REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND THE COUNCIL on Trade and Investment Barriers 1 January 2018 - 31 December 2018
Date: 2019-06-17
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, 17.6.2019  COM(2019) 271 final  REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND THE COUNCIL on Trade and Investment Barriers        1 January 2018 - 31 December 2018  
 
 
INTRODUCTION  

The ninth edition of the Trade and Investment Barriers Report analyses the new barriers 
faced by EU business in 2018 as well as  those removed for our companies in the same 
year  thanks  to  the  EU  Market  Access  Partnership,  which  brings  together  the 
Commission,  Member  States  and  European  businesses.1  This  Partnership  is  driven  by 
and for stakeholders. It identifies barriers that EU firms face in third countries, defines a 
common strategy to remove them —and follows this strategy through.  

To respond to the rise in protectionism, the Commission has made enforcement – along 
with  the sharper focus on the implementation of trade agreements - a top  priority. This 
follows the thread of our "Trade for All"2 communication, which married a more robust 
approach  to  traditional  barrier  removal  with  sharper  efforts  to  implement  the  important 
commitments obtained in our wide hub of Free Trade Agreements.3  

With  respect  to  the  traditional  market  access  element,  we  have  worked  in  three 
directions.  First  we  have  strenghtened  coordination  among  EU  institutions  and 
stakeholders  (in  Brussels,  Member  States,  and  in  our  large  network  of  diplomatic 
missions). Second, the Commission has improved its communication efforts to explain, 
especially to small and medium-sized enterprises (SMEs), how they can report any new 
barriers  they  might  be  facing  outside  the  EU  and  how  the  Commission  and  Member 
States  can  design  and  implement  a  tailor-made  strategy  to  resolve  them.  This  has 
benefitted from the Market Access Days initiative, where sessions adapted to the needs 
of  local  business  are  held  in  our  Member  States—events  have  already  taken  place  in 
Denmark,  Spain,  the  Netherlands,  Lithuania,  Portugal  and  France.  Third,  we  have 
engaged  in  a  savvier  prioritisation  of  barriers—allowing  us  to  focus  resources  more 
effectively to achieve results. 

This  current  report  offers  new  improvements  in  this  regard,  in  order  to  identify  and 
describe  in  more  detail  the  barriers  most  significantly  impacting  EU  companies.  While 
previous reports have traditionally focused on partners with the highest number of new 
and  resolved  barriers,  this  year's  report  also  puts  an  emphasis  on  the  barriers  that  have 
weighed most on EU exports, shedding new light on their relative significance.  

The first section of the report presents a quantitative and qualitative analysis, per country, 
per type of barrier and per sector, of the total stock of 425 active4 trade and investment 

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 (MAAC) and sectorial Market Access Working Groups (MAWGs) 
in Brussels and regular meetings of the Market Access Teams (MATs) or Trade counsellors' meetings in 
third countries. 

2 http://trade.ec.europa.eu/doclib/docs/2015/october/tradoc_153846.pdf  
3 http://trade.ec.europa.eu/doclib/press/index.cfm?id=1933  
4  "Active"  barriers  are  the  barriers  that  are  actively  followed-up  in  the  Market  Access  Partnership  (as 

opposed to resolved barriers that have become inactive once resolved).  

1 

 
 
 
                                                           
barriers  and  the  45  new  barriers  recorded  in  2018,  as  reported  to  the  Commission  and 
recorded in the EU's Market Access Database.5  

The second section provides a more detailed analysis of the new barriers reported in 2018 
(1  January  –  31  December  2018),  describing  specific  trends  in  various  countries  and 
assessing potentially affected trade flows. 

The third section identifies the tools used in our Market Access Strategy to address these 
barriers  and  reviews  the  35  barriers  successfully  resolved  in  2018.  It  also  analyses  in 
more  detail  some  of  the  most  impactful  barriers  resolved.  Finally,  it  also  elaborates  on 
the  economic  gains  generated  by  our  Market  Access  Partnership  since  the  start  of  this 
Commission on the basis of economic modelling.  

5  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 

2 

 
 
 
 
                                                           
I. 

  OVERVIEW OF TRADE AND INVESTMENT BARRIERS  

Our  stakeholder-driven  approach  implies  that  the  report  focuses  exclusively  on  those 
obstacles that business has flagged. This chapter analyses such trade barriers faced by EU 
companies in third countries and the related trends and actions taken to remove them in 
the framework of our Market Access Partnership. While the database 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  prioritized  for  further  action  in  our 
market access work as they might be discriminatory, disproportionate or otherwise trade-
restrictive. They are all included in our Market Access Database. 

A. 

OVERALL STOCK OF TRADE AND INVESTMENT BARRIERS 

At the end of 2018, 425 active trade and investment barriers in 59 third countries6 existed 
in the EU's Market Access Database.7 This record figure confirms the continued rise of 
protectionism affecting EU stakeholders. At the same time, it also shows the increasing 
success of our Market Access Partnership as the forum our stakeholders ever more often 
turn to in order to identify and address trade barriers.  The database allows distinguishing 
recorded trade barriers per third country, per type of measure and per sector. This report 
follows this breakdown.  

1. 

Barriers per third country 

Compared  to  2017,  the  top  ten  countries  with  the  highest  number  of  barriers  have 
remained the same, although in a slightly different order. Most notably, and for the first 
time,  China  has  taken  over  as  the  country  with  the  highest  stock  of  recorded  barriers, 
with 37 obstacles hindering EU export and investment opportunities. Russia came a close 
second with 34 barriers currently in place, followed by India (25), Indonesia (25) and the 
United States with 23 barriers.  

Other third countries with ten or more trade barriers in place include Turkey (20), Brazil 
(18),  South  Korea  (17),  Australia  (15),  Thailand  (12),  Mexico  (11)  and  Algeria  (10). 
Figure 1 provides a more detailed breakdown of barriers across the world. 

6  Algeria,  Argentina,  Armenia, Australia, Bangladesh, Belarus, Bolivia, Bosnia and Herzegovina, Brazil, 
Cameroon, Canada, Chile, China, Colombia, Dominican Republic, Ecuador, Egypt, Hong Kong, Iceland, 
India,  Indonesia,  Iran,  Iraq,  Israel,  Japan,  Jordan,  Kazakhstan,  Lebanon,  Malaysia,  Mexico,  Moldova, 
Morocco,  Mozambique,  New  Zealand,  Nigeria,  Norway,  Oman,  Pakistan,  Paraguay,  Peru,  Philippines, 
Russian Federation, Saudi Arabia, Singapore, South Africa, South Korea, Switzerland, Taiwan, Thailand, 
Tunisia,  Turkey,  Uganda,  Ukraine,  United  Arab  Emirates,  United  States  of  America,  Uruguay, 
Venezuela, Vietnam and Panama. 

7 Tallying  last  year's  measures (396 active  barriers) with 2018 figures (45 new and 35 resolved barriers) 
would  yield  406  barriers.  The  difference  resides  in  the  fact  that  the  Commission  has  started  encoding 
active barriers in a more granular fashion as of 2018 – as anticipated already in footnote 9 of last year's 
report-,  leading  to  a  nominally  higher  number  of  barriers  while  not  altering  the  underlying  trends. 
Recording  each  different  aspect  of  a  barrier  separately  allows  for  a  more  effective  monitoring  of  each 
obstacle, as well as the possibility to design removal strategies in a more tailor-made fashion.  

3 

 
 
                                                           
Number of barriers 

Figure 18: Geographical breakdown of trade and investment barriers in the MADB  

8 Created with mapchart.net ©. 

4 

 
 
 
                                                           
2.  

Barriers per type of measure 

Figure 2 shows that behind the border measures (234) are more numerous than traditional 
border measures (191), following the evolution observed already last year. 

Behind the border measures are restrictions related to services, investments, government 
procurement,  intellectual  property  rights  or  unjustified  technical  barriers  to  trade 
concerning  trade  in  goods.  Most  of  these  measures  are  recorded  in  China  (25),  Russia 
(18) and Brazil (15). 

Border  measures  are  restrictions  that  directly  affect  imports  and  exports,  typically 
through tariff increases, quantitative restrictions, certain sanitary and phytosanitary (SPS) 
measures, import licensing or through outright trade bans. Russia (16) is the country that 
recorded  the  highest  number  of  such  measures,  followed  by  Indonesia  (13)  and  the 
United States (13). 

Figure 2: Breakdown of trade and investment barriers recorded in the MADB per type 
(number of measures) 

B. 

NEW TRADE AND INVESTMENT BARRIERS REPORTED IN 2018 

A total of 45 new barriers in 23 third countries9 were registered in 2018, approximately 
one third lower than the 67 new obstacles reported in 2017. However, as described below 
in more detail, the estimated economic impact of barriers reported in 2018 is significantly 
higher than those of last year. EU exporters have been facing increasingly complex and 
more  systemic  barriers  in  significant  markets,  re-confirming  the  trend  of  increasing 
protectionism highlighted in the previous two reports. 

9 Algeria, Australia, Brazil, China, Egypt, India, Indonesia, Iran, Iraq, Japan, Pakistan, Peru, Philippines, 
Russian  Federation,  Saudi  Arabia,  South  Africa,  Thailand,  Tunisia,  Turkey,  Ukraine,  United  Arab 
Emirates, United States of America and Vietnam.  

5 

 
 
 
 
 
                                                           
Trade flows  affected by  the new barriers in  2018 amount to  EU28 exports worth  up to 
€51.4 billion, a figure that has more than doubled compared to 2017 (€23.1 billion). As 
this figure does not include services barriers or those where the product coverage is not 
easily  identifiable,  trade  flows  potentially  affected  are  likely  to  be  somewhat 
underestimated.10 

1. 

New barriers reported in 2018 per third country 

Table I and Figure 3 provide an overview of the geographical breakdown of new barriers 
recorded in  2018. This shows that the highest  number of new barriers were reported in 
our trade an investment relations with Algeria and India, which both registered five new 
barriers. China and the United States follow closely as they registered four new barriers 
each. Three barriers have been reported in Indonesia, Iran and the United Arab Emirates, 
respectively.  Brazil  and  Turkey  furthermore  introduced  two  new  barriers  while  the 
remaining  fourteen  barriers  were  recorded  for  other  third  countries.  Looking  at  the 
regional tendencies, we  observe that a vast  majority of the new obstacles in  2018 were 
imposed in Asia (17), and South Mediterranean and Middle East region (17). 

Comparing these figures with the the 2017 results, the continued presence of China (ten 
new barriers last year) and India (three new barriers last year) point to a negative trend. It 
is also worth mentioning that Algeria was also touched upon in last year's report as part 
of a contagion effect that was emerging in the South Mediterranean region; the five new 
barriers in 2018 appear to have confirmed this tendency. 

Table I: Geographical breakdown of new barriers reported in 2018 

10 Concerning the quantification of trade potentially affected (based on bilateral EU export figures for the 
relevant Harmonised System tariff codes quantifying the trade that happens despite the barrier) the analysis 
of  non-tariff  barriers  and  their  impact  remains  particularly  difficult.  The  main  reason  is  that  non-tariffs 
barriers are characterized by different degrees of restriction. Other than outright bans, most trade-restrictive 
measures  do  not  fully  eliminate  trade  but  rather  reduce  it.  Moreover,  restrictions  regarding  the  same 
products  or  services  may  overlap.  As  a  result,  additional  barriers  may  not  necessarily  mean  additional 
impact, nor does the removal of one barrier imply automatic improvement in market access.  

6 

 
 
 
 
                                                           
Figure 3: Geographical breakdown of new barriers reported in 2018, per region 

7 

 
 
 
 
 
 
 
 
 
 
 
 
As  indicated  above,  this  report  puts  an  increased  emphasis  on  the  economic  weight  of 
new barriers. Figure 4 illustrates the estimated trade flows affected against the number of 
barriers  recorded  in  2018  for  specific  partners  and  regions.  It  shows  that  new  barriers 
recorded  in  China  (4)  have  significantly  more  impact  on  trade  flows  affected  (€25.7 
billion) in comparison to barriers recorded in other third countries. It is worth mentioning 
this  substantial  figure  of  trade  potentially  affected  is  caused  in  particular  by  one  new 
barrier  in  the  ICT  sector  that  could  have  a  major  economic  impact  for  EU  operators' 
exports to China – this barrier is described in more detail in Chapter II. 

Figure 4 also shows that China, the United States, India and Algeria rank the highest –
albeit  in  a different  order-  regarding both  the number of new barriers recorded in  2018 
and  the  magnitude  of  EU28  trade  flows  affected  by  these  new  barriers.  Those  four 
partners  represent  81  percent  (€41.8  billion)  of  all  2018  EU28  trade  affected  and  40 
percent of new reported barriers (18).   

Figure 4: Number of new barriers reported and trade affected for EU28 (€ billion), 
selected partner countries and regions  

Table  II  reports  on  the  trade  flows  affected  for  all  23  partner  countries  that  introduced 
new  trade  barriers  in  2018.  However,  the  assessment  of  the  economic  impact  of  new 
market  access  barriers  may  not  at  times  fully  reflect  the  real  impact  of  obstacles.  This 
might  be  the  case  concerning  barriers  in  services  or  of  horizontal  nature,  which  are 
difficult  to  quantify,  or  when  it  comes  to  overlapping  restrictions  covering  the  same 
products.  

8 

 
 
 
 
 
  
Table II: EU28 trade flows affected by new barriers reported in 2018 by partner 
countries, (€ billion) 

2. 

New barriers reported in 2018 per type of measure 

A  breakdown  of  the  new  barriers  per  type  of  measures  shows  a  similar  range  of  new 
behind  the  border  (23)  and  border  measures  (22),  underlining  that  third  countries 
continue to resort to both sets of restrictions.  

Most  of  behind  the  border  measures  refer  to  labelling  requirements,  tax  measures  and 
new  regulatory  requirements  that  have  been  introduced  by  several  third  countries.  The 
majority  of  border  measures  are  SPS  restrictions11  and  measures  relative  to  increased 
custom duties, tariffs and quotas. This  year, two new barriers were also  reported in  the 
field of services. 

Figure 5: Breakdown of new trade and investment barriers reported in 2018 per type 
(number of measures) 

11 For SPS, new barriers have been raised whereby third countries banned exports from the whole territory 
of certain EU Member States, instead of limiting restrictions to areas affected by the animal disease. Thus 
the EU regionalization policy was not recognized. The EU has worked to tackle these barriers and continue 
working on similar barriers raised before 2018.   

9 

 
 
                                                           
3. 

New barriers reported in 2018 per sector 

The new barriers reported in 2018 affected EU trade in 13 specific sectors of economic 
activity, as  well as in  the form  of horizontal or cross-cutting barriers impacting several 
areas. 

The  highest  number  of  new  barriers  were  reported  in  the  wines  and  spirits  (9)  and 
agriculture and fisheries (8) sectors. A total of ten barriers were also recorded that were 
either fully horizontal (5)12 or cross-cutting restrictions affecting  various industries (5). 
The cosmetics and automotive sectors faced the emergence of four and three new barriers 
respectively  while  the  pharmaceuticals  and  textiles  &  leather  industries  each  saw  two 
new  hurdles  appear  in  2018.  Finally,  several  other  sectors  were  each  affected  by  one 
newly  imposed  barrier  to  trade:  ICT;  ceramics  and  glass;  iron,  steel  and  non-ferrous 
metals; mineral products; paper, wood & pulp; plastics and precious metals. 

Figure 6: Sectorial breakdown of trade and investment barriers reported in 2018 
(number of barriers) 

12 Including two horizontal barriers related to trade in services. 

10 

 
 
 
 
 
 
 
 
 
 
                                                           
While the number of measures identified is an important indicator, the analysis of trade 
affected sheds more light on the actual weight of each barrier. As displayed in Figure 7, 
industrial  sectors  accounted  for  about  97  percent  of  the  trade  affected,  with  barriers  in 
only  three  sectors  (ICT;  iron,  steel  and  non-ferrous  metals;  precious  metals) 
corresponding to 72 percent of all EU28 exports affected by new reported barriers.13  

Figure 7: EU28 trade flows affected by barriers reported in 2018, per sector 
(percentage of trade flows affected) 

13  "Other"  includes  the  following  sectors  of  economic  activity:  Ceramics  and  Glass;  Mineral  Products; 
Plastics; Wood, Pulp and Paper. 

11 

 
 
 
                                                           
II.  MAIN  NEW  TRADE  AND  INVESTMENT  BARRIERS  REPORTED  IN 
2018 

This chapter provides an analysis of new barriers reported in trading partners for which 
four or more barriers were recorded in 2018 and which represent the lion's share of the 
EU's  potentially  affected  trade  flows  (81  percent),  namely  China,  the  United  States  of 
America, India and Algeria.  

A. 

1. 

QUALITATIVE ANALYSIS OF THE NEW BARRIERS  

China 

The EU-China trade relationship is among the most complex ones. While China remains 
an important market for EU companies, a plethora of trade distortions and market access 
barriers  have  considerably  affected  our  bilateral 
trade  relationship  for  years, 
encompassing  various  systemic  concerns  such  as  massive  subsidisation,  obligations  to 
transfer  technology,  overcapacity  in  traditional  sectors  -  such  as  steel  and  aluminium  - 
but  also  increasingly  in  high-tech  areas  (Made  in  China  2025),  or  unjustifiable 
cybersecurity and encryption regulations. 

In  this  context,  China  resorted  to  four  new  barriers  in  2018,  confirming  the  trend 
observed last year when a record of ten new barriers were reported – these developments 
have  now  established  China  as  the  most  trade-restrictive  partner  for  the  EU  with  an 
overall  stock  of  37  barriers.  Taken  together,  these  four  new  barriers  could  affect  EU 
exports up to €25.7 billion. 

As  already  highlighted  in  last  year's  report,  China  has  been  introducing  various  trade-
restricting  measures  in  the  area  of  high-tech  industries,  which  have  also  been 
complemented  by  overarching  industrial  policy  considerations  and  various  trade 
distortions  under the Made in  China 2025 strategy.  In 2018, China continued to  add to 
the dozens of implementing measures in the ICT area to operationalise the Cybersecurity 
Law  that  entered  into  force  on  1  June  2017.  As  part  of  this  development,  the  draft 
Regulation  on  Classified  Cybersecurity  Protection,  also  known  as  Cyber  Multi-
Level  Protection  Scheme  (or  Cyber-MLPS)  was  issued  by  the  Ministry  of  Public 
Security for public consultation in June 2018 and could replace the original Multi-Level 
protection  Scheme  (MLPS)  of  2007.  The  aim  of  these  regulations  is  to  classify  all 
information systems by their level of security. Based on the perceived level of sensitivity, 
foreign  companies  could  be  excluded  from  certain  market  segments.  In  general,  it  is 
problematic that the draft leaves considerable room for interpretation as key concepts are 
not defined. In addition, the burden of proof for companies could increase even in lower 
risk applications, more applications could unjustifiably fall under higher risk categories, 
and  unnnecessary  testing  and  certification  requirements  could  apply  for  cryptography 
applications. The measures are also a concern from an intellectual property perspective. 
Finally, the longstanding issue of the lack of access to relevant Chinese standardisation 
bodies (TC 260 Working Group 3, Cybersecurity Standardisation Technical Committee) 
has  also  become  even  more  pressing  in  conjunction  with  this  Cyber-MLPS,  due  to  the 
nexus  with  the  standards  these  bodies  develop.  This  single  barrier  would  considerably 
affect  EU  exports:  trade  flows  affected  in  the  ICT  and  electronics  sector  are  valued  at 

12 

 
 
 
 
€24.9  billion  –  while  noting  that  this  measure  could  in  fact  also  have  considerable 
implications on EU investments in China, and would also stretch beyond the ICT sector 
to various other high-tech industries. 

In  addition,  distributors  of  culinary  gas-filled  whippers  and  chargers  for  the  food 
service market encountered difficulties caused by unclear  requirement to  hold  a licence 
for  the  storage  and  distribution  of  “dangerous  goods”  under  China's  current  regulatory 
framework. This concerns exports up to €383 million. 

Third, standards into food regulation set restrictive yeast parameters that prevented EU 
export of certain cheeses and created delays in the authorization procedures for the export 
of sterilized milk. This could concern exports up to €469 million. 

Finally, China revised its salt monopoly rules through measures published in December 
2017  and  May  2018.  As  a  result,  all  imports  of  salt  have  effectively  been  stopped  by 
Chinese customs and the rules provide that only designated salt wholesale companies can 
retail salt in China. It is unclear whether foreign companies can be designated.  

While  the  EU  has  used  all  avenues  to  address  the  challenges  it  faces  with  China, 
including bilateral dialogues (Economic and Trade Working Group, ICT Dialogue, Cyber 
Task  Force,  Trade  and  Investment  Policy  Dialogue,  High  Level  Economic  Dialogue, 
Summit)  and  multilateral  fora  (various  WTO  Committees),  the  recent  developments 
require additional, well-coordinated efforts to better address market access issues vis-à-
vis China.  

In  parallel,  in  situations  where  dialogues  have  not  led  to  satisfactory  outcomes,  the 
Commission did not hesitate to take resolute action to enforce international trade rules: 
on 1 June 2018 the EU launched legal proceedings in the WTO against Chinese measures 
on the transfer of technology" (DS549) that undermine the intellectual property rights of 
European companies. At the same time, it has become clear that certain trade distortions 
now  risk  threatening  the  integrity  of  the  global  trading  system.  While  the  EU  will 
continue to make full use of its wide toolbox to address trade distorting practices within 
the existing international  rulebook, it has  also become evident that WTO rules must be 
modernised to find genuine, lasting remedies. In this context, a bilateral Working Group 
on WTO Reform was launched at the 2018 EU-China Summit. 

Negotiations are also ongoing for a Comprehensive Agreement on Investment (CAI) to 
facilitate  the  investment  market  access  conditions  faced  by  EU  companies  in  China. 
Following the 2018 EU-China Summit, both sides exchanged market access offers. 

2.  

USA 

The EU and the United States have the largest economic relationship in the world. With 
the transatlantic economy supporting 15 million EU and US jobs, EU-US collaboration is 
essential for the stability of significant trade flows and the multilateral trading system.  

Trade tensions between the EU and US increased in 2018, as the US imposed four new 
trade  barriers,  bringing  the  overall  barrier  count  to  23.  While  one  of  these  issues  has 

13 

 
 
already  been  successfully  resolved  in  2018,  the  remaining  three  barriers  concern  EU 
exports worth up to €6.8 billion.14  

Trade tensions between the EU and US increased notably as a result of the imposition on 
1 June 2018 of additional so-called ''Section 232'' duties on imports of EU steel (25%) 
and  aluminium  (10%)  on  alleged  national  security  grounds.  The  EU  reacted  promptly 
and  proportionately  to  these  measures  by  requesting  consultations  under  the  WTO 
Dispute  Settlement  Understanding,  implementing  rebalancing  through  additional  tariffs 
on selected goods imported from the US on €2.8 billion of US exports; and introducing 
safeguard  measures  of  its  own  to  guard  against  potential  trade  diversion  and  protect 
European businesses from indirect negative effects of the US measures.   

Further,  the  launch  in  May  2018  of  a  separate  investigation  into  the  national  security 
dimension of US imports of cars and car parts are a cause for serious concern for the EU 
as any adverse measures could have a significant impact on two-way transatlantic trade.15 

It was against this backdrop that President Juncker and President Trump met on 25 July 
2018.  Their  discussions  were  successful  and  the  Presidents  reached  an  agreement  to 
launch a new phase in the trade relationship with a view to facilitate trade and deescalate 
trade  tensions.  Their  Joint  Statement  of  25  July  2018  defined  a  set  of  work  streams  to 
achieve this objective. In addition, the EU and US agreed to refrain from any measures 
that  would  go  against  the  spirit  of  their  agreement  while  work  on  this  joint  agenda  is 
ongoing.  

Other recent trade barriers imposed by the US, outside the scope of the Joint Statement, 
relate  first  to  two  specific  provisions  of  the  US  Tax  Cuts  and  Jobs  Act  2017,  i.e.  the 
Base Erosion and Anti-abuse Tax (BEAT), which has some discriminatory aspects, and 
the  Deduction  for  Foreign  Derived  Intangible  Income  (FDII),  which  may  configure  a 
prohibited  subsidy.  The  EU  has  concerns  that  the  two  provisions  would  negatively 
impact European businesses (notably banks and insurers) and has raised them at political 
and technical level with US counterparts. 

Second,  certain  custom  classification  discrepancies,  i.e.  the  fact  the  US  Customs 
Administration  does  not  follow  the  World  Customs  Organisation  classification  of 
multilayer parquet for customs purposes, result in the imposition of a 5% import duty 
instead of 0%, or even of 8% when multilayer parquet is considered as plywood. 

Finally,  a  barrier  introduced  in  2018  under  the  ''Formaldehyde  Act'',  which  sets  out 
emission  standards  of  formaldehyde  for  domestically  manufactured  and  imported 
composite  wood  products,  was  resolved.  The  issue  had  been  caused  due  to  earlier 
compliance date than originally announced (June 2018 instead of December 2018). As a 
result, some EU companies were  concerned  about  the short deadline, especially  for the 
shipments that were already on their way to the US. Following EU demarches before the 
US  administration  (including  a  letter  to  the  US  Environmental  Protection  Agency)  and 
consultation  with  EU  stakeholders  it  was  confirmed  that  the  issue  was  resolved  as  no 
shipments had been put on hold by the US customs.   

14 In line with the methodology applied in this report, this amount was calculated on the basis of 2018 trade 
flows in the products concerned.  
15 This could be a very important additional barrier if the US were to take measures. 

14 

 
                                                           
The  long-standing  issue  of  undue  delays  in  the  publication  of  the  final  rule  permitting 
eight EU Member States (Belgium, Netherlands, France, Italy, Spain, Germany, Portugal 
and  Poland)  to  export  apples  and  pears  to  the  US  has  not  yet  been  solved  and  merits 
particular note. The application is pending since 2008 and the publication of the final rule 
allowing  trade  is  unreasonably  postponed  despite  the  lack  of  Sanitary/Phytosanitary 
grounds. 

3. 

India 

The  year  2018  was  marked  by  a  continued  protectionist  trend  in  India  with  the 
persistence,  and  to  some  extent  amplification,  of  barriers  to  EU  imports.  This  includes 
prohibitive  imports  duties  on  goods  in  key  sectors,  sanitary  and  phyto-sanitary  (SPS) 
restrictions on agricultural imports, and a growing number of technical barriers to trade 
in  various  forms,  including  deviations  from  agreed  international  standards.  Additional 
difficulties  for  EU  operators  are  linked  to  local  content  requirements  in  government 
procurement and the absence of a protection framework for foreign investments. 

In this context, five new trade barriers were recorded in 2018 which brings the number of 
barriers in  India to  a total  of 25. While one of these barriers has already been partially 
resolved in 2018, the remaining four barriers concern EU exports up to €6.5 billion.  

Of  the  new  barriers,  one  concerns  the  registration  process  of  cosmetics,  with 
discriminatory  registration requirements for imports and deviation  from  internationally-
agreed  standards,  while  another  is  related  to  a  new  increase  of  import  tariffs  on 
polished diamonds – the fourth such duty hike in six years. These new barriers, which 
have  yet  to  be  the  subject  of  extensive  discussions  with  Indian  authorities,  concern  a 
substantial  value  of  EU  exports  worth  up  to  €6.1  billion  and  could  become  a  serious 
obstacle to EU trade with India.  

In addition, on top of longstanding high duties and taxes in the automotive sector, India 
has over the  years introduced over 1000 new country-specific standards, an increasing 
number of which do not correspond to internationally-agreed standards. The combination 
of  these  measures  prevent  European  manufacturers  from  competing  with  local 
manufacturers  on  an  equal  footing,  affecting  trade  flows  currently  worth  up  to  €144 
million  -  an  amount  that  is  comparatively  low  in  a  sector  for  wich  EU  exports  are 
traditionally  high  which  is  demonstrative  of  the  limited  market  access  EU  companies 
currently enjoy in this important sector.  

Moreover,  in  April  2018,  the  Food  Safety  and  Standards  Authority  of  India (FSSAI) 
published a new regulation on food safety and standards that includes new standards for 
distilled  alcoholic  beverages,  wine  and  beer.  Despite  some  positive  elements,  the 
regulation contains provisions that would harm EU imports into India worth up to €193 
million.  This  for  instance  includes  the  non-recognition  of  geographical  indications, 
technical  specification  that  diverge  from  international  standards  and  practices,  or 
excessive labelling requirements. 

Positively,  one  of  the  new  barriers  reported  in  2018  regarding  mandatory  veterinary 
certificates upon importation of leather goods has already been partially resolved and 
is examined in the resolved barriers section of the present report.  

15 

 
 
In addition to these new barriers, further negative developments concerning an existing 
barrier should also be noted as  India has pursued the negative trend, started in 2014, of 
increasing  customs  duties  on  ICT  products.  The  most  recent  duty  hikes  were 
introduced  in  October  2018,  further  expanding  the  list  of  products  and  increasing  their 
applied duties. The increased rates affect imports of numerous ICT products such as base 
stations, mobile phones, as well as their components and accessories, at a level of around 
€800  million.16  The  Commission  launched  a  WTO  case  on  these  measures  on  2  April 
2019.17 

As  highlighted  in  the  new  “EU  Strategy  on  India”18,  the  EU  values  its  Strategic 
Partnership with India and is fully aware of the untapped potential and mutual benefit of 
the  bilateral  economic  and  trade  relations.  It  is  therefore  fully  committed  to  working 
constructively with India towards an improved business environment, enhanced and fair 
market access, and investment protection. In this context, the EU has consistently taken 
actions  and  will  remain  vigilant  to  tackle  both  new  and  longstanding  barriers  in  India. 
The  EU  and  India  have  a  regular  bilateral  trade  dialogue  aimed  at  addressing  trade 
barriers  in  the  context  of  the  EU-India  Sub-Commission  on  Trade  and  its  specialised 
working groups, for instance on SPS and TBT issues. However, this is a gradual process 
which last  year  yielded only limited results in addressing EU concerns. The difficulties 
encountered  by  EU  exporters  and  lack  of  progress  on  finding  solutions  appear  to  be 
linked  to  the  Indian  government’s  economic  priority  of  turning  India  into  a 
manufacturing hub through the "Make in  India" initiative, which aims to attract foreign 
investment but does not prioritise trade openness.  

4. Algeria 

The  trend  of  growing  protectionism  identified  in  the  Mediterranean  region  in  the  2017 
edition of this report continued in 2018. An increased stock of 36 trade and investment 
barriers  was  in  place  in  the  region  (Algeria,  Egypt,  Israel,  Lebanon,  Morocco  and 
Tunisia), with Algeria now accounting for the highest number of obstacles (10), followed 
by Egypt (8) and Israel (6). 

In  addition  to  a  series  of  long-standing  barriers  hampering  EU  exports  and  despite 
continuous  EU  engagement  for  a  constructive  dialogue,  Algeria  introduced  five  new 
barriers in 2018, tied with India for the most among all EU trading partners. While one of 
these issues has already been successfully resolved in 2018, the overall impact of these 
barriers remains very significant, as EU exports concerned are worth up to €2.7 billion.  

First, Algeria introduced a wide-ranging temporary import ban on 851 products in about 
45 product families through the Budget Law and related implementing decree adopted on 
7 January 2018 and then extended the ban to 877 products later in May (the measure was 
further  amended  in  2019).  The  2018  Budget  Law  also  significantly  increased  custom 

16 As this barrier has not been considered as a  new obstacle for 2018, this amount is not included in the 

overall calculations of trade affected. 

See 

Joint  Communication 

17 http://trade.ec.europa.eu/doclib/press/index.cfm?id=2001 
18 
(https://eeas.europa.eu/delegations/india/54057/joint-communication-elements-eu-strategy-india_en) 
Council 
(https://www.consilium.europa.eu/media/37410/st14638-en18.pdf). 

Conclusions 

“Elements 

strategy 

strategy 

“EU 

EU 

for 

on 

on 

on 

on 

an 

India” 
and 
India”     

16 

 
 
 
                                                           
duties  on  a  list  of  129  tariff  lines.  This  list  includes  important  products  for  European 
exporters such as telephone components, modems, cables and electrical appliances, with 
tariffs amounting to up to 60%.  

Moreover,  European  shipping  companies  were  heavily  affected  by  two  new  measures 
introduced  in  2018.19  First,  a  VAT  obligation  was  imposed  as  of  1  January  2018. 
Services  provided  by  shipping  vessels  and  relating  to  their  cargo  are  now  subject  to  a 
VAT rate of 19 percent.  In contrast to Algerian shipping companies  - subject to a zero 
VAT rate in the Member States of the European Union - European shipping companies 
cannot  recover  the  VAT.  Second,  as  of  20th May  2018,  a  new  Circular  designated  the 
Algerian Custom authorities as a competent authority to identify, on a random basis, the 
dry  ports  where  ships  are  directed  to  discharge  goods  in  the  port  of  Algiers.  The 
circular is causing European shipping companies serious operational, legal and financial 
issues. 

The  EU  has  been  addressing  the  various  existing  and  newly  implemented  trade-
restrictive  measures  in  all  possible  fora  with  the  Algerian  authorities  (e.g.  Association 
Council,  Association  Committee,  Trade  Sub-Committee  and  other  relevant  Sub-
Committees);  and  a  high  level  working  group  has  also  been  established  in  2018  to 
discuss these issues in order to find a commonly agreed solution within the framework of 
the  EU-Algeria  Association  Agreement.  Notwithstanding  those  efforts,  Algeria  has 
continued  to  act  unilaterally,  imposing  trade  barriers  and  becoming  one  of  the  most 
challenging  trading  partners  for  the  EU  from  a  market  access  perspective.  The 
Commission will spare no effort to correct this situation. 

Finally,  as  mentioned  above,  one  of  the  new  barriers  introduced  in  2018  has  been 
resolved.  The  Algerian  authorities  had  required  importers  to  produce  an  official 
certificate  of  free  movement  issued  in  the  country  of  origin.  The  measure  did  not 
specify  which  authority  would  have  had  to  issue  the  certificate  and  the  practical 
implementation of the measure was not always consistent, thus creating legal uncertainty 
among  operators  and  potentially  impacting  all  imports  from  all  EU  Member  States.  In 
April  2018,  at  a  meeting  of  the  newly  established  EU-Algeria  Trade  Contact  Group  in 
Algiers,  and  thanks  to  EU  stakeholders'  input  in  the  framework  of  our  Market  Access 
Partnership, the Commission submitted to Algeria a template form that could be issued 
by all EU Member States Chambers of Commerce. In May 2018, the Algerian authorities 
officially  confirmed that the proposed form  was accepted, allowing  all EU exporters to 
comply with the requirement. While this is a positive development, the overall situation 
of  market  access  for  EU  companies  due  to  the  number  and  impact  of  outstanding 
barriers, as explained above, remains of serious concern. 

19 Potential economic impact for EU shipping companies could not be quantified. 

17 

 
 
                                                           
III.    MAIN TRADE AND INVESTMENT BARRIERS RESOLVED IN 2018  

This chapter analyses the 35 barriers that were totally or partially resolved in 25 different 
third countries in 2018 and outlines the European Commission's strategy to address trade 
and investment barriers. 

A. 

EU STRATEGY TO ADDRESS TRADE AND INVESTMENT BARRIERS 

Removing  trade  barriers  in  a  world  where  protectionism  is  on  the  rise  became  an 
essential task of the Commission’s work. To that end, the EU’s Market Access Strategy 
has  been  reinforced,  the  coordination  among  EU  institutions  and  stakeholders 
strengthened,  the  prioritisation  of  barriers  improved  and  the  communication  and 
awareness-raising enhanced. These efforts resulted in 23 obstacles addressed in 2015, 20 
resolved  barriers  in  2016,  a  record  number  of  45  successfully  tackled  barriers  in  2017 
and 35 removed barriers in 2018. Overall, under the mandate of the current Commission, 
123  barriers  were  resolved;  a  result  that  reflects  the  increased  prioritiy  given  to 
implementation  and  enforcement  in  the  current  more  transactional  global  trading 
environment. In addition, the various channels of our Market Access Strategy also serve 
as an early warning system to prevent barriers even before they could occur. 

EU companies can use  different channels  to  report  trade  and investment barriers to  the 
European  Commission.  Once  identified,  the  Commission  relies  on  its  wide  arsenal  of 
tools to tackle obstacles to trade.  

Tool 1: Diplomatic actions. There is a stream of diplomatic work, where the European 
Commission, the European External Action Service, the EU Member States and industry 
engage  in  a  close  collaboration  through  the  network  of  EU  Delegations  and  Member 
States’  embassies  in  third  countries.  This  encompasses  a  wide  variety  of  activities  – 
ranging  from  technical  trade  projects,  such  as  dialogues  and  committees,  to  formal 
demarches, like High Level Missions of Commissioners and ministerial and presidential 
actions. Wherever it enhances the effectiveness of our work, action is coordinated with 
like-minded  partners.  In  this  context,  it  is  also  worth  noting  that  the  Commission  has 
continued to advance in the European Economic Diplomacy initiative – closing the first 
cycle  of  identification  of  economic  diplomacy  priorities  which  has  covered  107 
countries.  In  virtually  all  these  countries,  market  access  is  listed  as  a  key  priority,  and 
thus  benefits  from  the  concerted  efforts  of  all  players  on  the  ground  –  that  is  Member 
States, business associations and EU Delegations – to advance in this area and contribute 
to the removing of barriers.  

Tool  2:  Dispute  Settlement.  Regular  WTO  committee  work  is  complemented  by  the 
Commission's robust activity in  the context  of the Dispute Settlement.  In 2018, the EU 
has  launched  two  new  WTO  disputes:  a  dispute  against  the  US'  steel  and  aluminium 
measures  (DS548),  and  a  dispute  against  China  on  its  measures  related  to  technology 
transfer (DS549). The EU also initiated compliance proceedings with respect to Russia's 
measures relating to the importation of pork (in DS 475). The EU has also ensured the 
correct implementation of WTO rulings by third countries: for example by Russia in the 
disputes relating to tariffs (DS485) and to anti-dumping measures on Light Commercial 
Vehicles  (DS479),  and  by  China  in  the  third  dispute  on  raw  materials  ("Raw  materials 

18 

 
 
 
III",  DS  509).  The  WTO  also  issued  its  final  rulings  in  EU’s  dispute  against  Brazil  on 
wide-ranging  import-substitution  measures,  confirming  the  EU  position  that  these 
measures violated WTO rules. Again, the EU is now vigilantly monitoring the situation 
to make sure that these rulings are properly implemented.  

The  EU  has  also,  for  the  first  time,  requested  consultations  relating  to  sustainable 
development commitments in a bilateral free trade agreement, namely with the Republic 
of  Korea.  The  case  with  the  recent  launch  of  proceedings  with  Ukraine  under  the 
Association  Agreement  (wood  export  ban)  –  which  is  strictly  speaking  a  2019 
development -, demonstrates that, if necessary, the Commission does not hesitate to turn 
to bilateral dispute settlement as provided for in its Free Trade Agreements.  

Finally,  as  an  additional  tool,  the  Commission  can  also  make  use,  at  the  request  of 
exporters,  of  the  procedure  foreseen  by  the  Trade  Barrier  Regulation  (TBR),  as  for 
example done in the case of Turkey in 2017 concerning paper products. This mechanism 
provides stakeholders  the possibility to request the Commisison to consider resorting to 
Dispute Settlement.  TBR investigations may  also lead to  a negotiated solution  with the 
third  country  concerned  before  a  formal  WTO  case  is  launched,  contributing  to  the 
quicker resolution of barriers to the benefit of our companies and consumers.  

Tool 3: EU Free Trade Agreements. Barriers detected via our market access work are 
channelled directly into trade negotiations  —or, where free trade agreements exist, into 
the  relevant  implementation  mechanisms—  to  ensure  that  market  access  priorities  are 
effectively  addressed.  The  current  Commission  continued  its  ambitious  agenda  of 
expanding its wide array of well-balanced trade and investment agreements. This resulted 
in  the  implementation  of  eight  agreements  with  15  countries20,  bringing  the  overall 
number to 40 EU trade agreements with 72 partners across the world. Our intense agenda 
of  negotiation  continues  apace.21  In  addition,  agreements  are  reviewed,  not  least  to 
resolve new barriers not covered by the existing framework.22  

The Commission also reinforced its implementation and enforcement efforts in order to 
ensure  that  businesses,  including  SMEs,  can  take  advantage  of  existing  commitments. 
The EU has the tools and uses them effectively to eliminate trade barriers, to improve the 
protection  and  enforcement  of  intellectual  property  rights  (IPR),  to  bring  dispute 
settlement action, and impose trade defence measures in cases of unfair trade  – and has 
enhanced coordination of these various pillars of its enforcement activities. In this regard, 
in 2018, the Commission adopted its second Report on Implementation of EU Free Trade 
Agreements 23, published its Report on the protection and enforcement of IPRs24 in third 

20 The latest were the Economic Partnership Agreement with Japan, which was ratified by both parties in 
December  2018  and  fully  entered  into  force  on  1  February  2019;  and  a  Free  Trade  Agreement  and 
Investment  Protection  Agreement  (IPA)  with  Singapore.  The  Commission  adopted  and  presented  to  the 
Council an FTA and an IPA with Vietnam, which are currently in preparations for signature.  
21 Intense  negotiations took place  with MERCOSUR  with important progress, and  the  Commission also 
started trade negotiations  with  Australia and New  Zealand.  Negotiations for a  Deep and Comprehensive 
Free Trade Area (DCFTA) with Tunisia are also on-going. 
22 A deal at the political level was reached with Mexico for the modernisation of the trade agreement, and 
negotiations with Chile are on-going. 
23 http://trade.ec.europa.eu/doclib/docs/2018/october/tradoc_157468.pdf  
24 http://trade.ec.europa.eu/doclib/docs/2018/march/tradoc_156634.pdf  

19 

 
                                                           
countries and published the 36th annual Report on the EU's Anti-Dumping, Anti-Subsidy 
and Safeguard activities.25 

B. 

OVERVIEW OF THE BARRIERS RESOLVED IN 2018 

Thanks  to  the  combined  efforts  of  all  stakeholders  in  our  market  access  partnership,  a 
total  of  35  barriers  have  been  fully  or  partially  resolved  in  2018  in  25  different  third 
countries  and  in  mainly  8  sectors  of  economic  activity,  as  well  as  horizontally.  When 
accounting  for  all  quantifiable  barriers,  EU  exports  concerned  by  the  removed  trade 
barriers in 2018 reached €7.8 billion for the EU28.26  

1. 

Barriers resolved in 2018 per third country 

Figure 8 shows third countries where barriers were successfully tackled. Egypt ranks first 
in  line  with  three  barriers  resolved  in  2018,  followed  by  Brazil,  Turkey,  Argentina, 
China,  South  Korea,  India,  Algeria,  and  Russia  (two  each).  Sixteen  additional  trade 
barriers faced by European companies in sixteen other third countries were also removed 
in 2018.  

Figure 8: Geographical breakdown of barriers resolved in 2018 (*-G20 countries) 

Based on the value of trade affected (Table III) of removed barriers, the most significant 
obstacles  were  removed  in  Russia,  corresponding  to  a  share  of  23  percent  of  all  trade 
flows  affected,  followed  by  the  United  Arab  Emirates  (16  percent)  and  China  (15 

25 http://trade.ec.europa.eu/doclib/docs/2018/july/tradoc_157212.pdf  
26 Last year, for the removal of 45 barriers, the corresponding figure was €8.2 billion. 

20 

 
 
 
 
 
                                                           
percent).  18  percent  of  trade  flows  affected  by  resolved  barriers  were  in  South 
Mediterranean countries.  

Table III: EU28 trade flows affected by barriers resolved in 2018 by partner countries, 
(€ million)27 

2. 

Barriers resolved in 2018 per type of measure 

Our market access partnership efforts have contributed more considerably to the removal 
of  border  measures  (26)  compared  to  behind  the  border  restrictions  (9).  This  is 
comparable  to  last  year’s  findings  when  34  border  and  eleven  behind  the  border 
measures were tackled.  

Almost  a  third  of  the  border  measures  that  have  been  removed  in  2018  relate  to  SPS 
matters in the agriculture and fisheries sector. Other obstacles addressed were impacting 
EU businesses in the form of customs duties, customs administrative procedures, export 
taxes  or  export  bans.  Finally,  one  barrier  in  trade  in  services  was  also  successfully 
resolved in 2018. 

For the nine behind the border measures, successes were achieved in the area of technical 
barriers to trade and standards, as well as trade related taxation measures.  

27 "Other" includes the following partner countries: Argentina, Angola, Brazil, Chile, Colombia, Malaysia, 
Uruguay, and Thailand.  

21 

 
 
 
 
 
                                                           
Figure 9: Breakdown of barriers resolved in 2018 per type (number of measures) 

3. 

Barriers resolved in 2018 per sector 

Figure 10  gives  an overview of the number of barriers resolved in  the various areas of 
economic  activity.  Agriculture  and  fisheries  was  the  sector  with  the  most  measures 
resolved (10), followed by five barriers tackled in the automotive sector. The textiles and 
leather, as well as the wines and spirits sectors each accounted for four resolved barriers. 
A  total  of  eight  barriers  were  also  addressed  that  were  either  fully  horizontal  (4)  or 
affected various industries (4). Finally, individual barriers were resolved in the cosmetics 
and mineral products sectors, alongside with partially resolved barriers related to aircraft 
parts and the ICT sector, respectively. 

Figure 10: Sectorial breakdown of barriers resolved in 2018 as recorded in MADB 
(number of barriers) 

22 

 
 
 
Based on calculations of affected trade flows, figure 11 displays the economic weight of 
the  resolved  barriers  in  the  different  sectors,  highlighting  that  their  resolution  in  2018 
could  positively  affect  EU  exports  first  and  foremost  in  the  automotive  sector,  which 
corresponds  to  32  percent  of  the  overall  potentially  affected  trade  flows.  The  wines  & 
spirits (17 percent) and cosmetics (16 percent) sectors also benefitted considerably from 
the  removal  of  barriers.  Overall,  industrial  sectors  accounted  for  83  percent  of  the 
economic  significance  of  resolved  barriers,  while  agriculture  and  fisheries  took  up  17 
percent. 

Figure 11: EU28 trade flows affected by barriers resolved in 2018, per sector 
(percentage of trade flows affected)28 

C. 

QUALITATIVE ANALYSIS OF BARRIERS RESOLVED IN 2018 

This chapter provides a more in-depth analysis of a selected number of barriers that the 
enhanced Market Access Partership managed to tackle. Contrary to last year, when this 
qualitative  analysis  concentrated  on  partners  with  the  highest  number  of  barriers 
resolved29, we now shift the focus to the countries with the most significant trade flows 
potentially affected by the resolved measures. As a result, we will analyse how effective 
the  EU  was  in  tackling  barriers  in  the  following  partner  countries:  Russia,  China,  the 
United  Arab  Emirates,  Egypt,  Japan,  India  and  South  Korea.  These  seven  partners 
correspond  to  93  percent  of  trade  flows  potentially  affected  by  resolved  measures  in 
2018. 

28 "Other" includes the  following sectors of economic activity: Ceramics and Glass; Electronics; Mineral 
products; Plastics; Precious metals. 
29  This  year,  the  highest  number  of  resolved  or  partially  resolved  barriers  (at  least  two)  was  recorded  in 
nine trade partners: Algeria, Argentina, Brazil, China, Egypt, India, South Korea, Turkey, and Russia. 

23 

 
 
 
 
 
                                                           
 
1.  

Russia 

As explained in Chapter I, the trends in market access terms have been generally negative 
with  Russia  as  EU  exporters  face  a  second-highest  stock  of  34  barriers  in  the  country, 
which continued to pursue an import substitution policy via a wide array of means. For 
example,  barriers  reported  in  previous  years,  such  as  the  restrictions  to  shipping  in  the 
Arctic  and  export  quotas  on  birch  logs,  have  indeed  started  to  affect  EU  operators  in 
2018.  In  addition,  further  negative  developments  regarding  an  existing  barrier  should 
also be noted concerning the requirements on labelling, which were further extended to 
other products such as electronics. 

While  several  measures  are  questionable  in  terms  of  compatibility  with  Russia’s 
international  commitments  -  and the EU has used the relevant  fora to  challenge them  - 
they  have  not  proven  to  be  efficient  to  boost  Russia’s  competitiveness  and  ability  to 
attract foreign investments. On the contrary, they have contributed, among other factors, 
to prevent an increase of trade between the EU and Russia. 

Against  this  challenging  trade  environment,  the  EU  used  the  most  resolute  tools  at  its 
disposal  and  produced  considerable  results 
the  correct 
implementation of two WTO rulings in Russia, which concerned EU exports in the range 
of €1.8 billion. This corresponds to a 23 percent share of EU exports affected by the 35 
overall resolved measures in 2018. 

in  2018  by  ensuring 

One of these instances featured a barrier affecting various industries, concerning which 
Russia  has  fully  implemented  the  WTO  ruling  in  a  tariffs-related  dispute  (DS485).  In 
addition, on the basis of the panel findings in DS485, a second dispute against Russia on 
tariffs (additional tariff lines of interest to the EU) was prepared back in 2017. However, 
following bilateral discussions with Russia end of 2017 and early 2018 it did not become 
necessary  to  launch  the  dispute  since  Russia  fully  removed  the  inconsistencies  on  the 
tariff lines concerned. This is a good example where the Commission's concerted action 
has led to concrete results without the need to actually resort to WTO litigation.  

Similarly, the dispute the EU launched with respect to the automotive sector concerning 
anti-dumping measures on Light Commercial Vehicles (DS479) from Germany and Italy 
has  led  to  a  positive  outcome  as  the  measures  expiring  in  mid-2018  have  not  been 
renewed.  

2.  

China 

As highlighted in Chapter I, China has become the EU's most restrictive trading partner 
with 37 barriers in place overall and with 14 obstacles introduced since 2017. However, 
some  progress  if  mostly  incremental  has  been  achieved,  demonstrating  that  the  EU 
barrier removal strategy can produce results even in the most challenging environments. 
Such progress was achieved in the SPS area, with the partial removal of two barriers and 
further improvements on another long-standing issue. The two partially resolved barriers 
in the agriculture and fisheries sector correspond to a combined share of 15 percent of all 
EU exports concerned by resolved measures in 2018. 

First, while demand for cheese from China is expected to increase, Chinese standards in 
the dairy sector are not aligned with international standards creating an unjustified barrier 
to trade for EU exporters. After this issue has been raised by the EU in different bilateral 

24 

 
 
meetings,  China  decided  not  to  enforce  these  standards  for  products  that  have  already 
been  imported  for  many  years  (traditional  products).  In  addition,  China  also  informed 
that it would now be reviewing its cheese standards in more general terms, which the EU 
welcomed. Although the underlying issue is still pending and the Food Safety Standard 
need  to  be  revised  to  fully  resolve  the  EU  concerns,  the  trade  impact  has  already  been 
managed  as  a  result  of  the  solution  found  on  traditional  products,  and  could  positively 
affect EU exports up to €1.2 billion.  

Second,  early  2012,  China  took  a  temporary  trade  restrictive  measure  on  imports  of 
bovine semen, bovine embryo, ovine semen and ovine embryo, which are produced after 
1  June  2011  from  several  EU  Member  States.  The  EU  invited  Chinese  experts  at  two 
occasions to come to Europe and Chinese scientists have visited veterinary institutes and 
research centres of several EU Member States. As a result, China announced the lifting 
of the trade restrictions on exports of bovine/ovine genetic material from several Member 
States. 

Finally, with respect to a partially resolved barrier already reported in last year's edition, 
it is worth mentioning that further progress has been achieved with regard to the import 
ban  on  EU  bovine  products  and  beef,  with  Ireland  and  the  Netherlands  now  granted 
access  to  the  market.  As  the  process  for  other  Member  States  is  not  yet  finalised,  the 
Commission will continue to raise this matter at all possible occasions. 

3.  

United Arab Emirates 

The United Arab Emirates (UAE) is an important trading partner. Thus, the Commission 
has  made  great  efforts  and  resolved  an  important  market  access  barrier  in  2018  in  the 
cosmetics  sector,  a  measure  that  corresponds  to  a  share  of  16  percent  of  EU  exports 
concerned by all resolved measures in 2018. 

This  obstacle concerned  new labelling  requirements,  which would have banned the use 
of a sticker over the original packaging and made mandatory the printing of a logo on all 
cosmetics  packaging  by  the  end  of  2018.  This  measure  obliged  companies  to  create  a 
specific  artwork  for  the  UAE  market  only.  The  Commission  reached  out  to  the  UAE 
through the WTO TBT enquiry point and EU businesses and the EU Delegation shared 
concerns with the Ministry of Economy and the  Emirates Authority for Standardization 
and  Metrology  (ESMA).  As  a  result,  ESMA  confirmed  at  a  meeting  with  the  EU 
Delegation that the cosmetic sector was finally exempted from this requirement before its 
entry into force, allowing EU companies to continue exporting to the UAE market, and 
positively affecting EU exports up to €1.2 billion.  

4.  

Egypt 

EU-Egypt trade relations are based on an Association Agreement. With one new barrier 
each in 2017 and in 2018 adding to several long-standing issues, Egypt now accounts for 
a total stock of eight barriers; which appears to confirm the trends for new protectionist 
measures  observed  in  the  South  Mediterranean  region  in  last  year's  report.  Faced  with 
this challenging tendency, the EU market access strategy also contributed to the removal 
of one barrier in 2018 in the automotive sector and two barriers in the textiles and leather 

25 

 
 
 
sector.  EU  exports  concerned  by  the  removal  of  these  barriers  are  worth  up  to  €1.2 
billion.  

Regarding  the  automotive  sector,  following  a  high-level  dialogue  and  exchange,  Egypt 
has totally eliminated duties on cars originating in the EU, now coming into compliance 
with  the  tariff  dismantling  schedule  agreed  in  the  Association  Agreement.  This  could 
positively affect EU exports in the range of  €1.1 billion. 

Furthermore, the textiles and leather sector faced a disproportionate restriction of trade 
in  textiles  products  due  to  mandatory  labelling  requirements  that  resulted  in  a  time-
consuming and costly operation for producers, taking into account that it had to be done 
manually.  The  form  of the labelling and the type of information requested on the label 
were eventually relaxed following bilateral discussions with the EU.  

Finally,  another  long-standing  issue  in  the  textiles  and  leather  sector  related  to  the 
handling  by  the  Egyptian  customs  of  mixed  invoices  containing  preferential  and  non-
preferential goods was finally resolved in 2018 after it had been raised repeatedly by the 
EU with the Egyptian authorities.   

5.  

Japan 

EU-Japan  trade  relations  are  now  based  on  the  Economic  Partnership  Agreement  that 
entered into force on 1 February 2019. In parallel, a barrier was successfully tackled in 
the wine and spirit sector.  

In 2018, the Ministry of Health, Labour and Welfare of Japan considered deleting some 
additives  for  food  and  beverages  from  the  list  of  authorized  additives  in  Japan.  If 
delisted, many companies in the EU wine and spirit sector would have been negatively 
impacted. The Commission wrote to the competent authorities in Japan (April 2018) and 
provided  comments  on  the  list  of  additives  envisaged  for  delisting  (September  2018). 
Japan accepted the comments provided, and as a result, none of the additives identified as 
used by EU producers will be delisted.  This could facilitate EU exports in the range of 
€1.1 billion. 

6.  

India 

As described in section II, the protectionist trend in India continued in 2018. Despite this 
difficult  context,  the  Market  Access  Strategy  also  delivered  some  positive  results.  A 
barrier  in  the  ICT  sector  and  a  barrier  in  the  textiles  and  leather  sector  were  partially 
resolved, accounting for six percent of all EU exports concerned by resolved measures in 
2018 (€457 million). 

Indian authorities asked for mandatory veterinary certificates upon importation of leather 
goods. Consequently, imports of finished products – that have no longer the attributes of 
the  raw  animal  product  –  continued  to  be  subject  to  sanitary  requirements.  However, 
according  to  the  international  standards  of  the  World  Organization  for  Animal  Health 
(OIE) and the WTO SPS Agreement, such requirements should only apply to raw animal 
products or should otherwise be scientifically justified by India. As a result of the efforts 
of  the  EU  in  raising  the  issue  with  relevant  authorities  in  India,  this  barrier  had  been 

26 

 
 
 
resolved  for  selected  finished  products  through  the  adoption  of  a  new  notification  by 
India. Notwithstanding this partial success, the EU will pursue its efforts to fully resolve 
the matter.   

Regarding  the  ICT  sector,  India  remains  a  challenging  partner  due  to  the  various 
restrictions  hampering  the  market  access  of  EU  companies,  such  as  continued  duty 
increases  (as  mentioned  in  Chapter  II),  mandatory  testing  and  licensing30,  as  well  as 
compulsory  registration  and  labelling  requirements.  Yet,  one  barrier  regarding  used 
telecommunications equipment has been partially resolved as India substantially relaxed 
the  norms  for  exported  goods  which  need  to  be  imported  back  for  repair. As  per  the 
notification  issued  by  the  Central  Board  of  Indirect  Taxes  and  Customs  (CBIC),  these 
goods can be imported duty-free under the condition that they will be re-exported after 
repairs. The exported electronic goods can now be imported back for repairs within seven 
years of its export (previously three years) and have to be exported back within one year 
of the import (previously six months). Should EU operators continue to face difficulties 
in spite of these positive steps, the Commission stands ready to keep addressing this issue 
with India.  

7.  

South Korea 

EU-South Korea trade relations are based on the EU-South Korea Free Trade Agreement 
(FTA)  that  was  provisionally  applied  since  July  2011  and  was  formally  ratified  in 
December  2015.  While  there  remain  seventeen  barriers  in  South  Korea,  one  was 
successfully  resolved  in  the  automotive  sector  and  one  was  partially  resolved  in  the 
aircraft parts sector. 

Regarding the  automotive sector, South  Korea required that the ground clearance of an 
unloaded  vehicle  should  be  greater  than  12cm.  As  the  EU  did  not  have  an  equivalent 
regulation,  since  it  was  considered  to  be  an  outdated  safety  criterion,  this  resulted  in 
difficulties  to  specific  categories  of  vehicles  (sport  vehicles)  to  enter  the  market. 
Following  interventions  of  the  EU  Delegation,  South  Korea  considered  positively  the 
amendment  of  the  measure  so  as  to  reflect  EU  requirements.  Accordingly,  the  ground 
clearance was amended from 12 to 10 cm and some sport vehicles can now be marketed 
in South Korea without the need to make costly adaptations in this regard. The EU will 
continue  to  use  all  avenues  to  address  remaining  automotive  barriers  in  South  Korea, 
such  as  the  certification  of  car  parts,  truck  tractors  or  cumbersome  customs  and 
administrative procedures. 

As the FTA has no provision exempting  repaired goods from customs duties on re-entry 
to South Korea after repair in the EU, certain goods such as aircraft parts repaired in the 
EU could have been subject to customs duties (3% to 8%) when re-entering South Korea. 
Back in 2016, following the Commission's frequent interventions, South Korea extended 
duty exemptions for these products until the end of 2018 – which were now set to expire. 
Following  various  interventions  from  the  EU  Delegation  and  discussion  in  the 
Trade  in  Goods  Committee  and  in  the  Customs  Committee  of  the  EU-Korea  FTA  in 
2018,  the  National  Assembly  has  now  further  extended  the  exemption  for  repaired 

30 Application of this measure for telecom equipment has been further extended until 1 August 2019. 

27 

 
 
                                                           
aircraft  parts  for  three  years  until  31  December  2021. Notwithstanding  this  welcomed 
temporary solution, the EU will continue to seek a permanent solution to this matter. 

D. 

IMPACT OF THE BARRIERS RESOLVED  

In previous chapters of this report, we analysed the trade flows linked to barriers resolved 
in  2018.  That  methodology  is  based  on  bilateral  EU  export  figures  for  the  relevant 
Harmonised  System  (HS)  tariff  codes  and  quantifies  the  trade  that  happens  despite  the 
barrier. 

In  addition  to  that,  since  last  year,  this  report  includes  a  refined  analysis  based  on  an 
econometric  model  which  is  able  to  assess  how  much  the  trade  flows  with  the  partner 
countries that have imposed a barrier have changed after its removal. In order to do so, a 
regression analysis has been used to quantify the impact of the removal of barriers on EU 
exports.31  

The  result  of  this  econometric  analysis  might  not  show  the  full  impact  of  the  Market 
Access  Strategy  as  we  have  focused  only  on  the  barriers  completely  removed,  and 
because  the  analysis  does  not  cover  more  complex  horizontal  barriers  that  affect  for 
instance investment or intellectual property rights. We have analysed the effects of this 
reduced set of barriers removed between 2014 and 2017.32 

Results  show  that  the  removal  of  this  subset  of  barriers  generated  tangible  benefits  for 
EU exporters. The estimates point to an average increase in trade of about 57% after the 
removal of the barriers. This implies, in value terms, that the resolution of these barriers 
generated €6.1 billion additional exports for our companies in 2018. This is in the order 
of magnitude of the benefits of many of our trade agreements. For example, this is more 
than the combined impact of our agreements with Colombia and Peru.  

Last year, the analysis using the same methodology yielded a figure of €4.8 billion. 

31 More specifically, we adopted a Difference-in-Difference methodology and analysed the impact on trade 
flows  only  between  the  EU  and  the  countries  that  has  imposed  the  barrier  on  the  specific  products 
involved. 
32 The analysis does not cover the number of barriers removed in 2018 as we need at least one full year of 
data after barrier removal to establish the impact on trade. 

28 

 
 
 
 
                                                           
IV. CONCLUSION 

This  report  gives  an  overview  of  trade  and  investment  barriers  directly  affecting  EU 
businesses,  as  reported  and  addressed  through  the  EU's  enhanced  Market  Access 
Partnership between the Commission, Member States and European business. 

In 2018, 45 new barriers were reported to the Commission, bringing the total stock to a 
record  425  trade-restrictive  measures.  For  the  first  time,  China  has  taken  over  as  the 
country  with  the  highest  overall  stock  of  barriers  (37)  for  our  companies,  followed  by 
Russia (34), India (25), Indonesia (25) and the United States (23).  

As for the 45 new barriers reported in 2018, China, the United States, India and Algeria 
rank the highest regarding both the number of new barriers recorded in 2018 (18) and the 
magnitude  of  their  potential  impact  on  trade  flows  (€41.8  billion)  -  81%  of  the  total. 
From a regional perspective, Asia and South Mediterranean regions are those which have 
introduced  the  highest  number  of  new  trade-restrictive  measures  in  2018,  applying  26 
new barriers and confirming the negative trend of 2017.  

Most sector-specific measures targeted the wines and spirits and agriculture and fisheries, 
cosmetics  and  automotive  industries.  In  terms  of  their  possible  impact,  barriers  in 
industrial  sectors  such  as  ICT;  precious  metals;  and  iron,  steel  and  non-ferrous  metals 
sectors  stood  out,  combining  for  73  percent  of  the  affected  exports,  which  overall 
amounted to €51.4 billion (more than double than last year: €23.1 billion).  

This confirms that protectionism is on the rise and that trade barriers increasingly affect 
EU stakeholders.  In  response, the EU has made  enforcement and implementation  of its 
trade  policy  a  top  priority.  Indeed,  the  Commission  reinforced  its  Market  Access 
Strategy,  with  strengthened  coordination  among  EU  institutions  and  stakeholders, 
improved  prioritisation  of  barriers  and  enhanced  communication  and  awareness-raising 
(such as through the Market Access Days initiative). The EU has not only continued to 
make full use of but also further extended its wide array of tools to effectively eliminate 
trade  barriers,  ranging  from  multilateral  and  bilateral  dispute  settlement  action  to  an 
ambitious agenda for trade negotiations, FTA implementation, diplomatic demarches, as 
well as the launch of the overarching European Economic Diplomacy initiative.  

With 23 obstacles addressed in 2015, 20 resolved barriers in 2016, a record number of 45 
successfully tackled barriers in 2017 and an additional 35 removed barriers in 2018, the 
tally  of  resolved  barriers  under  the  current  Commission  reached  123.  This  robust 
enforcement record reflects the EU’s firm response to a more transactional global trading 
environment.  

In 2018, the 35 barriers removed helped particularly eight different sectors of economic 
activity – among others agriculture and fisheries, automotive, textiles and leather, wines 
and spirits, cosmetics, mineral products, aircraft parts, ICT. In terms of trade concerned, 
17  percent  of  the  potential  benefits  are  linked  to  agriculture  and  fisheries  area  and  83 
percent  to  industrial  sectors,  with  the  automotive  (32  percent),  wines  and  spirits  (17 
percent)  and  cosmetics  (16  percent)  sectors  benefitting  most  significantly.  Overall,  our 
market  access  partnership  could  positively  affect  EU28  exports  in  the  range  of  €7.8 
billion. 

As of last  year, these  reports have  also  contained a refined regression analysis to  more 
precisely  quantify  the  real  impact  of  the  removal  of  barriers  on  EU  exports.  Estimates 

29 

 
indicate that the removal of barriers over the 2014-2017 period have generated additional 
exports  of  at  least  €6.1  billion  for  our  companies  in  2018.  This  is  in  the  order  of 
magnitude  of  many  of  our  trade  agreements.  Last  year,  the  analysis  using  the  same 
methodology yielded a figure of € 4.8 billion. 

This underlines that, as protectionism has risen abroad, so have our efforts to bring down 
barriers. Implementation and enforcement are more important than ever before to deliver 
growth, jobs and competitiveness to the benefit of our companies and citizens.  

In  the  closest  cooperation  with  Member  States  and  stakeholders,  the  Commission 
remains fully committed to continue further reinforcing the Market Access Partnership to 
effectively tackle barriers and enhance opportunities for EU operators operating around 
the world.  

30