COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE AND THE COMMITTEE OF THE REGIONS Trade for All Towards a more responsible trade and investment policy
Date: 2015-10-14
Institutions: Directorate-General for Trade and Economic Security, European Commission
Subjects: World Trade Organisation, common commercial policy, economic growth, foreign policy, international trade, investment policy, sustainable development, trade agreement (EU), trade policy, trade relations

EN 

   EN 

   EUROPEAN COMMISSION  Brussels, 14.10.2015  COM(2015) 497 final   COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE AND THE COMMITTEE OF THE REGIONS Trade for All  Towards a more responsible trade and investment policy  
 
 
TRADE FOR ALL 
Towards a more responsible trade and investment policy 

Introduction 

1.  Trade and investment are powerful engines for growth and job creation 

1.1.  The EU’s performance in trade is strong 

1.2.  The EU trade and economic agenda enhances the benefits of trade 

2.  An effective policy that tackles new economic realities and lives up to its promises 

2.1.  Responding to the rise of global value chains 

2.2.  Living up to promises: implementation, enforcement, small businesses and workers 

3.  A more transparent trade and investment policy 

3.1.  Working more closely with Member States, the European Parliament and civil society 

3.2.  A more open policymaking process 

4.  A trade and investment policy based on values 

4.1.  A more responsive approach to the public’s expectations on regulations and investment 

4.2.  A trade agenda to promote sustainable development, human rights and good governance 

5.  A forward-looking programme of negotiations to shape globalisation 

5.1.  Reinvigorating the multilateral trading system 

5.2.  Moving forward bilateral relationships 

Conclusion 

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Introduction 

Following a drawn-out and painful recession, the challenge for the EU is now to  boost jobs, growth and 
investment.  The  Commission  has  placed  this  at  the  top  of  its  political  priorities.  Trade  is  one  of  the  few 
instruments available for boosting the economy without burdening state budgets, similarly to structural reforms 
undertaken by the Member States as well as work undertaken as part of the EU investment plan (1). 

The  EU  is  well  placed  to  use  trade  and  investment  policy  to  contribute  to  this  objective  and  benefit 
companies, consumers and workers alike. The EU is the world’s largest exporter and importer of goods and 
services taken together, the largest foreign direct investor and the most important destination for foreign direct 
investment (FDI). This scale makes the EU the largest trading partner of about 80 countries and the second most 
important partner for another 40. The EU should use this strength to benefit both its own citizens and those in 
other parts of the world, particularly those in the world’s poorest countries. 

However, changes in the way the world economy works imply a  different way of designing trade policy. 
Today’s  economic  system  —  global  and  digital  at  its  core  —  is  based  on  international  value  chains  that  see 
conception, design and production happen in a series of steps across many countries. 

The European Union’s trade and investment policy must further embrace this reality, looking at all the 
ways  EU  companies  interact  with  the  rest  of  the  world.  Services, for instance, are now increasingly traded 
across  borders.  They  are  also  tightly  interlinked  with  traditional  manufacturing  trade.  As  a  result,  trade 
increasingly involves moving people and information, not just goods, across borders. This intensifies the ways in 
which trade boosts the exchange of ideas, skills and innovation. EU trade policy must facilitate this exchange. 

An  effective  trade  policy  should,  furthermore,  dovetail  with  the  EU’s  development  and  broader  foreign 
policies,  as  well  as  the  external  objectives  of  EU  internal  policies,  so  that  they  mutually  reinforce  each 
other. The impact of trade policy has significant repercussions on the geopolitical landscape — and vice versa. 
Furthermore,  trade  policy,  combined  with  development  cooperation,  is  a  powerful  engine  of  growth  in 
developing countries. The EU will continue its long-standing commitment to sustainable development in its trade 
policies, contributing to the newly agreed global sustainable development goals (SDGs) under the 2030 Agenda 
for  Sustainable  Development ( 2).  Finally,  trade  policy  reinforces  the  functioning  of  the  EU  Internal  Market 
linking its rules with the global trade system. 

In  recent  years,  the  debate  about  trade  has  intensified.  A  much  broader  public  is  now  interested  in  trade 
policy  and  many  have  concerns  about  issues  like  regulatory  protection  and  the  potential  impact  on  jobs.  The 
discussion has focused to a large extent on the Transatlantic Trade and Investment Partnership (TTIP). The focus 
of this communication goes beyond  this and looks at the European Union’s wider trade agenda. However, the 
Commission  has  drawn  conclusions  from  the  TTIP  debate  that  are  relevant  for  the  EU’s  wider  trade  policy. 
Fundamentally, the debate has asked the question: ‘Who is EU trade policy for?’ This communication shows that 
EU trade policy is for all. It seeks to improve conditions for citizens, consumers, workers and the self-employed, 
small,  medium  and  large  enterprises,  and  the  poorest  in  developing  countries,  and  addresses  the  concerns  of 
those  who  feel  they  are  losing  out  from  globalisation.  While  trade  policy  must  deliver  growth,  jobs  and 
innovation, it must also be consistent with the principles of the European model. It must, in short, be responsible. 
It  must  be  effective  at  actually  delivering  economic  opportunities.  It  must  be  transparent  and  open  to  public 
scrutiny. It must promote and defend European values. 

European Commission, Communication ‘An investment plan for Europe’, COM(2014) 903. 

(1) 
(2)  United Nations, ‘Transforming our world — The 2030 Agenda for Sustainable Development’. 

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1.  Trade and investment are powerful engines for growth and job creation 

1.1.  The EU’s performance in trade is strong 

Trade has never been more important for the EU economy. The recent crisis brought a realisation that trade 
could be a stabilising  force in tough  times. When  EU domestic demand was  weak, trade  softened the blow of 
recession  by  channelling  demand  from  growing  economies  back  to  Europe.  Trade  will  be  an  even  more 
important  source  of  growth  in  the  future.  Approximately  90 %  of  global  economic  growth  in  the  next  10  to 
15 years is expected  to be generated  outside Europe. Economic  recovery will need  to be consolidated through 
stronger links with the new centres of global growth. 

Sales to the rest of the world have become an increasingly significant source of jobs for Europeans. More 
than 30 million jobs are now supported by exports outside the European Union — two thirds more than 15 years 
ago — meaning exports now support almost one in seven jobs in Europe. These jobs are highly skilled and better 
paid than average. They are spread across all EU Member States, and are both directly and indirectly linked to 
exports  outside  the  EU.  For  instance,  200 000  jobs  in  Poland,  140 000  in  Italy,  and  130 000  in  the  United 
Kingdom are linked to German exports outside the EU. French exports outside the EU support 150 000 jobs in 
Germany, 50 000 in Spain and 30 000 in Belgium. As a result, the benefits of trade are spread much more widely 
than is often realised (3). 

Exports  also  support  Europe’s  small-  and  medium-sized  enterprises  (SMEs).  Over  600 000  SMEs, 
employing  more  than  6 million  people,  directly  export  goods  outside  the  EU,  accounting  for  one  third  of  EU 
exports. Such international engagement makes these companies more competitive and allows them to diversify 
markets. Many more export services or export indirectly as suppliers of other larger companies. Still more have 
ambitions to export in the future since exporting is often the fastest way to grow and create jobs. 

Export opportunities are of crucial importance for sectors undergoing structural change such as the agri-
food sector (4). Progressive reforms in the common agricultural policy have allowed the sector to become more 
market oriented, gain international competitiveness and respond to new market opportunities. 

Imports  are  equally  important.  Opening  up  the  EU  economy  to  trade  and  investment  is  a  major  source  of 
productivity gains and private investment, both of which the EU sorely needs. They bring ideas and innovation, 
new technologies and the best research. They benefit consumers, lowering prices and broadening choice. Lower 
costs  and  greater  choice  of  inputs  directly  contribute  to  the  competitiveness  of  EU  companies  at  home  and 
abroad. 

More generally, the development of global value chains underlines the interdependence between imports 
and exports. It is widely understood that production in the EU is dependent on energy and raw material imports. 
But it is often forgotten that the same is true for parts, components and capital goods like machinery. Together, 
these  products  make  up  80 %  of  EU  imports.  They  are  essential  to  the  functioning  of  the  economy  and  the 
competitiveness  of  EU  companies.  The  share  of  imports  in  the  EU’s  exports  has  increased  by  more  than  half 
since 1995. 

Investment is essential. Outward investment helps European companies improve their competitiveness. Inward 
investment is responsible for employing 7.3 million people in the EU. Investment in both directions is a key part 
of the infrastructure that connects the European economy to global value chains. The EU’s ‘Investment plan for 
Europe’ aims to boost investment, which in 2014 was 15 % down on pre-crisis levels. A key requirement is to 
make smarter use of new and existing financial resources. International partners have a  key role to play in that 
process. The EU’s policy on FDI should support this, in line with the Europe 2020 objectives and priorities (5). 

EU companies are highly competitive at the global level. The EU is therefore well placed to benefit from 
increased  international  engagement.  Since  the  beginning  of  the  century,  exports  of  European  goods  have 
almost  tripled,  increasing  by  approximately  EUR  1.5  trillion.  The  EU’s  share  of  world  goods  exports  remains 

(3) 

(4) 
(5) 

European Commission, DG Trade document ‘How trade policy and regional trade agreements support and strengthen EU economic performance’, 
March 2015. 
The food supply chain in the EU provides 47 million jobs, 7 % of GDP and more than 7 % of EU exports in goods. 
European Commission, Communication ‘Taking stock of the Europe 2020 strategy for smart, sustainable and inclusive growth’, COM(2014) 130. 

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above 15 % of the total, having only slightly declined  — from just over 16 % — since the turn of the century. 
This  must  be  seen  in  the  context  of  the  rise  of  China,  whose  share  of  world  goods  exports  grew  from  5 %  to 
more than 15 % in the same period. Given that fact, the EU’s performance is exceptional. It is also better than 
comparable economies. The United States saw its share decline four times more than Europe’s in relative terms, 
leaving it with less than 11 % of total global goods exports, down from over 16 % in 2000, the same level as the 
EU. The same happened to Japan, whose share halved, falling from 10 % to 4.5 % of the global goods export 
market. 

1.2.  The EU trade and economic agenda enhances the benefits of trade 

To  boost  the  EU’s  capacity  to  benefit  from  trade  and  investment,  the  Commission  has  developed  an 
ambitious  bilateral  agenda  that  complements  the  EU’s  engagement  at  the  World  Trade  Organization 
(WTO). The EU has concluded or is negotiating bilateral free trade agreements (FTAs) with partners across all 
continents6. While FTAs in force covered less than a quarter of EU trade ten years ago, that is now the case for 
more than a third of EU trade. It could reach two thirds if all ongoing negotiations are concluded. This is by far 
the most ambitious trade agenda in the world today. 

The  EU–South  Korea  FTA  is  a  prime  example  of  the  kind  of  new  generation  agreements  the  EU  can 
negotiate and of the concrete results they produce. It is the most ambitious trade deal ever implemented by 
the  EU,  eliminating  almost  99%  of  duties  on  both  sides  within  five  years  and  dealing  with  non-tariff  barriers 
(NTBs).  It  goes  beyond  the  US-  Korea  FTA.  In  four  years,  EU  exports  of  goods  have  increased  by 
55 %.generating EUR 4.7 billion worth of extra exports in the first three years. Automotive exports have more 
than tripled. The long-standing EU trade deficit has now turned into a surplus. The EU’s share of South Korea’s 
imports increased from 9 % to 13 %, while the US remained stable and Japan lost 2 %. 

However,  trade  policy  can  only  help  if  supported  by  domestic  reform.  Structural  reforms,  less  red  tape, 
better access to finance and more investment in infrastructure, skills and research and development are essential 
to further strengthen the Union’s capacity to take advantage of open markets. The EU’s investment plan brings 
together  these  reforms  at  the  EU  level  and  will  make  European  businesses,  particularly  SMEs,  still  more 
competitive.  At  the  same  time,  recent  experience  has  shown  that  structural  reforms  implemented  by  Member 
States also pay off in improved trade performance. The European Semester is thus an important tool to maximise 
synergies between trade and domestic policies. 

2.  An effective policy that tackles new economic realities and lives up to its promises 

2.1.  Responding to the rise of global value chains 

Global  value  chains  mean  trade  policy  can  no  longer  be  approached  from  a  narrow  mercantilist  angle. 
Raising the cost of imports reduces companies’ ability to sell on global markets. Interdependencies need to be 
better  understood.  There  is  no  advantage  to  be  gained  from  resorting  to  protectionist  measures,  even  in  the 
difficult economic circumstances of today. 

EU  trade  policy  must  strengthen  Europe’s  place  in  global  supply  chains. It must support the full range of 
economic  activities  through  which  Europeans  create  and  sell  value.  That  includes  the  manufacturing  of 
components  and  final  products,  which  is  vital (7).  It  also  includes  services,  research,  design  and  marketing, 
assembly, distribution, and maintenance. 

Adapting to this reality, EU trade policy has already expanded from traditional tariff discussions. It takes 
a holistic approach, covering vital issues like public procurement, competition, including subsidies, or sanitary 
and  phytosanitary  barriers  (SPS).  These  remain  essential.  Public  procurement  spending,  for  instance,  accounts 
for 15 % to 20 % of GDP worldwide. Infrastructure investment and other public procurement in emerging and 
developed economies are likely to be major driving forces of economic growth in coming years. While the EU 

6 http://trade.ec.europa.eu/doclib/docs/2006/december/tradoc_118238.pdf 

(7) 

European Commission, Communication ‘For a European industrial renaissance’, COM(2014) 14. 

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has  progressively  integrated  and  opened  its  markets,  EU  companies  still  encounter  discrimination  and 
restrictions  abroad.  It  is  therefore  essential  to  ensure  a  level  playing  field  in  market  access,  and  this  can  be 
achieved  partly  through  FTAs  and  negotiations  on  the  accession  of  new  countries  to  the  WTO  Government 
Procurement Agreement (GPA). 

However, trade policy will need to tackle a wider range of issues if the EU is to secure its place in global 
value  chains.  This  requires  us  to  promote  trade  in  services,  facilitate  digital  trade,  support  the  mobility  of 
professionals,  address  regulatory  fragmentation,  secure  access  to  raw  materials,  protect  innovation  and  ensure 
the swift management of customs. Joined-up strategy across different areas of economic policy will also need to 
ensure responsible management of supply chains (see 4.1.1 and 4.2.3) and to address aggressive corporate profit 
shifting  and  tax  avoidance  strategies  that  make  use  of  the  fragmentation  of  value  chains.  The  Commission  is 
tackling this through different policy tools. Trade agreements support efforts promoting international standards 
of transparency and good governance. 

2.1.1.  Promoting trade in services 

Services account for some 70 % of EU GDP and employment and are an increasingly important part of 
international  trade.  In  the  past,  most  services  could  only  be  delivered  locally.  Technology  has  changed  that, 
and  EU  exports  of  services  have  doubled  in  10  years,  up  to  EUR  728  billion  in  2014.  Furthermore,  beyond 
services trade per se, manufacturing companies now increasingly buy, produce and sell services that allow them 
to  sell  their  products.  This  embedding  of  services  in  the  manufacturing  process  has  significantly  expanded  in 
recent years. Services now make up almost 40 % of the value of goods exported from Europe. About one third of 
the jobs generated by exports of manufactured goods are actually in companies supplying auxiliary services like 
transport  and  logistics.  For  complex  equipment  like  machines,  wind  turbines  or  medical  devices,  services  like 
installation, support, training and maintenance are part of the package. Many other business, insurance, telecoms 
and transport services are also required. 

The rise of services embedded  in  manufacturing calls for still greater focus on liberalising services both 
within  the  EU  and  with  the  rest  of  the  world.  It  is  increasingly  important  to  improve  market  access  for 
manufacturing  and  services  in  conjunction  with  each  other.  That  means  moving  beyond  traditional  thinking 
exemplified by the fact that goods and services liberalisation commitments are currently dealt with separately in 
trade  negotiations.  For  instance,  the  mobility  of  people  who  provide  services  can  support  goods  and  services 
sales, and facilitating digital trade and data flows supports both goods and services companies. 

Facilitating trade in  services also requires openness to foreign direct investment.  Over 60 % of EU direct 
investment  abroad  is  connected  to  trade  in  services.  International  trade  in  services  requires  companies  to 
establish  in  markets  abroad  to  deliver  services  to  new  local  customers.  The  WTO  estimates  that  two  thirds  of 
services are delivered through establishment. Investing around the world also allows service companies to offer 
global solutions to customers at home, supporting the connections of EU manufacturing and service companies 
to global value chains. The EU’s negotiations on international investment, as well as the international dimension 
of the Investment Plan for Europe, will facilitate these ties. 

The  EU  is  one  of  the  25  WTO  members  negotiating  the  ambitious  plurilateral  Trade  in  Services 
Agreement (TiSA). Together they already account for 70 % of world trade in services and TiSA could become a 
stepping stone for the full WTO membership to progress on services liberalisation and rules, catching up with 
the level of liberalisation and rule-making in goods. In addition, the ongoing negotiations for an Environmental 
Goods Agreement (EGA) should ultimately address the services necessary to sell those goods effectively across 
borders. The EU has also proposed that the WTO Doha Development Agenda (DDA) should focus on services 
that are strong enablers for trade in goods. 

At the same time the EU’s position on public services remains clear. EU trade agreements do not and will not 
prevent  governments,  at  any  level,  from  providing,  supporting  or  regulating  services  in  areas  such  as  water, 
education,  health,  and  social  services,  nor  will  they  prevent  policy  changes  regarding  the  financing  or 
organisation of these services. Trade agreements will not require governments to privatise any service, nor will 
they prevent governments from expanding the range of services they offer to the public. 

The Commission will prioritise trade in services, seeking ambitious outcomes in all trade negotiations. 

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2.1.2.  Facilitating digital trade 

The  digital  revolution  is  sweeping  aside  barriers  of  geography  and  distance  with  massive  impacts  on 
economies and societies around the world. For trade, it means new opportunities, including for EU SMEs and 
consumers, thanks to a global e-commerce market now estimated to be worth over EUR 12 trillion (8). Although 
compliance  costs  usually  are  greater  in  cross-border  trade  for  smaller  firms  than  for  larger  firms,  e-commerce 
means  even  small  online  businesses  can  access  customers  across  the  globe.  As  the  world’s  largest  services 
exporter, the EU is in a strong position to benefit from this. 

The digital revolution has also meant new concerns about the protection of consumers and their personal 
data  within  the  EU  and  internationally.  The  Commission  is  committed  to  ensuring  that  EU  citizens’ 
fundamental  rights  to  privacy  and  the  protection  of  their  personal  data  are  fully  guaranteed  by  a  robust  legal 
framework for data protection (9). Rules on the processing of personal data are not negotiated in or  affected by 
trade agreements.  

However,  the  digital  economy  also  means  that  new  types  of  trade  barriers  must  be  addressed.  Some  of 
those affect companies specifically focused on trade through digital channels. Others affect a much wider set of 
companies. The collection, storage, processing and transfer of data (including economic, financial, statistical and 
scientific information) and its digitalisation have become an integral part of modern business models, including 
for manufacturing firms. They are central, in fact, to the development of global value chains. As a result, the free 
flow  of  data  across  borders  has  become  more  important  for  European  competitiveness  in  general.  Regulatory 
cooperation, mutual recognition and harmonization of standards are the best tools to address the challenges of 
the digital economy. 

The digital single market strategy (DSM) (10) addresses many of these questions within the EU. However, 
European companies still face significant barriers around the world, such as non-transparent rules, government 
interference,  unjustified  data  localisation  and  data  storage  requirements.  Data  security  is  essential  for  all 
companies handling data. Digital infrastructures, encryption and common standards are also important for global 
value chains and therefore belong also in the remit of trade policy. In addition, some of the DSM’s key actions, 
like the ‘European  Cloud’ initiative and the copyright reform have  an international  dimension  which could be 
addressed in trade agreements. 

The goal for the EU should be the creation of a global level playing field, with non-discrimination and the 
absence  of  unjustified  data  localisation  requirements.  Europe  should  promote  this  objective  in  bilateral, 
plurilateral and multilateral fora. 

The Commission will seek to use FTAs and the TiSA to set rules for e-commerce and cross-border data flows 
and tackle new forms of digital protectionism, in full compliance  with and without prejudice to the EU’s data 
protection and data privacy rules; and 

2.1.3.  Supporting mobility and addressing migration 

The  temporary  movement  of  professionals  has  become  essential  for  all  sectors  to  conduct  business 
internationally.  It  facilitates  exports  and  provides  ways  to  bridge  skills  gaps.  Restrictions  to  mobility  are 
widespread  internationally  and  may  impair  the  full  benefits  of  trade  and  investment  agreements.  Mobility  of 
professionals does not undermine social and employment laws and regulations. 

The economic potential of the temporary movement of service providers in particular is highlighted in the 
European Agenda for Migration (11). The agenda also calls for the better use of synergies across policy areas in 
order to incentivise the cooperation of third countries on migration and refugees issues (12). Trade policy should 
take into account the policy framework for the return and readmission of irregular migrants. 

(8)  Unctad, Information Economy Report, 2015. 
(9) 

European  Commission,  ‘Proposal  for a  regulation  on  the  protection  of  individuals  with  regard  to  the  processing  of  personal  data  and  on  the  free 
movement of such data (general data protection regulation)’, COM(2012 ) 11. 

(10)  European Commission, Communication ‘A digital single market strategy for Europe’, COM(2015) 192. 
(11)  European Commission, Communication ‘A European agenda for migration’, COM(2015 )240. 
(12)  European Commission, Communication ‘EU action plan on return’, COM(2015) 453. 

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The Commission will: 

  negotiate mobility provisions directly related to the sale of particular goods and equipment (e.g. engineering 

or maintenance services) in parallel with negotiations on market access for those goods; 

 

  offer  to  incorporate  certain  benefits  of  the  intra-corporate  transfers  (ICT)  directive ( 13 )  into  trade  and 
investment agreements in exchange for the reciprocal treatment of European professionals by partners; 

  use  the  review  of  the  blue  card  directive (14)  to  assess  the  possibility  of  including  conditions  of  entry  and 
residence of third-country nationals providing a service on a temporary basis in line with EU commitments 
in trade agreements; 

  promote recognition of professional qualifications in trade agreements; 

  make  better  use  of  synergies  between  trade  policy,  and  the  EU  policy  on  return/readmission  and  visa 

facilitation, in order to ensure better outcomes for the EU as a whole;  and 

 

support  EU-financed  exchange,  training  and  other  capacity-building  programmes  and  portals,  which 
facilitate the effective use of mobility provisions in FTAs. 

2.1.4.  Reinforcing international regulatory cooperation 

Requirements  applied  to  products  and  services  differ  widely  across  the  globe,  sometimes  because  of 
cultural differences and societal choices, but often simply because regulatory approaches were developed 
in isolation. Such regulatory fragmentation implies significant additional costs for producers that have to modify 
their products and/or undergo duplicative conformity assessments for no added safety or other public benefit; in 
some cases, this is just disguised protectionism. These costs are particularly significant for SMEs, for which they 
can constitute an insurmountable market access barrier. 

While  it  is  easier  to  address  these  issues  in  bilateral  negotiations,  regional  and  global  solutions  have  a 
bigger impact. Reinforced international regulatory cooperation helps to facilitate trade, raises global standards, 
makes regulations more effective and helps regulators to make better use of limited resources. It must be done in 
a way that does not restrict the right of governments to act to  achieve legitimate public policy objectives (see 
4.1.1). Progress with strategic trading partners, like the United States and Japan, will give renewed momentum to 
the  work  in  bodies  like  United  Nations  Economic  Commission  for  Europe  (UNECE)  for  motor  vehicles,  the 
International Conference for Harmonisation for pharmaceutical products, or SPS-related international standard-
setting bodies like the Codex Alimentarius for food. International standardisation organisations (ISO, IEC, ITU) 
play an important role as well. The WTO could develop its role in promoting good regulatory practices. 

The Commission will  

 

address regulatory issues as a priority in negotiations and steer greater cooperation in international regulatory 
fora, while maintaining high European standards. 

  Continue  its  efforts  to  eliminate  non-tariff  barriers  through  the  enforcement  of  agreements  and  regulatory 

cooperation.   

2.1.5.  Ensuring the efficient management of customs 

The  effective  management  of  the  movement  of  goods  through  international  supply  chains  is  critical.  It 
ensures the facilitation of trade, the protection of the financial and economic interests of the EU and its Member 
States,  and  compliance  with  trade  regulations.  Agencies  across  the  EU  and  worldwide  must  manage  and 
minimise  a  wide  range  of  risks  arising  from  global  trade.  Greater  exchange  of  risk  information  (taking  due 
account  of  the  protection  of  personal  data  and  business  secrets),  coordination  between  customs  and  other 
authorities and closer international cooperation are needed. The implementation of trade facilitation rules in the 

(13)  Directive 2014/66/EU, 15 May 2014, OJ L 157. 
(14)  Council Directive 2009/50/EC, 25 May 2009, OJ L 155. 

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WTO  and  bilateral  agreements  and  their  inclusion  in  future  FTAs  are  increasingly  significant  dimensions  of 
trade policy. 

The  Commission  will  make  best  use  of  existing  mutual  administrative  assistance  and  promote  the  use  by  EU 
trading partners of authorised economic operators programmes to address risks in global supply chains. 

2.1.6.  Securing access to energy and raw materials 

In view of the EU dependence on imported resources, access to energy and raw materials is critical for the 
EU’s competitiveness. Trade agreements can improve access by setting rules on non-discrimination and transit; 
by  tackling  local  content  requirements;  by  encouraging  energy  efficiency  and  trade  in  renewables;  and  by 
ensuring  state  owned  enterprises  compete  with  other  companies  on  a  level  playing  field  according  to  market 
principles. Such provisions must fully respect the sovereignty of each country over its natural resources and must 
not prevent action to protect the environment, including the fight against climate change. 

The Commission will,  as part  of broader work to create a European energy  union (15) and in  line with  the raw 
materials initiative (16), propose an energy and raw materials chapter in each trade agreement. 

2.1.7.  Protecting innovation 

Creativity,  research  and  design  are  essential  to  a  value  chain  economy.  They  account  for  a  third  of  EU 
jobs and 90 % of EU exports (17). However, they are particularly vulnerable to poor protection and enforcement 
of intellectual property rights (IPR) in other jurisdictions and are at times subject to forced technology transfer. 
SMEs  are  particularly  vulnerable.  EU  trade  policy  must  support  innovative  and  high-quality  products  by 
protecting  the  entire  spectrum  of  IPRs,  including  patents,  trademarks,  copyrights,  designs,  and  geographical 
indications,  as  well  as  trade  secrets.  This  is  not  only  about  defining  rules  and  procedures  but  also  about 
guaranteeing their enforcement. 

The Commission will: 

 

 

step up the protection and enforcement of IP rights in FTAs and at the WTO (18), and work with partners to 
combat fraud; and 

continue promoting an ambitious global health agenda (19) and better access to medicines in poor countries, 
including  through  a  permanent  waiver  for  least  developed  countries  (LDCs)  for  pharmaceutical  products 
under the WTO Agreement on Trade-Related Aspects of IPRs (TRIPs). 

2.2.  Living up to promises: implementation, enforcement, small businesses and workers 

2.2.1.  Better implementation 

The EU has the widest range of FTAs in the world, the challenge is now to ensure they make a difference 
for all.. For example, despite the excellent results of the EU–South Korea FTA overall, companies are not taking 
full advantage of the reduced tariffs it provides. In the first year of implementation of the agreement, only 40 % 
of  EU  exports  actually  benefited  from  the  opportunities  created  by  the  FTA,  while  60 %  were  still  subject  to 
unnecessary duties. The effective use of those preferences has now improved to cover two thirds of EU exports 
but the wide range of utilisation rates across Member States (from 80 % in Cyprus, Latvia and Austria to 40 % or 
less  in  Estonia,  Malta  and  Bulgaria)  and  the  higher  rate  of  utilisation  by  South  Korean  companies  (80 %) 
suggests  that  more  can  still  be  done  to  improve  the  effective  implementation  of  this  and  other  EU  trade 
agreements. 

(15)  European  Commission,  Communication  ‘A  framework  strategy  for  a  resilient  energy  union  with  a  forward-looking  climate  change  policy’, 

COM(2015) 80.  

(16)  European Commission, Communication, ‘The raw materials initiative’, COM(2008) 699. 
(17)  European  Patent  Office  and  the  Office  for  Harmonisation  in  the  Internal  Market,  Industry-Level  Analysis  Report  ‘IPR-intensive  industries: 

contribution to economic performance and employment in the EU’, 2013. 

(18)  European Commission, Communication ‘Trade, growth and intellectual property’, COM(2014) 389. 
(19)  European Commission, Communication ‘The EU role in global health’, COM(2010) 128. 

9 

 
 
                                                            
Better  implementation  is  a  joint  responsibility  of  the  Commission,  Member  States,  the  European 
Parliament and stakeholders. The Commission should tackle issues like complex rules of origin and customs 
procedures,  as  well  as  insufficient  information  and  support.  Member  States  have  a  critical  role  to  play  in 
managing  and  implementing  the  EU’s  customs  regime  and  conducting  trade  and  investment  promotion.  The 
European Parliament’s role will be particularly important for the implementation of the sustainable development 
chapters of trade agreements (see 4.2.2). 

The Commission will: 

 

 

strive  for  simplicity  and  consistency  of  rules  of  origin  and  provide  user-friendly  information  on  trade 
opportunities. This is particularly important for SMEs; 

enhance  cooperation  between  customs  authorities,  ensure  the  implementation  by  Member  States  of  the 
simplifications of customs formalities provided for in the European Union Customs Code and cooperate with 
Member States to employ the most efficient electronic systems including electronic payments; 

  propose  ‘enhanced  partnership’  with  Member  States,  the  European  Parliament  and  stakeholders  for  the 
implementation of trade agreements. This would extend and reinforce the current ‘market access partnership’ 
beyond  the  removal  of  obstacles  to  trade  and  investment  to  the  implementation  of  FTAs,  including 
awareness raising and customs cooperation activities, trade facilitation and sustainable development; and 

 

report annually on the implementation of the most significant FTAs and give more in-depth analysis ex-post 
of  the  effectiveness  of  EU  trade  agreements,  looking  at  sectors  and  Member  States  and  the  impact  on  the 
economies of partner countries in selected cases. 

2.2.2.  Stronger enforcement of the EU’s rights 

The EU must ensure that its partners play by the rules and respect their commitments. This is an economic 
as well as a political imperative. Constant monitoring and engagement by the Commission and Member States 
with partners is the basis for that. When diplomatic interventions fail, the EU does not hesitate to use the dispute 
settlement  procedures  of  the  WTO.  The  EU  is  one  of  the  most  active  and  successful  users  of  WTO  dispute 
settlement, prioritising cases based on legal soundness, economic importance and systemic impact20. 

Potential  benefits  of  trade  agreements  must  be  available  to  all  EU  Member  States.  This  calls  for  close 
cooperation between Commission, Member States and EU industry to address issues such as repetitive market 
access application procedures with possibly diverging outcomes that may be the cause of unnecessary delays and 
costs. This is particularly the case in the agri-food sector, where the EU is the largest exporter in the world but 
may not make full use of this potential due to such barriers. Recognition of the EU as a single entity in the agri-
food sector is essential to ensure exports from the 28 EU Member States are all treated equally. At the same time 
the  EU  may  need  to  reflect  on  how  to  offer  trading  partners  the  guarantees  they  seek  in  order  to  address  the 
issue. 

The  EU  also  needs  to  stand  firm  against  unfair  trade  practices  through  anti-dumping  and  anti-subsidy 
measures. This is necessary to uphold the EU’s commitment to open markets. The EU is one of the main users 
of  trade  defence  instruments  globally.  It  ensures  that  procedures  are  followed  rigorously  and  takes  all  the 
Union’s interests into account. 

The Commission will: 

  develop  a  more  coordinated  approach  to  economic  diplomacy,  ensuring  that  all  EU  diplomatic  assets  are 

deployed to support EU trade and investment interests; 

  use dispute settlement procedures as necessary, including in FTAs; 

  use the mediation mechanism agreed in recent FTAs to tackle non-tariff barriers quickly; 

20 https://www.wto.org/english/tratop_e/dispu_e/dispu_by_country_e.htm 

10 

 
 
                                                            
 

identify those instances where we could most effectively capitalise on the achievements of the EU’s single 
market — particularly in the agri-food area — leading to further improved market access. The Commission 
will also address cases where our trading partners discriminate between EU Member States; 

  pay  particular  attention,  in  trade  defence,  to  subsidisation  and  to  increasingly  problematic  circumvention; 

and 

 

take stock of the use of trade defence instruments, evaluating their efficiency and effectiveness. 

2.2.3.  More attention to small business 

The  cost  of  entering  a  new  market  weighs  more  heavily  on  SMEs  than  on  larger  firms.  Establishment, 
conformity assessment, authorisation of products, recognition of professional qualifications may have the same 
nominal  costs.  But  they  have  a  greater  impact  on  SMEs  who  have  fewer  resources  for  internationalisation, 
penetrating new markets, overcoming trade and investment barriers and complying with regulation. Ambitious 
elimination  of  barriers  and  regulatory  convergence  through  trade  agreements  should,  therefore,  particularly 
benefit SMEs. 

The same asymmetries apply to access to information about market access opportunities. Large companies 
may be able to afford legal and economic advice on regulatory requirements but this is more difficult for SMEs. 
FTAs can help, for example, by setting up government websites that act as a one-stop shop for all information on 
relevant product requirements. 

The Commission will: 

 

 

 

 

include dedicated SME provisions in all negotiations, including dedicated web portals to facilitate access to 
information  on  product  requirements  in  foreign  markets,  opportunities  provided  by  FTAs,  and  available 
support; 

take into account SME specificities in all chapters of trade and investment negotiations; 

coordinate  with  national  trade  promotion  policies  and  SME  internationalisation  efforts,  for  example  in  the 
context of the ‘enhanced implementation partnership’; and 

conduct  regular  surveys  on  barriers  SMEs  face  in  specific  markets  and  work  more  closely  with  SME 
representative bodies to better understand their needs. 

2.2.4.  More effective tools to help workers adapt to change 

As noted, trade is an important source of jobs for Europeans, with exports supporting almost one in seven 
jobs in  the  EU. Trade also involves structural change that helps prepare the economy to create the jobs of the 
future.  However,  that  change  can  involve  temporary  disruptive  impacts  for  some  regions  and  workers,  if  new 
competition  proves  too  intense  for  some  firms.  The  Commission  takes  these  realities  into  account  in  trade 
negotiations,  ensuring  adequate  transition  periods,  excluding  certain  sectors,  or  using  tariff  rate  quotas  and 
safeguard  clauses.  As  a  result,  when  new  trade  agreements  are  implemented  the  negative  impacts  tend  to  be 
limited, as shown by the EU–South Korea FTA. Despite concerns before its entry into force, the agreement did 
not lead to a surge in imports damaging to EU industry — there was neither a need to activate the surveillance 
mechanism foreseen in the agreement nor to initiate any safeguard investigation. 

However, for the people directly affected a change like this is not small. It is a serious personal challenge. 
Finding  new  employment  often  means  learning  new  skills,  adapting  to  new  ways  of  working  or  considering 
moving  to  another  region  or  to  another  EU  Member  State  to  seize  job  opportunities,  none  of  which  are 
straightforward. People therefore need both time and support to anticipate change and to adapt when it happens. 

Actively  managing  change  is  therefore  essential  to  making  sure  the  benefits  of  globalisation  are  fairly 
distributed  and  negative  impacts  are  mitigated.  The  social  consequences  of  market  opening  must  be 
addressed. 

The EU and Member States have a responsibility to ensure that active labour market policies enable those 
who  lose  jobs  to  find  new  ones  quickly,  either  in  more  competitive  firms  within  their  sector  or  in  a  new 

11 

 
 
occupation  altogether.  The  Commission  pursues  a  strategy  for  jobs  and  growth  aimed  at  facilitating  the 
creation  of  new  and  sustainable  jobs  in  the  EU.  Education  policies  are  one  key  element  and  must  support 
continuous  skills  development  to  prepare  workers  for  future  jobs.  The  EU’s  Structural  and  Investment  Funds 
support this objective.  

The European Globalisation Adjustment Fund (EGF) is another tool, providing support to communities 
faced  with  one-off,  clearly  defined  job  losses  like  factory  closures  within  the  EU  due  to  international 
competition  or  outsourcing.  So  far,  the  reserve  set  aside  for  potential  EGF  interventions  has  never  been  fully 
drawn  down  in  a  given  year.  The  remainder  of  the  reserve  could  be  usefully  deployed  if  the  criteria  for 
disbursement were further expanded. 

The Commission will: 
 
 

review the performance of the EGF making it more effective; and 
enhance consultation of social partners on possible impacts of trade and investment on jobs, in particular, in 
the framework of SIAs; 

3.  A more transparent trade and investment policy 

Trade  policy  is  more  debated  today  than  at  any  time  in  recent  years,  with  many  asking  whether  it  is 
designed to support broad European interests and principles or the narrow objectives of large firms. The focus in 
recent negotiations, in particular the TTIP, on regulatory issues has been seen by some as a threat to the EU’s 
social  and  regulatory  model.  In  addition,  the  EU  gained  responsibility  for  investment  protection  and  dispute 
settlement with  the Lisbon Treaty, triggering a passionate debate about whether the mechanisms developed  so 
far by Member States to ensure such protection undermine the right of the EU and its Member States to regulate. 
A third aspect of current public debate on trade is that consumers are increasingly informed and are concerned 
about social and environmental conditions in production sites around the world as well as the respect of human 
rights.  Finally,  the  effects  of  FTAs  on  countries  other  than  the  partner,  notably  LDCs,  are  being  increasingly 
scrutinised. 

The Commission takes these concerns seriously. Policymaking needs to be transparent and the debate needs to 
be based on facts. Policymaking must respond to people’s concerns with regard to the EU’s social model. The 
Commission  must  pursue  a  policy  that  benefits  society  as  a  whole  and  promotes  European  and  universal 
standards and values alongside core economic interests, putting a greater emphasis on sustainable development, 
human rights, tax evasion, consumer protection, and responsible and fair trade. 

3.1.  Working more closely with Member States, the European Parliament and civil society 

As co-legislator alongside with the Council, the European Parliament also has a central role in ensuring 
full  democratic  scrutiny  and  accountability  of  trade  policy.  The  Parliament  and  the  Commission  have 
intensified their interaction, ensuring the close involvement of the Parliament at every step of the negotiations. 

The  Commission  will  also  step  up  its  efforts  to  promote  an  informed  debate  in  Member  States  and  a 
deeper dialogue with civil society  at large. This is an opportunity to raise people’s awareness about ongoing 
and planned trade and investment negotiations, and to get feedback on issues from stakeholders concerned. 

In line with the principles of the ‘Better regulation’ agenda (21), every significant initiative in the field of 
trade policy will be the subject of an impact assessment. During the negotiation of major trade agreements, 
the  Commission  carries  out  sustainability  impact  assessments  which  allow  a  more  in-depth  analysis  of  the 
potential  economic,  social  and  environmental  impacts  of  trade  agreements,  including  on  SMEs,  consumers, 
specific  economic  sectors,  human  rights  and  on  developing  countries.  The  Commission  also  analyses  the 
economic impact of agreements after their  conclusion and  carries out  ex post evaluations after they have been 
implemented.  Impact  assessments  and  evaluations  are  crucial  for  the  formulation  of  sound,  transparent  and 
evidence-based trade policies. 

(21)  European Commission, Communication ‘Better regulation for better results — An EU agenda’, COM(2015) 215. 

12 

 
 
 
                                                            
The Commission: 
  will  make  its  closer  engagement  with  the  European  Parliament  in  the  context  of  TTIP  the  rule  for  all 

negotiations; 

  will actively engage with civil society and the public at large in the context of the civil society dialogues and 

citizens’ dialogues. Commissioners will visit Member States and national parliaments regularly; and 

  will urge national governments to be more proactive in the debate around trade. 

3.2.  A more open policymaking process 

Transparency  is  fundamental  to  better  regulation.  Lack  of  transparency  undermines  the  legitimacy  of  EU 
trade  policy  and  public  trust.  There  is  demand  for  more  transparency  in  trade  negotiations,  particularly  when 
they  deal  with  domestic  policy  issues  like  regulation.  The  Commission  has  taken  unprecedented  steps  in 
response to this demand, in particular in publishing EU negotiating proposals. In the same way, the Council has 
published  the  TTIP  and  TiSA  negotiating  directives.  Furthermore,  the  Commission  publishes  on  its  website 
information on meetings with interested representatives held by all Members of the European Commission, their 
cabinets and directors-general. 

Transparency  should  apply  at  all  stages  of  the  negotiating  cycle  from  the  setting  of  objectives  to  the 
negotiations themselves and during the post-negotiation phase. 

On top of existing measures, the Commission will: 

 

at launch, invite the Council to disclose all FTA negotiating directives immediately after their adoption; 

  during  negotiations,  extend  TTIP  practices  of  publishing  EU  texts  online  for  all  trade  and  investment 
negotiations  and  make  it  clear  to  all  new  partners  that  negotiations  will  have  to  follow  a  transparent 
approach; and 

 

after finalising negotiations, publish the text of the agreement immediately, as it stands, without waiting for 
the legal revision to be completed. 

Transparency should be further increased in the area of trade defence as well. While the EU already goes 
beyond WTO standards for openness, more can be done. 

The Commission will: 

 

 

 

from the first half of 2016 onwards, provide more transparency to interested parties in trade defence cases, 
for  example  by  giving  them  access  to  more  documents  and  in  an  easier  way  through  a  dedicated  web 
platform; 

also  from  the  first  half  of  2016  onwards,  provide  more  transparency  to  the  general  public  for  instance  in 
relation to the publication of the non-confidential version of complaints and requests for reviews of existing 
measures, including expiry reviews; and 

explore initiatives to further increase transparency in the medium term, such as the possibility of improving 
access to anti-dumping and anti-subsidy investigation files by the legal representatives of interested parties 
and extending access to the non-confidential file to the general public. 

13 

 
 
4.  A trade and investment policy based on values  

The  Commission  will  also  go  beyond  changes  to  the  process  of  policymaking  in  the  area  of  trade.  Public 
concerns  cover  substantive  issues  such  as  the  way  regulation  and  investment  will  be  dealt  with  in  trade 
agreements and the consistency of EU trade policy with broader European values. 

4.1.  A more responsive approach to the public’s expectations on regulation and investment 

4.1.1.  Ensuring consumers can be confident in the products they buy in a global economy 

Consumers have benefited from the elimination of trade barriers, enjoying a broader choice of products at 
lower prices. Today Europeans have access to products from all continents and can purchase services thanks to 
easier travel and digital networks. New trade agreements can further expand choice and lower prices. However, 
consumers also care about the safety of the products they use and about the respect of human rights, labour rights 
and the environment in the way they are produced. 

Consumers  have  the  right  to  know  what  they  are  buying  in  order  to  take  well-informed  decisions.  The 
rules of the EU’s single market mean that consumers can have full confidence in the goods and services they buy 
from  other  EU  Member  States.  EU  health,  safety,  consumer  protection,  labour  and  environmental  rules  are 
amongst the most protective and effective in the world. But the same is not the case everywhere. And in an open 
global  economy,  where  products  are  produced  along  value  chains  that  criss-cross  developed  and  developing 
economies  alike,  ensuring  that  consumers  can  be  confident  in  what  they  buy  is  a  bigger  challenge.  The 
Commission must address this reality. 

The  EU’s  trade  and  investment  policy  must  respond  to  consumers’  concerns  by  reinforcing  corporate 
social responsibility initiatives and due diligence across the production chain with a focus on the respect of 
human rights and the social –including labour rights, and environmental aspects of value chains (see 4.2.3). At 
the  same  time,  Member  State  governments  must  also  fulfil  their  responsibility  to  enforce  EU  regulations  on 
goods and services on imported as well as domestically produced products. 

Regulatory  cooperation  (see  2.1.4),  can  also  help  promote  high  standards.  By  engaging  partners  in 
regulatory cooperation, the Commission can exchange ideas and best practices and promote EU standards in a 
way  that  will  help  consumers  everywhere  to  benefit  from  the  highest  and  most  effective  levels  of  protection. 
Trade  agreements  are  a  way  to  give  political  momentum  to  this  kind  of  dialogue.  However,  contrary  to 
traditional  trade  negotiations,  regulatory  cooperation  is  not  about  give  and  take  or  trading  one  regulation  for 
another. 

The Commission: 
 

in  line  with  existing  EU  Trade  policy,  pledges  that  no  EU  trade  agreement  will  lead  to  lower  levels  of 
consumer, environmental or social and labour protection than offered today in the European Union, nor will 
they constrain the ability of the EU and Member States to take measures in the future to achieve legitimate 
public  policy  objectives  on  the  basis  of  the  level  of  protection  they  deem  appropriate.  Any  change  to  the 
level of protection linked to a trade agreement can only be upward; 

  will work with consumer associations, expert groups and relevant civil society organisations to ensure that 

trade and investment policies fit consumers’ demands; and 

  will enhance the analysis of the impact of trade policy on consumers both in impact assessments and ex-post 

evaluations. 

4.1.2.  Promoting a new approach to investment 

While boosting investment is at the heart of the Commission’s economic priorities, investment protection 
and  arbitration  have  triggered  a  heated  debate  about  fairness  and  the  need  to  preserve  the  right  of  public 

14 

 
 
 
authorities  to  regulate  both  in  the  EU  and  in  partner  countries,  in  particular  in  the  context  of  the  TTIP 
negotiations. 

Over the past 50 years, states set up a dense global web of more than 3 200 bilateral investment treaties 
(BITs)  —  1 400  of  them  involving  EU  Member  States  —  with  the  goal  of  protecting  and  encouraging 
investment. 

The  current  debate  has  cast  light  on  the  risk  of  the  abuse  of  provisions  common  to  many  of  those 
agreements,  as  well  as  lack  of  transparency  and  independence  of  the  arbitrators. The need  for reform is 
now largely acknowledged globally and ‘while practically every country is part of the global investment regime, 
and has a real stake in it, no one seems really satisfied with it,’ as underlined in a recent Unctad report (22). The 
question is not whether the system should be changed but how this should be done. While the status quo is not an 
option,  the  basic  objective  of  investment  protection  remains  valid  since  bias  against  foreign  investors  and 
violations of property rights are still an issue. 

The EU is best placed  — and has a special responsibility — to lead the reform of the global investment 
regime,  as  its  founder  and  main  actor.  The  Commission,  which  has  new  responsibilities  for  investment 
protection since the Lisbon Treaty transferred competence in this area to the EU, has made reform a priority and 
is ready to take the lead globally. It has already started reforming the system in the context of the TTIP23. 

The Commission will: 

 

 

 

in a first step, include modern provisions in bilateral agreements, putting stronger emphasis on  the right of 
the state to regulate, something which was not sufficiently highlighted in the past. EU bilateral agreements 
will  begin  the  transformation  of  the  old  investor–state  dispute  settlement  into  a  public  Investment  Court 
System  composed  of  a  Tribunal  of  first  instance  and  an  Appeal  Tribunal  operating  like  traditional  courts. 
There will be a clear code of conduct to avoid conflicts of interest, independent judges with high technical 
and  legal.  qualifications  comparable  to  those  required  for  the  members  of  permanent  international  courts, 
such as the International Court of Justice and the WTO Appellate Body; 

in parallel, engage with partners to build consensus for a fully-fledged, permanent International Investment 
Court; 

in  the  longer  term,  support  the  incorporation  of  investment  rules  into  the  WTO.  This  would  be  an 
opportunity  to  simplify  and  update  the  current  web  of  bilateral  agreements  to  set  up  a  clearer,  more 
legitimate and more inclusive system; and 

  before  the  end  of  its  mandate,  take  stock  of    the  progress  made,  review  the  2010  communication  on 

international investment24 and map out the way forward. 

4.2.  A trade agenda to promote sustainable development, human rights and good governance  

The EU Treaties demand that the EU promotes its values, including the development of poorer countries, 
high social and environmental standards, and respect for human rights, around the world.  In this regard, 
trade and investment policy must be consistent with other instruments of EU external action. 

One of the aims of the EU is to ensure that economic growth goes hand in hand with social justice, respect 
for human rights, high labour and environmental standards, health and safety protection. This applies to 
external as well as internal policies, and so also includes trade and investment policy. The EU has been leading 
in integrating sustainable development objectives into trade policy and making trade an effective tool to promote 
sustainable development worldwide. The importance of the potential contribution of trade policy to sustainable 
development  has  recently  been  reaffirmed  in  the  2030  Agenda  for  Sustainable  Development,  including  the 
SDGs, which will guide global action in the next 15 years. 

(22)  Unctad, World Investment Report, 2015. 
(23)   Commission draft text TTIP – investment, http://trade.ec.europa.eu/doclib/docs/2015/september/tradoc_153807.pdf 
(24)   Commission Communication Towards a comprehensive European international investment policy. COM (2010) 343 

15 

 
 
                                                            
4.2.1.  Using trade and investment to support inclusive growth in developing countries 

The EU is at the forefront of using trade policy to promote the development of the poorest countries. 

  The  EU  is  the  most  open  market  for  developing  countries’  exports.  The  2001  ‘Everything  but  arms’ 
(EBA)  initiative (25)  was  radical  in  fully  opening  the  EU  market  to  LDCs,  without  tariffs  or  quotas.  It  has 
been effective. Excluding energy, the EU imports more from LDCs than the United States, Canada, Japan 
and  China  put  together.  The  EU  has  also  concluded  successful  economic  partnership  agreements  (EPAs) 
with African, Caribbean and Pacific countries, in particular recently in Africa (see 5.2.3). 

  The  EU’s  objective  is  to  support  development  by  enabling  countries  to  integrate  into  and  move  up 
regional  and  global  value  chains.  The  EU  has  relaxed  its  rules  of  origin  in  the  Generalised  Scheme  of 
Preferences (GSP). They are now simpler, easier to comply with and offer greater possibilities for sourcing 
based on regional and trans-regional cumulation between countries. The EU and its Member States have also 
been driving global ‘Aid for trade’ efforts, accounting for more than a third of global support, to the tune of 
EUR 11 billion per year. 

 

In line with the principle of policy coherence for development, the EU needs to make sure that its trade 
and  investment  initiatives  contribute  to  sustainable  growth  and  job  creation  and  minimise  any  negative 
impact on LDCs and other countries most in need. This is particularly relevant with regard to TTIP, given 
that  the  EU  and  the  US  are  the  world’s  two  most  important  markets  for  developing  countries’  goods  and 
services. 

The Commission will: 

  undertake a mid-term review of the GSP by 2018, notably learning from the main achievements under the 
GSP+ scheme. The review would also provide an opportunity to take stock of lessons learnt on preferences 
for goods and consider similar preferences in services for LDCs to the EBA scheme, in line with the recent 
waiver for LDCs on services agreed at the WTO; 

 

review,  together  with  EU  Member  States,  the  2007  joint  EU  ‘Aid  for  trade’  strategy (26)  to  enhance  the 
capacity of developing countries to make use of the opportunities offered by trade agreements, in line with 
the 2030 Agenda for Sustainable Development; 

  propose, in the context of TTIP and other negotiations on regulatory issues, options that reinforce broader 
international  regulatory  cooperation  and  have  positive  spillovers  in  third  countries,  in  particular  in 
developing countries; 

  undertake  an  in-depth  analysis  of  the  possible  effects  of  new  FTAs  on  LDCs  in  sustainability  impact 

assessments, with a view to designing flanking measures when necessary; and 

 

continue supporting a meaningful LDC package in the context of the conclusion of the Doha round and push 
in  the  G20,  the  WTO  and  other  multilateral  fora  for  close  monitoring  of  the  effect  of  third  countries’ 
protectionist measures on LDCs and how to remove them. 

4.2.2.  Promoting sustainable development 

The  EU  is  also  in  the  lead  on  using  trade  policy  to  promote  the  social  and  environmental  pillars  of 
sustainable  development.  This  is  done  in  a  positive,  incentive-based  way,  without  any  hidden  protectionist 
agenda. 

  The  GSP+  scheme  is  an  innovative  tool  that  offers  incentives  and  support  for  human  rights, 
sustainable development and good governance in countries committed to implementing core international 
conventions in those areas. 

(25)  Council Regulation 2001/416/EC, 28 February 2001, OJ L 60. 
(26)  Conclusions of the Council of the European Union on ‘EU strategy on aid for trade: Enhancing EU support for trade-related needs in developing 

countries’, Doc.14470/07, 29 October 2007. 

16 

 
 
                                                            
  The  EU  is  playing  a  key  role  in  taking  forward  negotiations  for  an  environmental  goods  agreement 
(EGA) with 16 other major WTO members. The aim is to facilitate trade in vital green technologies like 
renewable  energy  generation,  waste  management  and  air  pollution  control  and  contribute  to  combatting 
climate change and protecting the environment. 

  Recent EU FTAs also systematically include provisions on trade and sustainable development. The aim 
is notably to maximise the potential of increased trade and investment to decent work and to environmental 
protection,  including  the  fight  against  climate  change,  and  engage  with  partner  countries  in  a  cooperative 
process  fostering  transparency  and  civil  society  involvement.  Provisions  also  allow  for  independent  and 
impartial review. 

As FTAs enter into force, the EU will have to make sure that the provisions on trade and sustainable 
development are implemented and used effectively, including by offering appropriate support through 
development  cooperation.  This  is  a  crucial  step  in  bringing  about  change  on  the  ground.  Respecting  the 
commitments on labour rights and environmental protection can be a significant challenge for some of our 
trading  partners.  The  Commission  stands  ready  to  assist  trading  partners  to  improve  the  situation. 
Coordinating  aid  and  cooperation  programmes  better  in  these  areas  will  allow  the  EU  to  use  the 
opportunities and leverage a closer trade relationship to promote this value-based agenda. 

The Commission will: 

 

focus  on  the  implementation  of  the  sustainable  development  dimensions  of  FTAs.  It  should  be  a  core 
component of the enhanced partnership with Member States, the European Parliament and stakeholders on 
FTA implementation, as well as dialogue with civil society; 

  prioritise  work  to  implement  effectively  the  core  labour  standards  (abolition  of  child  labour  and  forced 
labour,  non-discrimination  at  the  workplace,  freedom  of  association  and  collective  bargaining),  as  well  as 
health and safety at work in the implementation of FTAs and GSP; 

 

increase  the  priority  given  to  the  sustainable  management  and  conservation  of  natural  resources 
(biodiversity,  soil  and  water,  forests  and  timber,  fisheries  and  wildlife)  and  to  the  fight  against  climate 
change in FTAs and their implementation; 

  offer  to  better  link  trade  policy  instruments  with  the  aim  of  addressing  labour  rights  and  environmental 
protection (GSP, sustainable development chapters in FTAs) to aid/cooperation actions in these areas to help 
our partners ensure high levels of protection; 

  promote  an  ambitious  and  innovative  sustainable  development  chapter  in  all  trade  and  investment 
agreements. In TTIP, it should contain far-reaching commitments on all core labour rights in line with the 
fundamental conventions of the International Labour Organisation (ILO), as well as on ensuring high levels 
of occupational health and safety and decent working conditions in accordance with the ILO Decent Work 
Agenda.  It  should  also  contain  far-reaching  commitments  on  environmental  protection  in  relation  to 
multilateral environment agreements; 

 

 

take into account sustainable development considerations in all relevant areas of FTAs (for example, energy 
and raw materials or public procurement); and 

support a significant outcome in the negotiation of the EGA. The goal should be to eliminate tariffs on green 
goods, open markets for green services, and include a mechanism to tackle non-tariff barriers in the future. 
The Commission wants to make it easy to add new  products to the list, and to allow as many countries as 
possible to join the initiative. 

4.2.3.  Ensuring responsible management of supply chains 

Responsible management of global supply chains is essential to align trade policy with European values. 
The  EU  has  already  taken  steps  with  specific  partners  (e.g.  the  Bangladesh  Sustainability  Compact  and  the 

17 

 
 
Labour  Rights  Initiative  with  Myanmar)  and  on  specific  issues  (conflict  minerals  initiative (27),  illegal  logging 
regulations (28),  sustainability criteria for biofuels (29), corporate reporting on supply chains issues (30), corporate 
transparency on payments made to governments by extractive and logging industries (31)). The Commission will 
further develop these policies in the coming years. They are complex and must involve a range of public, private 
and civil society actors to make meaningful changes for people on the ground. They also involve a mix of soft 
and innovative tools and legislative changes. 

The Commission will: 

 

 

together  with  the  High  Representative,  support  the  implementation  of  the  UN’s  Guiding  Principles  for 
Business and Human Rights, the UN Global Compact and the ILO Tripartite Declaration on Multinational 
Enterprises  and  Social  Policy  and  encourage  the  EU’s  trading  partners  to  comply  with  these  international 
principles and in particular the OECD Guidelines for Multinational Enterprises; 

actively  promote  the  international  uptake  of  the  ambitious  EU  approaches  to  conflict  minerals  and  illegal 
logging, building on the work of the OECD, UN and G7; 

  work closely with the ILO and the OECD to develop a global approach to improving working conditions in 

the garment sector; 

 

 

identify  and  assess  new  sectoral  or  geographic  opportunities  for  additional  responsible  supply  chain 
partnerships; and 

increase transparency in supply chains and improve consumer information by creating additional incentives 
for  supply-chain  due  diligence  reporting  by  large  EU  companies,  notably  by  publishing  annually  a  list  of 
reports submitted by ‘responsible supply chain reporting’ companies32. 

4.2.4.  Promoting fair and ethical trade schemes 

Promoting  fair  and  ethical  trade  schemes  reflects  EU  consumer  demand  and  contributes  to  developing 
more sustainable trade opportunities for small producers in third countries. There is a lack of information 
today about access to fair trade schemes for both producers and EU consumers. The Commission has a role to 
play in facilitating this connection and in raising awareness on both the supply and the demand sides. 

The Commission will: 

  use  the  existing  structure  for  implementation  of  FTAs  to  promote  fair  trade  and  other  sustainability 

assurance schemes, like the EU organic scheme; 

 

address fair and ethical trade more systematically in the upcoming review of the EU ‘Aid for trade’ strategy 
and report on fair trade-related projects as part of its annual ‘Aid for trade’ report; 

  promote through the EU delegations and in cooperation with the High Representative, fair and ethical trade 

schemes to small producers in third countries, building on existing best practice initiatives; 

 

step up support to work in international fora, such as the International Trade Centre, to gather market data in 
relation  to  fair  and  ethical  trade  markets,  which  could  then  serve  as  a  basis  to  follow  the  evolution  of  the 
markets; and 

(27)  European Commission, Proposal for a Regulation, COM(2014) 111. 
(28)  Regulation 2010/995/EU, 20 October 2010, OJ L 295; Commission Delegated Regulation 2012/363/EU, 23 February 2012, OJ L 115; Commission 

Implementing Regulation 2012/607/EU, 6 July 2012, OJ L 177. 

(29)  Commission  Regulation  2014/1307/EU,  8  December  2014,  OJ  L 351;  Directive  2009/28/EC  of  the  European  Parliament  and  of  the  Council, 

23 April 2009, OJ L 140. 

(30)  Directive 2014/95/EU, 22 October 2014, OJ L 330; Directive 2013/34/EU of 26 June 2013, OJ L 182. 
(31)  Directive 2013/50/EU, 22 October 2013, OJ L 294. 
32 Directive 2014/95/EU requires disclosure of non-financial and diversity information by certain large undertakings and 
groups. 

18 

 
 
                                                            
  develop awareness-raising activities in the EU, in particular working with local authorities in the EU via the 

possible launch of an ‘EU City for Fair and Ethical Trade’ award. 

4.2.5.  Promoting and defending human rights 

Trade  policy  can  be  a  powerful  tool  to  further  the  advancement  of  human  rights  in  third  countries  in 
conjunction  with  other  EU  policies, in particular foreign policy and development cooperation. Human  rights 
breaches that may be found in global supply chains such as the worst forms of child labour, forced prison labour, 
forced labour as a result of trafficking in human beings and land grabbing deserve particular attention. Human 
rights  considerations  have  increasingly  been  incorporated  into  EU  bilateral  FTAs,  into  unilateral  preferences 
(especially  in  the  GSP+  scheme)  and  into  EU  export  controls  policy.  For  example,  in  cases  of  serious  and 
systematic violations of human  rights, beneficiary countries have lost their  preferences under the GSP scheme 
(e.g. Sri Lanka, Belarus, Myanmar/Burma) until the situation improved sufficiently. The Commission has also 
developed guidelines to help examine the impact of trade policy initiatives on human rights in both the EU and 
partner countries. 

The Commission seeks an effective export control of items used for torture and capital punishment and supports 
the on-going review33. Strict enforcement and exchange of information between authorities is essential to pursue 
the EU objective of abolition of death penalty and control of products used for inhuman treatment. 

The Commission will: 

 

 

 

 

ensure  the  implementation  of  the  provisions  on  trade  and  investment  of  the  EU  2015-2018  human  rights 
action plan (34); 

together  with  the  High  Representative,  step  up  the  dialogue  with  particular  GSP  countries  and  EBA 
beneficiaries where the EU can have most impact on the fight against human rights breaches, learning from 
the monitoring approach taken with GSP+ partners, and continue to be ready to suspend GSP benefits in the 
most serious cases; 

contribute to the international target of elimination of all the worst forms of child labour (35) and the abolition 
of forced prison labour by working with third countries (especially those with whom the EU offers GSP or 
has agreements) and by promoting partnerships and multi-actor solutions where relevant; 

enhance the analysis of the impact of trade policy on human rights both in impact assessments and in ex post 
evaluations based on the recently developed guidelines; and 

  propose an ambitious modernisation of the EU’s policy on export controls of dual use goods,  including the 
prevention  of  the  misuse  of  digital  surveillance  and  intrusion  systems ( 36)  that  results  in  human  rights 
violations.  

4.2.6.  Fighting against corruption and promoting good governance 

Corruption  is  a  plague  on  economies  and  societies.  It  holds  countries  back  from  development,  distorting 
public procurement, wasting scarce public funds, discouraging investment, hampering trade and creating unfair 
competition. It undermines the rule of law and the trust of citizens. 

Trade policy already contributes to the fight against corruption, for example by increasing the transparency 
of  regulations  and  procurement  processes,  and  by  simplifying  customs  procedures.  Under  the  GSP+  the  EU 

33 Commission proposal for a regulation amending Council Regulation (EC) No 1236/2005 – COM (2014)0001 

(34)  Council Conclusions on the Action Plan on Human Rights and Democracy 2015-2019, Doc. 10897/15, 20 July 2015. 
(35)  European Commission, Staff Working Document ‘Trade and worst forms of child labour’, SWD(2013) 173. 
(36)  European  Commission,  Communication  ‘‘The  review  of  export  control  policy:  ensuring  security  and  competitiveness  in  a  changing  world’, 

COM(2014) 244. 

19 

 
 
                                                            
offers  trade  preferences  to  countries  that  ratify  and  implement  international  conventions  relating  to  good 
governance, including the UN Convention Against Corruption (37). 

Trade  agreements  could  be  used  further  to  tackle  corruption  and  ensure  international  conventions  and 
principles are implemented in practice. 

The Commission will: 

  use FTAs to monitor domestic reform in relation to the rule of law and governance and set up consultation 

mechanisms in cases of systemic corruption and weak governance; and 

  propose to negotiate ambitious provisions on anti-corruption in all future trade agreements, starting with the 

TTIP. 

5.  A forward-looking programme of negotiations to shape globalisation 

Delivering the full potential from trade will require an ambitious and forward-looking programme of multilateral 
and bilateral negotiations. 

5.1. 

Reinvigorating the multilateral trading system 

The  multilateral  system  must  remain  the  cornerstone  of  EU  trade  policy.  The  WTO  rulebook  is  the 
foundation of the world trading order. However, despite some improvements, it has remained largely unchanged 
for the past two decades, due to the failure to conclude the DDA negotiations and the fact that the focus of WTO 
members’  efforts  has  moved  elsewhere.  The  EU  should  do  everything  possible  to  restore  the  centrality  of  the 
WTO as a trade negotiation forum. Everybody stands to gain from global rules that apply to almost all countries, 
161  at  the  last  count.  The  biggest  losers  of  a  failure  to  move  forward  at  WTO  would  be  the  most  vulnerable 
developing countries, as well as countries without an active bilateral or regional agenda. 

5.1.1.  Making progress at WTO 

To  re-establish  itself  as  the  driver  of  global  trade  liberalisation  and  the  pre-eminent  forum  for  trade 
negotiations,  the  WTO  needs  first  to  turn  the  page  on  the  DDA.  That  will  require  a  strong  sense  of 
responsibility from all its members. The WTO’s 10th ministerial conference in Nairobi in December 2015, the 
first  in  Africa,  comes  at  a  critical  moment.  The  EU  is  ready  to  play  its  part  in  finding  an  agreement,  though 
success does not depend on the EU alone. The parameters under negotiation in 2008 — the last serious attempt 
to conclude the round — did not work. Developments since then make it even clearer that it will not be possible 
to conclude on that basis. WTO members should acknowledge the need for significant recalibration. 

Building on an agreement in Nairobi, the EU should seek to reinvigorate the WTO 

  First, by entrusting the WTO with a central role in developing and enforcing the rules of global trade, 
from  intellectual  property  to  customs,  from  digital  trade  to  good  regulatory  practices.  Recent  years  have 
shown  that  despite  the  lack  of  progress  at  the  WTO,  trading  partners  continue  to  develop  responses  to 
changing  global  trade  realities,  but  they  do  this  bilaterally  and  regionally.  However,  when  rules  are 
developed outside the WTO in hundreds of separate regional arrangements, the resulting incoherence may 
actually  complicate  trade,  especially  for  SMEs.  Paradoxically  this  reality  coincides  with  the  emergence  of 
global value chains, which in fact make a truly global set of rules more important than ever. Disciplines on 
trade-distorting agricultural domestic support or rules can only be effectively developed in the WTO. 

  Second, by pursuing results through a more focused approach. The success of the 2013 Bali Ministerial 
Conference was possible because members addressed each issue on its own merits. This proved to be much 
more effective than the single-undertaking approach, in which no individual outcome can be agreed until all 
items of a vast agenda are agreed. After Nairobi, issues-based negotiations may be a more promising way to 

(37)  European Commission, Communication ‘Fighting corruption in the EU’, COM(2011) 308. 

20 

 
 
                                                            
advance the  WTO agenda than another broad and complex round. Such an approach could  be explored  to 
break new ground at the WTO, and make further progress in areas where commitments exist already. The 
role of the WTO in fostering the exchange of information and monitoring policy developments, notably on 
rules developed in the context of FTAs, could also be strengthened. 

  Third, by proposing that a subset of WTO members can advance on a given issue, while keeping the 
door  open  for  interested  WTO  Members  to  join  at  a  later  stage.  This  would  allow  for  new  plurilateral 
agreements  under  the  WTO  umbrella  and  would  make  it  easier  to  anchor  in  the  WTO  those  plurilateral 
agreements that are currently negotiated outside the organisation. 

Implementing these three principles would be in the interests of all WTO Members — and, in particular, 
the smallest and poorest. Ensuring inclusiveness starts by making sure that WTO members can effectively craft 
the  rules  governing  global  trade  within  the  WTO  and  are  not  forced  to  go  outside  it  to  move  forward.  If 
negotiations  on  rules  were  not  hostage  to  negotiations  on  market  access,  each  individual  issue  hostage  to  all 
others,  and  the  entire  collective  membership  hostage  to  any  individual  member,  the  WTO  would  gain  much-
needed dynamism. That would allow it to tackle more effectively the challenges of modern global trade such as 
the digital economy, the rising importance of services, export restrictions and the complexity of rules of origin. 

These changes, however, are not enough.  Fully revitalising the WTO will require members to go back to the 
root causes of the current impasse. The real obstacle in the negotiations so far is not institutional, technical or 
even  related  to  the  content  of  the  agenda,  but  rather  to  the  will  of  the  participants  to  find  a  compromise.  It 
follows  from  the  fact  that  the  WTO  system  has  not  evolved  as  quickly  as  global  economic  reality.  There  has 
been  a  major  shift  in  the  relative  economic  power  of  the  major  trading  partners  and  it  has  not  yet  been  fully 
reflected in the WTO system. As a result, there is a growing imbalance between the contribution large emerging 
countries make to the multilateral trading system and the benefits they derive from it. Already tangible when the 
DDA was launched, this tendency has grown significantly since, and is set to go on doing so in future. 

Rebalancing the relative contribution of developed countries  and emerging economies to the system is a 
key requirement to move forward in the future. This is a highly sensitive political issue and there is no drive 
for the moment to address it in earnest. But it will not be possible to move ahead with any deep change to the 
way the WTO works until the system gets past that roadblock. 

The Commission will, in the short term: 

 

actively push for the conclusion of the Doha round;  

and in the longer term: 

 

seek to place the development of rules to govern global trade at the heart of WTO; 

  make proposals for more focused and targeted outcomes at the WTO; 

 

support the objective of a critical mass of members to advance initiatives within the WTO framework; and 

  make proposals to better reflect the different capacities of WTO members to contribute to the system, based 

on more dynamic and sector/issue-specific approaches. 

5.1.2.  Designing an open approach to bilateral and regional agreements 

The EU needs to pursue bilateral and regional agreements in a manner that supports returning the WTO 
to the centre of global trade negotiating activity. FTAs can serve as a laboratory for global trade liberalisation. 
The  EU  should  develop  future  WTO  proposals  to  fill  the  gaps  in  the  multilateral  rulebook  and  reduce 
fragmentation from solutions achieved in bilateral negotiations. 

The  EU  should  include  in  its  FTAs  appropriate  mechanisms  allowing  other  interested  countries  to  join 
them  in  future,  provided  they  are  ready  to  meet  the  established  level  of  ambition.  The  EU  has  already 
pursued this approach in the context of the TiSA negotiations, insisting since the beginning that this plurilateral 
agreement must be based on the multilateral architecture of the General Agreement on Trade in Services, and be 
open to all willing WTO members to join. Another example is the FTA that the EU signed with Colombia and 
Peru  in  2012,  and  to  which  Ecuador  will  accede  as  a  result  of  negotiations  concluded  in  July  2014.  Looking 

21 

 
 
ahead, several countries have signalled an interest in joining the future TTIP agreement. This could be explored, 
starting with countries that have close relationships with the EU or the US and are ready to meet the high level of 
ambition. A similar approach could be followed in linking the EU’s existing and future FTAs in the Asia-Pacific, 
a region critical for the operation of global value chains. 

The  EU  has  already  taken  concrete  steps  towards  the  inter-operability  of  its  agreements  by  facilitating 
cumulation  of  origin.  Normally,  products  only  qualify  for  an  FTA’s  duty-free  access  to  the  EU  market  if  a 
certain  percentage  of  their  value  or  certain  key  steps  of  the  production  process  happen,  or  originate,  in  the 
partner country. When origin can be cumulated, inputs can be sourced from certain other countries that also have 
an FTA with the EU and still benefit from duty-free access. For example, this is already the case between the 
EU, the Mediterranean region and the EFTA countries. Inputs from each other are considered as qualifying for 
the  FTA  tariff  preferences  under  what  is  known  as  the  ‘System  of  Pan-Euro-Mediterranean  cumulation’. 
Cumulation  of  origin  reduces  the  tension  between  the  bilateral  nature  of  FTAs  and  the  fragmentation  of 
production processes across value chains in different countries. 

The Commission will: 

  develop contributions to address key challenges facing the WTO based on solutions achieved in bilateral and 

regional initiatives; 

 

 

show  readiness  to  open  FTAs,  including  TTIP  and  customs  agreements  to  third  countries  willing  to  join 
them, provided they are ready to meet the high level of ambition; and 

explore, in ongoing negotiations, the possibility to follow cumulation of origin for countries with which both 
the EU and its FTA partners already have free trade agreements. 

5.2.  Moving forward bilateral relationships 

Our bilateral agenda should follow three guiding principles. 

  For EU trade policy to deliver jobs and growth, our priorities to open negotiations must continue to be 
primarily based on economic criteria, while also considering partners’ readiness and the broader political 
context. 

  FTAs must provide reciprocal and effective opening, based on a high level of ambition. This requires 
tackling  barriers  in  a  comprehensive  way,  along  with  effective  implementation  and  enforcement,  without 
leaving room for new barriers to replace old ones. Nonetheless, the EU needs to keep a flexible approach to 
FTA negotiations to take account of the economic realities of its partners. 

 

In future, the EU will need to improve consistency between its approach towards emerging countries 
at multilateral, bilateral and unilateral levels. In particular, with those countries that have graduated from 
GSP, close to full reciprocity in our future bilateral agreements should be expected. 

5.2.1.  Results with the United States and Canada 

TTIP  is  the  most  ambitious  and  strategic  trade  negotiation  that  the  EU  has  ever  undertaken.  It  will 
strengthen  Europe’s  relationship  with  the  United  States,  our  most  important  political  ally  and  biggest  export 
market,  and  provide  an  effective  laboratory  for  global  rules.  After  10  negotiating  rounds  since  July  2013,  the 
contours of what could be a balanced agreement are beginning to emerge. From the EU perspective, this would 
include: 

 

 

 

an ambitious and balanced market access package comparable to the EU’s FTA with Canada; 

a new approach to regulatory cooperation, as well as concrete regulatory outcomes in key sectors, while fully 
respecting the level of protection and regulatory autonomy of each side; and 

a modernisation of the rules on international trade, including in areas such as sustainable development, anti-
corruption, trade-related aspects of energy and raw materials, and investment. 

22 

 
 
The comprehensive economic and trade agreement (CETA) with Canada is the EU’s most comprehensive 
FTA to date. The CETA is a ground-breaking agreement which provides for an ambitious liberalisation of trade 
and  investment.  It  will  create  significant  economic  opportunities  for  European  companies,  consumers  and  the 
general  public  and  it  promotes  EU  standards.  It  includes  unprecedented  commitments  from  Canada  on  public 
procurement and geographical indications. 

The Commission will: 

 

aim to conclude an ambitious, comprehensive and mutually beneficial TTIP as one of its top 10 priorities for 
this mandate; and 

 

submit the CETA to the Council and the European Parliament for approval as early as possible in 2016. 

5.2.2.  A strategic engagement in Asia and the Pacific region 

This  region  is  crucial  to  European  economic  interests. The EU has already established its footprint in Asia 
with an ambitious agreement with South Korea; an ASEAN strategy based on individual agreements as building 
blocks  towards  a  region-to-region  EU-ASEAN  framework;  FTA  negotiations  with  Japan;  and  ongoing 
investment negotiations with China and Myanmar. This Asia strategy will need to be pursued, consolidated and 
enriched over the next few years. 

The conclusion of the EU–Japan FTA is a strategic priority, which should lead not only to increased bilateral 
trade  and  investment,  but  also  to  greater  economic  integration,  closer  cooperation  between  EU  and  Japanese 
firms, and closer cooperation between the EU and Japan in international regulatory and standardisation bodies. 

The  EU  is  engaged  in  deepening  and  rebalancing  our  relationship  with  China  in  a  mutually  beneficial 
way.  The  ongoing  negotiation  of  a  bilateral  investment  agreement  is  the  top  priority  towards  this  objective. 
Completing  this  agreement  will  support  China’s  reforms  and  would  facilitate  Chinese  participation  in  the 
Commission’s  investment  plan  for  Europe  as  well  as  European  participation  in  China’s  ‘One  belt,  one  road’ 
projects.  Both  sides  would  also  benefit  from  the  conclusion  of  a  bilateral  agreement  that  takes  genuine  steps 
towards protecting geographical indications at the highest level laid down in international standards. China has 
suggested further deepening the relationship through an FTA, but the EU will only be ready to engage in such a 
process once the right conditions are met, as expressed in the EU–China 2020 strategic agenda for cooperation. 
Those conditions are also related to the successful implementation of a range of domestic economic reforms in 
China, since the purpose of an FTA would necessarily be to establish a level playing field. At the same time, the 
EU and China should strengthen their dialogue on regional and multilateral trade and investment issues. The EU 
should  encourage  and  support  China’s  growing  role  in  the  multilateral  trading  system  and  in  plurilateral 
initiatives, including TiSA, the Information Technology Agreement, the EGA, the International Working Group 
on Export Credits and the GPA, in a way that would see China strengthen the ambition of these initiatives and 
assume responsibilities in line with the benefits it draws from an open trading system. 

Operating  in  an  increasingly  integrated  regional  supply  chain,  EU  investors  in  east  Asia  would  benefit 
from  a  broader  network  of  investment  agreements  in  the  region.  Building  on  the  investment  provisions 
under negotiation with China, the EU will explore launching negotiations on investment with Hong Kong and 
Taiwan38. 

The  EU–South  Korea  FTA  is  the  most  ambitious  trade  deal  ever  implemented  by  the  EU.  It  clearly 
established the credibility of the EU’s commitment to engagement with Asia, while opening up a fast-growing 
east  Asian  market  for  EU  exports.  However,  the  agreement  does  not  cover  investment  protection  as  it  was 
negotiated  before  the  EU  gained  this  competence  following  the  Lisbon  Treaty.  The  lessons  drawn  from  the 
implementation  of  the  agreement  also  suggest  some  provisions  could  be  adjusted  to  improve  its  functioning. 
Both issues could be addressed in parallel in a revision of the agreement. 

In south-east Asia, following the agreement with Singapore, the conclusion of negotiations with Vietnam 
has  set  a  second  benchmark  for  engaging  with  other  partners.  The  EU  remains  committed  to  resuming 

38 The separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu 

23 

 
 
                                                            
negotiations with Malaysia; and with Thailand when the conditions are right to do so; to conclude the investment 
negotiations  with  Myanmar;  and  to  open  FTA  negotiations,  when  appropriate,  with  the  Philippines  and  with 
Indonesia. At the regional level, the Commission and ASEAN countries will soon have a stocktaking meeting to 
review progress in ASEAN integration, the status of bilateral FTAs between the EU and ASEAN members, and 
how these initiatives can serve as building blocks for a region-to-region trade and investment agreement. 

An ambitious outcome of the FTA with India would create new trade opportunities in a combined market 
of  more  than  1.7  billion  people.  The  Commission  remains  ready  to  resume  the  negotiations  for  a 
comprehensive and ambitious FTA. 

Australia  and  New  Zealand  are  Europe’s  close  partners,  share  Europe’s  values  and  views  on  many issues 
and  play  an  important  role  in  the  Asia-Pacific  region  and  in  multilateral  settings.  Stronger economic  ties  with 
these  countries  will  also  provide  a  solid  platform  for  deeper  integration  with  wider  Asia-Pacific  value  chains. 
Strengthening these relationships should be a priority. 

Following  the  agreement  on  Iran's  nuclear  programme, the EU will evaluate in due time the possibility of 
deepening  trade  relations,  firstly  through  Iran's  accession  to  WTO.  The  Commission  remains  ready  to  finalize 
the FTA negotiations with the Gulf Cooperation Council countries. 

The Commission will: 
 

request  authorisation  to  negotiate  FTAs  with  Australia  and  New  Zealand,  taking  into  account  the  EU 
agricultural sensitivities; 

  work  towards  restarting  negotiations  for  an  ambitious  region-to-region  FTA  with  ASEAN,  building  on 

 

 

bilateral agreements between the EU and ASEAN members;  
explore launching negotiations on investment with South Korea in the context of a possible revision of the 
FTA;  and 
conclude  ongoing  investment  negotiations  with  China  and  explore  launching  negotiations  on  investment 
with Hong Kong and with Taiwan. 

5.2.3.  A redefined relationship with Africa 

Africa’s  ongoing  transformation  will  have  a  significant  impact  on  the  world.  The  stakes  are  high  both  in 
terms of poverty eradication and new economic opportunities. Africa has been the fastest growing continent over 
the past decade. However, the key challenge is to make growth sustainable. This implies an effective agenda for 
economic  transformation  and  industrialisation.  Trade  and  investment  will  be  instrumental  in  addressing  those 
challenges. Africa still suffers from highly fragmented markets with high barriers between countries. There is a 
strong case for fostering regional integration and creating hubs that would benefit a whole region. 

EU–Africa  trade  relations  entered  a  new  phase  in  2014  with  the  conclusion  of  three  regional  EPAs 
(Economic  Partnership  Agreements)  involving  27  western,  southern  and  eastern  African  countries.  It 
established a new dynamic partnership between the two continents, and paved the way to closer cooperation in 
the  future.  EPAs  also  support  Africa’s  own  regional  integration  and  prepare  the  ground  for  wider  African 
integration efforts. 

Fulfilling  the  promise  of  these  agreements  will  be  a  major  deliverable  for  the  next  few  years.  Many 
challenges lie ahead, including ensuring that they deliver their potential in terms of development. EPAs can help 
make  the  business  environment  more  predictable  and  transparent  but  much  will  depend  on  genuine  domestic 
reforms.  This  lies  in  the  hands  of  African  countries  but  the  EU  is  ready  to  continue  supporting  them.  The 
available development aid can reinforce capacity and optimise the conditions for African countries to reap the 
benefits of effective EPA implementation, in a way that is consistent with their own development strategies. 

Looking ahead, EPAs are also a bridge to the future. Current EPAs mostly cover trade in goods only. There 
is a strong  rationale for progressively extending EPAs to other areas like services and investment. Facilitating 
and protecting investment will be fundamental as the next step to support growth on the continent. 

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The Commission will: 
  work  with  African  partners  to  ensure  effective  implementation  of  EPAs  by  putting  in  place  strong 
institutions, structures and mechanisms (including partnership with Member States, the European Parliament 
and civil society), which also contribute to enhancing rule of law reforms and good governance; 
continue  supporting  regional  integration  and  offering  dedicated  capacity  building,  including  via  ‘Aid  for 
trade’; 

 

  deepen relationships with those African partners that are willing  to build on EPAs, using, in particular, the 

 

review clauses on services and investment; 
consider  bilateral  investment  agreements  with  key  African  economies  based  on  economic  criteria  and  the 
existing legal framework for foreign investment; and 

  develop principles on investment together with the African Union or the regional economic communities. 

5.2.4.  A broad and ambitious agenda with Latin America and the Caribbean 

The  EU  and  Latin  America  and  the  Caribbean  are  longstanding  trade  and  investment  partners. 
Preferential  trade  agreements  have  been  concluded  with  26  out  of  the  33  Latin  American  and  Caribbean 
countries. EU companies are the largest investors in Latin America with a portfolio that surpasses EU investment 
in other regions.  

The Economic Partnership Agreement with the Caribbean and FTAs with Peru, Colombia, Ecuador and 
Central America are creating new dynamics for trade and investment and for promoting a shared agenda on 
sustainable  development  and  regional  integration.  The  EU-Mexico  FTA  negotiated  before  2001  has  been 
mutually beneficial but it is now outdated. It is the right time to start negotiations on modernisation of the EU-
Mexico  Global  Agreement  and  reap  all  the  untapped  benefits  for  our  economies.  The  Commission  is  also 
assessing the potential of a modernisation of the Association Agreement with Chile. The EU and Mercosur have 
been  negotiating  an  FTA  since  2000.  The  EU  reconfirms  its  commitment  to  a  broad  and  comprehensive  FTA 
with  Mercosur  that  takes into  account the  economic  realities  in  the  region;,  aiming  at  eliminating  barriers  and 
boosting trade. 

The Commission will: 
 
 

continue negotiations for an ambitious, balanced and comprehensive FTA with Mercosur  
request negotiating  directives to  modernise the FTAs with Mexico  and Chile after  completing  the scoping 
exercise.  These  agreements  should  be  comparable  to,  and  compatible  with,  our  FTA  with  Canada  and  the 
future agreement with the United States; and 

  be  ready  to  consider  investment  agreements  with  key  Latin  American  countries,  where  the  EU  has 

significant investment stocks, and to develop, as a first step, soft law principles on investment. 

5.2.5.  A close partnership with Turkey 

Turkey is the closest emerging economy to the EU and a key regional player but the trade and investment 
relationship is sub-optimal. Since 31 December 1995, the EU and Turkey are linked by a customs union. As it 
currently stands, the customs union covers only industrial goods and lacks a mechanism for settling disputes. A 
modernised customs union should release the untapped economic potential of areas like services, agriculture and 
government  procurement.  A  reformed  Customs  Union  could  also  pave  the  way  for  associating  Turkey  with 
future EU FTAs.. 

The Commission will develop a new, more ambitious framework with Turkey, updating the customs union.  

5.2.6.  Stability and prosperity in EU's  neighbourhood 

The  European  neighbourhood  policy  is  currently  under  review  in  light  of  the  major  developments  of 
recent years. In the east, the focus will be on effective implementation of association agreements and deep and 
comprehensive  FTAs  (AAs/DCFTAs)  with  Ukraine,  Moldova  and  Georgia,  leading  to  gradual  market 
integration.  The  Commission  will  cooperate  closely  with  the  three  countries  so  as  to  maximise  the  tangible 

25 

 
 
economic results of these ambitious agreements. In the south, the aim is to conclude a DCFTA with Morocco 
and Tunisia. 

While  the  Commission  remains  ready  to  explore  the  AA/DCFTA  option  with  other  neighbourhood 
partners,  notably  Jordan,  it  recognises  that  closer  integration  with  the  EU  is  not  for  everyone.  The 
Commission will therefore examine other tailor-made ways of enhancing our trade and investment relationship 
with other neighbourhood partners on the basis of  mutual interest. In parallel, and in order to enhance regional 
trade integration with the EU and amongst its neighbours, there is a need to accelerate the ongoing negotiations 
in the framework of the single regional convention on PanEuroMed rules of origin with the aim of modernising 
and simplifying these rules. 

The Commission will: 

 

 

 

effectively implement AA/DCFTAs with Georgia, Moldova and Ukraine; 

aim to conclude DCFTAs with Morocco and Tunisia; and 

seek to conclude the ongoing negotiations to modernise and simplify PanEuroMed rules of origin under the 
single regional convention on PanEuroMed rules of origin. 

5.2.7.  A challenging relationship with Russia 

The EU’s strategic interest remains to achieve closer economic ties with Russia. The prospects for this will, 
however, be determined primarily by the course of Russia’s domestic and foreign policy, which so far gives no 
signs of the necessary changes. The developments within the Eurasian Economic Union also have to be reflected 
upon.  

Conclusion 

Trade is not an end in itself. It is a tool to benefit people. The aim of EU trade policy is to make the most of 
those benefits. 

That means making sure that trade and investment policy is effective. It must tackle real issues based on an 
up-to-date understanding of the fact that the world economy is tightly linked by global value chains, that services 
—  including  those  that  require  providers  to  move  across  borders  —  are  increasingly  important;  and  that  the 
digital  revolution  is  transforming  the  international  economy.  Trade  agreements  must  tackle  the  barriers 
companies  face  in  the  modern  global  economy.  They  must  also  be  effectively  implemented  and  enforced, 
including for small- and medium-sized companies. 

Trade  and  investment  policy  must  equally  take  responsibility  for  supporting  and  promoting  EU  values 
and  standards. The EU must engage with partners to promote human rights, labour rights and environmental, 
health and consumer protection, support development and play its part in stamping out corruption. Furthermore, 
key  policies  for  the  future  of  Europe’s  integration  into  the  world  economy,  like  investment  and  regulatory 
cooperation, must support, not undermine, the EU’s broader objectives of protecting people and the planet. Any 
change to the level of protection can only be upward. 

Essential  to  meet  all  of  these  objectives  is  a  trade  policy  that  remains  ambitious  in  its  effort  to  shape 
globalisation. Trade benefits people most when creating economic opportunity. That means action to support the 
multilateral system embodied in the WTO and a targeted strategy for bilateral and regional trade and investment 
agreements. 

The EU can only reach these goals if it speaks with one voice and ensures that all EU Member States, people 
and  companies  are  treated  equally.  It  has  to  be  coherent  across  policy  areas.  These  principles  of  unity  and 
coherence  must  underlie  daily  work  as  the  Commission,  with  the  support  of  the  Council  and  the  Parliament, 
seeks to implement this communication in the coming years. 

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