684.0  -31,294.8  -19,523.8  -884.9  -43,705.2  168,758.1  -17,368.0  
 Canada  81,455.9  -196,046.5  -7,362.3  32,048.3  92,509.3  -67,771.9  -20,264.0  5,801.6  
 Cayman  Islands  -41,279.8  3,350.6  -38,513.3  36,240.7  28,400.7  -16,360.3  8,690.1  7,334.1  
 China  10,544.9  11,502.0  8,680.8  -505.9  12,366.8  -7,536.3  4,242.5  6,972.1  
 Guernsey  -5,372.1  3,518.6  5,877.7  3,877.9  2,112.6  -3,336.0  -144.2  206.2  
 Guyana  0.0 960.1  2,078.1  -9.1 108.1  718.8  2,795.8  -138.4  
 Hong Kong,  China  10,914.2  37,684.2  -2,511.3  -15,976.1  6,675.0  76,823.1  -42,091.0  -26,594.7  
 India 215.7  734.3  -825.4  84.0 6,220.6  9,000.3  7,511.8  -417.5  
 Israel  1,916.5  6,602.0  -5,494.1  2,567.1  3,604.1  6,238.7  2,482.2  7,162.5  
 Japan  9,074.7  12,433.6  9,067.1  10,699.0  7,201.5  2,954.1  -3,003.4  -2,415.1  
 Jersey  10,809.6  19,276.0  -5,188.0  13,204.6  2,180.5  1,707.9  4,513.6  -10,337.8  
 Mexico  -2,310.3  745.5  -12,915.6  4,358.6  9,558.2  6,654.5  -3,728.1  13,908.9  
 Norway  9,707.0  3,724.9  -1,864.1  4,055.1  -1,028.1  7,426.4  -2,664.6  6,116.0  
 Russian  Federation  10,968.6  11,637.1  1,374.4  16,527.1  14,250.1  16,571.4  -17,845.9  -476.0  
 Singapore  -1,496.5  -10,043.3  50,304.0  -27,345.3  -64,199.4  47,552.4  13,845.5  28,690.9  
 South  Africa  -1,455.1  117,747.6  3,289.8  478.5  309.4  1,334.3  133.6  11,061.6  
 Korea,  Rep. of 2,710.6  5,623.6  3,771.4  2,210.6  2,138.8  -6,081.0  -39.9 -3,265.7  
 Switzerland  30,613.7  -15,478.0  -81,044.9  -57,348.8  44,176.7  49,001.5  -140,039.6  -66,292.9  
 United  Arab Emirates  -526.5  20,281.1  52,088.4  3,996.1  3,487.8  176,720.1  -126,965.7  -1,864.9  
 United  Kingdom  41,157.7  -37,201.3  79,170.3  -34,126.2  -75,051.0  -1,284.8  28,015.9  49,210.3  
 United  States  -173,797.1  82,652.5  254,690.6  -215,549.6  -188,535.3  -37,643.3  203,941.4  84,678.5  
 Uruguay  3,731.7  -1,186.0  -2,576.2  4,565.2  2,122.7  10,683.8  5,986.6  4,167.7  
 US Virgin  Islands  -68.0 -224.1  -9.0 17.8 2,981.4  3,393.3  1,668.8  -840.1  
Source:  Eurostat , Balance of Payments  (bop_fdi6_geo). Viewed at: https://ec.europa.eu/eurostat/web/main/data/database .   
   
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Table A1. 7 Extra -EU-27 FDI positions, by major partner, EU, 2018 -21 
 
Value in EUR  billion  % of extra -EU27 total  
Direct investment in the EU -27 Direct investment abroad  Direct investment in the EU -27 Direct investment abroad  
2018  2019  2020  2021  2018  2019  2020  2021  2018  2019  2020  2021  2018  2019  2020  2021  
Extra -EU-27 6,971.7  7,253.4  7,318.9  7,558.6  8,737.1  9,286.9  8,760.5  9,306.2  100.0  100.0  100.0  100.0  100.0  100.0  100.0  100.0  
United  States  1,843.6  1,953.8  2,240.7  2,465.7  2,127.6  2,099.2  2,224.3  2,512.9  26.4 26.9 30.6 32.6 24.4 22.6 25.4 27.0 
United  Kingdom  1,264.3  1,305.2  1,250.5  1,414.1  1,816.5  1,922.4  1,844.8  2,059.7  18.1 18.0 17.1 18.7 20.8 20.7 21.1 22.1 
Switzerland  758.1  768.3  681.5  613.9  1,036.5  1,013.8  910.5  885.9  10.9 10.6 9.3 8.1 11.9 10.9 10.4 9.5 
Bermuda  468.1  450.4  429.4  405.1  264.9  231.2  170.3  111.5  6.7 6.2 5.9 5.4 3.0 2.5 1.9 1.2 
Canada  366.1  263.5  257.7  267.9  366.4  332.0  278.5  270.5  5.3 3.6 3.5 3.5 4.2 3.6 3.2 2.9 
Cayman  Islands  235.9  237.0  206.1  239.9  70.7 73.5 74.8 90.7 3.4 3.3 2.8 3.2 0.8 0.8 0.9 1.0 
Jersey  269.9  287.8  281.8  212.2  37.9 50.4 51.1 49.7 3.9 4.0 3.9 2.8 0.4 0.5 0.6 0.5 
Japan  166.1  209.8  220.5  211.6  80.2 81.1 84.1 84.7 2.4 2.9 3.0 2.8 0.9 0.9 1.0 0.9 
Singapore  122.5  121.1  170.0  171.2  185.8  221.2  245.5  263.3  1.8 1.7 2.3 2.3 2.1 2.4 2.8 2.8 
Russian  Federation  146.7  152.1  148.0  162.4  279.9  277.0  243.9  256.0  2.1 2.1 2.0 2.1 3.2 3.0 2.8 2.8 
Hong Kong,  China  154.1  202.9  158.3  150.3  79.3 167.4  102.6  84.7 2.2 2.8 2.2 2.0 0.9 1.8 1.2 0.9 
United  Arab 
Emirates  39.8 66.0 122.2  126.1  39.0 426.5  144.3  151.2  0.6 0.9 1.7 1.7 0.4 4.6 1.6 1.6 
South  Africa  7.4 111.8  138.1  113.2  44.3 44.9 40.4 42.8 0.1 1.5 1.9 1.5 0.5 0.5 0.5 0.5 
British  Virgin Islands  87.8 141.5  110.5  93.8 99.5 59.9 222.1  195.6  1.3 2.0 1.5 1.2 1.1 0.6 2.5 2.1 
Norway  76.8 78.2 79.9 85.7 84.2 91.5 85.1 91.0 1.1 1.1 1.1 1.1 1.0 1.0 1.0 1.0 
China  54.5 60.9 67.3 69.9 187.5  203.5  210.6  233.6  0.8 0.8 0.9 0.9 2.1 2.2 2.4 2.5 
Israel  65.5 56.3 46.9 50.1 40.6 43.2 48.8 60.5 0.9 0.8 0.6 0.7 0.5 0.5 0.6 0.7 
Mexico  42.6 74.6 45.5 28.9 168.7  193.8  176.8  170.0  0.6 1.0 0.6 0.4 1.9 2.1 2.0 1.8 
Australia  19.3 18.9 20.3 22.2 126.2  121.5  113.5  121.0  0.3 0.3 0.3 0.3 1.4 1.3 1.3 1.3 
India 7.0 6.1 5.2 6.2 69.5 82.3 90.0 96.1 0.1 0.1 0.1 0.1 0.8 0.9 1.0 1.0 
Brazil  -9.3 7.1 -26.7 -5.2 316.4  322.0  251.7  262.1  -0.1 0.1 -0.4 -0.1 3.6 3.5 2.9 2.8 
Source:  Eurostat , Balance of Payments  (bop_fdi6_pos). Viewed at: https://ec.europa.eu/eurostat/web/main/data/database . 
 
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  Table A2. 1 Involvement in WTO dispute settlement, 2019 -22 
Subject  Complainant  Respondent  Date of 
request for 
consultations  Status as at 
31/12/2022  WTO 
document 
series  
Anti-Dumping Duties on 
Frozen Fries from 
Belgium, Germany and 
the Netherlands  European  Union  Colom bia 15/11/2019  Arbitration award 
circulated  WT/DS591  
Measures Relating to 
Raw Materials  European  Union  Indonesia  22/11/2019  Panel composed  WT/DS592  
Certain Measures 
Concerning Domestic 
and Foreign Products 
and Services  European  Union  Russian  Federation  22/07/2021  Panel composed  WT/DS604  
Measures Concerning 
the Exportation of Wood 
Products  European  Union  Russian  Federation  20/01/2022  In consultations  WT/DS608  
Registration 
Requirements Relating 
to the Importation of 
Certain Products  European  Union  Egypt  26/01/2022  In consultations  WT/DS609  
Measures Concerning 
Trade in Goods and 
Services  European  Union  China  27/01/2022  In consultations  WT/DS610  
Enforcement of 
Intellectual Property 
Rights  European  Union  China  18/02/2022  In consultations  WT/DS611  
Measures Relating to the 
Allocation of Contracts 
for Difference in Low 
Carbon Energy 
Generation  European  Union  United  Kingdom  28/03/2022  In consultations  WT/DS612  
Certain Measures 
Concerning Palm Oil and 
Oil Palm Crop-based 
Biofuels  Indonesia  European  Union  09/12/2019  Panel composed  WT/DS593  
Safeguard Measures on 
Certain Steel Products  Türkiye  European  Union  13/02/2020  Panel report 
circulated and 
adopted  WT/DS595  
Certain Measures 
Concerning Palm Oil and 
Oil Palm Crop -based 
Biofuels  Malaysia  European  Union  15/01/2021  Panel composed  WT/DS600  
Provisional Anti -
Dumping Duty on 
Mono -Ethylene Glycol 
from Saudi Arabia  Saudi  Arabia, 
Kingdom of  European  Union  17/08/2021  In consultations  WT/DS606  
Measures Concerning 
the Importation of 
Certain Poultry Meat 
Preparations from Brazil  Brazil  European  Union  08/11/2021  In consultations  WT/DS607  
Measures Concerning 
the Importation of Citrus 
Fruit from South  Africa  South  Africa  European  Union  27/07/2022  In consultations  WT/DS613  
Note:  Reporting period 1  October  2019 to 31  December  2022.  
Source:  Compiled by the WTO Secretariat, based on information from WTO dispute settlement gateway. 
Viewed at : https://www.wto.org/english/tratop_e/dispu_e/dispu_by_country_e.htm . 
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  Table A2. 2 Most recent  WTO notifications, December  2022  
Agreement  Description  Periodicity  Most recent WTO document  
Agreement on Agriculture  
Articles  10 and 18.2 
(ES:1, ES:2)  Export subsidies  Annual  G/AG/N/EU/74, 01/03/2022  
G/AG/N/EU/75/Corr.1, 14/07/2022  
Article  18.2 (DS:1)  Domestic support  Annual  G/AG/N/EU/79/Corr.1, 26/10/2022  
Article  18.2 (MA:1)  Administration of tariff and 
other quota commitments  Once, then 
changes  G/AG/N/EU/72, 07/02/2022, and 
corrigendum  
Article  18.2 (MA:2)  Tariff and other quota 
commitments  Annual  G/AG/N/EU/76, 15/03/2022  
Article  18.3 (DS:2)  New or modified domestic 
support measures exempt 
from reduction  Ad hoc  G/AG/N/EU/78, 14/06/2022  
Articles  5.7 and 18.2 
(MA:5)  Special safeguard provisions  Annual  G/AG/N/EU/80, 26/07/2022  
Article  12.1(b)  Export restrictions – new 
export restrictions  Ad hoc  G/AG/N/EU/77/Rev.3, 20/12/2022  
Article  16.2 Measures concerning the 
possible negative effects of 
the reform programme on 
least developed and net food 
importing developing countries  Annual  G/AG/N/EU/73, 01/03/2022  
Agreement on Anti -Dumping  
Article  16.4 Reports concerning 
anti-dumping actions  Ad hoc  G/ADP/N/376, 11/11/2022  
Article  16.4 Semi-annual reports of anti -
dumping actions (taken within 
the preceding six  months)  Semi-annual  G/ADP/N/370/EU, 05/10/2022  
Agreement on Import Licensing Procedures  
Article  1.4 (a) and 
Article  8.2(b)  Sources in which the 
information concerning import 
licensing procedures are 
published (Article  1.4 (a)), 
and changes in relevant 
laws/regulations 
(Article  8.2(b))  Ad hoc  G/LIC/N/2/EU/13/Corr.1, 2/11/ 2021 
G/LIC/N/2/EU/14/Corr.1, 2/11/2021  
G/LIC/N/2/EU/15/Corr.1, 2/11/2021  
G/LIC/N/2/EU/16/Corr.1, 2/11/2021  
G/LIC/N/2/EU/18, 02/11/2021  
Articles 5.1 -5.4 Institution of licensing 
procedures or changes in 
these procedures.  Ad hoc  G/LIC/N/2/EU/19, 30/11/2022  
G/LIC/N/2/EU/20, 30/11/2022  
G/LIC/N/2/EU/21, 30/11/2022  
Article  7.3 Replies to questionnaire on 
import licensing procedures  Annual  G/LIC/N/3/EU/11, 27/09/2022  
Agreement on Customs Valuation  
Article  22.2 Notification of changes to 
laws, regulations  Ad hoc  G/VAL/N/1/EU/1, 30/06/2020  
Agreement on Government Procurement  
GPA 2012, 
Article  XVI  Notification of procurement 
statistics  Annual  GPA/130/Add.10; GPA/137/Add.12; 
GPA/142/Add.13, 21/02/2020  
Appendix  1 Notification of thresholds  Biennial  GPA/THR/EU/3, 20/12/2021  
Agreement on Subsidies and Countervailing Measures  
Article  25.1 Report on subsidies  Biennial  G/SCM/N/372/EU, 16/07/2021, and 
addenda covering 27 member States  
Article  25.11  Report on Countervailing duty 
actions (preliminary or final)  Ad hoc  G/SCM/N/396, 13/09/2022  
Article  25.11  Semi-annual report on 
countervailing duty actions  Semi-annual  G/SCM/N/392/EU, 04/10/2022  
Agreement on Rules of Origin  
Annex  II, 
para. 4 - First time  Existing preferential rules of 
origin; judicial decisions and 
administrative rulings of 
general application relating to 
preferential rules of origin  Once, only  G/RO/N/219, 29/04/2021  
Agreement on the Application of Sanitary and Phytosanitary Measures  
Article  7 and 
Annex  B Sanitary/phytosanitary 
regulations  Ad hoc  G/SPS/N/EU/606, 14/12/2022  
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  Agreement  Description  Periodicity  Most recent WTO document  
Agreement on Safeguards  
Article  12.1 (a)(b)(c)  Initiation of investigations, 
injury determinations and 
decisions to apply, extend or 
adjust a safeguard measure  Ad hoc  G/SG/N/10/EU/1/Suppl.16, 
02/12/2022, and corrigendum, 
05/12/2022  
Article  12.5 Results of consultations  Ad hoc  G/L/1408; G/SG/266, 26/10/2021  
Article  12.5 Suspension of concessions  Ad hoc  G/L/1356; G/SG/N/12/EU/2, 
07/04/2020  
Article  9.1 and 
footnote 2  Non-application of safeguard 
measures against a product 
originating in a developing 
country Member for reasons 
specified in Article  9.1 Ad hoc  G/SG/N/10/EU/1/Suppl.15, 
30/05/2022  
Agreement on Technical Barriers to Trade  
Articles  2.9.2 
and 5.6.2 Technical regulations and 
conformity assessment 
procedures  Ad hoc  G/TBT/N/EU/942, 22/12/2022  
Article  2.10.1  Technical regulations (urgent)  Ad hoc  G/TBT/N/EU/758, 18/11/2020  
Other  Other  Ad hoc  G/TBT/N/EU/893, 25/05/2022  
Agreement on Trade -Related Aspects of Intellectual Property Rights  
Article  63.2 Laws and regulations  Once, then 
changes  IP/N/1/EU/40; IP/N/1/EU/G/16, 
21/07/2022  
Agreement on Trade Facilitation (WT/L/911, replaced by WT/L/931)  
Article  1.4 Procedures for importation, 
exportation, and transit  Once, then 
changes  G/TFA/N/EU/1/Rev.8, 20/12/2022;  
G/TFA/N/EU/1/Add.1/Rev.3,  
20/12/2022  Article  10.4.3  Operation of the single 
window  Once, then 
changes  
Article  10.6.2  Use of customs brokers  Once, then 
changes  
Article  12.2.2  Contact point for the 
exchange of information  Once, then 
changes  
Article  22.1  Information on assistance and 
support for capacity -building 
disbursed in previous and 
coming year  Annual  G/TFA/N/EU/2/Add.3/Corr.1, 
03/02/2022  
GATS  
Article  III:3 Change in regulation affecting 
trade in scheduled sectors  Ad hoc  S/C/N/1004/Corr.1, 11/6/2020  
S/C/N/1007/Corr.1, 11/06/2020  
S/C/N/1009/Corr.1, 11/06/2020  
GATT  1994, Article  XVII:4(a) and Understanding on its Interpretation (State trading)  
Article  XVII:4(a)  State trading activities  Biennial  G/STR/N/19/EU, 30/06/2022  
GATT  1994, Article  XXIV and GATS, Article  V (Participation in regional trade agreements)  
GATT  1994, 
Article  XXIV:7(a)  Formation of a free trade area  Ad hoc  WT/REG332/N/1/Add.1, 23/03/2021  
GATS, Article  V:7(a)  Economic integration 
agreements  Ad hoc  S/C/N/680/Add.1, 23/03/2021  
GATT  1994, Article  XXVIII:5  
Article  XXVIII:5  Modification of schedules  Once, then 
changes  G/MA/381, 26/10/2020  
Decision on Notification Procedures for Quantitative Restrictions (G/L/59/Rev.1)  
G/L/59/Rev.1  List of quantitative restrictions 
in force  Biennial  G/MA/QR/N/EU/6, 07/10/2022  
G/L/59/Rev.1  List of quantitative restrictions 
in force  Ad hoc  
(changes)  G/MA/QR/N/EU/6, 07/10/2022  
Note:  Reporting period: 1  October  2019 to 31  December  2022.  
Source:  Compiled by the WTO Secretariat, based on notifications documents.  
 
 
  WT/TPR/S/442  • European Union  
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  Table A3. 1 Minimum excise duties on EU harmonized products, 2022  
Category  Minimum rate  Unit 
Alcohol:  
Beer 
Wine 
Intermediate products  
Spirits   
EUR 0.748 or EUR  1.87 
EUR 0 
EUR 45 
EUR 550  
Hl per degree Plato or hl per degree alcohol  
Hl of volume  
Hl of volume  
Hl of volume  
Energy and electricity:  
For motor fuels  
Leaded petrol  
Unleaded petrol  
Gas oil  
Kerosene  
LPG 
Natural gas  
For commercial/industrial use  
Gas oil  
Kerosene  
LPG 
Natural gas  
For heating and electricity  
Gas oil  
Heavy fuel oil  
Kerosene  
LPG 
Natural gas  
Coal and coke  
Electricity   
 
421 
359 
330 
330 
125 
2.6 
 
21 
21 
41 
0.3 
 
21 
15 
0 
0 
0.15 or 0.3a 
0.15 or 0.3a 
0.5 or 1.0a  
 
EUR per 1,000 litres  
EUR per 1,000 litres  
EUR per 1,000 litres 
EUR per 1,000 litres  
EUR per 1,000  kg 
EUR per gigajoule  
 
EUR per 1,000 litres  
EUR per 1,000 litres  
EUR per 1,000  kg 
EUR per 1,000 litres  
 
EUR per 1,000 litres  
EUR per 1,000 kilos  
EUR per 1,000 litres  
EUR per 1,000  kg 
EUR per 1,000 litres  
EUR per 1,0 00 litres  
EUR per MWh  
Tobacco products:  
Fine-cut smoking tobacco  
 
Cigars and cigarillos  
 
Other smoking tobaccos  
 
Cigarettes   
50% or EUR  60 
 
5% or EUR  12 
 
20% or EUR  22 
 
7.5% to 76.5%, and  
Ad valorem  component   
Of the weighted average retail selling price 
per kg  
Of the retail selling price per 1,000 or 
per kg 
Of the retail selling price per kg  
 
Specific component – of the total tax burden  
Ad valorem  component -% of the maximum 
retail selling price  
Overall excise – at least EUR  90 per 
1,000  cigarettes and 60% of the weighted 
average retail selling price  
a The lower rate applies to businesses; the higher rate applies for non -businesses.  
Source:  European Commission, Excise Duties on Tobacco . Viewed at: 
https://ec.europa.eu/taxation_customs/business/excise -duties -alcohol -tobacco -energy/excise -
duties -tobacco_en ; Excise Duty on Alcohol . Viewed at: 
https://ec.europa.eu/taxation_customs/business/excise -duties -alcohol -tobacco -energy/excise -
duties -alcohol_en ; and Excise Duty on Energy . Viewed at: 
https://ec.europa.eu/taxation_customs/business/excise -duties -alcohol -tobacco -energy/excise -
duties -energ y_en. 
  WT/TPR/S/442  • European Union  
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  Table A3. 2 Standards in the European  Union, 2019 -22 
 2019  2020  2021  2022  
Total number of European standards (CEN and CENELEC)  22,773  23,464  23,922  24,169  
 - number of European harmonised standards  3,399  3,467  3,530  3,225  
 - approximative share of European harmonised standards 
identical to international standards  40% 40% 40% 40% 
 - number of European standards identical to international 
standards  n.a. n.a. 10,708  11,026  
n.a. Not applicable.  
Source:  Information provided by the Commission.  
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  Table A4. 1 OECD indicators for support to agriculture, 2017 -21 
(EUR million, except producer NPC)   
2017  2018  2019  2020  2021  
Total  
 Value  of production (at farm gate)  392,159  395,551  404,416  397,305  399,540  
 TSE 97,938  103,728  105,581  104,561  95,479  
 SCT 20,598  23,601  23,178  19,990  16,019  
 PSE 87,183  92,504  93,906  91,254  82,848  
 % PSE (% of total gross farm receipts)  18.9 19.7 19.5 19.3 17.6 
 MPS 15,151  18,237  17,746  14,568  10,761  
 Producer NPC  1.04 1.05 1.05 1.04 1.03 
Common wheat  
 Value of production (at farm gate)  24,114  23,901  27,560  24,313  30,179  
 SCT 1,313  988 1,295  0 0 
 MPS 1,313  988 1,295  0 0 
 Producer NPC  1.06 1.04 1.05 1.00 1.00 
Durum wheat  
 Value of production (at farm gate)  1,938  1,849  1,744  1,985  2,860  
 SCT 84 83 102 99 98 
 MPS 0 0 4 0 0 
 Producer NPC  1.00 1.00 1.00 1.00 1.00 
Barley  
 Value of production (at farm gate)  8,796  9,756  10,660  10,181  11,167  
 SCT 277 0 218 0 0 
 MPS 277 0 218 0 0 
 Producer NPC  1.03 1.00 1.02 1.00 1.00 
Maize  
 Value of production (at farm gate)  10,701  11,488  11,362  10,928  16,723  
 SCT 0 0 1 1 893 
 MPS 0 0 0 0 892 
 Producer NPC  1.00 1.00 1.00 1.00 1.06 
Rice 
 Value of production (at farm gate)  939 894 1,043  1,025  991 
 SCT 198 128 403 240 245 
 MPS 141 72 334 170 177 
 Producer NPC  1.18 1.09 1.47 1.20 1.22 
Sugar  
 Value of production (at farm gate)  3,961  3,032  3,045  2,733  2,881  
 SCT 281 721 632 356 301 
 MPS 0 410 326 53 0 
 Producer NPC  1.00 1.16 1.12 1.02 1.00 
Milk 
 Value of production (at farm gate)  57,404  56,997  57,263  56,444  53,393  
 SCT 1,310  1,132  1,111  3,023  1,088  
 MPS -97 -54 -81 1,811  -96 
 Producer NPC  1.01 1.00 1.00 1.04 1.00 
Beef and veal 
 Value of production (at farm gate)  27,984  28,531  26,974  25,817  24,294  
 SCT 7,001  10,371  8,133  5,240  3,970  
 MPS 5,153  8,527  6,357  3,454  2,208  
 Producer NPC  1.23 1.43 1.31 1.15 1.11 
Poultry meat  
 Value of production (at farm gate)  17,204  18,544  18,992  18,556  16,146  
 SCT 4,089  4,279  3,973  5,179  4,299  
 MPS 4,072  4,271  3,963  5,162  4,288  
 Producer NPC  1.32 1.31 1.27 1.39 1.38 
Wine  
 Value of production (at farm gate)  21,644  27,393  22,691  22,136  19,878  
 SCT 617 610 639 657 649 
 MPS 0 0 0 0 0 
 Producer NPC  1.00 1.00 1.00 1.00 1.00 
Potatoes  
 Value of production (at farm gate)  12,759  11,541  16,659  14,631  12,565  
 SCT 1,159  1,053  1,528  1,381  1,194  
 MPS 1,153  1,048  1,523  1,365  1,178  
 Producer NPC  1.10 1.10 1.10 1.10 1.10 
Plants and flowers  
 Value of production (at farm gate)  18,768  18,579  19,683  19,637  19,991  
 SCT 458 421 476 475 402 WT/TPR/S/442  • European Union  
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2017  2018  2019  2020  2021  
 MPS 458 421 476 475 402 
 Producer NPC  1.03 1.02 1.02 1.02 1.02 
Non-MPS commodities  
 Value of production (at farm gate)  105,388  108,319  105,447  109,647  111,295  
 SCT 3,449  3,444  4,373  2,712  2,753  
 MPS 2,996  2,745  3,610  2,078  2,160  
 Producer NPC  0.00 0.00 0.00 0.00 0.00 
Note:  EU-27 and the United  Kingdom for 2020, and EU -27 from 2021. The United  Kingdom withdrew from 
the European  Union in early 2020 . However, the 2020 PSE for the European  Union includes the 
United  Kingdom, as the UK budget for agricultural expenditures for 2020  continued to be sourced 
largely from the European Commission, and the United  Kingdom was part of the Common Market 
in 2020.  
 TSE: Total Support Estimate, PSE: Producer Support Estimate, SCT: Single Commodity Transfers; 
MPS: Market Price Support; NPC: Nomi nal Protection Coefficient (ratio between the average price 
received by producers and the border price).  
Source:  OECD, Agricultural Policy Monitoring and Evaluation . Viewed at: 
https://www.oecd.org/agriculture/topics/agricultural -policy -monitoring -and-evaluation/ . 
 
 
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