REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND THE COUNCIL on Trade and Investment Barriers 1 January 2016 - 31 December 2016
Date: 2017-06-23
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, third country, trade restriction

EN 

   EN 

   EUROPEAN COMMISSION  Brussels, 23.6.2017  COM(2017) 338 final   REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND THE COUNCIL on Trade and Investment Barriers  1 January 2016 - 31 December 2016  
 
 
REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT 
AND THE COUNCIL 

on Trade and Investment Barriers 

1 January 2016 - 31 December 2016 

INTRODUCTION  

As  part  of  the  Market  Access  Strategy  ("MAS"),  this  seventh  edition  of  the  Trade  and 
Investment Barriers Report ("TIBR") analyses the trade and investment barriers reported 
by  business  and  Member  States  to  the  Commission  through  the  Market  Access 
Partnership ("MAP")1. 

This  Partnership  between  the  Commission,  Member  States  and  European  business  has 
already proven invaluable to gather information on trade barriers, and to jointly prioritize 
and define a common barrier removal strategy. Building on this experience and mindful 
of  the  rise  in  protectionism,  the  Commission  in  its  ''Trade  for  All''2  communication 
announced an ''enhanced partnership'' to reinforce the existing joint efforts and to extend 
them beyond the removal of obstacles to trade and investment to the implementation of 
Free Trade Agreements ("FTAs")3.  

In  this  context,  this  year's  edition  of  the  TIBR  focusses  on  concrete  barriers  directly 
affecting EU economic operators in third countries. This approach marks a shift from the 
analyses  of  general  protectionist  trends  examined  in  the  previous  edition4,  in  order  to 
focus on the most relevant barriers affecting EU exports to 51 third countries5 as reported 

1   The  Market  Access  Partnership  was  set  up  in  2007  to  deepen  the  cooperation  between  the 
Commission,  Member  States  and  EU  business  both  in  Brussels  and  locally.  It  is  based  on  monthly 
meetings of the Market Access Advisory Committee and sectorial Market Access Working Groups in 
Brussels  and  regular  meetings  of  the  Market  Access  Teams  or  Trade  counsellors'  meetings  in  third 
countries. 

2   http://trade.ec.europa.eu/doclib/docs/2015/october/tradoc_153846.pdf  

3   A new report on FTA implementation is foreseen for adoption towards the end of 2017. 

4   A  more  general  analysis  of  protectionist  trends  is  still  undertaken  by  the  biannual  WTO  report  on 
protectionist measures adopted by G20 countries. The last WTO trade monitoring report at the time of 
drafting  this  report  (https://www.wto.org/english/news_e/news16_e/trdev_09dec16_e.htm)  dated  9 
December 2016.  

5   Algeria,  Angola,  Argentina,  Armenia,  Australia,  Bangladesh,  Belarus,  Bosnia  and  Herzegovina, 
Brazil,  Cameroon,  Canada,  Chile,  China,  Colombia,  Dominican  Republic,  Ecuador,  Egypt,  India, 
Indonesia, Israel, Japan, Kazakhstan, Lebanon, Malaysia, Mexico, Moldova, Morocco, New-Zealand, 
Nigeria,  Norway,  Oman,  Pakistan,  Paraguay,  Peru,  Philippines,  Russian  Federation,  Saudi  Arabia, 

2 

 
 
 
 
                                                 
via  the  MAP  and  recorded  in  the  trade  barriers  section  of  the  Market  Access  Database 
("MADB")6.  This  analysis  of  measures  impacting  EU  businesses  also  allows  drawing 
some  conclusions  that  generally  confirm  the  continued  rise  in  protectionist  trends 
observed in previous TIBRs and protectionism reports.  

The  first  section  of  this  report  presents  a  numerical  analysis,  per  country,  per  type  of 
barrier  and  per  sector,  of  the  total  stock  of  372  active7  trade  and  investment  barriers 
registered in the MADB and of the 36 new barriers recorded in 2016. 

The second part provides a more detailed analysis of the new barriers reported in 2016 (1 
January – 31 December 2016), describing specific trends in various countries and sectors 
and assessing potentially affected trade flows.  

The third section elaborates on the tools used in the MAS to address these barriers and 
provides  an  overview  of  the  20  barriers  that  were  successfully  resolved  in  2016. 
Following  a  general  analysis  on  potentially  affected  trade  flows  and  main  sectors  that 
benefitted, some major success stories are also highlighted. 

I. 

  OVERVIEW OF TRADE AND INVESTMENT BARRIERS  

This chapter provides a factual and numerical analysis of trade barriers in third countries 
and  related trends,  based  on  the  trade  barriers section  of  the  MADB,  which  records  all 
barriers for which actions have been taken in the framework of the MAP.  

It is important to note that the MADB (and this report) do not provide a comprehensive 
overview of all trade hurdles faced by EU economic operators8. Companies may decide 

Singapore,  South  Africa,  South  Korea,  Switzerland,  Taiwan,  Thailand,  Tunisia,  Turkey,  Uganda, 
Ukraine, Uruguay, USA, Venezuela and Vietnam. 

6   The  market  access  database  (http://madb.europa.eu/madb/indexPubli.htm)  gives  information  to 
companies  exporting  from  the  EU  about  import  conditions  in  third  country  markets.  This  includes 
information  on  trade  barriers,  but  also  on  tariffs  and  rules  of  origin,  procedures  and  formalities  for 
importing  into  third  countries,  sanitary  and  phytosanitary  (SPS)  measures,  statistics,  and  on  specific 
export-services 
Helpdesk 
(http://exporthelp.europa.eu/thdapp/index.htm) also provides information on conditions for importing 
from  trade  partners  into  the  EU  (including  applicable  tariffs  and  requirements,  preferential 
arrangements, and quotas and statistics). 

Conversely, 

provided 

Export 

SMEs. 

EU's 

the 

to 

7  

"Active" barriers mean that the barriers are actively followed-up in the Market Access Partnership (as 
opposed to resolved barriers). 

8   Cf. for example, the recent joint report of the International Trade Centre (ITC) and the Commission, 
"Navigating  Non-tariff  Measures:  Insights  From  A  Business  Survey  in  the  European  Union", 
December 
the 
overview  of  potentially  trade  restrictive  measures  described  in  the  context  of  the  previous  TIBR 
(http://trade.ec.europa.eu/doclib/docs/2016/may/tradoc_154568.pdf; 
http://trade.ec.europa.eu/doclib/docs/2016/june/tradoc_154665.pdf) or previous protectionism reports. 

(http://trade.ec.europa.eu/doclib/docs/2016/december/tradoc_155181.pdf), 

2016 

3 

 
 
 
                                                                                                                                                 
not  to  report  certain  barriers  to  the  MAP  because  they  hope  to  resolve  them  or 
circumvent  their  effects,  or  the  barrier  may  not  be  prioritized  in  the  MAP.  Some 
companies  may  moreover  not  be  aware  of  the  possibility  to  tackle  barriers  through  the 
MAP.   

While  the  MADB  and  this  report  do  not  prejudge  the  (il)legality  of  the  recorded 
measures,  these  barriers  have  all  been  identified  as  problematic  for  EU  companies  and 
they  might  be  discriminatory, 
prioritized  for  further  action 
disproportionate or trade-restrictive.    

the  MAP  as 

in 

A. 

OVERALL STOCK OF TRADE AND INVESTMENT BARRIERS 

At the time of the drafting of this report, 372 active trade and investment barriers were 
recorded  in  the  MADB  overall.  This  figure  demonstrates  the  success  of  the  MAP  as  a 
forum to identify trade barriers, but it also shows that a significant number of measures 
continue to restrict the opportunities of EU exporters and investors. The MADB  allows 
distinguishing  recorded  trade  barriers  per  third  country,  per  type  of  measure  and  per 
sector. This report follows this breakdown. 

1. 

Breakdown of all barriers per third country 

Table  1  shows  a  graphic  representation  of  the  geographical  distribution  of  these 
measures.  

Despite  the  fact  that  pledges  of  G20  leaders  to  reject  protectionism  were  once  again 
repeated in 2016 at the G20 Summit held on 4-5 September 2016 in Hangzhou, the ten 
countries with the highest number of trade barriers still in place are all G20 economies. 
The highest stock of barriers has been observed in Russia with 33 measures recorded. 16 
of  these  were  applied  directly  at  the  border,  14  behind  the  border  and  3  were  trade-
distorting subsidies. The countries with the second highest number of active barriers were 
Brazil, China and India, each with a stock of 23 measures currently in place. These were 
mainly behind the border measures (14 for Brazil, and 12 both for China and India) but 
also directly at the border (9  for Brazil,  10 for China and 11 for India). For China, the 
MADB also recorded one subsidy-related measure.  

Other  third  countries  with  10  or  more  trade  and  investment  barriers  registered  include 
Indonesia  (17),  South  Korea  (17),  Argentina  (16),  the  United  States  (16),  Turkey  (15), 
Australia (13), Thailand (11), Vietnam (11), Chile (10) and Mexico (10).  

4 

 
 
 
Table 1: Geographical breakdown of trade and investment barriers in the MADB (* - G20 countries)  

 
 
 
 
   
 
2. Breakdown of all barriers per type of measure 

The MADB also enables differentiating between the types of barriers. This is illustrated 
in Table 2.    

Table 2: Breakdown of trade and investment barriers recorded in the MADB per 
type   

The chart reveals an equal number of barriers (183 each) in the areas of more traditional 
border measures on one hand and behind the border measures on the other hand. Border 
measures are restrictions that directly affect imports and exports, typically through tariff 
increases,  quantitative  restrictions,  sanitary  and  phytosanitary  (SPS)  measures,  import 
licensing  or  through  outright  trade  bans.  Russia (16),  India (11),  Argentina  (11),  China 
(10) and Turkey (10) are the countries that have most often resorted to these barriers.  

The  MADB  recorded  an  equally  high  number  of  behind  the  border  measures.  These 
barriers  include  restrictions  related  to  services,  investments,  government  procurement, 
intellectual  property  rights  or  unjustified  technical  barriers  to  trade.  Russia,  Brazil  (14 
each), China (12) and India (12) have the highest number of such measures recorded.  

The  third  main  category  of  barriers  registered  is  trade-distorting  subsidies.  Although 
subsidies  are  rather  addressed  via  anti-subsidy  investigations,  Member  States  and 
businesses chose to report some subsidy schemes (six) in the framework of the MAP as 
well  -  underlining  the  increasing  challenges  posed  by  this  unfair  practice.  Russia  is 
responsible  for  half  of  the  particularly  trade-distortive  registered  subsidies  (three), 
followed by China, South Korea and the United States (one each). 

 
 
 
 
   
 
 
 
B. 

TRADE AND INVESTMENT BARRIERS REPORTED IN 2016 

Considering its annual scope, the TIBR presents a good opportunity to take stock of the 
new  barriers  as  well  as  the  barrier  removal  activities  of  the  MAP  on  an  annual  basis. 
Based  on  the  data  recorded  in  the  MADB,  36  new  barriers  in  21  third  countries9  were 
registered  in  2016.  The  number  of  new  barriers  in  2016  was  therefore  fairly  consistent 
with the 39 new measures in 2015. 

1. 

Breakdown of barriers reported in 2016 per third country 

The geographical distribution of these new barriers is visualised in Table 3.  

Table 3: Geographical breakdown of trade and investment barriers reported in 
2016 (* - G20 countries)  

The highest occurrence of new barriers in 2016 was reported in the trade and investment 
relations  with  Russia  (six)  and  India  (five),  which  confirms  the  protectionist  trends 
already  identified  in  last  year's  edition  of  the  TIBR.  Switzerland  also  resorted  to  three 
new barriers, while two new barriers were reported in Algeria, China, Egypt and Turkey, 
respectively.  The  remaining  14  new  barriers  were  recorded  for  other  individual  third 
countries.   

2. 

Breakdown of barriers reported in 2016 per type of measure 

Table 4 provides an overview of the three main types of measures recorded in 2016.   

9 

Algeria,  Armenia,  Brazil,  Chile,  China,  Ecuador,  Egypt,  India,  Kazakhstan,  Malaysia,  Mexico, 
Moldova, New Zealand, Oman, Russia, South Africa, South Korea, Switzerland, Turkey, Ukraine and 
Uruguay.   

7 

 
  
                                                 
Table 4: Breakdown of trade and investment barriers reported in 2016 per type  

The  majority  of  the  barriers  registered  in  2016  are  measures  behind  the  borders  (20), 
indicating  an  increased  reliance  on  internal  measures  affecting  EU  exports  or 
investments, which are often more difficult to perceive and address. Most of the recorded 
restrictions were  adopted  in  the  area  of  trade  in  goods,  including  unjustified  regulatory 
barriers,  internal  tax  measures  and  intellectual  property  rights  (17).  In  addition,  a  few 
new barriers were recorded with regard to trade in services (two) and investments (one).    

While  the  number  of  new  behind  the  border  measures  in  2016  overtook  the  traditional 
trade barriers faced by EU exporters at customs, the number of new border measures also 
remained significant (13). The majority of these restrictions hindered imports into third 
countries  by  way  of  increased  tariffs,  quotas,  bans  or  burdensome  licencing  schemes 
(eight).  In  addition,  a  substantial  amount  of  new  SPS  restrictions  also  emerged  (four). 
The number of new recorded export restrictions by the EU's trading partners was more 
limited in 2016 (one).  

The list of barriers reported in 2016 also contained new subsidy measures (three), either 
in  the  form  of  general  subsidy  schemes  (two)  or  specifically  linked  to  export 
performance (one).    

3. 

Breakdown of barriers reported in 2016 per sector 

Table  5  demonstrates  that  the  number  of  new  measures  registered  in  2016  affected  13 
different sectors of economic activity.  

8 

 
 
Table 5: Sectorial breakdown of trade and investment barriers reported in 2016  

The  highest  number  of  new  reported  barriers  was  recorded  for  the  wines  and  spirits 
sector (seven), followed by the agriculture and fisheries sector (six). For the automotive, 
pharmaceutical, services, medical devices, toys sectors and the iron, steel and non-ferrous 
metals sector two new barriers each were recorded. Individual barriers were also reported 
in the construction, furniture, ICT, shipbuilding and textiles sectors (one each). Finally, 
six horizontal barriers, affecting several sectors, were also recorded.  

II.    MAIN TRADE AND INVESTMENT BARRIERS REPORTED IN 2016  

This  chapter  provides  a  deeper  analysis  of  new  barriers  in  the  seven  trade  partners  for 
which  multiple  new  barriers  were  recorded  in  2016:  Russia,  India,  Switzerland,  China, 
Algeria, Egypt and Turkey. It also estimates the potentially affected trade flows.  

A. 

QUALITATIVE ANALYSIS OF THE NEW BARRIERS  

1. 

Russia 

In  the  midst  of  a  major  domestic  economic  crisis,  Russia  continued  to  resort  to  trade 
barriers  in  2016  to  protect  its  local  industry,  confirming  trends  observed  in  previous 
reports.  Russia  recorded  the  highest  number  of  new  barriers  in  2016  (six),  raising  the 
stock of existing barriers for this country to 33, also ranking it highest in total number of 
trade barriers recorded.  

Trade-distorting  subsidies  were  among  the  main  barriers  reported  for  Russia,  with  two 
new such measures registered in 2016. One of the new subsidy measures was targeted at 
promoting  the  output  of  Russian  industrial  plants  in  the  automotive  and  agricultural 
machinery sectors following the significant slowdown of local demand. In this context, 

9 

 
 
 
the Government issued two decrees providing export subsidies from the federal budget to 
companies in these sectors operating in Russia. 

The  government  also  introduced  specific  restrictions  for  the  participation  of  foreign 
companies  in  the  framework  of  investment  projects  undertaken  by  state-owned 
enterprises (SOEs) or by private companies that are subsidised by the state. In the context 
of  this  measure,  Russia  also  introduced  a  15%  price  preference  for  Russian  companies 
participating in tenders by SOEs. 

Further, Russia adopted two new certification-related barriers concerning the cement and 
pharmaceutical sectors, aimed at protecting local manufacturing and encouraging further 
production  localisation.  For  cement,  it  introduced  mandatory  certification  requirements 
while  not  issuing  certificates  to  importing  companies  (except  for  white  cement),  which 
has  stopped  EU  cement  exports  to  Russia  since  March  2016.  Russia  has  also  adopted 
''Good  Manufacturing  Practice''  certificate  requirements  for  the  marketing  and  the 
renewal  of  marketing  authorizations  for  pharmaceuticals,  without  ensuring  sufficient 
capacities  to  carry  out  these  procedures  in  Russia,  leading  to  undue  delays  for  the  EU 
pharmaceutical industry. 

Russia (together with Kazakhstan) has also notified a draft amendment to the toy safety 
regulation  of  the  Eurasian  Economic  Union,  planning  to  introduce  requirements  on 
psychological  and  educational  safety,  which  is  unprecedented  in  international  practice 
and appears to bear no relation to actual toy safety objectives.  

Finally, Russia rolled out a major border measure in the form of a transit ban on carriers 
via  road  and  railway  from  the  territory  of  Ukraine  to  the  territory  of  Kazakhstan  and 
Kyrgyzstan via Russia, regardless of their origin (i.e. including the EU). The restriction 
has led to a considerable increase of transport costs for certain EU exporters.  

It is important to note that Russia also extended its longstanding restrictions for foreign 
companies to participate in government procurement to two additional sectors (foodstuff 
and radio-electronic products). For the purposes of this report, these issues have not been 
considered  to  be  new  barriers  but  rather  as  new  aspects  of  longstanding  restrictions  on 
government  procurement,  which  had  already  covered  a  long  list  of  goods  (textiles, 
medical  devices,  imported  vehicles,  light  industry  imports,  machinery  and  equipment, 
pharmaceuticals, software). 

The Commission has raised all new and existing barriers with Russia at all available fora, 
including  at  the  2016  WTO  Trade  Policy  Review  of  Russia,  at  the  relevant  WTO 
Committees as well as via bilateral meetings and letters. Where Russia's policies were in 
breach of its WTO commitments, the EU also resorted to the WTO Dispute Settlement 
system. In 2016, WTO Panels have ruled in favour of the EU with regard to EU exports 
of  pig  meat  products  (confirmed  by  the  Appellate  Body  on  23  February  2017)  and  to 
Russia's  excessive  tariffs  for  certain  agricultural  and  manufacturing  products  (the 

10 

 
reasonable  period  of  time  for  Russia's  compliance  with  the  WTO  ruling  had  not  yet 
expired at the moment of drafting).   

2.  

India 

India resorted to five new barriers in 2016, bringing the overall barrier count to 23 and 
confirming  protectionist  tendencies  identified  in  last  year's  TIBR.  The  majority  of  the 
new  restrictions  put  in  place  were  measures  behind  the  border  (four)  targeting  a  wide 
range of sectors such as steel, medical devices, textiles as well as wines and spirits. 

With  regard  to  the  steel  sector,  India  introduced  minimum  import  pricing,  initially 
imposed in February 2016 on 173 steel products. The measure was last extended for two 
months in December 2016 for 19 steel products.10 In addition, the list of products falling 
under  the  scope  of  the  system  of  mandatory  certification  operated  by  the  Bureau  of 
Indian Standards (BIS) was extended in June 2016 to include additional 3 stainless steel 
products, on top of 35 steel products defined in the Quality Control order of 2012. 

Medical devices in India are still regulated as "drugs" under the terms of India's Drug and 
Cosmetics  Act  and  Rules,  unnecessarily  entailing  stricter  requirements.  In  this  context, 
exports  of  "refurbished"  medical  devices  (i.e.  products  that  have  been  completely 
remanufactured  and  that,  as  a  consequence,  cannot  be  considered  as  second-hand 
equipment) are prohibited, limiting the export opportunities of EU producers.  

On  textiles,  additional  duties  on  the  maximum  retail  price  of  certain  articles  have  been 
doubled  (from  30%  to  60%).  This  increase,  coupled  with  the  related  landing  charges, 
imposes a heavy burden on EU apparel.  

Furthermore, business opportunities of the wines and spirits sector in India are affected 
by  unjustifiable  regulatory  divergences  from  international  standards  regarding  labelling 
requirements and by internal taxation measures.  

While  partly  positive  developments  were 
for  exports  of 
telecommunication  equipment,  other  burdensome  requirements  still  remain,  such  as  the 
obligation to re-export used electrical and electronic assemblies in case of repair, testing, 
research and development or project work. This leads to delays of imports that negatively 
affect both the repair of telecom networks and potential research cooperation projects.  

in  2016 

reported 

While  the  negotiations  for  a  broad-based  FTA  with  India  were  brought  to  a  de  facto 
standstill  in  the  summer  of  2013  due  to  a  mismatch  of  the  level  of  ambitions  and 
expectations, the Commission regularly raises these issues with the Indian authorities in 
all available multilateral and bilateral fora, such as the WTO Technical Barriers to Trade 
(TBT) Committee or in the EU-India Working Groups and Sub-Commission on Trade. 

10  On 6 February 2017, India's Ministry for Steel announced that the minimum import pricing would not 
be further extended. As a result, this barrier no longer exists and will, if confirmed, be considered as a 
resolved barrier for the 2017 TIBR.   

11 

 
                                                 
3. 

Switzerland 

Three  new  barriers  were  raised  in  the  MAP  for  Switzerland  in  2016,  raising  the  total 
stock  of  registered  barriers  to  seven.  Two  of  the  new  restrictions  concern  the  services 
sectors:  so  far,  EU  businesses  providing  services  had  to  register  for  Value-Added  Tax 
(VAT) in Switzerland if their annual turnover in Switzerland reached a certain threshold. 
New  legislation  proposed  in  2016  would  change  the  reference  from  turnover  in 
Switzerland  to  worldwide  turnover.  As  a  result,  most  EU  businesses  providing  cross-
border  services  in  Switzerland  would  be  required  to  register  for  and  pay  VAT.  In 
addition,  an  EU  based  business  would  need  a  fiscal  representative  in  Switzerland, 
creating  further  costs.  The  rules  for  low  value  consignments,  which  are  exempt  from 
VAT, will also be modified, rendering low value imports (notably through e-commerce) 
less attractive. 

Moreover,  a  new  registration  requirement  for  artisan  workers  introduced  in  Canton 
Ticino  requires  a  number  of  craft  professions  (e.g.  carpenters,  painters,  gardeners)  to 
register  on  the  basis  of  professional  (e.g.  diploma  and  minimum  years  of  practical 
experience) and personal requirements (e.g. no criminal record). The fulfilment of these 
requirements  must  be  proven  by  the  applicant,  in  the  case  of  foreigners  by  way  of 
certified documents by the competent authorities. This negatively affects the potential for 
European professionals to provide such services.  

Switzerland also introduced a border measure by reclassifying tariffs for seasoned meat, 
significantly  increasing  these  tariffs.  Even  though  a  decision  has  been  taken  in  the 
meantime to reduce the tariff for seasoned meat "imported for the purpose of producing 
dry meat", importers will have to prove upon request that the meat has been imported for 
that  purpose.  As  a  result,  part  of  EU  exports  will  continue  to  be  subject  to  the  higher 
duties.  

The EU has raised these barriers with Switzerland both locally at experts' level together 
with  the  Market  Access  Team  as  well  as  more  formally  in  the  context  of  the  relevant 
Joint Committee meetings on customs, free movement of persons and agriculture. 

4. 

China 

As  highlighted  in  previous  TIBRs  and  in  the  MADB,  China  remains  among  the  most 
trade-restrictive partners of the EU. EU companies face numerous longstanding barriers 
in China, including joint venture requirements, market entry restrictions, obligations for 
technology  transfer  and  unjustifiable  technical  regulations.  China's  production  also 
remains the key factor in the existing and growing global overcapacity in the steel sector, 
as well as a number of others, including not only the traditional energy-intensive sectors 
but increasingly high-tech industries as well. Chinese overcapacity in some cases exceeds 
the size of total EU production or the total EU market. This poses a risk of dumping at 
unfair prices and resulting major market disruptions in the EU.   

12 

 
Specifically  for  2016,  two  new  barriers  (both  regulatory  measures  behind  the  border) 
were reported to the MAP, in the furniture and medical devices sectors, respectively. 

With regard to furniture, limits were introduced for the level of certain volatile organic 
compounds that are not in line with international standards and pose a considerable risk 
for  EU  companies  of  not  being  able  to  sell  their  products  in  China.  The  Commission 
raised  these  measures  in  its  response  to  the  relevant  TBT  notifications  and  on  several 
other  occasions  in  the  WTO  TBT  Committee  and  at  bilateral  EU-China  committee 
meetings. 

For medical devices China updated its regulatory requirements in 2016 by publishing a 
second catalogue including 350 devices exempt from clinical trials. However, in order to 
be  registered  in  China,  the  most  innovative  devices  continue  to  be  subject  to  a  clinical 
trial  to  be  conducted  in  China.  The  Commission  regularly  requests  China  to  align  its 
medical  devices  regulatory  system  with  international  standards  and  practices,  including 
at  the  EU-China  Medical  Device  Expert  Roundtable,  the  EU-China  Annual  Regulatory 
Dialogue  and  Market  Access  Meeting  and  at  the  EU-China  Food  and  Drug 
Administration High Level Meeting. 

While addressing the new barriers recorded in 2016, the EU is of course also undertaking 
all  necessary  actions  that  can  contribute  to  the  removal  of  the  23  existing  barriers 
recorded  in  the  MADB.  However,  the  prospects  for  the  emergence  of  new  barriers 
remain  significant.  For  example,  China  is  introducing  horizontal  security-related  rules 
with  significant  economic  impact  on  several  sectors.  China  has  also  recently  signalled 
upcoming  legislation  in  important  areas  for  EU  economic  operators,  such  as  for  New 
Energy  Vehicles  (NEV).  In  addition,  China  has  indicated  its  intention  to  introduce 
unjustifiable  food  certification  requirements  affecting  a  large  number  of  products, 
including drinks (alcoholic and non-alcoholic), confectionary, chocolates, biscuits, jams, 
compotes  and  other  fruit  preparations,  milled  products  and  grains,  breakfast  cereals  as 
well  as  dry  products  such  as  noodles  and  pasta.  These  measures,  if  confirmed,  will  be 
addressed in the next edition of the TIBR.   

5. 

Algeria 

Algeria has not featured prominently in the reports of previous years but in the context of 
the  worsening  current  account  and  trade  balance  and  in  its  effort  to  increase  local 
industrial  production,  the  country  put  in  place  two  major  barriers  in  2016  with  wide-
ranging effects for EU exporters in several sectors.  

Following  up  on  a  2015  legislation  enabling  potentially  sweeping  quantitative 
restrictions, an import licence scheme for four categories of products (vehicles, cement, 
rebar  and  steel  wire  rods)  was  introduced  in  2016.  Consequently,  EU  exporters  were 
significantly  affected  in  2016.  For  example,  only  approximately  57 000  licenses  were 
issued in 2016 for EU automobile exports, a significant drop compared to EU exports to 

13 

 
this market in previous years (e.g. around 245 000 vehicles in 2012). Rebar steel, cement 
and steel wire rod products were also hard-hit by the measure. 

Further, Algeria continued to resort to the industrial localization policies launched in the 
2015  Finance  Law,  adopting  a  decree  to  create  a  horizontal  consumer's  credit  for  the 
purchase of products manufactured or assembled in Algeria as of 2016.  

The  EU  has  raised  these  issues  with  Algeria  under  the  framework  of  the  EU-Algeria 
Association Agreement but Algeria so far remains reluctant to amend its trade-restricting 
policies. This also contributes to the lack of progress in its WTO accession talks. 

6. 

Egypt 

While Egypt has not been a focus of previous reports, an increasing number of barriers 
affecting  trade  are  being  put  in  place.  Most  recently,  in  a  cross-cutting  measure 
encompassing  25  categories  of  goods,  ranging  from  agricultural  products,  bikes, 
cosmetics  and  garments  to  ceramic  tiles  and  furniture,  the  Egyptian  Government 
introduced  a  mandatory  registration  of  companies  willing  to  export  their  products  to 
Egypt.  Among  the  documents  required  for  the  registration,  the  Decree  includes  a 
certificate  that  the  producer  and/or  the  trademark  owner  maintain  a  quality  control 
system.  All  the  documents  to  be  provided  have  to  be  certified  by  a  Chamber  of 
Commerce, approved by an Egyptian embassy and translated by an accredited translation 
centre.  The  measure  raises  concerns  as  to  its  compatibility  with  the  WTO  and  the  EU-
Egypt  Association  Agreement  frameworks  as  well  as  creates  a  number  of  practical 
difficulties  for  companies  (e.g.  lack  of  transparency  of  the  registration  process,  lack  of 
appeal procedure, extensive delays).  

The  EU  has  raised  its  concerns  in  all  available  fora,  including  at  the  WTO  TBT 
Committee,  in  the  bilateral  framework  provided  by  the  EU-Egypt  Association 
Agreement, via the EU Delegation in Cairo as well as in a letter on a high political level. 

In  addition,  Egypt  is  also  preparing  a  draft  automotive  tax  incentive  scheme  with  the 
objective of forced localisation. The scheme would provide tax deductions for companies 
reaching  a  required  local  component  percentage,  a  local  production  quantity  and/or 
exportation threshold from Egypt. 

7. 

Turkey  

Over the past years Turkey has maintained several trade barriers which are contrary to its 
obligations  under  the  EU-Turkey  Customs  Union,  such  as  burdensome  customs 
procedures or additional duties. In 2016, Turkey introduced two further trade-restrictive 
measures, raising the overall number of reported trade barriers to 15. 

One  of  these  new  barriers  consists  in  Turkey's  application  of  excessive  certification 
requirements  for  a  large  number  of  products  (including  machinery,  electric  motors  and 
pumps)  despite  that  there  have  not  been  any  incidents  of  malfunctions  or  defects  with 

14 

 
these  products.  Consequently,  a  large  number  of  EU  companies  have  experienced 
problems with customs proceedings when exporting to Turkey. 

Another significant new trade barrier is that Turkish authorities are implementing forced 
localisation  measures  in  the  pharmaceutical  sector  to  boost  domestic  production  in 
Turkey. The Turkish Ministry of Health has requested foreign manufacturers of several 
pharmaceutical  products  to  produce  them  locally.  In  the  absence  of  a  'sufficient' 
localisation commitment by foreign manufacturers, the products will be deleted from the 
list  of  items  that  can  be  reimbursed  under  the  Turkish  health  insurance  system.  This 
implies  that  those  products  will  be  effectively  excluded  from  the  Turkish  market.  The 
measure  is  discriminatory  against  imports  and  will  have  serious  implications  for  the 
ability  of the  EU  pharmaceutical  industry  to  export to  and operate  in  Turkey,  risking  a 
significant loss of market share. 

The  EU's  concerns  about  both  new  measures  in  various  bilateral  meetings  have  been 
raised with the Turkish Ministry of Economy, Ministry of Health and the Medicines and 
Medical Devices Agency. The Commission will continue to address these and other trade 
irritants, with the objective to deter further escalation of protectionist measures, increase 
market  access  for  European  companies  as  well  as  to  improve  the  overall  trading 
environment.  Turkey's  implementation  of  its  existing  obligations  under  the  EU-Turkey 
Customs  Union  will  also  be  taken  into  consideration  in  the  context  of  the  foreseen 
negotiations to modernise the Customs Union and to further extend its coverage. 

TRADE  FLOWS  POTENTIALLY  AFFECTED  BY  THE  BARRIERS 

B. 
RECORDED IN 2016 

Estimating the economic impact of specific market access barriers remains a challenging 
exercise, which requires close cooperation between the business community, the Member 
States and the Commission. One of the factors in prioritizing trade barriers in the MAP is 
the expected impact of any new measure reported. 

While the Commission intends to focus more on collecting such information through the 
MAP  in  the  future,  available  economic  data  for  the  registered  barriers,  although 
improving,  remains  partial.  Therefore,  this  section  analyses  the  trade  flows  potentially 
affected  by  the  new  barriers  to  trade  in  goods.  This  is  based  on  bilateral  EU  export 
figures  (and  import  figures  in  the  case  of  export  restrictions  of  third  countries)  for  the 
relevant Harmonised System (HS) tariff codes. As the barriers that emerged in 2016 may 
already  have  limited  EU  exports  that  same  year,  the  analysis  is  based  on  the  average 
trade flows of the three consecutive previous years 2013-2015. While the exact effect of 
the  trade  barriers  on  these  trade  flows  could  not  be  measured11,  this  at  least  gives  an 
indication  of  the  importance  of  the  underlying  exports  potentially  affected  by  the  trade 
barriers. 

11  Not  all  trade  barriers  constitute  total  trade  bans,  and  some  have  more  trade-restrictive  effects  than 

others. 

15 

 
                                                 
This method was applied to 32 of the 36 new barriers recorded in 2016, excluding two 
services and one investment measure (for which no trade flow data are available) and one 
important  horizontal  measure  for  which  no  specifically  affected  sectors  could  be 
identified.  

The  outcome  of  this  estimate  shows  that  the  new  trade  barriers  recorded  in  2016 
potentially affected EU exports worth up to EUR 27.17 billion12. This exceeds total EU 
exports  to  trading  partners  such  as  South  Africa13,  Algeria14  or  Ukraine15  and 
corresponds to 1.6% of all EU exports globally in the same years.  

It is estimated that - taken together - the measures introduced by Russia could have the 
highest impact on EU exports, potentially affecting trade flows up to EUR 12.26 billion. 
This is followed by the potential impact of the barriers put in place by Algeria (EUR 3.75 
billion), China (EUR 3.7 billion), Turkey (EUR 2.69 billion), India (EUR 2.2 billion) and 
Egypt (EUR 1.72 billion). 

This  analysis  also  showed  that  the  new  measures  introduced  by  Russia  particularly 
targeted  sectors  in  which  EU  exports  to  Russia  were  traditionally  strong.  For  example, 
before the introduction of the unjustified certificate requirements on pharmaceuticals, EU 
medicines exports to Russia were worth EUR 6.1 billion per year and the subsidies for 
automobiles  and  agricultural  machinery  may  affect  trade  flows  in  these  sectors 
accounting for EUR 5.85 billion in EU exports to Russia per year. 

Algeria's decision to introduce new quantitative restrictions and import licensing scheme 
on motor vehicles, cement, steel and steel wire rods could also have a significant impact 
on EU exporters, with previous exports for these sectors worth EUR 3.75 billion.   

Other barriers with potential impact on notably high trade flows include the clinical trial 
obligations required by China for European medical devices, which could pose a risk for 
EUR 2.95 billion of EU exports; the burdensome customs procedures applied by Turkey 
to several products including machinery, electric motors and pumps, which could have an 
adverse  impact  on  EU  exports  worth  EUR  2.6  billion; and the  Indian minimum  import 
price barrier on steel, which could negatively affect EU exports worth EUR 1.36 billion. 
Moreover, the  factory  registration  requirements  in  Egypt,  which  cover  25  categories  of 
goods ranging from agricultural products, bikes, cosmetics and garments to ceramic tiles 
and furniture, could affect trade flows worth EUR 1.03 billion in EU exports.     

12  Average EU exports in 2013-2015 served as the basis for the analysis. 

13  EU total exports to South Africa in 2013-2015 averaged EUR 24.41 billion / year. 

14  EU total exports to Algeria in 2013-2015 averaged EUR 22.67 billion / year. 

15  EU total exports to Ukraine in 2013-2015 averaged EUR 18.31 billion / year. 

16 

 
                                                 
The significant level of trade possibly affected by the imposition of new market access 
barriers  reconfirms  the  importance  of  the  EU's  Market  Access  Strategy  and  the 
''enhanced partnership'' to monitor and address trade-restrictive measures globally, and to 
prioritize and address them with the most appropriate tools. 

III.    MAIN TRADE AND INVESTMENT BARRIERS RESOLVED IN 2016  

This  chapter  elaborates  on  the  strategy  the  Commission  followed  to  address  trade  and 
investment  barriers  in  2016  and  the  results  obtained  in  terms  of  barriers  resolved.  The 
section then looks into some of the key success stories of 2016 in more details. Finally, it 
estimates the value of trade affected by these measures before their resolution.  

A. 

EU STRATEGY TO ADDRESS TRADE AND INVESTMENT BARRIERS 

The  previous  edition  of  the  TIBR  already  elaborated  on  the  main  avenues  used  by  the 
MAP to address the increasing number of barriers in third countries16. During the course 
of 2016, the MAP continued to rely on a similarly wide range of tools to resolve market 
access cases.  

Under the WTO framework, the EU remains a strong supporter of the multilateral trade 
agenda  and  dispute  settlement  mechanism.  The  EU  also  maintained  its  active  and 
constructive role in the WTO Committees (e.g. TBT17, SPS18, SCM19, TRIMS20, Import 
Licensing  Procedures,  Balance  of  Payments  Restrictions),  which  provided  useful 
opportunities in 2016 to express EU concerns about many of the measures described in 
previous chapters.  

Where consultation mechanisms could not effectively solve barriers adversely affecting 
EU interests, the EU also resorted to the WTO Dispute Settlement system. In 2016, the 
EU  launched  two  new  cases,  one  related  to  China's  duties  and  other  restrictions  on  the 
export of raw materials (DS 509) and another relating to discriminatory treatment of EU 
exports of spirits to Colombia (DS 502). Also in 2016, two WTO Panels ruled in favour 
of the EU (in DS 475 regarding Russia's policies on the imports of pig products and in 
DS  485  on  the  Russian  tariff  treatment  of  certain  agricultural  and  manufacturing 
products).  

16   TIBR 2016, pp. 17-23. http://trade.ec.europa.eu/doclib/docs/2016/june/tradoc_154665.pdf  

17   WTO Committee on Technical Barriers to Trade 

18   WTO Committee on Sanitary and Phytosanitary Measures 

19   WTO Committee on Subsidies and Countervailing Measures 

20   WTO Committee on Trade-Related Investment Measures 

17 

 
 
                                                 
Further,  the  EU  continued  to  pursue  an  ambitious  trade  negotiating  agenda,  another 
instrument to open markets and to resolve trade barriers. During the course of 2016, the 
Comprehensive  Economic  and  Trade  Agreement  with  Canada  (CETA)  and  Ecuador's 
accession  to  the  FTA  with  Colombia  and  Peru  were  signed,  the  FTA  talks  with  Japan 
significantly advanced, the MERCOSUR FTA discussions resumed, the modernisation of 
the Mexico FTA started and new negotiations were launched with several countries such 
as  Indonesia,  the  Philippines  and  Tunisia.  Many  market  access  barriers  are  addressed 
directly during negotiations. For example, as a result of the CETA signed with Canada in 
2016, tariff elimination will be complemented by the removal of many significant behind 
the border barriers in various sectors such as wines and spirits. 

In  the  context  of  the  enhanced  MAP  and  mindful  of  the  increased  protectionism,  the 
Commission also decided to reinforce its partnership with Member States and business in 
order  to  further  improve  coordination  efforts  to  eliminate  barriers  with  third  countries. 
Importantly, the Commission has also reinforced discussions with the MAP stakeholders 
on the trade barriers in place in countries for which FTA negotiations are contemplated 
or have started in order to determine the best strategy to address those barriers.  

The  implementation  and enforcement  of trade agreements also remains a key aspect of 
EU trade policy. Implementation structures established by FTAs significantly contribute 
to eliminating specific trade barriers. In 2016, this was for example the case for the EU-
South  Korea  FTA,  and  the  EU-Ukraine  Deep  and  Comprehensive  Free  Trade  Area 
(DCFTA), the latter of which commenced provisional application on 1 January 2016 (cf. 
section  III.C.  of  this  report).  The  Commission  is  also  closely  monitoring  that 
commitments  made  under  CETA  are  transposed  into  Canadian  law  and  effectively 
implemented. CETA provides furthermore the necessary framework to discuss obstacles 
that may arise in areas such as SPS, TBT or investments. In the context of the ''enhanced 
partnership''  announced  in  the  ''Trade  for  All''  strategy  adopted  in  October  2015,  the 
Commission will publish a targeted report on FTA implementation later this year. 

B. 

1. 

OVERVIEW OF THE BARRIERS RESOLVED IN 2016 

Breakdown of barriers resolved in 2016 per third country 

Thanks  to  the  combined  efforts  of  all  MAP  stakeholders,  20  of  the  registered  trade 
barriers applicable in  12 different third  countries  could fully or partially  be resolved in 
2016.  These  results  obtained  last  year  are  broadly  comparable  with  the  23  measures 
tackled in 2015. 

Table  6  illustrates  the  third  countries  where  barriers  were  most  successfully  tackled. 
South Korea was first in line with five trade barriers resolved in 2016, followed by China 
(three), Israel and Ukraine (two each). Also in Argentina, Botswana, Brazil, Egypt, India, 
Japan, Taiwan and Turkey, one of the registered barriers could in each case be resolved.  

18 

 
 
Table  6:  Geographical  breakdown  of  trade  and  investment  barriers  resolved  in 
2016 (* - G20 countries) 

It  should,  however,  be  repeated  that  as  the  MADB  does  not  provide  a  comprehensive 
overview of all trade barriers encountered by EU exporters, it does not give a complete 
picture of all barriers resolved in 2016 either. In particular where FTA negotiations were 
ongoing, barriers and their removal were sometimes not registered. This will be followed 
up more closely in the MAP in the future in the context of the "enhanced partnership".  

2. 

Breakdown of barriers resolved in 2016 per type of measure 

Considering the increasing resort in 2016 to behind the border barriers (20) as opposed to 
border measures (13), it is useful to analyse how effective the EU was in tackling these 
different types of measures last year. 

Table 7 shows that the MAS has equally contributed to the resolution of border (10) and 
behind  the  border  (10)  measures,  demonstrating  that  its  toolbox  also  remains  effective 
when tackling measures that are often more difficult to perceive.    

With  regard  to  the  10  border  measures  successfully  addressed,  most  related  to  SPS 
matters  (seven),  while  the  other  resolved  barriers  constituted  import  bans  or  customs 
issues (three). 

For the 10 behind the border measures, most positive outcomes were achieved in the area 
of regulatory or taxation measures for trade in goods (nine), while one services issue was 
also successfully resolved. 

3. 

Breakdown of barriers resolved in 2016 per sector 

Table  7  provides  a  snapshot  of  the  main  sectors  of  economic  activity  in  which  trade 
barriers  were  resolved  in  2016:  Agriculture  and  fisheries  was  the  top  sector  with  eight 
barriers  (fully  or  partially)  resolved,  in  particular  relating  to  SPS  matters  (five).  The 
wines and spirits industry also saw a considerable number of its barriers resolved (three), 
followed  by  the  automotive  and  cosmetics  sectors  (two  each).  Additionally,  individual 
barriers  were  resolved  in  the  electronics,  pharmaceutical  and  ICT  sectors.  Finally,  two 
horizontal  barriers  were  also  solved  -  both  in  South  Korea:  one  with  respect  to  origin 

19 

 
 
verification and another (solved temporarily) regarding tariff treatment of (re-imported) 
repaired goods (cf. also section III.C.1.).   

Table 7: Sectorial breakdown of trade and investment barriers resolved in 2016 as 
recorded in MADB 

C. 

QUALITATIVE ANALYSIS OF BARRIERS RESOLVED IN 2016 

This section provides a deeper analysis of the barriers resolved in the four trade partners 
for  which  the  highest  number  of  resolved  barriers  was  recorded  in  2016:  South  Korea, 
China, Israel and Ukraine.  

1. 

South Korea  

A particularly positive trend can be observed in South Korea, where only one new barrier 
was  registered  in  2016  while  five  barriers  were  eliminated.  This  underscores  that  the 
FTA implementation structure provides an effective vehicle to address trade barriers (cf. 
also section III.A).   

While trade flows significantly improved in the  automotive sector since the application 
of  the  FTA,  certain  market  access  issues  have  persisted  in  this  sector  and  the 
Commission continued to raise these concerns in the FTA Automotive Working Group. 
In  this  framework,  South  Korea  in  2016  agreed  to  amend  its  unique  seat  size  and 
clearance  requirements,  as  well  as  to  harmonise  certain  regulations  to  international 
standards  (e.g.  48  V  issue  under  UNECE  Regulation  100).  The  Commission  will 
continue  to  raise  the  remaining  barriers  in  the  relevant  FTA  implementation  bodies,  as 
well as in possible amendments to the existing deal.   

A barrier was also resolved for the cosmetics sector in 2016: after intervention of the EU 
with the South Korean counterparts, a discriminatory measure, obliging downtown duty-
free shop operators in South Korea to reserve a minimum floor area for selling domestic 
products, was amended into a less discriminatory obligation to reserve a minimum floor 
area for selling the products of small and mid-sized enterprises. 

20 

 
 
In  the  field  of  trade  in  agricultural  products,  the  trade-distortive  aspects  of  a  draft 
regulation containing unjustified technical requirements for raw milk cheese that would 
have negatively impacted EU business was softened following EU interventions.  

More horizontally, South Korea has also amended its customs procedures with regard to 
the verification of origin. Until 2016, the Korea Customs Service continued to carry out 
its  origin  verification  for  EU  goods  in  a  manner  equivalent  to  the  direct  origin 
verification  method,  i.e.  by  directly  approaching  importers.  EU  companies  in  various 
sectors  complained  about  this  approach,  which  was  contrary  to  the  indirect  origin 
verification foreseen in the FTA. Following EU interventions, South Korea has accepted 
the  indirect  origin  verification  in  line  with  the  FTA,  thus  significantly  improving  the 
situation of EU exporters.  

An  additional  longstanding  horizontal  issue  concerns  South  Korea's  tariff  treatment  of 
(re-imported)  repaired  goods.  The  EU-South  Korea  FTA  has  no  provision  exempting 
repaired  goods  from  customs  duties  on  re-entry  to  South  Korea  after  repair  in  the  EU. 
Following  the  Commission's  frequent  interventions,  South  Korea  extended  the  current 
duty  exemption  in  December  2016  until  the  end  of  2018.  Further  to  this  temporary 
solution, the EU will also continue to seek a long-term resolution to this issue, including 
in the context of potential FTA amendments.   

2. 

China  

China  remains  among  the  countries  that  resort  most  to  market  access  barriers  both  in 
terms of the overall stock of registered measures (23) and new ones that emerged in 2016 
(two). However, 2016 also saw positive developments for three recorded trade barriers, 
showing  that  the  EU  barrier  removal  strategy  can  also  work  effectively  vis-à-vis  major 
economies.  

Progress  has  been  achieved  on  a  major  barrier  in  the  ICT  segment:  China  planned  to 
adopt rules forcing companies that procure ICT goods for Chinese banks to use Chinese 
intellectual property and disclose key software codes, which are considered as business 
secrets.  Following  high  level  interventions  of  the  Commission,  China  has  decided  to 
temporarily suspend the adoption of the measure, pending revision of the regulation. The 
Commission  will  continue  to  closely  monitor  this  issue  with  the  aim  to  achieve  a  full 
resolution of this issue on the ground. 

Another  positive  development  was  recorded  in  the  cosmetics  industry,  where  a  new 
legislation was expected to introduce burdensome requirements such as the prohibition of 
''overstickering'' of the original label or the obligation to display the name and address of 
subcontractors on the packaging. Following EU interventions at all relevant multilateral 
and  bilateral  fora,  China  agreed  to  suspend  the  measure.  As  of  2016,  this  allowed  EU 
cosmetics companies to continue their exports to China as before. 

21 

 
The spirits sector also registered a success: China used to maintain an unjustifiable SPS 
measure  requiring  very  low  levels  on  certain  phthalates,  which  were  stricter  than  the 
safety levels set under their own risk assessment. The issue was resolved in 2016, when 
China  confirmed  that  it  would  revert  to  its  previous  practice  in  accordance  with  the 
outcome of its own risk assessment, ensuring that EU spirits exporters can continue their 
operations.   

3. 

Israel 

EU-Israel trade relations are based on the Association Agreement that entered into force 
in 2000. Israel has in general been supportive of facilitating trade and has not been a very 
active  user  of  market  access  barriers  vis-à-vis  EU  businesses,  which  in  turn  has 
contributed to a strong trade relationship. With two barriers effectively resolved in 2016, 
only three barriers remain active in the MADB overall.   

One of the recently resolved barriers concerns pharmaceutical exports: Following direct 
contacts with the Israeli Ministry of Health, Israel now accepts to consider requests for 
pharmaceutical  market  authorisation  from  all  EU  Member  States,  including  those  that 
have  joined  the  EU  as  of  2004.  This  has  finally  enabled  companies  in  those  Member 
States  to  export  pharma  products  to  Israel  as  well.  The  EU  is  hopeful  that  a  similar 
barrier for medical devices can also be solved soon. 

Since 2016 Israel has also resumed granting authorization to several EU Member States 
to export live cattle, therefore addressing this SPS concern.  

4. 

Ukraine 

The provisional application of the EU-Ukraine DCFTA since 1 January 2016 resulted in 
the continued improvement of trade relations. The total stock of active trade barriers in 
place  in  Ukraine  has  decreased  from  five  to  four,  following  the  elimination  of  two 
barriers in 2016 and the adoption of one new barrier in 2016. With regard to the newly 
adopted measure, which consists of an export duty on metal scrap, it should be noted that 
following the  intervention by the European Commission and a subsequent  veto applied 
by the President of Ukraine on the initial proposal, the adopted measure was eventually 
shortened to one year and is expected to expire in September 2017. This should bring the 
overall barrier stock further down. 

Ukraine has shown progress in eliminating barriers of concern for EU exporters, such as 
by  repealing  the  longstanding  SPS  ban  for  beef  and  veal  (although  some  import 
conditions  are  still  not  fully  in  line  with  EU  standards)  or  the  equally  longstanding 
quarantine permit for import or transit of vegetables. It is nevertheless regrettable that the 
wood  export  ban  adopted  by  Ukraine  in  2015  is  still  in  force  despite  the  many 
commitments made by Ukraine to abandon the measure. Together with its partners in the 
enhanced  MAP,  the  Commission  will  continue  to  monitor  the  implementation  of  the 
DCFTA in view of resolving barriers and preventing new ones from emerging.  

22 

 
TRADE  FLOWS  POTENTIALLY  AFFECTED  BY  THE  BARRIERS 

D. 
RESOLVED IN 2016 

In the absence of sufficiently reliable economic data at this stage, the same methodology 
explained  in  section  II.B  was  also  used  for  the  purpose  of  calculating  the  trade  flows 
potentially  affected  for  barriers  resolved  in  2016.  While  this  methodology  is  less  than 
perfect  –  as  looking  at  trade  flows  of  previous  years  for  resolved  barriers  provides 
distorted figures due to the EU exports being depressed by the barrier that used to be still 
in  place  -  it  gives  at  least  some  (albeit  potentially  underestimated)  indication  of  the 
importance of the trade flows that may benefit from the resolved barriers. 

The  methodology  was  used  for  17  of  the  20  barriers  that  were  resolved  in  2016, 
exceptions  relating  again  to  more  horizontal  cases  (the  issues  of  repaired  goods  and 
origin verification in South Korea) and to the ICT related issue in China described in the 
previous  section.  Although  the  economic  value  generated  by  the  removal  of  these 
barriers  is  expected  to  be  considerable,  it  remains  too  difficult  to  identify  and  measure 
relevant trade flows and hence these are not included in the analysis.   

Nevertheless, based on this methodology, the resolution of trade barriers in 2016 could 
positively  affect  EU  exports  in  the  range  of  EUR  4.2  billion21.  In  any  case,  taking  into 
account the limitations of the methodology, it will be useful for the future to follow the 
evolution of trade in these areas now that the barriers are resolved, in order to draw more 
precise conclusions on the impact of their resolution.22 

Concerning  the  trade  flows  potentially  affected  with  regard  to  specific  barriers,  EU 
exporters could have significantly better trade opportunities following the elimination of 
seven  SPS-related  barriers  in  2016,  accounting  for  EU  exports  of  EUR  1.86  billion  in 
total.  For  example,  EU  farmers  could  benefit  from  the  removal  of  the  SPS  restriction 
formerly applied by Ukraine, which could affect current exports valued at EUR 602.62 
million.  

The resolution of the barriers in China related to cosmetics and spirits might also have a 
major  impact,  as  EU  exports  in  these  sectors  were  worth  EUR  678.6  million  and  EUR 
398.39 million, respectively. The cosmetics sector could also benefit from the abolition 
of discriminatory treatment in Korea, which could provide a boost to the current level of 
EU exports valued at EUR 452.56 million.  

21  The basis for the analysis remains the average EU exports in 2013-2015 in the HS codes concerned. 

22  While  the  Commission  has  developed  a  methodology  to  more  precisely  assess  the  impact  of  the 
resolved  barriers,  this  methodology  requires  the  observation  of  trade  flows  after  the  barrier  was 
removed.  The  last  such  analysis  was  carried  out  in  2015  and  concluded  that  the  barriers  removed  in 
2012 and 2013 within the MAS had resulted in EUR 2.4 billion of additional trade flows in the year 
2014, the equivalent of a small FTA such as the one concluded with Colombia. 

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IV. CONCLUSION 

The  focus  of  this  year's  report  is  to  provide  a  comprehensive  overview  of  trade  and 
investment  barriers  directly  affecting  EU  economic  operators  as  reported  and  resolved 
via  the  Market  Access  Partnership  between  the  Commission,  Member  States  and 
business  organisations.  The  Market  Access  Database,  which  registers  these  barriers, 
currently  counts  372  active  barriers  reported  for  51  countries  across  the  globe.  Large 
economies such as Russia, Brazil, China, India and Indonesia continue to be main users 
of such protectionist instruments. 

Similar  global  trends  were  observed  in  the  calendar  year  2016,  the  reference  period  of 
this report. Within  the total  of 36 new barriers reported in 2016, Russia  resorted to the 
highest number of new trade restrictions, closely followed by India, while China kept its 
position  in  the  top  5  users  of  trade  barriers  as  well.  Several  new  measures  were  also 
reported  regarding  Switzerland,  while  Algeria,  Egypt  and  Turkey  were  highlighted  in 
particular  as  active  users  of  localisation  policies.  In  addition  to  certain  horizontal 
measures, new barriers were registered for 13 sectors of economic activity, among which 
mainly the wines and spirits as well as the agriculture and fisheries sectors were featured, 
but  also  the  automotive,  pharmaceutical,  services,  medical  devices,  toys  and  iron,  steel 
and non-ferrous metals sectors. The trade flows potentially affected by all new barriers 
registered in 2016 were estimated to reach up to EUR 27.17 billion, which exceeds total 
EU exports to partners such as South Africa, Algeria or Ukraine and corresponds to 1.6% 
of total EU exports.  

On the positive side, the Market Access Partnership contributed to tackling 20 trade and 
investment barriers in 2016, in seven different sectors as well as horizontal barriers. The 
positive  tendencies  observed  in  particular  in  South  Korea  and  Ukraine  underscore  the 
effectiveness of the implementation of Free Trade Agreements to resolve market access 
barriers and the Commission is committed to further strengthening and bundling efforts 
with  its  partners  under  the  'enhanced  partnership'  to  ensure  even  more  effective 
implementation of EU Free Trade Agreements. While the road ahead is admittedly long, 
some  barriers  were  also  tackled  in  China,  which  demonstrates  that  the  EU  barrier 
removal strategy can also work effectively vis-à-vis large economies with which no Free 
Trade  Agreements  are  in  place.  The  EU  will  also  continue  to  rely  on  the  WTO 
framework  and  its  own  ambitious  trade  negotiating  agenda,  which  will  remain  key 
instruments for addressing barriers. All in all, the trade flows potentially affected by the 
barriers resolved in 2016 were in the range of EUR 4.2 billion. 

In  conclusion,  the  EU  Market  Access  Strategy  has  proven  very  valuable  in  identifying 
and removing barriers, thus contributing to better export and investment opportunities for 
EU  economic  operators.  In  light  of  the  globally  increasing  protectionism,  the 
Commission  will  further  intensify  its  efforts  to  ensure  that  all  stakeholders  join  forces 
through  the  Market  Access  Partnership  in  order  to  trigger  economic  growth  and 
productivity on the basis of open markets worldwide. 

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