REPORT FROM THE COMMISSION TO THE COUNCIL AND THE EUROPEAN PARLIAMENT on Trade and Investment Barriers and Protectionist Trends 1 July 2014 - 31 December 2015
Date: 2016-06-20
Institutions: Directorate-General for Trade and Economic Security, European Commission
Subjects: World Trade Organisation, common commercial policy, foreign trade, free-trade agreement, investment abroad, liberalisation of trade, market access, protectionism, trade restriction

EUROPEAN 
COMMISSION 

Brussels, 20.6.2016  
COM(2016) 406 final 

REPORT FROM THE COMMISSION TO THE COUNCIL AND THE EUROPEAN 
PARLIAMENT 

on Trade and Investment Barriers and Protectionist Trends 

1 July 2014 - 31 December 2015 
{SWD(2016) 204 final} 

EN 

   EN 

 
 
 
 
  
 
SUMMARY 

This  report  incorporates  and  replaces  the  Report  on  the  Monitoring  of  Potentially  Trade-
Restrictive  Measures  of 
the  European  Commission's  Directorate-General  for  Trade 
("Protectionism  Report")  and  the  Commission's  Trade  and  Investment  Barriers  Report 
("TIBR"). Both have been published regularly since 2008 and 2011 respectively.  

The  first  part  of  this  report  mirrors  the  Protectionism  Report.  It  gives  an  overview  of 
protectionist tendencies in 31 EU trade partners1 in the period 1 July 2014 to 31 December 
2015  (the  "Reference  Period"),  complementing  a  similar  biannual  WTO  report  on 
protectionist  measures  adopted  by  G20  countries.2  It  finds  that  the  stockpile  of  trade-
restrictive measures adopted since 2008 continues to increase, although at slightly slower pace 
than in previous years.   

The second part mirrors the TIBR, and provides an overview of main trade barriers in place 
in  some  of  the  EU's  key  economic  partners  (Mercosur,  China,  India,  Japan,  Russia  and  the 
United  States  (US)),  new  such  barriers  introduced  during  the  Reference  Period  and  EU 
actions to address them.  

The third part describes the Commission's strategy to address trade and investment barriers. 
It  underlines  the  importance  of  negotiations  and  implementation  of  multilateral,  plurilateral 
and bilateral agreements and of the Market Access Strategy (MAS) in this context. In light of 
the Commission's Communication on Trade for All3, it emphasizes the shared responsibility 
of  the  Commission,  the  EU  Member  States  (MS),  the  European  Parliament  (EP)  and 
stakeholders in implementation and proposes an "enhanced partnership" to this effect.  

I. 

GLOBAL MACROECONOMIC PICTURE AND KEY TRENDS 

An overview of protectionist tendencies cannot be disconnected from global economic trends:  

1   Algeria,  Argentina,  Australia,  Belarus,  Brazil,  Canada,  China,  Ecuador,  Egypt,  India,  Indonesia,  Japan, 
Kazakhstan,  Malaysia,  Mexico,  Nigeria,  Pakistan,  Paraguay,  the  Philippines,  Russia,  Saudi  Arabia,  South 
Africa, South Korea, Switzerland, Taiwan, Thailand, Tunisia, Turkey, Ukraine, the US and Vietnam. 

2   The 

(14th)  WTO 

last 

measures 
(https://www.wto.org/english/news_e/news15_e/g20_wto_report_oct15_e.pdf)  at  the  time  of  drafting  this 
report dated 30.10.2015. Since the beginning of the global economic crisis, G20 leaders regularly renewed 
their  commitment  not  to  impose  new  barriers  to  trade  or  investment  and  to  roll  back  existing  ones.  This 
pledge was also reconfirmed at the last three G20 summits. 

monitoring 

report 

trade 

trade 

G20 

on 

3   Commission Communication "Trade for All – Towards a more responsible trade and investment strategy", 

14.10.2015 (http://ec.europa.eu/trade/policy/in-focus/new-trade-strategy/). 

2 

 
 
 
 
 
 
 
                                                 
A.  MIXED MACROECONOMIC AND TRADE PERFORMANCE PICTURE 

In 2015 growth strengthened in advanced economies (including the EU) while the emerging 
world  entered  a  considerably  more  challenging  environment  driven  by  the  slowdown  in 
China,  the  fall  of  commodity  prices  and  the  tightening  of  international  financial  conditions. 
Overall, the world economy slowed down slightly to 3.1% (from 3.4% in 2014). Against this 
backdrop global trade activity in 2015 was relatively weak: trade volumes fell in the first half 
of the year (-0.7% in Q1 and Q2, on a quarterly basis) before returning to growth (+1.9%) in 
the  third  quarter4.  For  2016  the  latest  IMF  forecasts  point  to  an  acceleration  of  growth  in 
world  trade  volumes  (goods  and  services)  to  3.4%5.  The  IMF  also  highlights  a  long  list  of 
risks  to  the  outlook  that  could  eventually  lead  to  weaker  than  foreseen  trade  performance. 
Moreover,  the  WTO  underlined  that  the  expansion  of  world  trade  is  already  below  the  5% 
average of the last 20 years (1995-2015).  

The outlook is therefore characterised by a high degree of uncertainty. The deep recession in 
advanced economies  that followed the outbreak  of the  global financial crisis  paved the way 
for  an  atypical  global  recovery  sustained  by  the  emerging  economies,  which  remained 
structurally vulnerable and proved to be too dependent on China, on very large capital inflows 
and on revenues from commodities exports. This proves to be a challenge for the robustness 
of  the  global  economic  outlook  and  risks  curtailing  the  acceleration  of  trade  expansion  in 
coming months. There are also concerns that the current sluggish trade growth is of a more 
structural nature, reflecting a reduction in responsiveness (or elasticity) of trade to GDP over 
time. The macroeconomic uncertainty in the emerging and developing world together with the 
likely increase in volatility in foreign exchange and financial markets in the coming months 
calls for the monitoring of protectionist measures to be kept a policy priority. 

B. 

NEW  POTENTIALLY  TRADE  RESTRICTIVE  MEASURES  IN  THE  PERIOD  1  JULY  2014-31 
DECEMBER 2015 

1. 

General Protectionist Tendencies 

(a) 

General 

As in previous Protectionism Reports, the Commission has taken stock of all potentially trade 
restrictive measures ("Relevant Measures") that were adopted, substantially modified or in an 
advanced  stage  of  adoption  in  31  EU  trade  partners  in  the  Reference  Period.  The  Staff 
Working  Document  accompanying  this  report  lists  all  such  Relevant  Measures  per  country 
and  provides  a  more  detailed  analysis  of  protectionist  tendencies.  A  list  of  all  Relevant 
Measures,  measures  rolled-back  and  trade  facilitating  measures  adopted  since  2008  is 

4   Cf.: http://www.cpb.nl/en/number/cpb-world-trade-monitor-november-2015. 

5  

IMF, World Economic Outlook Update, January 2016. 

3 

 
 
 
 
                                                 
published  on  the  Commission's  website  ("overview  of  potentially  trade-restrictive  measures 
December 2015").  

Depending  on  the  complexity,  product  scope,  duration  and  comprehensive  nature  of  the 
Relevant  Measures,  their  effect  on  trade  can  vary  and  have  more  or  less  far-reaching 
consequences  for  EU  or  third  country  business.  Also,  the  Commission  may  not  have  a  full 
overview of all new Relevant Measures, which are often adopted in a non-transparent way. In 
line  with  previous  Protectionism  Reports,  the  aim  of  this  section  is  thus  to  provide  an 
overview  of  protectionist  tendencies,  not  a  comprehensive  list  of  new  trade  barriers.  This 
section  does  not  prejudge  the  (il)legality  of  the  Relevant  Measures.  Yet,  all  identified 
Relevant Measures have the capacity to unduly restrict trade.  

During  the  18-month  Reference  Period,  a  total  of  201  new  Relevant  Measures  were 
introduced  while  only  16  previously  imposed  Relevant  Measures  were  actively  withdrawn. 
Recalculation  on  the  basis  of  a  notional  13-month  period  for  comparison  with  previous 
Protectionism  Reports  gives  a  total  of  around  145  newly  adopted  Relevant  Measures,  i.e.  a 
reduction  of  15%  when  compared  to  the  170  Relevant  Measures  identified  in  the  previous 
Protectionism  Report.  However  it  increases  the  total  stock  of  Relevant  Measures  identified 
since 2008 to 1059 while only 180 have been removed since then.  

The protectionist tendencies observed in previous periods, as well as in the WTO's 14th trade 
monitoring report6 are thus largely confirmed during this Reference Period. This also applies 
to  several  G20  member  countries,  despite  their  pledge  to  refrain  from  adopting  new 
protectionist measures and to remove existing ones (cf. footnote 2).  

The same emerging economies as in the last Protectionism Report adopted the bulk of new 
Relevant Measures: China, Russia, Indonesia and India together account for nearly half of 
all  new  Relevant  Measures  identified.  They  were  followed  by  South  Africa,  Argentina, 
Turkey, Ecuador, Algeria, Brazil, Mexico, Thailand, the US, Egypt, Nigeria and Malaysia. 

6   The methodology of the WTO's trade monitoring report on G20 trade measures differs from this report, as it 
takes into account a smaller group of countries over a shorter, 6-month period.  It also includes trade defence 
instruments, which this report does not.  Nevertheless, the findings of the two reports are largely consistent 
and both conclude that the rate by which trade-restrictive measures are being eliminated remains insufficient 
to significantly counteract the growing number of new measures. 

4 

 
 
  
 
 
 
                                                 
Tables 1 and 2 show a graphic representation of the main findings for this Reference Period:  

Table 1: Potentially trade-restrictive measures by country since October 2008 (* - G20 countries) 

Table 2: Potentially trade-restrictive measures by type since October 2008 

5 

 
 
 
 
 
 
 
 
(b) 

Border Measures 

As reflected in table 2, in terms of types of Relevant Measures applied, countries once more 
resorted  mainly  to  border  measures  directly  affecting  imports  and  exports,  typically 
through  tariff  increases,  quantitative  restrictions,  import  licensing  or  through  outright  trade 
bans.  Over  the  18-month  period,  the  number  of  new  import  measures  was  again  much 
higher  (80)  than  the  number  of  export  restrictions  (12).  When  calculated  on  a  13  month 
basis for comparison with the last Protectionism Report, the number of new import measures 
remains stable, while the number of new export restrictions has been reduced by half. While 
this  is  in  itself  a  positive  development,  the  increase  in  border  restrictions  is  still  far  from 
counterbalanced by the number of such measures removed.   

(c) 

Behind-the-Border Measures 

The  Reference  Period  also  shows  a  significant  increase  in  the  number  of  new  measures 
applied  "behind-the-border"  (81).  This  suggests  greater  reliance  on  internal  measures 
affecting  foreign  competition,  which  are  often  more  difficult  to  tackle  than  border  barriers. 
They include new measures in the field of government procurement (23) and in services and 
investment (27) (both in line with the last seven years average), as well as 31 "other" behind-
the-border  measures.  China  once  again  resorted  to  the  highest  number  of  such  behind-the-
border measures, followed by Russia.   

Russia  issued  the  largest  number  of  measures  restricting  government  procurement, 
followed by the US. Compared to the previous reporting period, the number of such measures 
has  significantly  increased  in  Russia  but  decreased  in  the  US.  The  continued  protectionist 
trends  in  this  area  confirm  the  importance  of  ensuring  the  largest  possible  coverage  of  the 
Government  Procurement  Agreement  (GPA)  and  of  the  EU's  efforts  in  negotiating  public 
procurement  chapters  in  free  trade  agreements  (FTAs),  including  TTIP.  It  also  shows  the 
importance  of  moving  ahead  with  the  proposed  "International  Procurement  Instrument"  (cf. 
section III.A.1).  

In particular in the field of services and investment, China has adopted the highest number 
of  restrictive  measures,  followed  by  Indonesia.  The  continued  protectionist  trend  in  many 
countries  in  this  area  underlines  the  need  for  an  ambitious  plurilateral  Trade  in  Services 
Agreement  (TiSA)  as  well  as  ambitious  outcomes  on  bilateral  services  and  investment 
negotiations, starting with the bilateral investment agreement with China (cf. section III).  

Further,  the  31  behind-the-border  measures  "other"  than  those  relating  to  services, 
investment  or  public  procurement  continue  to  represent  an  important  part  (38%)  of  newly 
adopted behind-the-border  measures,  although their number has  decreased (by around 34%) 

6 

 
 
 
 
 
 
 
 
 
compared  to  the  previous  reporting  period.  They  typically  include  discriminatory  tax 
measures  or  other  discriminatory  provisions  favouring  local  business  or  requiring  local 
content,  registration  procedures  and  other  standards  and  technical  requirements.  Such 
measures have mostly been observed in China, followed by Argentina, Thailand, Indonesia 
and  Algeria.  Also  Russia  follows  an  import  substitution  policy  with  a  great  number  of 
measures containing local content requirements (LCRs), including in its subsidy schemes (cf. 
section II.F). 

(d) 

Stimulus packages and other incentives 

Finally,  many  countries  continued  to  support  their  economic  operators  with  new  subsidies, 
incentives  and  other  measures  (28).  Although  we  can  observe  a  decline  in  the  number  of 
such  new  measures  compared  to  the  previous  monitoring  period,  this  does  not  apply  to  the 
number of newly introduced stimulus measures aimed at boosting exports (11), which remains 
stable.  Such  measures  can  have  distorting  competitive  conditions  globally  and  they  are 
regularly raised at the WTO Committee on Subsidies and Countervailing Measures (SCM). 

(e) 

Trade facilitating measures 

In  addition  to  monitoring  protectionist  tendencies,  the  Commission  also  took  stock  of 
measures  potentially  improving  trade  or  investment  conditions.  In  the  Reference  Period,  70 
trade-facilitating measures were identified, over 40% of them enacted by China, Argentina 
and Mexico together. On a 13 month basis, this number (46) is considerably higher than for 
the last monitoring period (36). This is a positive evolution as these measures contribute to the 
liberalisation of global trade flows and to the mitigation of existing protectionist trends, e.g., 
by  reducing  import  or  export  duties,  facilitating  import  procedures  or  relaxing  foreign 
ownership limitations. However they do not qualify as eliminating existing obstacles in line 
with the G20 roll-back pledge (cf. footnote 2).   

2. 

Protectionist trends in specific sectors 

As  observed  in  previous  Protectionism  Reports,  many  countries  still  retain  barriers  to  the 
export  of  raw  materials  and  discriminatory  provisions  relating  to  energy  goods.  During  the 
Reference Period, existing export restrictions relating to raw materials were largely retained 
(e.g.  in  Algeria,  Indonesia,  Egypt,  India  and  South  Africa)  and  new  ones  enacted  (e.g.  in 
Indonesia, Malaysia and Ukraine). In the energy sector frequent use was made of LCRs (e.g. 
in Morocco, Nigeria, Turkey and South Korea). Tackling market access barriers and opening 
markets in these sectors remains a priority. The Commission has also committed7 to include 
an energy and raw materials chapter in each trade agreement as part of the broader work to 

7   Commission Communication "Trade for All", footnote 3. 

7 

 
 
 
 
 
                                                 
create a European Energy Union8 and in line with the raw materials initiative9. 

Further, the digitalisation of the economy has brought new types of trade barriers. Since 2008, 
more  than  35  Relevant  Measures  have  been  issued  relating  to  the  Information  and 
Communication Technology (ICT) sector (mainly in China, India, Russia and Indonesia), of 
which  more  than  15  have  been  issued  or  implemented  during  the  Reference  Period.  They 
often include localisation or LCRs. The Commission will use all available trade tools to tackle 
these challenges. Through trade agreements, notably FTAs and TiSA (cf. section III.A.1), it 
will seek to set rules related to ICT standards, e-commerce and cross-border data flows and 
tackle  new  forms  of  digital  protectionism10.  On  the  positive  side,  the  recently  concluded 
Information Technology Agreement (ITA2, cf. section III.A.1) will have a significant role in 
further eliminating customs duties on ICT products.  

Finally,  the  acute  worsening  of  global  overcapacity  in  the  steel  sector  has  resulted  in  an 
increase of protectionist measures in this sector, in particular in the form of border measures 
(mainly duties), as well as in an increased use of Trade Defence Instruments (TDI), including 
safeguard  measures  (cf.  section  III.A.3.).  The  EU  is  also  discussing  with  its  partners 
bilaterally  (notably  with  China)  and  within  the  OECD  Steel  Committee  to  tackle  the  root 
causes  of  the  overcapacity  problem.  As  true  solutions  are  expected  to  take  some  time  to 
emerge, this trend is likely to continue beyond the Reference Period. This is e.g. confirmed by 
the import licensing regime and quota for steel products introduced early 2016 in Algeria, the 
EU’s second biggest steel export destination.  

II.  MAIN  TRADE  AND  INVESTMENT  BARRIERS  MAINTAINED  BY  SOME 
OF THE EU'S KEY ECONOMIC PARTNERS ON 31 DECEMBER 2015  

This  section  describes  the  most  significant  trade  barriers  in  place  for  some  of  the  EU's  key 
economic  partners.  In  line  with  previous  TIBRs,  this  Report  focuses  in  particular  on 
Argentina/Brazil (Mercosur), China, India, Japan, Russia and the US.  

A. 

ARGENTINA 

While Argentina remains among the countries with the highest number of Relevant Measures 
enacted since 2008, the picture during the Reference Period is encouraging, with fewer such 
measures introduced than in previous periods and several positive developments following the 
entry into office of the new Argentine administration in December 2015.  

8   Commission  Communication  "A  framework  strategy  for  a  resilient  energy  union  with  a  forward-looking 

climate change policy", COM(2015) 80. 

9   Commission Communication, "The raw materials initiative", COM(2008) 699. 

10   Cf. Communication "Trade for All" (footnote 3), p. 12. 

8 

 
 
 
                                                 
Trade  facilitating  measures  include  the  elimination  in  December  2015  of  the  "prior  sworn 
import  declaration"  ("DJAI")  for  imports  of  goods  (a  major  barrier  over  the  last  years) 
following a WTO ruling in a case initiated by the EU and others (DS438). However, the DJAI 
remains  in  place  for  services.  Also,  for  goods  it  was  replaced  by  a  new  Import  Monitoring 
System  (SIMI)  and  licence  requirements  (automatic  for  the  majority  of  imports,  but  non-
automatic  for  around  1400  tariff  lines).  In  addition,  importers  of  footwear  and  textiles  must 
submit a sworn declaration of product composition. The Commission will closely follow these 
new measures.  

Further, the new administration lifted most currency controls and allowed the peso to freely 
float with the aim of increasing inflows of foreign currency and investments.  

It further abolished the system of export licences and most11 export taxes on agricultural and 
industrial products (a long standing issue for the EU economy with regard to open and secure 
access  to  raw  materials).  Export  taxes  on  soybeans  and  soy  by-products  were  reduced. 
Finally,  Argentina  also  modified  the  luxury  tax  that  applied  to  vehicles,  motorcycles  and 
boats, eliminating direct discrimination against imported products. The modified tax will be 
applied on a non-discriminatory basis but may still affect certain (more expensive) imported 
cars more than those locally produced. 

B.  BRAZIL 

The number of new Relevant Measures Brazil adopted during the Reference Period remained 
stable, but significant barriers persist. Brazil continues to resort to border measures as much 
as to behind-the-border measures, including in particular by providing discriminatory support 
to its local economy in a wide range of economic sectors. 

Investment:  some  sectors,  including  media  and  communications,  aviation,  transportation, 
postal services, mining and health care, are still subject to foreign ownership limitations. The 
EU  seeks  to  address  these  restrictions  both  bilaterally  in  the  Mercosur  negotiations,  and 
multilaterally.  

Taxes  and  subsidies  conditional  upon  local  content  continue  to  apply  in  many  sectors, 
specifically  automotive  vehicles,  electronics,  automated  machinery  and  other  related  goods. 
The EU launched a WTO case against Brazil (DS472) on discriminatory tax advantages in the 
automotive,  electronics  and  technology  sectors,  for  which  a  panel  was  composed  on  17 
December 2014. This dispute has since been joined procedurally with a similar case launched 
by Japan (DS497). In July 2014, Brazil also reintroduced the "Reintegra" programme which 
provides  export  subsidies  in  the  form  of  tax  advantages  to  domestic  companies  that  export 
50% or more of their production. The programme now covers most of Brazil's exports. The 

11   Important  exceptions  include  soybeans  and  soy  by-products,  biodiesel  and  seven  tariff  lines  concerning 

ferrous waste and scrap. 

9 

 
 
                                                 
Commission  follows  this  issue  closely  with  Brazil  through  the  EU-Brazil  Joint  Committee 
Trade  meetings,  with  particular  focus  on  the  method  of  calculating  the  tax  credits.  Its 
compatibility with the WTO Agreement on Subsidies and Countervailing Measures (SCM) is 
also being assessed.  

Other  tax  discrimination:  following  a  Supreme  Court  ruling  on  the  tax  calculation  basis  for 
social  security  taxes12,  Brazil  in  June  2015  increased  the  rates  of  these  taxes  for  imported 
goods, with a higher increase for certain specific categories of products (e.g. pharmaceuticals, 
cosmetics  and  tyres)  resulting  in  discriminatory  treatment  of  imports  and  increased  market 
protection. The EU continues to raise this with Brazil. 

Procurement:  Brazil  maintains  measures  establishing  preferential  margins  (from  8  to  25%, 
across a wide range of sectors) for certain national products in public tendering procedures. 
The Commission is tackling this issue in the context of its procurement strategy. 

SPS: Brazil maintains long, complex and unpredictable approval procedures; e.g. relating to 
the approval of labels for products of animal origin, delays to perform audits, or costly pest 
risk  analyses  for  plant  products  to  be  performed  by  the  competent  authority  of  Brazil 
(MAPA). These have resulted in an important and longstanding backlog of EU applications to 
market  animal  and  plant  products.  Brazil  also  fails  to  apply  international  standards  on 
regionalisation  for  plant  and  animal  pests  and  diseases  and  often  delays  pre-listing  of  EU 
establishments  wishing  to  export  products  of  animal  origin  to  Brazil.  The  Commission 
regularly raises such issues in its bilateral contacts (e.g. the yearly meetings of the EU-Brazil 
SPS Consultation Mechanism) as well as in the WTO SPS Committee.  

Trade  facilitating  measures:  On  the  positive  side,  the  discriminatory  ad  rem  system  for 
internal taxation of wines and spirits was abolished on 30 December 2015. A 5% nominal 
tax rate discrimination in favour of cachaça against other spirits remains, but proposals for a 
higher discrimination margin of 13% were rejected in the face of objections from the EU and 
other stakeholders. Brazil also announced new legislation that should speed up and simplify 
its label approval procedures, expected to be adopted in 2016, and it relaxed the LCRs for 
exploration of oil and gas through a newly adopted incentives program. In the field of SPS, 
in 2015 there was significant progress regarding exports from the EU to Brazil of dairy, pork, 
fish,  honey,  beef  and  related  products  and  of  several  plants  and  plant  products,  following 
political  engagement  in  Brazil  and  the  EU.  While  not  yet  engaged  on  an  import/export 
structured  dialogue  (listing  the  legal  and  administrative  steps  and  timelines  to  solve  all 
pending market access applications and SPS issues), MAPA also announced market opening 
for additional products, scheduled audits in several EU Member States for 2015 and 2016 and 
undertook to address systemic issues and the long list of remaining applications. 

12   PIS  ("Programa  de  Integração  Social")  and  COFINS  ("Contribuição  para  o  Financiamento  da  Seguridade 

Social").  

10 

 
 
 
                                                 
C.  CHINA 

China introduced more new Relevant Measures than any other country during the Reference 
Period,  notwithstanding  its  commitment  to  increase  market  access  for  the  private  sector, 
including  foreign  companies13.  Most  of  the  new  measures  are  behind-the-border  measures, 
notably regarding services and investment. 

EU companies continue to face numerous barriers in China, including relating to local partner 
requirements,  market  entry  restrictions,  approval  processes,  technology  transfer  as  well  as 
discriminatory post-establishment practices, for example in the field of technical regulations 
and standards. 

National security requirements: Many of the new measures have been taken on the ostensible 
grounds  of  “national  security”,  including  in  the  cyber  domain.  Examples  include  the 
National Security Law, the Anti-terrorism Law, the draft Cyber Security Law, the draft Law 
on Foreign NGO Management and measures taken in the context of “secure and controllable 
ICT” (in  the  banking and insurance  sectors). Much  of this legislation goes beyond essential 
national  security  concerns,  contains  broad  and  unclear  definitions  of  national  security  that 
create  legal  uncertainty,  oblige  firms  to  hand  over  sensitive  data  to  the  authorities  and 
generally  risk  imposing  unnecessary  restrictions  on  commercial  activities.  This  is  not 
consistent  with  China’s  Third  Plenum  commitment  to  "predictable  and  open  investment 
conditions" and can potentially reduce trade, investment and innovation in China.   

The EU has repeatedly raised these issues with China bilaterally and has commented on the 
above legislation during public consultations. This appears to have had an effect in relation to 
the  suspension  of  the  guidelines  on  secure  ICT  for  banking.  However,  the  above  concerns 
remain and the Commission continues to follow this closely. 

Investment: Progress to open up sectors closed to Foreign Direct Investment (FDI) remains 
slow.  Restrictions  include  joint  venture  requirements,  restrictions  on  technology  transfer  as 
well as local content and administrative pre-approval requirements. Further, the draft 'Foreign 
Investment  Law',  published  in  2015,  contains  some  positive  elements,  but  also  tightens 
national security review screening and requires prior approval for investments above a certain 
threshold. Areas where foreign investment is specifically restricted appear to have remained 
largely unchanged with new restrictions in some areas.  In October 2015, China announced a 
nation-wide “negative list” system which foresees the adoption of two lists of sectors where 
investment  is  prohibited  or  restricted:  one  list  for  domestic  investors  (and  foreign  investors 
from  jurisdictions  having  an  investment  agreement  with  China)  and  another  list  for  other 
foreign  investors.  The  system  is  intended  to be  both  simpler  and  more  transparent  since  for 
sectors  outside  the  list,  in  principle,  there  should  be  no  prior  approval  for  investment. 

13 The Third Plenum of the 18th National Congress of the Communist Party of China Central Committee was head in 
November 2013. It sets China’s policy direction up to the year 2020. 
http://www.china.org.cn/china/third_plenary_session/2014-01/16/content_31212602.htm 

11 

 
 
                                                 
However this remains to be implemented and is still discriminatory. Also, considerations of 
national security can take priority.  

The ongoing EU-China negotiations for an investment agreement focus mainly on investment 
market access and protection issues, including improving the regulatory environment. In 2015 
negotiations had not yet entered into sector-specific areas. 

Procurement:  the  EU  continues  to  encourage  China  to  enhance  its  market  access  offer  for 
accession to the WTO GPA and to bring its legislation into line with it. In December 2014, 
China submitted a revised GPA offer. The EU welcomes the progress in terms of coverage at 
sub-central level but significant improvements are still needed, in particular with regard to the 
coverage of State-Owned Enterprises (SOEs). 

Intellectual  property:  the  Commission  still  has  major  concerns  as  regards  patentability 
requirements, bad faith trade mark applications, protection for trade secrets, and the launch of 
competition  cases  against  foreign  IP  holders.  The  administrative  and  judicial  enforcement 
system  in  China  remains  problematic,  particularly  for  foreign  companies.  E-commerce 
platforms have further aggravated China's severe counterfeiting problem. All these issues are 
raised bilaterally with China notably through the annual EU-China IP Dialogue and bi-annual 
IP Working Group. 

Sanitary and Phytosanitary measures (SPS): China remains a very important market for EU's 
exports  of  agri-food  products  and  offers  a  huge  growth  potential.  EU  companies  face  many 
SPS-related import measures in China, despite the very high EU food safety standards. This 
includes  overly  burdensome  approval  procedures,  causing  delays  for  years  in  some  cases 
(notably  for  meats);  country-wide  bans  without  scientific  justification  (such  as  an  over  15 
years old ban on beef imports from most EU Member States, allegedly on BSE grounds); non-
compliance  with  international  standards;  and  country-wide  bans  following  any  outbreak  of 
major  diseases  (such  as  avian  influenza  and  African  swine  fever)  inconsistent  with 
international  rules on regionalisation. In  2015, China also redrafted its Food Safety Law, in 
particular for imports of dairy products. The Commission has made submissions in relation to 
the relevant draft implementing rules with a view to preventing unnecessary restrictions. SPS 
issues are tackled through several bilateral dialogues. 

Technical  Barriers  to  Trade  (TBT):  For  medical  devices  and  pharmaceuticals,  China's 
regulatory  system  should  be  aligned  with  international  standards  on  issues  such  as  clinical 
trials  and  registration  requirements.  Also,  the  registration  process  for  new  cosmetics 
ingredients should be improved and limited to higher risk ingredients. Concerning labelling of 
cosmetics by using stickers (so-called "overstickering"), it is positive that China suspended a 
measure aimed at prohibiting overstickering. The Commission addresses these issues through 
bilateral trade dialogues and sector-specific technical dialogues. 

12 

 
 
D. 

INDIA 

India  still  features  amongst  the  four  countries  with  the  highest  number  of  new  Relevant 
Measures.   

Tariffs: It raised duties on many products including ICT, steel and motor vehicles. Regarding 
ICT, India effectively imposes a 10% customs duty on four groups of ICT products, claiming 
that they do not fall under the Information Technology Agreement 1 (ITA1). The Commission 
has  raised  the  issue  regularly  with  India,  including  in  the  context  of  the  EU-India  ICT 
Working Group and the Sub-Committee on Trade, and a Market Access Team has been set up 
at the EU Delegation in Delhi (bringing together the EU, Member States and stakeholders) to 
closely follow up on ICT issues. Relating to steel, in a possible attempt to limit the negative 
effects of global overcapacities, India imposed a provisional safeguard duty of 20%, increased 
customs duties for certain steel products and extended mandatory BIS certification (cf. TBT 
below).  

SPS:  Indian  requirements  appear  disproportionate  and  often  diverge  from  international 
standards.  EU  exports  affected  include  animal  and  animal  products  (particularly  bovine 
semen, pork), plant and plant products, processed food and alcoholic beverages. India is 
reviewing comments submitted by EU companies and authorities to its Draft 2015 Regulation 
on alcoholic beverages and the competent authority (FSSAI) accepted a dialogue with the EU 
and to meet European industry.  

Further,  in  September  2015  India  restricted  imports  of  apples  exclusively  to  the  port  of 
Mumbai, causing an increase of cost for EU exporters in reaching the final destination. India 
eventually  withdrew  the  measure  in  January  2016,  after  the  EU  raised  this  issue  bilaterally 
and in WTO Committees. 

TBT:  ICT  and  steel  products  as  well  as  tyres  continued  to  be  affected  by  disproportionate 
conformity assessment requirements that do not seem in line with the WTO TBT Agreement. 
In particular, the proposed mandatory in-country security testing and certification of telecom 
network elements (postponed until April 2016) raises questions about test methods, costs and 
delays. Further, the Bureau of Indian Standards' (BIS) mandatory certification regime for 15 
steel  products  was  extended  to  21  additional  steel  products  and  to  three  stainless  steel 
products,  placing  an  additional  strain  on  EU  steel  industry  in  the  form  of  burdensome  and 
lengthy  conformity  assessment  procedures  and  factory  inspections.  With  regard  to  tyres, 
marking fees and bank guarantee requirements continue to be key barriers for EU exporters. 
Also the new BIS scheme for testing and inspection for certification of cars and pneumatic 
tyres  for  passenger  cars  introduces  the  concept  of  'control  unit'  (5,000  tyres  of  the  same 
family) and requires testing of every tenth control unit. This is an improvement compared to 
the previous requirement of 3-monthly Conformity of Production (COP) tests on all sizes of 
tyres imported to India, but is still very burdensome. The  EU addressed this with India and 

13 

 
 
requested  notification  of  the  measure  to  the  WTO. In  2015 EU companies also experienced 
TBTs  in  the  implementation  of  the  Indian  liberalisation  reform  in  retail  and  insurance 
services and relating to the marketing and labelling of alcoholic beverages.  

The  Commission  raises  these  NTMs  regularly  in  the  WTO  TBT  and  SPS  Committees, 
bilaterally in the relevant EU-India Working Groups and at the EU-India Sub-Commission on 
Trade. Also close interaction is maintained with EU Member States and stakeholders both in 
Delhi and in Brussels. 

Procurement:  no  further  substantial  progress  can  be  reported  with  regard  to  the 
implementation  of  the  Preferential  Market  Access  policy  for  domestically  manufactured 
electronic goods in public procurement.   

Intellectual  Property:  effective  patent  protection  in  India  remains  difficult.  The  reasons 
include restrictive patentability criteria, such as the overly restrictive definition of "inventive 
step"  to  deny  patent  protection  for  innovative  pharmaceuticals  that  build  upon  pre-existing 
products,  combined  with  difficulties  in  enforcing  patents  and  extremely  broad  criteria  for 
granting  compulsory  licences  or  for  the  revocation  of  patents.  This  affects  pharmaceuticals, 
chemicals  and  other  sectors  where  local  innovation  is  being  promoted.  India  has  so  far 
declined  the  EU's  calls  for  a  regular  IP-dialogue  (in  accordance  with  a  specific  2005 
agreement),  but  the  Commission  continues  to  channel  its  concerns  through  other  bilateral 
contacts, including the EU-India Sub-Committee on Trade.   

Investment: on multi-brand retail, the new Indian government did not withdraw the existing 
51%  FDI  cap  (despite  announcement  during  elections  that  it  would  close  this  part  of  retail 
from FDI), but left its implementation up to the discretion of each single Indian State, without 
ensuring enforcement from the centre. This de facto restricts EU investments in the majority 
of  Indian  States.  On  the  positive  side,  the  30%  LCR  for  FDI  in  single  brand  retail  (to  be 
achieved  within  five  years  from  receipt  of  the  first  FDI  tranche)  was  relaxed  in  November 
2015 and the applicable condition should be 30% LCR in five years as of the start of business 
operation.  The  current  text  of  the  notification  states  that  the  30%  LCR  should  be  achieved 
immediately  upon  start  of  business  operations,  but  the  competent  ministry  has  promised  to 
correct  this.  Also,  following  regular  discussions  between  the  EU  and  relevant  Indian 
authorities, single brand retailers are allowed to sell online since November 2015. 

E. 

JAPAN 

The EU seeks to address the numerous longstanding market access barriers (including tariffs, 
non-tariff  measures  (NTMs  -  i.e.  TBT  and  SPS)  and  public  procurement  restrictions)  in  its 
comprehensive FTA negotiations with Japan. This has already had some concrete results: 

NTMs: Some TBT/SPS barriers (e.g. regarding organic food, liquor wholesale licensing) have 
already been resolved. On some others for which Japan committed to act during the first year 

14 

 
 
 
 
of  negotiations,  significant  progress  can  be  reported,  including  on  the  adoption  of 
international standards (e.g.  pharmaceuticals, food additives, medical devices authorisation 
procedures  and  automotive  standards  on  the  basis  of  UNECE  regulations).  Further,  by  31 
December 2015 Japan had lifted its long-standing ban on beef (based on an alleged BSE risk) 
for  four  EU  Member  States  and  application  procedures  were  at  an  advanced  state  for  three 
other Member States. Discussions also continue regarding the restrictions on imports of pig 
meat and pig meat products from certain EU Member States that Japan still maintains.  

In general, negotiations on NTMs continue on the basis of a second list submitted to Japan in 
December  2014.  This  list  includes  many  outstanding  SPS-related  measures,  such  as  the 
approval of food additives. Other possible NTMs are addressed in the context of specific FTA 
chapters, such as subsidies for which disciplines are being discussed within the competition 
chapter. 

Procurement:  The  EU  is  also  negotiating  the  further  opening  of  the  Japanese  public 
procurement market, including its railway market. As part of the discussions on the so-called 
"one-year package", Japan has already taken concrete measures to increase the transparency 
of  its  railways  procurement  market.  Discussions  now  continue  with  the  objective  of 
improving market access for EU companies, notably by addressing the so-called "Operational 
Safety Clause", which Japan can invoke to avoid public tendering procedures. 

F.  RUSSIA 

EU trade policy vis-à-vis Russia focusses on solving a range of trade restricting measures that 
Russia  has  recently  put  in  place,  including  some  that  breach  its  WTO  commitments.  After 
China, Russia introduced the highest number of new Relevant Measures during the Reference 
Period, resorting mostly to measures directly at the borders.   

SPS: Russia introduced 10 new SPS-related import bans during the Reference Period. The EU 
has an ongoing WTO case against Russia's import restrictions on live pigs, pork and certain 
pig  products  originating  in  the  EU  (DS  475).  On  7  August  2014  Russia  imposed  a  new, 
politically  motivated,  ban  on  agricultural  products  and  foodstuffs  from  the  EU,  applying  to 
countries – including EU Member States – that took sanctions against Russia in the context of 
the  Ukraine  crisis.  Overall  losses  for  EU  exports  have  been  partially  compensated  by 
increased  exports  to  China,  South  Korea,  Hong  Kong,  Turkey  and  the  US.  But  certain 
Member States and sectors have been hit hard (e.g. dairy products sector in Finland and in the 
Baltic countries).  

Tariffs:  Russia's  tariffs  on  paper  and  paper  products,  appliances  (such  as  refrigerators)  and 
palm oil appear to violate Russia's WTO bound tariff commitments. On 31 October 2014, the 
EU  launched  a  WTO  case  challenging  such  tariffs (DS485). On  15 September 2014, it also 
launched a WTO case (DS479) against the illegal levy by Russia of anti-dumping duties on 
light commercial vehicles from Germany and Italy. 

15 

 
 
 
 
 
TBT:  Some  of  the  Russian  technical  regulations,  now  adopted  at  the  level  of  the  Eurasian 
Economic Union, impose overly burdensome conformity assessment requirements that are not 
in line with international standards. The Commission is particularly concerned about two: the 
draft technical regulation on alcoholic drinks safety (in particular its provisions on beer, wine 
and  hard  liquors)  and  the  draft  amendments  to  the  regulation  "On  safety  of  products  for 
children  and  adolescents".  The  Commission  has  raised  concerns  regarding  these  regulations 
bilaterally and at the WTO TBT Committee and has requested Russia to ensure sufficient time 
before entry into force in order to allow manufacturers to adapt.   

Subsidies:  Russia  adopted  a  number  of  discriminatory  subsidy  programmes  favouring 
Russian  producers,  in  particular  in  the  car  sector  (subsidies  with  LCRs)  and  in  the  form  of 
subsidies  to  producers  of  farm  equipment  and  agricultural  machinery  under  local  content 
conditions.  This  is  detrimental  for  EU  exporters  of  cars  and  agricultural  machinery  (in 
particular  of  combine  harvesters)  which  have  a  strong  interest  in  the  Russian  market.  The 
Commission has addressed this several times bilaterally and in WTO committees. 

Procurement:  Russia  adopted  a  series  of  sectorial  measures  during  the  Reference  Period 
restricting access to  public procurements  for  non  Russian  companies.  Russia  has  not  signed 
the  GPA,  but 
to  be  economically 
counterproductive.  It  also  adopted  legislation  aimed  at  formalizing  the  policy  of  giving 
preference  to  Russian  goods  in  procurement  by  Russian  SOEs  and  investment  projects 
(including with private companies) with a minimum of 10% State participation.  

this  series  of  measures 

likely  ultimately 

is 

G.  UNITED STATES (US) 

For the US, market access barriers are mainly addressed in the ongoing TTIP negotiations. 

Procurement:  After  Russia,  the  US  introduced  the  largest  number  of  new  procurement 
restrictions  during  the  Reference  Period.  "Buy  American"  restrictions  at  federal,  state  and 
local levels still cover a large portion of public purchasing.   

Intellectual property (IP): EU companies face difficulties in protecting IP rights, particularly 
EU geographical indications (GIs) in the wine, cheese and meat sectors.  

SPS/TBT: The US still maintains several long-standing TBTs (such as third party certification 
or local standard requirements in certain sectors, notably engineering) as well as SPS import 
restrictions on meat (sheep, beef and goat) and on egg products, as well as excessive delays in 
processing import applications by EU companies for certain animal and plant products.  

The TTIP negotiations provide an important opportunity to remove these restrictions, achieve 
a better protection for EU GIs in the US and obtain commitments to process SPS applications 
more quickly. 

16 

 
 
 
Subsidies:  During  the  Reference  Period,  the  EU  launched  a  new  WTO  case  against  the  US 
concerning subsidies granted to Boeing (DS487). 

III.  EU STRATEGY TO ADDRESS TRADE AND INVESTMENT BARRIERS  

A.  MULTILATERAL AND PLURILATERAL TRADE FRAMEWORK AND NEGOTIATIONS 

1. 

Multilateral and plurilateral trade negotiations 

The continuous increase in the number of trade restrictions world-wide and the limited roll-
back  as  described  above  underline  the  importance  of  a  strong  multilateral  trade  framework 
that can effectively address such protectionist measures. The EU therefore continues to be a 
strong  supporter  of  furthering  the  multilateral  trade  agenda  and  disputes  resolution  system, 
which remain the cornerstone of EU trade policy14.  

In  this  context,  the  WTO  "Nairobi"  package,  agreed  at  the  10th  WTO  Ministerial 
Conference  of  15-18  December  2015  ("MC10")  delivered  a  very  significant  deal  aimed  at 
ensuring  fairer  global  trade  and  supporting  development.  Agreement  was  reached  among 
others  on  eliminating  subsidies  and  other  schemes  unfairly  supporting  agricultural 
exports; ensuring that food aid for developing countries is given in a way that does not distort 
local  markets;  seeking  to  simplify  the  conditions  that  exporters  from  the  poorest  countries 
have to meet so that their products benefit from trade agreements (rules of origin) and giving 
more  opportunities  for  businesses  from  the  poorest  countries  to  provide  services  in  other 
WTO member countries. The outcomes achieved on least-developed country specific issues, 
as well as the decisions on the accessions of Afghanistan and Liberia showed the attentiveness 
of WTO to the needs of its most vulnerable members. Moreover, MC10 saw the conclusion of 
the Information Technology Agreement (ITA2), which eliminates customs duties on more 
than 200  high-tech products (including  semi-conductors, medical equipment, game consoles 
and GPS devices), extending the 1996 ITA to cover EUR 1.3 trillion in global trade.  

On  5  October  2015,  the  EU  ratified  the  WTO  Trade  Facilitation  Agreement  (TFA),  the 
most significant multilateral trade deal since the 1990s. The TFA is expected to significantly 
simplify and modernise customs procedures around the world. This should help in particular 
small  businesses  access  new  export  opportunities.  It  should  also  play  a  significant  role  in 
increasing developing countries' involvement in global value chains.15 

At the plurilateral level, negotiations on a TiSA progressed well and are expected to speed up 
in 2016. TiSA is currently being negotiated by 23 WTO members (including the EU), which 

14 Cf. Communication "Trade for All" (footnote 3), pp. 27-29.  

15 http://trade.ec.europa.eu/doclib/press/index.cfm?id=1374  

17 

 
 
 
                                                 
together  account  for  70%  of  world  trade  in  services. It aims at liberalising trade in services 
beyond  the  GATS  in  areas  such  as  licensing,  financial  services,  telecoms,  e-commerce, 
maritime transport, and professionals moving abroad temporarily to provide services. Services 
account for some 70% of EU GDP and employment and represent an increasingly important 
part  of  international  trade.  The  TiSA  has  significant  potential  to  help  EU  businesses  export 
services.  

Since  July  2014,  the  EU  and  16  other  WTO  Members  have  also  been  negotiating  an 
agreement  to  liberalise  global  trade  in  environmental  goods  (the  "Environmental  Goods 
Agreement"  or  EGA),  with  the  aim  of  removing  barriers  to  trade  and  investment  in  goods, 
services and technologies that can contribute to protecting or improving the environment. At 
present the talks focus on removing tariffs on a broad range of environmental goods. The EU's 
ambition is also to include services related to exports of environmental goods (e.g. repair and 
maintenance of wind turbines) and to tackle non-tariff barriers, such as LCRs or restrictions 
on investment. The EU being a world leader in exports and imports of environmental goods, 
the EGA could create significant opportunities for EU business. 

The  revised  GPA  entered  into  force  on  6  April  2014.  While  the  ratification  process  is 
ongoing, discussions continue on upcoming accessions to the Agreement, in particular those 
of China and Australia. The EU participates in these discussions with the aim to ensure  the 
largest possible coverage.  

In  addition,  on  29  January  2016  the  Commission  adopted  an  amended  proposal  for  an 
"international  procurement  instrument"16,  a  tool  to  promote  further  opening  of  public 
procurement markets around the world. While the EU is an open economy, many of the EU's 
major trading partners apply restrictive practices discriminating against EU businesses. Many 
such  new  measures  were  again  adopted  during  the  Reference  Period  (cf.  section  I.B.1.(c)). 
The new proposed tool should allow the Commission to initiate public investigations in cases 
of alleged discrimination against EU companies in third country procurement markets. If the 
discrimination is confirmed, the Commission could invite the country concerned to engage in 
consultations on the opening of its procurement market. If this fails, bids by companies from 
the  country  concerned  for  EU  procurement  tenders  could  be  subject  to  a  price  adjustment 
mechanism,  thereby  giving  bids  from  other  non-EU  and  EU  companies  a  competitive 
advantage. At the end of 2015, the proposal was under discussion in the Council. It should be 
adopted by ordinary legislative (co-decision) procedure. 

16   Amended proposal for a Regulation of the European Parliament and the European Council on the access of 
third-country  goods  and  services  to  the  Union’s  internal  market  in  public  procurement  and  procedures 
supporting negotiations on access of Union goods and services to the public procurement markets of third 
countries, COM(2016)34 final, 29.01.2016. 

18 

 
 
 
                                                 
2.  WTO Committees and Dispute Settlement proceedings  

The EU remains among the most proactive WTO Members in WTO Committees dealing with 
TBT,  SPS,  SCM,  Import  Licensing  Procedures  and  Trade  Related  Investment  Measures. 
These  committees  are  effective  fora  for  highlighting  EU  concerns,  informing,  raising 
awareness and building alliances with other affected WTO Members and for resolving issues 
or - if necessary - preparing the grounds for further enforcement action.   

WTO  Dispute  Settlement  (DS)  remains  the  strongest  option  when  other  enforcement  tools 
have  proven  to  be  insufficient.  Although  such  proceedings  take  considerable  time  and 
resources, they can tackle significant barriers in a systematic way and increase legal certainty 
in the longer term.    

In the Reference Period, the EU launched two WTO DS cases: one against Russia on tariffs 
(DS485)  and  one  against  the  US  concerning  subsidies  granted  to  Boeing  (DS487).  WTO 
panels were also established in a dispute against Brazil regarding tax advantages for domestic 
producers  of  automotive  vehicles,  electronics  and  automated  goods  (DS472)  and  in  two 
disputes  against  Russia  on  certain  measures  concerning  the  importation  of  pigs  and  pork 
(DS475)  and  on  anti-dumping  duties  on  light  commercial  vehicles  (DS479).  Further, 
proceedings  were  concluded  in  an  important  dispute  on  Argentina's  import  restrictions 
(DS438) with a positive outcome for the EU (cf. section II). Another important example of a 
successful case (DS 432) launched by the EU concerns China's restrictions on the export of 
rare earths, where China decided in January and April 2015 to abolish respectively its export 
quotas and export duties following a WTO ruling adopted by the DS Body in August 2014. 

3. 

Trade Defence Instruments (TDI) 

The use of TDI (anti-dumping (AD), countervailing measures (AS) and safeguards) is subject 
to WTO rules. Such measures are not listed in this Report as potentially protectionist, as they 
aim  precisely  at  correcting  anticompetitive  behaviour  or  at  reacting  to  sudden  increases  in 
imports causing injury. At the end of the Reporting Period, the number of TDI measures in 
force against the EU or its Member States remained stable (151). The most active countries 
imposing  such  measures  were  Brazil,  India,  Australia,  Indonesia,  Morocco  and  Turkey. 
Of particular concern to the EU is the increased imposition of safeguard measures (24 during 
the  Reporting  Period).  Such  measures  apply  against  all  countries  of  origin,  whether  or  not 
they cause any injury to the domestic industry, and without demonstration of the existence of 
unfair trade practices.  

The Commission continues to actively monitor trade defence cases initiated by third countries 
against EU companies17 in order to ensure that any measures are applied in strict observance 

17   The  Commission  prepares  every  year  a  detailed  analysis  of  third  countries  defence  actions  against  EU 
companies,  published  at:  http://ec.europa.eu/trade/policy/accessing-markets/trade-defence/actions-against-
exports-from-the-eu/. 

19 

 
 
                                                 
of  the  relevant  WTO  rules.  E.g.,  during  the  Reference  Period,  the  EU  initiated  a  WTO  DS 
case against Russia's unfair levy of AD duties on light commercial vehicles (cf. section II.F).  

Conversely, the EU also applies TDI against unfair third country trade practices. End of 2015, 
a total of 97 definitive measures were in place (86 AD and 11 AS). Most affected by those 
measures were the steel and chemicals sectors. The country most targeted was China with 56 
measures  in  place.  However,  only  less  than  1%  of  EU's  total  imports  are  affected  by  TDI, 
making the EU a very moderate user of TDI globally.   

In light of the current significant overcapacity and strong pressure on prices in the steel sector, 
an increased resort to TDI relating to steel products could be observed as from the second half 
of  2015.  By  the  end  of  2015,  out  of  the  33  definitive  measures  in  force  concerning  steel 
(30AD and 3AS), 14 were targeting steel imports originating in China (13AD and 1AS) and 
other investigations are ongoing. To face the steel crisis, other countries (US, Morocco and 
India in particular) likewise adopted such measures, including safeguards (India). 

B. 

1. 

BILATERAL TRADE AGENDA 

Negotiations 

The  EU  aims  at  pursuing  bilateral  and  regional  agreements  in  a  manner  that  supports 
returning  the  WTO  to  the  centre  of  global  trading  activity18.    It  has  the  most  ambitious 
bilateral  trade  agenda  in  the  world,  with  preferential  trade  agreements  in  place  with  52 
countries and negotiations for FTAs and Economic Partnership Agreements (EPAs) ongoing 
with 80 countries, including with some of its key economic partners (the US, Japan, Mercosur 
and  India  –  although  negotiations  with  the  latter  country  are  currently  stalled).  It  is  also 
negotiating investment agreements with China and Myanmar19. While FTAs in force covered 
less than a quarter of EU trade ten years ago, they now cover more than a third of EU trade 
and will cover two thirds if and when all ongoing negotiations are concluded. 

Bilateral and regional negotiations are very important in terms of removing trade barriers and 
opening markets. This is so both during negotiations, as well as upon their conclusion. E.g., 
even  before  official  launch  of  the  ongoing  FTA  negotiations  with  Japan,  substantial  work 
started on NTMs, which has led to concrete results during negotiations, such as on the issue of 
the liquor wholesale licensing (cf. Section II).  

18   Cf. Communication "Trade for All" (footnote 3), pp. 29 et seq. 

19   For an overview, cf. http://ec.europa.eu/trade/policy/countries-and-regions/agreements/.  

20 

 
 
 
 
 
                                                 
Furthermore,  the  FTA  negotiations  with  Vietnam  were  concluded  in  December  201520.  In 
line with the usual procedure, the text of the FTA will now be subject to a legal review and 
translated  into  all  EU  languages  before  being  presented  to  the  Council  and  the  European 
Parliament  for  ratification.  During  this  period,  the  Commission  is  already  working  closely 
with  Vietnam  to  identify  legislation  that  needs  to  be  adopted  or  amended  by  either  side  to 
bring it in line with the new FTA. Several long standing market access barriers are expected 
to be removed as part of this process, allowing rapid results when the FTA enters into force 
(cf.  Commission's  website:  "overview  of  potentially  trade-restrictive  measures  December 
2015").  

Also  the  negotiations  between  the  EU  and  Ecuador  of  a  Protocol  of  Accession  to  the  EU-
Colombia Peru FTA  were  concluded  on  17  July  2014  and  the Protocol is now to be  signed 
and ratified by the Parties. Similarly, the negotiations of the EU-Canada FTA (CETA) were 
concluded on 26 September 2014 and of the EU-Singapore FTA on 17 October 2014. 

2. 

Implementing and enforcing existing FTAs  

As underlined in the Communication "Trade for all", in order to ensure that FTAs, once they 
enter  into  force,  result  in  the  promised  market  opening  and  business  opportunities  on  the 
ground,  it  is  crucial  to  ensure  their  fullest  implementation.  Currently,  this  is  done  mainly 
through the  MAS (cf. section C.), by making use  of the specific structures set up  under the 
FTAs (such as specific trade committees allowing early exchange and diplomatic resolution 
of  market  barriers  and,  as  a  last  resort,  specific  DS  mechanisms)  as  well  as  of  the  general 
existing structures such as WTO Committees or WTO DS21, if more appropriate. 

The  EU's  FTA  with  South  Korea,  which  has  been  applied  since  1  July  2011,  shows  the 
importance  of  effective  monitoring  to  ensure  the  fullest  possible  implementation  of  the 
FTA22.  In  the  period  covered  by  this  Report,  a  number  of  FTA  implementation  and  market 
access  issues  could  thus  be  solved.  E.g.,  in  the  financial  services  area,  following  continued 
pressure by the EU and in line with Korea's FTA commitment, a new framework was enacted 
in June 2015 authorizing EU financial institutions to transfer data abroad and to outsource IT 
facilities, facilitating greatly their operations in Korea. Moreover, concerning organic food, an 
equivalence  arrangement  that  was  finalised  in  autumn  2014  entered  into  force  in  February 
2015  and  has  been  smoothly  implemented  since.  Further,  in  the  automotive  area,  following 
EU  intervention,  since  summer  2015  the  Korean  authorities  accept  "Euro  VI"  approved 

20   Cf. http://trade.ec.europa.eu/doclib/press/index.cfm?id=1449.  

21   So  far,  enforcement  action  has  taken  place  exclusively  through  WTO  channels,  but  FTA  enforcement 

channels may gain importance as more FTAs with specific DS mechanisms enter into force.  

22   For 

the 

latest 

implementation 

report, 

cf. 

http://ec.europa.eu/trade/policy/countries-and-

regions/countries/south-korea/. 

21 

 
 
 
                                                 
vehicles  without  additional  excessive  requests  for  information.  Nevertheless,  market  access 
issues persist in this sector and continued close monitoring continues to be important.  

Also  the  implementation  process  relating  to  the  EU-Colombia  Peru  FTA23  works  well.  
Some concerns remain, e.g., in the area of SPS for Peru and on taxation of spirits in Colombia 
and Peru. On the positive side, Colombia presented in June 2015 a single procedure covering 
all the necessary steps to authorise EU exports for animal products. This simplifies formalities 
imposed  on  EU  exports  and  reduces  response  times,  facilitating  EU  market  access.  Further, 
526 Colombian and 1133 Peruvian companies, out of which  a significant  number of SMEs, 
exported for the first time to the EU since the entry into force of the FTA.  

The  start  of  implementation  of  the  EU-Georgia  and  EU-Republic  of  Moldova  Deep  and 
Comprehensive FTAs (DCFTAs) on 1 September 2014 has enabled close cooperation with 
business organisations and Member States to support trade governance reforms and intensify 
work on addressing trade barriers in those countries. Whereas the business climate in Georgia 
is  largely  favourable,  the  Commission  worked  intensely  on  resolving  several  business 
concerns in the Republic of Moldova (e.g. on energy, insurance, customs formalities, ground-
handling). Implementation of the DCFTA reform agenda is expected to ensure a level-playing 
field for EU and local business in those countries. 

Effective  monitoring  and  implementation  of  FTAs  thus  create  new  market  access 
opportunities and contribute to the removal of existing barriers. 

C. 

THE MARKET ACCESS STRATEGY: TOWARDS AN ENHANCED PARTNERSHIP 

The  Market  Access  Strategy  (MAS)24  complements  the  EU's  multilateral,  plurilateral  and 
bilateral  trade  negotiations  by  ensuring  that  trade  opportunities  created  by  trade  agreements 
(both  FTAs  and  the  WTO  agreements)  are  translated  into  real  market  access  for  European 
exporters.  The  Strategy  is  based  on  a  "Market  Access  Partnership"  (MAP),  consisting  of 
regular coordination between the Commission, Member States and business both in Brussels 
and in third Countries. The MAS has proven to be an effective tool for gathering information 
on  trade  barriers  and  for  prioritizing  and  defining  a  common  barrier  removal  strategy.  That 
strategy  can  range  from  diplomatic  demarches,  discussions  within  specific  committees  or 
structures within the WTO or of FTAs to mediation and formal DS.  

In light of the ever expanding bilateral trade agenda and the number of FTAs that will enter 
into force over the next few years, the MAS will play an ever more important role in pursuing 

23   The  second  Annual  report  on  the  implementation  of  the  EU-Colombia  Peru  Agreement  was  adopted  on 

10.02.2016 (https://ec.europa.eu/transparency/regdoc/rep/1/2016/EN/1-2016-58-EN-F1-1.PDF). 

24   Cf. Commission Communication on "Global Europe – A stronger partnership to deliver market access for 

European exporters" of 18 April 2007, COM(2007) 183 final (Market Access Strategy). 

22 

 
 
 
 
 
 
                                                 
the  EU's  trade  interests  and  rights.  Ensuring  that  EU  FTAs  are  properly  implemented  and 
enforced  will  be  crucial  in  order  to  ensure  that  they  translate  into  actual  market  access  and 
business opportunities for EU exporters abroad. This is, however, not an exclusive task of the 
Commission, but a shared responsibility of the Commission, the Member States, the European 
Parliament and stakeholders. In its 2015 Communication "Trade for All", the Commission has 
therefore proposed an "enhanced partnership" with Member States, the European Parliament 
and stakeholders for the implementation of trade agreements. This will extend and reinforce 
the current "MAP" beyond the removal of obstacles to trade and investment. It will cover the 
implementation  of  FTAs,  including  reinforced  awareness  raising  and  customs  cooperation 
activities, trade facilitation and sustainable development. 

CONCLUSION  

The slight slowdown of world economy and relatively weak global trade activity in 2015 were 
accompanied  by  an  increased  resort  to  potentially  trade  restrictive  measures  during  the 
Reference  Period  July  2014-December  2015  and  by  a  very  limited  roll  back  of  previously-
introduced  measures.  The  stock  of  trade  restrictive  measures  enacted  since  2008  thus 
continues  to  grow.  As  in  previous  years,  emerging  countries  have  resorted  to  restrictive 
measures  to  the  greatest  extent,  but  also  developed  countries,  including  G20  members, 
continue to apply such practices, despite their repeated pledge not to adopt trade-protectionist 
measures and to roll back existing ones.  

Also some of the EU's key economic partners analysed in this Report continue to maintain a 
large  number  of  trade  barriers.  For  the  US  and  Japan,  the  EU  seeks  to  address  these  in  the 
context of the FTA negotiations and some could already be resolved, in particular for Japan. 
With still many significant barriers remaining, some positive developments could further be 
noted  for  the  Mercosur  countries  (for  Brazil  and  in  particular  for  Argentina)  following  EU 
efforts  bilaterally,  multilaterally  and  in  the  context  of  the  FTA  negotiations.  For  India 
progress  remains  difficult  and  market  access  barrier  removal  remains  most  challenging  in 
China and Russia, with only limited successes in the Reporting Period.  

Against  this  background,  effective  further  progress  in  the  multilateral,  plurilateral  and 
bilateral trade agenda continues to be crucial, while it is at the same time essential to increase 
the focus on effective implementation and enforcement of trade agreements. The EU Market 
Access Strategy with its Market Access Partnership between the Commission, Member States 
and stakeholders, remains of central importance in this regard. In light of the ever expanding 
bilateral  trade  agenda,  an  "enhanced  partnership"  with  Member  States,  the  European 
Parliament and stakeholders is proposed with a view to join forces in the implementation of 
trade  agreements,  ensuring  that  they  translate  into  actual  market  access  and  business 
opportunities to the maximum extent.   

23 

 
 
 
At the same time, it is necessary to continue to call upon more anti-protectionist determination 
at global political level, keeping in mind the positive effects of open markets on innovation, 
productivity, economic growth and prosperity. 

24