COMMISSION STAFF WORKING DOCUMENT Individual reports and info sheets on implementation of EU Free Trade Agreements Accompanying the document REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE AND THE COMMITTEE OF THE REGIONS on Implementation of Free Trade Agreements 1 January 2018 - 31 December 2018
Date: 2019-10-14
Institutions: Directorate-General for Trade and Economic Security, European Commission
Subjects: association agreement (EU), cooperation agreement (EU), free-trade agreement, investment, preferential agreement, service, sustainable development, tariff quota, third country, trade agreement (EU)

EN 

  EN 

   EUROPEAN COMMISSION  Brussels, 14.10.2019  SWD(2019) 370 final  COMMISSION STAFF WORKING DOCUMENT Individual reports and info sheets on implementation of EU Free Trade Agreements Accompanying the document REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE AND THE COMMITTEE OF THE REGIONS  on Implementation of Free Trade Agreements    1 January 2018 - 31 December 2018   {COM(2019) 455 final}  
 
 
DATA USED FOR THE COMPILATION OF INDIVIDUAL REPORTS AND 
INFORMATION SHEETS .................................................................................................... 14 

PART I:   NEW GENERATION FREE TRADE AGREEMENTS .............................. 15 

ANNUAL REPORT ON THE IMPLEMENTATION OF THE COMPREHENSIVE 
ECONOMIC AND TRADE AGREEMENT (CETA) BETWEEN THE EU AND ITS 
MEMBER STATES AND CANADA ................................................................................... 16 

1. 

Introduction ................................................................................................................... 16 

2.  Evolution of trade .......................................................................................................... 18 

3.  Activities of the implementation bodies ........................................................................ 19 

4. 

Implementation of the provisions on trade and sustainable development .................... 23 

5.  Agriculture .................................................................................................................... 24 

6.  Regulatory Cooperation ................................................................................................ 27 

7.  Conclusions and outlook ............................................................................................... 28 

8.  Statistics ........................................................................................................................ 28 

ANNUAL REPORT ON THE IMPLEMENTATION OF THE EU-SOUTH KOREA 
FREE TRADE AGREEMENT ............................................................................................. 31 

1. 

Introduction ................................................................................................................... 31 

2.  Evolution of bilateral trade ............................................................................................ 31 

2.1 Trade in Goods ........................................................................................................... 31 

2.2 Trade in agricultural goods ........................................................................................ 32 

2.3 Trade in Services and Foreign Direct Investment (FDI) ............................................ 33 

3.  Activities of the implementation bodies ........................................................................ 34 

4. 

Implementation of the provisions on trade and sustainable development .................... 36 

5.  Specific areas subject to monitoring ............................................................................. 37 

6.  Progress, main open issues and follow-up actions ........................................................ 38 

7.  Conclusions and outlook ............................................................................................... 39 

8.  Statistics ........................................................................................................................ 39 

ANNUAL REPORT ON THE IMPLEMENTATION OF THE EU-
COLOMBIA/ECUADOR/PERU TRADE AGREEMENT ................................................ 41 

1. 

Introduction ................................................................................................................... 41 

2.  Evolution of trade .......................................................................................................... 42 

2.1 Trade in Goods ........................................................................................................... 42 

2.1.1 Overall evolution .............................................................................................................. 42 

2.1.2 Trade in agricultural goods ............................................................................................... 45 

2.2 Trade in Services and development of investment ..................................................... 49 

2.2.1 Trade in Services ............................................................................................................... 49 

2.2.2 Foreign Direct investment (FDIs) ...................................................................................... 50 

1 

 
 
 
3  Activities of the implementation bodies ........................................................................ 50 

4. 

Implementation of the provisions on trade and sustainable development .................... 54 

5.  Specific areas subject to reporting or monitoring ......................................................... 55 

6.  Conclusions and outlook ............................................................................................... 57 

7.  Statistics ........................................................................................................................ 57 

ANNUAL REPORT ON THE IMPLEMENTATION OF PART IV OF THE 
ASSOCIATION AGREEMENT BETWEEN THE EU AND ITS MEMBER STATES 
AND CENTRAL AMERICA ................................................................................................ 63 

1. 

Introduction ................................................................................................................... 63 

2.  Overall assessment: evolution of bilateral trade............................................................ 63 

2.1  Trade in Goods overall ........................................................................................... 63 

Sectoral structure of trade ........................................................................................................ 64 

Country-by-Country analysis ..................................................................................................... 64 

2.2  Trade in agricultural goods .................................................................................... 66 

2.3  Trade in Services and Foreign Direct investment (FDIs) ...................................... 68 

Trade in Services ........................................................................................................................ 68 

Development of Foreign Direct investment (FDI) ..................................................................... 68 

3  Activities of the implementation bodies ........................................................................ 69 

4 

Implementation of the provisions on trade and sustainable development .................... 70 

5  Specific areas subject to reporting or monitoring ......................................................... 70 

6  Conclusions and outlook ............................................................................................... 72 

7  Statistics ........................................................................................................................ 72 

PART II: ANNUAL REPORT ON THE IMPLEMENTATION OF THE DEEP AND 
COMPREHENSIVE FREE TRADE AREA (DCFTA) BETWEEN THE EU AND 
UKRAINE, MOLDOVA AND GEORGIA .......................................................................... 81 

ANNUAL REPORT ON THE IMPLEMENTATION OF THE DEEP AND 
COMPREHENSIVE FREE TRADE AREA (DCFTA) BETWEEN THE EU AND ITS 
MEMBER STATES AND UKRAINE .................................................................................. 82 

1.  Evolution of trade .......................................................................................................... 82 

1.1 Trade in goods overall ................................................................................................ 82 

Scope of trade liberalisation...................................................................................................... 82 

Sectoral structure of EU-Ukraine trade in goods ...................................................................... 82 

1.2 Trade in agricultural goods ........................................................................................ 83 

Use of Tariff Rate Quotas .......................................................................................................... 83 

1.3 Autonomous trade measures ...................................................................................... 85 

1.4 Establishment, trade in services and investments ...................................................... 85 

Market access related to establishment and trade in services ................................................. 85 

Trade in services ........................................................................................................................ 86 

2 

 
 
Foreign Direct investment (FDI) ................................................................................................ 86 

1.5 EU support to the implementation of the DCFTA ..................................................... 86 

1.5 EU support for Small and Medium sized Enterprises (SMEs) ................................... 87 

2  Activities of the implementation bodies ........................................................................ 88 

2.1 Joint decisions of the Association Bodies .................................................................. 88 

2.2 Meetings of the Association Bodies ........................................................................... 88 

3 

Implementation of the provisions on trade and sustainable development .................... 90 

4  Progress made, main open issues and follow-up actions .............................................. 90 

4.1 Wood export ban ........................................................................................................ 90 

4.2 Value added tax law 2440 .......................................................................................... 91 

4.3 Poultry meat imports .................................................................................................. 91 

4.4 Technical barriers to trade .......................................................................................... 91 

4.5 SPS aspects ................................................................................................................. 92 

4.6 Customs and Trade facilitation .................................................................................. 92 

4.7 Intellectual property rights (IPR) ............................................................................... 93 

4.8 Geographical indications (GIs) .................................................................................. 93 

4.9 Competition and State aid .......................................................................................... 94 

4.10 Public procurement .................................................................................................. 94 

5  Conclusions and outlook ............................................................................................... 94 

6  Statistics ........................................................................................................................ 95 

ANNUAL REPORT ON THE IMPLEMENTATION OF THE DEEP AND 
COMPREHENSIVE FREE TRADE AREA (DCFTA) BETWEEN THE EU AND ITS 
MEMBER STATES AND GEORGIA ................................................................................. 97 

1.  Evolution of trade .......................................................................................................... 97 

1.1 Trade in Goods overall ............................................................................................... 97 

The scope of trade liberalisation ............................................................................................... 97 

Overall evolution of EU–Georgia trade in goods ....................................................................... 98 

Sectoral structure of EU-Georgia trade in goods ...................................................................... 98 

1.2 Trade in agricultural goods ........................................................................................ 99 

1.3 Use of Tariff Rate Quotas (TRQ) ............................................................................... 99 

1.4 Establishment, trade in services and investments ...................................................... 99 

Market access related to establishment and trade in services ................................................. 99 

Trade in services ...................................................................................................................... 100 

Foreign Direct investment ....................................................................................................... 100 

2.  Activities of the implementation bodies ...................................................................... 100 

2.1 Joint decisions of the Association Bodies ................................................................ 100 

2.2 Meetings of the Association Bodies ......................................................................... 101 

3 

 
 
3. 

Implementation of the provisions on trade and sustainable development .................. 102 

4.  Specific areas subject to reporting or monitoring ....................................................... 103 

5.  Progress made, main open issues and follow-up actions ............................................ 103 

6.  EU support to DCFTA implementation ...................................................................... 106 

7.  Conclusions and outlook ............................................................................................. 106 

7.  Statistics ...................................................................................................................... 107 

ANNUAL REPORT ON THE IMPLEMENTATION OF THE DEEP AND 
COMPREHENSIVE FREE TRADE AREA (DCFTA) BETWEEN THE EU AND ITS 
MEMBER STATES AND MOLDOVA ............................................................................. 109 

1  Evolution of trade ........................................................................................................ 109 

1.1 Trade in goods overall .............................................................................................. 109 

The scope of trade liberalisation ............................................................................................. 109 

Overall evolution of EU-Moldova trade in goods .................................................................... 110 

Sectoral structure of EU-Moldova trade in goods ................................................................... 110 

1.2 Trade in agricultural goods ...................................................................................... 111 

Review clause for agricultural products .................................................................................. 111 

Anti-circumvention mechanism for agricultural products ...................................................... 111 

Use of Tariff Rate Quotas (TRQs) ............................................................................................. 112 

1.3 Establishment, trade in services and investments .................................................... 112 

Market access related to establishment and trade in services ............................................... 112 

Trade in Services ...................................................................................................................... 113 

Foreign Direct investment (FDIs) ............................................................................................. 113 

2.  Activities of the implementation bodies ...................................................................... 113 

2.1 Joint decisions of the Association Bodies ................................................................ 113 

2.2 Meetings of the Association Bodies ......................................................................... 114 

3. 

Implementation of the provisions on trade and sustainable development .................. 115 

4.  Progress made, main open issues and follow-up actions ............................................ 115 

4.1 SPS aspects ............................................................................................................... 115 

4.2 Technical Barriers to Trade ...................................................................................... 116 

4.3 Customs and Trade Facilitation ................................................................................ 116 

4.4 Energy ...................................................................................................................... 116 

4.5 Competition policy ................................................................................................... 117 

4.6 Intellectual Property Rights ...................................................................................... 117 

4.7 Services .................................................................................................................... 117 

4.8 Public Procurement .................................................................................................. 117 

5.  EU support to DCFTA implementation ...................................................................... 118 

5.1 EU Support to DCFTA-related reforms ................................................................... 118 

4 

 
 
5.2 EU Support for SMEs .............................................................................................. 118 

6.  Outlook and Conclusion .............................................................................................. 118 

7.  Statistics ...................................................................................................................... 120 

PART III: FIRST GENERATION FREE TRADE AGREEMENTS ............................. 122 

FIRST GENERATION FREE TRADE AGREEMENTS WITH MEDITERRANEAN 
PARTNERS .......................................................................................................................... 123 

ANNUAL INFO SHEET ON THE IMPLEMENTATION OF THE EU-ALGERIA 
ASSOCIATION AGREEMENT ......................................................................................... 124 

1. 

Introduction ................................................................................................................. 124 

2.  Evolution of trade ........................................................................................................ 124 

2.1 Trade in Goods ......................................................................................................... 124 

2.2 Trade in agricultural goods ...................................................................................... 125 

2.3 Trade in Services and Investment ............................................................................ 126 

3. 

Issues addressed in the Sub-Committee meetings ....................................................... 126 

4.  Specific areas of importance ....................................................................................... 127 

5.  Progress made, main open issues and follow-up actions ............................................ 128 

6.  Conclusions and outlook ............................................................................................. 128 

7.  Statistics ...................................................................................................................... 128 

ANNUAL INFO SHEET ON THE IMPLEMENTATION OF THE EU-EGYPT 
ASSOCIATION AGREEMENT ......................................................................................... 131 

1. 

Introduction ................................................................................................................. 131 

2.  Evolution of trade ........................................................................................................ 131 

2.1 Trade in Goods ......................................................................................................... 131 

2.2 Trade in agricultural goods ...................................................................................... 132 

2.3 Trade in Services and Foreign Direct Investment .................................................... 133 

3. 

Issues addressed in the Joint Committee meetings ..................................................... 133 

4.  Specific areas of importance ....................................................................................... 134 

5.  Progress made, main open issues and follow-up actions ............................................ 135 

6.  Conclusions and outlook ............................................................................................. 136 

7.  Statistics ...................................................................................................................... 136 

ANNUAL INFO SHEET ON THE IMPLEMENTATION OF THE EU-ISRAEL 
ASSOCIATION AGREEMENT ......................................................................................... 138 

1. 

Introduction ................................................................................................................. 138 

2.  Evolution of trade ........................................................................................................ 138 

2.1  Trade in Goods ..................................................................................................... 138 

2.2  Trade in agricultural goods .................................................................................. 139 

2.3  Trade in Services and Foreign Direct Investment (FDI)...................................... 140 

3. 

Issues addressed in the Annual (Joint Committee/Trade Committee) meeting .......... 140 

5 

 
 
4.  Specific areas of importance ....................................................................................... 141 

5.  Progress made, main open issues and follow-up actions ............................................ 141 

6.  Conclusions and outlook ............................................................................................. 142 

7.  Statistics ...................................................................................................................... 142 

ANNUAL INFO SHEET ON THE IMPLEMENTATION OF THE EU-JORDAN 
ASSOCIATION AGREEMENT ......................................................................................... 144 

1. 

Introduction ................................................................................................................. 144 

2.  Evolution of trade ........................................................................................................ 144 

2.1.  Trade in Goods ........................................................................................................ 144 

2.2.  Trade in agricultural goods ...................................................................................... 145 

2.3.  Trade in Services and Investment ............................................................................ 145 

3. 

Issues addressed in the Annual (Joint Committee/Trade Committee) meeting .......... 146 

4.  Specific areas of importance ....................................................................................... 146 

5.  Progress made, main open issues and follow-up actions ............................................ 148 

6.  Conclusions and outlook ............................................................................................. 148 

7.  Statistics ...................................................................................................................... 148 

ANNUAL INFO SHEET ON THE IMPLEMENTATION OF THE EU-LEBANON 
ASSOCIATION AGREEMENT ......................................................................................... 151 

1. 

Introduction ................................................................................................................. 151 

2.  Evolution of trade ........................................................................................................ 151 

2.1 Trade in Goods ......................................................................................................... 151 

2.2 Trade in agricultural goods ...................................................................................... 152 

2.3 Trade in Services and Foreign Direct Investment (FDI) .......................................... 152 

3. 

Issues addressed in the Annual Joint Committee meetings ......................................... 153 

4.  Specific areas of importance ....................................................................................... 154 

5.  Progress made, main open issues and follow-up actions ............................................ 154 

6.  Conclusions and outlook ............................................................................................. 155 

7.  Statistics ...................................................................................................................... 155 

ANNUAL INFO SHEET ON THE IMPLEMENTATION OF THE EU-MOROCCO 
ASSOCIATION AGREEMENT ......................................................................................... 157 

1. 

Introduction ................................................................................................................. 157 

2.  Evolution of trade ........................................................................................................ 157 

2.1 Trade in Goods ......................................................................................................... 157 

2.2 Trade in agricultural goods ...................................................................................... 158 

2.3 Trade in Services and Foreign Direct investment (FDIs)......................................... 159 

3. 

Issues addressed in the Joint Committee meetings ..................................................... 159 

4.  Specific areas of importance ....................................................................................... 159 

5.  Progress made, main open issues and follow-up actions ............................................ 160 

6 

 
 
6.  Conclusions and outlook ............................................................................................. 161 

7.  Statistics ...................................................................................................................... 161 

ANNUAL INFO SHEET ON THE IMPLEMENTATION OF THE EU-PALESTINE 
INTERIM ASSOCIATION AGREEMENT ...................................................................... 163 

1. 

Introduction ................................................................................................................. 163 

2.  Evolution of trade ........................................................................................................ 163 

2.1 Trade in Goods ......................................................................................................... 163 

2.2 Trade in agricultural goods ...................................................................................... 164 

2.3  Trade in Services and Foreign Direct investment (FDIs) .................................... 165 

3. 

Issues addressed in the Annual (Joint Committee/Trade Committee) meeting .......... 165 

4.  Specific areas of importance ....................................................................................... 165 

5.  Progress made, main open issues and follow-up actions ............................................ 166 

6.  Conclusions and outlook ............................................................................................. 166 

7.  Statistics ...................................................................................................................... 166 

ANNUAL INFO SHEET ON THE IMPLEMENTATION OF THE EU-TUNISIA 
ASSOCIATION AGREEMENT ......................................................................................... 169 

1. 

Introduction .................................................................................................................... 169 

2.  

Evolution of trade .................................................................................................... 170 

2.1 Trade in Goods ......................................................................................................... 170 

2.2 Trade in agricultural goods ...................................................................................... 171 

2.4 Trade in Services and Investment ............................................................................ 171 

3. 

Issues addressed in the Joint Committee meetings ........................................................ 172 

4.  Specific areas of importance .......................................................................................... 172 

5.  Progress, main open issues and follow-up actions ......................................................... 173 

6.  Conclusions and outlook ................................................................................................ 174 

7.  

Statistics ................................................................................................................... 175 

FIRST GENERATION FREE TRADE AGREEMENTS WITH THE WESTERN 
BALKAN PARTNERS ........................................................................................................ 177 

ANNUAL INFO SHEET ON THE IMPLEMENTATION OF THE TRADE PILLAR 
OF THE EU-ALBANIA STABILISATION AND ASSOCIATION AGREEMENT .... 178 

1. 

Introduction ................................................................................................................. 178 

2.  Evolution of trade ........................................................................................................ 178 

2.1 Trade in Goods ......................................................................................................... 178 

2.2 Trade in agricultural goods ...................................................................................... 179 

2.3 Trade in Services and Foreign Direct investment (FDIs)......................................... 179 

3. 

Issues addressed in the Joint Committee meetings ..................................................... 180 

4.  Specific areas of importance ....................................................................................... 180 

5.  Main open issues and follow-up actions ..................................................................... 180 

7 

 
 
6.  Conclusions ................................................................................................................. 181 

7.  Statistics ...................................................................................................................... 181 

ANNUAL INFO SHEET ON THE IMPLEMENTATION OF THE TRADE PILLAR 
OF THE EU-BOSNIA AND HERZEGOVINA STABILISATION AND ASSOCIATION 
AGREEMENT ...................................................................................................................... 183 

1. 

Introduction ................................................................................................................. 183 

2.  Evolution of trade ........................................................................................................ 183 

2.1 Trade in Goods ......................................................................................................... 183 

2.2 Trade in agricultural goods ...................................................................................... 183 

2.3 Trade in Services and Foreign Direct investment (FDIs)......................................... 184 

3. 

Issues addressed in the annual Committee meetings .................................................. 184 

4.  Specific areas of importance ....................................................................................... 185 

5.  Main open issues and follow-up actions ..................................................................... 185 

6.  Conclusions ................................................................................................................. 185 

7.  Statistics ...................................................................................................................... 186 

ANNUAL INFO SHEET ON THE IMPLEMENTATION OF THE TRADE PILLAR 
OF THE STABILISATION AND ASSOCIATION AGREEMENT BETWEEN THE EU 
AND NORTH MACEDONIA ............................................................................................. 190 

1. 

Introduction ................................................................................................................. 190 

2.  Evolution of trade ........................................................................................................ 190 

2.1 Trade in Goods ......................................................................................................... 190 

2.2 Trade in agricultural goods ...................................................................................... 191 

2.3 Trade in Services and FDI ........................................................................................ 191 

3. 

Issues addressed in the annual Committee meetings .................................................. 191 

4.  Specific areas of importance ....................................................................................... 192 

5.  Main open issues and follow-up actions ..................................................................... 192 

6.  Conclusions ................................................................................................................. 192 

7.  Statistics ...................................................................................................................... 193 

ANNUAL INFO SHEET ON THE IMPLEMENTATION OF THE TRADE PILLAR 
OF THE EU-KOSOVO STABILISATION AND ASSOCIATION AGREEMENT ..... 195 

1. 

Introduction ................................................................................................................. 195 

2.  Evolution of trade ........................................................................................................ 195 

2.1 Trade in Goods ......................................................................................................... 195 

2.2 Trade in agricultural goods ...................................................................................... 196 

2.4 Trade in Services and Foreign Direct investment (FDIs)......................................... 196 

3. 

Issues addressed in the annual Committee meetings .................................................. 196 

4.  Specific areas of importance ....................................................................................... 196 

5.  Main open issues and follow-up actions ..................................................................... 196 

8 

 
 
6.  Conclusions ................................................................................................................. 197 

7.  Statistics ...................................................................................................................... 197 

ANNUAL INFO SHEET ON the IMPLEMENTATION OF THE TRADE PILLAR OF 
THE EU-MONTENEGRO STABILISATION AND ASSOCIATION AGREEMENT 199 

1. 

Introduction ................................................................................................................. 199 

2.  Evolution of trade ........................................................................................................ 199 

2.1 Trade in Goods ......................................................................................................... 199 

2.2 Trade in Agricultural Goods .................................................................................... 200 

2.3 Trade in Services and Foreign Direct investment (FDIs)......................................... 200 

3. 

Issues addressed in the annual Committee meetings .................................................. 200 

4.  Specific areas of importance ....................................................................................... 200 

5.  Main open issues and follow-up actions ..................................................................... 201 

6.  Conclusions ................................................................................................................. 201 

7.  Statistics ...................................................................................................................... 201 

ANNUAL INFO SHEET ON THE IMPLEMENTATION OF THE TRADE PILLAR 
OF THE EU-SERBIA STABILISATION AND ASSOCIATION AGREEMENT ........ 203 

1. 

Introduction ................................................................................................................. 203 

2.  Evolution of trade ........................................................................................................ 203 

2.1 Trade in Goods ......................................................................................................... 203 

2.2 Trade in agricultural goods ...................................................................................... 203 

2.3 Trade in Services and Foreign Direct investment (FDIs)......................................... 204 

3. 

Issues addressed in the annual trade committee meeting ............................................ 204 

4.  Specific areas of importance ....................................................................................... 205 

5.  Main open issues and follow-up actions ..................................................................... 205 

6.  Conclusions ................................................................................................................. 205 

7.  Statistics ...................................................................................................................... 206 

FIRST GENERATION FREE TRADE AGREEMENTS WITH LATIN AMERICAN 
COUNTRIES ........................................................................................................................ 208 

ANNUAL INFO SHEET ON IMPLEMENTATION OF THE TRADE PILLAR OF 
THE EU-CHILE ASSOCIATION AGREEMENT .......................................................... 209 

1. 

Introduction ................................................................................................................. 209 

2.  Evolution of trade ........................................................................................................ 209 

2.1  Trade in Goods ..................................................................................................... 210 

2.2  Trade in agricultural products .............................................................................. 210 

2.3  Trade in Services and Foreign Direct investment (FDIs) .................................... 210 

3.  Annual Trade Coordinators Meeting and Trade-related Sub-committees .................. 211 

4.  Progress made, Main open issues and follow-up actions ............................................ 211 

5.  Conclusions and outlook ............................................................................................. 212 

9 

 
 
6.  Statistics ...................................................................................................................... 212 

ANNUAL INFO SHEET ON IMPLEMENTATION OF THE TRADE PILLAR OF 
THE EU-MEXICO ASSOCIATION AGREEMENT ...................................................... 215 

1. 

Introduction ................................................................................................................. 215 

2.  Evolution of trade ........................................................................................................ 215 

2.2 Trade in goods .......................................................................................................... 215 

2.2 Trade in agricultural goods ...................................................................................... 216 

2.3 Trade in services and Foreign Direct investment (FDIs) ......................................... 217 

3. 

Issues addressed in the joint committee meetings ....................................................... 217 

4.  Progress made, main open issues and follow-up actions ............................................ 217 

5.  Conclusions and outlook ............................................................................................. 218 

6.  Statistics ...................................................................................................................... 219 

FIRST GENERATION FREE TRADE AGREEMENTS WITH THE EFTA 
COUNTRIES NORWAY AND SWITZERLAND ............................................................ 221 

ANNUAL INFO SHEET ON IMPLEMENTATION OF THE EU-NORWAY FREE 
TRADE AGREEMENT ....................................................................................................... 222 

1. 

Introduction ................................................................................................................. 222 

2.  Evolution of trade ........................................................................................................ 222 

2.1 Trade in Goods ......................................................................................................... 222 

2.2 Trade in agricultural goods ...................................................................................... 222 

2.3 Trade in Services and Foreign Direct investment (FDIs)......................................... 223 

3. 

Issues addressed in the EEA and FTA Joint committees ............................................ 223 

4.  Specific areas of importance ....................................................................................... 224 

5.  Progress made, main open issues and follow-up actions ............................................ 224 

6.  Conclusions and outlook ............................................................................................. 225 

7.  Statistics ...................................................................................................................... 225 

ANNUAL INFO SHEET ON IMPLEMENTATION OF THE EU-SWITZERLAND 
FREE TRADE AGREEMENT ........................................................................................... 232 

1. 

Introduction ................................................................................................................. 232 

2.  Evolution of trade ........................................................................................................ 233 

2.1.

  Trade in Goods ..................................................................................................... 233 

2.2.

  Trade in agricultural goods .................................................................................. 233 

2.3.

  Trade in Services and Foreign Direct investment (FDIs) .................................... 234 

3. 

Issues addressed in the annual joint committee meeting ............................................. 234 

4.  Specific areas of importance ....................................................................................... 234 

5.  Progress made, main open issues and follow-up actions ............................................ 235 

6.  Conclusions and outlook ............................................................................................. 236 

7.  Statistics ...................................................................................................................... 236 

10 

 
 
THE CUSTOMS UNION WITH TURKEY ...................................................................... 238 

ANNUAL INFO SHEET ON IMPLEMENTATION OF THE EU-TURKEY CUSTOMS 
UNION AND TRADE AGREEMENTS ............................................................................ 239 

1.  Evolution of trade ........................................................................................................ 239 

1.1  Trade in Goods ..................................................................................................... 240 

1.2 Trade in agricultural goods ...................................................................................... 240 

1.3  Trade in Services and Foreign Direct investment (FDIs) .................................... 240 

2 

Issues addressed in the Committee Meetings .............................................................. 241 

3  Specific areas of importance ....................................................................................... 242 

4  Progress made, main open issues and follow-up actions ............................................ 242 

5  Conclusions and outlook ............................................................................................. 243 

6.  Statistics ...................................................................................................................... 243 

PART IV: ANNUAL INFO SHEET ON THE IMPLEMENTATION OF THE 
ECONOMIC PARTNERSHIP AGREEMENTS (EPAs) WITH AFRICAN, 
CARRIBEAN AND PACIFIC COUNTRIES .................................................................... 245 

ANNUAL INFO SHEET ON THE IMPLEMENTATION OF THE ECONOMIC 
PARTNERSHIP AGREEMENT (EPA) BETWEEN THE EU AND THE SOUTHERN 
AFRICAN DEVELOPMENT COMMUNITY (SADC) ................................................... 246 

1. 

Introduction ................................................................................................................. 246 

2.  Evolution of trade ........................................................................................................ 246 

2.1 Trade in goods .......................................................................................................... 246 

2.2 Trade in services ....................................................................................................... 250 

2.3 Foreign Direct Investment (FDI) .............................................................................. 251 

3. 

Issues addressed in the annual EPA Committee meeting............................................ 253 

4.  Specific areas of importance ....................................................................................... 253 

5.  Progress made, main open issues and follow-up actions ............................................ 255 

6.  Conclusions and outlook ............................................................................................. 255 

7.  Statistics ...................................................................................................................... 256 

ANNUAL INFO SHEET ON THE IMPLEMENTATION OF THE INTERIM 
ECONOMIC PARTNERSHIP AGREEMENT BETWEEN THE EU AND EASTERN 
AND SOUTHERN AFRICAN STATES ............................................................................ 263 

1. 

Introduction ................................................................................................................. 263 

2.  Evolution of trade ........................................................................................................ 263 

2.1 Trade in Goods ......................................................................................................... 263 

2.2 Trade in Services ...................................................................................................... 266 

2.3 Foreign Direct investment (FDI) .............................................................................. 267 

3. 

Issues addressed in the annual EPA Committee Meeting ........................................... 267 

4.  Development Cooperation ........................................................................................... 268 

5.  Progress made, main open issues and follow-up actions ............................................ 269 

11 

 
 
6.  Conclusions and outlook ............................................................................................. 270 

7.  Statistics ...................................................................................................................... 270 

Madagascar ........................................................................................................................... 271 

Mauritius ............................................................................................................................... 272 

Seychelles ............................................................................................................................... 274 

Zimbabwe .............................................................................................................................. 275 

ANNUAL INFO SHEET ON THE IMPLEMENTATION OF THE ECONOMIC 
PARTNERSHIP AGREEMENT (EPA) BETWEEN THE EU AND COTE D’IVOIRE
 ................................................................................................................................................ 277 

1. 

Introduction ................................................................................................................. 277 

2.  Evolution of trade ........................................................................................................ 277 

2.1 Trade in goods .......................................................................................................... 277 

2.2 Trade in services ....................................................................................................... 279 

2.3 Foreign Direct investment (FDI) .............................................................................. 279 

3. 

Issues addressed in the annual EPA Committee meeting............................................ 280 

4.  Development Cooperation ........................................................................................... 280 

5.  Progress made, main open issues and follow-up actions ............................................ 281 

6.  Conclusions and outlook ............................................................................................. 282 

7.  Statistics ...................................................................................................................... 282 

ANNUAL INFO SHEET ON THE IMPLEMENTATION OF THE ECONOMIC 
PARTNERSHIP AGREEMENT (EPA) BETWEEN THE EU AND GHANA .............. 284 

1. 

Introduction ................................................................................................................. 284 

2.  Evolution of trade ........................................................................................................ 284 

2.1 Trade in goods .......................................................................................................... 284 

2.2 Trade in services ....................................................................................................... 286 

2.3 Foreign Direct investment (FDIs) ............................................................................ 286 

3. 

Issues addressed in the first meeting of the joint EPA Committee ............................. 287 

4.  Development Cooperation ........................................................................................... 287 

5.  Follow-up actions ........................................................................................................ 288 

6.  Conclusions and outlook ............................................................................................. 288 

7.  Statistics ...................................................................................................................... 289 

ANNUAL INFO SHEET ON THE IMPLEMENTATION OF THE ECONOMIC 
PARTNERSHIP AGREEMENT (EPA) BETWEEN THE EU AND CAMEROON .... 291 

1. 

Introduction ................................................................................................................. 291 

2.  Evolution of trade ........................................................................................................ 291 

2.1 Trade in goods .......................................................................................................... 291 

2.2 Trade in services ....................................................................................................... 294 

2.3 Foreign Direct investment (FDI) .............................................................................. 294 

12 

 
 
3. 

Issues addressed in the annual EPA Committee meeting............................................ 295 

4.  Development Cooperation ........................................................................................... 296 

5.  Main open issues and follow-up actions ..................................................................... 297 

6.  Conclusions and outlook ............................................................................................. 297 

7.  Statistics ...................................................................................................................... 297 

ANNUAL INFO SHEET ON THE IMPLEMENTATION OF THE ECONOMIC 
PARTNERSHIP AGREEMENT (EPA) BETWEEN THE EU AND CARIFORUM ... 300 

1. 

Introduction ................................................................................................................. 300 

2.  Evolution of trade ........................................................................................................ 300 

2.1 Trade in goods .......................................................................................................... 300 

2.2 Trade in services ....................................................................................................... 302 

2.3 Foreign Direct investment (FDI) .............................................................................. 302 

3. 

Issues addressed in the EPA Committee meetings ...................................................... 303 

4.  Specific areas of importance ....................................................................................... 304 

5.  Progress made, main open issues and follow-up actions ............................................ 307 

6.  Conclusions and outlook ............................................................................................. 307 

7.  Statistics ...................................................................................................................... 307 

ANNUAL INFO SHEET ON THE IMPLEMENTATION OF THE ECONOMIC 
PARTNERSHIP AGREEMENT (EPA) BETWEEN THE EU AND PACIFIC STATES
 ................................................................................................................................................ 309 

1. 

Introduction ................................................................................................................. 309 

2.  Evolution of trade ........................................................................................................ 309 

2.1 Trade in goods .......................................................................................................... 309 

2.2 Trade in services ....................................................................................................... 311 

2.3 Foreign Direct investment (FDI) .............................................................................. 312 

3. 

Issues addressed in the EPA Committee meetings ...................................................... 312 

4.  Development Cooperation ........................................................................................... 313 

5.  Progress made, main open issues and follow-up actions ............................................ 313 

6.  Conclusions and outlook ............................................................................................. 314 

7.  Statistics ...................................................................................................................... 314 

13 

 
 
 
 
DATA  USED  FOR  THE  COMPILATION  OF  INDIVIDUAL  REPORTS  AND 
INFORMATION SHEETS 

The  trade  statistics  used  in  this  report  and  the  attached  staff  working  document  on  the 
evolution  of  trade  and  investment  flows  are  based  on  EUROSTAT  data  as  available  on  30 
March  2019,  except  where  indicated  otherwise.  The  most  recent  annual  data  available  for 
trade in goods are for 2018, and for services and investment for 2017, except where indicated 
otherwise.  

14 

 
 
 
 
 
 
PART I:  

NEW GENERATION FREE TRADE AGREEMENTS 

15 

 
 
 
 
 
 
ANNUAL  REPORT  ON  THE  IMPLEMENTATION  OF  THE  COMPREHENSIVE 
ECONOMIC  AND  TRADE  AGREEMENT  (CETA)  BETWEEN  THE  EU  AND  ITS 
MEMBER STATES AND CANADA 

1. 

INTRODUCTION 

The  EU-Canada  Comprehensive  Economic  and  Trade  Agreement  (“CETA”)  has  been 
provisionally  applied  since  21  September  2017.  2018  was  the  first  full  year  of  provisional 
application.  While  it  is  too  early  to  take  a  definitive  view  on  the  economic  impact  of  the 
Agreement,  trade  flows  suggest  a  positive  trajectory  with  EU  goods  exports  rising  by  15% 
compared to the average of the previous three years. Good progress has also been achieved in 
implementing  the  institutional  structure  foreseen  by  the  Agreement,  with  the  parties 
identifying  the  co-chairs  and  contact  points  for  the  twenty  committees  and  dialogues 
established under CETA and almost all committees and dialogues held their first meetings in 
the  course  of  2018  (more  details  below).  Important  efforts  were  made  to  ensure  that  the 
conduct  of  these  meetings  is  transparent  and  inclusive.  Meeting  schedules,  provisional 
agendas and reports of all CETA committees and dialogue meetings were made public on DG 
TRADE's  website  (http://trade.ec.europa.eu/doclib/press/index.cfm?id=1811).  Civil  society 
mechanisms  as  foreseen  by  agreement  were  set  up  and  further  initiatives  of  civil  society 
engagement  were  implemented  for  committees  like  the  Regulatory  Co-operation  Forum,  in 
light of the interest of stakeholders regarding the Forum.  

On 26 of September 2018, the EU and Canada held the first CETA Joint Committee, which is 
the  highest  body  under  the  agreement.  They  reviewed  progress  made  by  the  various  CETA 
committees  and  dialogues  and  discussed  the  effective  implementation  of  the  agreement. 
Several Member States and Canadian provinces participated in the meeting. 

Issues  of  concern  that  the  EU  raised  related  notably  to  the  cheese  TRQ  management  by 
Canada, access to the Canadian Wines & Spirits and Geographical Indications (GI) protection 
in Canada. From the Canadian side, main concerns relate to EU legislation in the Sanitary and 
phytosanitary  (SPS)  field  (Country  of  Origin  Labelling,  Maximum  Residue  Levels),  the 
implementation  of  the  conformity  assessment  protocol  and  the  beef  and  pork  TRQ 
management.  

The Joint Committee formally adopted three recommendations, which set the stage for further 
work, namely to encourage small and medium-sized enterprises (SMEs) to use opportunities 
offered by CETA, to work jointly on climate action measures and the implementation of the 
Paris Agreement within the CETA context, and to work jointly to better understand how trade 
agreements can contribute to gender equality. The Parties also set up dedicated contact points 
for  trade  and  gender  and  trade  and  SMEs.  Work  is  underway  to  implement  the  concerned 
recommendations.  For  instance,  a  CETA  Workshop  on  Trade  and  Gender,  co-organised  by 
the Commission and by the Mission of Canada to the EU, took place in Brussels on 1 April 
2019.  Participants  from  business,  civil  society,  EU  Member  States  and  international 
organisations  engaged  with  the  objective  to  learn  from  women-led  businesses  about  their 
experiences under CETA and challenges faced when participating in international trade more 
generally. Participants also discussed potential actions to implement CETA’s trade and gender 
recommendation.  To help  SMEs, the EU and Canada put  online  a dedicated webpage  with 

16 

 
 
 
information  useful  to  smaller  businesses  on  accessing  Canadian  and  EU  markets  such  as 
import requirements and other information considered to be useful for SMEs. 

In  line  with  its  commitments  in  the  recommendation  on  climate  action,  a  joint  EU-Canada 
conference on Trade and Climate was organised in Brussels on 24 January 2019. The event 
provided a platform for policy makers, businesses, non-governmental organisations to engage 
(more details below).  

Work has also been ongoing on the foundations of the Investment Court System (ICS) already 
established in CETA. Although the ICS provisions are not provisionally applied, the contours 
of  the  further  work  on  the  ICS  has  been  agreed  between  EU  and  Canada  in  the  Joint 
Interpretative  Instrument  on  CETA1  and  is  also  reflected  in  the  Commission  and  Council 
Statement No 362. In the course of 2018, the Commission has consulted with Member States 
and  discussed  with  Canada  on  how  to  bring  forward  the  work  that  has  been  committed  to 
during the CETA ratification process. 

In particular, the Commission has been working with the Member States at the Trade Policy 
Committee (Services and Investment) on four strands of action for the implementation of the 
Investment  Court System: (1) the rules regarding the functioning of the  Appellate Tribunal, 
(2) the code of conduct for the Members of the Tribunals, (3) the rules for mediation and (4) 
the  procedure  to  adopt  binding  interpretations.  The  European  Parliament  has  been  kept 
informed  of  the  discussions.  At  the  first  inaugural  meeting  of  the  CETA  Committee  on 
Services  and  Investment  on  18  September  2018,  the  EU  and  Canada  had  first  positive 
exchanges  on  the  draft  decisions.  The  Commission  continued  technical  discussions  on  the 
texts with the EU Member States and with Canada. The aim is to reach a technical agreement 
on those texts in due course.  

The Commission started work on other areas related to the implementation of the Investment 
Court  System,  in  particular  on  the  selection  mechanism  for  the  Members  of  the  Court. 
Discussions  on  this  issue  with  the  Member  States  at  the  Trade  Policy  Committee  (Services 
and Investment) started in December 2018 and are ongoing. In its Opinion 1/17 delivered on 
30  April  2019,  the  Court  of  Justice  of  the  EU  confirmed  the  compatibility  of  the  CETA’s 
provisions on the Investment Court System with EU law3. 

At  the  time  of  writing,  13  Member  States  had  notified  the  completion  of  their  ratification 
process (Austria, Czech Republic, Denmark, Estonia, Spain, Croatia, Latvia, Lithuania, Malta, 
Portugal,  Finland,  Sweden  and  the  UK).  The  ratification  process  is  still  ongoing  in  other 
Member  States  and  the  Commission  continues  to  be  engaged  with  Member  States  and 
stakeholders to create awareness of the opportunities and to ensure EU stakeholders are able 
to derive full benefits of the agreement. As part of these efforts, the Commission developed 
specific guides to assist EU businesses which are or want to become active on the Canadian 

1    Para. 6 (“Investment Protection”) of the Joint Interpretative Instrument on the Comprehensive Economic and 
Trade  Agreement  (CETA)  between  Canada  and  the  European  Union  and  its  Member  States  (OJ  L  11,  14 
January 2017, pp. 3–8) 

2      Statement  No  36  (“Statement  by  the  Commission  and  the  Council  on  investment  protection  and  the 
Investment  Court  System  (ICS)”)  of  the  Statements  entered  in  the  Council  minutes  in  the  occasion  of  the 
signature of CETA (OJ L 11, 14 January 2017, pp. 9–22)  

3   The 

Opinion 

at: 
http://curia.europa.eu/juris/document/document.jsf?text=&docid=213502&pageIndex=0&doclang=EN&mod
e=req&dir=&occ=first&part=1&cid=6942898.  

available 

Court 

the 

of 

is 

17 

 
 
                                                 
market (notably on the protection of geographical indications and public procurement). More 
such guides are in the process of being developed (notably on services and investment). The 
Commission also updated its Market Access Data Base to provide more information useful to 
EU exporters to Canada, in particular SMEs.  

2. 

EVOLUTION OF TRADE 

In terms of trade in goods, Canada is now the EU’s 10th largest trading partner (imports plus 
exports),  with  total  trade  flows  worth  €72  billion,  or  2%  of  the  EU’s  total  trade  with  third 
countries4.  

The EU had a trade surplus of €10.4 billion, which amounted to a €3.9 billion improvement 
compared to the average between 2015 and 2017. 

Although  one  year  after  the  provisional  application  of  CETA  some  caution  is  needed  to 
interpret  the  limited  data  available,  EU  exports  were  on  a  positive  trajectory  in  2018.  EU 
goods exports to Canada increased by 15% percent when compared to the average of the three 
previous years (€36 billion). This meant a stronger increase than for EU goods exports to third 
countries,  which  went  up  by  8%  during  the  same  period.  Over  the  same  period,  total  EU 
goods imports from Canada increased by 5% or €1.5 billion.  

The  EU’s  most  important  export  items  all  experienced  a  significantly  stronger  export 
performance  when  compared  to  the  average  of  the  three  previous  years:  ‘Machinery  and 
mechanical appliances’ were up 16% (accounting for almost one-fifth of total EU exports to 
Canada);  ‘Vehicles  and  parts’  were  up  11%  (accounting  for  14%  of  total  EU  exports  to 
Canada);  ‘Pharmaceuticals’  were  up  29%  (accounting  for  12%  of  total  EU  exports  to 
Canada);  ‘Agricultural  goods’  were  up  7%  (accounting  for  9%  of  total  EU  exports  to 
Canada); ‘Electrical machinery’ was up 2% and ‘Organic chemicals’ were up by 77%.  

EU exports to Canada, 2018 

Other 
31% 

Agriculture 
9% 

Organic chemicals 
4% 

Electrical 
machinery 
5% 

4 Total 2018 trade in goods, imports and exports combined. 

18 

Machinery and 
mechanical 
appliances 
18% 

Vehicles and parts 
14% 

Pharmaceuticals 
12% 

Mineral fuels and 
oils 
7% 

 
 
 
                                                 
At the same time, EU imports from Canada increased during the same period by 5% or €1.5 
billion,  from  on  average  €29.5  billion  in  2015-2017  to  €31.0  billion  in  2018.  Imports  from 
Canada grew at a slower pace than overall EU imports from third countries, which over the 
same period grew by 12%.   

Canada  is  the  EU’s  12th  largest  source  of  imported  goods,  accounting  for  2%  of  all  goods 
imported from countries outside the EU. To put this into perspective, 20% of the EU’s total 
imports originate from China (€394 billion), which is the EU’s first trading partner in terms of 
imports. 

The EU's most important imports from Canada are displayed in the graph below. 

With the exception of aircraft and spacecraft and ores, slag and ash, these sectors are also part 
of the EU's top ten sectors when it comes to overall world imports. 

Concerning services, total exchanges in 2018 amounted to €38.7 billion, an 11% increase compared to 
2017 (see section statistics for the 2017 data). EU exports to Canada amounted to €23.5 billion, whilst 
Canada’s exports to the EU amounted to €15.1 billion; the EU maintained a trade surplus at around 
€8.3 billion.  

In 2017, total FDI stocks amounted to €600 billion. 

3. 

ACTIVITIES OF THE IMPLEMENTATION BODIES 

In  2018,  18  of  the  20  the  committees  and  dialogues  established  under  CETA  met  (only  the 
Dialogue on electronic  commerce and the Mutual  recognition  of Professional  Qualifications 
Committee did not meet). For more details, the agendas and reports of these meetings can be 
found on the Commission’s "CETA – Meetings and documents" webpage5.  

Committees 

5  http://trade.ec.europa.eu/doclib/press/index.cfm?id=1811  

19 

 
 
 
 
 
                                                 
The CETA Joint Committee met in Montreal on 26 September 2018 (details provided in the 
introduction). The activities of the other committees and dialogues were as follows: 

The first meeting of the CETA Committee on Government Procurement took place on 15 
March 2018 in Brussels. The Parties exchanged recent legislative developments and discussed 
inter alia  technical  updates that need to  be made to  Annex 19-8 of Canada’s market  access 
schedule,  ongoing  work  in  developing  Canada’s  single  point  of  access  for  public 
procurement,  existing  bid  challenge  mechanisms/domestic  review  procedures,  as  well  as 
public procurement opportunities, particularly in the space sector.  

The first meeting of the Sanitary and Phytosanitary Joint Management Committee (JMC) 
on 26-27 March 2018 in Ottawa, achieved the following outcomes (i) identification of priority 
SPS issues affecting trade between the European Union and Canada, and (ii) establishing the 
foundations  for  bilateral  exchanges  of  information  and  for  ongoing  cooperative  efforts 
including cooperation on animal welfare and antimicrobial resistance. More specifically, the 
EU  and  Canada  identified  the  topic  of  long  distance  transport  of  animals  as  a  topic  for 
engagement  within  the  context  of  the  CETA  Regulatory  Cooperation  Forum  meeting  of 
December 2018.  
During the 2nd  SPS JMC meeting in February 2019 the agreed follow-up actions were further 
deepened to make the outcome more result- oriented on several pending market access issues, 
as 
report 
detail 
more 
(http://trade.ec.europa.eu/doclib/docs/2019/march/tradoc_157809.pdf). 

reflected 

public 

the 

in 

in 

The  Committee  on  Geographical  Indications  (GIs)  convened  on  17  May  2018.  Canada 
explained the important  changes it had made to  its  legislative framework  to  meet  its CETA 
commitments  on  the  protection  of  GIs.  Concerns  were  raised  by  the  EU  about  Canada’s 
implementation of CETA articles regarding administrative enforcement of GI protection and 
the lack of a list of companies entitled to use the grandfathering clause. Canada committed to 
organising  explanatory  meetings  in  certain  EU  Member  States,  which  notably  took  place  in 
Brussels, Paris, Madrid and Rome. 

The  Joint  Customs  Cooperation  Committee  (JCCC)  convened  in  Brussels  on  22  June 
2018. Parties exchanged information about recent legislative and regulatory developments in 
the field of customs, explored bilateral and international cooperation topics and made progress 
towards  the  mutual  recognition  of  the  EU  and  Canada  Authorised  Economic  Operator 
programmes. 

The  Wine  and  Spirits  Committee  met  in  Brussels  on  5  July  2018.  Parties  had  a  detailed 
discussion on the implementation of the CETA Joint Declaration on wines and spirits, which 
contributed to developing a mutual understanding of their respective views. The EU expressed 
concerns about the enforcement of the protection of certain EU Wines and Spirits GIs, which 
the Canadian counterparts explained they were resolving. The EU provided an overview of its 
legislation  on  certain  duty  reductions,  as  well  as  on  the  on-going  recast  of  the  EU  wine 
legislation, which should address Canada's concern about red ice wine.  

The Financial Services Committee met in Brussels on 19 June 2018. The Parties discussed 
financial sector developments as well as regulatory and supervisory issues relating to banking 
and  capital  markets.  They  also  discussed  issues  pertaining  to  financial  stability  as  well  as 
cybersecurity, consumer and data protection and sustainable finance. 

20 

 
 
The  Committee  on  Trade  and  Sustainable  Development  (TSD)  met  in  Brussels  on  13 
September  2018.  The  meeting  was  preceded  and  informed  by  exchanges  of  the  first  CETA 
Civil  Society  Forum,  which  took  place  on  12  September  2018.  In  addition,  the  Parties  met 
with  the  representatives  of  the  domestic  advisory  groups  (DAGs)  referred  to  by  the  TSD 
chapters, and debriefed them on the TSD Committee discussions. They exchanged views on 
the  subjects  raised  during  the  TSD  meeting  and  discussed  expectations  for  future  work 
between  the  DAGs  and  the  Parties.  The  EU  and  Canada  acknowledged  the  envisaged 
adoption  of  three  recommendations  on  trade  and  climate,  trade  and  gender  and  trade  and 
SMEs,  which  had  been  prepared  in  the  framework  of  the  TSD  implementation  work  and 
which were subsequently adopted by the CETA Joint Committee on 26 September 2018.  

The  Committee  on  Services  and  Investment  met  in  Brussels  on  18  September  2018.  On 
investment  protection,  the  Parties  discussed  the  functioning  of  the  Appellate  Tribunal,  the 
code  of  conduct  and  rules  for  mediation.  Both  the  EU  and  Canada  agreed  that  subsequent 
work  will  be  carried  out  at  technical  level  to  produce  a  draft  decision  in  early  2019.  On 
services,  the  Parties  exchanged  information  on  Mutual  Recognition  Agreements,  Canada’s 
coastal  shipping  legislative  reform,  ongoing  negotiations  relating  to  the  development  of 
performance requirements obligations for financial services, and the provision of information 
on temporary entry. Both Parties agreed that technical level discussions would advance these 
issues further.  

The  Agriculture  Committee  met  on  19  September  2018  in  Brussels.  Reviewing  their 
respective  trade  data,  both  Parties  welcomed  increased  imports  across  most  agricultural 
goods. Canada raised concerns about the EU’s beef and pork quota management system and 
asked  about  data  access,  while  the  EU  expressed  concern  about  the  Canadian  cheese  quota 
administration and the very low uptake of the quota until late in 2018. Other issues discussed 
were Canada’s price class for milk protein ingredients as well as European national measures 
on  origin  labelling.  Both  Parties  agreed  to  engage  in  information  sharing  to  remedy  the 
flagged  issues,  calling  for  more  collaboration  in  order  to  take  advantage  of  CETA’s  new 
opportunities.  

On 16 November 2018, the Joint Sectoral Group (JSG) on Pharmaceuticals convened by 
videoconference.  Six  administrative  arrangements  to  facilitate  the  effective  implementation 
and  monitoring  of 
the  CETA  Good  Manufacturing  Practices  Protocol  (GMP)  on 
Pharmaceuticals were approved (Components of the Information Sharing Process; Two-way 
Alert  Program;  Procedure  for  Evaluating  New  Regulatory  Authorities;  Equivalence 
Maintenance  Program;  Components  of  a  GMP  Compliance  Program;  Contact  Points). 
Canada’s Proposal on a Mutual Recognition Agreement (MRA) for Drug Facility Inspections 
in  third  countries  and  the  Recognition  of  the  Active  Pharmaceutical  Ingredients  Program 
under the CETA GMP Protocol on Pharmaceuticals were discussed, with Parties agreeing to 
develop  a  common  approach  and  propose  a  plan.  The  JSG  confirmed  the  continued  mutual 
recognition of GMP inspections and batch certification between the Parties.  

On 29 November 2018, the Trade in Goods Committee convened via videoconference. The 
Committee  welcomed  the  progress  made  on  the  reciprocal  exchange  of  information  on  the 
safety of consumer products and discussed the implementation of the Protocol on conformity 
assessment.  The  Parties  also  exchanged  information  regarding  the  informal  IPR  dialogue  in 
June  2018,  the  joint  report  of  the  Joint  Sectoral  Group  on  Pharmaceutical  products,  which 

21 

 
 
took  place  on  16  November,  as  well  as  legislative  developments.  The  Reports  of  the 
Agricultural  Committee  and  the  Wines  &  Spirits  Committee  were  discussed  thereafter, 
covering  a  range  of  issues  (including  the  cheese  TRQ,  provincial  discriminatory  measures 
against EU wines exporters, enforcement of W&S GI protection, origin declaration on Wines 
& Spirits, veterinary medicines regulation, and country-of-origin labelling, amongst others).  

The  Regulatory  Cooperation  Forum  met  on  14  December  2018  in  Brussels  (and 
videoconference)  and  agreed  on  a  work  plan.  It  was  also  agreed  that  the  plan  should  be 
published  online  and  updates  should  be  published  regularly.  Topics  retained  in  the  work 
programme were ‘cybersecurity and the Internet of Things’, ‘animal welfare’, ‘cosmetics-like 
drug products’, and ‘pharmaceutical inspections’. Both Parties emphasised the importance of 
safety  of  consumer  products  and  welcomed  the  new  administrative  arrangement  adopted  to 
exchange  non-personal  information  on  dangerous  non-food  consumer  products.  Finally,  the 
Forum  debriefed  civil  society  stakeholders  and  in  response  to  requests  of  stakeholders 
conveyed  openness  to  receiving  suggestions  for  new  topics,  if  there  is  a  common  interest. 
Stakeholders welcomed the increased transparency.  

The  Joint  Committee  on  Mutual  Recognition  of  Professional  Qualifications  met  in 
Brussels on 16 April 2019. The Committee officially acknowledged the receipt of documents 
submitted  by  the  Canadian  Architectural  Licensing  Authorities  (CALA)  and  the  Architects’ 
Council  of  Europe  (ACE)  with  a  view  to  providing  a  joint  recommendation  on  a  Mutual 
Recognition  Agreement  (MRA)  between  Canada  and  the  EU  concerning  the  profession  of 
architects. The Committee discussed the joint submission in light of Article 11 of CETA and 
exchanged views about the next steps in the process of the possible negotiation and adoption 
of the MRA. 

Dialogues 

The Bilateral Dialogue on Forest Products held a productive meeting on 23 May 2018 by 
videoconference,  discussing  resource  efficiency  of  wood-based  products,  their  sustainable 
use,  product  standards,  hazard-based  approach 
regulation  of  plant  protection 
products/biocides and EU-Canada cooperation on research and innovation.  

to 

The Bilateral Dialogue on Raw Materials took place on 16 November 2018 and discussed 
research  and  innovation  aspects  of  the  raw  materials  life  cycle.  The  EU  and  Canada  also 
agreed  to  continue  to  exchange  best  practices  on  sustainable  mining  as  well  as  to  find 
synergies to boost investment opportunities in exploration and mining in the EU and Canada. 
Stakeholder representatives joined part of the meeting to report on the main outcome of the 
EU-Canada Raw Materials Stakeholders Forum.  
The 14th Joint Science and Technology Cooperation Committee meeting - the first under 
CETA-  acknowledged  the  importance  of  the  recent  research  and  innovation  policy 
developments  in  Canada  and  in  the  European  Union  -  Budget  2018  and  Horizon  2020. 
Reinforcing the links between industry  and research was a key objective of both  Parties for 
this  meeting  and  they  agreed  to  continue  their  strong  cooperation  in  key  areas  like  marine, 
health, aeronautics and agricultural research. Mobility of Canadian and European researchers 
was strongly reaffirmed and continued development of appropriate framework conditions for 
research cooperation was agreed.  

22 

 
 
The  Dialogue  on  Biotechnology  took  place  on  26  April  2018  by  videoconference.  Both 
Parties underlined the importance of information exchange on regulatory and technical issues 
affecting  trade  in  agricultural  products  of  biotechnology.  Both  sides  exchanged  information 
on  legislative  and  policy  developments.  The  EU  raised  the  issue  of  Genetically  Modified 
(GM)  animals  in  Canada,  specifically  about  GM  salmon  and  its  traceability  requirements. 
Canada  reaffirmed  that  all  products  exported  to  the  EU,  including  salmon,  must  meet  EU 
import requirements and therefore no GM salmon is exported to the EU.  

The  meeting  of  the  Bilateral  Dialogue  on  Motor  Vehicle  Regulations  was  held  via 
videoconference on 5 October 2018 and focused on regulatory developments with respect to 
motor vehicles. Regulatory ambitions in the Automated Driving sector were discussed and the 
Parties agreed to hold additional technical meetings on regulations of relevance ahead of the 
UNECE  meetings  in  Geneva.  Both  sides  confirmed  their  willingness  to  continue  technical 
exchanges on issues of common interest.  

4. 

IMPLEMENTATION  OF  THE  PROVISIONS  ON  TRADE  AND 
DEVELOPMENT 

SUSTAINABLE 

In  the  context  of  the  Trade  and  Sustainable  Development  Committee,  the  EU  and  Canada 
discussed  issues  of  common  interest  in  the  multilateral  context  and  exchanged  views  on 
potential priority areas in the trade and labour, trade and environment and other cross-cutting 
fields. The Parties recalled the existing high intensity of bilateral relations on environmental 
issues in general, and noted their commitment to future cooperation under CETA. The Parties 
updated  each  other  on  their  relevant  processes  in  relation  to  multilateral  environment 
agreements  (MEAs).  In  this  context,  the  Parties  also  exchanged  views  on  areas  of  mutual 
interest,  such  as  trade  in  plastics,  trade  and  biodiversity  and  clean  technology.  The  Parties 
provided updates on their respective mechanisms and practices in receiving communications 
on  the  Trade  and  Environment  Chapter  (Canada)  and  Trade  and  Sustainable  Development 
(EU) from non-governmental stakeholders and the wider public. 

To expand the awareness of EU-Canada trade and climate action in the context of CETA, the 
EU and Canada hosted a conference in  Brussels  on 24 January 2019 to explore how to best 
leverage  CETA’s  institutional  and  legal  framework  to  encourage  further  joint  actions  to 
support implementation of the Paris Agreement. At this conference business, civil society and 
policy communities from both sides of the Atlantic discussed topics such as the application of 
CETA to support sustainable and green investment, regulatory cooperation and trade in green 
technologies and services. 

In  relation  to  trade  and  labour,  the  Parties  outlined  their  respective  legal  mechanisms  for 
monitoring  and  ensuring  compliance  with  core  labour  standards,  and  discussed  possible 
priorities  for  cooperation.  In  this  context,  the  EU  and  Canada  expressed  their  preliminary 
interest  in  working  jointly  on  (i)  labour  issues  in  relation  to  global  supply  chains  in  third 
countries;  (ii)  on  collective  bargaining  in  the  context  of  the  changing  world  of  work,  in 
particular on the platform economy;  and (iii) on gender-related issues in the world of work, 
also in coordination with the work on the Trade and Gender Recommendation.  

Under  cross-cutting  issues,  the  Parties  also  stressed  the  important  role  of  businesses  in 
promoting labour and environmental objectives and outlined their respective ongoing efforts 

23 

 
 
in  promoting  responsible  business  conduct/corporate  social  responsibility  with  their  trade 
partners. They agreed as a follow-up to explore potential synergies and cooperation activities.   

Trade and Sustainable Development (TSD) review 

The  review  process  was  formally  initiated  by  an  exchange  of  letters  between  the  EU  and 
Canada  after  CETA  provisionally  came  into  force  on  21  September  2017.  In  the  course  of 
2018, the Parties held several technical level discussions and exchanged views in the context 
of the early review of the Trade and Sustainable Development chapters. Canada and the EU 
reconfirmed their commitment to advance this process and agreed to intensify their efforts on 
this commitment, with a view to reviewing the implementation of the TSD chapters, including 
their enforcement mechanisms, to propose solutions and outcomes at the second CETA Joint 
Committee meeting and subsequent Joint Committee meeting as pertinent. In parallel, the EU 
Commission published a 15-point action plan to make EU trade and sustainable development 
chapters more effective and which is informing the EU position on TSD. The Parties devised 
a  joint  work  plan  to  be  implemented  in  advance  of  the  second  CETA  Joint  Committee 
meeting.   

5. 

AGRICULTURE 

Since the provisional application of CETA on 21 September 2017, the Commission has been 
closely  following  the  implementation  of  the  commitments  made  in  the  field  of  agriculture. 
Canada is the 10th most important market for EU agri-food exports. In 2018, the EU’s trade 
surplus with Canada grew by 31.5% to reach €1.7 billion.  

EU-28  agri-food  exports  to  Canada  were  up  4%  in  value  when  compared  to  2017  and 
increased by 7% when compared with the average of the last three years (2015-2017). This is 
just slightly below the 4.3% annual growth recorded in the previous 4 years.  

Meanwhile EU imports fell by nearly 12%. This was largely due to a sharp decline of 40% in 
oilseeds (notably rapeseeds and soybeans) and a decline of 26% in wheat imports. The tariff 
rate  quotas  opened  by  the  EU  for  the  import  of  Canadian  agricultural  products  were  hardly 
utilised.  The  highest  fill  rate  was  11%  for  the  common  wheat  and  sweet  corn  quotas.  For 
meat, fill rates ranged from 0% for frozen beef to 4% for bison meat. They were particularly 
low  (0%–1%)  for  the  origin  quotas  for  sugar-containing  products,  chocolate,  food 
preparations and pet food.  

The additional duty free quotas for cheese are among the major gains for the EU in CETA. 
The EU therefore pays particular attention to ensure that the administration of this quota by 
Canada is in line with the principles agreed in CETA.  

In 2018, the CETA cheese quota was nearly completely filled (96.4%), an even better result 
than in 2017. The quota uptake, however, was very slow to take off for well over the first half 
of 2018 and the EU raised its concerns in this regard to Canada, both in CETA’s Agriculture 
Committee as well as in the CETA Joint Committee. In these forums, the EU also highlighted 
other concerns with the Canadian quota management system, which notably foresees that 50% 
of quota licenses be allocated to Canada’s cheese manufacturers, which would not appear to 
constitute the most likely users of the quota. At the CETA Joint Committee it was agreed that 
in order to draw meaningful conclusions it was important to have data for the first full year of 
quota utilisation. The experience of the first full year of application of CETA has confirmed 
concerns raised by EU stakeholders about a large number of quota licenses (up to 40%) being 

24 

 
 
 
 
transferred  to  other  operators.  Such  transfers  add  costs  to  EU  cheeses  in  Canada.  In  April 
2019, the EU therefore requested that Canada conduct a mid-term review of its CETA cheese 
quota administration system.  

 Utilisation of the CETA quota for EU cheese 

Tariff 
Code 

0406 

Product 

Cheese 
  of which: 

Quota 2018 
(tonnes) 
5 900 

high quality 
industrial 

5 333 
567 

Source: Global Affairs Canada. 

Utilisation 2018 
(tonnes) 

Utilisation rate 

5 693 

5 290 
403 

96,5 % 

99,2 % 
71,1 % 

On various occasions in 2018, the EU also expressed concerns about Canada’s price class for 
milk  protein  ingredients  (milk  class  7),  which  are  made  available  to  the  food  processing 
industry at world prices. 

Canada  for  its  part,  raised  concerns  about  the  EU’s  quota  management  system  for  meat 
quotas, specifically the automatic on-demand issuance of import licenses. The EU explained 
that  for  volumes  not  allocated  during  the  initial  application  period,  import  licenses  are 
automatically issued on-demand after they are processed. Canada also called for better access 
to quota utilisation data. The EU pointed out that data on quota allocation, which is publically 
available on-line, was a reliable guide to actual imports.   

Alcoholic beverages, in particular wines and spirits,  top  the list  of EU agricultural  exports, 
accounting for over 40%. Many discriminatory practices remain in Canada against imported 
wines  and  spirits,  notably  at  provincial  level.  Ontario  and  Quebec  have  implemented  the 
commitment  foreseen  in  CETA  and  have  moved  away  from  ad-valorem  cost  of  service 
differential  fees  to  a  volume  based  system.  In  accordance  with  the  agreement,  the  EU  has 
requested  that  Ontario  and  Quebec  carry  out  new  audits  of  their  accounting  system.  In 
addition, the EU called for more transparency and clarity on cost allocation in relation to these 
cost  of  service  differential  fees  (some  costs  are  seen  as  unduly  absorbed  by  imported 
products). The federal excise duty on imported wine (that exists since 2006) was increased in 
2017 by 2% and an escalator clause linked to inflation was included. The EU requested that 
the discriminatory aspects of the tax to be removed. The tax has also been challenged in the 
World  Trade  Organisation  by  Australia.  Finally,  the  Commission  is  working  with  the 
Canadian authorities to seek mutually agreed solutions to the multitude of concerns relating to 
the  discrimatory  treatment  of  EU  alcoholic  beverages  compared  to  local  ones  across  few 
provinces.  

Since the entry into force of CETA 143 EU food  geographical indications (GIs) enjoy full 
protection  from  imitations  in  Canada,  at  a  level  comparable  to  that  under  EU  law.  The 
Commission  worked  with  Canada  to  ensure  that  the  protection  of  these  GIs  would  be  fully 
enforced.  The  amendment  of  Canada’s  Trade-Mark  Act  to  protect  the  geographical 
indications  of  food  products,  which  was  introduced  as  a  result  of  CETA,  established  a 
procedure  for  the  direct  application  for  protection  by  EU  rights-holders.  The  new  system 
delivered  its  first  result  in  September  2018  with  the  protection  of  an  additional  EU  GI 
“Prosciutto  di  Carpegna”.  This  progress  should  be  seen  as  a  concrete  positive  outcome  of 

25 

 
 
 
 
 
 
 
 
CETA. European producers who are interested in exporting to Canada have for the first time 
access to an effective and easy mechanism to protect their geographical indications. In order 
to  assist  EU  GI  right  holders  to  fully  avail  themselves  of  this  new  mechanism,  the  EU 
produced a GI guide available to businesses on the Commission’s webpage. Certain concerns 
remain  as  to  how  the  administrative  enforcement  can  be  ensured  notably  for  the  8 
grandfathered  GIs  for  which  a  specific  regime  applies  in  view  of  certain  prior  uses  on  the 
Canadian  market.  The  Commission  will  continue  to  engage  with  Canada  on  this  issue.    In 
addition, the EU and Canada will also continue to work on updating the Annex of Wines and 
Spirits GIs. In the case of alcoholic beverages, CETA, as a result of the incorporation of the 
EU Canada wines and spirits agreement, only provides a list of GI names which are eligible 
for  protection  in  Canada.  EU  GI  rights-holders  would  still  need  to  submit  an  application  to 
Canadian authorities.  

SPS measures   

Currently  only  17  EU  Member  States  are  authorised  to  export  meat  to  Canada.  Work  is 
ongoing to ensure that the remaining EU Member States will also have access to this market. 
At  the  end  of  2018,  a  process  was  agreed  for  Canada  to  recognise  the  EU  Meat  inspection 
system, based on an additional set of audits of a selection of EU Member States in 2019. If 
this were to result in a satisfactory outcome in all audited EU Member States, Canada would 
allow  the  exports  of  meat  from  all  EU  Member  States  for  bovine,  swine  and  poultry.  This 
process  will  not  affect  ongoing  trade  for  those  EU  Member  States  currently  authorised  to 
export meat to Canada. 

Work on the harmonisation of EU export certificates continues, with priorities put forward by 
both sides aiming at some tangible initial results in 2019. 

For  some  plant  commodities,  Canada  does  not  recognise  alternatives  to  the  use  of  methyl 
bromide as a pest mitigating measure for trade. In 2018, an EU project on alternatives to the 
use of methyl bromide was launched in close cooperation with Canadian authorities with the 
objective to identify risk measures not based on the use of a pesticide which is known to be an 
ozone depleting compound. A workshop with experts on both sides took place in March 2019. 
The outcome of this cooperation will result in a guidance document for EU exporters of plants 
and plant products for the Canadian market.  

Several  other  SPS  issues  are  still  outstanding  and  are  being  further  discussed  with  Canada 
with a view to finding a solution. For example, the export of EU bovine semen is limited only 
to  Schmallenberg  Virus  serologically  negative  animals,  while  there  is  no  scientific  basis  to 
justify this restriction. Exports from the EU to Canada are also not authorised for potatoes for 
planting (called also “potato mini tubers” by Canada) and fresh tomato with vines, stems, and 
calyces,  due  to  restrictive  plant  health  requirements  for  Canadian  imports.  Discussions  are 
ongoing with the Canadian authorities to identify appropriate solutions.  

6. 

REGULATORY COOPERATION  

Chapter 21 of CETA lays out the framework for voluntary regulatory cooperation activities, 
including the establishment of the “Regulatory Cooperation Forum” (the Forum). The Forum 
builds on the existing regulatory cooperation agreement between the EU and Canada signed in 
2004.  

26 

 
 
To prepare for this first meeting, both  the EU and Canada held  stakeholder consultations to 
identify  issues,  priorities,  and  sectors  that  the  Forum  could  consider  to  include  into  its  first 
work  plan.  In  January  2018,  the  Commission  published  a  call  for  proposals  inviting  civil 
society to come forward with suggestions for topics for regulatory cooperation with Canada. 
The Commission received 26 responses to this call, which were made public6. From February 
to  April  2018,  Canada  also  sought  comments  from  stakeholders  on  potential  areas  for 
regulatory cooperation with the EU. Canada received close to 40 responses, which were also 
made public7. 

The first meeting of the Forum took place on 14 December 2018 in Brussels (and via video 
conference).  The  topics  to  be  included  in  the  work  plan  were  drawn  from  the  consultations 
following feedback  from EU and Canadian  regulators, before being agreed between the EU 
and Canadian Co-chairs. In choosing the topics, the EU and Canada also took into account the 
readiness of the topics proposed for regulatory cooperation and whether or not the topics were 
already dealt with in other CETA committees or existing bilateral or international dialogues. 
Regulators  from  both  sides  provided  an  update  on  the  feedback  received  during  the 
consultations, how the initiatives were identified for cooperation, bilateral discussions to date 
and  next  steps.  On  this  basis,  the  parties  agreed  on  a  work-plan  including  the  following  5 
topics:  (i)  cybersecurity  and  the  internet  of  things;  (ii)  animal  welfare  –  transportation  of 
animals;  (iii)  re-testing  of  cosmetics-like  products;  (iv)  co-operation  on  pharmaceutical 
inspections  in  third  countries;  and  (v)  exchange  of  information  on  the  safety  of  consumer 
products.  

information  on  dangerous  non-food  consumer  products  between 

The last topic already saw the conclusion of an administrative arrangement for the exchange 
the  European 
of 
Commission’s Directorate-General for Justice and Consumers (DG JUST) and Health Canada 
on 13 November 2018, during International Product Safety Week. The Forum welcomed the 
agreed  administrative  arrangement  and  took  stock  of  the  context,  scope,  and  type  of 
information that will be exchanged under the administrative arrangement. Furthermore, it was 
agreed that it would be relevant for the Forum to receive a report of the implementation of the 
administrative arrangement at the next meeting. 

During the civil society meeting, co-chairs and regulators from the EU and Canada debriefed 
civil  society  stakeholders  about  the  Forum’s  activities.  Audiences  from  multiple  physical 
locations  participated  in  this  exchange:  stakeholders  participating  in  person  in  Brussels,  in 
Ottawa  via  video  conference,  and  from  desks  and  conference  rooms  via  web  streaming. 
Several stakeholders in Brussels and Ottawa participated and had the opportunity to comment 
on the outcomes of the Forum and indicated their interests for future initiatives to strengthen 
regulatory cooperation.  

7. 

CONCLUSIONS AND OUTLOOK 

The  first  year  of  provisional  application  of  CETA  showed  good  results.  The  institutional 
structure of the Agreement was set up and committees and dialogues started their activities. 

6 http://trade.ec.europa.eu/consultations/index.cfm?consul_id=248. 

7 https://open.canada.ca/data/en/dataset/c45c4cda-7134-4e65-8e99-5214eb07bcf3 

27 

 
 
                                                 
 
 
Important efforts were made to ensure the conduct of meetings was transparent and inclusive 
and this was welcomed by stakeholders and civil society.  

Trade statistics for 2018 indicated that companies were starting to benefit from the signficant 
reduction of  duties applicable since 21 September 2017 (i.e. 98% of the overall duties which 
will be ultimately reduced by CETA). We can  observe an increase in trade in many sectors, 
particularly in those sectors where duties were high before the entry into force of CETA. The 
preliminary  statistics  also  indicated  an  increase  of  EU  exports  to  Canada  for  agricultural 
products,  in  particular  for  processed  agricultural  products  and  cheeses  where  the  EU  has 
strong  economic  interests.  CETA  also  offers  the  protection  of  143  distinctive  EU  food 
products labelled with GIs. Thanks to CETA, the Canadian Trade Mark Act was amended to 
allow  for  a  procedure  for  the  direct  application  for  protection  by  EU  rights-holders  of  food 
GIs.  A  first  successful  additional  protection  of  an  EU  GI  was  delivered  through  that 
mechanism in September 2018. 

CETA  also  provides  for  a  significant  further  opening  of  the  Canadian  procurement  market, 
including  at  provincial  and  local  level  which  represent  an  important  percentage  of  public 
procurment. These openings have been vigourously welcomed by EU companies. CETA also 
gives  unparalleled  services  market  access  for  the  EU,  including  new  market  access  in 
maritime services, and more globally establishes legal certainty in all key economic sectors. It 
also  includes  provisions  to  facilitate  the  movement  of  professionals  and  the  recognition  of 
qualifications.  A  first  proposal  for  a  Mutual  Recognition  Agreement  (MRA)  was  made  in 
2018  by  the  Canadian  Architectural  Licensing  Authorities  (CALA)  and  the  Architects’ 
Council  of  Europe  (ACE)  aiming  to  facilitate  recognition  and  licensing  procedures  of 
architects  in  the  EU  and  in  Canada,  thus  completing  a  first  step  of  the  mutual  recognition 
framework outlined in CETA.  

The  Commission  will  continue  its  work  to  ensure  correct  implementation  of  CETA  in  all 
areas and will collaborate with EU Member States and stakeholders in order to make sure that 
EU companies and citizens take full advantages of the benefits created by CETA.  

8. 

STATISTICS 

Merchandise trade EU28 2014-2018 

2014 

2015 

2016 

2017 

2018 

EU28 trade with Canada (mio €) 
Imports 
Exports 
Balance 
Share Canada in EU28 trade with 
Extra-EU28 

27.431 
31.654 
4.223 

28.027 
35.145 
7.118 

29.016 
35.228 
6.212 

31.509 
37.704 
6.195 

30.988 
41.355 
10.366 

Imports 
Exports 
Total (I+E) 

Imports 
Exports 
Total (I+E) 

1,6% 
2,0% 
1,8% 

1,6% 
1,9% 
1,7% 
Share EU28 in trade Canada with world 
11,3% 
7,4% 
9,4% 

11,4% 
7,2% 
9,4% 

11,4% 
7,7% 
9,6% 

1,7% 
2,0% 
1,9% 

1,7% 
2,0% 
1,9% 

1,6% 
2,1% 
1,8% 

11,7% 
7,3% 
9,6% 

12,3% 
7,4% 
10,0% 

28 

 
 
 
  
 
  
  
  
  
 
  
  
  
  
Source Trade G2 Statistics/ISDB  
Trade EU28: Eurostat COMEXT;  Trade Canada: IMF Dots 

Total merchandise trade EU28 with Canada (mio €) 

25-
mars-
19 

Canada 

2017 

2018 

Imports 
Exports 
Balance 
Total trade 
Source Trade G2 Statistics/ISDB from Eurostat COMEXT 

31.509 
37.704 
6.195 
69.213 

30.988 
41.355 
10.366 
72.343 

Agrifood trade EU28 with Canada (mio €) 

Canada 

2017 

2018 

Imports 
Exports 
Balance 
Total trade 
Source Trade G2 Statistics/ISDB from Eurostat COMEXT 

2.251 
3.560 
1.309 
5.810 

1.988 
3.707 
1.720 
5.695 

NAMA trade EU28 with Canada (mio €) 

Canada 

2017 

2018 

EU28 imports 
EU28 exports 
Balance 
Total trade 
Source Trade G2 Statistics/ISDB from Eurostat COMEXT 

29.258 
34.144 
4.886 
63.403 

29.001 
37.647 
8.647 
66.648 

Services trade EU28 with Canada (mio €) 

Canada 

2016 

2017 

Imports 
Exports 
Balance 
Total trade 
Source Trade G2 Statistics/ISDB from Eurostat BOP statistics 

12.067 
20.221 
8.154 
32.288 

13.228 
21.681 
8.454 
34.909 

Services trade EU28 with Canada (mio €) 
2015 
12.640 
19.376 
6.736 
32.017 

2013 
11.684 
17.976 
6.292 
29.661 

2014 
11.036 
16.558 
5.522 
27.594 

Imports 
Exports 
Balance 
Total trade 
Source Trade G2 Statistics/ISDB 
from Eurostat BOP statistics 

FDI EU28 with Canada (mio €) 

29 

Growth 

mio € 
-521 
3.651 
4.172 
3.130 

annual 
% 
-1,7% 
9,7% 

4,5% 

Growth 

mio € 
-263 
147 
411 
-116 

annual 
% 
-11,7% 
4,1% 

-2,0% 

Growth 

mio € 
-258 
3.503 
3.761 
3.245 

annual 
% 
-0,9% 
10,3% 

5,1% 

Growth 

mio € 
1.160 
1.460 
300 
2.620 

annual 
% 
9,6% 
7,2% 

8,1% 

2016 
12.067 
20.221 
8.154 
32.288 

2017 
13.228 
21.681 
8.454 
34.909 

 
 
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
Inward 
Outward 

Inward 
Outward 
Source Trade G2 Statistics/ISDB 
from Eurostat BOP statistics 

2013 

2014 

2015 

2016 

2017 

FDI Stocks 
165.239  211.486  245.556  299.979  292.998 
256.748  286.867  283.214  315.153  304.782 
FDI Flows 
20.367 
22.243 

30.507 
-10.475 

40.437 
21.918 

29.400 
4.058 

17.856 
9.291 

30 

 
 
  
  
  
  
  
  
 
 
 
ANNUAL  REPORT  ON  THE  IMPLEMENTATION  OF  THE  EU-SOUTH  KOREA 
FREE TRADE AGREEMENT 

1. 

INTRODUCTION 

The  Free  Trade  Agreement  (FTA;  referred  to  as  ‘the  Agreement’)  between  the  EU  and  its 
Member States and the Republic of South Korea (in this report referred to as "South Korea") 
has  been  provisionally  applied  since  July  2011.  On  13  December  2015,  it  entered  formally 
into force after ratification by EU Member States. The Additional Protocol to the FTA, to take 
into account the accession of Croatia to the EU, has been provisionally applied since 26 May 
2014 and it entered into force on 1 January 2016. 

The EU-South Korea FTA is the first of a new generation of comprehensive FTAs meaning 
that apart from providing market opening commitments as well as a basis for regulatory co-
operation  in  key  sectors,  it  includes  a  substantial  chapter  on  sustainable  development  that 
upholds and promotes social and environmental standards.  

This  is  the  7th  Annual  Report  on  the  implementation  of  the  EU-South  Korea  FTA,  which 
presents  the  recent  evolution  of  EU-South  Korea  bilateral  trade  and  investment  and  against 
2010, which is the last year before the Agreement went into force. An overview of activities 
of the FTA Working Groups and Committees is also included in the report. Special attention 
is given to the Trade and Sustainable Development chapter. 

According  to  the  ex-post  evaluation  of  the  EU-South  Korea  FTA  conducted  by  an 
independent  contractor,  published  in  March  20198,  the  EU  economy  gained  additional  €4.4 
billion and the South Korean economy €4.9 billion through the FTA. This happened despite 
the  fact  that  the  external  environment,  notably  the  post  financial  crisis  period  was  not 
particularly supportive, weighing on demand and international trade. 

2. 

EVOLUTION OF BILATERAL TRADE 

2.1 Trade in Goods 

In 2018, South Korea accounted for 2.5% of the EU’s total trade in goods and was the EU's 
eighth largest trading partner.  The liberalisation of trade in goods has been beneficial for EU 
exports as the introduction of the EU-South Korea FTA saw EU exports in goods rise from 
€27.9 billion in 2010 to €49.2 billion in 2018, a 76% increase. EU imports of South Korean 
products  also  grew  significantly  over  the  same  period,  albeit  at  a  slower  pace,  as  values 
increased from €39.5 billion in 2010 to €51 billion in 2018. 

While historically, the EU has had a trade deficit with South Korea, the sharp rise in exports 
since the introduction of the FTA led to an EU trade surplus from 2013 to 2016. Data for 2018 
shows that the EU has a slight trade deficit of  -€1.9 billion, however it is clear that there is 
now a more balanced level of trade in goods between the two partners. 

8   http://trade.ec.europa.eu/doclib/docs/2019/march/tradoc_157716.pdf 

31 

 
 
 
 
 
 
 
                                                 
EU28 trade in goods with South Korea 2010-2018 
(millon euro) 

60.000
50.000
40.000
30.000
20.000
10.000
0
-10.000
-20.000

2010

2011

2012

2013

2014

2015

2016

2017

2018

EU28 imports

EU28 exports

balance

The increase in EU exports over the 2010-2018 period was driven by a surge in trade in some 
key product  categories. Machinery and appliances accounted for almost  30% (€14.2 billion) 
of EU  exports to  South  Korea. Exports in  this category have increased by  31% since 2010. 
The  largest  gains  over  the  2010-2018  period  have  been  in  transport  equipment  (+187%) 
which accounts for just under one fifth (€9.6 billion) of total EU exports. This was driven by a 
+226% increase in motor vehicles (including parts) which were valued at €8.6 billion (17% of 
total EU exports) in 2018. 

At the same time, EU imports of machinery and appliances made up over one third of total 
EU imports (€18.4 billion) in 2018. There was a sharp decline in the import of these products 
in  the  first  years  after  the  FTA’s  entry  into  force    (falling  as  low  as  €13  billion  in  2013), 
however since 2015 there has been a resurgence and imports of machinery and appliances are 
now  at  a  very  similar  level  as  they  were  in  2010  (i.e.  €18  billion).  Imports  of  transport 
equipment grew by 16% and made up a quarter (€12.7 billion) of EU imports in 2018. Again, 
this increase was triggered by a substantial rise in imports of motor vehicles (including parts) 
(+165%)  over  the  2010-2018  period.  Motor  vehicles  (including  parts)  accounted  for  20% 
(€10.2 billion) of total EU goods imported from South Korea in 2018.   

Annual  comparisons  show  that  both  the  EU  total  exports  and  imports  from  South  Korea 
slithly  decreased  in  2018,  compared  to  2017,  in  line  with  the  overall  slowdown  of 
international trade dynamics. 

2.2 Trade in agricultural goods 

With respect to trade in agriculture goods, EU exports to South Korea continued to grow in 
2018 at 4.8%, albeit at a slower pace than in previous years and stood at €3 billion in 2018. 
Imports  from  South  Korea  in  the  agri-food  sector  stagnated  at  the  record  high  of  €201 
million reached in 2017, resulting in a surplus of € 2.8 billion in 2018. Overall, EU exports 
have increased by 37.8% and imports have increased by 62% since 2014, the strongest growth 
rate in the agri-food sector among FTA partners. Main products exported by the EU are pork 
(24.6%  of  EU  agricultural  exports  to  South  Korea),  followed  by  beer,  cheese,  chocolate, 
confectionery and ice cream, spirits and liqueurs and wine.  

32 

 
 
 
 
 
 
The main impediments to expanding trade were again the following: first, approvals of EU 
beef  (due  to  a  Bovine  Spongiform  Encephalopathy  (BSE)-related  import  ban)  remained 
pending and have been for some Member States since 2004, and also for poultry there was no 
progress  in  revising  the  Korean  policy  of  country-wide  import  bans  in  the  event  of  an 
outbreak of avian influenza. Similarly, the country-wide bans of pork imposed on Belgium, 
Hungary and Poland due to African Swine Fever (ASF) were not lifted by South Korea. South 
Korea recently filed applications for beef exports to the EU, which might indicate a stronger 
trade orientation in the South Korean administration. 

For  sensitive  agricultural  products  the  EU-South  Korea  FTA  foresees  specific  tariff  rates 
quotas  (TRQs).  The  fill  rate  of  these  import  quotas  applied  by  South  Korea  to  goods 
originating in the EU decreased for 3 out of 10 product groups. Only in case of oranges the 
TRQ was not used in the two reference periods. 

EU-South Korea FTA TRQ Fill Rates 

Utilisation Rate 

7/2016 to 6/2017 

7/2017 to 6/2018 

Milk  Powder,  Condensed 
milk (cream) 
Butter 
Food Whey 
Cheeses 
Prepared dry milk 
Natural honey 
Oranges 
Marling barley, malt 
Supplementary feed 
Dextrin 
Source: South Korean authorities 

99.9 % 

100.0 % 
98.3 % 
99.9 % 
99.8 % 
98.9 % 
0.0 % 
99.0 % 
99.0 % 
78.7 % 

100.0 % 

99.9 % 
99.0 % 
99.1 % 
60.5 % 
49.1 % 
0.0 % 
80.8 % 
99.2 % 
70.6 % 

2.3 Trade in Services and Foreign Direct Investment (FDI) 

EU exports of services to South Korea increased from €7.4 billion in 2010 to €13.5 billion in 
2017  while  EU  imports  rose  by  66%  (€3.1  billion)  over  the  same  period  to  €7.9  billion  in 
2017. Although trade in services have grown in both directions, the EU has consistently held a 
trade surplus with South Korea that peaked at €6.3 billion in 2015. This fell to €5.6 billion of 
a surplus in 2017, which is greater than the 2010 balance (€2.6 billion). 

Transport services account for the highest share of both EU imports (€2.4 billion) and exports 
(€2.9 billion) of services to South Korea. EU imports of construction services have increased 
significantly since the introduction of the EU-South  Korea  FTA,  rising  from  €87 million  in 
2010 to €818 million in 2017 while other business services increased by 161% over the same 
period to €2.8 billion in 2017. 

The largest gains in EU exports to South Korea include travel (+120%), telecommunications 
(+125%) and intellectual property (+189%) which account for over 40% (€5.3 billion) of total 
EU exports to South Korea in 2017. 

33 

 
 
 
 
 
 
 
As is the case with goods and services, the EU-South Korea FTA has also stimulated growth 
in  FDI  between  the  two  partners.  Latest  available  data  shows  that  the  stock  of  EU  FDI  in 
South  Korea  rose  from  €37.5  billion  in  2010  to €51.3  billion  in  2017,  a 37%  increase.  The 
stock of South Korean FDI in the EU more than doubled, rising from €13.1 billion in 2010 to 
€28.3 billion in 2017.   

3. 

ACTIVITIES OF THE IMPLEMENTATION BODIES 

The  institutional  provisions  of  the  EU-South  Korea  FTA  (Article  15)  established  seven 
Specialised  Committees,  seven  Working  Groups  and  an  Intellectual  Property  (IP)  and 
Electronics Dialogue. The annual meeting of the Trade Committee at ministerial level plays a 
supervisory  role  and  ensures  that  the  FTA  operates  properly.  The  summary  below  presents 
activities  of  Working  Groups  and  Committees  that  took  place  between  June  2018  and  May 
2019. 9  

The Trade Committee met for the 8th time on 9 April 2019 in Seoul. Both sides agreed that 
the  FTA  is  a  success  that  has  significantly  increased  bilateral  trade  and  investment  even 
though  some  concerns  on  implementation  persist,  including  the  long  delayed  market  access 
for EU beef and the non-ratification of four fundamental ILO Conventions. Furthermore, the 
deteriorating  business  climate  in  South  Korea  remains  a  challenge  for  businesses  to  fully 
benefit from the FTA.  

While recognising some positive developments related to the beef issue, the EU highlighted 
that  the  market  remained  closed  and  South  Korea  agreed  to  rapidly  complete  the  technical 
steps  for  the  most  advanced  applicants.  On  TSD,  the  EU  recognized  that  some  efforts  have 
been  made  by  the  South  Korean  government  but  progress  has  been  insufficient  for  South 
Korea to comply with its commitments. With regard to the car sector, both sides endorsed the 
finalisation of the administrative amendment of the car annexes under the written procedure. 
The Commissioner also raised the concerns that the car sector has highlighted regarding the 
difficult  business  climate.  The  EU  also  raised  the  well-known  Intelletual  Property  Rights 
related issues (i.e. public performance rights and geographical indications) while South Korea 
repeated its request for market access for Samgyetang (chicken ginseng soup) and asked for a 
solution for the long-standing surimi issue. South Korea was also concerned about the adverse 
effect of the EU steel safeguards measures. 

The 6th meeting of the Working Group on Geographical Indications was held in Brussels, 
on 30 May 2018. The extension of the initial list of EU Geographical indications remains a 
significant irritant with respect to the implementation of the FTA provisions on protection of 
intellectual property. With the recent adoption of the rules of procedures of the said Working 
Group, the EU now expects Korea to examine the 2014 EU request to add 46 GIs to the list of 
EU GIs protected under the FTA. 

On 22 November 2018, the Customs Committee met in Brussels. It mostly addressed issues 
related to rules of origin, in particular origin verification procedures and issues related to the 
approved exporter system. The EU also raised duty relief on goods re-entered after repair and 
both sides discussed mutual administrative assistance, including the exchange of information 
points and cooperation on specific cases in which the level of co-operation from South Korea 
was considered by the EU side as unsatisfactory.  

9 The 2018 edition of the Implementation report covered activities over 2017-mid 2018. 

34 

 
 
 
 
 
 
 
                                                 
On  7  November  2018,  the  4th  EU-South  Korea  Dialogue  on  Electronics  took  place  in 
Brussels. A wide range of issues was discussed, including the following: the implementation 
and  enlargement  of  the  scope  of  Annex  2-B  of  the  agreement  to  include  radio  equipment 
testing;  the  review  of  Appendix  2-B-3  of  the  agreement  to  simplify  conformity  assessment 
procedures; a future cooperation on the development of new standards; modifications on the 
EU  Eco-design  Regulation  for  Electronic  Display  asked  by  South  Korea.  Discussions  were 
also  held  on  EU  energy  labelling  requirements  for  electronic  displays,  light  source  and 
household refrigerating appliances.  

The  Working  Group  on  Motor  Vehicles  and  Parts  met  in  Brussels  on  4  December  2018 
and  addressed  environmental  issues,  technical  standards,  harmonization,  convergence  and 
market  access  issues.  Compared  to  previous  years,  the  Working  Group  also  discussed 
different  issues  related  to  broader  cooperation  on  trade  policy,  including  international 
developments,  the  state  of  play  of  bilateral  trade  flows  and  investments  and  the  business 
climate  in  the  sector.  During  the  April  2019  Trade  Committee  the  EU  and  South  Korea 
concluded to endorse the administrative amendment of Annex 2-C in order to be implemented 
by September 2019. On the regulatory side, the parties agreed to share information on CO2 
emission  regulations  for  passenger  cars,  heavy-duty  vehicles  and  “Emission  Related 
Components”  certification  procedures.  The  EU  agreed  to  provide  additional  information  on 
the  entry  into  force  of  the  EU  “Whole  Type  Approval”.  Market  access  issues  discussed 
included,  inter  alia,  truck-tractors,  self-certification  and  marking  of  car  parts,  vehicle  width 
limit, homologation certificates and producers responsibility for end of life vehicles.  

The  7th  meeting  of  the  Working  Group  on  Pharmaceuticals  and  Medical  Devices  took 
place on 5 December 2018. In the area of medical devices, the parties exchanged information 
on i.a. the current draft of the Unique Device Identifier (UDI) rules in South Korea and on the 
objective  and  future  implementation  of  the  Integrated  Medical  Device  Information  System 
(IMDIS)  in  South  Korea.  Concerning  pharmaceuticals,  both  sides  discussed  i.a.  the  draft 
amended premium pricing policy published on 7 November 2018 by South Korea that amends 
the conditions for rewarding innovations in new pharmaceutical products in South Korea.  

The  Working  Group  on  Chemicals  organised  a  videoconference  on  5  March  2019  and 
engaged  in  useful  exchanges  on  regulatory  developments  of  interest  to  both  sides.  The  EU 
notably  requested  additional  information  and  clarifications  on  i.a.  the  amendments  to  the 
South Korean REACH legislation implemented in January 2019 and on the requirements for 
treated articles placed on the South Korean market under the South Korean Biocidal Product 
Regulation.    

The  Committee  on  SPS  Measures  met  in  Brussels  on  19  September  2018.  The  Parties 
discussed pending applications for import of  EU  and South  Korean beef,  the recognition  of 
regionalisation measures for avian influenza and African swine fever, and policies related to 
certification.  South  Korea  also  requested  to  discuss  the  pending  application  for  export  of 
chicken-ginseng soup and dairy products to the EU. The meeting was followed by a one-day 
seminar to discuss regionalisation policies in the EU and South Korea to control outbreaks of 
highly pathogenic avian influenza. 

The  7th  EU-South  Korea  Trade  in  Goods  Committee  was  held  on  6th  December  2018  in 
Brussels.  A  number  of  sectoral  issues  wre  discussed  including  the  preparation  of  the  next 
Trade  Committee  foreseen  for  April  2019.  The  meeting  brought  many  clarifications  on  the 
cosmetics sector legislation in South Korea and the F-gas quota system in the EU. While no 

35 

 
 
 
 
 
 
 
breakthrough  was  registered  at  the  meeting,  enhanced  cooperation  on  electronics  with  the 
view  to  enlarge  the  annex  to  radio  equipment  was  agreed.  EU  concerns  were  raised  with 
regard to an increased support to shipbuilding by  the South Korean government and the EU 
requested  more  transparency  and  a  dedicated  dialogue.  The  implementation  of  the 
competition chapter was also raised. Finally, both sides discussed the preparation of the Trade 
Committee. 

The 5th and the 6th meetings of the Trade Remedy Cooperation Working Group were held 
on 7 December 2018 in Brussels and 20 May 2019 in Seoul, respectively. The latter meeting 
took  place  back-to-back  with  the  International  KTC  Seoul  Forum  on  Trade  Remedies  in 
which  the  EU  side  participated.  During  the  5th  and  the  6th  meetings  of  the Trade  Remedy 
Cooperation  Working  Group,  the  two  sides  updated  each  other  on  latest  developments  in 
domestic  trade  remedy  laws,  policies  and  practice.  The  EU  side  notably  debriefed  South 
Korea  on  the  entry  into  force  and  implementation  of  the  two  latest  amendments  to  the  EU 
Trade  Remedy  basic  legislation,  namely  the  ‘new  anti-dumping  methodology’  and  the 
‘modernisation of trade defence instruments’, which had entered into force in December 2017 
and  June  2018  respectively10.  South  Korea  expressed  concerns  with  respect  to  the  EU  steel 
safeguard measures11 and the EU briefed South Korea on the upcoming review investigation 
of  the  steel  safeguard  measures.  The  EU  expressed  concerns  with  the  respect  of  general 
fairness  and  transparency  principles  in  a  recent  investigation  conducted  by  South  Korea 
against Italian exports of stainless steel bars. The EU invited South Korea to revise its policy 
and  methodology  accordingly.  The  two  sides  also  shared  statistics  on  Trade  Defence  cases 
and  exchanged  views  on  global  trends  in  trade  remedy  investigations,  and  related  WTO 
litigation. 

The  meeting  of the  Working  Group  on  Government  Procurement  took  place  in  Brussels 
on 26 November 2018. The Parties provided information  on recent legislative developments, 
discussed  market  access  issues  and  potential  irregularities  raised  by  European  and  South 
Korean industries. Both sides are committed to ensure that the FTA is implemented and any 
irregularity  in  the  effective  public  procurement  market  access  is  corrected.  Among  other 
issues the Parties exchanged views on cooperation on SME policy (that may require a follow 
up with a recently established Ministry for SMEs in South Korea) and the EU inquired about 
a  possible  interest  from  the  South  Korean  side  to  integrate  a  machine  translation  tool  for 
tender notices in its e-procurement portal.  

The  6th  EU-South  Korea  Cultural  Cooperation  Committee  convened  on  13  May  2019  in 
Seoul,  followed  by  a  2  day  study  visit  to  various  South  Korean  cultural  institutions.  The 
topics  discussed  included  performing  arts,  culture  and  cities,  new  developments  in  cultural 
and  creative  sectors-  namely  cultural  entrepreneurship,  the  cultural  content  industry  and  the 
connections  between  arts,  science  and  technology-  architecture  and  audio-visual  co-
productions.  

4. 

IMPLEMENTATION  OF  THE  PROVISIONS  ON  TRADE  AND 
DEVELOPMENT 

SUSTAINABLE 

The Commission continued to express its serious concerns and stepped-up its messages vis-à-
vis the South Korean government regarding FTA commitments related to international (ILO) 
standards and agreements. These concerns have been raised in the framework of regular FTA 

10 OJ L 338/1 2017 and OJ L148 2018 
11 OJ L31 of 1.2.2019  

36 

 
 
 
 
 
                                                 
committees including at the 6th meeting of the TSD committee of 13 July 201812. Also, civil 
society  has  again  raised  these  concerns  in  the  context  of  regular  work  of  the  Domestic 
Advisory Groups and the Civil Society Forum under the FTA.  

Due to insufficient progress on the envisaged steps presented by Korea at the 6th Committee 
on  Trade  and  Sustainable  Development,  and  in  line  with  the  more  assertive  approach  to 
enforcement of commitments as outlined in the TSD 15-point action plan of February 2018, 
on  17  December  2018  the  Commission  formally  requested  the  government  request 
consultations under Article 13.14 of the FTA to seek a mutually satisfactory solution13.  

In that context, the EU raised concerns with regard to Korea’s issues with respecting in law 
and practice of the core International Labour Organisation (ILO) principles of the freedom of 
association  and  right  to  collective  bargaining,  and  with  regard  to  the  insufficient  efforts  by 
Korea towards the ratification of four outstanding fundamental ILO Conventions. 

Government consultations are a first step of dispute settlement proceedings. This is the first 
dispute  settlement  initiated  by  the  EU  under  bilateral  trade  agreement.  The  EU  held 
government consultations with Korea on 21 January 2019. Korean government has engaged 
cooperatively  however  the  consultations  however  these  did  not  lead  to  any  satisfactory 
solution and the progress made until now by Korea has been insufficient. In the follow-up to 
the  government  consultations,  the  Commission  raised  the  insufficient  progress  on  labour 
commitments at meetings with Korean trade and labour ministers at the occasion of 8th Trade 
Committee on 9 April 2019 in Seoul. 

Since the outcome of the efforts by the Korean government remain uncertain, on 4 July 2019, 
the  EU  requested  the  establishment  of  a  panel14  (the  2nd  stage  of  the  arbitration  procedure 
under  the  FTA)  to  examine  the  matters  that  have  not  been  satisfactory  addressed  through 
government consultations. During the panel proceedings, the Commission will remain open to 
continue looking for a mutually agreed solution to the dispute. If Korea does not comply with 
its  commitments  in  a  timely  manner,  the  panel  of  experts  will  deliver  a  public  report  with 
recommendations  on achieving compliance. The implementation  of the recommendations of 
the panel report will then be monitored by the Trade and Sustainable Development Committee 
created under the terms of the EU-Korea trade agreement. 

5. 

SPECIFIC AREAS SUBJECT TO MONITORING 

In line with Article 14 of the protocol on Rules of Origin, South Korea’s imports of key car 
parts  and  electronics  from  the  most  important  suppliers  (outside  the  EU)  have  been 
monitored. China and Japan remain the largest car parts suppliers. Japan still pays full duty on 
car parts while China benefits from tariff reduction (within the South Korea-China agreement 
most car parts will be liberalised in 10 or 15 years). 

12   http://trade.ec.europa.eu/doclib/docs/2018/july/tradoc_157105.PDF  
13   http://trade.ec.europa.eu/doclib/docs/2018/december/tradoc_157586.pdf  
14   http://trade.ec.europa.eu/doclib/docs/2019/july/tradoc_157992.pdf  

37 

 
 
 
 
 
 
 
                                                 
Source: KITA 

In  conclusion,  the  import  pattern  has  not  fundamentally  changed  since  the  EU-South  Korea 
FTA was signed and there was no significant increase in imports of car components and key 
electronics  from  the  largest  suppliers  to  South  Korea  in  2018  compared  to  2017.  Based  on 
these  trade  statistics,  it  is  not  possible  to  establish  a  link  between  the  allowance  of  duty 
drawback and the increase in EU imports of cars from South Korea. 

6. 

PROGRESS, MAIN OPEN ISSUES AND FOLLOW-UP ACTIONS 

Progress  on  the  implementation  of  the  Trade  and  Sustainable  Development  chapter  of  the 
FTA by South Korea has not been sufficient with regard to the ratification of the four pending 
ILO conventions and protection of labour rights. Therefore, the Commission stepped up the 
engagement with South Korea and launched dispute settlement proceedings under the FTA in 
order to address these issues.  

Access of EU beef to the South Korean market, which has been closed to all EU imports since 
January 2001, remains another EU key concern. By mid-2019, South Korea carried out audits 
in two Member States (Denmark and The Netherlands) which depending on the conclusions 
of  the  auditors,  open  the  door  to  beef  from  these  two  Member  States  on  the  South  Korean 
market.  However,  the  acceptance  of  the  principle  of  regionalisation  for  animal  diseases  by 
South Korea remains an important topic in the sanitary and phyto-sanitary area in particular 
for the exports of pig meat and poultry products.  

In  the  area  of  Intellectual  Property,  South  Korea  still  needs  to  establish  an  effective 
remuneration  system  for  public  performance  rights.  Lack  of  progress  in  this  area  remains  a 
concern to the EU. The revised Presidential Decree, which entered into force in August 2018 
did  not  sufficiently  address  the  core  issues  of  exempting  the  majority  of  retail  venues  from 
paying  remunerations  and  the  low  level  of  fees. These  issues  will  be  discussed  again  at  the 
next  EU-South  Korea  Intellectual  Property  Dialogue  under  the  FTA  in  autumn  2019.  The 
extension of the geographical indications’ (GI) list protected by the FTA is also still pending. 
Recent adoption of the Rules of Procedure of the EU-South Korea GIs Working Group should 
ease  the  way  towards  adding  further  EU  and  South  Korean  geographical  indications  to  the 
Annex of the FTA. 

Improvements in the area of customs procedures could contribute to increase the preference 
utilisation rates, and further facilitate the participation of small and medium sized enterprises 
(SMEs). 

38 

2018 total import 1st 201720182nd20172018Electronic sectorHS 8522Parts and accessories for pictures and sound reproducing and recording apparatus$28.097China$20.894$18.232Thailand$12.690$3.827HS 8527Reception apparatus$169.174China$89.383$73.744Malaysia$10.326$50.898HS 8529Parts for reception apparatus$2.244.550China$699.436$1.023.065Vietnam$381.769$757.471Core car partsHS 8407Spark-ignition reciprocating or rotary internal combustion piston engine$463.651Japan$65.950$226.852USA$70.722$147.791HS 8408Diesel or semi-diesel engines$882.462Japan$367.842$181.951China $53.887$50.773HS 8409Parts for engines of 8407 or 8408$1.132.947China $190.986$220.214Japan$244.395$179.184HS 8708Parts and accessories for motor vehicles of headings 8701 to 8705$3.877.938China $1.108.612$1.136.596Japan$788.173$736.9822018 main import sourcing (outside the EU) and evolution of imports 
 
 
 
 
 
 
7. 

CONCLUSIONS AND OUTLOOK 

The EU-South Korea FTA offers a sound institutional framework for bilateral trade between 
the EU and South Korea despite the fact that some difficulties persist as outlined in section 6.  
The  ex  post  evaluation  study  of  the  FTA  published  by  the  EU  Commission  in  March  2019 
concluded  that  in  the  vast  majority  of  areas  the  implementation  works  well,  supporting 
economic development on both sides. 

Both parties continue working on the implementation of the EU-South Korea FTA in order to 
bring  further  benefits  to  their  businesses  and  consumers.  In  this  respect,  the  specialised 
committees and working groups established under the EU-South Korea FTA serve as a forum 
to  discuss  and  seek  solutions  to  the  implementation  and  market  access  issues,  including 
regulatory developments on both sides. 

8. 

STATISTICS 

Total merchandise trade EU28 with South Korea (mio €) 

South Korea 

2017 

2018 

Imports 
Exports 
Balance 
Total trade 
Source Trade G2 Statistics/ISDB from Eurostat COMEXT 

51.089 
49.250 
-1.839 
101.866  100.339 

51.734 
50.132 
-1.601 

Growth 

mio € 
-645 
-882 
-238 
-1.527 

annual 
% 
-1,2% 
-1,8% 

-1,5% 

Agrifood trade EU28 with South Korea (mio €) 

South Korea 

2017 

2018 

Imports 
Exports 
Balance 
Total trade 
Source Trade G2 Statistics/ISDB from Eurostat COMEXT 

203 
2.889 
2.686 
3.092 

201 
3.028 
2.827 
3.229 

Growth 

mio € 
-2 
139 
141 
137 

annual 
% 
-0,9% 
4,8% 

4,4% 

NAMA trade EU28 with South Korea (mio €) 

South Korea 

2017 

2018 

EU28 imports 
EU28 exports 
Balance 
Total trade 
Source Trade G2 Statistics/ISDB from Eurostat COMEXT 

51.531 
47.244 
-4.287 
98.774 

50.888 
46.222 
-4.666 
97.110 

Services trade EU28 with South Korea (mio €) 

South Korea 

2016 

2017 

Imports 
Exports 
Balance 

7.215 
12.608 
5.393 

7.939 
13.520 
5.581 

39 

Growth 

mio € 
-643 
-1.021 
-378 
-1.664 

annual 
% 
-1,2% 
-2,2% 

-1,7% 

Growth 

annual 
% 
10,0% 
7,2% 

mio € 
724 
912 
188 

 
 
 
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
21.459 
Total trade 
Source Trade G2 Statistics/ISDB from Eurostat BOP statistics 

19.823 

1.637 

8,3% 

Services trade EU28 with South Korea (mio €) 

2013 
5.653 
10.662 
5.010 
16.315 

2014 
6.310 
11.761 
5.451 
18.071 

2015 
2016 
2017 
7.939 
7.215 
6.917 
13.247  12.608  13.520 
6.330 
5.581 
5.393 
20.164  19.823  21.459 

Imports 
Exports 
Balance 
Total trade 
Source Trade G2 
Statistics/ISDB from Eurostat 
BOP statistics 

FDI EU28 with South Korea (mio €) 
2015 

2014 

2016 

2017 

2013 
FDI Stocks 
15.517 
32.105 
FDI Flows 
1.868 
868 

17.922 
42.976 

4.286 
7.731 

18.571  24.308  28.288 
42.520  47.013  51.286 

2.068 
-5.195 

1.809 
3.244 

2.245 
4.978 

Inward 
Outward 

Inward 
Outward 
Source Trade G2 
Statistics/ISDB from Eurostat 
BOP statistics 

40 

 
 
  
  
  
  
  
  
  
  
  
  
  
  
  
  
 
 
 
ANNUAL  REPORT  ON  THE 
COLOMBIA/ECUADOR/PERU TRADE AGREEMENT 

IMPLEMENTATION  OF  THE  EU-

1. 

INTRODUCTION 

2018  marked  the  fifth  full  year  of  implementation  of  the  Trade  Agreement  between  the 
European Union and its Member States, of the one part, and Colombia and Peru, of the other 
part15,  as  amended  by  the  Protocol  of  Accession  of  Ecuador  (‘the  Agreement’).  The 
Agreement has been provisionally applied with Peru since March 2013, with Colombia since 
August 2013, and with Ecuador since 1 January 2017. Ratification by Member States of both 
the Trade Agreement and the Protocol of Accession of Ecuador is ongoing16.  

The Agreement was also amended through the Protocol of Accession of Croatia to the EU. 
After completion of the ratification procedure by Peru on 6 April 2017, this Protocol entered 
into force with Peru on 1 May 2017. The ratification process by Colombia is ongoing.  

This  report shows that the  results after almost six  years of provisional application in  the 
case of Peru and Colombia, and almost three  years in the case of Ecuador, remain  positive, 
although bilateral trade with Colombia and Peru in 2018 underwent a slight decrease after the 
rebound  of  2017.  The  Agreement  offers  tariff-free  access  for  virtually  all  industrial  and 
fishery  products  from  the  three  Andean  countries,  and  substantial  tariff  preferences  for  the 
few  agricultural  products  which  were  not  fully  liberalised,  with  very  few  exceptions.  This 
improved  market  access,  more  predictable  trade  and  investment  relationship  and  the  better 
rules have helped partner countries diversify trade and notably Andean countries’ exports of 
agri-food  products.  Regarding  EU  exports, 
including 
pharmaceuticals,  machinery  and  vehicles,  have  also  strongly  benefitted  from  the  improved 
market access.  

industrial 

several 

sectors 

The  Parties  are  dedicating  important  resources  to  the  implementation  process  through  the 
work  in  the  bodies  under  the  Agreement,  notably  the  Trade  Committee  and  its  eight 
specialised Sub-committees.  The Trade Committee  and its Sub-Committees  have met on an 
annual basis since 2013.  Ecuador joined the institutions in 2017. The institutional structure of 
the Agreement is common and the Trade Committee and the Sub-committees take place in the 
presence of all Parties, i.e. between the EU and the three Andean partner countries.  

In  December  2018,  the  annual  meetings  of  the  Trade  Committee  and  eight  Sub-committees 
met in Quito (Ecuador) (see below).  

In accordance with Article 13 of Regulation (EU) No 19/2013 of the European Parliament 
and of the Council of 15 January 2013 implementing the bilateral safeguard clause and 
the stabilisation mechanism for bananas of the Trade Agreement between the European Union 
and  its  Member  States,  of  the  one  part,  and  Colombia  and  Peru,  of  the  other  part17 
(‘Regulation’),  the  Commission  committed  to  submit  an  annual  report  to  the  European 
Parliament and the Council on the application, implementation and fulfilment of obligations 

15  OJ L 354, 21.12.2012, p. 3. 
16  Trade  Agreement  with  Colombia 

(http://www.consilium.europa.eu/en/docuents-
publications/agreements-conventions/agreement/?aid=2011057)  and  Protocol  of  Accession  of  Ecuador 
(http://www.consilium.europa.eu/en/documents-publications/treaties-agreements/agreement/?id=2016044). 

Peru 

and 

17  OJ L 17, 19.1.2013, p. 1. 

41 

 
 
 
 
 
 
 
                                                 
of the Agreement and the Regulation. This report responds to this requirement (see section 5 
below).  

2. 

EVOLUTION OF TRADE 

2.1 Trade in Goods 

The present section focuses on bilateral trade in goods as well as on Non-Agricultural Market 
Access (NAMA) products. As per the definition in the WTO Agreement on Agriculture, these 
non-agricultural  products  include  industrial  goods,  manufactured  goods,  textiles,  fuels  and 
mining products, footwear, jewellery, forestry products, fish and fisheries, and chemicals. 

2.1.1 Overall evolution 

Colombia 

In 2018, the EU has gone from Colombia´s second to third trading partner (14%), after the US 
(26%) and China (16%). In fact, bilateral trade between the EU and Colombia decreased by 
4%. Colombian exports to the EU saw a 9% decline amidst falling global prices of coffee, a 
key  export  product.  Compared  to  2012  (year  before  the  application  of  the  Agreement), 
bilateral trade decreased by 22%, in line with the 22% decrease of Colombia’s total trade with 
the rest of the world over the same period.  

In 2018, bilateral trade amounted to €11 billion, compared to €11.5 billion in 2017. While 
historically, Colombia ran a trade surplus with the EU, this trend reversed since 2017 and the 
EU now posts a trade surplus of €925 million.  

EU exports to Colombia increased by 1% in 2018 to €6 billion. The headings that recorded 
the  largest  increases  were  pharmaceutical  products,  vehicles,  electrical  machinery  and  base 
metals while exports of machinery products and aircrafts suffered the greatest declines.  

EU imports from Colombia amounted to €5.1 billion in 2018, down from €5.6 billion in 2017, 
representing  a  9%  decrease.  It  is  noteworthy  that  for  the  first  time  agricultural  products 
represented  the  same  share  (43%)  of  total  exports  from  Colombia  as  minerals.  Overall,  the 
export  basket  of  Colombia  to  the  EU  is  more  diversified  than  Colombia's  trade  with  China 
and the US, more dominated by coal and petroleum products.  

EU-Colombia trade in non-agricultural products (NAMA) 

EU exports to Colombia of NAMA products amounted to €5.6 billion in 2018, increasing by 
1%. The most important categories in 2018 were:  

  Machinery and mechanical appliances (HS 84) represented the largest share of EU exports 
at  16%,  amounting  to  €978  million  despite  suffering  the  largest  drop  in  absolute  terms, 
with a decrease of 17% compared to 2017.  

  Pharmaceutical products (HS 30), totalling €813 million, or 14% of EU exports, increased 

by 12%;  

42 

 
 
 
 
 
 
 
 
 
  Motor vehicles (HS87),  registered a 17% increase up to €556 million,  now representing 

9% of total EU exports. 

EU imports from Colombia of NAMA products amounted to €2.9 billion in 2018, decreasing 
by 9% compared to the previous year. The main categories in 2018 were:  

  Minerals  (HS  27),  €2.1  billion,  representing  43%  of  total  EU  imports  from  Colombia, 

versus 46% in 2017;  

  Precious  stones  and  minerals  (mainly  emeralds  and  gold)  (HS  71);  increased  by  171% 

compared to 2017, now representing €156 million, or 5% of total imports,   

  Base  metals  (HS  72  to  83)  (of  which  mainly  iron  and  steel)  amounted  to  €99  million, 

representing 2% of EU imports, an increase of 3% compared to 2017.  

Peru  

The EU is Peru’s third largest trading partner (14% of total Peruvian trade), after China (24%) 
and the US (19%). In 2018, bilateral trade with the EU amounted €9.9 billion, decreasing 
by 3% compared to 2017, while Peru’s overall trade with the rest of the world increased by 
17% over the same period. The EU’s trade deficit increased from €2.1 billion to €2.4 billion.  

EU exports to Peru amounted to €3.7 billion, an 8% decrease when compared to 2017.  93% 
of  EU  exports  are  industrial  products,  mostly  machinery  and  appliances,  chemical  products 
and transport equipment.  

EU imports from Peru remained stable when compared to 2017 (€6.2 billion), Peru increased 
its  exports  to  the  rest  of  the  world  by  23%.  Key  export  items  are  ores,  slag  and  ashes, 
minerals,  fruits,  coffee  and  fishery  products.  The  share  of  agricultural  products  in  imports 
from Peru into the EU continued to increase. 

EU-Peru trade in non-agricultural products (NAMA) 

EU  exports  to  Peru  of  non-agricultural  products  amounted  to  €3.47  billion  in  2018,  a  9% 
decrease (from €3.8 billion in 2017). The most important categories in 2018 were: 

  Machinery,  mechanical  appliances  (HS  84),  amounting  to  €898  million  representing 

24% of total EU exports to Peru, with a 7% decrease compared to 2017; 

  Electrical  machinery  and equipment  (HS 85), or  €327 million,  accounting for 9% of 

total EU exports to Peru, and with a 18% contraction compared to 2017; 

  Vehicles and parts (HS 80), worth €300 million or 8% of EU exports, decreasing by 

1% compared to 2017; 

  Pharmaceutical  products  (HS30),  amounting  to  €198  million,  or  5%  of  EU  exports, 

decreasing by -3% compared to 2017. 

EU imports from Peru of non-agricultural products also decreased by 4% amounting to €3.87 
billion in 2018 (from €4.02 billion the previous year). The main categories in 2018 were: 

43 

 
 
 
 
 
 
 
 
 
 
  Ores (HS  26), amounting to  €1.7 billion representing 27% of total  EU imports from 

Peru, versus 30% in 2017, with a 10% decrease compared to 2017; 

  Mineral fuels (HS27) mainly natural gas, worth €496 million, representing 8% of EU 

imports, a 26% decrease of 26% compared to 2017; 

  Fish and crustaceans (HS 03), amounting to €308 million or 5% of EU imports, with a 

strong 18% increase compared to 2017. 

Ecuador 

In  2018,  the  EU  remained  Ecuador´s  second  largest  trading  partner  (14%  of  total  Ecuador 
trade) after the US (27%) and ahead of China (12%). In 2018, bilateral trade amounted to 
€5.4 billion, a 3% increase compared to €5.2 billion in 2017, a much slower rate compared to 
the remarkable 20% growth registered in 2017, the first year of application of the Agreement. 
Ecuador’s  trade  with  the  rest  of  the  world  increased  by  12%  in  2018,  compared  to  16%  in 
2017.  Several  factors  may  explain  these  figures:  i)  a  strong  dollar  reducing  the 
competitiveness of Ecuadorian products in international markets; ii) a slowdown in Ecuador´s 
domestic  consumption;  and  iii)  a  trade  diversion  towards  Central  American  countries  and 
China. While the EU has historically maintained a trade deficit with  Ecuador, this deficit is 
getting progressively reduced.  

EU exports to Ecuador increased by 6% year-on-year (2017: €2.2 billion; 2018: €2.3 billion) 
and concentrated on agricultural products and fishery products.  

EU imports from Ecuador grew by 1% year-on-year (2017: €3 billion; 2018: €3 billion). Key 
categories were machinery and appliances, chemical products and mineral products.   

EU-Ecuador trade in non-agricultural products (NAMA)  

EU exports to Ecuador of NAMA products increased by 5% amounting €2.2 billion in 2018. 
The most important categories in 2018 were:  

  Machinery and mechanical appliances (HS84), worth €425 million and accounting for 

18% of total EU exports to Ecuador, shrunk by 3% compared to 2017;  

  Mineral  fuels  (HS  27),  amounting  to  €350  million,  or  15%  of  total  EU  exports, 

contracted by 11%;  

  Vehicles and parts (HS87), of a value of €171 million, or 7% of EU exports, grew by 
70%; Railways and trams (HS86), of €15 million,  registering a 730% increase, as a 
consequence  of  works  on  the  public  transportation  system  (the  metro  of  Quito,  the 
tramway of Cuenca, and the cableway in Guayaquil).  

  Pharmaceutical products (HS 30), €166 million, or 7% of EU exports, grew by 6%;  

  Fishery products (HS03), worth €98 million accounting for 4% of EU total exports to 

Ecuador.  

EU imports of NAMA products from Ecuador decreased by 2% amounting to €1.42 billion in 
2018. The main categories in 2018 were: 

44 

 
 
 
 
 
 
 
 
  Fish  and  crustaceans  (HS  03),  amounted  to  €657  million,  and  accounted  for  22%  of 

total EU imports from Ecuador, shrunk by 3%;  

  Preparation  of  fish  (tuna)  (HS  16)  worth  €656  million,  or  22%  of  total  EU  imports, 

shrunk by 2%;  

2.1.2 Trade in agricultural goods 

This section focuses on agricultural products as defined by Article 2 of the WTO Agreement 
on Agriculture and as listed in Annex 1 of the same agreement.  

Colombia 

EU  exports  to  Colombia  of  agricultural  products  increased  by  7%  in  2018,  and  were 
dominated by:  

  Beverages  and  spirits  (HS22)  at  €91.4  million,  or  21%  of  EU  exports  of  agricultural 

products to Colombia;  

  Preparations of cereals, flour, starch (HS19) and preparation of vegetables, fruits, nuts or 

plants (HS20) account for 1% of agricultural exports each.  

  Animal  and  vegetable  fats  and  oils  (HS15)  increased  by  5%,  representing  1%  of  EU 

agricultural exports.  

EU imports of agricultural products from Colombia amounted to €2.2 billion, decreasing by 
9% from 2017 to 2018. The most important categories in 2018 were:  

  Fruits  (HS08),  worth  €1  billion,  accounting  for  20%  of  total  EU  imports  from  Ecuador, 
down  by  5%  when  compared  to  2017.  Bananas  represented  83%  of  all  fruits  exported, 
followed by avocados with 6%. From 2017 to 2018, there was a strong increase in exports 
of limes (78%), guavas, mangoes and mangosteens (31%) and oranges (19%);  

  Coffee (HS09), €491 million, decreased by 20%, represents 10% of EU imports;  

  Crude  palm  oil  (HS151110)  and  crude  palm  kernel  oil  decreased  by  15%  and  5% 

respectively but still accounted for 5% and 1% of imports.  

Total EU imports of agricultural products from Colombia have increased by 45% since 2012, 
and now account for 43% of Colombian exports to the EU, versus 18% in 2012. 

Use of Tariff-rate quotas (TRQs) 

The  Agreement  provides  for  Tariff  Rate  Quotas  (TRQs)  which  grant  the  other  party 
preferential tariff treatment up to the quota’s quantitative threshold, above which imports are 
subject to the applicable Most-Favoured Nation tariff.  

45 

 
 
 
 
 
 
 
 
 
 
Colombia’s use of the TRQ for cane sugar and chemically pure sucrose decreased to 64.8%. 
The TRQ for Rum was used for the first time in 2018. Other TRQs are hardly utilised or not 
utilised at all.  

Rate of utilisation of EU TRQs by Colombia 

2018 
2013 
Cane sugar and chemically pure sucrose  88.4%  85.7%  93.8%  96.2%  94.8%  64.8% 
1.3% 
1.4% 
Sugar confectionery 
Rum in containers holding > 2 litres 
0%  58.8% 
0% 
Source: TAXUD, Surveillance Database 

1.3% 
0% 

1.2% 
0% 

1.5% 
0% 

1.5% 

2014 

2015 

2016 

2017 

The EU is fully using the TRQs established for mushrooms, milk and cream in powder and 
sweetcorn, to a somewhat lesser extent the TRQs on preparations for infant use (almost fully 
used)  and 
through  a  better 
implementation of the Agreement. The TRQ for yogurt has experienced a sharp decrease after 
two years being almost fully used, while the one for cheese has increased although it remains 
low (13.4%).  The EU barely uses its TRQ on sugar confectionery (less than 5% in 2018).  

ice  cream,  which  experienced  a  substantial 

increase 

2016 

2017 

Rate of utilisation of Colombia TRQs by the EU 
2015 

2013   2014 
1.6% 

2018 
5%   100%   100%   100%   100% 
0%  34.9%   100%   100%   82.5%   100% 

Mushrooms 
Milk and cream in powder 
Whey 
Preparations for infant use  40.4%  67.5%   99.1%   100%   100%  
Yogurt 
0% 
Sweetcorn 
Ice cream 
Cheese 
Sugar confectionary 
Source: DIAN (Dirección de Impuestos y Aduanas nacionales) 

99% 
99%   17.4% 
0.4%  54.2%   100%   100%   100%   100% 
87% 
5.3%  13.4%   7.4%   25.9%   45.7%  
8%   8.2%   7.9%   3.1%   13.4% 
3.4%   3.1%   3.8%   3.9%   4.7% 

0.5%   0.8%   100%  

No more TRQ 

50%   92.9%  

9% 
1.8% 

57.6% 

Peru  

EU exports to Peru of agricultural products in 2018 increased by 1% compared to 2017. The 
most important categories in 2018 were: 

  Beverages  and  spirits  (HS22),  accounting  for  23%  of  total  EU  exports  of  agricultural 

products to Peru have decreased by -6% compared to 2017; 

  Preparations  of  vegetables  (HS20),  representing  11%  of  total  EU  exports  of  agricultural 

products to Peru decreased by -8% compared to 2017; 

  Dairy  products  (HS04),  posting  a  strong  26%  increase  compared  to  2017  thanks  to  the 
introduction of a harmonized import certificate in  2017. Dairy exports represent  11% of 
total EU exports of agricultural products to Peru. 

EU imports of agricultural products from Peru increased by 6% from 2017 to 2018. The most 
important categories in 2018 were: 

46 

 
 
 
 
 
 
 
 
 
 
 
  Fruits (HS08), accounted for 52% of total EU imports of Peruvian agricultural products , 
up 17% compared to 2017; avocados accounted for 32% of all fruits exported, a remained 
equal  compared  to  2017,  followed  by  fresh  grapes  representing  20%  (+68%),  mangos 
14% (+10%), fresh blackberries 12% (+59%) and fresh bananas 8% (+10%); 

  Coffee  (HS09)  represents  16%  of  total  EU  imports  of  agriculture  products  from  Peru 

decreasing by 9.6% from 2017. 

  Edible vegetables which account for 9% of total of agriculture products from Peru raised 

by 6% between 2017 and 2018   

Total EU imports of agricultural products from Peru increased by 49% since 2012, and now 
account for 37% of Peruvian exports to the EU, versus 24% in 2012. 

Use of Tariff-rate quotas 

Sweetcorn  is  the  only  product  under  TRQ  where  Peru  has  reached  almost  100%  utilisation 
rate  in  2018,  maintaining  a  positive  trend  since  the  date  of  application  of  the  Agreement. 
Quota utilisation of both cane sugar and garlic has steeply dropped in 2018. Peru is starting to 
take advantage of the TRQ on maize (corn). Other TRQs have very low utilisation rate. The 
quotas for the other 11 products have not been utilised at all since the date of application of 
the Agreement. 

Rate of utilisation of EU TRQs by Peru  

2014 
100% 
76% 
0% 
0% 
2,9% 

2013 
100% 
21% 
0% 
0% 
0,7% 

Cane sugar 
Sweetcorn 
Garlic 
Rum 
Maize (Corn) 
Sugar 
confectionery 
Rice 
Source: TAXUD, Surveillance Database  

0,02%  0,01% 

0% 

0% 

2015 
3,5% 
83,2% 
2,4% 
0,0% 
1,8% 

2016 
99,9% 
87,3% 
53,8% 
7% 
6,1% 

2017 
100% 
95,7% 
54,2% 
0% 
13,1% 

2018 
9,2% 
97,7% 
0% 
5,7% 
15,5% 

0,2% 
0% 

0,1% 
0% 

0,3% 
0% 

0,02% 
0,04% 

The EU is fully using the TRQ established by Peru for milk powder and almost fully for  ice 
cream  and butter thanks  to  the harmonized certificate for dairy products.  Good progress  for 
rum. Other TRQs are barely used. 

Rate of utilisation of Peru TRQs by the EU  
2015 
96% 
0% 
98,5% 
99,7% 
0% 

2014 
0% 
0% 
89,6% 
4,1% 
0% 

2013 
0% 
0% 
59% 
0% 
0% 

Butter 
Cheese 
Ice cream 
Milk powder 
Milk for babies 
Sugar 
confectionery 
Sugar 
Rum 

0% 
0% 
4% 

0% 
0% 
0% 

0,1% 
0% 
3,5% 

47 

2016 
100% 
4,3% 
95,6% 
100% 
29,9% 

2,2% 
0% 
5,8% 

2017 
82% 
5,4% 
94,2% 
100% 
0,0% 

3,4% 
0% 
4,2% 

2018 
100% 
5% 
100% 
100% 
0% 

2% 
0% 
27% 

 
 
 
 
 
  
 
 
  
Source: SUNAT (Superintendencia Nacional de Aduanas y de Administracion Tributaria) 

Ecuador 

EU  exports  of  agricultural  products  to  Ecuador  amounted  to  €157  million  in  2018,  a  29% 
increase  compared  to  2017,  although  the  SPS  chapter  has  not  been  fully  implemented  and 
some  obstacles  still  persist.  Agricultural  products  represented  7%  of  total  EU  exports  to 
Ecuador. The most important categories in 2018 were: 

  Beverages and spirits (HS22) amounting €36 million, growing by 102%, representing 

23% of total EU agricultural exports, but 2% of total EU exports; 

  Miscellaneous  edible  preparations  (HS21),  worth  €25  million,  a  29%  increase 

compared to 2017, and 16% of EU agricultural exports; 

  Residues and waste from food industry (HS23) increased by 23%, representing 11% of 

EU agricultural exports. 

EU imports of agricultural products from Ecuador increased by 2% in 2018, reaching a total 
of €1.61 billion. EU continues to be Ecuador´s prime market for non-oil exports. Agricultural 
products represented 53% of total EU imports from Ecuador. The most important categories 
in 2018 were: 

  Fruits  (HS08),  accounting  for  €1  billion  or  64%  of  total  EU  imports  of  AMA  (a  9% 
increase  compared  to  2017)  and  34%  of  total  EU  imports  from  Ecuador.  Bananas 
accounted for 94% of fruit imports (+10% in 2018 compared to 2017). Fresh tamarinds 
grew by  19%, fresh plantains and dried bananas  by  10%  and 15% respectively, while 
fresh pineapples and frozen fruit both decreased by 17%.  

  Live trees and other plants, mainly fresh cut flowers (HS06) accounting for 13% of total 

AMA imports, increased by 11% compared to 2017. 

  Cocoa and cocoa preparations (HS18), accounting for 10% of EU agricultural imports 

(and 5% of total Ecuador’s exports to the EU), shrunk by 13% compared to 2017.  

Use of Tariff Rate Quotas (TRQs)  

Ecuador´s use of the TRQs is progressively increasing in some categories of products.  

Rate of utilization of EU TRQs by Ecuador 

Sweet corn, uncooked, or cooked 
Sweet corn provisionally preserved 
Rice 
Raw  cane  sugar  not  containing  added  flavouring  or 
colouring 
Sugar and sugar products 
Source: TAXUD, Surveillance Database  

2017 
3.3% 
- 
0.01% 
4.3% 

2018 
9.5% 
0.7% 
0.3% 
8.3% 

1.6% 

0.6% 

48 

 
 
 
 
 
 
 
 
 
 
 
In 2018, the EU use of TRQs established for dairy products (powder milk, butter milk serum, 
whey) has almost tripled compared to the first year of FTA implementation. Other products 
where  significant  increases  were  registered  are  processed  sweet  corn  and  pork  products  (10 
and 14% increase respectively).  

A  complex  TRQ  management  system  set  out  by  the  Ecuadorian  authorities  together  with  a 
slow  process  of  registration  of  sanitary  and  phytosanitary  conditions  of  Member  States  and 
EU establishments may explain the low TRQ use by the EU. 

Rate of utilization of Ecuador TRQs by the EU 

Preparations for animal feeding 
Preparations for animal feeding 
Bovine guts 
Dairy  products:  Powder  milk,  butter  milk  serum, 
whey 
Dairy products: Evaporated milk, condensed milk   
Diary  products:  Yoghourt,  cheeses:  grated  or 
powdered, melted, others 
Dairy products: Blue-veined cheese, mature cheese 
Fresh sweet corn: Sweet corn, fresh, refrigerated 
Processed sweet corn: Sweet corn: frozen, canned 
Swine  products:  cured  ham,  bellies 
sausages and similar meat products 
Frozen potatoes 
Confectionary  product  (high  sugar  content):  Juices, 
chocolate, coffee, tea and others 
Source:  Ministry of Agriculture and Livestock  

(streaky) 

Preference Utilization Rate (PUR)  

2017 

2018 

6.1% 
0% 
0% 

8.1% 
2.7% 
0% 

12.5% 

35.7% 

1.0% 
2.7% 

3.0% 
19.0% 

3.9% 

7.0% 

21.9% 
5.7% 

32.8% 
18.9% 

0% 
0.9% 

1.9% 
0% 

In  the  context  of  the  Sub-committee  on  Market  Access,  the  Parties  agreed  in  2015  to 
exchange  data  on  PUR  on  an  annual  basis.  During  the  annual  meeting  that  took  place  in 
December  2018  in  Quito,  the  EU  stressed  the  need  to  have  reliable  data  to  get  a  better 
overview of the effects of the Agreement and to explore means to assist economic operators, 
in particular SMEs, to make better use of the opportunities.  

2.2 Trade in Services and development of investment 

2.2.1 Trade in Services 

Colombia 

Bilateral trade in services between the EU and Colombia increased by 22% in 2017 compared 
to 2016, totalling €5.4 billion. Both EU exports and Colombian exports increased during this 
period of time by 26% and 13% respectively.  

49 

 
 
 
 
 
 
 
 
 
 
 
According  to  Colombian  statistics  (DANE),  the  EU’s  share  in  Colombia’s  total  trade  in 
services represented 16% in 2018. Key EU exports of services are travel, IT and passenger air 
transport.  

Peru  

In  2017,  EU-Peru  bilateral  trade  in  services  amounted  to  €3  billion.  Both  EU  exports  (€1.9 
billion)  and  Peruvian  exports  (€1.1  billion)  increased  year-on-year  by  21%  and  13% 
respectively. Balance remains positive for the EU.   

Ecuador 

In 2017, bilateral trade in services between the EU and Ecuador increased by 11%  year-on-
year to amount to €1.6 billion. EU exports amounted to €1 billion, increasing by 4% year-on-
year.  Ecuadorian  exports  of  services  (€582  million)  experienced  a  27%  growth.  The  EU 
maintains  a  surplus  in  trade  in  services  in  2017  although  this  surplus  has  shrunk  by  15%. 
According to Ecuador’s Central Bank data, the EU share in Ecuador´s total trade in services 
represented 35%.  

2.2.2 Foreign Direct investment (FDIs) 

Colombia 

For the fourth year in a row, the EU was the first foreign investor in Colombia, totalling €15 
billion of Foreign Direct Investment (FDI) stocks in 2017. According to Colombian statistics, 
EU  FDI  accounted  for  39%  of  the  total  FDI  inflows  to  Colombia  in  2018.  Colombian  FDI 
stocks in the EU increased by 33% since 2016, totalling €4.6 billion in 2017, and according to 
Colombian statistics, 31% of its outward flows went to the EU in 2018.  

Peru  

The EU is according to Peruvian statistics the first foreign investor in Peru. EU FDI stocks 
in  Peru  slightly  decreased  (-1%)  between  2016  and  2017,  totalling  €16.6  billion  in  2017. 
Between 2013 and 2014 total EU FDI stocks in Peru increased by 74%.  

Peru’s  FDI  stocks  in  the  EU  increased  by  21%  compared  to  2016  totalling  €3.4  billion  in 
2017.  

Ecuador 

In 2017, EU FDI stocks have remained constant at €5.12 billion compared to 2016. According 
to Ecuador´s Central Bank statistics, in 2017, the EU was the first foreign investor, accounting 
for 32% of total FDI inflows into Ecuador.   

3 

ACTIVITIES OF THE IMPLEMENTATION BODIES 

The fifth meeting of the Trade Committee took place on 13 and 14 December 2018 in Quito 
(Ecuador). It was preceded between 29 November and 12 December 2018 by meetings of all 
8 Sub-committees under the Agreement.  

50 

 
 
 
 
 
 
 
 
 
 
 
Trade Committee  

The  EU  and  Colombia  signed  a  Decision  to  include  nine  new  Colombian  geographic 
indications  (GIs)  to  the  Annex  of  the  Trade  Agreement.  This  is  the  first  time  since  the 
provisional application of the Agreement. 

The  Trade  Committee  was  able  to  take  stock  of  progress  achieved  in  the  eight  Sub-
committees.  The  EU  reiterated  some  of  its  main  concerns,  notably:  with  Colombia,  the 
imposition  of  anti-dumping  duties  against  frozen  potatoes  from  Belgium,  Germany  and  the 
Netherlands,  the  de  facto  lack  of  access  to  sub-central  entities  despite  the  signature  of  the 
Decision  of  the  Trade  Committee  in  2017,  the  backtracking  on  truck  scrappage  policy  with 
the  six-month  extension  of  its  elimination,  and  discriminatory  measures  on  alcoholic 
beverages (beers and spirits); with  Peru, the  continued discrimination  of imported spirits in 
Peru, the lack of enforcement for EU GIs and cumbersome procedures to facilitate imports of 
medical devices and medicines from the EU; with Ecuador, the discriminatory treatment for 
imported alcoholic beverages, and trade-restrictive management of tariff-rate quotas (TRQs).  

The EU also expressed concerns on slow progress on SPS matters with the three countries, 
notably on the approval of harmonised procedures (certificates and prelisting) or long delays 
or  deviations  from  international  standards  attributed  to  Community  of  Andean  Nations 
legislation and procedures. The EU called specifically upon Colombia to progress or lift trade 
restrictions imposed on Belgium over outbreaks of African Swine Fever in wild boars. 

The EU called for more constructive engagement from the three Andean countries to change 
their  provisions  defining  direct  transport  to  allow  for  the  splitting  of  consignments  for 
products transiting a third country.  

Colombia,  Peru and Ecuador raised concerns about the potential impact of some EU  SPS 
measures on their exports of agricultural products. They also showed interest to examine in 
2019  the  improvement  of  tariff  liberalisation  for  bananas  pursuant  to  the  clause  in  the 
agreement. They  expressed concerns about  the recent  increase of the autonomous TRQs for 
tuna  and  shrimps,  which  they  consider  to  erode  their  preferences.  Colombia  and  Ecuador 
conveyed  their  preoccupations  about  EU  legislative  activities  that  they  consider  may  affect 
their exports of palm oil to the EU.   

The EU gave an update on the state of ratification process in EU Member States of both the 
Agreement  and  the  Protocol  of  Accession  of  Ecuador.  Colombia  informed  about  the 
ratification process regarding the Protocol to the Agreement to take account of the accession 
of the Republic of Croatia to the European Union.  

Sub-Committee on Customs, Trade Facilitation and Rules of Origin  

The two main issues discussed were the following:  

The EU raised the update of the rule on Direct Transport with a view to allowing the splitting 
of  consignments  for  originating  goods  transiting  regional  transport  hubs  in  third  countries. 
Unfortunately, no agreement could be reached on moving forward on this point. 

For  regional  cumulation  between  the  Andean  countries  and  Central  America,  the  parties 
discussed the requirement for adequate customs cooperation agreements. The two regions are 

51 

 
 
 
 
 
 
 
 
 
 
 
in  the  process  of  finalising  a  region  to  region  agreement  to  re-establish  the  agreement  that 
existed under the Generalised System of Preference (GSP). 

Sub-Committee on Government Procurement 

The  EU  raised  concerns  on  the  interpretation  by  Colombia  of  the  Decision  1/2017  of  the 
Trade  Committee  adopted  in  November  2017  on  the  coverage  by  Colombia  of  some 
government procurement contracts at municipal level. As a result of Colombia’s interpretation 
of  the  exemption  related  to  sub-central  contracting  entities  with  industrial  and  commercial 
character, EU companies are not granted national treatment in public procurement procedures 
in  those  contracts.  This  impacted  the  EU  participation  in  major  infrastructure  projects  in 
Colombia such as metros and hospitals and pressed Colombia to find a solution to remedy the 
situation  and  meet  the  legitimate  EU  expectations.  Colombia  and  the  EU  agreed  to  work 
towards a mutually agreeable solution on this issue. 

The Andean countries expressed their interest  in exchanging information  on the functioning 
of the EU public procurement platform SIMAP-TED, in order to facilitate the identification of 
business opportunities for Andean economic operators in the EU public procurement market. 

Sub-Committee on Technical Barriers to Trade (TBT) 

With regard to Peru, the EU reiterated its concerns about the lack of recognition by Peru of 
all  Member  States  as  having  ‘strong  health  monitoring’  (“Alta  Vigilancia  Sanitaria”),  as  it 
facilitates  the  recognition  of  their  certification  for  pharmaceutical  and  medical  devices 
products to be exported to Peru.  

Colombia, Ecuador and Peru expressed their concerns as regards EU legislation on endocrine 
disruptors. Colombia and Ecuador raised concerns about EU legislation on renewable energy 
that, in their view, may have a negative impact on their exports of palm oil to the EU. 

Sub-Committee on Sanitary and Phytosanitary matters (SPS) 

For the EU, the main offensive points were to make progress on the approval of harmonised 
certificates,  to  obtain  the  lifting  or  progress  concerning  trade  restrictions  imposed  by 
Colombia on Belgium over outbreaks of African Swine Fever in wild boars, and ensuring that 
the Agreement’s provisions on communication, emergency measures and regionalization for 
animal diseases are respected. 

The EU also pushed for progress on several market access applications, for which Colombia, 
Ecuador and Peru refer to SPS legislation (or procedures) at Community of Andean Nations 
(CAN)  level  to  justify  long  delays  or  deviations  from  international  standards.  While 
respecting  the  role  of  CAN,  the  EU  insisted  that  the  provisions  of  the  Agreement  and 
international standards must be complied with.  

Peru, Colombia and Ecuador reiterated their  concerns on issues already  raised bilaterally or 
multilaterally in other fora (for example, Codex, WTO SPS Committee, etc.), in particular the 
EU  measures  for  maximum  levels  of  cadmium  in  some  cocoa-based  products  (e.g. 
chocolates), the ongoing revision of the maximum residue limits (MRLs) for some pesticides, 
the legislative framework on endocrine disruptors and the approval procedure for novel food. 

52 

 
 
 
 
 
 
 
 
 
Both  sides  agreed  on  an  agenda  and  actions  plans  for  the  main  points.  Finally,  the  Andean 
countries presented several requests for technical assistance. 

Agricultural Sub-Committee 

The Parties exchanged information on the trade flows in agri-food trade (including the use of 
preferences  and of tariff-rate quotas) and on the implementation  of the Banana Stabilisation 
Mechanism. 

Concerning Colombia, the EU expressed concerns on the methodology for the calculation of 
retail  prices  on  alcoholic  beverages,  as  well  as  about  a  new  certification  of  Good 
Manufacturing Practices, which - if adopted - could impose additional requirements affecting 
EU  exports.  With  Ecuador,  the  EU  raised  concerns  about  the  system  in  place  for  granting 
import  licences  and  the  administration  of  tariff-rate  quotas.  With  Peru,  the  EU  raised 
concerns on the longstanding tax discrimination against spirits aggravated and invited Peru to 
take appropriate action.  

Colombia and Ecuador expressed concerns on legislative developments in the EU that may 
affect  their  exports  of  palm  oil  as  well  as  concerning  production  of  cacao  and  coffee.  They 
also  reiterated  their  interest  to  negotiate  with  the  EU  bilateral  agreements  on  organic 
production. 

Sub-Committee on Intellectual Property Rights 

Regarding Geographical Indications (GIs), the Parties addressed specific issues regarding on-
going  investigations  launched  by  Colombia  on  the  usurpation  of  certain  EU  cheese  GIs,  as 
well as effective action needed on Peru’s side to protect a number of EU GIs suffering from 
usurpation. The request for corrections to the names of certain EU GIs already recognised in 
Peru was also discussed, as well as a case of alleged usurpation of an EU GI in Ecuador. Peru 
referred to the protection of “Pisco” in the EU in relation to registration of trademarks.  

The EU informed of work concluded for the protection of nine additional Colombian GIs, and 
on-going  work  concerning  the  recognition  of  additional  GIs  from  Colombia,  Ecuador  and 
Peru.  The  Parties  also  exchanged  information  concerning  non-agricultural  GIs  in  their 
respective markets.  

Other issues discussed included the overall enforcement of intellectual property rights (IPR), 
including on-line and at the border, patentability issues in Colombia and Ecuador, as well as 
the  protection  of  regulatory  data  submitted  for  marketing  authorisations  of  pharmaceuticals 
and  agro-chemicals.  Copyright  and  related  rights  in  the  framework  of  revised  legislation 
(Colombia)  or  implementing  regulations  (Ecuador)  were  also  addressed,  as  well  as  the 
importance of effective protection of plant variety rights in Ecuador.  

Cooperation projects were discussed in the context of activities already implemented by the IP 
Key  Latin  America  Programme,  and  future  possible  activities  aimed  at  supporting  the 
implementation of IPR commitments in the Trade Agreement. 

53 

 
 
 
 
 
 
 
 
 
 
Market Access Sub-Committee 

The  Parties  exchanged  statistics  on  trade  flows,  including  the  use  of  preferences  and  tariff 
rates quotas.  

With  Colombia,  the  EU  raised  its  concerns  regarding  the  decision  in  November  2018  to 
impose anti-dumping duties  against EU frozen potatoes,  the  extension by six months  of the 
elimination  of  the  truck  scrappage  policy,  discrimination  against  imported  beers  in  some 
departments,  the  implementation  of  the  spirits  law.  On  anti-dumping,  Colombia  mentioned 
the possibility for the EU to request an administrative review of the decision. With Ecuador, 
discussions  focused  on  discriminatory  treatment  against  imported  spirits,  where  Ecuador 
indicated that it would need an additional 6 to 12-month period to remove the discrimination.  

Colombia, Ecuador and Peru referred to the clause in the Agreement to examine in 2019 a 
possible improvement of tariff liberalisation for bananas. They also expressed concerns about 
the recent  increase of the EU autonomous TRQs for tuna and shrimps, which they  consider 
may erode their preferences. 

4. 

IMPLEMENTATION  OF  THE  PROVISIONS  ON  TRADE  AND 
DEVELOPMENT 

SUSTAINABLE 

The  fifth  meeting  of  the  Sub-committee  on  Trade  and  Sustainable  Development  (TSD) 
reviewed the progress  made during a  year of stepped-up engagement on  TSD issues,  which 
was accompanied by regular exchanges between the Parties.     

The intense engagement with Peru reflects the more assertive EU stance on enforcing TSD 
commitments,  in  line  with  the  European  Commission’s  15-point  action  plan  to  improve 
implementation of TSD chapters. In her letter of July 2018 to Peru’s Trade Minister Rogers 
Valencia  Commissioner  Malmström  expressed  EU’s  concerns  regarding  the  implementation 
by Peru of some of the commitments undertaken in the TSD chapter. These concerns related 
to  the  right  on  freedom  of  association  and  collective  bargaining  (notably  for  workers  in 
particular  sectors  including  textiles  and  agriculture),  the  high  levels  of  child  labour    and 
informality as well as weak capacity of labour inspection. The letter also signaled the need to 
sustain  environmental  protection  levels  and  highlighted  the  insufficient  civil  society 
consultation  on  labour  and  environmental  issues  related  to  the  implementation  of  the  TSD 
chapter.  The  submission  filed  with  the  European  Commission  by  a  group  of  civil  society 
organisations in October 2017 also raised some of these issues.  

Following this letter, the EU and Peru  engaged in more sustained contacts  aiming to  renew 
the impetus on the implementation of the TSD chapter, which included a technical mission of 
the  Commission’s  services  to  Lima  in  October  2018.  Throughout  the  process,  the 
Commission  maintained  a  regular  dialogue  with  civil  society  organisations,  including  the 
social partners.  

The result of this engagement is reflected in the minutes of the TSD Sub-committee meeting 
that  are  available  on  the  Commission’s  website.  Peru  reiterated  its  commitment  to  the  full 
implementation of the TSD chapter and listed the main policy initiatives already in place (or 
in  preparation)  to  address  the  substantive  challenges  identified,  while  acknowledging  that 
efforts  needed  to  continue  to  ensure  the  commitments  are  met.  Peru  also  agreed  to  be 
proactive  in  using  the  domestic  mechanisms  it  chose  to  rely  on  to  engage  civil  society  on 
TSD-related issues. 

54 

 
 
 
 
 
 
 
 
Furthermore,  the  TSD  Sub-committee  meeting  reviewed  progress  made  by  Colombia  and 
Ecuador  in  the  implementation  of  the  TSD  chapter.  On  labour,  Colombia  made  advances 
notably  through  the  implementation  of  initiatives  to  reduce  labour  informality  and  child 
labour. These included the national network of labour formalisation and the revision of the list 
of hazardous occupations. However, the persistence of cases of violence against trade union 
leaders remains concerning. In Ecuador, the right to freedom of association also continues to 
be  a  concern  as  well  as  labour  informality.  Both  countries  need  to  intensify  efforts  to 
strengthen labour inspection. The EU also encouraged all parties to ratify the 2014 Protocol to 
the ILO Forced Labour Convention. 

On  environment,  Colombia  and  Ecuador  continued  to  put  in  place  initiatives  to  address 
deforestation and implement the Convention on International Trade in Endangered Species of 
Wild  Fauna  and  Flora  (CITES).  Colombia  also  adopted  a  national  strategy  for  circular 
economy and a programme to support green business. The fight against the use of mercury in 
mining and industrial activities remains a main challenge for the country. Ecuador also made 
noteworthy  advances  by  ratifying  the  Nagoya  Protocol  of  the  Convention  of  Biological 
Diversity in December 2017. In April 2018, the country adopted the Organic Environmental 
Code.  The  fight  against  illegal  mining  remains  a  concern  as  well  as  Ecuador’s  compliance 
with its commitments on illegal, unreported and unregulated fishing. 

There  was  good  progress  in  the  involvement  of  civil  society  in  accompanying  the 
implementation  of the TSD chapter. The EU domestic advisory  group (DAG) met regularly 
throughout 2018 to discuss issues of relevance to the TSD chapter. In Colombia, the dedicated 
consultative  group  continued  to  be  consolidated.  In  Ecuador,  the  government  organised  a 
consultation  process  with  civil  society  that  led  to  the  setting  up  of  a  dedicated  consultative 
group for TSD issues in December 2018. Peru committed to make a more proactive use of its 
domestic  consultative  mechanisms.  In  line  with  Article  282  of  the  Agreement,  the  Sub-
committee on TSD organised an open session on 12 December 2018 in Quito.  

The  Parties  made  progress  with  cooperation  activities.  In  Colombia,  two  workshops  were 
organised  in  March  2018:  one  on  the  use  of  mercury  for  gold  extraction  and  one  on 
responsible  mining.  The  implementation  of  a  new  EU-financed  project  led  by  the  ILO  to 
strengthen  labour  inspection  in  agricultural  areas  started  in  January  2019.  With  Ecuador 
cooperation  initiatives  mostly  focused  on  assisting  the  early  phase  of  TSD  implementation. 
These included the drafting of a TSD implementation handbook in partnership with Sweden. 
With  Peru,  a  regional  workshop  on  circular  economy  was  organised  in  Lima  in  September 
2018.  

The  positive  momentum  achieved  with  all  three  partner  countries  will  allow  further 
engagement  to  continue.  It  also  reflects  the  more  assertive  and  focused  efforts  by  the  EU, 
grounded  on  a  closer  partnership  with  EU  Member  States  and  the  ILO  and  on  the  greater 
involvement of civil society, in accordance with the 15-point action plan.  

5. 

SPECIFIC AREAS SUBJECT TO REPORTING OR MONITORING 

The  Agreement  provides  a  preferential  customs  duty  on  bananas  under  heading  0803.00.19 
(fresh  bananas),  progressively  reduced  since  the  date  of  provisional  application  of  the 
Agreement  until  the  year  2020  (following  a  schedule  indicated  in  a  tariff  reduction  table). 
This  special  treatment  is  linked  to  a  ‘stabilisation  clause’  that  sets  out  an  annual  trigger 
volume for imports from each Andean country during the transition period.  

55 

 
 
 
 
 
 
 
Article 15 of Regulation (EU) No 19/201318 provides for the stabilisation mechanism. When 
the  annual  trigger  volume  of  imports  per  country  as  set  in  the  Agreement  is  met,  the 
Commission  examines  the impact  of these imports on the situation of the Union market  for 
bananas  and  take  a  decision  to  either  temporarily  suspend  the  preferential  customs  duty  or 
determine  that  such  suspension  is  not  appropriate.  The  stabilisation  mechanism  shall  apply 
until 31 December 2019.  

In  this  context  and  in  accordance  with  Articles  3  and  13  of  Regulation  19/2013,  the 
Commission has been monitoring the evolution of imports of fresh bananas from Colombia, 
Peru and Ecuador. 

2018 imports of fresh bananas from Colombia, Ecuador and Peru 

Country 
Colombia 
Ecuador 
Peru 
Total 
Source Eurostat 

Used volume 
(tonnes) 

Trigger level 
(tonnes) 

% 

1.286.314 
1.514.549 
127.168 
2.928.031 

1.890.000 
1.880.127 
97.500 
3.867.627 

68% 
81% 
130% 
76% 

In  2018,  EU  imports  of  fresh  bananas  from  Colombia  amounted  to  1 286 313  metric  tons. 
Colombia remained 32% below the trigger volume of 1 890 000 metric tonnes established by 
the Agreement.  

Ecuador exported 1 514 548 metric tons of fresh bananas to the EU, with imports remaining 
19%  below  the  trigger  level  of  1 880 127  metric  tonnes,  established  for  Ecuador  in  the 
Agreement.  

Peru exceeded its trigger volume established in the Agreement (97 500 metric tonnes) on 15 
October 2018. In line with Article 15(3) of the above-mentioned Regulation(EU) No 19/2013, 
the  Commission  examined  the  impact  on  the  EU  market  taking  into  account,  inter  alia,  the 
effects on the price level, developments of imports from other sources and the overall stability 
of the EU market.   

As  a  result  of  the  examination,  the  Commission  concluded  that  the  suspension  of  the 
preferential  duty on  fresh bananas originating in  Peru was not  appropriate for the following 
reasons19:  

1.  the  share  of  imports  from  Peru  (2.2%)  in  the  overall  imports  of  bananas  over  the 
period 1 January 2018 - 15 October 2018 was very small and the price development of 
imports from Peru remained in line with other import prices; 

18   Regulation  (EU)  No  19/2013  of  the  European  Parliament  and  of  the  Council  of  15  January  2013 
implementing  the  bilateral  safeguard  clause  and  the  stabilisation  mechanism  for  bananas  of  the  Trade 
Agreement between the European Union and its Member States, of the one part, and Colombia and Peru, of 
the other part as amended by Regulation (EU) 2017/540 of the European Parliament and of the Council of 15 
March 2017. 

19  Commission  Implementing  Decision  (EU)  2018/1888  of  3  December  2018  determining  that  a  temporary 
suspension  of  the  preferential  customs  duty  pursuant  to  Article  15  of  Regulation  (EU)  No  19/2013  of  the 
European Parliament and of the Council and pursuant to Article 15 of Regulation (EU) No 20/2013 of the 
European Parliament and of the Council is not appropriate for imports of bananas originating in Guatemala 
and Peru (OJ L 308, 04.12.2018, p.49). 

56 

 
 
 
 
 
 
 
 
 
                                                 
2.  the  other  exporting  countries  remained  -  at  that  moment  of  the  year  -  far  below  the 
thresholds defined for them (annual exports from the three Andean countries reached 
76% of the cumulated trigger level); 

3.  Peruvian  imports  did  not  show  any  negative  effect  on  the  EU  wholesale  price  for 

bananas, which has remained fairly stable during the period.  

Therefore, there was no indication that the stability of the EU market or the situation of the 
EU  producers  was  affected  by  the  level  of  Peruvian  exports.  Nevertheless,  the  Commission 
will continue its reinforced monitoring of banana imports and evaluate the market situation.  

6. 

CONCLUSIONS AND OUTLOOK 

After almost six years of provisional application with Colombia and Peru and the three years 
with Ecuador, the Agreement continues to function well and has created important business 
opportunities,  which  are  being  increasingly  seized  by  businesses  and  exporters  from  both 
sides.  Despite  a  slight  decrease  in  bilateral  trade  with  Colombia  and  Peru  in  2018,  the 
Agreement  continues  to  contribute  to  an  important  diversification  of  Colombia  and  Peru’s 
exports, away from mineral products or ores, notably in favour of the agricultural sector, thus 
creating  new  opportunities,  notably  for  SMEs.  With  Ecuador,  results  after  two  years  of 
implementation are positive and there is still potential for growth and diversification on both 
sides.  

Full  implementation  of  the  Agreement  remains  a  priority  for  the  EU.  The  institutional 
framework under the Agreement has  been working  well and allows for discussions  to  seek 
solutions to the implementation and market access issues on both sides. Nevertheless, some 
difficulties  persist  and  all  Parties  should  continue  working  on  the  implementation  of  the 
Trade Agreement in order to bring further benefits to their businesses and consumers.  

In  2018,  the  Commission  will  launch  an  external  ex  post  evaluation  on  the  five  years  of 
implementation of the Agreement, which will undertake an in-depth analysis of the trade and 
economic  impacts,  social  impacts,  impact  on  labour  and  human  rights,  and  environmental 
impacts  of  the  Agreement.  Stakeholders  and  the  civil  society  will  be  widely  consulted, 
including through dedicated meetings.  

7. 

STATISTICS 

Colombia 

Merchandise trade EU28 2014-2018 
2014 

2015 

2016 

2017 

2018 

EU28 trade with Colombia (mio €) 
Imports 
Exports 
Balance 

Share Colombia in EU28 trade 
with Extra-EU28 

8.178 
6.352 
-1.826 

6.724 
6.523 
-202 

5.443 
5.403 
-40 

5.590 
5.973 
383 

5.085 
6.010 
925 

Imports 
Exports 
Total (I+E) 

Imports 
Exports 

0,3% 
0,3% 
0,3% 
Share EU28 in trade Colombia with world 

0,5% 
0,4% 
0,4% 

0,4% 
0,4% 
0,4% 

0,3% 
0,3% 
0,3% 

0,3% 
0,3% 
0,3% 

13,7%  15,3%  13,5%  14,7% 
17,1%  16,6%  12,8%  13,4% 

15,1% 
12,5% 

57 

 
 
 
 
  
 
  
  
  
  
 
  
  
  
  
Total (I+E) 

15,3%  15,8%  13,2%  14,1% 

Source Trade G2 Statistics/ISDB  
Trade EU28: Eurostat COMEXT;  Trade Colombia: IMF Dots 

Total merchandise trade EU28 with Colombia (mio €) 

13,9% 
25-
mars-
19 

Colombia 

2017 

2018 

Imports 
Exports 
Balance 
Total trade 
Source Trade G2 Statistics/ISDB from Eurostat COMEXT 

5.085 
6.010 
925 
11.564  11.095 

5.590 
5.973 
383 

Agrifood trade EU28 with Colombia (mio €) 

Colombia 

2017 

2018 

Imports 
Exports 
Balance 
Total trade 
Source Trade G2 Statistics/ISDB from Eurostat COMEXT 

2.407 
400 
-2.007 
2.808 

2.187 
428 
-1.760 
2.615 

NAMA trade EU28 with Colombia (mio €) 

Colombia 

2017 

2018 

EU28 imports 
EU28 exports 
Balance 
Total trade 
Source Trade G2 Statistics/ISDB from Eurostat COMEXT 

3.183 
5.573 
2.390 
8.756 

2.898 
5.582 
2.684 
8.480 

Services trade EU28 with Colombia (mio €) 

Colombia 

2016 

2017 

Imports 
Exports 
Balance 
Total trade 
Source Trade G2 Statistics/ISDB from Eurostat BOP statistics 

1.381 
3.063 
1.682 
4.444 

1.554 
3.846 
2.292 
5.400 

Services trade EU28 with Colombia (mio €) 
2015 
2013 
1.466 
1.453 
2.966 
2.563 
1.500 
1.111 
4.431 
4.016 

2014 
1.538 
2.398 
860 
3.935 

Imports 
Exports 
Balance 
Total trade 
Source Trade G2 Statistics/ISDB 
from Eurostat BOP statistics 

58 

Growth 

mio € 
-505 
37 
542 
-468 

annual 
% 
-9,0% 
0,6% 

-4,0% 

Growth 

mio € 
-220 
27 
247 
-193 

annual 
% 
-9,1% 
6,8% 

-6,9% 

Growth 

mio € 
-285 
9 
295 
-276 

annual 
% 
-9,0% 
0,2% 

-3,1% 

Growth 

mio € 
173 
783 
610 
956 

annual 
% 
12,5% 
25,6% 

21,5% 

2016 
1.381 
3.063 
1.682 
4.444 

2017 
1.554 
3.846 
2.292 
5.400 

 
 
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
FDI EU28 with Colombia (mio €) 
2013 
FDI Stocks 

2014 

2015 

2016 

2017 

Inward 
Outward 

Inward 
Outward 
Source Trade G2 Statistics/ISDB 
from Eurostat BOP statistics 

Ecuador 

4.789 
4.589 
8.214 
17.848  16.223  21.738  15.382  15.051 

3.457 

3.828 

FDI Flows 
1.365 
-261 

-214 
71 

2.348 
1.579 

-584 
-2.010 

650 
1.313 

Merchandise trade EU28 2014-2018 

2014 

2015 

2016 

2017 

2018 

EU28 trade with Ecuador (mio €) 
Imports 
Exports 
Balance 
Share Ecuador in EU28 trade with 
Extra-EU28 

2.621  2.595  2.724  3.018 
2.199  2.010  1.638  2.214 
-804 
-586  -1.086 
-422 

3.032 
2.353 
-679 

Imports 
Exports 
Total (I+E) 

Imports 
Exports 
Total (I+E) 

0,2% 
0,1% 
0,1% 
Share EU28 in trade Ecuador with world 

0,2% 
0,1% 
0,1% 

0,2% 
0,1% 
0,1% 

0,2% 
0,1% 
0,1% 

0,2% 
0,1% 
0,1% 

11,0%  11,6%  11,5%  13,0% 
11,6%  15,1%  16,9%  16,6% 
11,3%  13,2%  14,2%  14,7% 

12,9% 
15,1% 
14,0% 
25-
mars-
19 

Source Trade G2 Statistics/ISDB  
Trade EU28: Eurostat COMEXT;  Trade Ecuador: IMF Dots 

Total merchandise trade EU28 with Ecuador (mio €) 

Ecuador 

2017 

2018 

Imports 
Exports 
Balance 
Total trade 
Source Trade G2 Statistics/ISDB from Eurostat COMEXT 

3.018  3.032 
2.214  2.353 
-804 
-679 
5.232  5.386 

Agrifood trade EU28 with Ecuador (mio €) 

Ecuador 

2017 

2018 

Imports 
Exports 
Balance 
Total trade 
Source Trade G2 Statistics/ISDB from Eurostat COMEXT 

1.567  1.606 
157 
-1.445  -1.449 
1.689  1.763 

122 

Growth 

annual 
% 
0,5% 
6,3% 

2,9% 

mio € 
15 
140 
125 
154 

Growth 

annual 
% 
2,5% 
28,6% 

4,4% 

mio € 
39 
35 
-4 
74 

59 

 
 
  
  
  
  
  
  
 
  
 
  
  
  
  
 
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
NAMA trade EU28 with Ecuador (mio €) 

Ecuador 

2017 

2018 

EU28 imports 
EU28 exports 
Balance 
Total trade 
Source Trade G2 Statistics/ISDB from Eurostat COMEXT 

1.451  1.427 
2.092  2.197 
770 
3.543  3.623 

641 

Services trade EU28 with Ecuador (mio €) 

Ecuador 

2016 

2017 

582 
Imports 
1.016  1.055 
Exports 
473 
Balance 
Total trade 
1.474  1.638 
Source Trade G2 Statistics/ISDB from Eurostat BOP statistics 
Services trade EU28 with Ecuador (mio €) 

558 

458 

Growth 

annual 
% 
-1,7% 
5,0% 

2,3% 

mio € 
-24 
105 
129 
80 

Growth 

annual 
% 
27,2% 
3,9% 

11,1% 

mio € 
124 
40 
-85 
164 

Imports 
Exports 
Balance 
Total trade 
Source Trade G2 Statistics/ISDB 
from Eurostat BOP statistics 

2013 
378 

2014 
408 

2015 
374 

2016 
458 
1.141  1.309  1.094  1.016 
558 
1.519  1.716  1.468  1.474 

764 

901 

720 

2017 
582 
1.055 
473 
1.638 

FDI EU28 with Ecuador (mio €) 

2013 
FDI Stocks 

2014 

2015 

2016 

2017 

399 

176 
4.052  5.157  8.254  5.152 

536 

230 

178 
5.123 

FDI Flows 
-56 
-119 

-233 

-177 
2  1.087 

-115 
80 

-13 
349 

Inward 
Outward 

Inward 
Outward 
Source Trade G2 Statistics/ISDB 
from Eurostat BOP statistics 

Peru 

Merchandise trade EU28 2014-2018 
2016 
2014 

2015 

2017 

2018 

EU28 trade with Peru (mio €) 
Imports 
Exports 
Balance 
Share Peru in EU28 trade with 
Extra-EU28 

Imports 
Exports 
Total (I+E) 

4.978 
3.236 
-1.742 

5.033 
3.732 
-1.301 

5.183 
3.614 
-1.569 

6.175 
4.053 
-2.122 

6.157 
3.731 
-2.426 

0,3% 
0,2% 
0,2% 

0,3% 
0,2% 
0,2% 

0,3% 
0,2% 
0,3% 

0,3% 
0,2% 
0,3% 

0,3% 
0,2% 
0,3% 

60 

 
 
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
 
 
  
 
  
  
  
  
 
  
  
  
  
Imports 
Exports 
Total (I+E) 

Share EU28 in trade Peru with world 

11,8%  11,7%  12,0%  12,3% 
16,6%  16,1%  15,1%  14,7% 
14,0%  13,7%  13,5%  13,5% 

Source Trade G2 Statistics/ISDB  
Trade EU28: Eurostat COMEXT;  Trade Peru: IMF Dots 

Total merchandise trade EU28 with Peru (mio €) 

12,1% 
15,1% 
13,7% 
25-
mars-
19 

Peru 

2017 

2018 

Imports 
Exports 
Balance 
Total trade 
Source Trade G2 Statistics/ISDB from Eurostat COMEXT 

6.175 
4.053 
-2.122 
10.228 

6.157 
3.731 
-2.426 
9.888 

Agrifood trade EU28 with Peru (mio €) 

Peru 

2017 

2018 

Imports 
Exports 
Balance 
Total trade 
Source Trade G2 Statistics/ISDB from Eurostat COMEXT 
NAMA trade EU28 with Peru (mio €) 

2.158 
251 
-1.907 
2.410 

2.280 
255 
-2.026 
2.535 

Peru 

2017 

2018 

EU28 imports 
EU28 exports 
Balance 
Total trade 
Source Trade G2 Statistics/ISDB from Eurostat COMEXT 
Services trade EU28 with Peru (mio €) 

4.017 
3.802 
-215 
7.818 

3.876 
3.476 
-400 
7.353 

Growth 

mio € 
-18 
-322 
-303 
-340 

annual 
% 
-0,3% 
-7,9% 

-3,3% 

Growth 

mio € 
122 
4 
-118 
125 

annual 
% 
5,6% 
1,4% 

5,2% 

Growth 

mio € 
-140 
-325 
-185 
-466 

annual 
% 
-3,5% 
-8,6% 

-6,0% 

Growth 

Peru 

2016 

2017 

Imports 
Exports 
Balance 
Total trade 
Source Trade G2 Statistics/ISDB from Eurostat BOP statistics 

1.108 
1.955 
848 
3.063 

978 
1.621 
643 
2.599 

mio € 
130 
335 
205 
464 

annual 
% 
13,3% 
20,6% 

17,9% 

Imports 
Exports 
Balance 

Services trade EU28 with Peru (mio €) 
2015 
2013 
899 
840 
1.710 
1.699 
812 
859 

2014 
910 
2.109 
1.199 

2016 
978 
1.621 
643 

2017 
1.108 
1.955 
848 

61 

 
 
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
Total trade 
Source Trade G2 
Statistics/ISDB from Eurostat 
BOP statistics 

2.538 

3.020 

2.609 

2.599 

3.063 

2014 

FDI EU28 with Peru (mio €) 
2013 
FDI Stocks 
244 
9.567 
FDI Flows 
129 
519 

-363 
-1.440 

2015 

2016 

2017 

158 

3.416 
9.702  13.244  16.754  16.630 

2.812 

2.293 

836 
2.613 

769 
3.862 

60 
752 

Inward 
Outward 

Inward 
Outward 
Source Trade G2 
Statistics/ISDB from Eurostat 
BOP statistics 

62 

 
 
  
  
  
  
  
  
  
  
  
  
  
 
 
 
ANNUAL  REPORT  ON  THE  IMPLEMENTATION  OF  PART  IV  OF  THE 
ASSOCIATION  AGREEMENT  BETWEEN  THE  EU  AND  ITS  MEMBER  STATES 
AND CENTRAL AMERICA 

1. 

INTRODUCTION 

The trade pillar (Part  IV) of the European Union  - Central  America Association Agreement 
(“the Agreement”)20 has been in application for five years. 

Under  Article  13  of  Regulation  (EU)  No  20/2013  of  the  European  Parliament  and  of  the 
Council of 15 January 2013 implementing the bilateral safeguard clause and the stabilisation 
mechanism for bananas of the Agreement establishing an Association between the European 
Union  and  its  Member  States,  on  the  one  hand,  and  Central  America  on  the  other21,  the 
Commission  committed  to  submit  an  annual  report  to  the  European  Parliament  and  the 
Council  on  the  application,  implementation  and  fulfilment  of  obligations  of  the  Agreement 
and the Regulation. This report also responds to this requirement.   

2. 

2.1 

OVERALL ASSESSMENT: EVOLUTION OF BILATERAL TRADE 

Trade in Goods overall 

The  EU  trade  with  Central  America  in  2018  was  overall  quite  balanced,  with  only  a  slight 
overall  deficit  of  around  €0.1  billion  in  favour  of  Central  America.  The  EU  enjoyed  a 
considerable surplus of  around €1.8 million  with Panama and a €0.5 billion surplus with El 
Salvador. This surplus, however, is netted out by the deficit recorded with Costa Rica (€1.6 
billion)  and  Honduras  (€0.6  billion).  Trade  flows  with  Guatemala  were  quite  balanced 
whereas with Nicaragua the EU recorded a deficit of about €0.2 billion. 

EU  imports  amounted  to  around  €6.2  billion  and  remained  roughly  at  the  same  level  as  in 
2017.  They  were  however  still  around  5.5%  higher  than  the  average  value  for  the  period 
2014-2018.  The  EU  maintained  a  stable  level  of  imports  from  its  largest  supplier  in  the 
region,  Costa  Rica.  A  significant  increase  in  relative  terms  (almost  40%)  was  recorded  in 
imports  from  Panama,  but  that  growth  translated  to  a  still  relatively  low  level  in  absolute 
terms  (€0.7  billion).  On  the  whole,  Central  America  accounts  for  around  0.3%  of  total  EU 
trade with the world.  

In  constrast  to  previous  years,  in  2018  EU  exports  to  Central  America  registered  an 
annual double-digit growth of 11%. This growth fits into the general trend of increasing EU 
global exports (4% over 2017). The increase in exports was mainly due to increased exports 
to Panama (up 15%) and El Salvador (up 68%). As regards other countries in the region, no 
significant  change  in  trade  flows  was  observed.  Panama  imported  almost  2.5  times  more 
transport equipment from the EU than in 2017 (ships and aircraft). El Salvador made similar 
purchases to the value of €0.3 billion, unobserved in previous years (aircraft).  

20  OJ L 346, 15.12.2012, p. 3. Additional information on EU – Central America trade relations can be found at 

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

21   OJ L 17, 19.1.2013, p. 13. 

63 

 
 
 
 
                                                 
Sectoral structure of trade 

EU imports 

Agricultural foodstuffs make up 2/3 of EU imports from Central America, totalling €4.1 
billion. Fruits constitute the largest chunk of those agricultural imports (close to €2 billion), 
including  mainly  bananas  (€1.2  billion),  pineapples,  melons  and  papayas.  Costa  Rica  is 
responsible for exports of a vast  majority of these fruit to  the EU. 2018 was another record 
setting  year  in  the  sale  of  fruits  to  the  EU,  in  particular  in  the  case  of  bananas.  Other 
significant  items  include  coffee  (€0.9  billion),  and  animal  and  vegetable  oils  (€0.5  billion). 
Coffee comes mainly from Honduras, and to a smaller extent from Guatemala, Costa Rica and 
El Salvador. In 2018 Honduras was the third EU’s supplier of coffee (unroasted) (after Brazil 
and  Vietnam).  Vegetable  oils  include  primarly  palm  oil  (85%  of  the  category)  and  coconut 
oil. Honduras and Guatemala and the biggest exporters of palm oil from the region, together 
accounting for around 11% of EU imports of palm oil. Little changes in trade in these main 
agricultural items were observed over the year, with a slight fall in the value of coffee (down 
6%)  and  a  slight  increase  in  fruits  (up  4%).  Yet,  on  a  national  level,  Honduras  suffered  a 
strongest  decline  (down  11%)  which  was  compensated  to  some  extent  by  others  (e.g. 
Guatemala, Nicaragua). 

Another  major  category  of  imports  are  medical  instruments  and  devices  that  the  EU 
sources from Costa Rica. These supplies are on the upward path, up 10% from the previous 
year. They accounted for around 12% of imports from Central America last year. 

EU exports 

EU exports to Central America are more diversified than imports. Around 60% of EU exports 
are  concentrated  in  three  major  product  categories:  chemical  industry  products,  machinery 
and  appliances,  and  transport  equipment.  The  chemical  industry  products  are  mainly 
pharmaceuticals  and  cosmetics,  going  primarily  to  Panama.  Exports  of  transport  equipment 
included ships and aircraft. EU exports of chemical products remained at a similar level as in 
2017; a slight drop (8%) was observed in the case of machinery and appliances, whereas in 
the case of transport equipment, the EU recorded a spectacular growth of 144%. As explained 
above this was mainly due to increased purchases of Panama and El Salvador. 

Country-by-Country analysis 

On a national basis, the Costa Rica accounts for 44% of all EU imports from the six Central 
American countries. By contrast, Panama is the greatest recipient of EU exports, with a 42% 
share in the EU’s total exports to these countries.  

The  top  three  recipients  of  EU  exports  are  Panama,  Costa  Rica  and  Guatemala,  together 
accounting  for  around  75%  of  EU  sales  to  the  region  in  2018.  By  contrast,  the  top  three 
sources of imports were Costa Rica, Honduras and Guatemala with a combined 79% share in 
EU total imports from the six Central American countries. 

64 

 
 
 
 
 
 
 
Country 

Costa Rica 
El Salvador 
Guatemala 
Honduras 
Nicaragua 
Panama 
TOTAL 

EU 
exports 
(mio €) 
1.046 
807 
986 
480 
190 
2 527 
6.036 

% 
share  

17% 
13% 
16% 
8% 
3% 
42% 
100% 

EU 
imports 
(mio €) 
2.689 
221 
981 
1.148 
390 
729 
6.158 

% share 

Trade 
balance 

44% 
4% 
16% 
19% 
6% 
12% 
100% 

-1643 
586 
5 
-668 
-200 
1798 
-122 

Source: Eurostat 

Costa Rica 

EU  trade  with  Costa  Rica  in  2018  remained  at  the  level  of  2017.  No  particular  change 
occurred  in  the  structure  of  trade  in  comparison  with  2017.  Costa  Rica  is  the  EU’s  largest 
supplier  of  bananas  and  pineapples  to  the  EU  in  the  region.  The  EU  exports  mainly 
machinery, transport equipment and chemical products to Costa Rica. Some drop in exports of 
these categories was observed in 2018: transport equipment down by 16%; chemical products 
down by 9% but a slight increase (5%) was observed in the case of machinery. Overall, EU 
exports slightly declined (down by 5%). 

El Salvador 

The trade flows between the EU and El Salvador were at the level of €1 billion in 2018, with 
EU  exports  shooting  up  by  68%  i.e.  by  €0.3  million.  The  surge  in  exports  was  due  to 
increased  purchases  of  transport  equipment  from  the  EU  (aircraft).  Another  item  that  El 
Salvador typically buys from the EU is machinery and appliances – no particular change was 
observed here in the value of annual purchases.  

Imports from El Salvador went down by around 12%, to the level of €0.2 million. This was 
due  to  a  drop  in  sales  of  frozen  fish,  apparel  and  clothing  as  well  as  sugar.  The  main 
categories  of  products  imported  by  the  EU  are  electrical  capacitors  (up  20%),  frozen  fish 
(down 26%) and fish products (no change), coffee (up 26%). 

Guatemala 

Trade with Guatemala remained very balanced. Both imports and exports amounted to around 
€1  billion  in  each  direction.  Only  a  slight  drop  was  observed  in  the  overall  imports  value 
(down  5%).  Around  half  of  EU  exports  to  Guatemala  are  machinery  and  appliances  (down 
16%),  products  of  the  chemical  industry  (up  5%),  which  include  also  pharmaceutical 
products.  Other  exported  items  were  vehicles,  including  cars  (down  8%),  as  well  as 
aluminium (up 9%).  

Guatemala’s  top  export  items  were  palm  oil  (up  3%)  with  around  22%  share  in  total 
Guatemala’s  exports, coffee (up 9%) bananas (up 49%) altogether accounting for close to  a 

65 

 
 
 
 
 
 
 
 
 
 
half  the  country’s  exports.  Other  items  exported by  Guatemala  include  iron  and  steel,  spirit 
drinks as well as sugar. 

Honduras 

In  2018,  the  EU  recorded  a  deficit  of  about  €0.7  billion,  with  imports  amounting  to  €1.1 
billion. The top item imported from Honduras that accounted for around 50% of EU imports 
was coffee (down by 11%). Other products included palm oil (down 7%) with a 20% share 
and fruit (melons and papayas, bananas) (up 8%), with a 6% share in 2018. 

EU’s exports (€0.5 billion) are more diverse, with machinery and mechanical appliances (up 
39%),  electrical  and  electrical  appliances  (down  24%)  accounting  for  about  45%  of  EU 
exports  to  Honduras.  Other  export  items  include  products  such  as  pharmaceutical  products, 
paper and plastics, amongst others.  

Nicaragua 

Nicaragua is the smallest trading partner of all the six countries of the region. Similarly to the 
case above, the EU typically  records a trade deficit  in  trade with  Nicaragua, which in  2018 
increased further to €200 million. EU’s exports dropped by 22% over the year, down to 190 
million.  The  EU  mainly  imports  coffee  (up  10%)  with  a  28%  share  in  total  imports  from 
Nicaragua,  fish  and  crustaceans  (up  3%)  with  a  23%  share,  as  well  as  peanuts  (no  change) 
with a 13% share in total imports. Other import items are mainly agricultural foodstuffs. 

EU exports are more diverse and cover various, mainly industrial, product categories. The top 
three  export  items  to  Honduras  include  machinery  and  mechanical  appliances  (down  34%), 
electrical machinery (down 30%) as well as pharmaceutical products  (down 26%). All these 
categories accounted together for over 40% of EU exports.  

Panama 

Panama  remained  the  EU’s  top  export  market  in  the  region,  receiving  around  €2.5  billion 
worth  of  EU  goods.  Over  40%  of  EU  exports  to  the  region  are  destined  for  Panama.  Note 
however  that  these  data  does  not  capture  goods  that  may  be  later  re-exported  via  Panama, 
which  can  amount  to  quite  a  considerable  amount.  Pharmaceutical  products  and  cosmetics 
made up about 21% of EU exports in 2018, with a slight drop (down by 5% for cosmetics and 
down by 2% for pharma). Machinery and mechanical appliances accounted for about 10% of 
EU  exports  (down  by  20%).  2018  saw  a  significant  change  in  the  purchases  of  aircraft 
(increasing  from  €8  million  to  €243  million).  Other  significant  surges  in  sales  concerned 
railway or tramway locomotives (up 320%) as well as vehicles (cars) (up 39%). 

In 2018 imports from Panama largely consisted of fruit (mainly bananas which represent 35% 
of  imports  and  were  up  by  2%)  and  ships  and  boats  (33%  share,  up  by  287%).  Other 
important import items included gold, rubber, as well as fish and crustaceans. 

2.2 

Trade in agricultural goods 

The Agreement defines a number of tariff rate quotas (TRQs) with parties granting each other 
a  preferential  tariff  treatment  up  to  the  quota’s  quantitative  threshold.  Imports  over  this 
threshold are subject to the applicable Most-Favoured Nation (MFN) tariff. 

66 

 
 
 
 
 
 
 
 
 
 
 
 
Under the Agreement, the EU  grants  eight  TRQs in  favour of Central  America on products 
that did not enjoy preferential access to the EU market prior to the date of application of the 
Agreement. In 2018, as in previous years, the cane sugar and rum quotas were fully utilised. 
Guatemala supplied most of the rum imported under the quota and even increased its share to 
86%, up from 82% the previous year. Guatemala also increased its market share in the sugar 
quota up to 48% (vs 43% in 2017). While five quotas remained unused in 2018, the manioc 
starch quota was filled by 13%. 

TRQs granted by the EU to Central America – Utilisation in 2018 

Origin 

Product 

Unit 

Garlic 
Rice 
Bovine meat 
Mushroom 
Manioc starch 
Sweetcorn 
Sugar 
Rum in container > 2 l 

Tonnes 

hl pure alcohol 

Central America 

Central America 
except Panama 
Source: European Commission. 

TRQ 
volume 

550 
25 000 
11 875 
275 
5 000 
2 040 
172 500 
8 500 

EU 
imports 
0 
0 
0 
0 
646 
0 
165 388 
8 500 

Utilisation 
rate 

0% 
0% 
0% 
0% 
13% 
0% 
96% 
100% 

The  Central  American  countries  grant  TRQs  for  four  EU  products.  In  2018,  EU  exporters 
continued to make use of some of the opportunities offered by these TRQs. Notably, the milk 
powder  quota  was  fully  utilised  in  Honduras,  as  was  the  cheese  quota  in  Costa  Rica.  The 
quota fill rate was also high for those two products in Panama. However, a margin of growth 
remains as  the overall  fill rate was  below 50%  for those dairy quotas  across  the region.  An 
even larger margin of growth remains for preferential exports of pork. 

TRQs granted by Central American countries to the EU – Utilisation in 2018 

Products 

Quota 
(tonnes) 

Annual increase 
(tonnes) 

Importing 
country 

Volume 
(tonnes) 

Utilisation 
rate 

Cured hams  
(joint quota) 

1 125 

45 

Prepared swine meat 
(joint quota) 

1 125 

45 

Powdered milk 
(6 country-specific 
quotas) 

Cheese 
(6 country-specific 
quotas) 

2 375 

95 

3 750 

150 

67 

Costa Rica 
El Salvador 
Guatemala 
Honduras 
Nicaragua 
Panama 
Costa Rica 
El Salvador 
Guatemala 
Honduras 
Nicaragua 
Panama 
Costa Rica 
El Salvador 
Guatemala 
Honduras 
Nicaragua 
Panama 
Costa Rica 
El Salvador 
Guatemala 
Honduras 

55 
21 
43 
0 
0 
274 
13 
0 
27 
0 
0 
75 
0 
105 
25 
500 
0 
545 
396 
165 
332 
312 

35% 

10% 

0% 
42% 
5% 
100% 
0% 
87% 
100% 
23% 
44% 
50% 

 
 
 
 
 
Products 

Quota 
(tonnes) 

Annual increase 
(tonnes) 

Importing 
country 

Volume 
(tonnes) 

Utilisation 
rate 

Nicaragua 
Panama 

0 
594 

0% 
79% 

Source: Data collected at national level in the Central American countries. 

2.3 

Trade in Services and Foreign Direct investment (FDIs) 

Trade in Services 

As in previous years, trade in services between the two regions accounted for around 40% of 
total trade in goods and services. In 2017, total trade in services amounted to €7.8 billion, out 
of which Panama made up over 60%. Costa Rica was next in line with a share of almost 20% 
in total trade in services.  

Similarly to the trade in goods, three countries stand out as the top recipients of EU exports of 
services  (85%  in  total):  Panama  (58%),  Costa  Rica  (18%)  and  Guatemala  (8%).  The  same 
countries are the three top destinations for EU exports of goods. 

2016 

2017 

EU Exports  EU Imports 

Total 

% 

EU Exports  EU Imports  Total  % 

786 

258 

298 

171 

176 

2 330 

4 019 

555 

94 

249 

94 

69 

2 403 

3 464 

1341 

18% 

352 

547 

265 

245 

5% 

7% 

4% 

3% 

770 

229 

316 

205 

178 

749 

91 

306 

124 

96 

1519 

19% 

320 

622 

329 

274 

4% 

8% 

4% 

4% 

4 733 

63% 

7 483 

100% 

2 306 

4 004 

2 435 

3 801 

4 741 

61% 

7 805 

100% 

Country 

Costa Rica 

El Salvador 

Guatemala 

Honduras 

Nicaragua 

Panama 

Total 
Source: Eurostat 

Development of Foreign Direct investment (FDI) 

As in previous years, in 2018 EU’s FDI concentrated in three countries: Panama, Costa Rica 
and Guatemala, with Panama alone benefiting from around 75% of investment in the region.  
The  overall  outward  investment  of  EU’s  investors  in  the  economies  of  the  six  countries 
slightly  decreased  (by  6%),  still  representing  a  figure  that  is  comparable  to  the  investment 
made  in  Colombia  and  Peru  all  together.  Except  for  Guatemala  and  Nicaragua,  Central 
American countries saw some decline in the value of stocks of EU’s direct investment in the 
region. 

In  2017,  a  noticeable  downturn  in  inward  investment  occurred,  with  Panamanian  investors 
cutting  their  stocks  in  the  EU  by  around  half.  As  a  result,  the  total  value  of  stocks  held  by 
Central American investors in the EU was over 40% lower in 2017 compared to 2016. 

68 

 
 
 
 
 
 
Country 

Costa Rica 

El Salvador 

Guatemala 

Honduras 

Nicaragua 

Panama 

Total 

2016 

Inward 

Outward 

1 157 

29 

1 374 

15 

57 

25 593 

28 225 

3 499 

984 

2 387 

480 

345 

23 688 

31 383 

2017 

Inward  Outward 

Total 

4 656 

1 013 

3 761 

495 

402 

% 

8% 

2% 

6% 

1% 

1% 

1 272 

147 

2 729 

32 

95 

49 281 

83% 

11 551 

59 608 

100% 

15 826 

3 113 

854 

2 615 

384 

428 

21 987 

29 381 

Total 

4 385 

1 001 

5 344 

416 

523 

% 

10% 

2% 

12% 

1% 

1% 

33 538 

74% 

45 207 

100% 

3 

ACTIVITIES OF THE IMPLEMENTATION BODIES 

The body  implementing  the agreement is  the Association Committee.  It  met in  June 2018. 
The meeting of Association Committee and the meeting of its sub-committees (Market access, 
Customs  and  rules  of  origin,  Technical  Barriers  to  Trade  (TBT),  SPS,  Intellectual  Property 
Rights  (Geographical  Indications),  Board  on  Trade  and  Sustainable  Development, 
Government  Procurement)  were  reported  on  in  the  2018  Staff  Working  Document  on  FTA 
Implementation  (2018)  454  final/2.    During  the  Association  Committee  of  June  2018,  the 
Parties reached an agreement on the incorporation of Croatia to the Association Agreement, 
including the offer on compensation for bananas as submitted earlier by the EU. In order to 
start  the  final  administrative  procedures  to  adopt  the  relevant  protocol,  after  the  Committee 
meeting  in  2018,  the  EU  submitted  a  final  revised  text  of  the  Croatia  Protocol  to  Central 
America  for  confirmation  so  that  the  procedure  for  incorporation  of  Croatia  into  the 
agreement could eventually be completed. 

The  Parties  continued  to  work  on  the  collection  of  reliable  data  on  the  use  of  tariff 
preferences by EU exporters  as deficiencies in this  regard had been identified in  previous 
years. Both parties had technical exchanges which aimed at finding a solution to the issue. 

In  the  course  of  2018,  the  Parties  also  worked  on  the  preparation  of  several  procedural 
decisions that were pending in the area of customs and rules of origin.  

During  the  2018  Committee,  Central  America  insisted  on  the  need  to  establish  clear  and 
workable procedures for cumulation of origin with other countries of Latin America. In this 
regard,  the  EU  clarified  that  it  is  awaiting  the  confirmation  of  existence  of  administrative 
cooperation arrangements between the countries of Andean Community and Central America. 

The fourth meeting of the sub-committee on Sanitary and Phytosanitary Measures (SPS), 
held  on 4-5 June 2018, delivered positive outcomes and consolidated progress  was made to 
date. The EU highlighted the following issues:  

•  The  importance  for  Central  America  to  fulfil  procedures  established  in  the 
Association Agreement to ensure that market access requests are handled in a timely 
and  transparent  manner,  including  the  approval  of  lists  of  establishments  and 
verifications, among others.  

•  The importance of complying with standards, guidelines and recommendations of the 

international standard setting organisations. 

69 

 
 
 
 
 
 
 
4 

IMPLEMENTATION  OF  THE  PROVISIONS  ON  TRADE  AND 
DEVELOPMENT 

SUSTAINABLE 

Representatives  of  the  EU  and  of  the  six  Central  American  countries  met  in  the  Trade  and 
Sustainable  Development  (TSD)  Board  established  under  the  EU  Central  America 
Association Agreement on 11-12 June 2018 in Brussels. A report on the meeting is available.  
A Civil Society Forum took place on 13 June 2018.   

Implementation  activities  were  framed  by  the  15-point  action  plan  published  by  the 
Commission  in  February  2018.  The  EU  continued  to  provide  support  to  the  ILO  Regional 
Office for Central America to assist its efforts to support implementation of the fundamental 
ILO  Conventions  in  Guatemala  and  El  Salvador.  Commission’s  services  (DG  TRADE  and 
DG EMPL) also held several videoconferences with Guatemala regarding its implementation 
of  a  country-specific  ILO  Roadmap.  Some  progress  was  made  in  Guatemala,  notably  the 
establishment of a tripartite Labour Council. Nonetheless, significant challenges remain with 
regards  to  ensuring  labour  rights  and  the  implementation  of  the  fundamental  ILO 
Conventions, particularly in Guatemala, El Salvador and Honduras. 

A  seminar  and  workshop  on  “Decent  Work,  Corporate  Responsibility  and  the  EU-Central 
America Association  Agreement” was held in Guatemala City on 15-16 May 2018 with the 
participation  of  representatives  of  OECD  and  the  ILO  and  support  of  the  regional  project 
ATEPECA and Guatemala government. The event drew considerable interest with over 200 
participants,  including  from  other  Central  American  countries.  The  EU  Delegation  in  Costa 
Rica  also  provided  support  to  the  Costa  Rican  government  for  the  development  and 
implementation of a new national policy on Corporate Social Responsibility, which takes into 
account  Costa  Rica’s  international  commitments  and  the  Sustainable  Development  Goals 
(SDGs). 

In  addition,  the  EU,  through  in-country  meetings  and  other  contacts,  encouraged  Central 
American domestic advisory groups (DAGs) established under the Association Agreement to 
take an active role in implementation of the Trade and Sustainable Development Chapter. 

5 

SPECIFIC AREAS SUBJECT TO REPORTING OR MONITORING 

Political situation 

In  the  course  of  last  year,  the  EU  monitored  closely  the  situation  of  the  civil  society  in 
Nicaragua  in  the  context  of  human  rights’  violation.  The  EU  condemned  the  repression  of 
peaceful demonstrations, independent media and civil society. It is to be noted that the respect 
of the rule of law and human rights constitute an essential element of the EU-Central America 
Association Agreement. 

The EU continues to monitor an alarming situation in Guatemala with respect to the rule of 
law and respect of human rights, while it continues to make diplomatic efforts to encourage a 
peaceful solution of the crisis. 

Special clauses: banana mechanism 

The Agreement provides a preferential customs duty on bananas under heading 0803.00.19 
(fresh bananas), progressively reduced since the date of application of the Agreement until the 
year 2020 (following the schedule indicated in a tariff reduction table). This special treatment 

70 

 
 
 
 
 
 
 
 
 
is linked to a stabilisation clause that sets out an annual trigger volume for imports from 
each Central American country during the transition period. If as a result of the reduction of 
customs duties the level of imports of bananas is such as to cause or threaten to cause serious 
injury  to  the  EU  banana  sector,  the  Regulation  establishes  the  appropriate  procedures  to  be 
adopted to avoid serious harm to this sector.  

Implementation of Regulation (No) 20/2013 

Article 15 of Regulation (EU) No 20/201322 provides for the stabilisation mechanism for fresh 
bananas (HS code 08 03 90 10). When the annual trigger volume of imports per country as set 
in  the  agreement  is  met,  the  Commission  examines  the  impact  of  these  imports  on  the 
situation of the Union market for bananas and takes a decision to either temporarily suspend 
the  preferential  customs  duty  or  determines  that  such  suspension  is  not  appropriate.  The 
stabilisation mechanism shall apply until 31 December 2019.  

In  this  context  and  in  accordance  with  Articles  3  and  13  of  Regulation  20/2013,  the 
Commission has been monitoring the evolution of imports of fresh bananas from the Central 
American  countries  party  to  the  free  trade  agreement  (Guatemala,  Honduras,  Nicaragua, 
Panama, Costa Rica and El Salvador). 

Used volume 

2018 EU imports of fresh bananas from Central America  
Country 
Guatemala 
Honduras 
Nicaragua 
Panama 
Costa Rica 
El Salvador 
Total 
Source: Eurostat  

149.509.230  
20.759.675  
80.097.320  
253.458.920  
1.188.350.193  
0  
1.692.175.338  

Trigger level 

70.000.000  
70.000.000  
14.000.000  
525.000.000  
1.435.000.000  
2.800.000  
2.116.800.000  

% 
214% 
30% 
572% 
48% 
83% 
0 
80% 

Imports  of  fresh  bananas  from  Central  America  as  a  whole  did  not  reach  their  trigger  level 
under  the  stabilisation  mechanism.  At  the  end  of  2018,  the  overall  total  import  volume  that 
had  benefitted  from  preferential  treatment  in  Central  America  was  80%.  These  import 
volumes  were  higher,  but  still  close  to  the  74.4%  reached  in  the  previous  year,  and  did  not 
threaten the EU banana sector.   

Nevertheless, banana imports from both Guatemala and Nicaragua exceeded their individual 
trigger level for 2018, as they did in previous years, by 114% and 472% respectively. In line 
with Article 15(3) of the Regulation, the Commission examined the impact on the EU market 
taking  into  account,  inter  alia,  the  effects  on  the  price  level,  developments  of  imports  from 
other sources and the overall stability of the EU market.  

Notwithstanding these individual countries’ level of exports, the Commission concluded that 
the suspension of the preferential duty on imports of fresh bananas originating in Guatemala 

22   Regulation  (EU)  No  20/2013  of  the  European  Parliament  and  of  the  Council  of  15  January  2013 
implementing the bilateral safeguard clause and the  stabilisation  mechanism for bananas of the  Agreement 
establishing  an  Association  between  the  European  Union  and  its  Member  States,  on  the  one  hand,  and 
Central America on the other, of the other part as amended by Regulation (EU) 2017/540 of the European 
Parliament and of the Council of 15 March 2017. 

71 

 
 
 
 
 
 
 
 
 
                                                 
and Nicaragua was not appropriate as23 the share of imports from these two countries (1.2% 
for Nicaragua and 2.95% for Guatemala) in the overall imports of bananas was very small at 
the  moment  the  respective  thresholds  were  exceeded;  imports  from  the  other  countries 
remained far below the thresholds defined for them at the moment the respective thresholds 
were exceeded; and these imports did not show any negative effect on the EU wholesale price 
for bananas, which remained fairly stable in 2018.  

6 

CONCLUSIONS AND OUTLOOK 

Five years after the application of the agreement, EU exports picked up to bring to a balance 
the trade  flows between  Central  America and the EU. EU exports to  the  region  were up by 
11%, reaching a record high of €6 billion in 2018. Similarly to previous years, Panama was 
the main destination of EU exports to the region and, together with El Salvador, accounted for 
most of the growth of EU’s annual exports. 

The correct functioning of the institutions created by the Agreement is necessary for its proper 
implementation.  

Building upon the positive cooperation now established with Central America is an ongoing 
priority for the EU, so as to continue contributing to the common aim of achieving a complete 
and  correct  implementation  of  the  Agreement  by  all  relevant  actors.  This  has  allowed 
economic  operators,  consumers  and  civil  society  from  both  regions  to  take  advantage  of 
numerous opportunities provided by the Agreement. 

In  2018,  the  Commission  will  launch  an  ex-post  evaluation  study  into  the  Agreement.  The 
study will assess the impact of the trade pillar of the Association Agreement (economic, social 
and  environmental  impact  and  impact  on  human  rights).  The  findings  are  meant  to  offer 
lessons for the further improvement of the implementation of the Agreement.  

7 

STATISTICS 

Merchandise trade EU28 2014-2018 

2014 

2015 

2016 

2017 

2018 

EU28 trade with Central America 6 (mio €) 

Imports 
Exports 
Balance 

Share Central America 6 in EU28 trade with Extra-EU28 

Imports 
Exports 
Total (I+E) 

Source Trade G2 Statistics/ISDB  
Trade EU28: Eurostat COMEXT;  Trade Central America 6: IMF Dots 

6.228 
5.254 
-974 

0,4% 
0,3% 
0,3% 

5.215 
5.719 
504 

0,3% 
0,3% 
0,3% 

5.488 
5.294 
-193 

0,3% 
0,3% 
0,3% 

6.097 
5.446 
-651 

0,3% 
0,3% 
0,3% 

6.158 
6.037 
-121 

0,3% 
0,3% 
0,3% 
25-mars-
19 

Total merchandise trade EU28 with Central America 6 (mio €) 

Central America 6 

2017 

2018 

Growth 

23   Commission  Implementing  Decision  (EU)  2018/874  of  14  June  2018  determining  that  a  temporary 
suspension  of  the  preferential  customs  duty  pursuant  to  Article  15  of  Regulation  (EU)  No  20/2013  of  the 
European Parliament and of the Council is not appropriate for imports of bananas originating in Nicaragua 
(OJ L 152, 15.06.2018, p.58) and Commission Implementing Decision (EU) 2018/1888 of 3 December 2018 
determining  that  a  temporary  suspension  of  the  preferential  customs  duty  pursuant  to  Article  15  of 
Regulation (EU) No 19/2013 of the  European Parliament and of the Council and pursuant to Article 15 of 
Regulation (EU) No 20/2013 of the European Parliament and of the Council is not appropriate for imports of 
bananas originating in Guatemala and Peru (OJ L 308, 04.12.2018, p.49). 

72 

 
 
 
 
 
  
 
  
  
  
  
 
  
  
  
  
  
  
  
  
  
  
  
  
  
                                                 
Imports 
Exports 
Balance 
Total trade 
Source Trade G2 Statistics/ISDB from Eurostat COMEXT 

6.097 
5.446 
-651 
11.543 

6.158 
6.037 
-121 
12.194 

Agrifood trade EU28 with Central America 6 (mio €) 

Central America 6 

2017 

2018 

Imports 
Exports 
Balance 
Total trade 
Source Trade G2 Statistics/ISDB from Eurostat COMEXT 

4.209 
637 
-3.571 
4.846 

4.121 
679 
-3.442 
4.800 

NAMA trade EU28 with Central America 6 (mio €) 

Central America 6 

2017 

2018 

EU28 imports 
EU28 exports 
Balance 
Total trade 
Source Trade G2 Statistics/ISDB from Eurostat COMEXT 

1.889 
4.809 
2.920 
6.697 

2.037 
5.358 
3.321 
7.394 

mio € 
60 
591 
530 
651 

annual 
% 
1,0% 
10,8% 

5,6% 

Growth 

mio € 
-88 
42 
130 
-46 

annual 
% 
-2,1% 
6,6% 

-0,9% 

Growth 

mio € 
148 
549 
401 
697 

annual 
% 
7,8% 
11,4% 

10,4% 

Costa Rica 

Merchandise trade EU28 2014-2018 

EU28 trade with Costa Rica (mio €) 

Imports 
Exports 
Balance 

Share Costa Rica in EU28 trade with Extra-EU28 

2014 

2015 

2016 

2017 

2018 

3.771 
829 
-2.942 

2.250 
976 
-1.275 

2.404 
1.052 
-1.352 

2.648 
1.095 
-1.552 

2.689 
1.046 
-1.643 

Imports 
Exports 
Total (I+E) 

Imports 
Exports 
Total (I+E) 

0,2% 
0,0% 
0,1% 

0,1% 
0,1% 
0,1% 
Share EU28 in trade Costa Rica with world 
9,2% 
18,8% 
12,9% 

8,3% 
17,6% 
12,0% 

Source Trade G2 Statistics/ISDB  
Trade EU28: Eurostat COMEXT;  Trade Costa Rica: IMF Dots 

0,1% 
0,1% 
0,1% 

0,1% 
0,1% 
0,1% 

9,6% 
21,0% 
14,1% 

10,0% 
20,9% 
14,4% 

0,1% 
0,1% 
0,1% 

9,6% 
20,9% 
14,2% 
25-mars-
19 

Total merchandise trade EU28 with Costa Rica (mio €) 

Costa Rica 

2017 

2018 

Imports 
Exports 
Balance 
Total trade 
Source Trade G2 Statistics/ISDB from Eurostat COMEXT 

2.648 
1.095 
-1.552 
3.743 

2.689 
1.046 
-1.643 
3.735 

Agrifood trade EU28 with Costa Rica (mio €) 

Costa Rica 

2017 

2018 

Imports 
Exports 
Balance 
Total trade 
Source Trade G2 Statistics/ISDB from Eurostat COMEXT 

1.830 
120 
-1.709 
1.950 

1.781 
116 
-1.665 
1.897 

73 

Growth 

mio € 
41 
-49 
-91 
-8 

annual 
% 
1,6% 
-4,5% 

-0,2% 

Growth 

mio € 
-48 
-4 
45 
-52 

annual 
% 
-2,6% 
-3,3% 

-2,7% 

 
 
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
 
  
 
  
  
  
  
 
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
NAMA trade EU28 with Costa Rica (mio €) 

Costa Rica 

EU28 imports 
EU28 exports 
Balance 
Total trade 
Source Trade G2 Statistics/ISDB from Eurostat COMEXT 

Services trade EU28 with Costa Rica (mio €) 

Costa Rica 

Imports 
Exports 
Balance 
Total trade 
Source Trade G2 Statistics/ISDB from Eurostat BOP statistics 

2017 

2018 

818 
975 
157 
1.793 

908 
930 
22 
1.838 

Growth 

mio € 
90 
-45 
-135 
44 

annual 
% 
11,0% 
-4,7% 

2,5% 

2016 

2017 

555 
786 
231 
1.341 

749 
770 
22 
1.519 

Growth 

mio € 
193 
-16 
-209 
178 

annual 
% 
34,8% 
-2,0% 

13,2% 

Services trade EU28 with Costa Rica (mio €) 

Imports 
Exports 
Balance 
Total trade 
Source Trade G2 Statistics/ISDB from Eurostat BOP statistics 

2013 

2014 

2015 

2016 

2017 

497 
600 
104 
1.097 

493 
621 
128 
1.115 

530 
617 
86 
1.147 

555 
786 
231 
1.341 

749 
770 
22 
1.519 

FDI EU28 with Costa Rica (mio €) 

FDI Stocks 

FDI Flows 

2013 

2014 

2015 

2016 

2017 

406 
1.648 

879 
2.339 

880 
2.708 

1.157 
3.499 

1.272 
3.113 

51 
200 

21 
140 

60 
400 

369 
210 

52 
308 

Inward 
Outward 

Inward 
Outward 
Source Trade G2 Statistics/ISDB from Eurostat BOP statistics 

El Salvador 

Merchandise trade EU28 2014-2018 

2014 

2015 

2016 

2017 

2018 

EU28 trade with El Salvador (mio €) 

Imports 
Exports 
Balance 

Share El Salvador in EU28 trade with Extra-EU28 

184 
530 
346 

195 
546 
351 

Imports 
Exports 
Total (I+E) 

Imports 
Exports 
Total (I+E) 

0,0% 
0,0% 
0,0% 

0,0% 
0,0% 
0,0% 
Share EU28 in trade El Salvador with world 
6,4% 
2,9% 
5,2% 

5,9% 
3,5% 
5,1% 

Source Trade G2 Statistics/ISDB  
Trade EU28: Eurostat COMEXT;  Trade El Salvador: IMF Dots 

217 
472 
255 

0,0% 
0,0% 
0,0% 

4,7% 
3,1% 
4,1% 

249 
481 
232 

0,0% 
0,0% 
0,0% 

6,3% 
3,1% 
5,2% 

221 
807 
587 

0,0% 
0,0% 
0,0% 

7,7% 
2,8% 
6,0% 
25-mars-
19 

Total merchandise trade EU28 with El Salvador (mio €) 

El Salvador 

2017 

2018 

Imports 
Exports 
Balance 
Total trade 
Source Trade G2 Statistics/ISDB from Eurostat COMEXT 

249 
481 
232 
730 

221 
807 
587 
1.028 

74 

Growth 

mio 
€ 
-29 
326 
355 
298 

annual 
% 
-11,5% 
67,8% 

40,8% 

 
 
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
 
  
 
  
  
  
  
 
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
Agrifood trade EU28 with El Salvador (mio €) 

El Salvador 

2017 

2018 

Imports 
Exports 
Balance 
Total trade 
Source Trade G2 Statistics/ISDB from Eurostat COMEXT 

69 
48 
-21 
116 

54 
52 
-2 
107 

NAMA trade EU28 with El Salvador (mio €) 

El Salvador 

2017 

2018 

EU28 imports 
EU28 exports 
Balance 
Total trade 
Source Trade G2 Statistics/ISDB from Eurostat COMEXT 

181 
434 
253 
614 

166 
755 
589 
922 

Services trade EU28 with El Salvador (mio €) 

El Salvador 

2016 

2017 

Imports 
Exports 
Balance 
Total trade 
Source Trade G2 Statistics/ISDB from Eurostat BOP statistics 

94 
258 
164 
352 

91 
229 
138 
319 

Services trade EU28 with El Salvador (mio €) 

Growth 

mio 
€ 
-14 
5 
19 
-10 

annual 
% 
-21,0% 
9,8% 

-8,4% 

Growth 

mio 
€ 
-14 
322 
336 
308 

annual 
% 
-7,8% 
74,2% 

50,1% 

Growth 

mio 
€ 
-3 
-29 
-26 
-33 

annual 
% 
-3,3% 
-11,4% 

-9,2% 

Imports 
Exports 
Balance 
Total trade 
Source Trade G2 Statistics/ISDB from Eurostat BOP statistics 

2013 

2014 

2015 

2016 

2017 

94 
224 
130 
318 

84 
242 
158 
327 

106 
276 
170 
382 

94 
258 
164 
352 

91 
229 
138 
319 

FDI EU28 with El Salvador (mio €) 

Inward 
Outward 

FDI Stocks 

FDI Flows 

Inward 
Outward 
Source Trade G2 Statistics/ISDB from Eurostat BOP statistics 

2013 

2014 

2015 

2016 

2017 

47 
710 

48 
933 

21 
1.101 

29 
984 

-18 
-408 

7 
326 

-13 
213 

-2 
-109 

147 
854 

140 
-266 

Guatemala 

Merchandise trade EU28 2014-2018 

2014 

2015 

2016 

2017 

2018 

EU28 trade with Guatemala (mio €) 

Imports 
Exports 
Balance 

Share Guatemala in EU28 trade with Extra-EU28 

691 
894 
203 

864 
956 
91 

920 
906 
-14 

1.035 
994 
-40 

Imports 
Exports 
Total (I+E) 

Imports 
Exports 
Total (I+E) 

0,0% 
0,1% 
0,0% 

0,1% 
0,1% 
0,1% 
Share EU28 in trade Guatemala with world 
7,5% 
7,8% 
7,6% 

7,1% 
7,5% 
7,3% 

0,1% 
0,1% 
0,1% 

7,2% 
9,0% 
7,9% 

0,1% 
0,1% 
0,1% 

7,4% 
9,1% 
8,0% 

Source Trade G2 Statistics/ISDB  
Trade EU28: Eurostat COMEXT;  Trade Guatemala: IMF Dots 

75 

981 
986 
5 

0,0% 
0,1% 
0,0% 

7,3% 
9,4% 
8,0% 
25-mars-
19 

 
 
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
 
 
  
 
  
  
  
  
 
  
  
  
  
  
  
  
  
Total merchandise trade EU28 with Guatemala (mio €) 

Guatemala 

Imports 
Exports 
Balance 
Total trade 
Source Trade G2 Statistics/ISDB from Eurostat COMEXT 

2017 

2018 

1.035 
994 
-40 
2.029 

981 
986 
5 
1.967 

Growth 

mio 
€ 
-54 
-9 
45 
-63 

annual 
% 
-5,2% 
-0,9% 

-3,1% 

Agrifood trade EU28 with Guatemala (mio €) 

Guatemala 

2017 

2018 

Imports 
Exports 
Balance 
Total trade 
Source Trade G2 Statistics/ISDB from Eurostat COMEXT 

718 
125 
-594 
843 

787 
132 
-654 
919 

NAMA trade EU28 with Guatemala (mio €) 

Growth 

mio 
€ 
68 
8 
-61 
76 

annual 
% 
9,5% 
6,0% 

9,0% 

Guatemala 

EU28 imports 
EU28 exports 
Balance 
Total trade 
Source Trade G2 Statistics/ISDB from Eurostat COMEXT 

2017 

2018 

316 
870 
553 
1.186 

194 
853 
659 
1.048 

Growth 

mio 
€ 
-122 
-16 
106 
-138 

annual 
% 
-38,5% 
-1,9% 

-11,7% 

Services trade EU28 with Guatemala (mio €) 

Guatemala 

2016 

2017 

Imports 
Exports 
Balance 
Total trade 
Source Trade G2 Statistics/ISDB from Eurostat BOP statistics 

249 
298 
49 
547 

306 
316 
10 
623 

Services trade EU28 with Guatemala (mio €) 

Growth 

mio 
€ 
57 
19 
-39 
76 

annual 
% 
23,0% 
6,2% 

13,9% 

Imports 
Exports 
Balance 
Total trade 
Source Trade G2 Statistics/ISDB from Eurostat BOP statistics 

2013 

2014 

2015 

2016 

2017 

205 
875 
671 
1.080 

214 
541 
327 
755 

297 
343 
46 
640 

249 
298 
49 
547 

306 
316 
10 
623 

FDI EU28 with Guatemala (mio €) 

Inward 
Outward 

FDI Stocks 

FDI Flows 

Inward 
Outward 
Source Trade G2 Statistics/ISDB from Eurostat BOP statistics 

2013 

2014 

2015 

2016 

2017 

153 
1.527 

4.041 
1.870 

2.628 
3.075 

1.374 
2.387 

2.729 
2.615 

-34 
127 

421 
140 

245 
618 

11 
234 

266 
22 

Honduras 

Merchandise trade EU28 2014-2018 

EU28 trade with Honduras (mio €) 

Imports 
Exports 
Balance 

Share Honduras in EU28 trade with Extra-EU28 

2014 

2015 

2016 

2017 

2018 

841 
450 
-391 

1.015 
496 
-519 

1.048 
452 
-596 

1.263 
437 
-826 

1.148 
480 
-668 

76 

 
 
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
 
  
 
  
  
  
  
 
  
  
  
  
Imports 
Exports 
Total (I+E) 

Imports 
Exports 
Total (I+E) 

0,0% 
0,0% 
0,0% 

0,1% 
0,0% 
0,0% 
Share EU28 in trade Honduras with world 
7,1% 
23,8% 
12,0% 

6,7% 
21,8% 
11,3% 

Source Trade G2 Statistics/ISDB  
Trade EU28: Eurostat COMEXT;  Trade Honduras: IMF Dots 

0,1% 
0,0% 
0,0% 

0,1% 
0,0% 
0,0% 

6,9% 
25,0% 
12,4% 

5,9% 
33,5% 
14,7% 

0,1% 
0,0% 
0,0% 

6,2% 
29,0% 
12,9% 
25-mars-
19 

Total merchandise trade EU28 with Honduras (mio €) 

Honduras 

Imports 
Exports 
Balance 
Total trade 
Source Trade G2 Statistics/ISDB from Eurostat COMEXT 

2017 

2018 

1.263 
437 
-826 
1.701 

1.148 
480 
-668 
1.629 

Growth 

mio € 
-115 
43 
158 
-72 

annual 
% 
-9,1% 
9,8% 

-4,2% 

Agrifood trade EU28 with Honduras (mio €) 

Honduras 

2017 

2018 

Imports 
Exports 
Balance 
Total trade 
Source Trade G2 Statistics/ISDB from Eurostat COMEXT 

1.049 
49 
-1.000 
1.098 

947 
54 
-893 
1.001 

NAMA trade EU28 with Honduras (mio €) 

Honduras 

2017 

2018 

Growth 

mio € 
-102 
5 
107 
-97 

annual 
% 
-9,7% 
10,3% 

-8,8% 

Growth 

EU28 imports 
EU28 exports 
Balance 
Total trade 
Source Trade G2 Statistics/ISDB from Eurostat COMEXT 

mio € 
-13 
38 
51 
25 

201 
426 
225 
627 

214 
388 
174 
603 

Services trade EU28 with Honduras (mio €) 

Honduras 

2016 

2017 

Growth 

Imports 
Exports 
Balance 
Total trade 
Source Trade G2 Statistics/ISDB from Eurostat BOP statistics 

mio € 
30 
34 
4 
64 

124 
205 
81 
329 

94 
171 
77 
265 

annual 
% 
-6,1% 
9,8% 

4,1% 

annual 
% 
32,3% 
19,9% 

24,3% 

Services trade EU28 with Honduras (mio €) 

Imports 
Exports 
Balance 
Total trade 
Source Trade G2 Statistics/ISDB from Eurostat BOP statistics 

2013 

2014 

2015 

2016 

2017 

187 
196 
9 
383 

81 
163 
83 
244 

107 
182 
75 
289 

94 
171 
77 
265 

124 
205 
81 
329 

FDI EU28 with Honduras (mio €) 

2013 

2014 

2015 

2016 

2017 

Inward 
Outward 

Inward 
Outward 
Source Trade G2 Statistics/ISDB from Eurostat BOP statistics 

FDI Stocks 

FDI Flows 

-5 
372 

51 
145 

93 
473 

-8 
41 

27 
532 

-90 
12 

15 
480 

-0 
-36 

32 
384 

2 
-91 

77 

 
 
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
Nicaragua 

Merchandise trade EU28 2014-2018 

2014 

2015 

2016 

2017 

2018 

EU28 trade with Nicaragua (mio €) 

Imports 
Exports 
Balance 

Share Nicaragua in EU28 trade with Extra-EU28 

285 
223 
-62 

327 
225 
-101 

Imports 
Exports 
Total (I+E) 

Imports 
Exports 
Total (I+E) 

0,0% 
0,0% 
0,0% 

0,0% 
0,0% 
0,0% 
Share EU28 in trade Nicaragua with world 
7,6% 
6,5% 
7,1% 

6,1% 
6,5% 
6,3% 

Source Trade G2 Statistics/ISDB  
Trade EU28: Eurostat COMEXT;  Trade Nicaragua: IMF Dots 

309 
236 
-73 

0,0% 
0,0% 
0,0% 

5,3% 
9,1% 
6,4% 

375 
244 
-130 

0,0% 
0,0% 
0,0% 

5,4% 
11,6% 
7,2% 

390 
190 
-200 

0,0% 
0,0% 
0,0% 

4,6% 
11,7% 
7,0% 
25-mars-
19 

Total merchandise trade EU28 with Nicaragua (mio €) 

Nicaragua 

Imports 
Exports 
Balance 
Total trade 
Source Trade G2 Statistics/ISDB from Eurostat COMEXT 

2017 

2018 

375 
244 
-130 
619 

390 
190 
-200 
580 

Growth 

mio € 
15 
-54 
-69 
-39 

annual 
% 
4,0% 
-22,1% 

-6,3% 

Agrifood trade EU28 with Nicaragua (mio €) 

Nicaragua 

Imports 
Exports 
Balance 
Total trade 
Source Trade G2 Statistics/ISDB from Eurostat COMEXT 

2017 

2018 

250 
24 
-226 
274 

260 
24 
-236 
285 

Growth 

mio € 
10 
0 
-10 
11 

annual 
% 
4,2% 
1,2% 

3,9% 

NAMA trade EU28 with Nicaragua (mio €) 

Nicaragua 

2017 

2018 

EU28 imports 
EU28 exports 
Balance 
Total trade 
Source Trade G2 Statistics/ISDB from Eurostat COMEXT 

125 
220 
95 
345 

129 
166 
36 
295 

Services trade EU28 with Nicaragua (mio €) 

Nicaragua 

2016 

2017 

Imports 
Exports 
Balance 
Total trade 
Source Trade G2 Statistics/ISDB from Eurostat BOP statistics 

69 
176 
107 
245 

96 
178 
83 
274 

Services trade EU28 with Nicaragua (mio €) 

Growth 

mio € 
5 
-54 
-59 
-50 

annual 
% 
3,7% 
-24,7% 

-14,4% 

Growth 

mio € 
26 
2 
-24 
28 

annual 
% 
38,2% 
1,1% 

11,6% 

Imports 
Exports 
Balance 
Total trade 
Source Trade G2 Statistics/ISDB from Eurostat BOP statistics 

2013 

2014 

2015 

2016 

2017 

47 
206 
159 
253 

90 
126 
36 
217 

89 
164 
75 
252 

69 
176 
107 
245 

96 
178 
83 
274 

78 

 
 
 
  
 
  
  
  
  
 
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
FDI EU28 with Nicaragua (mio €) 

Inward 
Outward 

FDI Stocks 

FDI Flows 

Inward 
Outward 
Source Trade G2 Statistics/ISDB from Eurostat BOP statistics 

Panama 

2013 

2014 

2015 

2016 

2017 

57 
874 

27 
656 

19 
296 

-15 
-572 

62 
419 

120 
48 

57 
345 

-6 
35 

95 
428 

41 
145 

Merchandise trade EU28 2014-2018 

2014 

2015 

2016 

2017 

2018 

EU28 trade with Panama (mio €) 

Imports 
Exports 
Balance 

Share Panama in EU28 trade with Extra-EU28 

455 
2.327 
1.872 

564 
2.521 
1.956 

Imports 
Exports 
Total (I+E) 

Imports 
Exports 
Total (I+E) 

0,0% 
0,1% 
0,1% 

0,0% 
0,1% 
0,1% 
Share EU28 in trade Panama with world 
11,7% 
27,5% 
12,6% 

11,4% 
26,1% 
12,3% 

Source Trade G2 Statistics/ISDB  
Trade EU28: Eurostat COMEXT;  Trade Panama: IMF Dots 

590 
2.176 
1.586 

0,0% 
0,1% 
0,1% 

528 
2.194 
1.666 

0,0% 
0,1% 
0,1% 

11,0% 
29,5% 
12,0% 

10,6% 
27,7% 
11,4% 

729 
2.527 
1.799 

0,0% 
0,1% 
0,1% 

10,0% 
29,4% 
11,0% 
25-mars-
19 

Growth 

mio € 
201 
334 
133 
535 

annual 
% 
38,1% 
15,2% 

19,6% 

Growth 

annual 
% 
-0,6% 
10,4% 

4,7% 

Total merchandise trade EU28 with Panama (mio €) 

Panama 

2017 

2018 

Imports 
Exports 
Balance 
Total trade 
Source Trade G2 Statistics/ISDB from Eurostat COMEXT 

528 
2.194 
1.666 
2.721 

729 
2.527 
1.799 
3.256 

Agrifood trade EU28 with Panama (mio €) 

Panama 

2017 

2018 

Imports 
Exports 
Balance 
Total trade 
Source Trade G2 Statistics/ISDB from Eurostat COMEXT 

mio € 
-2 
28 
30 
26 

292 
300 
8 
591 

293 
271 
-22 
565 

NAMA trade EU28 with Panama (mio €) 

Panama 

2017 

2018 

EU28 imports 
EU28 exports 
Balance 
Total trade 
Source Trade G2 Statistics/ISDB from Eurostat COMEXT 

234 
1.922 
1.688 
2.157 

437 
2.228 
1.791 
2.665 

Services trade EU28 with Panama (mio €) 

Panama 

2016 

2017 

Imports 
Exports 
Balance 

2.403 
2.330 
-73 

2.435 
2.306 
-129 

79 

Growth 

mio € 
203 
305 
103 
508 

annual 
% 
86,5% 
15,9% 

23,6% 

Growth 

annual 
% 
1,3% 
-1,0% 

mio € 
32 
-24 
-56 

 
 
  
  
  
  
  
  
 
  
 
  
  
  
  
 
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
Total trade 
Source Trade G2 Statistics/ISDB from Eurostat BOP statistics 

4.732 

4.741 

9 

0,2% 

Services trade EU28 with Panama (mio €) 

Imports 
Exports 
Balance 
Total trade 
Source Trade G2 Statistics/ISDB from Eurostat BOP statistics 

2013 

2014 

2015 

2016 

2017 

1.590 
1.533 
-58 
3.123 

1.689 
1.503 
-186 
3.192 

2.495 
2.055 
-440 
4.550 

2.403 
2.330 
-73 
4.732 

2.435 
2.306 
-129 
4.741 

Inward 
Outward 

FDI EU28 with Panama (mio €) 

2013 

2014 

2015 

2016 

2017 

FDI Stocks 

2.766 
14.240 

3.815 
18.632 

4.634 
38.265 

25.593 
23.688 

11.551 
21.987 

FDI Flows 

Inward 
Outward 
Source Trade G2 Statistics/ISDB from Eurostat BOP statistics 

336 
-13 

-0 
901 

1.956 
1.037 

4.765 
-2.432 

-1.263 
-2.541 

80 

 
 
  
  
  
  
  
  
  
  
  
  
  
  
  
  
 
 
 
PART II: ANNUAL REPORT ON THE IMPLEMENTATION OF THE DEEP AND 
COMPREHENSIVE FREE TRADE AREA (DCFTA) BETWEEN THE EU AND 
UKRAINE, MOLDOVA AND GEORGIA 

81 

 
 
 
 
ANNUAL  REPORT  ON  THE  IMPLEMENTATION  OF  THE  DEEP  AND 
COMPREHENSIVE  FREE  TRADE  AREA  (DCFTA)  BETWEEN  THE  EU  AND  ITS 
MEMBER STATES AND UKRAINE 

The Deep and Comprehensive Free Trade Area part of the Association Agreement (DCFTA) 
with  Ukraine  has  been  in  force  provisionally  since  1  January  2016  and  formally  since  1 
September  2017,  following  ratification  by  all  EU  Member  States.  Ukraine’s  commitments 
under the DCFTA are considerable in areas spanning from competition and state aid to public 
procurement and sanitary and phytosanitary measures.  

1. 

EVOLUTION OF TRADE 

Bilateral  trade  in  goods  continued  to  increase  in  2018  and  EU  imports  from  the  Ukraine 
reached  record  levels  in  2018  of  around  €18  billion.  This  is  an  increase  by  8%  from  2017, 
which was another record year of imports into the EU from Ukraine.  

EU  exports  continued  to  increase,  too,  and  reached  around  €22  billion  in  2018,  up  by  10% 
from  2017.  For  more  than  5  years,  the  EU  has  had  a  positive  trade  in  goods  balance  of  €4 
billion with Ukraine.  

The EU remained Ukraine’s main trading partner, representing 42% of Ukraine’s total trade, 
with  a  similar  split  between  imports  and  exports.  Total  trade  between  the  EU  and  Ukraine 
reached €40 billion in 2018, an increase of close to 9% when compared to 2017. Russia and 
China  are  the  2nd  and  3rd  largest  trading  partners  of  Ukraine,  respectively,  followed  by 
Belarus, Turkey and the US. Ukraine is EU’s 21st largest trading partner. 

1.1 Trade in goods overall 

Scope of trade liberalisation 

The  elimination  and  reduction  of  customs  duties  is  taking  place  over  a  transitional  period, 
which in the case of Ukraine runs until 2026 and will ultimately result in market opening for 
96% of tariff lines  for products  imported from  the EU (98% in  terms  of import value). The 
EU will open its market earlier than Ukraine, implementing its liberalisation commitments by 
2023 for 96% of tariff lines (97.8% in value) for products imported from Ukraine.  

The  reduction  and  elimination  of  customs  duties  are  taking  place  in  different  staging 
categories, depending on the specific product. Certain products are subject to annual duty-free 
Tariff Rate Quotas (TRQ) applied indefinitely by both sides, which foresee annual increases 
for some products over a five year transition period.  

A review clause related to trade in goods may be requested by either Party 5 years after the 
entry  into  force  of  the  Agreement,  whereby  both  sides  may  consider  accelerating  and 
broadening  the  scope  of  the  elimination  of  tariffs  between  themselves.  The  EU  granted 
unilateral trade concessions for a three years’ period in 2017. See more details in section 1.4. 

Sectoral structure of EU-Ukraine trade in goods 

The  EU  continues  to  have  a  trade  surplus  with  Ukraine,  as  a  result  of  the  trade  structure 
characterised  by  a  growing  share  of  goods  with  higher  value  added.  The  main  product 

82 

 
 
 
 
 
 
categories, exported by the EU to Ukraine in 2018 were machinery and appliances, chemical 
products, transport equipment, mineral products, plastics, rubber and articles thereof, textiles 
and textile articles.  

In  2018,  Ukraine  mainly  exported  base  metals,  mineral  products,  vegetable  products, 
machinery  and  appliances  and  wood  and  charcoal.  Ukraine’s  export  profile  is  now  more 
diversified  than  a  decade  ago  when  70%  of  exports  consisted  on  vegetable  products,  base 
metals and mineral products. Today, other categories such as animal products, foodstuff and 
machinery products, feature much more prominently on the export list. Footwear and articles 
of stone, although still relatively low have seen exports increasing by more than 50% over the 
last 10 years. 

1.2 Trade in agricultural goods 

In 2018, Ukraine continued to be the EUʼs 4th biggest supplier of agricultural products and the 
first  origin  of agri-food  imports among  preferential trade partners.  However, EU imports of 
agricultural products from Ukraine increased at a slower pace than in previous years (i.e. a 4% 
increase between 2017 and 2018, compared to a 32% increase between 2016 and 2017) and 
reached €5.6 billion. EU agricultural exports to Ukraine increased by 14% to €2.1 billion.  

While  traditional  export  products  continue  to  dominate  Ukrainian  imports  into  the  EU 
(cereals,  oil  seeds,  animal  and  vegetable  fats  and  oils  represented  73%  of  Ukrainian 
agricultural exports to the EU), vegetables and meat products showed considerable increases 
(278%, 184%, respectively) in 2018. Increase in imports of meat products were due to poultry 
meat, especially to new chicken cuts which can be marketed, after a minimum transformation, 
as  chicken  breast  (see  further  information  under  section  “Progress  made,  main  open  issues 
and  follow-up  actions”).  Imports  of  these  cuts  represented  45%  of  poultry  imports  from 
Ukraine in 2018. 

EU agricultural exports to Ukraine continued to be more diversified, with significant growth 
rates especially for beverages, food preparations, dairy products, meats and tobacco products. 

Use of Tariff Rate Quotas 

For products, which have not been completely liberalised under the DCFTA, tariff rate quotas 
are in place: 36 tariff rate quotas are granted by the EU, and five tariff rate quotas are granted 
by Ukraine.  

Ukraine was able to fully or nearly fully use the DCFTA tariff rate quotas for wheat, maize, 
butter,  honey,  garlic,  barley  groats  and  meal,  malt,  starch,  prepared  or  preserved  tomatoes, 
grape and apple juice, dextrins and glues, finishing agents and one of two TRQs for poultry 
meat. Other tariff rate quotas remained either not used or used only partially (see table below).  

DCFTA TRQs usage for exports by Ukraine to the EU in 2018 

Description 

Volume of 
TRQ in 
2018 (t) 

Imports in 
2018 (t) 

2018 quota fill  

Sheep meat 

Honey 

0 
5.400 

0 
100% 

1.800 

5.400 

83 

 
 
 
 
 
 
 
Garlic 

Oats 

Sugar 

Glucose and fructose 

Flavoured sugar syrup 

Groats, pellets, grains.. 

Malt and gluten 

Starches 

Dextrins and glues 

Residues 

Mushrooms 

Mushrooms 

Preserved tomatoes 

Grape and apple juice 

Buttermilk, cream, yogurt 

Dairy spreads 

Sweetcorn 

Fructose, preparations, odoriferous substances 

Tapioca, bulgur wheat 

Chocolate milk crumb and others 

Food preparations 

Ethyl alcohol 

Cigars, cigarettes 

Mannitol, sorbitol 

Finishing agents 

Beef Meat 

Pork Meat (TRQ 1) 

Pork Meat (TRQ 2) 

Poultry meat (TRQ 1) 

Poultry meat (TRQ 2) 

Milk, cream, condensed milk and yogurts 

Milk powder 

Butter and diary spreads 

Eggs and albumins (TRQ 1) 

Eggs and albumins (TRQ 2) 

Common wheat, flour and pellets 

Barley, flour and pellets 

Maize, flour and pellets 

Source: DG AGRI, DG TAXUD 

500 

4.000 

20.070 

14.000 

2.000 

6.900 

7.000 

10.000 

1.400 

19.000 

500 

500 

10.000 

14.000 

2.000 

250 

1.500 

2.400 

2.000 

380 

2.000 

56.200 

2.500 

100 

2.000 

 12.000 

20.000  

20.000  

17.600 

20.000 

8.800 

2.900 

2.100 

2.100 

3.000 

970.000 

290.000 

500.000 

490 
1.459 
17.062 
2.228 
0 
6.891 
7.000 
9.988 
1.400 
8.217 
0 
0 
10.000 
14.000 
443 
0 
14 
335 
802 
16 
17 
5.867 
0 
0 
2.000 
0 
0 
0 
16.492 
9947,708 
1279,04 
700 
2061,813 
756,049 
997,007 
956.031,084 
47.531,469 
538.738,921 

98% 
36,5% 
85% 
15,9% 
0 
99,9% 
100% 
99,9% 
100% 
43% 
0 
0 
100% 
100% 
22% 
0 
0,9% 
14% 
40% 
4,2% 
0,9% 
10,4% 
0 
0 
100% 
0 
0 
0 
93,7% 
49,7% 
14,5% 
24,1% 
98,2% 
36% 
33,2% 
98,6% 
16,4% 
100,00% 

The EU has (nearly) fully used the five TRQs granted by Ukraine to the EU for pork meat and 
poultry meat. However, the usage of the additional quota for poultry meat and the quota for 
sugar remain negligible. 

84 

 
 
 
 
DCFTA TRQs usage for exports by EU to Ukraine in 2018 

Product 

Volume of TRQ (t) 

Used quantity (t) 

Utilisation rate 

Pork 
Pork 
additional for: 
02031110, 02031219, 
02031911, 02031915, 
02031959, 02032110, 
02032219, 02032911, 
02032915, 02032959 
Poultry meat 
Poultry meat 
additional for: 
020712 
Sugar 
Source Ukraine authorities 

10 000 
10 000 

10 000 
9 995 

8 800 
10 000 

34 000 

8 800 
29 

677 

100% 
100% 

100% 
0,3% 

2% 

1.3 Autonomous trade measures 

In  view  of  the  difficult  economic  and  political  situation  in  Ukraine  the  EU  granted  it 
temporary autonomous trade measures (ATMs) for certain agricultural and industrial products 
for  a  period  of  three  years,  starting  on  1  October  2017.  These  additional  trade  concessions 
mean  that  tariff  elimination  for  22  industrial  products  (ammonium  sulphate  and  nitrate, 
fertilisers, footwear, aluminium and certain electrical machinery) is accelerated and additional 
Tariff  Rate  Quotas  are  granted  for  8  agricultural  products  (common  wheat,  maize,  barley, 
barley groats and pellets, oats, natural honey, processed tomatoes and grape juice). In 2018, 
most ATM tariff rate quotas were fully used: wheat, maize, natural honey, barley groats and 
pellets, prepared or preserved tomatoes. 

1.4 Establishment, trade in services and investments 

Market access related to establishment and trade in services 

The  agreement  contains 
the  progressive  reciprocal 
the  necessary  arrangements  for 
liberalisation  of  establishment  and  cross-border  trade  in  services  and  for  cooperation  in 
electronic  commerce.  This  includes  the  freedom  of  establishment  by  granting  each  other 
national  treatment  and  most  favoured-nation  treatment  (subject  to  several  reservations 
specified by EU Member States and Ukraine) as well as liberalisation of cross-border supply 
of  services  (by  granting  each  other  national  treatment)  with  several  limitations  and 
reservations  on  both  sides).  In  four  services’  sectors  (postal  and  courier  services, 
telecommunication,  financial  services  and  international  maritime  transport  services)  internal 
market treatment may be envisaged once Ukraine effectively implements the EU acquis and 
ensures adequate administrative capacity to implement and enforce it.24  

24   The Commission in 2018 notified Ukraine of the amendment to the  acquis listed in Annex XVII, which in 
some  cases  also  envisage  revised  dates  for  approximation.  Exchanges  continue  with  Ukraine  and  a  formal 
decision to update the annex is envisaged for 2019. 

85 

 
 
                                                 
Trade in services 

Total trade in services has increased considerably from around €8 billion in 2013 to more than 
€9  billion  in  2017.  In  2017,  EU  exports  of  services  accounted  for  70%  of  total  trade  in 
services. EU exports in  services increased by more than 20% while Ukraine experienced an 
increase of 9% in 2017.  

Foreign Direct investment (FDI) 

The inflows of FDI into Ukraine, particularly from the EU, were relatively low. According to 
Eurostat, FDI outward flows from the EU to Ukraine amounted to €245 million in 2017, while 
FDI inflows  from Ukraine to  the EU  were €152 million  in  the same  year. The EU outward 
FDI stock in Ukraine, which represents the value of EU investors' equity in and net loans to 
enterprises  in  Ukraine,  declined  from  almost  €14  billion  in  2016  to  around  €12  billion  in 
2017, largely due to valuation effects. According to the Ukrainian central bank, total inflows 
of FDI to Ukraine (from all countries) amounted to €2.3 billion (2.2% of Ukraine’s GDP) in 
2017 and €2 billion (1.8% of GDP) in 2018, while the outflows of FDI were minimal.   

More FDI is needed to diversify the economy and generate more value added production so 
Ukraine can advance its integration into global value chains, and hence stimulate growth and 
diversify exports. One of the most important factors in attracting FDI is the rule of law and an 
effective anti-corruption system. Ukraine has made progress in this field in recent years but a 
lot still needs to be done. 

Another  key  issue  for  FDI  is  macroeconomic  stability.  Ukraine’s  economic  recovery 
continues:  after the deep recession in  2014-15, real  GDP  growth  reached 2.5% in  2017 and 
accelerated  to  3.3%  in  2018,  driven  by  strong  investment  activity  and  private  consumption. 
The  unemployment  rate  has  decreased  in  the  wake  of  the  recovery  as  well  as  significant 
labour emigration. Annual inflation has slowed down to below 10% year on year, albeit at the 
cost  of  high  domestic  interest  rates  (policy  rate:  17%).  Budget  deficits  have  been  reduced 
since 2014 and the 2018 budget deficit was 2% of GDP. Improving business expectations and 
a  further  improvement  in  financial  performance  of  Ukrainian  enterprises  should  further 
stimulate foreign investment 

1.5 EU support to the implementation of the DCFTA 

EU assistance to the implementation of the DCFTA is embedded in a comprehensive support 
programme to systemic reforms, drawn up in response to the 2014 events as well as in view of 
the Association Agreement/DCFTA implementation. This includes a substantive package on 
good governance with Public Administration Reform, decentralization reform and the rule of 
law  including  the  fight  against  corruption  in  the  focus  sectors,  private  sector  development, 
fostering  of  energy  efficiency  and  energy  market  reforms,  support  to  the  conflict-affected 
areas in  Eastern Ukraine, skills  development  and people-to-people contacts.  With an annual 
budget of up to €200 million, €965 million have been allocated bilaterally under the European 
Neighbourhood Instrument so far.  

In  addition  to  regular  cooperation  assistance,  DCFTA  implementation  is  also  supported  by 
policy conditionality of the EU’s macro-financial assistance (MFA) to Ukraine. Conditions of 
the  current  MFA  operation  approved  in  2018  include  anti-money  laundering  and  customs 

86 

 
 
 
 
 
facilitation measures (the adoption of an anti-money laundering law and a law establishing an 
Authorised Economic Operator programme).   

including 

technical  barriers 

In the area of economic reform, including the implementation of the DCFTA and the related 
approximation of Ukrainian legislation to the EU acquis, EU support covers a wide range of 
sectors, 
intellectual  property  rights, 
competition, financial services, food safety, sanitary and phytosanitary measures, and others. 
Most significant EU support operations to DCFTA-related reforms currently take place in the 
areas  of  customs,  food  safety  and  financial  services.  Ukraine  benefits  from  EU  support 
projects provided through a whole set of assistance modalities, including technical assistance, 
twinning and TAIEX projects25.  

trade,  customs, 

to 

Legal  approximation  of  Ukraine's  customs  legislation  with  the  EU  acquis  is  about  to  be 
supported  under  the  Public  Finance  Management  Support  Program  for  Ukraine  (EU4PFM). 
This technical assistance programme aims to support the legal approximation of customs law 
with the EU acquis and implement customs reforms in order to facilitate mutual trade.  

The EU assists Ukraine with food safety and sanitary and phytosanitary measures in order to 
align  Ukrainian  standards  to  those  of  the  EU.  The  EU  continues  to  support  the  Ukraine 
through  a  technical  assistance  project  on  improvement  of  food  safety  control  system  and  a 
twinning project on approximation of Ukrainian legislation with the EU in the field of plant 
protection and plant health.  

In financial services, a technical project by the EU focuses on financial transparency, stability 
and  better  supervision.  Another  technical  assistance  project  intends  to  strengthen  the 
regulation and supervision of the non-bank financial market.  

The EU supports the alignment of the Ukrainian quality infrastructure system with that of the 
EU in order to remove technical barriers to trade. An EU technical assistance project works 
towards  furthering  regulatory  harmonisation  between  the  EU  and  Ukraine  in  the  area  of 
technical  barriers  to  trade,  including  through  a  twinning  project  with  the  Ukrainian 
standardisation body.  

Alignment of Ukraine's national competition legislation with EU standards is being supported 
by  a  twinning  project.  In  the  perspective  of  the  introduction  of  domestic  rules  on  state  aid 
control  in  the  Ukraine,  a  further  technical  assistance  project  is  aiming  to  build  institutional 
capacities and effective state aid control bodies.  

1.5 EU support for Small and Medium sized Enterprises (SMEs)  

SMEs  in  Ukraine  are  benefitting  from  EU  support  under  the  DCFTA  Facility  for  SMEs, 
which aims at increasing SMEs competitiveness, easing their access to finance, helping them 
to  seize  new  trade  opportunities  and  comply  with  new  food  safety,  technical  and  quality 
standards,  as  well  as  with  environmental  protection  measures  implied  by  the  DCFTA 
implementation.  

The DCFTA Facility consists of a set of programs implemented principally by European Bank 
for Reconstruction and Development (EBRD) and the European Investment Bank (EIB).  

25   https://ec.europa.eu/neighbourhood-enlargement/tenders/taiex_en  

87 

 
 
 
 
 
 
 
 
 
                                                 
EU also supports private sector in Ukraine, in particular SMEs through capacity building and 
by  facilitating  access  to  markets.  A  flagship  project  is  "EU4Business:  Network  of  Business 
Support  Centres  in  Ukraine"  implemented  by  EBRD.  It  offers  advisory  support  to  SMEs 
to  SMEs  by 
(creation  of  15  regional  Business  Support  Centres,  business  advice 
local/international  consultants)  and  investment  preparation.  Another  relevant  initiative  is 
“Eastern  Partnership:  Ready  to  Trade  (International  Trade  Centre)”.  The  EU  provides 
significant  technical  assistance  to  authorities  on  SME  policy,  better  regulation  and  the 
improvement of inspection services: FORBIZ including the Better Regulation Delivery Office 
(BRDO)  and  the  Small-and  Medium  Enterprise  Development  Office  (SMEDO),  and 
EU4Business: From Policies to Action (OECD). 

2 

ACTIVITIES OF THE IMPLEMENTATION BODIES 

2.1 Joint decisions of the Association Bodies 

Decision 1/201826 of the EU-Ukraine Customs Sub-Committee was adopted on 21 November 
2018,  replacing  Protocol  I  to  the  EU-Ukraine  Association  Agreement,  concerning  the 
definition of the concept of “originating products” and methods of administrative cooperation 
with  the Regional Convention on pan-Euro-Mediterranean preferential  rules of origin  (PEM 
Convention). 

2.2 Meetings of the Association Bodies 

The  third  Association  Committee  in  Trade  configuration  (ACTC)  was  held  22-23 
November  2018  in  Kyiv.  The  meeting  allowed  for  a  useful  exchange  of  views  and 
information  on  the  state  of  play  of  implementation  under  the  different  chapters  of  the 
agreement  as  well  as  on  the  evolution  of  bilateral  trade  over  the  past  year.  The  ACTC  also 
adopted its operational conclusion for 2019. 

In relation to customs and trade facilitation, Decision 1/2018 of the Customs Sub-committee, 
referred to in section 2.1 above is an important achievement to further facilitate trade and it 
will allow diagonal cumulation with other partners to the Regional Convention on pan-Euro-
Mediterranean  preferential  rules  of  origin  (PEM)  with  whom  Ukraine  has  a  free  trade 
agreement,  Norway  for  example.  Ukraine’s  accession  to  the  Conventions  on  a  Common 
Transit Procedure27 and the Convention on Simplification of Formalities in trade in goods, as 
well as the setting up an Authorised Economic Operator (AEO) Programme are still ongoing 
and  foreseen  under  the  Association  Agreement.  The  EU  provides  significant  support, 
assistance and expertise to help Ukraine in its efforts to accede to the conventions and setting 
up  the  AEO,  which  will  simplify,  ease  and  facilitate  the  movement  of  goods  between 
countries. 

The  EU  expressed  its  concern  about  the  lack  of  progress  on  intellectual  property  rights  and 
encouraged laws to be adopted to properly implement the intellectual property rights Chapter 
of  the  DCFTA  and  strengthen  enforcement  to  reduce  counterfeiting  and  piracy.  On 

26   OJ L 20, 23.1.2019, p. 40. 
27   The Convention of 20 May 1987 on a common transit procedure forms the basis for the movement of goods 
between the EU Member States, the four EFTA countries (Iceland, Norway, Liechtenstein and Switzerland), 
Turkey, North Macedonia and Serbia. 

88 

 
 
 
 
 
                                                 
geographical indications (GIs), the two Ukrainian GIs protected under the DCFTA have been 
included in the E-Bacchus28 database. Ukraine agreed to undertake during 2019 the necessary 
work with  the Ukrainian industry in  order to  develop  a new name for “Cognac of Ukraine” 
and to modify the recently adopted ‘rules of production of Cognac of Ukraine’, clearly stating 
that  these  rules  shall  be  applied  no  later  than  the  expiry  of  the  10-year  transition  period 
provided by the Association Agreement, i.e. no later than 2026.  

EU  provided  an  overview  of  the  state  of  play  of  notifications  on  amendments  to  EU 
legislation  on  the  four  services  sectors;  postal  and  courier  services,  telecommunication, 
financial  services  and  international  maritime  transport  services.  Ukraine  will  submit  its 
comments during the first half of 2019 following which, a consolidated list of legislation will 
be drawn and a formal decision to amend Annex XVII will be adopted. 

EU welcomed the updated roadmap on postal and courier services from March 2018, which 
would serve as a good guideline for approximation and alignment to EU legislation. Ukraine 
indicated that draft legislation with a view to aligning with Directive 97/96 was underway and 
would be submitted to the EU. 

EU reiterated its concerns about the wood export ban which was still in place as well as the 
value added tax law 2440 that restricted the exports for rapeseed and soybeans. Several other 
topics on RAPEX29, road  transport, the list  of  arbitrators for the bilateral  dispute settlement 
mechanism, competition and state aid, poultry imports and certificates and documentation for 
metal scrap exports were also discussed. The details of the discussions on SPS and TSD are 
reported below. 

The  Sanitary  and  Phytosanitary  Management  Sub-Committee  held  its  third  meeting  on 
16 November 2018 via video conference, however both parties have regular meetings on SPS 
issues to keep track of the developments and interfere where issues arise. During the meeting, 
the  Ukrainian  authorities  presented  progress  on  the  implementation  of  the  operational 
conclusions  from  the  previous  Sub-Committee  meeting  of  October  2017  and  updates  as 
regards  the  implementation  of  the  DCFTA  SPS  Chapter  as  well  as  on  institutional  reforms. 
The EU informed about the marketing standards it has in place for the import of shell eggs. 

Parties  discussed  the  final  steps  to  be  made  in  order  to  adopt  Annex  V  of  the  Association 
Agreements  that  lists  the  EU  SPS  legislation  and  the  deadlines  as  to  when  Ukraine  should 
have  concluded  the  approximation  per  act.  Parties  reached  a  technical  agreement  on  this 
annex and discussed their internal  procedures that  have to  be followed in order for the SPS 
Sub-Committee to finally adopt this important document.  

Due  to  the  importance  of  SPS  in  general  and  the  Ukrainian  commitment in  the  Association 
Agreement in particular, the SPS sector will remain a core sector in its bilateral cooperation 
with Ukraine for the years to come. Two projects of a combined value of around €5 million 
are foreseen in 2019. 

The Commission carried out an audit on the control system for poultry meat and informed that 
a  follow-up  audit  would  be  carried  out  in  2019  to  verify  whether  the  shortcoming  that  had 

28   E-Bacchus is a database that, among other things, lists non-EU countries' geographical indications and names 
of origin protected in the EU in accordance with bilateral agreements on trade in wine concluded between the 
EU and the non-EU countries' concerned. 

29   EU Rapid Alert System for non-food and feed products. 

89 

 
 
 
 
 
 
 
 
 
                                                 
been identified had been rectified accordingly. The next meeting is planned for the first half 
of 2019. 

3 

IMPLEMENTATION  OF  THE  PROVISIONS  ON  TRADE  AND 
DEVELOPMENT 

SUSTAINABLE 

The second Trade and Sustainable Development (TSD) Sub-Committee between the EU 
and  Ukraine  was  held  on  13  November  2018  in  Kyiv,  followed  by  an  open  Civil  Society 
Forum on 14 November 2018 during which members of the EU Advisory Group were able to 
meet  the  newly  established  Ukraine  Advisory  Group  for  the  first  time.  The  meeting  of  the 
Sub-Committee  enabled  a  first  substantial  exchange  on  TSD  labour  provisions.  It  notably 
discussed labour inspections as a cross-cutting issue for all labour standards, revision of the 
labour  legislation  to  address  compliance  gaps  with  several  ILO  fundamental  conventions  as 
well as recent issues around trade-unions’ rights. The EU notably called for action to bring the 
current  labour  inspection  system  fully  in  line  with  the  relevant  ILO  conventions.  An  EU-
funded  ILO  project  is  making  a  positive  contribution  to  strengthening  the  Ukrainian  labour 
inspection system and the EU encouraged Ukraine to take full advantage of this support. The 
operational conclusions of the TSD Sub-Committee and its joint statement to civil society are 
available online3031 and contains additional valuable information. They highlight the key areas 
of  EU-Ukraine  TSD  implementation  work,  including  on  trade  and  labour  issues  (labour 
inspection,  modernisation  of  labour  relations,  social  dialogue)  as  well  as  trade  and 
environmental  issues  (sustainable  forest  management  and  related  wood  production,  sales, 
processing and trade).  

In  line  with  the  TSD  15-point  action  plan  of  February  2018,  in  particular  its  theme  of 
“working together”, EU Member States were regularly updated both in Brussels through TSD 
expert group meetings and on the ground in Kyiv via the EU Delegation on TSD matters and 
were asked for inputs and feedback, for example regarding ongoing projects benefiting TSD 
implementation in Ukraine. 

In  2019,  Ukraine  is  expected  to  select  its  experts  for  the  TSD  list  of  experts.  A  panel 
composed of experts from that list would be sought for advice in cases of disputes over TSD 
matters between the EU and Ukraine. 

4 

PROGRESS MADE, MAIN OPEN ISSUES AND FOLLOW-UP ACTIONS 

4.1 Wood export ban 

Ukraine has not made any efforts in removing the wood export ban despite repeated requests 
by the EU at all levels and instances, and repeated promises by Ukraine to solve the problem. 
The EU consequently submitted on 15 January 2019 a formal request for dispute settlement 
consultations with regard to certain Ukrainian export restrictions on wood pursuant to Article 
305 of the Association Agreement. This request is publicly available and can be found on DG 
TRADE’s  web  site.  During  the  ensuing  bilateral  consultations  held  on  7  February  2019  in 
Kyiv,  Ukraine  provided  useful  information  and  replies  to  the  questions  prepared  by  the  EU 
but  the  consultations  essentially  confirmed  the  Commission’s  legal  assessment  of  the 
measures at stake as well as their economic and political background. The EU will carefully 

30 http://trade.ec.europa.eu/doclib/docs/2018/november/tradoc_157498.11.2018%20final.pdf 
31 http://trade.ec.europa.eu/doclib/docs/2018/november/tradoc_157499.11.2018%20final.pdf 

90 

 
 
 
 
                                                 
consider the next steps. The EU explained to Ukraine that the wood export ban could not be 
considered as an appropriate forest preservation measure and does not appropriately address 
the  challenges  of  the  forestry  sector  in  Ukraine  as  regards  corruption  and  illegal  business 
activities.  The  EU  has  always  been  a  staunch  supporter  of  efforts  to  develop  a  sustainable 
forest management in Ukraine and have provided support and assistance and continues to do 
so. 

4.2 Value added tax law 2440 

In 2018, Ukraine adopted a law 2440 on the cancellation of value added tax. The law denies, 
for certain exporters, the refund of the value added tax upon export of rapeseed and soybeans. 
The  law  sets  out  that  exporters,  when  exporting  soybeans  from  1.9.2018  to  31.12  2021  and 
rapeseed from 1.1.2020 to 31.12.2021 will not be reimbursed for the value added tax. This has 
a negative impact on most stakeholders, in particular processing plants in the EU (for whom 
the  cost  of  Ukrainian  grains  increases),  EU  and  Ukrainian  traders  without  Ukrainian 
production but also Ukrainian farmers who face lower domestic prices. This is a measure that 
appears  incompatible  with  the  provisions  of  the  Association  Agreement  and  Ukraine’s 
Protocol  of Accession to  the WTO. The EU has on several  occasions, at  both  technical  and 
Ministerial  level,  raised  concerns  about  this  measure  and  encouraged  Ukraine  to  take  the 
necessary steps to end it. 

4.3 Poultry meat imports 

The  imports  of  a  new  type  of  poultry  cut  continued  its  increase  in  2018.  This  novel  cut 
consists  of  a  traditional  breast  cap  with  the  humerus  bones  and,  after  a  minimal 
transformation,  this  cut  can  be  marketed  in  the  EU  as  poultry  breast.  The  rapid  increase  in 
duty  free  imports  of  this  particular  poultry  cut,  which  was  neither  existent  nor  foreseeable 
during the negotiations of the agreement, risk undermining the protection provided for poultry 
breast. The EU held working consultations with Ukraine during the summer 2018 and on 20 
December  2018,  the  Council  authorised  the  Commission  to  open  negotiations  with  Ukraine 
with a view to find a solution by amending the trade preferences for poultry meat and poultry 
meat preparations. The negotiations held in January, February and March 2019 resulted in an 
agreement  to  include  the  poultry  cuts  in  question  into  the  existing  quota,  reintroducing  the 
most favoured nations duty of €100.8 /100kg net and finally to increase the existing poultry 
quota  for  Ukraine.  Actual  imports  from  Ukraine  of  these  particular  poultry  cuts  reached 
55,000 tonnes in 2018. 

4.4 Technical barriers to trade 

The  dialogue  on  technical  barriers  to  trade  that  took  place  in  March  2019  allowed  the 
exchange of detailed information allowing for the assessment of the Ukrainian legislation, the 
quality infrastructure institutions, their effectiveness and their preparedness to implement EU 
legislation  in  the  field  of  technical  regulations.  Ukraine  is  making  substantive  progress  to 
align  its  regulatory  framework  and  standards  with  the  EU,  however  work  still  needs  to  be 
completed on standardisation. Legislative work is still pending in Verkhovna Rada in respect 
to  the  amendments  of  two  laws  (on  Technical  Regulations  and  on  Market  Surveillance). 
Furthermore,  implementation  and  enforcement  of  Ukrainian  legislation  transposing  the  EU 
acquis  by  relevant  institutions  must  be  strengthened,  in  particular  in  the  area  of  market 
surveillance where significant further efforts are needed to meet EU requirements. Work will 

91 

 
 
continue bilaterally to review progress  achieved before the next plenary session of the High 
Level Industrial and Regulatory Dialogue. 

4.5 SPS aspects 

Ukraine has  committed to  approximate its SPS and animal  welfare legislation to  that of the 
EU – in an ongoing process already undertaken by Ukraine with assistance and support from 
the  EU.  The  specific  details  concerning  the  timeline  of  approximation  with  regard  to 
individual EU legal acts was not included in the DCFTA and was to be agreed by the sides in 
the  comprehensive  SPS  strategy.  Both  sides  expect  to  be  able  to  formally  adopt  the  SPS 
strategy  in  2019.  The  SPS  Strategy  contains  more  than  240  acts  of  EU  legislation  for 
approximation by Ukraine and according to a recent examination 170 acts have already been 
approximated or are in the process of approximation.  

The EU informed Ukraine about the marketing standards it has in place for the import of shell 
eggs, which require imported eggs to be labelled as ‘non-EU compliant’ until equivalence has 
been  recognised,  which  includes  compliance  with  the  EU  animal  welfare  requirements. 
Further audits with favourable results have been conducted by the Commission on the official 
oversight  by  Ukraine  of  the  poultry  industries  regarding  animal  health  and  food  safety 
aspects. 

The parties also made progress on the establishment of harmonised certificates that will apply 
to  all  EU  Member  States  for  their  exports  of  animal  products  to  Ukraine.  Talks  on  the 
certificates for gelatine/collagen have been finalised and certificates for poultry products are 
in the final stages of negotiation. Ukraine is about to publish ‘Order 71’ that lists Ukraine’s 
import  requirements  on  animal  products  and  allows  for  favourable  treatments  of  EU 
products.” 

The  parties  discussed  the  implementation  of  the  article  in  the  Association  Agreement  on 
diseases  and pest  regionalisation and the EU requested that Ukraine  expand this to  diseases 
other  than  highly  Pathogenic  Avian  Influenza  (HPAI)  and  New  Castle  Disease  (NCD),  for 
which  Ukraine  conducted  an  audit  of  the  performance  of  EU-control  measures  (e.g. 
concerning African swine fever carried out by Lithuania).  

Ukraine requested the EU to finalise procedures leading to the recognition of equivalence of 
Ukrainian seed production and control systems for which all technical preparations have been 
concluded. 

Ukraine informed the EU about its interest to start exporting ware potatoes whereas the EU 
inquired  about  imports  of  Ash  wood  from  Ukraine  and  requested  information  about 
monitoring  systems  Ukraine  should  have  put  in  place  to  timely  detect  outbreaks  of  the 
emerald ash borer (Agrilus planipennis) and methods to prevent its spread to the EU. 

4.6 Customs and Trade facilitation  

Ukraine is working on topics to further facilitate trade and cross border cooperation with the 
EU through the possibilities already foreseen under the agreement. Ukraine has taken steps to 
introduce  the  Authorised  Economic  Operator  (AEO)  programme,  which  helps  improve 
customs clearance and facilitate external trade and the draft law to that effect is currently in 
the  Parliament  pending  for  the  second  reading.  Ukraine  has  also  drafted  a  law  on 

92 

 
 
 
 
 
 
 
implementing  the  provisions  to  accede  to  the  Convention  on  a  Common  Transit  Procedure, 
which pending its consideration in the Parliament. Similar progress is made for accession to 
Convention  on  the  Simplification  of  Formalities  in  Trade.  In  relation  to  Ukraine’s 
approximation  to  the  Union  Customs  Code  as  foreseen  under  Annex  XV  and  chapter  5  on 
Customs and Trade Facilitation, the first exchanges are foreseen in 2019 and, once finalised, 
the  annex  will  be  formally  updated.  Ukraine  is  a  member  of  the  PEM  Convention  on 
preferential  rules  of  origin  and  once  the  relevant  legislation  in  the  EU  is  updated  the  PEM 
Convention  will  apply.  These  are  important  initiatives  foreseen  under  the  agreement  which 
will help trade flow faster, easier and safer. 

4.7 Intellectual property rights (IPR) 

Throughout  2018,  implementation  results  of  the  ambitious  commitments  in  the  DCFTA  on 
alignment  of  Ukraine's  system  of  protection  and  enforcement  of  intellectual  property  rights 
(IPRs) were limited. The law on collective rights management in  force since July 2018 was 
reviewed  by  the  Commission,  which  identified  several  serious  shortfalls  that  need  to  be 
addressed. The Ministry of Economic Development and Trade established an expert group for 
the preparation of a new draft Law on Copyright and Related Rights, which will also address 
the  CMO  law  shortfalls.  The  European  Commission  follows  closely  and  supports  the 
endeavours of this expert group. Another bill aimed to improve the distribution of copyrighted 
material  was  adopted  by  the  Parliament  of  Ukraine  in  September  2018.  Regrettably,  many 
bills presented by the government as the IPR reform package contain problematic provisions 
and need to be carefully revisited to solve existing problems in the area of IPR and to become 
in full compliance with the DCFTA requirements. In particular, the draft patent bill needs to 
make sure that no limitations to the patentable subject matter that are contrary to the DCFTA 
and TRIPS are introduced. Throughout 2018 the EU provided inputs and comments to several 
draft  laws,  including  on  IPR  Border  Measures  which  has  still  not  been  adopted  by  the 
deadline  established  by  the  Association  Agreement,  Article  250  (by  1  January  2019). 
Furthermore,  the  Ukrainian  legislation  does  not  include  adequate  provisions  ensuring 
effective enforcement of IPR rights; they are particularly unfit for enforcement in the digital 
environment. The importance of these aspects has been made clear to Ukraine and was raised 
again during the Intellectual Property Rights dialogue that took place in Ukraine the 20 June 
2018.  The  Commission  is  following  this  closely  and  is  in  a  constructive  dialogue  with  the 
Ukrainian authorities. 

4.8 Geographical indications (GIs) 

In 2018, the draft Law "On amendments to a number of legislative acts of Ukraine to improve 
legal  protection  of  geographical  indications"  passed  its  first  reading  on  13  March  2018  and 
was  approved  for  the  second  on  4  July  2018.  Despite  having  been  on  the  agenda  of  the 
parliament since September 2018 the draft law has not been adopted yet. Furthermore, three 
additional draft laws were prepared and harmonised with EU legislation, respectively "on GIs 
for Agricultural  Products and Foodstuffs", "on  GIs  for Spirit  Drinks" and "on GIs  for Wine 
and Aromatized Wine Products".  The structure for the Law "on Viticulture and Production of 
Wine Products" has  also been finalised in  line with  new EU regulations and should now be 
discussed with the Ministry of Agrarian Policy and Food (MAPF) of Ukraine.  

Eight  hackathons  were  organized  throughout  the  country  in  order  to  determine  a  new  name 
that could replace “Cognac of Ukraine”. After a series of additional consultations, a list of 10 

93 

 
 
 
most popular brands were proposed to  the MAPF for further consideration, in  collaboration 
with the Industry. 

A  first  cheese  GI  Association  called  “Association  of  producers  of  traditional  Carpathian 
highland  bryndzya”  was  established  and  officially  registered  on  31  August  2018.  The 
specifications  of  “Hutsul  sheep  bryndzya”  was  developed  and  approved  by  the  members  of 
the producers association and the full dossier for application for registration of the PDO was 
sent to the Ministry of Economic Development and Trade on 19 December 2018.  

4.9 Competition and State aid 

In  2018  the  Antimonopoly  Committee  of  Ukraine  (AMCU)  continued  drafting  substantive 
and procedural rules in the field of antitrust and merger control. Several of these key drafts –
such  as  guidelines  on  market  definition  and  the  concept  of  dominance  -  cannot  however  be 
adopted  without  amending  the  Ukrainian  law  on  competition.  Regarding  the  latter,  AMCU 
continues working on draft amendments but it remains unclear if they will be submitted and 
adopted before the next Parliamentary elections in autumn 2019. In addition, AMCU and the 
EU  national  competition  authorities  have  worked  on  a  comparative  analysis  of  EU  and 
Ukrainian  competition  law.  The  EU  expects  that  the  findings  will  lead  to  a  structured  and 
holistic  approach  to  continue  legal  approximation.  Finally,  there  is  a  need  to  increase  the 
rigour of the enforcement of competition rules in individual cases. 

The State Aid rules in place have partially allowed controlling state aid by the Ukraine. This 
period has been useful for gaining experience on case enforcement. There is however a need 
to smarten up rules in view of addressing the main misalignments in the Law on State Aid, 
improving and simplifying the compatibility guidelines and shifting efforts from small to big 
cases.  The  quality  of  the  State  Aid  decisions  also  needs  to  improve,  notably  as  regards 
structure and substantiation. The government should also introduce mechanisms to ensure that 
large grantors notify state aid provided. 

4.10 Public procurement 

The Commission  has continued its assistance and its active involvement with  the Ukrainian 
authorities  to  progress  towards  building  a  transparent,  non-discriminatory,  competitive  and 
open  public  procurement  system.  Discussion  on  public  procurement  between  the  EU  and 
Ukraine  also  takes  place  in  the  Public  Procurement  Working  Group  of  the  High  Level 
Industrial  Dialogue  that  takes  place  annually.  Intense  cooperation  between  the  EU  and 
Ukrainian authorities, and through broad support and assistance by the EU throughout 2018, 
has  helped  Ukraine  in  drafting  a  new  law  on  public  procurement  that  intends  to  meet  the 
requirements for legislation approximation under phase two of Annex XXI of Chapter 8 of the 
Association  Agreement.  This  approximation  process  in  different  phases  foresees  gradual 
mutual  market  opening  to  each  other’s  public  procurement  market  when  conditions  of  the 
given  phase  have  been  met.  The  draft  law  is  intended  to  be  submitted  to  the  Ukrainian 
Parliament in 2019. 

5 

CONCLUSIONS AND OUTLOOK 

In terms of trade, the DCFTA delivers. Trade in both directions continued to increase in 2018 
and  Ukrainian  exports  to  the  EU  have  reached  their  highest  level  ever.  The  EU  has 

94 

 
 
 
 
consolidated  its  position  as  Ukraine’s  main  trading  partner  representing  around  42%  of  its 
trade.  

On  legal  approximation,  there  is  in  general  good  progress  in  many  areas,  including  a 
commitment  by  Ukraine  to  approximate  legislation,  harmonise  standards  and  carry  out 
reforms. At the same time, serious concerns remain about old and new trade irritants such as 
the wood export ban, the value added tax law 2440 and laws on intellectual property rights. 
Ukraine needs to step up efforts against counterfeiting and piracy and to align its enforcement 
laws on intellectual property rights and do more to remove existing trade irritants, including 
ensuring that no new irritants emerge. Implementation of DCFTA commitments, reforms and 
approximation  are  advancing  steadily  and  are  closely  monitored  and  supported  by  the 
Commission. Ukraine should be encouraged to continue its reform process, which is the best 
way to fully benefit from the agreement. 

6 

STATISTICS 

Merchandise trade EU28 2014-2018 
2014 

2015 

2016 

2017 

2018 

EU28 trade with Ukraine (mio €) 

Imports 
Exports 
Balance 

Share Ukraine in EU28 trade with Extra-EU28 

Imports 
Exports 
Total (I+E) 

Imports 
Exports 
Total (I+E) 

Source Trade G2 Statistics/ISDB  
Trade EU28: Eurostat COMEXT;  Trade Ukraine: IMF Dots 

13.734 
16.995 
3.262 

0,8% 
1,0% 
0,9% 

12.844 
14.033 
1.190 

0,7% 
0,8% 
0,8% 

Share EU28 in trade Ukraine with world 

38,7% 
31,6% 
35,2% 

40,9% 
34,1% 
37,5% 

13.182 
16.568 
3.386 

0,8% 
0,9% 
0,9% 

43,7% 
37,2% 
40,6% 

16.683 
20.196 
3.513 

0,9% 
1,1% 
1,0% 

42,2% 
40,7% 
41,5% 

18.002 
22.128 
4.127 

0,9% 
1,1% 
1,0% 

41,0% 
42,3% 
41,6% 
25-mars-19 

Total merchandise trade EU28 with Ukraine (mio €) 

Ukraine 

2017 

2018 

Imports 
Exports 
Balance 
Total trade 
Source Trade G2 Statistics/ISDB from Eurostat COMEXT 

16.683 
20.196 
3.513 
36.880 

18.002 
22.128 
4.127 
40.130 

Agrifood trade EU28 with Ukraine (mio €) 

Ukraine 

2017 

2018 

Imports 
Exports 
Balance 
Total trade 
Source Trade G2 Statistics/ISDB from Eurostat COMEXT 

5.415 
1.813 
-3.602 
7.229 

5.617 
2.064 
-3.553 
7.681 

NAMA trade EU28 with Ukraine (mio €) 

Ukraine 

2017 

2018 

EU28 imports 
EU28 exports 
Balance 
Total trade 

11.268 
18.383 
7.115 
29.651 

12.385 
20.064 
7.680 
32.449 

95 

Growth 

mio € 

1.318 
1.932 
613 
3.250 

annual 
% 
7,9% 
9,6% 

8,8% 

Growth 

mio € 

202 
251 
49 
452 

annual 
% 
3,7% 
13,8% 

6,3% 

Growth 

mio € 

1.117 
1.681 
564 
2.798 

annual 
% 
9,9% 
9,1% 

9,4% 

 
 
  
  
  
  
  
  
  
 
  
  
  
  
 
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
Source Trade G2 Statistics/ISDB from Eurostat COMEXT 

Services trade EU28 with Ukraine (mio €) 

Ukraine 

2016 

2017 

Imports 
Exports 
Balance 
Total trade 
Source Trade G2 Statistics/ISDB from Eurostat BOP statistics 

2.628 
5.508 
2.880 
8.136 

2.864 
6.677 
3.814 
9.541 

mio € 

236 
1.169 
934 
1.405 

Growth 

annual 
% 
9,0% 
21,2% 

17,3% 

Services trade EU28 with Ukraine (mio €) 

Imports 
Exports 
Balance 
Total trade 
Source Trade G2 Statistics/ISDB from Eurostat BOP statistics 

2013 

2014 

2015 

2016 

2017 

2.912 
5.061 
2.149 
7.973 

2.684 
4.710 
2.027 
7.394 

2.724 
5.105 
2.381 
7.829 

2.628 
5.508 
2.880 
8.136 

2.864 
6.677 
3.814 
9.541 

FDI EU28 with Ukraine (mio €) 
2014 

2013 
FDI Stocks 

2015 

2016 

2017 

Inward 
Outward 

Inward 
Outward 
Source Trade G2 Statistics/ISDB from Eurostat BOP statistics 

501 
19.623 
FDI Flows 
135 
169 

193 
17.729 

129 
-1.880 

602 
12.068 

211 
13.998 

263 
12.630 

208 
756 

79 
-252 

152 
245 

96 

 
 
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
 
 
ANNUAL  REPORT  ON  THE  IMPLEMENTATION  OF  THE  DEEP  AND 
COMPREHENSIVE  FREE  TRADE  AREA  (DCFTA)  BETWEEN  THE  EU  AND  ITS 
MEMBER STATES AND GEORGIA 

The  Deep  and  Comprehensive  Free  Trade  Area  (DCFTA)  of  the  EU-Georgia  Association 
Agreement (AA)32 entered into force on 1 July 2016 after being applied on provisional basis 
since 1 September 2014.33 This is the third report on the implementation of the EU-Georgia 
DCFTA.  It  responds  also  to  the  requirements  of  the  Regulation  implementing  the  anti-
circumvention mechanism provided for in the EU-Georgia Association Agreement.34  

The  Government  of  Georgia  adopted  in  November  2017  an  Action  Plan  for  the 
implementation of the DCFTA 2018-202035. It is a continuation of the Action Plan for 2014-
2017,  outlining  the  priorities  of  the  Association  Agenda,  planned  activities  related  to  each 
priority  with 
for 
implementation.  

institutions  and 

implementing 

responsible 

indicators, 

timeframe 

1. 

EVOLUTION OF TRADE 

1.1 Trade in Goods overall 

The scope of trade liberalisation 

At  the  start  of  provisional  application  of  the  DCFTA  on  1  September  2014  both  partners 
eliminated import duties for all goods with a few exceptions on the European Union side, 
related to  sensitive agriculture products,  for which market  access  has also improved.  In this 
context, the EU granted duty-free Tariff Rate Quotas for garlic originating from Georgia and, 
for 28 agricultural products (including fruits and vegetables) that are subject to entry prices, 
the EU eliminated the ad valorem component of the import duty.  

An  anti-circumvention  mechanism  applies  to  several  agricultural  goods  i.e.  beef,  pork, 
sheep  and  poultry  meat,  dairy  products,  eggs  and  albumins,  mushrooms,  cereals,  malt, 
starches  and  sugars  as  well  as  to  processed  agricultural  products  such  as:  sweetcorn, 
processed sugars and cereals and cigarettes. 

32  The  EU-Georgia  Association  Agreement  was  published 

in  OJ  L 261,  30.08.2014.  http://eur-

lex.europa.eu/legal-content/EN/TXT/PDF/?uri=OJ:L:2014:261:FULL&from=EN  

33  When it comes to DCFTA application to breakaway regions Abkhazia and South-Ossetia, the EU gives its 
full support to Georgia's territorial integrity, however, in accordance with Article 429 (Territorial application) 
of the Association Agreement, conditions enabling effective implementation of the DCFTA, and notably de 
facto  government  control  over  those  territories,  would  need  to  be  created  in  either  Abkhazia  or  South 
Ossetia, which is not the case at present. 

34  Regulation (EU) 2016/401 of the European Parliament and of the Council of 9 March 2016 implementing the 
anti-circumvention mechanism provided for in the Association Agreement between the European Union and 
the European Atomic Energy Community and their Member States, of the one part, and Georgia, of the other 
part  (OJ  L 77/2016).  According  to  its  Article  4,  the  Commission  shall  submit  annual  report  on 
implementation  of  this  Regulation  and  Title  IV  (DCFTA)  of  the  Association  Agreement.  The  report  shall, 
inter  alia,  include  information  about  the  application  of  the  anti-circumvention  mechanism  and  set  out  a 
summary of the statistics and the evolution of trade with Georgia. 

35  See http://www.dcfta.gov.ge/en/implementation  

97 

 
 
 
 
 
                                                 
The Parties agreed on a review clause, i.e. that after five years from the entry into force of the 
DCFTA, they  would consult  (if there is  a request  from  either party) to  consider broadening 
the scope of the liberalisation of customs duties in bilateral trade. 

Overall evolution of EU–Georgia trade in goods 

In  accordance  with  2018  Eurostat  data,  the  EU  is  the  most  important  trade  partner  of 
Georgia  with  27% share in  its overall trade (22% in  total  export and 29% imports) and is 
followed by Turkey (14%), Russia (11%), Azerbaijan (9%), and China (8%). Georgia is the 
EU’s 77th trade partner and accounts for only 0.1% of its total trade. 

In 2018 the overall trade between the EU and Georgia increased on year-on-year-basis by 3% 
and amounted to  €2.8 billion.  EU exports to  Georgia  increased in  that  time by 4  % while 
EU imports from Georgia noted a decrease of 1.6% compared to 2017. The top 5 products 
(mineral products, foodstuffs, beverages, tobacco, base metals, products of chemical or allied 
industries, and textiles and textile articles) account for 85 % of total Georgian exports to the 
EU. 

In  the  analysed  period  the  surplus  in  EU  trade  with  Georgia  has  increased  from 
€1.35 billion to €1.46 billion. 

Sectoral structure of EU-Georgia trade in goods 

As  concerns  the  structure  of  EU  exports  to  Georgia  in  2018,  the  most  important  product 
categories  (by  Sections  of  the  Harmonized  System  Nomenclature  –  HS)  were:  machinery 
and  appliances,  mineral  and  chemical  products.  The  observed  shares  and  dynamics  in 
2018 in comparison to 2017 were as follows: 

Machinery and appliances amounted to 21 % of overall EU exports to Georgia and increased 
by 17%; mineral products – 18%, decrease by 7%; products of chemical or allied industries - 
17%,  decrease  by  7%  (pharmaceutical  products  represented  the  largest  proportion  of  EU 
exports  to  Georgia  in  this  category,  accounting  for  10%).  Other  products  categories  that 
showed  an  increase  in  EU  exports  are  optical  and  photographic  instruments  and  prepared 
foodstuffs. 

In  terms  of  structure  of  EU  imports  from  Georgia  in  2018,  the  most  important  product 
categories  were:  mineral  products,  fruit  and  vegetables  (notably  nuts),  base  metals  and 
chemical goods. 

The  following  shares  and  dynamics  in  2018  comparing  to  2017  were  observed:  Mineral 
products  accounted  for  51  %  of  the  total  EU  imports  from  Georgia  and  decreased  by  2%; 
foodstuffs, beverages, tobacco accounted for 12% and increased by 29% (this is mainly due to 
an  increase  in  beverages,  spirits  and  vinegar  (+38%);  base  metals  and  articles  thereof 
accounted for 8% and decreased by 9%; products of chemical or allied industries accounted 
for 8% and decreased by 4%; textiles and textile articles accounted for 6% and decreased by 
13%; other categories of products that have shown an increase in EU imports from Georgia 
are plastics and rubber and machinery and appliances. 

98 

 
 
 
 
 
 
 
1.2 Trade in agricultural goods 

In 2018, EU imports of agricultural products from Georgia remained stable. Beverages, spirits 
and vinegar accounted for 53% of the EU's agri-food imports from Georgia in 2018, followed 
by  fruit  and  nuts  with  27%.  EU  exports  of  agricultural  products  to  Georgia  also  remained 
stable  over  the  same  period.  The  EU's  key  agri-food  exports  to  Georgia  consisted  of 
beverages,  spirits  and  vinegar  (24%),  sugars  and  sugar  confectionary  (10%)  and  food 
preparations, chocolate, confectionery & ice cream (9%). 

Throughout  the  first  four  years  of  DCFTA  implementation  Georgia  started  to  export  some 
new products to the EU e.g. kiwi fruit, blue berries and honey. This shows a potential of the 
DCFTA  to  attract  new  product  categories  to  be  commercialised  on  the  markets  of  both 
Parties. 

1.3 Use of Tariff Rate Quotas (TRQ) 

In  2018,  the  annual  duty-free  Tariff  Rate  Quotas  of  220  tonnes  the  EU  offers  for  Georgian 
garlic was used to a minimum extent (0,5%), mainly due to market forces.  

1.4 Establishment, trade in services and investments 

Market access related to establishment and trade in services 

In the DCFTA the EU and Georgia laid down the necessary arrangements for the progressive 
reciprocal  liberalisation  of  establishment  and  trade  in  services  and  for  cooperation  on 
electronic commerce. Both Partners committed to freedom of establishment as from the start 
of the DCFTA’s provisional application, by granting each other national treatment and most 
favoured-nation treatment (subject to several reservations specified by EU Member States and 
a  few  reservations  by  Georgia).  Cross-border  supply  of  services  was  also  liberalised  (EU 
and Georgia granted each other national treatment with several limitations and reservations on 
both sides). 

In four services sectors (postal and courier services, telecommunication, financial services 
and  international  maritime  transport  services)  Georgia  recognised  the  importance  of 
gradual approximation (over a period of 4 to 8 years) of its existing and future legislation to 
the  list  of  the  EU  acquis  (in  case  of  financial  services  Georgia  also  committed  to  the 
international  best  practice  and  standards).  Further  market  opening  in  those  sectors  is 
conditioned upon Georgia fulfilling its commitments of gradual approximation up to 2022. 

The EU and Georgia also agreed on a review clause with a view to liberalising establishment, 
cross-border supply of services (regular review) and capital movement (by the end of the fifth 
year  following  the  date  of  the  entry  into  force  of  the  DCFTA).  This  review  shall  take  into 
account,  inter  alia,  the  process  of  gradual  approximation  foreseen  in  the  DCFTA  and  its 
impact on the elimination of remaining obstacles to cross border supply of services between 
the parties. 

99 

 
 
 
 
 
Trade in services 

Trade  in  services  between  the  EU  and  Georgia  has  more  than  doubled  between  2006  and 
2017, both in terms of imports and exports. As Georgian exports are growing faster than EU 
exports,  EU  positive  trade  balance  has  been  gradually  decreasing.  Total  trade  in  services 
between the Partners increased by 22% from €704 to €857 million.  

The  structure  of  exports  of  services  by  Georgia  to  the  world  is  dominated  by  travel  and 
transport  services,  in  imports  the  most  important  sectors  are  transport,  travel,  insurance  and 
pension services as well other business services. 

Foreign Direct investment 

In  2017  Foreign  Direct  investment  (FDIs)  stocks  in  Georgia  originating  from  the  EU 
accounted  for €1.6 billion (no change compared  to  2016). The top  three  EU Member States 
investing in  Georgia include the United Kingdom,  the Netherlands and the Czech Republic. 
Inward  FDIs  flows  in  that  year  amounted  to  €150 million,  which  is  a  considerable  increase 
from the €37 million registered in 2016. 

According to the data provided both by the EU and Georgia, the main sectors chosen by EU 
investors are: telecommunications, transport, infrastructure and manufacturing. 

The above statistics show that positive impact of the DCFTA on attracting more investments 
from the EU is still ahead for Georgia. Georgia performs very well in international rankings in 
terms of business climate. According to the 2019 World Bank Doing Business Index Georgia 
is on 6th position amongst 190 countries. In the 2018 Transparency International – Corruption 
Perception Index Georgia appeared on 41st position among 180 countries. 

2. 

ACTIVITIES OF THE IMPLEMENTATION BODIES  

2.1 Joint decisions of the Association Bodies 

In 2018, the following amendments/updates were made to the Association Agreement:  

  Agriculture:  List of EU agricultural  products  and foodstuffs other than wine 
and  spirits  to  be  protected  in  Georgia  (Annex  XVII-C)  and  the  List  of  spirit 
drinks of the EU to be protected in Georgia (part B of Annex XVII-D);36 

  Standardisation: Annex III (rules applicable to standardisation, accreditation, 
conformity assessment, technical regulation and metrology); pending signature 
of the Joint Decision 

  Public Procurement: Annex XVI (public procurement); pending signature of 

the Joint Decision  

36  OJ L 100, 19.4.2018. 

100 

 
 
 
 
 
                                                 
2.2 Meetings of the Association Bodies 

The  5th  meeting  of  the  EU-Georgia  Association  Committee  in  Trade  configuration  was 
held on 17-18 December 2018 in Brussels. The meeting provided an opportunity to review all 
issues related to the comprehensive, timely and inclusive implementation of the EU-Georgia 
DCFTA.  The  Parties  reviewed  progress  made  in  all  DCFTA  Chapters,  including  trade  in 
goods,  SPS  measures,  intellectual  property  rights,  customs  and  trade  facilitation,  technical 
barriers  to  trade,  public  procurement,  establishment,  trade  in  services  and  electronic 
commerce,  trade-related  energy,  competition,  trade  and  sustainable  development.  The 
Committee assessed the development of bilateral trade after four years of implementation of 
the DCFTA. The Georgian side requested EU assistance in drafting a roadmap on identifying 
products and services with export potential to the EU market.  

Both  Partners  raised  their  respective  concerns  related  to  the  implementation  of  the 
commitments  on  approximation  with  the  EU  law  in  particular  in  the  area  of  SPS  measures, 
technical  barriers  to  trade,  public  procurement,  intellectual  property  rights,  Trade  and 
Sustainable Development and instructed the specialised Sub-Committees to continue to seek 
solutions. Both sides underlined the importance of EU financial and technical assistance in the 
implementation  of  the  DCFTA,  notably  projects  aimed  at  supporting  both  the  Georgian 
administration and the small  and medium-sized  enterprises (SMEs) to  align with  the  acquis 
and reap the benefits from the Agreement. 

The  4th  Customs  Sub-Committee  met  in  Brussels  on  20  March  2018.  The  discussion 
focused  on  the  following  matters:  developments  in  customs  legislation  and  procedures, 
including the approximation process (Annex XIII of the Agreement), customs enforcement of 
intellectual  property  rights,  Georgia's  accession  to  the  Convention  on  a  Common  Transit 
Procedure – preparatory phase to the Twinning Project, Mutual Administrative Assistance in 
Customs Matters, and World Customs Organisation matters, as well as rules of origin, linkage 
to the pan-Euro-Mediterranean Convention (PEM) on rules of origin. The Joint Decision on 
the  linkage  of  the  rules  of  origin  in  bilateral  trade  to  the  Protocol  of  PEM  Convention  was 
adopted during the meeting. This allowed for diagonal cumulation to come into force between 
the  EU,  Georgia  and  the  Republic  of  Turkey  as  of  June  2018.  The  parties  confirmed  the 
harmonisation of Georgian legislation with the EU Regulation 608/2013. 

The 4th Sub-Committee on SPS measures (SPS Sub-Committee), met on 17 October 2018 
in  Tbilisi,  Georgia.  During  the  meeting,  the  Georgian  authorities  presented  progress  in  the 
implementation of the operational conclusions from the previous Sub-Committee meeting of 
October  2017  and  updates  as  regards  the  implementation  of  the  DCFTA  SPS  Chapter  and 
institutional reforms. The EU underlined the importance for Georgian authorities to meet the 
deadlines  foreseen  in  Annex  XI-B  of  the  Association  Agreement  and  to  allocate  human 
resources  in  order  to  meet  this  priority.  Parties  discussed  the  need  to  make  some  slight 
changes  to  the before mentioned Annex given amendments  to the legal  acts  at  the EU side. 
Georgia gave detailed insights on the approximation process and the progress made. 

101 

 
 
 
 
 
 
The EU stressed the importance of providing regularly Tables of Correspondence that indicate 
the transciption of EU rules and standards into Georgian legalisation at article level. Georgia 
hailed  the  assistance  that  has  been  provided  by  the  EU  over  the  last  years  under  the 
Comprehensive Institutional Building Program (CIB) and asked this to be continued. Parties 
also had exchanges of thoughts about animal products from Georgia that would have potential 
for future exports to the EU. Sectors that were mentioned were dairy, poultry and more exotic 
food products such as snails. However parties recognised that possible authorisations would 
require  significant  preparations  and  hence  serious  commitments  form  the  Georgian 
government and the private industries. Finally the EU gave a presentation on the concept of 
protected zones and plant passport and parties discussed the possible relevance for Georgia.   

The  3rd  Geographical  Indications  Sub-Committee  meeting  took  place  in  Tbilisi  on  14 
March  2018.  The  Sub-Committee  discussed  updates  of  the  lists  of  EU  for  agricultural 
products  and  foodstuffs,  wines,  spirit  drinks  and  aromatized  wines.  During  the  meeting  the 
Parties  adopted  a  Decision  amending  Annex  XVII-C  (list  of  EU  agricultural  products  and 
foodstuffs other than wine and spirits to be protected in Georgia) and part B of Annex XVII-D 
(list of spirit drinks of the EU to be protected in Georgia) of the DCFTA. The provisions on 
exchange  of  information  on  all  the  updates  on  EU  as  well  as  Georgian  Geographical 
Indications (new ones, removals from the list, modifications) were also discussed in view of 
the need for each Party to have the possibility to run objection procedures for the new names 
and  for  any  other  procedures  necessary  for  the  next  update  of  Geographical  Indications 
Annexes to the DCFTA. 

3. 

IMPLEMENTATION  OF  THE  PROVISIONS  ON  TRADE  AND 
DEVELOPMENT 

SUSTAINABLE 

The 3rd TSD Sub-Committee took place on 26 March 2019. During the meeting, the EU and 
Georgia  reaffirmed  their  commitment  to  implement  the  TSD  Work  Plan  2018-20  agreed  in 
June  2018,  and  reviewed  the  state  of  play  of  the  areas  covered.  Accordingly,  the  Sub-
Committee  reviewed  the  implementation  of  the  labour  provisions  of  the  TSD  Chapter, 
including  the  ratification  and  effective  implementation  of  the  ILO  conventions  and  Decent 
Work Agenda. The EU welcomed the adoption of the revised Georgian Occupational Safety 
and  Health  (OSH)  law  and  on-going  strengthening  of  the  Labour  Inspection  Department’s 
capacity  as  further  steps  towards  aligning  supervision  and  control  in  this  area  with 
international and EU standards. The EU also took note of the plans to further developing the 
Department to ensure supervision and control of labour legislation. The state of play relating 
to  the  implementation  of  the  environmental  provisions  of  the  TSD  Chapter,  including  the 
implementation of multilateral environmental agreements (MEAs) and their joint efforts and 
cooperation to support multilateral environmental governance. Regarding climate change, the 
Parties recalled that, collectively, Nationally Determined Contributions (NDC) submitted by 
the Parties under the Paris Agreement and current emission trajectories fall far short of what is 
required to achieve the long-term goals of the Paris Agreement and discussed their respective 
strategies  on  greenhouse  gas  emission.  In  addition,  the  EU  emphasised  the  need  for  close 
cooperation  with  civil  society  and  highlighted  the  project  it  has  put  in  place  to  support  the 
functioning  of  civil  society  consultation  mechanisms  established  under  TSD  chapters  of  its 

102 

 
 
 
trade agreements. First workshop to build the capacity of the Domestic Advisory Groups was 
also organised in the margins of the TSD subcommittee.  An open Civil Society Forum was 
also organised during which the EU and Georgia presented the TSD  Sub-Committee’s Joint 
Statement  and  replied  to  the  questions  posed  by  the  EU  and  Georgian  Domestic  Advisory 
Groups.  

4. 

SPECIFIC AREAS SUBJECT TO REPORTING OR MONITORING 

Anti-circumvention mechanism  

For none of the products under the anti-circumvention mechanism the respective trigger levels 
were exceeded in 2018, due to the low trade levels for those products. It is worth noting that 
in the analysed period there were no or very little import of products to be potentially affected 
by anti-circumvention mechanism. 

5. 

PROGRESS MADE, MAIN OPEN ISSUES AND FOLLOW-UP ACTIONS 

The approximation commitments for 2015-2018 have not been entirely implemented to date. 
These concern inter alia the submission (6 months after the entry into force of the Agreement) 
of a list of the EU SPS, animal welfare and other legislative measures that Georgia should be 
approximating its laws to  (adopted in  2017);  the completion of the first  phase of the Public 
Procurement Roadmap (pending); four EU directives under telecommunication; as well as the 
approximation of Georgian law to EU legal acts on anti-money laundering (the 3rd Directive 
on anti-money laundering was due in 2017. However, its approximation has been overtaken 
by events as the 4th and 5th Directives on anti-money laundering have been adopted. Georgia 
is working on the implementation of the 4th Directive. It should be noted that the timeline for 
approximation of Georgian legislation was back-loaded by Georgia in the negotiation process 
to the extent that approximation intensified in 2018 and will continue e.g. until 2022 in TBT 
area  or  even  until  2027  as  concerns  certain  veterinary  measures,  plant  protection  and  food 
safety.  

The  Government  of  Georgia  adopted  in  November  2017  an  Action  Plan  for  the 
implementation of the DCFTA 2018-2020. It is a continuation of the Action Plan for 2014-
2017, outlining the priorities for implementation of the DCFTA in different sectors (including 
for  example  Technical  Barriers  to  Trade,  SPS  measures,  customs  or  IPR)  as  well  as  the 
planned activities related to each priority, indicating the responsible implementing institutions 
and timeframe for implementation. 

SPS aspects 

The  list  of  the  EU  SPS  acquis  that  Georgia  will  approximate  was  submitted  to  the  EU  in 
December  2015  and  formally  adopted  by  the  EU-Georgia  SPS  Sub-Committee  on  7  March 
2017. Deadlines  committed by Georgia to  achieve compliance  with  the  EU SPS system  are 
rather  long,  to  the  extent  that  about  45%  of  the  legal  acts  will  be  subject  to  approximation 

103 

 
 
 
 
 
only  after 2020 (in concrete terms,  35 legal  acts  in  case of veterinary measures, 41 on food 
safety and 46 in  case of plant protection).  The institutional capacity in terms  of food safety 
control still needs to be enhanced. A number of Georgian establishments are authorised to 
export fruits, vegetables, honey and fishery products (from the Black Sea) to the EU.  

The  European  Commission  and  the  Georgian  government  held  a  ministerial  meeting  in 
November  2018  where  Georgia’s  trade  potentials  were  discussed  also  with  respect  to 
agricultural and food products. The EU again expressed its willingness to support the country 
but  also  underlined  that  EU  food  and  feed  safety  standards  cannot  be  compromised.  Ideas 
were  raised  to  establish  closer  relations  of  Georgian  authorities  with  the  European  Food 
Safety Authority that could help the country to align to the EU food safety systems.  

In 2019, the Commission launched a process to verify Georgia’s efforts on approximating to 
the EU legislation regarding sanitary and phytosanitary measures.  

Technical Barriers to Trade  

Georgia  is  on  schedule  with  the  approximation  of  legislation  on  market  surveillance  of 
industrial and consumer products. The legislation on industrial products has been adopted and 
the  legislation  on  consumer  products  is  being  drafted.  The  twinning  project  launched  in  the 
beginning of 2018 helps the young Technical and Construction Supervision Agency (TCSA) 
to  contribute  to  the  approximation  of  legislation,  apply  relevant  institutional  changes  and 
build capacity of the staff, especially in order to effectively implement the adopted legislation. 
In  2018,  TCSA  made  progress  in  capacity  building  and  training  on  surveillance  and 
contributed  to  drafting  regulations  on  risk  assessment  methodology  for  market  surveillance 
activities and cooperation between market surveillance authorities. 

Public Procurement  

The institutional part in public procurement approximation has been partially accomplished37. 
The setting up of the impartial and independent review body is still pending. Discussions are 
ongoing  for  both  Parties  to  formally  adopt  a  roadmap  developed  by  the  Georgian  side.  The 
roadmap  will  be  a  point  of  reference  and  facilitate  the  implementation  of  the  Public 
Procurement Chapter of the DCFTA, including on the step by step alignment of the Georgian 
legislation to the EU acquis in this area. The institutional capacity needs to be built within the 
GSPA and the contracting authorities.  

37  In  accordance  with  the  Association  Agreement  the  first  approximation  stage  relates  to  the  setting  up  the 
institutional framework: executive body at central government level to be responsible for coherent policy in 
all  areas  related  to  public  procurement  and  an  impartial  and  independent  body  tasked  with  the  review  of 
decisions  taken  by  the  contracting  authorities  and  entities  as  well  as  introduction  of  basic  standards 
regulating the award of contracts. 

104 

 
 
 
 
 
 
 
                                                 
Intellectual Property  

The implementation of the IPR Chapter of the DCFTA has started and Georgia has brought 
the  majority  of  its  laws  in  compliance  with  the  DCFTA.  Still  the  exhaustion  regime  of 
Georgia  is  not  line  with  the  DCFTA  and  some  copyright  related  provisions  need  to  be 
improved, including the collective right management system. As one of the deliverables of the 
meeting between the Government of Georgia and the Commission on 21 November 2018, the 
Commission decided to allocate resources to a cooperation programme between the Georgian 
Intellectual  Property  Centre  (Sakpatenti)  and  the  European  Intellectual  Property  Office, 
aiming  at  e.g.  aligning  the  Georgian  laws  and  standards  concerning  registration  and 
management of IP rights with EU norms and standards. 

Rules of Origin 

On 1 July 2017 Georgia joined the  Convention  on pan-Euro-Mediterranean preferential 
rules of origin38. The joint Decision on the linkage of the rules of origin in bilateral trade to 
the Protocol of PEM Convention39 was adopted during the 4th Customs Sub-Committee which 
took place in Brussels on 20 March 2018 and the linkage entered into force on 1 June 2018. 
(report published on 6 June 2018). This allows Georgia to benefit from diagonal cumulation 
of origin with the EU and Turkey as of 1 June 2018, and be better integrated in regional trade 
flows.  

Energy 

Georgia officially became a Contracting Party to the Energy Community Treaty on 1 July 
2017.  The  Protocol  of  Accession  to  the  Energy  Community  Treaty  commits  Georgia  to 
approximate  its  legislation  to  key  energy  and  energy-related  EU  acquis  between  2017  and 
2020. 

Trade Facilitation 

On 4 January 2016, Georgia ratified the WTO Trade Facilitation Agreement which is in 
force since February 2017 and contains commitments on simplifying border procedures and 
modernisation  of  customs  techniques  and  instruments  and  customs  control.  An  unresolved 
issue  for  the  time  being  is  the  application  of  the  DCFTA  to  the  breakaway  territories  of 
Abkhazia  and  Southern  Ossetia.  According  to  Article  429  (Territorial  application)  of  the 
Association Agreement, conditions enabling effective implementation of the DCFTA need to 
be created in either Abkhazia or South Ossetia for the Association Agreement/DCFTA to be 
able to be applied in those areas.  

38  The  Decision  of  the  Joint  Committee  of  the  PEM  Convention  on  Georgia  accession  was  published  in  OJ 

L 329, 3.12.2016 http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:22016D2126 

39  Council  Decision  (EU)  2017/2433  of  18  December  2017  on  the  position  to  be  adopted  on  behalf  of  the 

European Union within the Customs Sub-Committee; OJ L 344, 23.12.2017, p. 21. 

105 

 
 
 
 
 
                                                 
6. 

EU SUPPORT TO DCFTA IMPLEMENTATION 

EU Support to DCFTA-related reforms 

The  EU  supports  the  implementation  of  the  DCFTA  through  technical  and  financial 
assistance.  A  Sector  Reform  Contract  focusing  on  the  transposition  of  relevant  EU  acquis 
(particularly  in  the  area  of  SPS,  TBT,  public  procurement),  capacity  building  of  relevant 
institutions  to  implement  the  DCFTA  (such  as  the  Competition  Authority  or  the  Market 
Surveillance Authority) and support to SME development to increase exports has been put in 
place.  This  is  complemented  by  technical  assistance  focusing  on  cluster  and  value  chain 
development and support to the SME regulatory/institutional framework as well as Twinning 
projects by Member States to share their experience in the transciption of EU law.  

DCFTA  implementation  is  also  supported  by  policy  conditionality  of  the  EU’s  macro-
financial assistance (MFA) to Georgia. Conditions of the current MFA operation approved in 
2018  include  public  procurement  and  labour  market  measures  (the  establishment  of  an 
independent  review  body  in  the  area  of  public  procurement  and  the  completion  of  the 
employment-related legal framework). 

An EU Twinning Project “Supporting the Accession of Georgia to the Conventions on Transit 
Area and Launching New Computerized Transit System (NCTS)" launched by the consortium 
Finland-Poland-Latvia  in  March  2018  aims  to  support  the  Revenue  Service,  Ministry  of 
Finance of Georgia. 

EU Support for SMEs 

SMEs in Georgia are benefitting from the EU support under the DCFTA Facility for SMEs, 
which aims at increasing SMEs competitiveness, easing their access to finance, helping them 
to  seize  new  trade  opportunities  and  comply  with  new  food  safety,  technical  and  quality 
standards,  as  well  as  with  environmental  protection  measures  implied  by  the  DCFTA 
implementation.   

The DCFTA Facility  consists  of a set  of programmes implemented principally by European 
Bank  for  Reconstruction  and  Development  and  European  Investment  Bank.  SMEs  are 
benefiting from the EU support through four types of instruments:  

1) risk sharing mechanisms (mostly first loss portfolio guarantees for local banks);  
2) currency hedging (interest rate subsidies for loans in local currency);  
3) investment incentives (grants provided to SMEs combined with investment loans to 
upgrade machinery or production processes in line with the EU standards) and  
4)  technical  assistance  (business  advice  to  SMEs  and  local  banks,  assessment  of  the 
compliance with the EU standards, capacity building for local banks).  

7.  CONCLUSIONS AND OUTLOOK 

After  four  years  of  the  DCFTA  implementation  external  trade  and  FDIs  remain  key  for  the 
overall economic growth of a small open economy like Georgia. Economic uncertainty in 
some  key  trading  partners  in  the  region  (Russia,  Turkey  and  Azerbaijan)  and  the  recovery 

106 

 
 
 
 
 
 
 
 
from the recession in the EU created a relatively fragile but positive external environment for 
Georgia’s trade in 2018.  

The  EU  is  constantly  encouraging  and  assisting  Georgia  to  accelerate  the  necessary 
reforms, notably in the SPS area, as these reforms would not only enhance food safety in the 
country but  also facilitate and allow further access for Georgian agricultural products to the 
EU  market.  In  the  medium  term,  the  benefits  from  approximation  to  the  EU  acquis  should 
translate into an increase of bilateral trade, and especially growth in Georgia’s exports to the 
EU. Georgia has  an untapped trade potential not  only in  relation  to  trade  in  goods, but  also 
services and public procurement. The DCFTA will help Georgia to diversify its economy and 
enhance regional trade with its neighbours and the broader paneuromed region. 

The continuation of the DCFTA implementation, notably through legal approximation (that 
has  a  dynamic  character  due  to  developments  in  the  EU  acquis)  and  institutional  capacity 
building will require continuous efforts by Georgian authorities as well as on the EU side in 
terms  of  assisting  Georgia  in  this  process.  To  this  end  the  Association  Committee  in  Trade 
configuration  as  well  as  the  specialised  Sub-Committees  established  under  DCFTA  remain 
the main fora for discussions and comprehensive evaluation of that progress. Simultaneously, 
in order to effectively enhance exports from Georgia, the EU delivers financial and technical 
support  to  the  reforms  and  administrative  capacity  building  in  trade-related  areas  like  TBT 
(e.g. standardisation and metrology infrastructure; accreditation and surveillance system), SPS 
(notably in  institutional  capacity building in  food safety control) as well as in  promotion  of 
producers organisations, value chain optimisation and the SMEs development. Improving the 
enforcement  and  governance  of  labour  standards  and  working  conditions  is  an  important 
factor for Georgia to fully reap the benefits of the DCFTA and of the Assocation Agreement.  

7. 

STATISTICS 

Merchandise trade EU28 2014-2018 

2014 

2015 

2016 

2017 

2018 

EU28 trade with Georgia (mio €) 

Imports 
Exports 
Balance 

Share Georgia in EU28 trade with Extra-EU28 

659 
1.909 
1.250 

735 
1.846 
1.111 

Imports 
Exports 
Total (I+E) 

Imports 
Exports 
Total (I+E) 

0,0% 
0,1% 
0,1% 

0,0% 
0,1% 
0,1% 
Share EU28 in trade Georgia with world 
32,6% 
29,3% 
31,9% 

27,6% 
21,7% 
26,1% 

Source Trade G2 Statistics/ISDB  
Trade EU28: Eurostat COMEXT;  Trade Georgia: IMF Dots 

521 
1.969 
1.448 

0,0% 
0,1% 
0,1% 

663 
2.018 
1.355 

0,0% 
0,1% 
0,1% 

30,4% 
26,8% 
29,6% 

27,7% 
24,0% 
26,7% 

653 
2.114 
1.460 

0,0% 
0,1% 
0,1% 

28,8% 
21,8% 
26,9% 
25-mars-
19 

Total merchandise trade EU28 with Georgia (mio €) 

Georgia 

Imports 
Exports 

2017 

2018 

663 
2.018 

653 
2.114 

Growth 

mio € 
-10 
95 

annual 
% 
-1,5% 
4,7% 

107 

 
 
 
 
 
  
 
  
  
  
  
 
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
Balance 
Total trade 
Source Trade G2 Statistics/ISDB from Eurostat COMEXT 

1.355 
2.682 

1.460 
2.767 

106 
85 

3,2% 

Agrifood trade EU28 with Georgia (mio €) 

Georgia 

2017 

2018 

Growth 

annual 
% 
-1,1% 
-0,2% 

-0,5% 

Imports 
Exports 
Balance 
Total trade 
Source Trade G2 Statistics/ISDB from Eurostat COMEXT 

mio € 
-1 
0 
1 
-2 

116 
247 
130 
363 

118 
247 
130 
365 

NAMA trade EU28 with Georgia (mio €) 

Georgia 

EU28 imports 
EU28 exports 
Balance 
Total trade 
Source Trade G2 Statistics/ISDB from Eurostat COMEXT 

2017 

2018 

546 
1.771 
1.225 
2.317 

537 
1.867 
1.330 
2.403 

Growth 

mio € 
-9 
96 
105 
87 

annual 
% 
-1,7% 
5,4% 

3,7% 

Services trade EU28 with Georgia (mio €) 

Georgia 

2016 

2017 

Imports 
Exports 
Balance 
Total trade 
Source Trade G2 Statistics/ISDB from Eurostat BOP statistics 

mio € 
78 
75 
-3 
153 

365 
492 
127 
857 

287 
417 
130 
704 

Growth 

annual 
% 
27,1% 
17,9% 

21,7% 

Services trade EU28 with Georgia (mio €) 

Imports 
Exports 
Balance 
Total trade 
Source Trade G2 Statistics/ISDB from Eurostat BOP statistics 

2013 

2014 

2015 

2016 

2017 

292 
494 
202 
786 

272 
597 
325 
869 

292 
567 
275 
860 

287 
417 
130 
704 

365 
492 
127 
857 

Inward 
Outward 

FDI EU28 with Georgia (mio €) 

2013 

2014 

2015 

2016 

2017 

FDI Stocks 

97 
3.101 

89 
3.984 

141 
3.918 

37 
1.636 

150 
1.610 

FDI Flows 

Inward 
Outward 
Source Trade G2 Statistics/ISDB from Eurostat BOP statistics 

-5 
154 

5 
218 

-12 
209 

-76 
-1.797 

117 
115 

108 

 
 
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
 
 
 
 
ANNUAL  REPORT  ON  THE  IMPLEMENTATION  OF  THE  DEEP  AND 
COMPREHENSIVE  FREE  TRADE  AREA  (DCFTA)  BETWEEN  THE  EU  AND  ITS 
MEMBER STATES AND MOLDOVA  

The  Deep  and  Comprehensive  Free  Trade  Area  (DCFTA)  between  the  EU  and  Moldova  as 
the main economic pillar of the Association Agreement (AA)40 has been provisionally applied 
since 1 September 2014 and fully entered into force on 1 July 2016. The DCFTA (Title V of 
the AA) also applies to Transnistria from 1 January 2016, as per Decision No 1/2015 of the 
EU-Republic of Moldova Association Council. The EU monitors the implementation of these 
arrangements  and  its  adherence  by  the  Republic  of  Moldova  and  Transnistria  on  a  yearly 
basis,  and  progress  is  assessed  in  the  framework  of  the  annual  Association  Committee  on 
Trade configuration. 

This  third  report  on  the  implementation  of  the  EU-Moldova  DCFTA  has  been  prepared  in 
accordance with the provisions of the Regulation implementing the safeguard clause and the 
anti-circumvention  mechanism.41  In  addition  to  providing  an  overview  of  the  evolution  of 
EU-Moldova trade, information about the application of trade defence measures and the anti-
circumvention mechanism has been included.  

1 

EVOLUTION OF TRADE 

1.1 Trade in goods overall 

The scope of trade liberalisation 

At the start of the DCFTA provisional application on 1 September 2014, the European Union 
eliminated  all  customs  duties  on  goods  imported  from  Moldova  except  six  agricultural 
products i.e. apples, table grapes, plums, grape juice, garlic and tomatoes, that are subject to 
annual  duty-free  Tariff  Rate  Quotas  (TRQs).  Further  to  that,  the  EU  has  eliminated  the  ad 
valorem component of the import duty for twenty agricultural products (the entry prices for 
fruits and vegetables remain). Import of 14 groups of agricultural and processed agricultural 
products (pig meat, poultry, dairy products and processed dairy products, eggs and albumins, 
cereals and processed cereals, sugar and sugar processed goods, cigarettes and sweet corn) is 
duty-free  but  monitored  under  anti-circumvention  mechanism  (if  the  imports  to  the  EU 
reaches certain agreed levels and Moldova fails to provide the origin of these imports, the EU 
may temporarily suspend the preferential treatment of the products concerned). 

Moldova liberalised import duties on 93.6% of tariff lines for goods imported from the EU at 
the start of provisional application of the DCFTA. One per cent of tariff lines (for agricultural 

40  The  EU-Republic  Moldova  Association  Agreement  was  published  in  OJ  L 260,  30.08.2014.  http://eur-

lex.europa.eu/legal-content/EN/TXT/PDF/?uri=OJ:L:2014:260:FULL&from=EN  

41  Regulation (EU) No 2016/400 of the European Parliament and of the Council of 9 March 2016 implementing 
the  safeguard  clause  and  the  anti-circumvention  mechanism  provided  for  in  the  Association  Agreement 
between the European Union and the European Atomic Energy Community and their Member States, of the 
one part, and the Republic of Moldova, of the other part (OJ L 77, 23.03.2016). According to Article 14 of 
the Regulation, the Commission shall submit an annual report to the European Parliament and to the Council 
on  the  application  and  implementation  of  this  Regulation  and  Title  V  of  the  Agreement.  Furthermore,  the 
report  shall,  inter  alia,  include  information  about  the  application  provisional  and  definitive  safeguard 
measures, prior surveillance measures, the termination of investigations and proceedings without measures, 
and  the  application  of  the  anti-circumvention  mechanism.  The  report  shall  also  set  out  a  summary  of  the 
statistics and the evolution of trade with Moldova. 

109 

 
 
 
 
                                                 
products) are covered by preferential  TRQs (pork meat,  poultry meat,  dairy, prepared meat, 
sugar).  Customs  duties  on  4.8%  of  products  in  terms  of  tariff  lines  are  to  be  liberalised  in 
stages (3, 5, 7 or 10 years; the longest liberalisation period applies to agri-food products). This 
schedule  of  tariff  elimination  reflects  an  asymmetric  market  opening  for  the  benefit  of 
Moldova.  

Overall evolution of EU-Moldova trade in goods 

The  EU  in  2018  remained  a  key  trade  partner  of  Moldova,  accounting  for  56%  of  its 
total trade  (70% of total exports and 50% of Moldova’s total imports), followed by Russia 
(8%) and Belarus (3%). Moldova is EU’s 61st trade partner. In 2018, the EU maintained a 
trade surplus with Moldova which increased to €880 million.  

In  2018,  the  total  trade  between  the  EU  and  Moldova  grew  by  14%  compared  to  2017  to 
slighlty over €4.6 billion. Over the reporting period, EU exports increased by 13% from €2.44 
billion to €2.76 billion while EU imports from Moldova increased by 16% from €1.61 billion 
to €1.88 billion in that period. This has been driven by economic growth as well as a better 
export performance of Moldovan companies as concerns machinery and appliances, vegetable 
products, textile products and base metals.  

The  number  of  companies  involved  in  trade  with  the  EU  has  continued  to  increase,  with 
approximately 1 748 Moldovan companies exporting to the EU in 2017 up from 1 360 firms 
engaged in exporting to the EU in 2016. This figure diminished slightly in 2018 to 1 734. 

Sectoral structure of EU-Moldova trade in goods 

The  main  product  categories  (according  to  the  Sections  of  the  Harmonized  System 
Nomenclature  –  HS)  exported  by  the  EU  to  Moldova  in  2018  were  machinery  and 
appliances,  mineral  products,  chemical  products  and  transport  equipment.  Machinery 
and appliances and mineral products rose by respectively 26% (the main increase) and 13%. 
Exports  of  chemical  products  increased  by  7%  to  €296  million  while  transport  equipment 
exports  saw  an  increase  of  11%  to  €261 million.  The  signs  of  recovery  in  EU  exports 
witnessed in 2016 (after a general decline of EU exports in certain key sectors in 2014-2015 
due  in  large  part  to  the  weak  performance  of  the  Moldovan  economy)  were  therefore 
confirmed  and  sustained  in  2017  and  2018.  This  is  evidenced  both  by  the  general  13% 
increase in EU exports to Moldova in 2018 (following a 2% decrease in 2016) as well as by 
the increase of EU exports across most of the main HS product categories (notable exceptions 
are exports of wood, which decreased by 16%, and live  animals and animal producs, which 
decreased by 2%). 

The  main  product  categories  in  EU  imports  from  Moldova  in  2018  were  machinery  and 
appliances,  vegetable  products,  textiles  and  textile  articles  and  base  metals.  Machinery 
accounted  for  a  large  part  of  Moldova’s  export  growth  to  the  EU  due  to  the  trade  and 
investment  opportunities  in  specific  sectors  such  as  the  manufacturing  of  wiring  harnesses.  
From the categories of products most widely imported from Moldova, the highest increase in 
imports  was  for  transport  equipment  (+102%)  although  remaining  at  a  low  level  of 
€11 million. 

Bilateral  trade  in  non-agricultural  products  has  experienced  an  increase  of  19%  (to 
€3.76 billion)  in  2018,  with  EU  imports  of  non-agricultural  goods  growing  by  31%  (to 

110 

 
 
 
 
 
 
€1.29 billion)  and  EU  exports  of  such  goods  increasing  by  14%  (to  €2.5 billion).  Trade  has 
grown  considerably  in  plastics,  textiles,  metals,  machinery  but  also  ceramics  and  toys. 
Similarly, the EU has become a major market for Moldova’s Information and Communication 
Technology services.  

1.2 Trade in agricultural goods 

In  2018,  agricultural  goods  accounted  for  19%  (€873 million)  of  total  bilateral  trade  with 
Moldova  while  non-agricultural  products  represented  81%  (€3.8 billion).  In  terms  of  EU 
imports  from  Moldova  in  2018,  the  share  of  agricultural  goods  stood  at  31%  while  non 
agricultural  goods  represented  69%  of  imports.  Agricultural  goods  constituted  10%  of  EU 
exports to Moldova, with 90% of EU exports being non-agricultural.  

While  trade  in  agri-food  products  with  Moldova  had  gradually  increased  up  to  2017  (it 
increased  by  25%  in  the  period  2016-2017)  to  the  benefit  of  both  sides,  it  has  slightly 
decreased in 2018 by 4% (€908 million to €873 million). EU imports of agricultural products 
from Moldova have decreased by 7% (€588 million) while EU exports have increased by 5% 
(€285 million). 

The main EU agricultural exports to Moldova included oilseeds, spirits and liqueurs, pork, pet 
food  and  other  food  preparations.  Key  EU  imports  from  Moldova  included  oilseeds,  wheat 
and other cereals, tropical fruits and nuts and vegetable oils. Imports of most of these products 
decreased in 2018 compared to 2017 (e.g. a decrease of 30% for wheat and 16% for oilseeds), 
while imports of other cereals increased (85%). 

Review clause for agricultural products 

The  EU  and  Moldova  agreed  on  a  review  clause  which  stipulates  that  three  years  after  the 
entry  into  force  of  the  DCFTA,  the  Parties  may  consider  accelerating  and  broadening  the 
scope of the elimination of customs duties on their bilateral trade.  

In  this  regard,  Moldova  made  a  request  to  increase  the  volumes  for  Tariff  Rate  Quotas 
(TRQs)  and  as  a  separate  exercise,  the  anti-circumvention  thresholds  under  the  DCFTA  for 
certain  agricultural  products  at  the  meeting  of  the  Association  Committee  in  Trade 
configuration  (ACTC)  in  October  2017,  thus  triggering  the  third  year  review  clause 
mentioned  above.  The  Commission  has  examined  this  proposal,  which  has  been  subject  to 
talks  with  the  Moldovan  side  (a  first  informal  discussion  took  place  in  the  margins  of  the 
ACTC, last October 2018). This review may result in the modification of Annex XV of the 
Agreement through a joint Decision of the ACTC.   

Anti-circumvention mechanism for agricultural products 

Fourteen  product  categories  of  agricultural  and  processed  agricultural  products  included  in 
Annex  XV-C  can  be  imported  duty-free  from  Moldova  into  the  EU;  their  imports  are 
monitored  under  anti-circumvention  mechanism.  This  means  that  the  EU  may  temporarily 
suspend the preferential treatment of the products concerned if the imports into the EU reach 
certain  trigger  volumes.  If  those  imports  reach  100%  without  justification,  the  EU  may 
temporarily suspend the preferential treatment. In 2018, those levels were exceeded for wheat, 
maize  and  processed  cereals  (ethanol).  The  Moldovan  authorities  provided  due  explanation 
about this in the context of the above mentioned review.  

111 

 
 
 
 
 
Use of Tariff Rate Quotas (TRQs) 

In accordance with Annex XV-B of the Association Agreement the EU applies annual duty-
free TRQs for 6 agricultural products imported from Moldova: tomatoes, garlic, table grapes, 
apples, plums and grape juice. In 2018, only the TRQs for table grapes and plums were fully 
used (with a 100% utilisation for both products).  

Utilisation of TRQs for imports from Moldova to the EU in 2018 

Product 

TRQ volume (t) 

Imported volume 
(t) 

TRQ use 

Tomatoes, fresh or chilled 

Garlic, fresh or chilled 

2.000 

220 

39,75 

2,0% 

0 

0,0% 

Table grapes, fresh 

10.000 

10.000 

100,0% 

Apples, fresh  

Plums, fresh 

Grape juice  

Source: DG TAXUD 

40.000 

1.858,88 

4,6% 

10.000 

9.899,39 

99,0% 

500 

0 

0,0% 

Moldova  grants  six  duty-free  TRQs  for  agricultural  products  exported  by  the  EU  (pork  and 
poultry meat, dairy, processed meat, sugar and sweeteners). All EU exports were in excess of 
the quota amount in 2018 except for sweeteners.  

Utilisation of TRQs for EU exports to Moldova in 2018  

Pork 
Poultry meat 
Dairy 
Processed meat 
Sugar 
Sweeteners 
Source: European Commission 

TRQ volume (tons)  EU exports (tons)  TRQ use 
4 000 
4 000 
1 000 
1 700 
5 400 
640 

4 907  100% 
8 280  100% 
16 529  100% 
2 488  100% 
13 659  100% 
319  50% 

1.3 Establishment, trade in services and investments 

Market access related to establishment and trade in services 

Approximation  to  the  EU  acquis  is  foreseen  in  four  services  sectors  (postal  and  courier 
services,  telecommunication  services,  financial services and international  maritime transport 
services).  Moldova  recognised  the  importance  of  gradual  (lasting  between  3  and  8  years) 

112 

 
 
 
 
 
approximation  of  its  existing  and  future  legislation  to  the  list  of  the  EU  acquis  (in  case  of 
financial services also to the international best practice and standards). 

Trade in Services 

In  2017,  total  trade  in  services  between  the  EU  and  Moldova  increased  by  3.4%  when 
compared to 2016 (i.e., up from €1.3 billion). Over the same period of time,  EU exports of 
services  to  Moldova  decreased  by  1.3%  (from  €483 million  to  €477 million)  while  EU 
imports increased by 6.4% (rising from €747 million to €795 million).  

While import and export values had been evolving mostly in tandem with a slight surplus for 
the EU, this was reversed in 2016, where the value of imports from Moldova into the EU was 
higher  than  the  value  of  exports  from  the  EU  to  Moldova.  This  trade  deficit  in  services 
slightly widened in 2017. The main sub-sectors of services exported by Moldova to the world 
remain transport, travel, ICT and other business services as well as manufacturing services on 
physical inputs owned by others. In terms of imports, the most important sub-sectors belong 
to transport and travel-related services. 

Foreign Direct investment (FDIs) 

In  2017,  EU  FDI  stocks  in  Moldova  remained  at  similar  levels  as  in  previous  years  and 
amounted to around € 1 billion, with the EU ranking as a major foreign investor representing 
over 60% of overall FDI stocks. EU companies are present in many sectors (including energy, 
financial sector, industry, retail trade, agriculture and services). According to data provided by 
Moldova,  5 712  active  companies  with  foreign  investments  coming  from  the  EU  are 
registered  in  Moldova.  These  are  mainly  from  Romania  (1 765),  Italy  (1 399),  Germany 
(427), Cyprus (306) and France (242).  

As  in  2016,  direct  investment  flows  from  the  EU  also  increased  in  2017  (to  €105 million), 
following a decrease in 2015 and 2014 as a result of the banking fraud scandal.  

2. 

ACTIVITIES OF THE IMPLEMENTATION BODIES  

2.1 Joint decisions of the Association Bodies 

In 2018, the following amendments/updates have been adopted by the Association bodies in 
2018 or are in the process of being adopted: 

  Customs: Annex XXVI on approximation of customs legislation42 

  Services: Annex XXVIII-A (Rules applicable to financial services), Annex XXVIII-B 
(Rules  applicable  to  telecommunication  services),  and  Annex  XXVIII-D  (Rules 
applicable to international maritime transport)43 

42  Decision  No  1/2018  of  the  EU-Republic  of  Moldova  Association  Council  of  3  May  2018  as  regards  the 
amendment of Annex XXVI to the Association Agreement between the European Union and the European 
Atomic Energy Community and their Member States, of the one part, and the Republic of Moldova, of the 
other part [2018/984] , OJ L 176, 12.07.2018. 
https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:22018D0984  

43  Council Decision (EU) 2017/0338 of 9 February 2018 on the position to be taken on behalf of the European 
Union,  in  the  Association  Committee  meeting  in  Trade  configuration  established  by  the  Association 

113 

 
 
 
 
                                                 
  Public  Procurement:  Decision  giving  a  favorable  opinion  regarding  Moldova’s 

comprehensive roadmap on public procurement44 

2.2 Meetings of the Association Bodies 

The  following  section  contains  an  overview  of  the  most  important  meetings  of  the 
implementation bodies in 2018.  

The  5th  Association  Committee  in  Trade  Configuration  met  on  19  October  2018.  The 
Parties  reviewed  progress  made  in  all  DCFTA  chapters,  including  trade  in  goods,  SPS 
measures,  intellectual  property  rights,  customs  and  trade  facilitation,  technical  barriers  to 
trade,  public  procurement,  establishment,  trade  in  services  and  electronic  commerce,  trade-
related energy, competition, trade and sustainable development. The Committee also assessed 
trade performance, trade policy aspects and business climate issues in bilateral trade relations.  

The  Moldovan  authorities  underlined  their  commitment  to  respect  the  rule  of  law  to  the 
benefit of its citizens and the business environment, and also in order to gain the confidence 
of the EU. Moldova presented its  latest  achievements as  regards the evolution  of trade with 
the EU and harmonisation with the acquis in intellectual property, public procurement, trade 
in services, quality infrastructure, energy, competition, etc.  

The  EU  side  welcomed  the  legislative  efforts  made  by  Moldova  so  far  to  implement  the 
DCFTA across different areas and stressed the need for further reform efforts to be made in 
order to reap the full benefits of the Agreement. It also recalled the positive trade dynamics 
since the start of application of the DCFTA, confirmed in the previous year (2017) by a 20% 
increase  in  bilateral  trade.  The  EU  nevertheless  expressed  concern  about  the  particular 
circumstances under which the ACTC was taking place this year, and which have a negative 
impact  on  the  stability  and  certainty  of  the  Moldovan  legal  framework,  its  business  and 
investment climate and, ultimately, on the results of the DCFTA.  

Both sides underlined the importance of EU financial assistance for the implementation of the 
DCFTA  which  aims  at  supporting  both  the  Moldovan  administration  and  the  companies 
(notably  SMEs)  in  aligning  with  the  acquis  and  reaping  the  benefits  of  the  Association 
Agreement.  

The  4th  Sub-Committee  on  SPS  measures  (SPS  Sub-Committee)  met  on  12  July  2018  in 
Brussels.  The  Moldovan  authorities  presented  progress  in  the  implementation  of  the 
operational conclusions from the previous Sub-Committee meeting of June 2017 and updates 
as  regards  the  implementation  of  the  DCFTA  SPS  Chapter  and  institutional  capacity  of  the 
Food Safety Agency (ANSA). The EU underlined the importance for Moldovan authorities to 
meet the deadlines foreseen in Annex XXIV-B of the DCFTA ranging from 2014-2019, and 

Agreement  between  the  European  Union  and  the  European  Atomic  Energy  Community  and  their  Member 
States, of the one part, and the Republic of Moldova, of the other concerning the update of Annex XXVIII-A 
(Rules applicable to financial services), Annex XXVIII-B (Rules applicable to telecommunication services) 
and Annex XXVIII-D (Rules applicable to international maritime transport) to the Agreement. 

44  Decision No 1/2018 of the EU-Moldova Association Committee in Trade configuration of 16 April 2018 
giving a favourable opinion regarding the comprehensive roadmap on public procurement [2018/955], OJ 
L 168/10, 5.7.2018.  https://eur-lex.europa.eu/legal-
content/EN/TXT/?toc=OJ%3AL%3A2018%3A168%3ATOC&uri=uriserv%3AOJ.L_.2018.168.01.0010.01.
ENG  

114 

 
 
 
 
 
 
 
                                                                                                                                                         
 
to allocate human resources in order to meet this priority. Discussions also touched upon the 
need  for  the  laboratory  network  to  be  strengthened  and  extended,  the  negotiation  on 
veterinary-sanitary certificates for export from the EU to Moldova, Moldova’s application for 
export  of  poultry  meat  and  eggs  as  well  as  continuing  the  working  closely  together 
combatting African swine fever (ASF). 

The 4th Sub-Committee on Customs and Trade Facilitation took place on 21-22 November 
2018. Both sides welcomed the amendment to Annex XXVI referring to the Union Customs 
Code for harmonisation and the EU informed about the implementation phases of the Union 
Customs Code and the related IT systems. Moldova informed that the national legislation on 
Authorised Economic Operator (AEO) in approximation to EU provisions applies since 2017, 
with  currently  117  AEOs  in  the  Republic  of  Moldova,  and  mentioned  the  successful  pilot 
project at RO-MD crossing Leuseni-Albita with unilateral recognition of EU AEOs.  

The  4th  Geographical  Indications  (GIs)  Sub-Committee  met  on  18  October  2018  and 
discussed  the  changes  in  the  GIs  system  in  the  Common  Agricultural  policy  post  2020,  the 
respective agreements on GIs with third partners, the enforcement of the protection of GIs by 
customs, the update of the GIs lists, as well as the promotional events organised by Moldova 
to raise awareness and encourage producers to engage in the GIs system. Areas of cooperation 
and technical assistance as well as progress made by Moldova as regards the alignment to the 
EU acquis were also discussed.  

As regards the 3rd TSD Sub-Committee meeting -see section 3 below.  

3. 

IMPLEMENTATION  OF  THE  PROVISIONS  ON  TRADE  AND 
DEVELOPMENT 

SUSTAINABLE 

The TSD Sub-Committee established under the TSD Chapter of the Association Agreement 
did not meet in 2018. Nonetheless, exchanges on labour, environmental and climate matters 
took place in a more informal nature and both sides discussed further cooperation on priority 
areas  such  as  labour  inspection  (including  operational  safety  and  health),  child  labour,  EU 
Eco-label scheme, the Convention on International Trade of Endangered Species (CITES) and 
climate change.  

The  EU  also  stressed  its  expectation  for  civil  society  in  Moldova  to  play  an  active  role  in 
overseeing the implementation of the TSD Chapter. The EU presented the new project it has 
put  in  place  to  support  the  functioning  of  civil  society  consultation  mechanisms  established 
under  TSD  chapters  of  its  trade  agreements  that  will  benefit  both  EU  and  Moldova’s 
Domestic Advisory Groups. 

4. 

PROGRESS MADE, MAIN OPEN ISSUES AND FOLLOW-UP ACTIONS 

4.1 SPS aspects  

In terms of SPS measures, the administrative capacity of the Food Safety Agency in verifying 
animal  health  and  animal  welfare  rules  has  been  strengthened.  However,  it  still  needs  to  be 
enhanced.  The  SPS  strategy  was  adopted  by  the  Government  in  December  2017  and  is 
currently being implemented (implementation period is from 2017-2022).  

115 

 
 
 
 
 
 
 
Moldova informed the EU that it is working to approximate to the EU acquis and that Tables 
of  Correspondence  will  be  shared  twice  a  year  to  follow  the  progress.  In  the  last  ACTC 
meeting in October 2018, Moldova informed that 60% of acquis have been approximated. 

Moldova has shown interest to be authorised to export poultry meat and table egg eto the EU. 
Moldova presented a draft roadmap describing how it will meet EU import requirements and, 
as a first step, the EU provided a questionnaire on the authorisation to export these products. 
Moldova will secure effective implementation of the roadmap and the Commission will carry 
out an audit for verifying Moldova’s readiness, when requested.  

Moldova implemented articles 186 and 187 of the DCFTA (respectively related to SPS import 
conditions  and  certification)  in  autumn  2018,  and  consequently  EU  business  operators 
reflected  on  the  website  of  EU  Member  States  are  now  eligible  for  exporting  to  Moldova 
without any further listing mechanisms being required.  

Thirteen  veterinary-sanitary  certificates  were  agreed  for  export  of  animal  products  and  live 
animals from the EU to Moldova. 

4.2 Technical Barriers to Trade 

Moldova  informed  that  all  acts  were  transposed  according  to  Annex  XVI.  Moldova  also 
indicated that it had decided to carry out a study in order to re-assess the priority sectors it had 
defined  for  the  future  negotiations  of  an  Agreement  on  Conformity  Assessment  and 
Acceptance of industrial products (ACAA). 

4.3 Customs and Trade Facilitation 

Moldova reported on its ongoing legislative efforts to align to the Union Customs Code and 
the  EU's  provisions  on  customs  enforcement  of  IPR.  The  amendment  to  the  Annex  XXVI 
(approximation  of  customs  legislation)  of  the  Association  Agreement  was  adopted  (via  a 
Decision of the Association Council on 3 May 2018) with a view to clarifying that Moldova 
needs  to  approximate  to  the  Union  Customs  Code,  not  the  repealed  Community  Customs 
Code. The EU side voiced its concerns with regard to the Law #172 that allows tax-free sales 
of fuel at land border crossing points, which will provide additional incentives for smuggling 
and is not in line with Directive 2008/118/EC. 

4.4 Energy  

With  regards  to  trade-related  energy,  Moldova  pursued  alignment  with  the  EU  acquis 
however concerns remain as regards the independence of the energy regulator ANRE and the 
transparency of the electricity procurement process. In this regard, the recommendations made 
by the Group of Observers for the 2018 Electricity Procurement in Moldova should be taken 
into account to improve the next procurement exercise. Full independence and impartiality of 
the  energy  regulator  is  crucial  to  ensure  proper  functioning  of  the  energy  market,  including 
proper  implementation  of  the  Third  EU  Energy  Package  and  secondary  legislation.  It  is 
equally important for Moldova to pursue work on the new distribution tariff methodology for 
electricity  in  consultation  with  all  concerned  stakeholders  and  the  Energy  Community 
Secretariat and comply with the settlement agreement reached with the company Gas Natural 
Fenosa in 2016. 

116 

 
 
 
 
 
4.5 Competition policy 

With  regards  to  competition  policy  Moldova  should  pursue  the  implementation  of  the 
National  Program on Competition and State Aid for  2017-2020. There are serious concerns 
with certain provisions contained in Moldova’s law on Domestic Trade which may limit free 
competition  on  the  market.  These  relate  in  particular  to  limitations  of  discounts  between 
traders and producers and an obligation for retailers to have at least 50% of local products on 
their  shelves,  contrary  to  DCFTA  and  WTO  provisions  on  national  treatment  of  goods.  If 
implemented, these provisions will severely affect the ability of European economic operators 
to conduct their business in Moldova. 

4.6 Intellectual Property Rights 

In the field of intellectual property rights (IPRs) progress has been registered in particular 
with  regards  to  the  usurpation  of  the  EU  Geographical  Indication  ‘Prosecco’.  In  December 
2017  and  April  2018,  the  Moldovan  Supreme  Court  of  Justice  has  issued  a  final  and 
irrevocable  decision  as  a  result  of  which  Moldovan  companies  now  have  a  ban  on  the 
production and placing on the market  of sparkling wine under the name ‘Prosecco’  and the 
corresponding  international  trademark  is  protected  in  Moldova.  Besides,  some  copyright 
related  provisions  need  to  be  improved  in  Moldova  (i.e.  terms  of  protection  for  music 
recordings and the collective right management). 

4.7 Services  

On  services,  in  international  maritime  transport  services  the  main  concerns  relate  to 
Moldova’s continued presence on the ‘black list’ of the Paris Memorandum of Understanding 
on Port State Control. Moldova has developed an Action Plan to exit the ‘black list’. Moldova 
informed  of  delays  in  the  implementation  of  the  newly  created  naval  agency,  which  is 
expected to be fully operational in 2019. Moldova has made progress in reforming its postal 
services  in  line  with  the  EU  acquis  (next  steps  foreseen  in  2019),  as  well  as  in 
telecommunications  services  with  the  adoption  of  a  law  on  electronic  communications. 
Moldova has also aligned with the 4th Anti-Money Laundering Directive. An update of Annex 
XXVIII-A  (Rules  applicable  to  financial  services  with  regards  to  anti-money  laundering), 
Annex  XXVIII-B  (Rules  applicable  to  telecommunication  services)  and  Annex  XXVIII-D 
(Rules  applicable  to  international  maritime  transport)  has  been  prepared  and  is  pending 
approval. 

4.8 Public Procurement  

Reforms  in  public  procurement  were  pursued  according  to  the  National  Reform  Plan  for 
Public Procurement for 2016-2020 including approximation of the legal framework to the EU 
acquis,  the  reform  of  the  Public  Procurement  Agency  and  progressive  introduction  of  e-
procurement  for  which  an  EU-funded  pilot  project  is  ongoing.  This  National  Reform  Plan 
received a favourable opinion via Decision No 1/2018 of the EU-Moldova ACTC of 16 April 
2018.  

117 

 
 
5. 

EU SUPPORT TO DCFTA IMPLEMENTATION 

5.1 EU Support to DCFTA-related reforms 

EU financial assistance is being provided to Moldova for the implementation of the DCFTA: 
it aims at supporting both the Moldovan administration and the companies (notably SMEs) in 
aligning with the acquis (i.e. norms for food products and non-food products) and reaping the 
benefits  of  the  Agreement.  Furthermore,  the  EU  supports  the  implementation  of  structural 
reforms  in  Moldova, including in  the  financial and the public administration sectors, with  a 
view  to  improving  the  business  environment  and  facilitating  trade.  The  EU  also  provides 
assistance  for  the  development  of  value  chains  (e.g.  textile)  and  of  economic  clusters  in 
Moldova. 

In  addition  to  regular  cooperation  assistance,  DCFTA  implementation  is  also  supported  by 
policy conditionality of the EU’s MFA to Moldova. Reforms supported by the current MFA 
operation approved in 2017 include, among others, reduction of the administrative burden for 
starting  and  operating  a  business,  facilitation  of  customs  procedures  (the  adoption  of  a  new 
Customs Service Law and a new Customs Code) as well as strengthening of the effectiveness 
and independence of the judiciary. 

5.2 EU Support for SMEs 

SMEs in Moldova are benefitting from the EU support under the DCFTA Facility for SMEs, 
which aims at increasing SMEs competitiveness, easing their access to finance, helping them 
to  seize  new  trade  opportunities  and  comply  with  new  food  safety,  technical  and  quality 
standards,  as  well  as  with  environmental  protection  measures  implied  by  the  DCFTA 
implementation.   

The DCFTA Facility  consists  of a set  of programmes implemented principally by European 
Bank  for  Reconstruction  and  Development  and  European  Investment  Bank.  SMEs  are 
benefiting from the EU support through four types of instruments:  

1)  risk  sharing  mechanisms  (mostly  first  loss  portfolio  guarantees  for  local 

banks);  

2)  currency hedging (interest rate subsidies for loans in local currency);  
3)  investment  incentives  (grants  provided  to  SMEs  combined  with  investment 
loans  to  upgrade  machinery  or  production  processes  in  line  with  the  EU 
standards) and  

4)  technical assistance (business advice to SMEs and local banks, assessment of 
the compliance with the EU standards, capacity building for local banks).  

6. 

OUTLOOK AND CONCLUSION 

Moldova  adopted  ambitious  legal  approximation  commitments  under  the  DCFTA  with 
extensive  work  required  in  the  first  four  years  of  implementation.  After  four  years  of 
implementation  of  the  trade  and  trade-related  part  of  the  Association  Agreement,  good 
progress  could  be  observed  in  terms  of  regulatory  approximation,  despite  political  and 
economic turbulence. With extensive support from the EU, Moldova has adopted a number of 
trade-related programmes, including for example a plan for SPS reform, roadmaps for the 
approximation  of  legislation  in  TBT  and  public  procurement  and  Moldova  has  also  taken 

118 

 
 
 
 
 
steps  in  preparing  to  adopt  a  new  Customs  Code  to  align  with  the  one  of  the  EU. 
Furthermore,  the  comprehensive  reform  of  the  public  administration  completed  in  2017 
should  enhance  the  capacity  and  functioning  of  key  regulatory  bodies  such  as  the  National 
Food  Safety  Agency  (ANSA),  National  Energy  Regulator  (ANRE),  National  Regulator  in 
Telecommunications (ANRCETI). 

The  DCFTA  has  helped  Moldova  to  gradually  enter  into  integrated  and  predictable 
international  value  chains,  and  engage  into  a  structural  transformation  of  its  trade  patterns 
towards a more sustainable model. Examples of successful companies testify to the benefits of 
the trade agreement with the EU both in the agricultural sector, producing wine, nuts, juices, 
fruit  conserves  and  alcohol,  and  in  the  industrial  sector,  making  electrical  cables,  apparel, 
shoes and smart electricity meters. 

The  EU  is  supporting  Moldova  to  align  with  and  implement  European  norms  for  food 
products and non-food products with a view to ensuring higher standards for the Moldovan 
consumers and workers and facilitating international trade. Furthermore, the EU is delivering 
financial  and  technical  assistance  in  the  implementation  of  structural  reforms  in  Moldova, 
including in the financial and the public administration sectors, with a view to improving the 
business  environment.  The  EU  has  also  strengthened  the  export  capacity  of  a  number  of 
Moldovan  companies  and  facilitated  their  access  to  finance:  over  2009-2017  in  Moldova, it 
has  provided  financial  support  for  5 000  enterprises,  supported  56 000  jobs  in  SMEs,  and 
created at least 1 735 new jobs. The EU also provides assistance for the development of value 
chains (e.g. textile) and of economic clusters in Moldova. 

However, further reform efforts are needed to ensure the respect of  the rule of law, to step 
up the fight against corruption, including high-level corruption, and to improve the business 
environment.  Implementation  and  enforcement  of  new 
laws  and  strengthening  of 
administrative capacity and relevant institutions should be the focus of attention. In particular, 
concrete progress is needed in the SPS area in meeting EU import requirements. Besides food 
safety  reform,  in  2019  focus  should  remain  on  technical  regulations  and  standards  (TBT), 
implementation of the customs code and of the public procurement strategy.  

Moldova should refrain from adopting any trade measures incompatible with the provisions of 
the  Association  Agreement/DCFTA.  In  this  regard,  the  specialised  Sub-Committees 
established  to  implement  the  DCFTA  will  continue  to  discuss  and  seek  solutions  to  the 
implementation and market access issues, with the aim to produce tangible results.  

In addition, for the DCFTA to deliver its full benefits, it is crucial for Moldova to  improve 
working  conditions,  the  business  and  investment  climate,  strengthen  the  rule  of  law  and 
ensure a level-playing field for all businesses and citizens alike. There is untapped potential in 
the  level  of  FDI  in  Moldova,  which  is  needed  to  modernise  and  diversify  the  economy. 
Pursuing  the  fight  against  corruption45,  ensuring  policy  stability  and  predictability,  and 
improving access to finance as well as governance of labour rights and standards is crucial to 
attract more investors and reap the full benefits of the DCFTA. 

45  According  to  the  2019  World  Bank  Doing  Business  Index,  Moldova  ranks  as  47th  out  of  190  countries 
(down  from  44th  in  2018).  Corruption  is  widely  spread  which  has  been  reflected  by  Transparency 
International in its 2017 Corruption Perceptions Index where Moldova has been ranked as 117th - out of 180 
countries  (+5  positions  in  comparison  to  the  previous  index)  -  with  the  score  33  (score  0  means  highly 
corrupted and 100 very clean). 

119 

 
 
 
 
 
 
 
                                                 
7. 

STATISTICS 

Merchandise trade EU28 2014-2018 
2015 

2014 

2016 

2017 

2018 

EU28 trade with Moldova (mio €) 

Imports 
Exports 
Balance 

Share Moldova in EU28 trade with Extra-EU28 

1.160 
2.352 
1.192 

1.223 
2.066 
842 

Imports 
Exports 
Total (I+E) 

Imports 
Exports 
Total (I+E) 

0,1% 
0,1% 
0,1% 

0,1% 
0,1% 
0,1% 
Share EU28 in trade Moldova with world 
49,0% 
61,4% 
53,1% 

48,6% 
54,1% 
50,3% 

Source Trade G2 Statistics/ISDB  
Trade EU28: Eurostat COMEXT;  Trade Moldova: IMF Dots 

1.320 
2.053 
733 

0,1% 
0,1% 
0,1% 

49,1% 
64,8% 
54,4% 

1.615 
2.447 
832 

0,1% 
0,1% 
0,1% 

49,4% 
65,7% 
54,9% 

1.877 
2.757 
880 

0,1% 
0,1% 
0,1% 

50,1% 
70,2% 
56,7% 
25-mars-19 

Total merchandise trade EU28 with Moldova (mio €) 

Moldova 

2017 

2018 

Growth 

Imports 
Exports 
Balance 
Total trade 
Source Trade G2 Statistics/ISDB from Eurostat COMEXT 

1.615 
2.447 
832 
4.063 

1.877 
2.757 
880 
4.634 

mio € 

262 
310 
48 
572 

Agrifood trade EU28 with Moldova (mio €) 

Moldova 

2017 

2018 

Growth 

Imports 
Exports 
Balance 
Total trade 
Source Trade G2 Statistics/ISDB from Eurostat COMEXT 

634 
271 
-363 
906 

mio € 

-46 
13 
59 
-33 

588 
285 
-304 
873 

NAMA trade EU28 with Moldova (mio €) 

Moldova 

2017 

2018 

Growth 

EU28 imports 
EU28 exports 
Balance 
Total trade 
Source Trade G2 Statistics/ISDB from Eurostat COMEXT 

981 
2.176 
1.195 
3.157 

mio € 

308 
297 
-12 
605 

1.289 
2.473 
1.184 
3.762 

Services trade EU28 with Moldova (mio €) 

Moldova 

2016 

2017 

Growth 

Imports 
Exports 
Balance 
Total trade 
Source Trade G2 Statistics/ISDB from Eurostat BOP statistics 

747 
483 
-264 
1.231 

mio € 

48 
-6 
-54 
42 

795 
477 
-318 
1.272 

annual 
% 
16,2% 
12,7% 

14,1% 

annual 
% 
-7,3% 
4,9% 

-3,6% 

annual 
% 
31,4% 
13,6% 

19,2% 

annual 
% 
6,4% 
-1,3% 

3,4% 

Services trade EU28 with Moldova (mio €) 

Imports 
Exports 
Balance 
Total trade 
Source Trade G2 Statistics/ISDB from Eurostat BOP statistics 

2013 

2014 

2015 

2016 

2017 

475 
524 
49 
999 

547 
582 
35 
1.130 

569 
588 
19 
1.157 

747 
483 
-264 
1.231 

795 
477 
-318 
1.272 

120 

 
 
  
  
  
  
  
  
  
 
  
  
  
  
 
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
FDI EU28 with Moldova (mio €) 
2014 

2013 
FDI Stocks 

2015 

2016 

2017 

Inward 
Outward 

Inward 
Outward 
Source Trade G2 Statistics/ISDB from Eurostat BOP statistics 

52 
941 

64 
1.001 

FDI Flows 

28 
263 

9 
37 

95 
1.128 

12 
24 

92 
957 

-5 
80 

100 
1.008 

-14 
105 

121 

 
 
  
  
  
  
  
  
 
 
 
PART III: FIRST GENERATION FREE TRADE AGREEMENTS 

122 

 
 
 
 
FIRST GENERATION FREE TRADE AGREEMENTS WITH MEDITERRANEAN 
PARTNERS 

123 

 
 
 
 
ANNUAL INFO SHEET ON THE IMPLEMENTATION OF THE EU-ALGERIA 
ASSOCIATION AGREEMENT 

1. 

INTRODUCTION 

The  EU  and  Algeria  established  a  free  trade  area  under  the  EU-Algeria  Association 
Agreement, signed in 2002, which entered into force on 1 September 2005 (hereinafter called 
‘the  Agreement’).  The  Agreement  provides  for  a  reciprocal  liberalisation  of  trade  in  goods, 
with elements of asymmetry in favour of Algeria, such as a 12 years’ transitional period for 
dismantling  tariffs  of  industrial  goods  and  a  selective  liberalisation  on  agriculture.  In  2012, 
the  EU  and  Algeria  agreed  to  review  the  timetable  of  tariff  dismantling  set  forth  in  the 
Association  Agreement  for  certain  products  (steel,  textile,  electronics,  and  automobiles), 
extending the transitional period from 12 to 15 years. Complete dismantling of tariffs and thus 
completion of the EU-Algeria free trade area is now scheduled for September 2020. Market 
opening for agricultural products so far only concerns a limited number of tariff lines subject 
to  full  liberalisation,  Tariff  Rate  Quotas  (TRQ)  or  a  reduction  of  Most  Favoured  Nation 
(MFN)  rates  respectively,  for  both  Parties.  The  Agreement  also  features  provisions  on 
investment and services, although less far-reaching than those on goods. So far, no additional 
negotiations have been opened on a Dispute Settlement Protocol.  

Algeria  is  a  member  of  the  Regional  Convention  on  pan-Euro-Mediterranean  preferential 
rules of origin,  which it signed in  2012 and notified the EU of ratification in January  2017. 
The  main  objective  of  the  Convention  is  to  provide  a  more  unified  framework  for  origin 
protocols. 

Algeria started negotiating its accession to the WTO  in 1987. The negotiation process with 
the Accession Working Party has, however, stalled since 2014.  

2. 

EVOLUTION OF TRADE 

2.1 Trade in Goods 

The  EU  was  Algeria’s  first  partner  for  merchandise  trade  in  2018,  accounting  for  59%  of 
Algeria’s total trade, before the United States and China (both 7%) and Brazil (4%). The EU 
is Algeria’s first export market. The EU is also Algeria’s first source of imports.  

Algeria  is  the  EU’s  first  trading  partner  amongst  all  Euromed  countries,  ahead  of  Morocco 
and Israel: in 2018, taking into account the eight Euromed countries with which the EU has 
trade agreements, 30% of EU imports originated from Algeria and 18% of EU exports went to 
Algeria.  This  privileged  position  is  mainly  due  to  the  prevalence  of  hydrocarbons  in  EU-
Algeria trade flows. 

Trade in goods between the EU and Algeria has intensified within the progressive free-trade 
area established by the Association Agreement: in 2018, the total two-way trade amounted to 
€40 billion, an increase  of 61%  from  its 2004 value of €24.8 billion, the  year preceding the 
entry  into  force  of  the  Association  Agreement.  Two-way  trade  peaked  in  2012  at 
€53.9 billion. 

124 

 
 
 
EU- Algeria trade in goods (in thousands of euro) 

EU Exports

EU Imports

EU imports of mineral fuels
(HS 27)

EU imports of agricultural
products

35.000.000

30.000.000

25.000.000

20.000.000

15.000.000

10.000.000

5.000.000

0

2
0
0
2

3
0
0
2

4
0
0
2

5
0
0
2

6
0
0
2

7
0
0
2

8
0
0
2

9
0
0
2

0
1
0
2

1
1
0
2

2
1
0
2

3
1
0
2

4
1
0
2

5
1
0
2

6
1
0
2

7
1
0
2

8
1
0
2

EU  exports  to  Algeria  grew  by  99%  between  2004  and  2018,  from  €9.5 billion  to 
€18.9 billion; the 2018 data, compared to the data from 2017 (€18.8 billion), marked a very 
small increase after several year of declining exports, from the peak of 2014 (€23.4 billion). 
In 2018, EU exports to Algeria were mainly made in the sectors of machinery and transport 
equipment  (37%),  agricultural  and  food  products  (14%)  and  chemicals  (12%).  The  four 
biggest EU exporters to Algeria were France, Spain, Italy and Germany. 

EU imports from Algeria are dominated by trade in the sectors of oil and gas (mineral fuels 
amount  to  96%  of  the  total  exports46  to  the  EU)  which  has  a  significant  impact  on  overall 
volumes. EU imports from Algeria rose 38% between 2004 and 2018, from €15.2 billion to 
€21 billion  (with  a  peak  of  €32.7 billion  in  2012,  which  represented  a  115%  increase 
compared  to  2004).  EU  imports  increased  (14%)  between  2017  and  2018,  with  imports 
reaching  €21 billion  compared  to  €18.5 billion  in  2017.  The  three  biggest  EU  importers  for 
Algeria in 2018 were Italy, Spain, and France.  

Because  of  the  absolute  preminence  of  oil  and  gas  in  Algeria’s  exports,  their  international 
price  has  a  direct  impact  on  the  value  of  Algerian  exports  and  on  the  merchandise  trade 
balance with the EU. Historically, Algeria shows a trade suplus, but the decline in oil and gas 
prices led to the shrinking of that surplus from 2012 to 2014, while in 2015 and 2016, the EU 
recorded  a  trade  surplus.  In  2017,  oil  and  gas  prices  began  to  rise,  consequently  Algeria’s 
trade balance with the EU reached the equilibrium in 2017 and became positive again in 2018 
(plus  €2.1  billion).  This  result  is  also  due  to  the  effect  of  several  trade  restrictive  measures 
that Algerian authorities have put in place since 2016 (see section 5). 

2.2 Trade in agricultural goods 

Total trade in agricultural products between the EU and Algeria increased by 170% between 
2003 (€1.0 billion) and 2018 (€2.7 billion). Between 2017 and 2018, EU agricultural exports 

46  Despite what the above graph suggests, mineral fuels continuously accounted for more than 90% of Algerian 
exports since the entry into force of the Agreement. The discrepancy between the lines ‘EU imports’ and ‘EU 
imports of mineral fuels’ prior to 2009 is presumably due to a change in the reporting methods. 

125 

 
 
 
 
 
 
 
                                                 
increased  by  10%,  going  from  €2.4  billion  to  €2.6  billion.  EU  imports,  on  the  other  hand, 
decreased by 28%, from €100 million to €74 million. In 2018, among our Euromed partners, 
Algeria was  the EU's  most important  destination for exports of agri-food products  (1.9% of 
total  exports).  The  main  product  categories  the  EU  exported  to  Algeria  were  wheat  (39%), 
milk powders & whey (11%), vegetable oils other than palm and olive oils (7%), infant food 
and  other  cereals,  flour,  starch  or  milk  preparations  and  live  animals  (6%).  EU  agricultural 
imports from Algeria were dominated by tropical fruit, fresh or dried, nuts and spices (51%) 
and  beet and cane sugar (18%).  

Regarding agricultural tariff ate quotas (TRQ), Algeria’s 2018 fill rate was low for a limited 
rnumber  of  products  such  as  couscous  (33%  -  though  an  improvement  if  compared  to  the 
value of 7% which was recored in 2017), olive oil (7%), seed potatoes (5%) and pasta (3%). It 
remained nil or close to zero for the majority of products, such as tomato juice, fruit juices, 
apricots, strawberries or wine. 

2.3 Trade in Services and Investment 

The total trade in services between the EU and Algeria remained relatively stable from 2010 
to 2017, going from €4.6 billion to almost €4.9 billion. In 2017, Algeria exported €1.6 billion 
in services to the EU and imported €3.3 billion from the EU. 

FDI flows between the EU and Algeria remained volatile between 2013 and 2017, with most 
investments  coming  from  the  EU  to  Algeria  (€1.3 billion  in  2017,  for  the  total  stock  of  EU 
FDI of €14.9 billion). Algerian investments  in  the EU  are extremely low: the stock in  2017 
levelled at €1.8 billion, more or less the same level of 2016. The weakness of EU-Algeria FDI 
flows is  mainly  due to investors’ concerns regarding the business  climate in  the  Algeria.  In 
2016, Algeria introduced some changes in its Investment Code, in an attempt to attract more 
investments;  according  to  the  Wold  Bank  ranking  on  Ease  of  Doing  Business,  Algeria 
improved its performances, which nevertheless remain poor and below the regional standards; 
as a matter of fact, according to 2019 data, the country ranks 157th out of 190 (it was 166th in 
2018), with a distance to frontier (DTF)47 score of 49.6 out of 100 (up from 47.6 in 2018). 

3. 

ISSUES ADDRESSED IN THE SUB-COMMITTEE MEETINGS 

The  last  Sub-Committee  on  Trade,  Industry,  and  Services  was  held  in  October  2018. 
Major trade irritants addressed included chiefly the newly introduced DAPS (droit additionnel 
de  prélevement  spécial),  a  tax  having  an  effect  equivalent  to  custom  duties,  as  well  as 
outstanding import suspension on certain other products (mainly vehicles)  (see in more detail 
section 5). Legal restrictions to foreign investments were also addressed, such as the so-called 
‘49/51  Law’,  which  sets  a  49%  cap  for  foreign  ownership  of  any  company  established  in 
Algeria, regardless of the sector of activity. Other long-standing issues were also mentioned, 
such as  the issue of ship-owners’ disbursement  accounts. Notwithstanding these issues, the 
EU recalled its commitment to support Algeria’s accession to the WTO.  

The Sub-Committee on Agricultural and Fisheries Products met in October 2018. Several 
technical  assistance  programmes  were  discussed,  as  well  as  potential  ways  to  reinforce  EU 
technical  assistance  to  Algeria  in  the  field  of  quality  policy  and  understanding  the  reasons 
behind Algeria’s poor utilisation rate of preferences. 

47  The DTF score is a measurement used by the World Bank to assess the absolute level of regulatory 

performance in economies over time. The higher the score, the better. 

126 

 
 
 
 
                                                 
During the EU-Algeria Sub-Committee on Customs Cooperation the parties discussed the 
development of their respective customs legislation and procedures, the revision of the PEM 
convention on Preferential Rules of Origin, the fight against counterfeiting and smuggling and 
modalities for setting in motion an ad-hoc working group on customs valuation. 

A number of senior officials' meetings were held in 2018, in an effort to tackle several market 
access  barriers  that  Algeria  has  been  imposing  on  trade  with  the  EU,  especially  from  2016. 
The  Association  Council  conclusions  of  May  201848,  provided  that  a  negotiated  solution 
should  be  found  by  the  end  of  2018,  but  this  has  not  proven  possible,  due  to  a  lack  of  real 
commitment on the side of the Algerian authorities.  

4. 

SPECIFIC AREAS OF IMPORTANCE 

The  recent  fall  in  oil  prices  significantly  impacted  Algeria's  finances.  Algerian  authorities 
resorted  to  severe  measures  to  restrict  imports,  with  a  view  to  reducing  trade  deficits  and 
countering  shrinking  foreign  currency  reserves.  The  EU  reacted  to  these  trade-restrictive 
measures  and  repeatedly  requested  full  compliance  with  the  provisions  of  the  Association 
Agreement.  Algeria  argued  that  the  present  economic  conjuncture  justifies  such  exceptional 
measures  while  recognising  the  need  for  economic  reforms  in  order  to  encourage  greater 
economic diversification and to foster investment.  

The Partnership Priorities adopted by the EU and Algeria at the Association Council of 13 
March 201749 mention cooperation for the socio-economic development of Algeria, including 
trade and access to the European single market. The EU and Algeria also conducted a  joint 
evaluation  of  the  Association  Agreement  in  2016-17.  The  evaluation  concluded  that,  as 
regards  cooperation  in  the  trade,  economic  and  investment  areas,  Algerian  efforts  and  EU 
assistance  should  focus  on  the  following  areas:  diversification  and  competitiveness  of  the 
Algerian  economy,  improvement  of  the  business  climate  and  facilitation  of  investments.  A 
number of trade related reforms were discussed following the release of the study and Algeria 
was  encouraged  to  commit  to  the  improvement  of  business  climate,  new  financing 
mechanisms  for  SMEs  (e.g.  the  EU’s  External  Investment  Plan),  a  fine-tuning  of  subsidies, 
and the reduction of red tape. 

The  EU  is  providing  support  to  Algeria  through  various  trade-related  assistance 
programmes such as DIVECO I, II (Programme d’appui à la diversification de l’économie), 
P3A  I  and  II  (Programme  d’appui  à  la  mise  en  oeuvre  de  l’Accord  d’Association),  or 
PADICA (Programme d’appui à la diversification industrielle et à l’amélioration du climat 
des  affaires),  implemented  in  partnership  with  the  Algerian  authority  for  trade  promotion 
(ALGEX)50.  Such  programmes  aim  to  strengthen  export  competitiveness,  to  modernise  the 
legal  framework,  to  diversify  the  economy,  and  to  improve  the  business climate  in  Algeria. 
This  support  will  continue  under  the  2018-20  programming  period.  The  EU  also  supports 
Algeria  in  preparation  of  negotiations  on  an  Agreement  on  Conformity  Assessment  and 
Acceptance of industrial products (ACAA), in sectors identified as key priorities by Algerian 
authorities such as construction materials, domestic appliances and low voltage electric goods. 
This work has been conducted since 2013 through TAIEX missions, resulting for instance in 
twinning  programmes  involving  the  Algerian  authority  for  certification  and  accreditation 
(ALGERAC). Additional programmes, such as PASSEM (Programme d’appui spécifique à la 

48 

For  more 

information 

see 

http://www.consilium.europa.eu/en/meetings/international-ministerial-

meetings/2018/05/14/algeria/  

49  They  can  be  downloaded  here:  https://eeas.europa.eu/delegations/algeria/31985/les-nouvelles-priorites-du-

partenariat-ue-algerie_en  

50  See DG DEVCO for more information https://ec.europa.eu/europeaid/home_en 

127 

 
 
                                                 
surveillance  et  à  l’encadrement  du  marché),  focus  on  specific  areas,  such  as  market 
surveillance and consumer protection.  

5. 

PROGRESS MADE, MAIN OPEN ISSUES AND FOLLOW-UP ACTIONS 

Several  market  access  issues  remain  in  Algeria.  The  most  relevant  in  2018  was  the 
introduction of a tax having an effect equivalent to a custom duty, ranging from 30% to 200% 
of  the  value  of  the  goods,  which  was  levied  on  1 095  tariff  lines,  across  all  sectors  of  the 
economy.  This  measure  replaces  an  import  ban  which,  in  2017,  affected  877  products.  The 
suspension of import currently concerns only vehicles - which were, until 2017, subject to an 
import  licence  scheme  which  effectively  resulted  in  a  zero  quota  for  three  years.  A  custom 
duty hike imposed in 2017 on another goup of 129 products still applies.  

Other trade-related issues include: a ban on imports of medicines for which exists a locally-
produced equivalent; technical standards; particularly stringent mandatory security devices for 
vehicles, coupled with obligatory inspections. The EU is engaging in an active political and 
technical dialogue with Algerian authorities on these measures to ensure they are brought in 
to line with the Association Agreement. 

Another  long-standing  issue  is  the  business  climate  in  Algeria,  and  the  reluctance  to  relax 
restrictions  on  foreign  investment.  Compliance  with  obligations  in  the  field  of  competition 
and public aid has also to be enhanced. Numerous obstacles to foreign investment remain, 
most notably the horizontal ‘49%/51%’ foreign equity cap that applies across the board to all 
sectors.  The  Algerian  government  showed  some  willingness  to  consider  changes  in  2016, 
notably  through  the  adoption  of  a  new  Investment  Code,  which  no  longer  features  the 
foreign equity cap. However, such a rule remains applicable as it is enshrined in the Budget 
Laws 2009 and 2012, and it will remain so until such a time these Budget Laws are repealed. 
Such a blanket  foreign equity  cap sends negative signals  to  potential investors and hampers 
Algeria’s  prospects  of  accession  to  the  WTO.  The  EU  has  routinely  raised  the  issue  with 
Algerian authorities, suggesting a more limited scope of application of the rule.  

6. 

CONCLUSIONS AND OUTLOOK 

There has been a positive overall trend in EU-Algeria trade since the entry into force of the 
Association Agreement, although Algeria’s heavy dependency on hydro-carbons has held 
back  any  significant  diversification  of  its  exports.  The  country  registered  its  first  negative 
trade balance with the EU in 2015, as a result of the drop in international oil prices which had 
started  in  the  second  half  of  2014.  In  2018,  following  the  upward  trend  in  international  oil 
prices, Algeria’s trade balance became positive again. The EU continues to offer its support to 
the  Algerian  government  to  diversify  its  economy.  At  the  same  time,  the  Commission  has 
pursued its dialogue with Algerian authorities on trade restrictive measures, in order to bring 
them in line with the Association Agreement.  

7. 

STATISTICS 

Merchandise trade EU28 2014-2018 
2014 

2015 

2016 

2017 

2018 

EU28 trade with Algeria (mio €) 

Imports 
Exports 
Balance 

Share Algeria in EU28 trade with Extra-EU28 

29.458 
23.442 
-6.016 

20.908 
22.253 
1.345 

16.509 
20.400 
3.891 

18.522 
18.834 
312 

21.047 
18.905 
-2.142 

128 

 
 
 
  
  
  
  
  
  
  
 
  
  
  
  
 
  
  
  
  
Imports 
Exports 
Total (I+E) 

Imports 
Exports 
Total (I+E) 

1,7% 
1,4% 
1,6% 

1,2% 
1,2% 
1,2% 

Share EU28 in trade Algeria with world 

51,1% 
64,3% 
57,9% 

49,7% 
65,1% 
56,0% 

Source Trade G2 Statistics/ISDB  
Trade EU28: Eurostat COMEXT;  Trade Algeria: IMF Dots 

1,0% 
1,2% 
1,1% 

47,5% 
58,5% 
51,7% 

1,0% 
1,0% 
1,0% 

43,7% 
58,9% 
50,3% 

1,1% 
1,0% 
1,0% 

53,6% 
63,2% 
58,3% 
25-mars-19 

Total merchandise trade EU28 with Algeria (mio €) 

Algeria 

2017 

2018 

Imports 
Exports 
Balance 
Total trade 
Source Trade G2 Statistics/ISDB from Eurostat COMEXT 

18.522 
18.834 
312 
37.356 

21.047 
18.905 
-2.142 
39.952 

Agrifood trade EU28 with Algeria (mio €) 

Algeria 

2017 

2018 

Imports 
Exports 
Balance 
Total trade 
Source Trade G2 Statistics/ISDB from Eurostat COMEXT 

103 
2.422 
2.318 
2.525 

74 
2.660 
2.586 
2.734 

mio € 

-29 
238 
267 
209 

NAMA trade EU28 with Algeria (mio €) 

Algeria 

2017 

2018 

EU28 imports 
EU28 exports 
Balance 
Total trade 
Source Trade G2 Statistics/ISDB from Eurostat COMEXT 

18.419 
16.412 
-2.007 
34.831 

20.973 
16.245 
-4.728 
37.218 

Services trade EU28 with Algeria (mio €) 

Algeria 

2016 

2017 

Growth 

mio € 

2.525 
71 
-2.454 
2.596 

annual 
% 
13,6% 
0,4% 

6,9% 

Growth 

annual 
% 
-28,4% 
9,8% 

8,3% 

Growth 

mio € 

2.554 
-167 
-2.722 
2.387 

annual 
% 
13,9% 
-1,0% 

6,9% 

Growth 

annual 
% 
3,9% 
-10,1% 

-6,0% 

Imports 
Exports 
Balance 
Total trade 
Source Trade G2 Statistics/ISDB from Eurostat BOP statistics 

1.500 
3.668 
2.168 
5.168 

1.558 
3.298 
1.740 
4.856 

mio € 

58 
-370 
-427 
-312 

Services trade EU28 with Algeria (mio €) 

Imports 
Exports 
Balance 
Total trade 
Source Trade G2 Statistics/ISDB from Eurostat BOP statistics 

2013 

2014 

2015 

2016 

2017 

1.487 
2.839 
1.352 
4.326 

1.619 
3.295 
1.676 
4.915 

1.728 
3.529 
1.802 
5.257 

1.500 
3.668 
2.168 
5.168 

1.558 
3.298 
1.740 
4.856 

FDI EU28 with Algeria (mio €) 
2014 

2015 

2016 

2017 

Inward 
Outward 

Inward 
Outward 
Source Trade G2 Statistics/ISDB from Eurostat BOP statistics 

1.878 
14.117 

222 
769 

1.779 
14.750 

157 
2.495 

1.846 
14.588 

26.661 
1.921 

1.857 
14.861 

21 
1.339 

2013 
FDI Stocks 
1.135 
14.022 
FDI Flows 
357 
2.196 

129 

 
 
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
130 

 
 
 
 
 
ANNUAL  INFO  SHEET  ON  THE  IMPLEMENTATION  OF  THE  EU-EGYPT 
ASSOCIATION AGREEMENT 

1. 

INTRODUCTION 

The  EU  and  Egypt  established  a  free  trade  area  as  part  of  the  EU-Egypt  Association 
Agreement, signed in 2001 (hereinafter referred to as ‘the Agreement’). The Agreement was 
provisionally  applied  from  21  December  2003  and  officially  entered  into  force  on  1  June 
2004. It provides for reciprocal liberalisation of trade in goods, with elements of asymmetry 
in favour of Egypt: Egypt was able to export to the EU all industrial products covered by the 
Agreement  tariff-free  from  the  day  of  entry  into  force  of  the  Agreement,  while  it  benefited 
from a transitional period of 3 to 15 years, depending on the product, to dismantle tariffs on 
EU imports, Egypt finalized the process of fully dismantling tariffs applied to industrial goods 
on 1 January 2019.  

In  October  2008,  the  EU  and  Egypt  signed  an  agreement  providing  for  liberalisation  in 
agricultural, processed agricultural and fisheries goods; the latter entered into force on 1 June 
2010 and extended the list of agricultural products covered by the original Agreement. Today, 
80% of trade in agricultural goods is covered by duty-free treatment. 

In  November  2010,  the  EU  and  Egypt  signed  a  protocol  establishing  a  Dispute  Settlement 
Mechanism (DSM), for which the ratification process is still pending.  

In November 2011, the Commission received a Council mandate authorising it to negotiate a 
Deep  and  Comprehensive  Free  Trade  Area  (DCFTA)  with  Egypt,  but  Egypt  has  shown 
limited interest so far. 

Egypt  also signed the Regional Convention on pan-Euro-Mediterranean preferential rules of 
origin  on  9  October  2013  and  notified  it  on  1  June  2014.  The  main  objective  of  the 
Convention is to provide a more unified framework for origin protocols. 

2.  EVOLUTION OF TRADE 

2.1 Trade in Goods  

In  2018,  the  EU  remains  Egypt’s  main  trading  partner,  accounting  for  23%  of  the  total 
Egyptian trade, before China (10%), the United States (8%) and Saudi Arabia (6%). The EU 
is  Egypt’s  first  export  market:  11%  of  Egyptian  exports  were  directed  towards  the  EU  in 
2018,  followed  by  United  States  (8%),  Ukraine  (7%)  and  Jamaica  (6%).  The  EU  is  also 
Egypts first source of imports, with 27% of Egyptian imports originating from the EU.  
Total  trade  in  goods  between  the  EU  and  Egypt  has  increased  significantly  over  the  period 
since  the  FTA  entered  into  force:  +176%  in  16  years,  from  €10.1 billion  in  2002  (the  year 
preceding the provisional  entry into  force of the  Association  Agreement)  to  €27.7 billion in 
2018. The level of total EU-Egypt trade in 2018 was very similar to the one achieved in 2017 
(€27.9 billion) , which was a record year in the bilateral trade of goods. 

131 

 
 
 
 
 
 
 
EU-Egypt trade in goods (thousands of euro) 
EU Exports

EU Imports

EU imports of mineral fuels (HS
27)

EU imports of agricultural
products

EU imports of other products

25.000

20.000

15.000

10.000

5.000

0

2
0
0
2

3
0
0
2

4
0
0
2

5
0
0
2

6
0
0
2

7
0
0
2

8
0
0
2

9
0
0
2

0
1
0
2

1
1
0
2

2
1
0
2

3
1
0
2

4
1
0
2

5
1
0
2

6
1
0
2

7
1
0
2

8
1
0
2

EU  exports  increased  by  193%  between  2002  and  2018,  from  € 6.7 billion  to  €19.2 billion. 
Between 2017 and 2018, EU exports decreased by 3%, from €19.2 billion to €19.8 billion. In 
2018,  the  EU  mainly  exported  to  Egypt  goods  in  the  sectors  of:  machinery  and  transport 
equipment  (34%),  chemicals  (15%),  fuels  and  mining  products  (11%),  and  agricultural 
products (7%). The three biggest EU exporters to Egypt were Germany, Italy and France.  

EU  imports  increased  by  142%  between  2002  and  2018,  from  €3.3 billion  to  €8.5 billion. 
Between 2017 and 2018, EU imports increased by 4.7%, from €8.1 billion to €8.5 billion. In 
2018,  EU  imports  were  principally  in  the  sectors  of:  fuel  and  mining  products  (35%), 
manufactured products (18%), and chemicals (16%). The three biggest importers of Egyptian 
products  in  the  EU  were:  Italy,  Germany  and  Spain.  EU  imports  of  agricultural  and  food 
products  and  in  non-fuel  industrial  products  have  been  stable  since  2011,  increasing  during 
2017 – most notably agricultural and food imports increased by 10.5% in 2017 – but back to a 
slower 1% growth in 2018. 

A reduction in Egyptian exports between 2012 and 2016, coupled with significant increase of 
imports from the EU, has resulted in a widening trade imbalance between the EU and Egypt. 
The decrease in Egyptian exports was largely imputable to the fall of oil prices and growing 
internal demand for energy in Egypt (fuels accounted for one third of Egyptian exports to the 
EU  in  2017,  while,  in  the  past,  they  used  to  constitute  almost  half  of  them).  In  2017,  an 
upward  trend  in  Egyptian  exports  to  the  EU  was  noted  with  an  increase  of  21.2%  which 
continued  in  2018  (+4.7%),  while  imports  from  the  EU  somewhat  decreased  in  2017  and 
2018. This was mainly the result of devaluation of the local currency carried out in November 
2016, coupled with government policy aimed at import reduction.  

2.2 Trade in agricultural goods  

Total trade in agri-food products between the EU and Egypt increased by 225% between 2003 
and 2018, from €0.8 billion in  2003 to  €2.6 billion in  2018. EU  agri-food exports increased 
slightly (+7%), going from €1.4 billion in 2017 to €1.5 billion in 2018. EU imports remained 
the same at €1 billion in 2018 compared to 2017.  

In  2018,  Egypt  was  the  EU’s  second  biggest  supplier  of  agri-food  products  among  our 
Euromed-partners. The EU imported mainly fruit (€426 million, 41%), including citrus fruit, 

132 

 
 
 
 
 
 
 
and  vegetables  (€291  million,  28%)  from  Egypt.  EU  agri-food  exports  to  Egypt  were 
dominated  by  wheat  (€224  million,  15%),  vegetables  (€176  million,  12%)  and  sugar  (€153 
million, 10%). 

Regarding agri-food tariff rate quotas (TRQs), Egypt’s 2018 fill  rate was high for  a limited 
number of products such as sweet oranges (93%), strawberries (89%, and already 100% for 
the  2019  season),  or  garlic  (87%),  but  remained  nil  or  close  to  zero  for  the  majority  of 
products, such as cucumbers, brown rice, cereal preparations, etc.  

2.3 Trade in Services and Foreign Direct Investment51 

After a period of instability from 2011 to 2014, the  total trade in services between the EU 
and  Egypt  had  fully  recovered  its  pre-2011  level  in  2015,  amounting  to  €10 billion 
(€10.2 billion  in  2010).  In  2016,  Egypt  witnessed  a  significant  reduction  in  the  export  of 
services, due to the reduced inflow of tourists, aggravated by the crash of a Russian airliner in 
November 2015 over the Sinai, and slightly lower revenues of the Suez Canal due to reduced 
global trade.  In 2016, total  trade in  services  amounted to  €9.1 billion, a 14% decrease from 
2015 levels; however, in 2017 it increased by 4% driven by increased exports of services by 
Egypt; total trade in services reached €9.5 billion.  

As regards Foreign Direct Investment (FDI), the EU remains the biggest investor in Egypt 
but  EU  foreign  investments  in  the  country  have  been  highly  volatile,  with  divestments 
exceeding  investments  by  €1.6 billion  in  2015.  Since  2016,  the  inflows  of  EU  investments 
into  Egypt  have  been  increasing;  they  reached  €2.7 billion  in  2017,  with  the  total  EU 
investment stock amounting to €39.2 billion.  

Overall, Egypt underperforms as regards its business climate. In 2018, it only ranked 120th out 
of 190 in the World Bank ranking "Doing Business 2019", with a distance to frontier (DTF)52 
score of 58.5 out  of 100  -  an increase of 2.7  in  DTF score  compared to  2017. FDI  remains 
concentrated in the oil and gas sector, with renewable energy on the rise (wind and solar). To 
improve  this  situation,  on  1  June  2017  a  new  Investment  Law  entered  into  effect  in  Egypt. 
Since November 2017, the Egyptian Government also applies an online "Investment Map", a 
dedicated website that displays the details of investment opportunities across the country. 

3. 

ISSUES ADDRESSED IN THE JOINT COMMITTEE MEETINGS 

No meeting took place in 2018. The next meetings of the Sub-Committees are in 2019. 

The latest Sub-Committee on Industry, Trade, Services, and Investment met in November 
2017  in  Brussels.  Bilateral  issues  discussed  included  Egypt’s  delay  in  the  dismantling  of 
tariffs for passenger vehicles (this issue has meanwhile been addressed by Egypt in January 
2019  in  accordance  with  the  Association  Agreement),  and  the  draft  tax  incentive  scheme 
targeting  the  automotive  industry,  which  in  2019  is  still  under  review  by  Egypt.  Egypt  was 
invited to ratify the Protocol on the Dispute Settlement Mechanism. Discussions also covered 
various trade irritants – see in more detail section 5. Other issues included the progress on a 
potential Agreement on Conformity Assessment and Acceptance (ACAA), the need for time 

51  Full statistics available here http://trade.ec.europa.eu/doclib/docs/2006/september/tradoc_122000.pdf  
52  The  DTF  score  is  a  measurement  used  by  the  World  Bank  to  assess  the  absolute  level  of  regulatory 

performance in economies over time.  

133 

 
 
 
 
 
 
                                                 
to  adapt  Egyptian  SPS  legislation  to  EU  requirements,  and  the  continued  possibility  of  a 
DCFTA in the long-term. 

During  the  2017  Sub-Committee  on  Agricultural  and  Fisheries  products,  the  following 
issues were discussed, among others: agri-food trade developments with the recent increase of 
Egyptian  agri-food  exports  to  the  EU  market,  the  latest  developments  in  the  agricultural 
policies of both EU and Egypt, possible future cooperation on organic farming and GIs, and a 
review  of  the  impact  of  the  EU  technical  assistance  provided  to  Egypt  in  the  sector  of 
agriculture and rural development.  

The last Sub-Committee on Customs Cooperation was held in Brussels in November 2017. 
The  EU  and  Egypt  agreed  to  reinforce  their  cooperation  through  organisation  of  a  TAIEX 
workshop on rules of origin and a workshop dedicated to tackle fraud (value, customs, forged 
documents).  

4.  SPECIFIC AREAS OF IMPORTANCE 

Since  2015,  the  Egyptian  economic  slowdown  and  currency  crisis  have  had  serious 
consequences  on  trade.  Faced  with  growing  trade  deficits  and  a  shortage  of  foreign 
exchange, in 2015 and 2016 the Egyptian government implemented a series of administrative 
measures aimed at restricting imports. In November 2016, the Egyptian authorities liberalised 
the  exchange  rate  and  adopted  an  economic  reform  programme  supported  by  a  three-year 
$12 billion IMF loan - the Extended Fund Facility (EFF) which is set to expire in mid-2019. 
Although challenging in the short term, bold economic measures were taken to address fiscal 
and external unbalances: flotation of the currency, energy subsidy reform, VAT introduction, 
and wage restraint.  

Overall,  since  the  start  of  the  IMF  programme,  Egypt’s  economy  has  improved  markedly. 
Growth has accelerated, external and fiscal deficits have narrowed, and public debt, inflation 
and  unemployment  have  declined  while  international  reserves  have  increased.  Prudent 
monetary and fiscal policies have significantly helped the Egyptian economy that is showing 
clear signs of stabilization  including an accelerated GDP growth (4.1% in 2017 fiscal  year 
and 5.3% in 2018 fiscal year), declining paths of inflation and unemployment, achievements 
in  fiscal  consolidation,  and  increased  international  currency  reserves.  Going  forward,  the 
government’s  reform  agenda  is  focused  on  public  finance  management,  financial  sector, 
energy  sector,  business  climate,  competition,  social  protection,  and  encouraging  women 
participation  in  the  labour  force.  While  the  principal  objective  of  the  reforms  is 
macroeconomic stability, a longer term objective is to foster more participation of the private 
sector in the economy by creating a more business friendly environment. However, while the 
Egyptian  government  seems  to  be  committed  to  reforming  legislation  directly  related  to 
investments, it does not focus to a sufficient extent on trade facilitation measures; on the 
contrary,  it  has  been  observed  to  direct  its  efforts  at  reducing  the  trade  deficit  in  goods  by 
adopting  measures  aimed  at  making  imports  more  difficult.  Although  the  reforms  have 
brought foreign reserves back to comfortable levels, the policy of import substitution is still 
prevalent.  In  addition,  the  business  environment  is  hindered  by  excessive  bureaucracy,  and 
lack of transparency and predictability of regulations continue to affect economic operators. 

134 

 
 
 
 
 
 
In the light of the revised European Neighbourhood Policy, Partnership Priorities53 were 
jointly agreed between the EU and Egypt, and adopted at the Ministerial Association Council 
on 25 July 2017. These  priorities will further  guide future relations, for three  years with  an 
annual review, and will also set the priorities for European Union support under the European 
Neighbourhood  Instrument  (ENI).  Trade-related  assistance  in  Egypt  has  been  conducted 
mainly  under  the  EUR 20 million  Trade  and  Domestic  Market  Enhancement  Programme 
(TDMEP)54, structured around two components: i) foreign trade and trade agreements and ii) 
industrial policy and quality infrastructure. The TDMEP assists Egypt with the establishment 
of a proper regulatory environment, including National Quality Policy, market surveillance 
strategy,  horizontal  and  sector  legislation,  and  supporting  the  alignment  of  quality 
infrastructure bodies. The programme has delivered significant results, such as the creation 
of  a  policy  unit  within  the  trade  ministry  and  the  adoption  of  a  trade  and  industrial 
development strategy. 

5.  PROGRESS MADE, MAIN OPEN ISSUES AND FOLLOW-UP ACTIONS 

Following extended bilateral consultations Egypt confirmed at the Association Committee in 
November  2018  that  it  would  apply  the  staged  reduction  in  tariffs  on  certain  motor 
vehicles under the terms of its obligations under the FTA. In line with this commitment Egypt 
fully liberalised its tariffs on imports of certain EU motor vehicles as of January 2019.  

EU-Egypt  trade  is  currently  being  affected  by  two  significant  technical  barriers  to  trade 
(TBTs): a registration scheme and pre-shipment inspections imposed on entities exporting 
certain goods to Egypt. These measures apply to 25 categories of manufactured goods since 
the beginning of 2016 and have been extended to four further product  categories in January 
2019.  The  measures  have  been  discussed  in  the  WTO  Technical  Barriers  to  Trade  (TBT) 
Committee and in the WTO Council for Trade in Goods (CTG) several times, and were raised 
in the trade Commissioner’s letters to the Egyptian Minister of Trade in 2018 and early 2019. 
The  Commission  also  addressed  this  issue  during  bilateral  meetings  in  2018  and  in  early 
2019,  insisting  on  more  transparency,  rapidity,  and  streamlining  of  the  administrative 
processes, in order to facilitate the registration from a practical point of view. 

Other  trade  irritants  include  the  following:  arbitrary  customs  valuations  by  the  Egyptian 
authorities, problems with acceptance of origin declarations by importers, restrictive labelling 
requirements, mainly affecting the ceramic tiles sectors, a prohibition on the import of certain 
motorcycles, and SPS issues, mainly affecting cereals and beef/live cattle importers. The issue 
of a ‘reference list’ of countries authorised to export milk formula that includes some, but not 
all, EU Member States was addressed by Egypt in early 2019. The implementation of the new 
approach will be now monitored. The EU is also closely following the drafting of a future tax 
incentives scheme targeting the automobile sector. The draft text of the legislation has yet to 
be disclosed by the Egyptian government, but several aspects of the future scheme may be at 
odds with Egypt’s commitments under the WTO and the Association Agreement, notably in 
terms of discrimination against imports and trade-related investment measures.  

The  SPS  workshop  organised  in  September  2018  in  Cairo  was  successful  and  appreciated. 
Reinforced  control  measures  imposed  by  Commission  Regulation  669/2009  on  strawberries 
and grapes were finally lifted in 2018 and the same is expected to happen for gelatine in 2019. 

53  See http://www.consilium.europa.eu/media/23942/eu-egypt.pdf  
54  This programme will end in 2020. 

135 

 
 
 
 
 
                                                 
Compliance with obligations in the field of competition and public aid, including transparency 
on the latter, has to be enhanced. 

Egypt still has to ratify the protocol establishing a Dispute Settlement Mechanism signed in 
November 2010.  

6.  CONCLUSIONS AND OUTLOOK 

Two-way  trade  has  grown  significantly  since  the  entry  into  force  of  the  FTA,  although  a 
mixture  of  political  and  economic  factors  have  impeded  Egyptian  exporters  from  fully 
benefitting  from  the  opportunities  it  created.  The  EU  is  therefore  engaged  in  several  trade-
related assistance projects with Egypt in order to create the conditions in which the FTA can 
deliver.  In  effect,  in  2017  and  2018,  Egypt’s  exports  to  the  EU  increased  resulting  in  a 
decrease of Egypt’s trade deficit.  

Discussion  on  implementation  focuses  on  the  above-mentioned  trade  irritants.  The  EU  and 
Egypt are engaged in an active dialogue to address these, both at political and technical level.  

Facilitating  trade  has  been  made  one  of  the  priorities  under  the  Partnership  Priorities 
adopted  by  the  EU  and  Egypt  in  201755,  which  should  cover  issues  such  as  reduction  of 
trade  barriers  as  well  as  technical  assistance  on  SPS  issues  and  ACAA-related  fields. 
Upgrading  bilateral  trade  and  investment  relations  remains  a  medium-term  objective  to  be 
followed once Egypt is ready for it. 

7.  STATISTICS 

Merchandise trade EU28 2014-2018 
2015 

2014 

2016 

2017 

2018 

EU28 trade with Egypt (mio €) 

Imports 
Exports 
Balance 

Share Egypt in EU28 trade with Extra-EU28 

8.579 
16.894 
8.315 

7.263 
20.426 
13.163 

6.703 
20.618 
13.915 

8.124 
19.807 
11.683 

8.503 
19.218 
10.715 

Imports 
Exports 
Total (I+E) 

Imports 
Exports 
Total (I+E) 

0,5% 
1,0% 
0,8% 

0,4% 
1,1% 
0,8% 
Share EU28 in trade Egypt with world 
32,4% 
27,7% 
31,3% 

32,2% 
29,5% 
31,4% 

Source Trade G2 Statistics/ISDB  
Trade EU28: Eurostat COMEXT;  Trade Egypt: IMF Dots 

0,4% 
1,2% 
0,8% 

0,4% 
1,1% 
0,7% 

29,7% 
30,4% 
29,9% 

26,9% 
34,1% 
28,9% 

0,4% 
1,0% 
0,7% 

26,5% 
10,6% 
22,3% 
25-mars-
19 

Total merchandise trade EU28 with Egypt (mio €) 

Egypt 

2017 

2018 

Imports 
Exports 
Balance 
Total trade 
Source Trade G2 Statistics/ISDB from Eurostat COMEXT 

8.124 
19.807 
11.683 
27.931 

8.503 
19.218 
10.715 
27.721 

55  See: http://www.consilium.europa.eu/media/23942/eu-egypt.pdf  

136 

Growth 

mio € 
379 
-590 
-969 
-211 

annual 
% 
4,7% 
-3,0% 

-0,8% 

 
 
 
 
 
 
 
  
 
  
  
  
  
 
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
                                                 
Agrifood trade EU28 with Egypt (mio €) 

Egypt 

2017 

2018 

Imports 
Exports 
Balance 
Total trade 
Source Trade G2 Statistics/ISDB from Eurostat COMEXT 

1.017 
1.351 
334 
2.368 

1.027 
1.528 
502 
2.555 

NAMA trade EU28 with Egypt (mio €) 

Egypt 

2017 

2018 

EU28 imports 
EU28 exports 
Balance 
Total trade 
Source Trade G2 Statistics/ISDB from Eurostat COMEXT 

7.107 
18.456 
11.349 
25.563 

7.476 
17.689 
10.213 
25.166 

Services trade EU28 with Egypt (mio €) 

Egypt 

2016 

2017 

Imports 
Exports 
Balance 
Total trade 
Source Trade G2 Statistics/ISDB from Eurostat BOP statistics 

4.587 
4.594 
6 
9.181 

5.092 
4.462 
-630 
9.553 

Services trade EU28 with Egypt (mio €) 

Growth 

mio € 
10 
177 
168 
187 

annual 
% 
1,0% 
13,1% 

7,9% 

Growth 

mio € 
369 
-767 
-1.136 
-398 

annual 
% 
5,2% 
-4,2% 

-1,6% 

Growth 

mio € 
504 
-132 
-636 
373 

annual 
% 
11,0% 
-2,9% 

4,1% 

Imports 
Exports 
Balance 
Total trade 
Source Trade G2 Statistics/ISDB from Eurostat BOP statistics 

2013 

2014 

2015 

2016 

2017 

4.982 
3.343 
-1.640 
8.325 

4.658 
3.439 
-1.220 
8.097 

5.281 
5.125 
-156 
10.406 

4.587 
4.594 
6 
9.181 

5.092 
4.462 
-630 
9.553 

Inward 
Outward 

FDI EU28 with Egypt (mio €) 

2013 

2014 

2015 

2016 

2017 

FDI Stocks 

6.550 
43.327 

836 
49.492 

185 
39.462 

683 
37.939 

875 
39.285 

FDI Flows 

Inward 
Outward 
Source Trade G2 Statistics/ISDB from Eurostat BOP statistics 

137 
3.542 

76 
1.519 

357 
-2.360 

-1 
2.865 

99 
2.179 

137 

 
 
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
 
 
 
 
 
ANNUAL  INFO  SHEET  ON  THE  IMPLEMENTATION  OF  THE  EU-ISRAEL 
ASSOCIATION AGREEMENT 

1. 

INTRODUCTION 

The EU and Israel have an Association Agreement (AA), which further liberalised two-way 
trade in industrial goods, creating a free trade area, hereinafter called ‘the Agreement’. This 
Agreement provisionally has been applied since 1996 and fully entered into force on 1 June 
2000.  The  EU  and  Israel  had  already  signed  a  Free  Trade  Agreement  (FTA)  in  1975:  such 
agreement  provided  reciprocal  free  trade  for  industrial  products  (applied  for  the  EU  since 
1977 for Israeli originated goods and since 1989 in Israel for community goods) and duty free 
entry  into  the  EU  of  70%  of  Israeli  agricultural  products.  The  Association  Agreement 
improved  the  provisions  on  rules  of  origin  and  included  a  series  of  reciprocal  agricultural 
concessions,  but  does  not  include  obligatory  provisions  on  services  and  investments.  The 
Association Agreement included selected arrangements on agri-food trade. The EU and Israel 
however subsequently upgraded the free trade area with further liberalisation of agricultural, 
processed agricultural and fish products, in force since 2010. An adaptation to this agreement 
on agri-food products due to the accession of Croatia to the EU started to be implemented in 
2018. Israel is a member of the Regional Convention on Pan-Euro-Mediterranean preferential 
rules  of  origin  (PEM  Convention)  which  it  signed  in  2013  and  notified  the  EU  of  its 
ratification and entry into force in 2014. The main objective of the Convention is to provide a 
more unified framework for origin protocols. 

The EU and Israel signed in 1999 a "Good Laboratory Practice" (GLP) agreement, ensuring 
the high quality, validity and reliability of health and environmental data generated during the 
testing  of  cosmetics,  industrial  chemicals,  pharmaceuticals,  food  additives,  animal  feed 
additives, pesticides by means of mutual recognition of OECD principles of good laboratory 
practice  (GLP)  and  compliance  monitoring  programmes.  The  EU  and  Israel  also  have 
Conformity Assessment and Agreement (ACAA) on pharmaceuticals, in force since January 
2013,  which  facilitates  trade  on  both  sides,  as  it  recognises  each  partner’s  certification  of 
conformity of pharmaceutical products without the need for re-testing at import. Finally, the 
Open  Skies  agreement  provisionally  entered  into  force  in  2013  and  substantially  increased 
cooperation in civil aviation services. 

2. 

EVOLUTION OF TRADE 

2.1  Trade in Goods 

In 2018 the EU was Israel’s first trading partner, representing 36% of Israeli trade, followed 
by the US  (19%) and China (8%).  Israel  is  the  EU’s 28th largest  trading partner and the 3rd 
largest  in  the  Euro-Mediterranean  region,  behind  Algeria  and  Morocco.  The  EU  was  the 
largest  exporter  to  Israel,  holding  a  41%  market  share,  ahead  of  the  US  (13%)  and 
Switzerland (10%). The EU was also Israel’s largest export market in 2018, receiving 29% of 
Israeli exports, closely followed by the USA with 28%. 

Since the Agreement is in place the value of EU exports to Israel has been increasing and the 
EU’s trade surplus increased from €4.8 billion in 2002 to €7.1 billion in 2018. 

138 

 
 
 
 
EU-Israel trade in goods (thousands of euro) 

25.000.000

20.000.000

15.000.000

10.000.000

5.000.000

0

EU Exports

EU Imports

EU imports of agricultural
products (excl. fisheries)

EU imports of industrial
products (excl. fuels and
minerals)

2
0
0
2

3
0
0
2

4
0
0
2

5
0
0
2

6
0
0
2

7
0
0
2

8
0
0
2

9
0
0
2

0
1
0
2

1
1
0
2

2
1
0
2

3
1
0
2

4
1
0
2

5
1
0
2

6
1
0
2

7
1
0
2

8
1
0
2

Since the Association Agreement came into force, the value of imports and exports between 
the EU and Israel has been increasing in both directions. In 2002, the first year in which data 
is  available,  the  value  of  trade  in  goods  was  €23.1 billion  and  in  2018  it  was  €34.3 billion, 
thus representing an increase by 48%.  

The value of EU exports to Israel has risen by 49% from €13.9 billion in 2002 to €20.7 billion 
in  2018.  Though,  EU  exports  between  2017  and  2018  contracted  by  3%,  going  from 
€21.4 billion  in  2017  to  €20.7  billlion  in  2018.  Nevertheless,  with  the  exception  of  2009 
(financial  crash),  EU  exports  to  Israel  have  shown  a  fairly  consistent  growth.  In  2018,  the 
most  important  export  items  by  value  were  machinery  and  appliances  (41%),  transport 
equipment (23%), and chemical products (23%).  

The  value  of  EU  imports  from  Israel  has  risen  from  €9.1 billion  in  2002  to  €13.6 billion  in 
2018, representing a 49% rise. Nevertheless, EU imports between 2017 and 2018 decreased 
by 8%, from €14.8 billion to €13.6 billion. At the same time, imports from  Israel have been 
steadily increasing (with the exception of 2009 due to the financial crash). In 2018 the  most 
important groups for import by value were chemicals (33%), machinery and appliances (18%) 
and mineral products (9%).  

2.2  Trade in agricultural goods 

Total trade in agri-food products between the EU and Israel increased by 100% between 2003 
and 2018, from €1.4 billion in 2003 to €2.8 billion in 2018. EU agri-food exports increased by 
11%  over  the  past  year,  going  from  €1.8 billion  in  2017  to  €2 billion  in  2018.  By  contrast, 
over the same time period, EU imports decreased by 10%, from €1 billion to €0.9 billion. In 
2018, Israel was the EU's second most important destination for exports of agri-food products 
in  the  region  and  the  EU's  third  largest  supplier  of  agri-food  products.  Among  the  EU's 
agricultural  imports  from  Israel  49%  were  fruit  and  vegetables,  including  citrus  fruit  while  
the  EU  mainly  exported  live  animals  (9%),  chocolate,  confectionary  &  ice  cream  (8%), 
followed by sugar (8%).  

Regarding agricultural Tariff Rate Quotas (TRQ), Israel’s 2018 fill rate was 100% for some 
products (new potatoes,  sweet peppers and wine). For the  year-round clementime quota, the 
fill rate was 100%. For the spring and summer clementine quota, the fill rate was 35%. Other 
products with a relatively higher share of used quota were processed starch (48%), cut flowers 

139 

 
 
 
 
 
 
 
(around  a  quarter  -  an  exact  number  is  not  given,  because  the  quota  year  does  not  coincide 
with the calendar year for one of the two quotas for these products), dried tomatoes (24%) and 
chicken  preparations  (25%),  orange  juice  (21%),  cucumbers  (18%),  whey  (18%),  turkey 
preparations  (17%),  fresh  tomatoes  other  than  cherry  tomatoes  (11%)  and  canned  tomatoes 
(6%).  Fill  rates  were  below  5%  for  other  products,  including  fresh  oranges,  fresh  melons, 
orange  and citrus juices, cherry tomatoes, sweetcorn, strawberries, live turkeys,  gingerbread 
and fried peach slices. 

2.3  Trade in Services and Foreign Direct Investment (FDI) 

In 2017 trade in services between the EU and Israel was worth €12.3 billion. Between 2010 
and  2017,  there  has  been  an  overall  increase  in  the  value  of  services  imported  from  Israel 
from  €3.2 billion  to  €5.2 billion.  Over  the  same  period  there  has  been  an  increase  in  EU 
exports of services to Israel from €3.8 billion to €7.1 billion. 

On  FDI  flows  there  is  no  consistent  image  on  volume  or  partner  country.  Figures  show 
fluctuations every year and no trend can be identified. EU FDI in both stocks and flows both 
in and out of Israel have grown continuously since 2001. The EU accounts for a substantial 
40%  of  all  outgoing  Israeli  investments,  followed  by  the  US  with  20%.  For  incoming 
investments into Israel, the share of the EU is 20% which is similar to that of the US.56  

According to The World Bank Doing Business Index 2019 which ranks 190 countries, Israel, 
an OECD member, was ranked 49th in the world (up from the 54th position of 2018) with  a 
distance to frontrier (DTF)57 score of 73.23 out of 100 – an improvement from the value of 
2018 (72.59). 

3. 

ISSUES  ADDRESSED  IN  THE  ANNUAL  (JOINT  COMMITTEE/TRADE  COMMITTEE) 
MEETING 

The  EU-Israeli  Sub-committees  on  Industry,  Trade  and  Services  met  in  May  2018.  A 
range  of  bilateral  issues  were  discussed  including  the  state  of  EU-Israeli  trade  under  the 
Association Agreement and the experience of the ACAA on Pharmaceuticals. Regarding trade 
barriers, the EU stressed the need to resolve the distinction between ‘new’ and ‘old’ Member 
States (pre and post-2004) for imports of medical devices, as well as the situation of the EU's 
request  for  granting  IPR  protection  to  biological  pharmaceuticals  and  the  EU's  comments 
regarding the legislation on cosmetics in Israel. Parties also exchanged information regarding 
the  implementation  of  the  so-called  “Technical  Arrangement"  on  zip  codes.  Both  parties 
provided an update on their ongoing bilateral and multilateral trade negotiations. 

The  EU-Israeli  Sub-Committee  on  Agriculture  and  Fisheries  also  met  in  May  2018.  A 
range of issues were discussed, including the current trade in agri-food products and related 
issues,  such as SPS regulations in  both  directions,  Israel's policy on imports of live animals 
and  Kosher  slaugthering.  Israel  provided  an  update  on  changes  to  its  agricultural  policy 
reform  as  well  as  the  state  of  play  of  Geographincal  Indications  in  Israel.  Parties  also 
discussed Israel's request to open negotiations of a bilateral agreement on organics, in order to 
adjust  Israel's  exports  to  the  EU,  following  the  new  EU's  organic  regulation  which  will  be 

56  Both Eurostat and IMF data was used for investment figures. 
57  The  DTF  score  is  a  measurement  used  by  the  World  Bank  to  assess  the  absolute  level  of  regulatory 
time.  

economies 

over 

in 

performance 
The higher the score, the better. 

140 

 
 
 
 
 
                                                 
applicable as of January 2021. On fisheries, Israel’s position in the framework of the General 
Fisheries Commission for the Mediterranean was discussed.  

The EU-Israel Customs Cooperation and Taxation Subcommittee did not meet in 2018.  

4. 

SPECIFIC AREAS OF IMPORTANCE 

The  Israeli  economy  stayed  on  its  path  of  steady  growth,  relatively  low  fiscal  deficit,  low 
unemployment  and  solid  external  position.  The  Shekel  has  been  on  an  appreciation  trend 
against  all  major  currencies  since  2015,  with  an  impact  on  the  price  competitiveness  of 
Israel's  exports.  The  discovery  of  natural  gas  fields  in  Israel's  exclusive  economic  zone  and 
the future export plans might  bring  related  risks but  also  opportunitites  to the economy. On 
the other side, recent growing budget deficit/GDP and debt/GDP ratios deserve an increased 
attention  by  the  government.  It  should  be  also  noted  that  there  is  a  growing  duality  in  the 
economy,  with  the  traditional  industrial  agriculture  and  services  lagging  behind.  Also,  the 
increased shortage of skilled labour could become an impediment for growth in the high-tech 
sector. 

With a clear understanding of the importance and the economic potential of EU regulations 
and  best-practice  in  many  fields,  the  Israeli  authorities  have  made  an  increasing  number  of 
requests for technical assistance from the EU in the form of TAIEX workshops and Twining 
programmes – the only type of capacity building assistance the EU provides to Israel being a 
developed  country.  In  a  wide  range  of  areas  (including  transport,  environment,  energy, 
statistics,    agriculture  and  telecomm)  EU  regulatory  practice  (norms,  standards  and 
procedures)  has  been  shared  with  the  Israeli  authorities,  thus  helping  specific  policy 
formulation and implementation. For trade, it is particularly important to continue providing 
support for ongoing market reforms, in particular those that relate to the opening of the Israeli 
domestic  market  –  such  as  in  the  areas  of  agricultural  policy,  accreditation,  import 
authorization procedures, conformity assessments and standard setting etc. – as this could also 
improve  market  access  conditions  for  EU  operators  and  increase  competition  in  Israel.  It 
should  also  be  noted  that  some  important  European  regulations  such  as  the  General  Data 
Protection  Regulation  (GDPR),  waste  management  and  others,  became  relevant  and 
economically important in the Israeli context. Also, there is an increasing number of European 
companies  establishing  research  centers,  tech  hubs  and  scouting  companies  in  Israel, 
particularily in the automative sector. 

Exports  of  gas  to  the  EU  are  also  on  the  agenda,  with  the  final  aim,  pending  feasibility,  to 
export natural gas from Israel to Cyprus, Greece and Italy as of 2025.  

5. 

PROGRESS MADE, MAIN OPEN ISSUES AND FOLLOW-UP ACTIONS 

No significant roll back of commitments in the Agreement has been recorded; however there 
are a number of persistent trade irritants. These include the discriminatory treatment of EU 
Member States, who have joined since 2004 and of Luxembourg, with particular reference to 
restrictions  on  import  authorization  of  medical  devices,  the  lack  of  data  protection  on 
biological  medicines,  the  rigid  regime  of  kosher  certification  of  slaughtered  meat,  the 
difficulties  in  registration  of  imported  food  products  as  well  as  restrictions  to  the  import  of 
live animals. A number of official and technical meetings have taken place to look into these 
issues.  On  trade  defence  policy,  an  anti-dumping  investigation  on  imports  of  cement  from 
Greece took longer than the WTO ceiling of 18 months. The EU has drawn Israel's attention 

141 

 
 
 
 
 
to  this  issue  and  asked  that  no  duty  would  be  imposed.  Israel  ignored  the  EU's  request  and 
imposed a minimal 0.25% duty. 

In the context of the wish expressed by the Israeli government to fight the high cost of living 
and enhance competitiveness on the market, the EU is supporting Israel’s ongoing market 
reforms  by  sharing  its  best  practices  on  issues  such  as  standards,  import  procedures, 
conformity assessments, agricultural support policy, competition, etc.  

6. 

CONCLUSIONS AND OUTLOOK 

Overall  the  value  of  trade  between  the  EU  and  Israel  has  increased  during  the  period  of 
implementation  of  the  Agreement  and  this  is  true  in  both  directions.  Goods  continue  to 
account  for  the  majority  of  trade,  although  services  and  foreign  investment  are  also 
noteworthy.  

There have been some recent successes in resolving trade irritants (e.g. for pharmaceuticals), 
which  is  a  path  that  the  EU  aims  to  continue  on  to  further  strengthen  trade  relations;  the 
deepening of such relations is also facilitated by a continuous dialogue in many areas, such as 
in  the regulatory  field,  where  Israel  considers the EU as an international  reference.  The EU 
and Israel continue to cooperate in bilateral and multilateral trade talks. 

Discussions  between  the  EU  and  Israel  on  a  Dispute  Settlement  Agreement  under  the 
Association Agreement are still to be finalised. Israel has expressed some limited interest in 
using the Agreement’s review clause on services.  

The EU will continue to support Israel’s ongoing market  reforms and will continue in 2019 
working with Israel on cosmetics, food and other areas, advocating for rules that are aligned 
with international and, possibly, EU standards. 

7. 

STATISTICS 

Merchandise trade EU28 2014-2018 
2014 

2015 

2016 

2017 

2018 

EU28 trade with Israel (mio €) 

Imports 
Exports 
Balance 

Share Israel in EU28 trade with Extra-EU28 

Imports 
Exports 
Total (I+E) 

Imports 
Exports 
Total (I+E) 

Source Trade G2 Statistics/ISDB  
Trade EU28: Eurostat COMEXT;  Trade Israel: IMF Dots 

13.255 
16.992 
3.737 

0,8% 
1,0% 
0,9% 

13.385 
18.930 
5.545 

0,8% 
1,1% 
0,9% 

Share EU28 in trade Israel with world 

33,4% 
27,4% 
30,4% 

36,4% 
24,3% 
30,2% 

13.178 
21.108 
7.931 

0,8% 
1,2% 
1,0% 

40,6% 
26,2% 
33,7% 

14.809 
21.426 
6.617 

0,8% 
1,1% 
1,0% 

41,2% 
29,7% 
35,8% 

13.602 
20.736 
7.134 

0,7% 
1,1% 
0,9% 

41,2% 
28,4% 
35,7% 
25-mars-19 

Total merchandise trade EU28 with Israel (mio €) 

Israel 

2017 

2018 

Imports 

14.809 

13.602 

-1.207 

mio € 

142 

Growth 

annual 
% 
-8,2% 

 
 
 
 
 
 
 
  
  
  
  
  
  
  
 
  
  
  
  
 
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
Exports 
Balance 
Total trade 
Source Trade G2 Statistics/ISDB from Eurostat COMEXT 

21.426 
6.617 
36.235 

20.736 
7.134 
34.337 

-690 
517 
-1.898 

-3,2% 

-5,2% 

Agrifood trade EU28 with Israel (mio €) 

Israel 

2017 

2018 

Growth 

annual 
% 
-11,7% 
8,8% 

1,5% 

Imports 
Exports 
Balance 
Total trade 
Source Trade G2 Statistics/ISDB from Eurostat COMEXT 

990 
1.798 
808 
2.788 

874 
1.955 
1.081 
2.829 

mio € 

-116 
157 
274 
41 

NAMA trade EU28 with Israel (mio €) 

Israel 

2017 

2018 

EU28 imports 
EU28 exports 
Balance 
Total trade 
Source Trade G2 Statistics/ISDB from Eurostat COMEXT 

13.819 
19.628 
5.809 
33.447 

12.728 
18.781 
6.053 
31.508 

Services trade EU28 with Israel (mio €) 

Israel 

2016 

2017 

Imports 
Exports 
Balance 
Total trade 
Source Trade G2 Statistics/ISDB from Eurostat BOP statistics 

4.756 
6.830 
2.074 
11.586 

5.186 
7.154 
1.967 
12.340 

Services trade EU28 with Israel (mio €) 

Growth 

mio € 

-1.091 
-848 
243 
-1.939 

annual 
% 
-7,9% 
-4,3% 

-5,8% 

Growth 

mio € 

430 
324 
-106 
754 

annual 
% 
9,0% 
4,7% 

6,5% 

Imports 
Exports 
Balance 
Total trade 
Source Trade G2 Statistics/ISDB from Eurostat BOP statistics 

2013 

2014 

2015 

2016 

2017 

4.272 
4.579 
307 
8.851 

3.913 
4.969 
1.057 
8.882 

4.633 
6.983 
2.350 
11.616 

4.756 
6.830 
2.074 
11.586 

5.186 
7.154 
1.967 
12.340 

FDI EU28 with Israel (mio €) 
2014 

2015 

2016 

2017 

Inward 
Outward 

Inward 
Outward 
Source Trade G2 Statistics/ISDB from Eurostat BOP statistics 

2.023 
4.194 

2013 
FDI Stocks 
32.237 
11.544 
FDI Flows 

40.872 
16.066 

7.094 
1.855 

33.445 
17.491 

2.348 
1.231 

45.155 
28.464 

13.948 
904 

58.254 
30.079 

205 
2.613 

143 

 
 
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
 
 
 
ANNUAL  INFO  SHEET  ON  THE  IMPLEMENTATION  OF  THE  EU-JORDAN 
ASSOCIATION AGREEMENT 

1. 

INTRODUCTION 

The  Association  Agreement  (AA)  creating  a  free  trade  area  between  the  EU  and  Jordan 
(hereinafter  referred  to  as  ‘the  Agreement’)  was  signed  on  24  November  1997  and  entered 
into force on 1 May 2002. It liberalised two-way trade in goods, with asymmetrical transition 
periods in favour of Jordan. This allowed Jordan to phase in tariff reductions over a 12 year 
period.  Tariff  dismantling  has  now  been  completed.  The  EU  and  Jordan  upgraded  the 
Agreement in 2006 concluding an additional agreement on trade in agricultural and processed 
agricultural  products.  Today  all  Jordanian  agricultural  products  can  enter  the  EU  duty  free 
with  the  exception  of  virgin  olive  oil  and  cut  flowers,  which  are  under  tariff  rate  quotas 
(TRQs), while agricultural liberalisation on the Jordanian side is substantial, but not complete. 
A  protocol  establishing  a  bilateral  Dispute  Settlement  Mechanism  was  added  to  the 
Agreement in  2011.  In  December 2018, the EU and Jordan agreed to  review their initiative 
from July 2016 to simplify the rules of origin that Jordanian exporters use in their trade with 
the EU58. 

Jordan is a member of the Regional Convention on pan-Euro-Mediterranean preferential rules 
of origin (PEM Convention) which it signed in 2011 and notified the EU of its ratification in 
2013.  The  Convention’s  main  objective  is  to  provide  a  more  unified  framework  for  origin 
protocols. 

In 2011 the Council of the European Union adopted negotiating directives to further enhance 
the  trade  relationship  through  a  Deep  and  Comprehensive  Free  Trade  Area  (DCFTA)  with 
Jordan, but negotiations have not yet started. 

2. 

EVOLUTION OF TRADE 

2.1. 

Trade in Goods 

EU-Jordan trade in goods (thousands of euros) 

4.500.000
4.000.000
3.500.000
3.000.000
2.500.000
2.000.000
1.500.000
1.000.000
500.000
0

EU Exports

EU Imports

EU imports of agricultural
products

2
0
0
2

3
0
0
2

4
0
0
2

5
0
0
2

6
0
0
2

7
0
0
2

8
0
0
2

9
0
0
2

0
1
0
2

1
1
0
2

2
1
0
2

3
1
0
2

4
1
0
2

5
1
0
2

6
1
0
2

7
1
0
2

8
1
0
2

In 2018 the EU was Jordan’s largest trade partner, representing 21.5% of its total trade. The 
EU  was  the  largest  importer  into  Jordan  with  a  16.8%  market  share.  It  was,  however,  only 

58 https://trade.ec.europa.eu/doclib/docs/2018/december/tradoc_157588.pdf  

144 

 
 
 
 
 
 
                                                 
Jordan’s 7th largest export market behind the US, India and regional players, including Saudi 
Arabia,  Iraq  and  the  UAE.  The  value  of  trade  in  goods  between  the  EU  and  Jordan  has 
increased in both directions since the Agreement entered into force, from €2.4 billion in 2002 
to  €3.87 billion in 2018.  

In  2018,  the  outlook  for  EU-Jordan  trade  reflects  the  concerns  of  the  state  of  the  Jordanian 
economy, with consumption levels contracting. Jordan was 64th on the list of the EU’s main 
trading partners, accounting for 0.1 % of the EU’s total trade with the rest of the world. Total 
trade in goods between the EU and Jordan in 2018 declined by 14% from €4.5 in 2017 to €3.9 
billion in 2018.  

The value of EU exports in goods to Jordan has increased more than EU’s imports. Jordan’s 
trade  deficit  with  the  EU  has  grown  over  the  period  2002-2018.  This  is  broadly  consistent 
with Jordan’s overall trade pattern. As the largest supplier to Jordan, the EU is also the trading 
partner  with  which  it  has  its  largest  trade  deficit  –  i.e.  €3.27 billion  (35.8%)  of  its 
€9.13 billion  total  deficit.  In  2018  the  overall  trade  in  goods  deficit  of  Jordan  with  the  EU 
decreased by 4.6% when compared to 2017.  

The value of EU exports to Jordan has risen by 80% between 2002 and 2018 (from €2 billion 
to €3.6 billion in 2018), but show a 13% decline in 2018 compared to 2017. Exports to Jordan 
have risen  year-on-year with the exception of 2009 (financial crisis), 2014 and 2018; which 
may  be  related  to  regional  political  and  economic  instability.  The  most  important  export 
sectors were machinery and transport equipment (32.4%), agricultural products (23.3%) and 
chemicals (16.5%).  

In 2018, the EU imported for €300 million in goods from Jordan, mostly chemicals (36.4%) 
and textiles and clothing (17.7%). 

The value of EU imports from Jordan has risen from €314 million in 2002 to €358 million in 
2017,  but  declined  in  2018  to  reach  €300  million.  Within  the  lifespan  of  the  agreement  the 
value of imports has fluctuated. In 2015, imports reached an all-time high of €386 million, but 
have  since  declined.  In8,  the  most  important  import  sectors  were  chemicals  (38.3 %)  and 
textiles and clothing (17.8 %).  

2.2. 

Trade in agricultural goods 

Total  trade  in  agricultural  products  between  the  EU  and  Jordan  increased  more  than  eight 
times  between  2003  and  2018,  from  €0.1 billion  in  2003  to  €0.87 billion  in  2018.  Between 
2017  and  2018,  EU  agricultural  exports  remained  stable.  EU  imports  decreased  (5%)  from 
€45 million  in  2017  to  €43 million  in  2018.  In  2018  the  EU  mainly  exported  wheat,  live 
animals,  chocolate  and  infant  food  and  other  cereals,  flour,  starch  or  milk  preparations  to 
Jordan. The EU's key agricultural imports from Jordan were cigars and cigarettes, vegetables 
and preparations of vegetables, fruits and nuts.  

Regarding agricultural tariff rate quotas (TRQs), Jordan’s 2018 fill rate of the two TRQs on 
virgin olive oil and fresh cut flowers and buds was close to 0% (very low imports of virgin 
olive oil – 229 kg in 2018 and 48 kg in 2019 until 10/04; no imports of fresh cut flowers).  

145 

 
 
 
 
 
 
 
 
 
 
2.3. 

Trade in Services and Investment 

In 2017 trade in services between the EU and Jordan was worth €1.5 billion. There has been 
an overall decline in the value of services imported from Jordan from €0.6 billion in 2010 to 
€0.5 billion in 2017, due to instability in the region. Over the same time period, EU services 
exports  to  Jordan  increased  from  €0.6 billion  to  €1.0 billion.  Jordan’s  services  exports  are 
dominated by services in the travel sector, while Jordan’s imports of services are dominated 
by the transport sector. 

In  2017,  FDI  stocks  were  worth  €4.3 billion  (i.e.  €3.3 billion  of  EU  FDI  in  Jordan  and 
€1 billion of Jordanian FDI in  the EU). According to  the World  Bank 2019 "Ease of Doing 
Business" index which ranks 190 countries, Jordan ranked 104th in the world for overall ease 
of doing business, with a distance to frontier (DTF)59 score of 60.98 out of 100 – an increase 
of 1.42 in DTF score compared to 2018. 

3. 

ISSUES  ADDRESSED  IN  THE  ANNUAL  (JOINT  COMMITTEE/TRADE  COMMITTEE) 
MEETING 

There were no sub-committee meetings in 2018. The latest committee meeting took place in 
2017  and  were  reported  in  the  2018  Staff  Working  Document  (SWD  (2018)454  Final) 
attached to the 2018 Report on the implementation of Free Trade Agreements. 

4. 

SPECIFIC AREAS OF IMPORTANCE 

The protracted Syrian crisis has had serious consequences  for the Jordanian economy and 
its trade. The closure of traditional trade routes resulted in significant losses and downscaling 
of production for the export market. The presence of over 650,000 Syrian refugees in Jordan60 
has  compounded  existing  economic  grievances.  In  the  absence  of  sufficient  reform  to  the 
regulatory environment, attracting foreign investments to offset the negative trend has proven 
difficult.  In  2016,  Jordan  agreed  with  the  IMF  on  a  three-year  programme  foreseeing  long-
delayed structural reforms. Additionally, Jordan (together with Tunisia) continued to benefit 
from  Macro-Financial  Assistance  (MFA)  from  the  EU  and  the  country  is  currently 
implementing  a  second  MFA  operation  aimed  at  strengthening  the  its  foreign  exchange 
reserve position and meeting its balance of payments and budgetary financing needs. In order 
to address the problems caused by the Syrian crisis, the EU provided Jordan with a package of 
support, including the simplification of the rules of origin applicable to Jordanian exports 
to the EU and trade support programs. The initiative to simplify rules of origin was agreed 
in  July  2016  and,  based  on  Jordan’s  request  for  additional  flexibility,  further  reviewed  in 
December 2018. Under the initiative, Jordanian exporters to the EU can now benefit from 
the same rules of origin for manufactured products as those applied by the EU for the 
Least Developed Countries, provided that certain conditions are met. These rules are simpler 
than those that would otherwise apply under the Agreement. The simplification applies to 52 
product groups. To qualify to use the simpler rules, production must take place in the territory 
of  Jordan  and  Syrian  refugees  must  also  account  for  no  less  than  15%  of  a  manufacturer’s 
workforce. The parties have also foreseen a possibility to extend the scheme to all companies 
operating in Jordan (without the 15% requirement as above) once Jordan reaches a target of 
60,000  legal  and  active  jobs  for  Syrian  refugees.  The  scheme  will  apply  until  2030.  The 
government of Jordan has also agreed to put in place specific monitoring procedures to ensure 

59  The  DTF  score  is  a  measurement  used  by  the  World  Bank  to  assess  the  absolute  level  of  regulatory 

performance in economies over time. The higher score the better. 

60   According to UNHCR data, see http://data2.unhcr.org/en/situations/syria/location/36  

146 

 
 
 
                                                 
companies  who  benefit  comply  with  all  the  requirements  of  the  scheme.  Monitoring  and 
capacity building for the Ministry of Labour will be carried out by the International  Labour 
Organisation (ILO). 

Regarding the Rules of Origin initiative there is interest on both sides to further incentivise 
economic operators to use the scheme. Thirteen companies have already registered and six of 
them exported their products into the EU for a total value of €19.26 million.  

A  renewed  effort  towards  enhancing  regulatory  coherence  features  among 
the 
Partnership Priorities adopted in December 201661 . The Priorities, which also cover actions 
to enhance Jordan’s social and economic resilience, were extended until the end of 2020. The 
EU seeks to work with Jordan to promote a stronger, more competitive economy whereby an 
enhanced  trade  and  investment  climate  will  encourage  and  enable  Jordanian  enterprises  to 
take better advantage of preferential access to the EU market and thus will act as a powerful 
incentive for job creation. Cooperation also covers the area of skills development and related 
educational reform to promote the productive contribution of young people to the economy.  

Trade policy  featured prominently in  both  the government's Renaissance/Nahda  Plan and in 
the  five-year  growth  plan  presented  during  the  London  Conference  of  February  2019.  The 
government identified trade as one of the engines for growth, with the aim to grow exports by 
5%  annually  and  reduce  imports  by  15%  by  the  end  of  2020.  In  the  coming  3  years  the 
government plans to work towards the following objectives: i) providing technical assistance 
and financial incentives for companies that export utilising Jordanian workers; ii) establishing 
a company that is concerned with export promotion; iii) rehabilitating border crossings with 
Syria, Iraq and Palestine; establishing a Jordanian–Iraqi joint free zone close to both borders; 
and iv) expanding the scope of insurance coverage for Jordanian exporters within the export 
credit  guarantee  program  to  reach  100  million  Dinars  annually  by  the  end  of  2020.  The 
government  is  also  requesting  support  in  its  efforts  to  reform  the  national  quality 
infrastructure and attract FDI. 

Jordan is also working on approximating its standards to EU standards. The Jordan Food and 
Drug  Administration  was  active  in  early  2017  on  undertaking  steps  for  alignment  to  EU 
technical  regulations  and  SPS  standards.  Two  expert  missions  were  conducted  to  determine 
the needs and potential technical assistance. 

On  trade-related  assistance,  the  EU  continued  to  provide  direct  and  indirect  assistance.  The 
EU is also providing one million euros to the Jordan Standards and Metrology Organisation 
for  capacity-building  for  accreditation  and  market  surveillance.  Progress  is  being  made  on 
regulatory  approximation  in  preparation  of  the  possible  launch  of  an  Agreement  on 
Conformity  Assessment  and  Acceptance  (ACAA).  In  addition,  to  support  the  government's 
objectives,  the  EU  is  also  preparing  to  sign  a  programme  with  the  International  Finance 
Cooperation/World  Bank  Group  for  technical  assistance  for  the  review  of  Jordan's  national 
quality infrastructure. 

Trade-related assistance  projects  to  improve the trade and investment  climate also  include a 
€55 million Private Sector Development programme comprising a budget support component, 
technical  assistance  to  the  Government  and  company-level  assistance  for  the  private  sector. 
There is a further project to support entrepreneurship in the north of Jordan, the region most 

61  See http://www.consilium.europa.eu/en/press/press-releases/2016/12/20/eu-jordan-partnership-priorities-and-

compact/  

147 

 
 
 
 
 
 
 
 
                                                 
strongly  affected  by  the  influx  of  refugees.  It  aims  at  stimulating  innovation,  increasing  the 
competitiveness of Jordanian exports and supporting the Rules of Origin initiative. 

5. 

PROGRESS MADE, MAIN OPEN ISSUES AND FOLLOW-UP ACTIONS 

Jordan has recently started to be more active in enacting/adopting trade restrictive measures: 
e.g.  Jordan  has  banned  (or  significantly  reduced)  imports  of  several  categories  of  dairy 
products. Discussions between the EU side and the relevant authorities are ongoing.  

There  is  also  a  continuing  difference  of  views  concerning  Jordan’s  commitments  on  the 
import conditions for alcoholic drinks, arising from the interaction between the initial and 
the  subsequently  updated  Agreement  that  brought  additional  liberalisation  of  trade  in 
agricultural, processed agricultural and fisheries products.  

Furthermore, there are a number of structural issues on the side of Jordan, which prevent the 
country  from  taking  full  advantage  of  the  Agreement,  such  as  a  lack  of  clear  trade  and 
development  policies  and  administrative  weaknesses.  There  is  a  lack  of  interest  from  the 
Jordanian  private  sector,  which  still  prefers  to  focus  on  neighbouring  markets  as  the  EU  is 
seen  as  a  highly  competitive  and  demanding  market  with  high  regulatory  requirements.  In 
addition,  production  costs  in  Jordan  are  high  due  to  water  shortages,  high  electricity  prices 
and  transportation  costs,  which  tend  to  reduce  the  international  competitiveness  of  goods 
made in Jordan. 

6. 

CONCLUSIONS AND OUTLOOK 

Overall the value of trade between the EU and Jordan has increased since the Association 
Agreement has come into force. Goods continue to account for the majority of trade, although 
services  and foreign investment are also present. However, in 2018, both EU exports to EU 
imports  from  Jordan  have  decreased  in  comparison  to  2017.  Over  the  same  time  period, 
Jordan’s exports to the EU decreased below the 2002 level. EU exports to Jordan have grown 
faster  than  Jordanian  exports  to  the  EU,  so  the  Jordanian  trade  deficit  with  the  EU  has 
increased in the same period, no doubt exacerbated by regional developments.  

The  Syria  crisis  has  closed  many  traditional  trade  routes  used  by  Jordan.  The  Decision  on 
relaxation  of  Rules  of  Origin,  adopted  in  July  2016  and  revised  in  2018,  was  designed  to 
boost Jordanian exports to the EU and to  support  formal integration of Syrian  refugees into 
the Jordanian economy. Further actions are planned to raise awareness of this initiative and to 
promote the business opportunities it provides.  

DCFTA  negotiations  have  not  yet  started,  however,  the  importance  of  the  DCFTA  to 
improve  the  resilience  of  the  Jordanian  economy  was  formally  recognised  in  the 
Partnership  Priorities62.  In  the  last  Sub-Committee  on  Industry,  Trade  and  Services,  Jordan 
indicated  that  they  preferred  to  deal  with  further  liberalisation  of  agriculture,  processed 
agriculture,  fisheries  and  processed  fisheries  products  under  the  DCFTA  when  the  time  is 
right.  

7. 

STATISTICS 

62  See http://data.consilium.europa.eu/doc/document/ST-12384-2016-ADD-1/en/pdf 

148 

 
 
 
 
 
 
 
                                                 
Merchandise trade EU28 2014-2018 
2015 

2014 

2016 

2017 

2018 

EU28 trade with Jordan (mio €) 

Imports 
Exports 
Balance 

Share Jordan in EU28 trade with Extra-EU28 

338 
3.672 
3.335 

384 
3.985 
3.601 

Imports 
Exports 
Total (I+E) 

Imports 
Exports 
Total (I+E) 

0,0% 
0,2% 
0,1% 

0,0% 
0,2% 
0,1% 
Share EU28 in trade Jordan with world 
21,6% 
2,5% 
16,9% 

19,7% 
4,2% 
16,0% 

Source Trade G2 Statistics/ISDB  
Trade EU28: Eurostat COMEXT;  Trade Jordan: IMF Dots 

337 
4.056 
3.719 

0,0% 
0,2% 
0,1% 

359 
4.105 
3.746 

0,0% 
0,2% 
0,1% 

24,4% 
2,8% 
19,1% 

22,0% 
2,8% 
17,4% 

300 
3.569 
3.269 

0,0% 
0,2% 
0,1% 

21,5% 
3,2% 
17,1% 
25-mars-
19 

Total merchandise trade EU28 with Jordan (mio €) 

Jordan 

Imports 
Exports 
Balance 
Total trade 
Source Trade G2 Statistics/ISDB from Eurostat COMEXT 

2017 

2018 

359 
4.105 
3.746 
4.463 

300 
3.569 
3.269 
3.869 

Growth 

mio € 
-58 
-536 
-477 
-594 

annual 
% 
-16,3% 
-13,1% 

-13,3% 

Agrifood trade EU28 with Jordan (mio €) 

Jordan 

2017 

2018 

Growth 

annual 
% 
-5,4% 
-0,4% 

-0,7% 

Imports 
Exports 
Balance 
Total trade 
Source Trade G2 Statistics/ISDB from Eurostat COMEXT 

mio € 
-2 
-3 
0 
-5 

43 
764 
722 
807 

45 
767 
722 
813 

NAMA trade EU28 with Jordan (mio €) 

Jordan 

EU28 imports 
EU28 exports 
Balance 
Total trade 
Source Trade G2 Statistics/ISDB from Eurostat COMEXT 

Services trade EU28 with Jordan (mio €) 

Jordan 

Imports 
Exports 
Balance 
Total trade 
Source Trade G2 Statistics/ISDB from Eurostat BOP statistics 

2017 

2018 

313 
3.337 
3.024 
3.650 

257 
2.804 
2.547 
3.062 

Growth 

mio € 
-56 
-533 
-477 
-589 

annual 
% 
-17,9% 
-16,0% 

-16,1% 

2016 

2017 

538 
897 
359 
1.434 

507 
974 
467 
1.481 

Growth 

mio € 
-30 
78 
108 
47 

annual 
% 
-5,6% 
8,7% 

3,3% 

Services trade EU28 with Jordan (mio €) 

Imports 
Exports 
Balance 
Total trade 
Source Trade G2 Statistics/ISDB from Eurostat BOP statistics 

2013 

2014 

2015 

2016 

2017 

460 
856 
396 
1.316 

668 
1.485 
817 
2.154 

471 
932 
461 
1.403 

538 
897 
359 
1.434 

507 
974 
467 
1.481 

FDI EU28 with Jordan (mio €) 

2013 

2014 

2015 

2016 

2017 

FDI Stocks 

149 

 
 
  
 
  
  
  
  
 
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
Inward 
Outward 

500 
2.424 

496 
2.977 

453 
2.914 

510 
3.193 

991 
3.261 

FDI Flows 

Inward 
Outward 
Source Trade G2 Statistics/ISDB from Eurostat BOP statistics 

72 
-153 

20 
335 

-27 
235 

-381 
227 

-7 
216 

150 

 
 
  
  
  
  
  
 
 
 
ANNUAL  INFO  SHEET  ON  THE  IMPLEMENTATION  OF  THE  EU-LEBANON 
ASSOCIATION AGREEMENT 

1. 

INTRODUCTION 

The EU and Lebanon have an Association Agreement, creating a tree trade area, which was 
provisionally  applied  on  1  March  2003  and  fully  entered  into  force  on  1  April  2006 
(hereinafter  referred  to  as  ‘the  Agreement’).  The  Agreement  liberalised  two-way  trade  in 
industrial goods with an asymmetrical transition period of 12 years in favour of Lebanon. The 
phased-in liberalisation of industrial products by Lebanon started in 2008 and was completed 
in 2015. In regard to agri-food trade, the Agreement as of its provisional application, granted 
tariff-free access of most Lebanese agricultural and processed agricultural products to the EU 
market  (i.e.  89%  of  products  enter  tariff  and  quota  free)  with  only  27  agricultural  products 
facing  a  specific  tariff  treatment,  mostly  Tariff  Rate  Quotas  (TRQs).  On  the  other  hand, 
agricultural  liberalisation by  Lebanon has been  more limited.  In 2010, the EU and  Lebanon 
signed  an  additional  protocol  on  a  Dispute  Settlement  Mechanism.  Lebanon  notified  the 
ratification of the protocol at the end of 2018. 

In  2014,  Lebanon  signed  the  Regional  Convention  on  Pan-Euro-Mediterranean  preferential 
rules of origin  (PEM  Convention). The country notified its ratification in October 2017 and 
formally joined on 1 December 201763. The Convention’s main objective is to provide a more 
unified framework for origin protocols. 

2. 

EVOLUTION OF TRADE 

2.1 Trade in Goods 

Since 2012, the EU has been consistently ranking as Lebanon’s number one trading partner. 
In 2018, the EU represented 37% of Lebanese trade. Over the last sixteen years, the value of 
EU  exports  to  Lebanon  has  increased  more  than  in  the  other  direction,  leading  to  a 
progressive  widening  of  Lebanon’s  trade  deficit  with  the  EU,  from  €3.0 billion  in  2002  to 
€6.7 billion in 2018.  

EU-Lebanon trade in goods (thousands of euro) 

8.000.000

7.000.000

6.000.000

5.000.000

4.000.000

3.000.000

2.000.000

1.000.000

0

EU Exports

EU Imports

EU imports of agricultural
products (excl. fisheries)

2
0
0
2

3
0
0
2

4
0
0
2

5
0
0
2

6
0
0
2

7
0
0
2

8
0
0
2

9
0
0
2

0
1
0
2

1
1
0
2

2
1
0
2

3
1
0
2

4
1
0
2

5
1
0
2

6
1
0
2

7
1
0
2

8
1
0
2

63  For  more  information  see  https://ec.europa.eu/taxation_customs/business/calculation-customs-duties/rules-

origin/general-aspects-preferential-origin/arrangements-list/paneuromediterranean-cumulation-pem-
convention_en  

151 

 
 
 
 
                                                 
Since the Agreement was provisionally applied, the value of imports and exports between the 
EU  and  Lebanon  has  increased  in  both  directions.  In  2002,  the  year  before  the  Association 
Agreement  was  provisionally  applied,  the  value  of  trade  in  goods  was  €3.4 billion  and  by 
2018 it reached €7.7 billion (an increase of 130%).  

The  value  of  EU  exports  to  Lebanon  has  risen  by  128%  from  €3.2 billion  in  2002  to 
€7.2 billion in 2018. In 2018 the EU exports were substantially stable, decreasing by less than 
1%. The most export sectors by value were fuel and mining products (33%), machinery and 
transport equipment (16%) and chemicals (14%).  

The value of EU imports from Lebanon has risen from less than €0.2 billion in 2002 to more 
than €0.5 billion in 2018. The value of imports rose year-on-year up to 2009 (financial crisis), 
then  recovered  to  exceed  pre-crash  levels  before  falling  again  from  2012  to  2014,  in  part 
explained  by  the  simultaneous  decrease  in  the  price  of  gold.  Between  2017  and  2018,  EU 
imports  increased  by  13%,  going  from  €455 million  to  €513  million.  The  most  important 
groups for import by value were base metals (32%), agricultural and food products (16%) and 
chemical products (11%).  

2.2 Trade in agricultural goods 

Total trade in agri-food products between the EU and Lebanon increased by 140% between 
2003  and  2018,  from  €0.5 billion  to  €1.2 billion.  Between  2017  and  2018,  EU  agri-food 
exports increased slightly (4%) from €1.03 billion to €1.07 billion. Over the same period, EU 
agri-food imports increased very slightly (0.1%) from €103 million to €104 million. In 2018, 
the EU mainly  exported live animals  (17%),  cheese (9%), spirits and liqueurs (6%), cereals 
other than wheat & rice (6%) and milk powder & whey (6%). The EU's key agri-food imports 
were  preparations  of  vegetables,  fruits  and  nuts  (23%),  offal,  animals  fats  &  other  meats 
(16%) and raw tobacco (11%). 

Regarding  agricultural  tariff  rate  quotas  (TRQs),  the  fill  rate  by  Lebanon  was  very  low  in 
2018. The country only used 8% of its olive oil quota. For table grapes, where the quota year 
does not coincide with the calendar year, it used 8% for 2017-18. It used less than 1% of its 
quotas for tomatoes, apples, apricots, peaches, or plums. All other quotas remained unused. 

2.3 Trade in Services and Foreign Direct Investment (FDI) 

In 2017, trade in services between the EU and Lebanon was worth €2.5 billion. Over the last 
5  years,  trade  in  services  increased  in  both  directions,  albeit  with  a  fluctuating  trend.  EU 
services  imports  from  Lebanon  have  risen  from  €0.9 billion  in  2010  to  €1.1 billion  in  2014 
and then have again shrunk to €1.0 billion in 2017, while EU services exports have risen from 
€1.2 billion  in  2010  to  €1.9 billion  in  2014,  before  shrinking  again  to  reach  €1.5 billion  in 
2017. The EU’s trade surplus has increased from €0.3 billion in 2010 to €0.4 billion in 2017.  

In 2017, EU FDI stocks in Lebanon amounted to €2.0 billion, with inward FDI stocks from 
Lebanon  to  the  EU  accounting  for  €4.6 billion.  In  2017,  EU  FDI  flows  accounted  for 
€256 million, while flow of Lebanese FDI reached €184 million.  

According  to  The  World  Bank  Doing  Business  Index  2019  ranking  190  countries,  Lebanon 
ranked  142nd  in  the  world  on  the  ease  of  doing  business  (it  ranked  133rd  in  2018),  with  a 

152 

 
 
 
 
 
 
 
distance to frontier (DTF)64 score of 54.04 out of 100 – stable if compared to 2018, when the 
value was 53.97.  

3. 

ISSUES ADDRESSED IN THE ANNUAL JOINT COMMITTEE MEETINGS 

The  EU-Lebanon  Sub-Committee  on  Industry,  Trade  and  Services,  Customs  met  on  7 
March  2018.  The  key  issues  discussed  were  the  need  to  further  increase  Lebanese  trade 
integration  with  the  EU  and  international  community  including  through  the  possible 
implementation  of  a  the  revised  PEM  rules,  Lebanese  accession  to  the  Agadir  Agreement65 
and the WTO membership bid  –  which the EU supports.  The parties also discussed the EU 
support  to  the  strengthening  of  Lebanese  capacity  in  key  sectors  that  were  identified  in  the 
Joint  Working  Group  on  Trade  and  Investment66  of  July  2017  and  included  in  an  Action 
Plan: pharmaceuticals products, agri-food and statistics. The EU also noted the obligation not 
to impose trade related measures without consultation and required information on a series of 
measures  that  could  affect  EU  exports,  notably  additional  duties  on  imports  of  wine  and 
spirits and the exemption of oil from  customs duties that have been suspended. Agricultural 
topics  were  also  discussed.  In  this  context,  the  Parties  exchanged  views  on  the  latest 
developments  in  Lebanese  and  EU  agricultural  and  rural  development  policies,  the  state  of 
play  regarding  the  review  of  the  Lebanese  draft  law  on  geographical  indications  (GIs), 
organic farming and the technical assistance for increasing competitiveness of the agricultural 
and agro-food sectors.  

The Sub-Committee took place in the framework of an ‘Economic Cluster’ which included, 
back-to-back:  the  Macro-Economic  dialogue  and  the  Subcommittee  on  other  economic-
related  areas.  The  latter  discussed  areas  of  mutual  economic  interest,  such  as  the  EU 
External Investment Plan (EIP), Lebanon’s economic fragility brought about by slow growth, 
rising  public  debt  and  vulnerability  to  the  reforms  planned  within  the  framework  of  the 
presentation  of  Lebanon’s  Capital  Investment  Programme  (and  its  monitoring  mechanism), 
EU-Lebanon  cooperation  to  fulfil  climate  change  commitments  and  its  impact  on  economic 
growth  and  job  creation,  waste  management,  energy  and  other  issues.  The  CEDRE67 
conference  was  held  on  6  April  2018  in  Paris  where  international  donors  met  to  support 
Lebanese developments and reforms and the conference on Supporting the future of Syria and 
the region took place in Brussels on 24 and 25 April 2018. 

Furthermore, the EU and Lebanon had technical discussions in July 2018 and January 2019 in 
the  framework  of  the  EU-Lebanon  Joint  Working  Group  on  Trade  and  Investment 
(JWG).  The  JWG  is  a  forum  for  technical  level  discussions  aimed  at  improving  economic 
cooperation and trade, in particular with a view to support Lebanon’s capacity to beneft from 
the trade preferences that are granted in the Agreement. Work in the JWG informs the Sub-
Committees.  The JWG has an important  role in shaping  future  assistance and advocates  for 
strategic  trade  reforms  (horizontal  reforms  and  sector  reforms,  business  climate,  quality 
standards etc.). Specific  issues addressed addressed by thr JWG include the following, inter 
alia:  facilitating  exports  of  agri-food  and 
improving 
competitiveness  and  productivity  of  the  agri-food  sector  as  well  as  services,  statistics,  SPS, 

industrial  goods 

the  EU, 

to 

64  The  DTF  score  is  a  measurement  used  by  the  World  Bank  to  assess  the  absolute  level  of  regulatory 

performance in economies over time. The higher the score, the better. 

65  The Agadir Agreement for establishing a Mediterranean Free Trade Area was signed on 25 February 2004 

and entered into force in 2007. Agadir member countries include Morocco, Tunisia, Egypt and Jordan. 
66  See in the following paragraph. For more information see  https://eeas.europa.eu/headquarters/headquarters-

Homepage/26716/european-union-and-lebanon-set-joint-working-group-trade-and-investment_en  

67  Conférence économique pour le développement, par les réformes et avec les entreprises 

153 

 
 
 
 
                                                 
SMEs, business and investment climate. The last JWG of January 2019 focussed on rules of 
origin,  EU  support  to  Lebanese  export  capacity  in  the  agri-food  and  pharmaceutical  sector, 
Lebanese participation in the Enterprise Europe Network, update on Geographical Indications 
as well as Lebanon’s accession to the Agadir Agreement. 

4. 

SPECIFIC AREAS OF IMPORTANCE 

The  protracted  Syrian  crisis  has  had  serious  consequences  for  Lebanon.  The  conflict  has 
exacerbated  the  security,  political  and  economic  issues  facing  the  country.  The  number  of 
Syrian refugees is extremely high (between 1 million and 1.5 million in a country of 6 million 
people, which alread hosts half a million of Palestinian refugees). These shocks have resulted 
in  a  decline  in  economic  activity,  such  as  tourism  and  investments.  Economic  growth  has 
been  falling  sharply  from  the  7%-9%  growth  rates  experienced  between  2008  and  2010  to 
sluggish rates: in 2017, the annual GDP only grew by 0.6% and by only 0.3% in 2018.  The 
unstable  political  environment  and  budgetary  constraints  (exacerbated  by  the  high  debt 
levels, currently at 152% of GDP) have made it difficult for Jordan to address issues such as 
poverty,  unemployment,  poor  infrastructures  and  the  ‘brain  drain’.  On  a  positive  note,  a 
government  was  formed  on  31  January  2019,  following  nine  months  of  deadlock  after  the 
national elections of May 2018. The new government vowed to revive the reform agenda that 
is  linked  to  the  CEDRE  Conference  (see  section  3),  where  international  donors  –  the  EU 
among them – pledged $11 billion in grants and loans, conditional upon the implementation 
of a fiscal and structural adjustment plan. 

At bilateral level, following the commitments undertaken by the EU and Lebanon (reflected 
in the Partnership Priorities and Compact) to address the factors hindering trade towards the 
EU, the Joint Working Group on Trade and Investment (JWG) was set. Its aim is to address 
issues  hindering  Jordan-EU  trade  and  to  help  Lebanon  to  upgrade  its  local  production 
standards  (see  in  more  detail  section  3  above).  Lebanon  also  receives  assistance  under  the 
TAIEX  program68.  In  addition,  there  are  a  number  of  trade  related  assistance  projects  to 
improve  the  trade  and  investment  climate.  For  example,  the  EU  is  currently  financing  a 
€ 15 million programme on improving value chains in agriculture and wood processing, with 
the aim to improve quality of Lebanese products and boost the competitiveness of the targeted 
sectors.  

5. 

PROGRESS MADE, MAIN OPEN ISSUES AND FOLLOW-UP ACTIONS 

The  EU  and  Lebanon  are  committed  to  strengthen  their  dialogue  on  trade,  with  a  view  to 
identifying  pragmatic  solutions  to  help  Lebanon  take  advantage  of  trade  opportunities 
provided  for  by  the  Agreement.  The  EU-Lebanon  Joint  Working  Group  on  Trade  and 
Investment created in 2017 will continue its works in a sustained way in the following months 
and years. 

In 2018, an intense dialogue took place on rules of origin: EU and Lebanon are cooperating 
in  the  revision  of  the  PEM  rules;  this  modernisation  will  allow,  most  probably  between  the 
end of 2019 and 2020, the implementation of much more modern rules of origins in the trade 
between EU and Lebanon and the rest of the Euro-mediterranean region. 
Lebanon  is  still  in  the  process  of  applying  to  join  the  WTO  and  announced  its  intention  to 
rediscuss its offers in terms of schedule of concession of goods. The accession process to join 
the Agadir Agreement is also ongoing and Lebanon now has to comply with the institutional 

68  More information can be found here: https://ec.europa.eu/neighbourhood-enlargement/tenders/taiex_en  

154 

 
 
 
 
                                                 
and administrative requirements that follow the approval of its candidature by the four current 
members.  The  EU  will  continue  to  support  and  encourage  Lebanon  to  pursue  these 
accessions. 

6. 

CONCLUSIONS AND OUTLOOK 

Overall the value of trade between the EU and Lebanon has increased in both directions 
since the Agreement entered into force. EU exports have grown more strongly than Lebanese 
exports  and  consequently  the  EU  trade  surplus  has  widened.  Goods  continue  to  account  for 
the majority of trade, although services and foreign investment are also noteworthy. 

Services  are  the  main  driver  of  Lebanon’s  economy.  Enhancing  the  competitiveness  of  the 
Lebanese  service  sector  could  thus  lead  to  economic  growth  in  selected  sectors  of  strategic 
importance for the country. There is therefore untapped potential in services sectors whose 
growth  could  have  positive  spill-over  effects  into  other  areas  of  the  economy.  At  the  same 
time, there  are a number of ongoing issues  restricting trade and investment  in  Lebanon and 
preventing  the  country  from  taking  full  advantage  of  the  Agreement.  Amongst  others, 
compliance  with  EU  standards,  for  example  for  SPS  and  Pharmaceutical  products,  will  be 
key. The private sector, in particular SMEs, forms the cornerstone of the Lebanese economy 
and  remains  the  main  source  of  job  creation  in  Lebanon.  Despite  its  dynamism  and  high 
resilience,  the  private  sector  continues  to  suffer  from  an  inadequate  business  environment, 
weak infrastructure (an example being the unreliable provision of energy, whose system is in 
need of a reform) and a lack of structural reforms. In those areas as well, the EU is ready to 
support Lebanon. 

Finally, Lebanon remains constrained by the spill-over of the Syrian conflict: apart from the 
high  number  of  Syrian  migrants  in  the  country,  traditional  trade  routes  for  both  Lebanese 
imports  and  exports  remain  closed.  The  EU  and  Lebanon  continue  to  consider  further 
collaboration to ease the strain of the refugee crisis. 

7. 

STATISTICS 

Merchandise trade EU28 2014-2018 

2014 

2015 

2016 

2017 

2018 

EU28 trade with Lebanon (mio €) 

Imports 
Exports 
Balance 

Share Lebanon in EU28 trade with Extra-EU28 

332 
6.545 
6.213 

408 
6.699 
6.291 

Imports 
Exports 
Total (I+E) 

Imports 
Exports 
Total (I+E) 

0,0% 
0,4% 
0,2% 

0,0% 
0,4% 
0,2% 
Share EU28 in trade Lebanon with world 
42,4% 
12,0% 
37,1% 

41,9% 
10,3% 
36,5% 

Source Trade G2 Statistics/ISDB  
Trade EU28: Eurostat COMEXT;  Trade Lebanon: IMF Dots 

407 
6.668 
6.261 

0,0% 
0,4% 
0,2% 

455 
7.265 
6.810 

0,0% 
0,4% 
0,2% 

40,5% 
10,7% 
35,5% 

42,4% 
8,9% 
36,8% 

513 
7.222 
6.709 

0,0% 
0,4% 
0,2% 

41,3% 
13,1% 
36,8% 
25-mars-
19 

Total merchandise trade EU28 with Lebanon (mio €) 

Lebanon 

Imports 
Exports 

2017 

2018 

455 
7.265 

513 
7.222 

Growth 

mio € 
59 
-43 

annual 
% 
12,9% 
-0,6% 

155 

 
 
 
 
 
  
 
  
  
  
  
 
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
Balance 
Total trade 
Source Trade G2 Statistics/ISDB from Eurostat COMEXT 

6.810 
7.719 

6.709 
7.736 

-101 
16 

0,2% 

Agrifood trade EU28 with Lebanon (mio €) 

Lebanon 

2017 

2018 

Imports 
Exports 
Balance 
Total trade 
Source Trade G2 Statistics/ISDB from Eurostat COMEXT 

103 
1.039 
936 
1.142 

104 
1.065 
960 
1.169 

NAMA trade EU28 with Lebanon (mio €) 

Growth 

mio € 
2 
26 
24 
27 

annual 
% 
1,6% 
2,5% 

2,4% 

Lebanon 

EU28 imports 
EU28 exports 
Balance 
Total trade 
Source Trade G2 Statistics/ISDB from Eurostat COMEXT 

Services trade EU28 with Lebanon (mio €) 

Lebanon 

Imports 
Exports 
Balance 
Total trade 
Source Trade G2 Statistics/ISDB from Eurostat BOP statistics 

2017 

2018 

352 
6.226 
5.874 
6.578 

409 
6.158 
5.749 
6.567 

Growth 

mio € 
57 
-68 
-126 
-11 

annual 
% 
16,3% 
-1,1% 

-0,2% 

2016 

2017 

1.074 
1.410 
336 
2.484 

1.025 
1.473 
448 
2.498 

Growth 

mio € 
-49 
63 
112 
15 

annual 
% 
-4,5% 
4,5% 

0,6% 

Services trade EU28 with Lebanon (mio €) 

Imports 
Exports 
Balance 
Total trade 
Source Trade G2 Statistics/ISDB from Eurostat BOP statistics 

2013 

2014 

2015 

2016 

2017 

981 
1.480 
499 
2.460 

1.121 
1.908 
788 
3.029 

967 
1.572 
605 
2.539 

1.074 
1.410 
336 
2.484 

1.025 
1.473 
448 
2.498 

Inward 
Outward 

FDI EU28 with Lebanon (mio €) 

2013 

2014 

2015 

2016 

2017 

FDI Stocks 

3.645 
1.331 

3.774 
1.601 

2.677 
1.866 

4.434 
2.232 

4.629 
2.046 

FDI Flows 

Inward 
Outward 
Source Trade G2 Statistics/ISDB from Eurostat BOP statistics 

320 
234 

261 
190 

1.231 
-46 

133 
213 

184 
256 

156 

 
 
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
 
 
 
ANNUAL  INFO  SHEET  ON  THE  IMPLEMENTATION  OF  THE  EU-MOROCCO 
ASSOCIATION AGREEMENT 

1. 

INTRODUCTION 

The EU and Morocco established a Free Trade Area as part of the EU-Morocco Association 
Agreement  (AA;  the  “Agreement”),  signed  in  1996,  which  entered  into  force  on  1  March 
2000. The Agreement provides for a reciprocal liberalisation of trade in goods, with elements 
of asymmetry in favour of Morocco: since the day of entry into force of the Agreement, all 
industrial  products  covered  could  be  exported  by  Morocco  to  the  EU  tariff-free,  while 
Morocco benefited from a transitional period of 12 years. The transitional period for Morocco 
to reduce its tariffs on industrial products to zero ended in March 2012. The EU and Morocco 
also  signed  an  agreement  on  additional  liberalisation  of  trade  in  agricultural  products, 
processed  agricultural  products,  fish  and  fisheries  products,  which  entered  into  force  in 
October 2012. Trade for industrial products is now entirely liberalised, while market opening 
for  agricultural  products  is  also  substantial  with  only  a  few  limited  number  of  Moroccan 
products subject to TRQs on each side when imported into the EU. The tariff dismantling for 
EU exports will be completed by 1 October 2020, with a considerable number of products still 
subject to quotas when exported to Morocco. Negotiations for a DCFTA started in 2013. The 
last round took place in April 2014.  

A  protocol  establishing  a  Dispute  Settlement  Mechanism  was  agreed  upon  by  the  EU  and 
Morocco  and  entered  into  force  in  2012.  Morocco  also  signed  the  Regional  Convention  on 
pan-Euro-Mediterranean preferential rules of origin (PEM Convention) on 18 April 2012 and 
ratified it in May 2019. The ratification process is still pending, though it could be accelerated 
in  view  light  of  the  upcoming  conclusion  of  negotiations  of  the  modernisation  of  the  PEM 
Convention.  The  main  objective  of  the  PEM  Convention  is  to  provide  a  more  unified 
framework for origin  protocols. Negotiations in  view of an Agreement  for the Protection of 
geographical indications (GIs) were concluded in 2015, and ratification is pending on both the 
EU and Morocco's sides. 

2. 

EVOLUTION OF TRADE 

2.1 Trade in Goods 

In 2018, the EU was Morocco’s first trading partner for goods, accounting for almost 55% of 
Morocco’s total trade. Other trading partners fell far behind the EU, such as China (9.9%), the 
United  States  (7.8%),  and  Turkey  (4.6%).  Morocco  is  the  EU’s  29th  largest  trading  partner 
and the second trading partner in the Euro-Mediterranean region (after Algeria). 

157 

 
 
 
 
25.000

20.000

15.000

10.000

5.000

0

EU Exports

EU Imports

EU Imports of agricultural
products

EU imports of other products
(excl. fuels and minerals)

2
0
0
2

3
0
0
2

4
0
0
2

5
0
0
2

6
0
0
2

7
0
0
2

8
0
0
2

9
0
0
2

0
1
0
2

1
1
0
2

2
1
0
2

3
1
0
2

4
1
0
2

5
1
0
2

6
1
0
2

7
1
0
2

8
1
0
2

Trade  in  goods  between  the  EU  and  Morocco  has  increased  significantly  over  the  period 
since the Free Trade Area entered into force: trade flows have consistently grown since the 
entry  into  force  of  the  agreement  and  more  than  doubled  over  the  past  16  years,  from 
€14.3 billion  in  2002  to  €39.3 billion  in  2018  (170%).  Between  2017  and  2018,  total  trade 
increased by 4.9%, from €37.5 billion to €39.3 billion. 

EU exports rose by 196% between 2002 and 2018, from €7.8 billion to €23.3 billion. Between 
2017 and 2018, EU exports increased (4%) from €22.4 billion to €23.3 billion.  In 2018, EU 
exports to Morocco were mainly made of machinery and transport equipment (38.3%), fuels 
and mineral products (12.9%) and textiles (6.8%).  

EU imports increased by 148% between 2002 and 2018. Between 2017 and 2018, EU imports 
increased  (6.3%)  from  €15.0 billion  to  €16.0  billion.  In  2018,  the  main  EU  imports  were 
machinery  and  transport  equipment  (41.6%),  agricultural  products  (21.3%)  and  textiles  and 
clothing (18.6%).  

The agreement has proven mutually beneficial. While the first years of implementation of the 
EU-Morocco  Free  Trade  Area  led  to  an  increase  of  the  trade  surplus  for  the  EU,  the  trade 
balance between the two partners has now stabilised to  slightly below 20% of total  trade in 
goods. 

2.2 Trade in agricultural goods 

Morocco is the largest exporter of vegetables to the EU. Among the EU’s Euromed partners, 
Morocco  is  the  largest  supplier  of  agricultural  products.  Total  trade  in  agricultural  products 
between the EU and Morocco tripled since 2003, from €1.3 billion in 2003 to €3.9 billion in 
2018. 

EU agricultural exports to Morocco were stable in 2018 at €1.5 billion. Agricultural imports 
have been increasing by 7% on average year-on-year, from €2.2 billion in 2017 to €2.4 billion 
in 2018, mainly driven by fruit imports. 

158 

 
 
 
 
 
 
 
 
 
Under the association agreement, the EU grants tariff rate quotas for 7 categories of Moroccan 
agricultural  products,  mostly  fruit  and  vegetables.  Most  quotas  are  opened  for  periods  split 
over two calendar years; as a result, quota fill rates set at the end of 2018 might not be fully 
representative.  As in previous years, at the end of 2018, the tomato monthly sub-quotas were 
entirely  utilised.  Fill  rates  remained  high  for  courgettes  (72%)  and  intermediate  for 
clementines  (52%),  cucumbers  (40%)  and  strawberries  (35%).  The  quotas  for  garlic  and 
fructose remained unused by Morocco. 

2.3 Trade in Services and Foreign Direct investment (FDIs) 

Total trade in services between the EU and Morocco increased between 2010 and 2017, from 
€7.5 billion  to  €10.4 billion.  Moroccan  exports  of  services  to  the  EU  rose  by  9%  between 
2016  and  2017  and  EU  exports  of  services  to  Morocco  increased  by  10.1%  over  the  same 
period. In 2017, the EU exported €4.3 billion in services to Morocco and Morocco exported 
€6.1 billion in services to the EU.  

EU-Morocco  FDI  flows  remained  relatively  steady  between  2013  and  2017,  despite  some 
volatility, resulting in a total EU FDI stock of €18.5 billion in Morocco at the end of 2017.  

More than 50% of FDI in Morocco comes from the EU, thanks to strong cooperation efforts 
between  EU  Member  States  and  the  Moroccan  Government,  quality  of  local  facilities  and 
infrastructure, and  above all attractive  conditions  made available for investors,  especially in 
the  automotive,  aeronautics  and  the  electronics  sectors.  With  the  aim  of  improving  its 
attractiveness  for investors, in  2017 Morocco merged three bodies  which were dealing  with 
investments  (Agence  Marocaine  de  Dévelopement  des  Investissements  –  AMDI,  the  Centre 
Marocain de Promotion des Exportations – CPME and the Office des Foires et Expositions de 
Casablanca – OFEC) into a single institution: the Agence Marocaine de  Développement des 
Investissements  – AMDI).  

Morocco currently ranks 69th out of 190 in the World Bank ranking ‘Doing Business 2018’, 
with a distance to frontier (DTF)69 score of 67.9 out of 100 – this means a decrease of 0.03 in 
DTF  score  compared  to  2017.  These  positive  developments  efficiently  mitigated  more 
contrasted results in traditional sectors (textiles, clothing, and tourism). 

3. 

ISSUES ADDRESSED IN THE JOINT COMMITTEE MEETINGS 

The  last  Sub-Committee  on  Industry,  Trade,  and  Services  was  held  in  December  2013  and 
both  the  last  Sub-Committee  on  Agricultural  and  Fisheries  Products  and  the  last  Sub-
Committee on Customs Cooperation took place in 2015. Committees did not meet since then 
but are expected to start reconvening in 2019.  

4. 

SPECIFIC AREAS OF IMPORTANCE 

Safeguard measures 

Morocco is a user of trade defence measures, some of which affect imports from the EU. 

69  The  DTF  score  is  a  measurement  used  by  the  World  Bank  to  assess  the  absolute  score  of  regulatory 

performance in economies over time.  

159 

 
 
 
 
 
 
 
                                                 
On  20  December  2018  the  Moroccan  Ministry  of  Trade  published  the  results  of  its 
investigations on the extension of two safeguard measures in the steel sector (one on wire rods 
and  reinforcing  bars,  another  on  cold-rolled  sheets,  neither  plated  nor  coated,  and  plated  or 
coated sheets), which were due to expire by the end of 2018. Having found that the concerned 
sectors  are  still  vulnerable  from  a  surge  of  imports,  the  Ministry  decided  that  the  safeguard 
measures should be extended for a further three years i.e. until end of 2021. The EU requested 
consultations  with  Morocco,  which  were  held  on  22  March  2019,  to  complain  about  the 
absence of prior consultation with the EU before imposing the measures (as foreseen by the 
EU-Morocco Association agreement) and the insufficient rhythm of liberalisation during the 
extension period (which does not meet the requirements of the WTO safeguard agreement).  

On another front, on 28 February 2019, the Moroccan Ministry of Trade organised a public 
hearing on the safeguard investigation on coated wood boards. The hearing brought together a 
large  number  of  representatives  of  governments  (EU,  France,  Italy,  Spain,  Portugal  and 
Turkey), wood board exporters and associations from the EU and Turkey, as well as domestic 
importers  and  industrial  users,  opposing  the  request  for  safeguard  measures  by  the  sole 
Moroccan manufacturer of coated wood boards CEMA Bois de l'Atlas. On 26 February 2019, 
the Ministry opened a mid-term review investigation on the implementation of the safeguard 
measure on imports of paper reels and reams, which have been applied since 1 January 2017 
for a 4 year period. 

Law  N°24-09  on  consumer  protection  makes  it  compulsory  to  affix  the  Cmim  marking  on 
products subject to specific technical regulation, whether locally produced or imported. As of 

1st February 2019, the new Moroccan 
(reads Cmim) marking became compulsory  for the 
sale in Morocco of electrical products subject to technical regulations 2573-14 (low voltage) 
and  2574-14  (electromagnetic  compatibility),  as  well  as  toys  subject  to  technical  regulation 
2574-15 on toy safety. These three technical regulations are aligned to relevant EU directives, 
and  their  drafting  and  adoption  back  in  July  2015  was  supported  by  EU  development 
cooperation. Although the Cmim marking is largely equivalent to the European CE marking, 
the  latter  will  no  longer  suffice  on  products  imported  into  Morocco.  In  due  course,  the 
Moroccan  Ministry  of  industry  would  be  interested  in  negotiating  a  mutual  recognition 
agreement with the EU.  

Once  the  Ministry  finalises  the  technical  regulations  applicable  to  other  sectors  (detergents, 
building materials,  gas appliances, personal protection equipment and industrial machinery), 
the Cmim marking will be extended to further families of products.  

5. 

PROGRESS MADE, MAIN OPEN ISSUES AND FOLLOW-UP ACTIONS 

Negotiations  on  the  amendments  to  the  Protocols  of  the  Association  Agreement  and  the 
fisheries agreement 

On  25  October  2018,  the  EU  and  Morocco  signed  the  amendment  of  the  Protocols  to  the 
Association Agreement extending trade preferences to goods originating in Western Sahara.  

On  16  January  2019  the  European  Parliament  approved  the  amendment  of  the  relevant 
protocols  of the EU-Morocco Association, thereby extending the tariff preferences laid down 
in  the  Association  Agreement  to  products  originating  in  Western  Sahara.  The  European 

160 

 
 
 
 
 
 
 
 
Parliament  on  12  February  2019  also  approved  the  new  Sustainable  Fisheries  Partnership 
Agreement (SFPA) with Morocco, which also covers the waters of Western Sahara.  

On 4th March 2019, the Council of the European Union adopted the decision on conclusion of 
the EU-Morocco Sustainable Fisheries Partnership Agreement, extending the fishing zone to 
waters of Western Sahara.  

The  ratification  of  both  agreements  still  needs  to  be  finalised  in  accordance  with  the  
Moroccan procedure. 

On 27 April 2019, Polisario Front has brought a case against the Council of the EU where it 
requests the Court of Justice to annul the Decision of the Council of the EU amending the EU-
Morocco  Association  Agreement.  Other  cases  brought  by  Polisario  are  also  pending  before 
national and European courts (the Court of Justice and the General Court) including the EU-
Morocco Aviation Agreement and the Sustainable Fisheries Partnership Agreement (SFPA) in 
which the fishing zone extends to waters adjacent to the territory of Western Sahara. 

6. 

CONCLUSIONS AND OUTLOOK 

EU-Morocco  trade  and  investment  relations  are  intense  and  are  expected  to  be  further 
strengthened  in  view  of  the  willingness  on  both  sides  to  relaunch  and  reinvigorate  all  the 
dimensions  of  the  EU-Morocco  partnership  following  the  resumption  of  full  political  
relations throughout 2019.  

The overall impact of the Free Trade Area on EU-Morocco trade has been positive, bringing 
both economies closer together and rapidly intensifying exchanges in goods. As a result, the 
EU is the leading trade partner of Morocco today, accounting for over 50% of total Moroccan 
trade. 

It will thus be all the more important to resume the technical work under the EU-Morocco 
trade sub-committee. Compliance with obligations in the field of competition and public aid, 
including  transparency  on  the  latter,  has  to  be  enhanced.  Negotiations  are  meant  to  cover 
areas  such  as  access  to  public  procurement,  disciplines  on  non-tariff  measures,  but  also 
standards  and  regulatory  issues  (bringing  them  closer  to  the  EU  acquis),  SPS  measures, 
intellectual property rights, consumer protection, competition, investment as well as trade in 
services and sustainable development. 

7. 

STATISTICS 

Merchandise trade EU28 2014-2018 

EU28 trade with Morocco (mio €) 

Imports 
Exports 
Balance 

Share Morocco in EU28 trade with Extra-EU28 

2014 

2015 

2016 

2017 

2018 

11.053 
18.213 
7.160 

12.456 
18.142 
5.686 

13.792 
20.966 
7.175 

15.117 
22.366 
7.249 

16.073 
23.260 
7.187 

Imports 
Exports 
Total (I+E) 

Imports 
Exports 
Total (I+E) 

0,7% 
1,1% 
0,9% 

0,7% 
1,0% 
0,9% 
Share EU28 in trade Morocco with world 
52,5% 
61,3% 
55,7% 

51,0% 
63,4% 
55,2% 

Source Trade G2 Statistics/ISDB  
Trade EU28: Eurostat COMEXT;  Trade Morocco: IMF Dots 

161 

0,8% 
1,2% 
1,0% 

0,8% 
1,2% 
1,0% 

55,6% 
64,9% 
58,9% 

56,5% 
64,6% 
59,4% 

0,8% 
1,2% 
1,0% 

54,6% 
64,1% 
57,9% 
25-mars-
19 

 
 
 
 
 
 
  
 
  
  
  
  
 
  
  
  
  
  
  
  
  
Total merchandise trade EU28 with Morocco (mio €) 

Morocco 

2017 

2018 

Imports 
Exports 
Balance 
Total trade 
Source Trade G2 Statistics/ISDB from Eurostat COMEXT 

15.117 
22.366 
7.249 
37.484 

16.073 
23.260 
7.187 
39.332 

Agrifood trade EU28 with Morocco (mio €) 

Morocco 

2017 

2018 

Imports 
Exports 
Balance 
Total trade 
Source Trade G2 Statistics/ISDB from Eurostat COMEXT 

2.248 
1.504 
-745 
3.752 

2.396 
1.485 
-911 
3.881 

NAMA trade EU28 with Morocco (mio €) 

Morocco 

2017 

2018 

EU28 imports 
EU28 exports 
Balance 
Total trade 
Source Trade G2 Statistics/ISDB from Eurostat COMEXT 

12.869 
20.863 
7.994 
33.732 

13.676 
21.775 
8.098 
35.451 

Services trade EU28 with Morocco (mio €) 

Morocco 

2016 

2017 

Imports 
Exports 
Balance 
Total trade 
Source Trade G2 Statistics/ISDB from Eurostat BOP statistics 

5.548 
3.933 
-1.615 
9.481 

6.074 
4.331 
-1.743 
10.405 

Services trade EU28 with Morocco (mio €) 

Growth 

mio € 
955 
893 
-62 
1.849 

annual 
% 
6,3% 
4,0% 

4,9% 

Growth 

mio € 
148 
-19 
-167 
130 

annual 
% 
6,6% 
-1,2% 

3,5% 

Growth 

mio € 
807 
912 
104 
1.719 

annual 
% 
6,3% 
4,4% 

5,1% 

Growth 

mio € 
526 
398 
-128 
923 

annual 
% 
9,5% 
10,1% 

9,7% 

Imports 
Exports 
Balance 
Total trade 
Source Trade G2 Statistics/ISDB from Eurostat BOP statistics 

2013 

2014 

2015 

2016 

2017 

4.483 
3.080 
-1.403 
7.563 

5.456 
3.369 
-2.087 
8.826 

5.094 
4.101 
-993 
9.194 

5.548 
3.933 
-1.615 
9.481 

6.074 
4.331 
-1.743 
10.405 

FDI EU28 with Morocco (mio €) 

Inward 
Outward 

Inward 
Outward 
Source Trade G2 Statistics/ISDB from Eurostat BOP statistics 

2013 

2014 

2015 

2016 

2017 

FDI Stocks 

707 
17.508 

948 
14.156 

927 
14.862 

543 
15.337 

869 
18.478 

FDI Flows 

-19 
860 

195 
-3.456 

42 
770 

-314 
608 

73 
340 

162 

 
 
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
 
 
 
ANNUAL  INFO  SHEET  ON  THE  IMPLEMENTATION  OF  THE  EU-PALESTINE 
INTERIM ASSOCIATION AGREEMENT 

INTRODUCTION 

1. 
The Interim Association Agreement creating a free trade area between the EU and Palestine70 
(hereinafter called ‘the Interim Agreement’) was signed in 1997 and entered into force on 1 
July 1997. The Interim Agreement liberalised two-way trade in industrial goods by providing 
duty-free  and  quota-free  access  for  industrial  goods  traded  in  both  directions,  with  some 
limited  liberalisation  of  agricultural  products  by  both  parties.  This  was  an  asymmetrical 
liberalisation to the extent that the EU dismantled its tariffs on the first day of the agreement 
while Palestine had a phased reduction of tariffs. The Agreement was first  updated in  2005 
before a more significant update was signed in 2011 to further liberalise trade in agricultural, 
processed agricultural products (PAPs), fish and fishery products. The EU removed all tariffs 
and quotas on agricultural products and PAPs imported into the EU for a period of ten years, 
which is renewable. Palestine continues to maintain a number of tariffs and quotas on selected 
agricultural and PAPs products.  

Products from  Israeli settlements in Palestinian territory do not benefit from the preferential 
tariff agreement under the EU-Palestine or EU-Israel Association Agreement. 

Palestine  is  a  member  of  the  Regional  Convention  on  pan-Euro-Mediterranean  preferential 
rules  of  origin  (PEM  Convention)71,  which  it  signed  in  2013  and  notified  the  EU  of  its 
ratification  in  2014.  The  main  objective  of  the  Convention  is  to  provide  a  more  unified 
framework for origin protocols. 

2. 

EVOLUTION OF TRADE 

2.1 Trade in Goods 

In 2018, the EU was Palestine’s second largest trade partner behind Israel, representing 11% 
of  its  total  trade.  With  a  11%  share,  the  EU  was  the  second  largest  exporter  to  Palestine 
behind  Israel  (53%).  Together  with  Kuwait  the  EU  was  Palestine’s  fourth  largest  export 
destination (2%), behind Israel (80%), Jordan (7%) and UAE (3%). 

The  value  of  trade  between  the  EU  and  Palestine  has  increased  since  the  Association 
Agreement  came  into  force,  in  both  directions.  In  2002  the  value  of  trade  in  goods  was 
€ 41 million and in 2018 it was € 243 million.  

It  should  be  noted  that  the  value  of  EU  exports  to  Palestine  has  increased  more  than  in  the 
other direction. This has deepened Palestine’s trade deficit with the EU over the same period. 
Palestinian exports remained largely at that same level despite full preferential market access 
to  the  EU  market.  This  is  largely  due  to  obstacles  facing  Palestinian  trade,  as  well  as 
competitiveness  issues  and  the  Palestinian  difficulty  in  meeting  EU  standards,  in  particular 
SPS and technical standards.  

70  This designation shall not be construed as recognition of a State of Palestine and is without prejudice to the 

individual positions of EU Member States on this issue 

71  More  information  can  be  found  at:  https://ec.europa.eu/taxation_customs/business/calculation-customs-
duties/rules-origin/general-aspects-preferential-origin/arrangements-list/paneuromediterranean-cumulation-
pem-convention_en  

163 

 
 
 
 
 
 
                                                 
EU-Palestine trade in goods (thousands of euro) 

EU Exports

EU Imports

EU imports of agricultural
products (excl. fisheries)

300.000

250.000

200.000

150.000

100.000

50.000

0

2
0
0
2

3
0
0
2

4
0
0
2

5
0
0
2

6
0
0
2

7
0
0
2

8
0
0
2

9
0
0
2

0
1
0
2

1
1
0
2

2
1
0
2

3
1
0
2

4
1
0
2

5
1
0
2

6
1
0
2

7
1
0
2

8
1
0
2

The value of  EU exports to  Palestine has risen from  €33 million  in  2002 to  €243 million  in 
2018 (an increase of more than 600%). EU exports decreased (7%) between 2017 and 2018, 
declining from €261 million to €243 million. This was the first decline after the period 2008-
09.  The  main  export  sectors  in  2018  were  machinery  and  transport  equipment  (49%),  food 
and live animals (20%) and chemicals (13%).  

The value of EU imports from Palestine has risen from less than €8 million in 2002 to more 
than  €18 million  in  2018,  which  represents  an  increase  of  137%.  Within  the  lifespan  of  the 
agreement, however, the value of imports has been fluctuating: Between 2017 and 2018, EU 
imports increased by 12% from €16 million to €18 million. In 2018 the most important import 
sectors  were  agri-food  products  (94%  out  of  which  50%  are  fruits  and  nuts)  and  chemicals 
(6%).  

2.2 Trade in agricultural goods 

Total trade in agri-food products between the EU and Palestine increased by 863% between 
2003  and  2018,  from  €8 million  to  €77 million  in  2018.  EU  exports  remained  the  same 
between  2017  and  2018,  accounting  for  €60 million.  EU  imports  increased  (31%)  between 
2017 and 2018, from €13 million to €17 million. 

In  2018,  agri-food  products  represented  the  majority  of  EU  imports  from  Palestine, 
accounting for €17 million (over 90%) of the EU's total imports. Palestine exports a limited 
number  of  agri-food  products  including:  fruit,  nuts  and  spices,  olive  oil,  bulbs,  roots,  live 
plants, and vegetables. Overall the level of Palestinian agri-food exports has grown since the 
Agricultural  Agreement  of  2012,  rising  from  €9 million  in  2011  to  its  current  value.  The 
biggest  increase  has  been  in  olive  oil,  which  has  risen  from  €1 million  to  €5 million  in  the 
same period, with  year-on-year variations.  Export levels  of vegetables, bulbs,  roots and live 
plants  have remained relatively static over the same period and  even fell slightly in  the last 
couple of years; the “star export item” more recently has been dates. The EU exported mainly 
infant  food  and  other  cereals,  flour  &  starch  or  milk  preparations,  followed  by  chocolate, 
confectionary and ice cream, and live animals to Palestine. 

164 

 
 
 
 
 
 
 
2.3 

Trade in Services and Foreign Direct investment (FDIs) 

In  2017  trade  in  services  between  the  EU  and  Palestine  was  worth  €113 million,  which 
represents a 23% increase as compared to €92 million in 2010. There have been year-on-year 
fluctuations  in  the  value  of  services  imported  from  Palestine,  which  has  declined  slightly 
overall  between  2011  and  2015.  In  2016,  EU  imports  from  Palestine  reached  a  high  of 
€95 million,  but  then  declined  to  €36  million  in  2017.  As  for  EU  exports  of  services,  they 
have been growing since 2014, with a slight fluctuation in 2016, to reach an all-time high of 
€78 million in 2017.  

In 2017, EU FDI stocks in Palestine amounted to €28 million, an increase from €15 million in 
2013. In 2016, EU FDI flows accounted for €14 million.  

According  to  the  World  Bank  2018  "Ease  of  Doing  Business"  index  which  ranks  190 
countries,  Palestine  ranked  116th  in  the  World  for  overall  ease  of  doing  business,  slightly 
down from the 114th position held in 2018. The distance to frontier (DTF)72 score is 59.11 out 
of 100 – a slight improvement from the value achieved in 2018 (58.7). 

3. 

ISSUES  ADDRESSED  IN  THE  ANNUAL  (JOINT  COMMITTEE/TRADE  COMMITTEE) 
MEETING 

The  most  recent  meeting  of  the  EU-Palestinian  Sub-committee  on  Trade  and  Internal 
Market, Industry, Agriculture and Fisheries, and Customs took place in September 2018. 
On trade, it was recognised that the Association Agreement had not reached its full potential 
due to  external  issues.  On wider trade matters, the EU reiterated its support  for Palestine to 
have observer status at the WTO – and inquired about concrete steps for Palestine’s accession 
to the Agadir Agreement73 and to materialise this in practice. A possible negotiation in view 
of  an  Agreement  on  Conformity  Assessment  and  Acceptance  (ACAA)  was  also  discussed 
where Palestine is focused on construction material and pharmaceuticals. Agriculture and SPS 
issues  were  also  raised,  with  the  EU  encouraging  Palestine  to  diversify  exports.  Customs 
issues  were  discussed  with  Palestine  providing  updates  on  customs  procedures  and  ongoing 
reforms.  

4. 

SPECIFIC AREAS OF IMPORTANCE 

The expansion of Palestinian trade is largely influenced by its relationship with Israel. Several 
reports  have  identified  a  number  of  key  trade  barriers  including  Israeli  control  over 
Palestinian  trade  routes,  internal  restrictions  on  the  movement  of  people  and  goods  by 
physical  barriers  (such  as  checkpoints)  and  the  cost  of  bureaucratic  process  –  including 
transaction costs imposed at Israeli checkpoints. Such restrictions contribute to the increased 
dependency  of  the  Palestinian  economy  on  Israel,  which  in  2018  accounted  for  53%  of 
Palestinian  imports  and  absorbed  80%  of  Palestinian  exports.  The  reactivation  of  the  Joint 
Economy Committee in charge of follow-up of the Paris Protocol that has not met since 2009 
would be an important step in achieving progress.  

Trade-related  support  to  Palestine  includes  the  EU-funded  project  on  ‘EU  Support  to  the 
Ministry of National Economy for trade policy formulation and WTO accession 2015-2017’. 

72  The  DTF  score  is  a  measurement  used  by  the  World  Bank  to  assess  the  absolute  score  of  regulatory 

performance in economies over time. The higher the score, the better. 

73  The Agadir Agreement for establishing a Mediterranean Free Trade Area was signed on 25 February 2004 
and entered into force in 2007. Agadir member countries include Morocco, Tunisia, Egypt and Jordan.  

165 

 
 
 
 
 
                                                 
The  project  supported  Palestinian  WTO  accession  Agenda  with  the  provision  of  technical 
assistance  to  align  policies,  legislation  and  trade  agreements  with  WTO  requirements. 
Furthermore,  the  EU  financed  the  National  Export  Strategy,  formulated  by  the  Palestinian 
Authority  and  Paltrade,  which  identified  12  potential  export  growth  sectors.  An  action  plan 
was rolled out mapping the specific activities needed for its implementation. The EU also co-
funds, together with certain EU Member States, projects supporting the implementation of the 
National Export Strategy and local entrepeneurship. The EU supported the implementation of 
the  Asycuda  customs  management  information  system,  in  cooperation  with  UNCTAD,  and 
reinforced Palestinian readiness for border management with a project running from 2007 and 
2011 and a Twinning between an EU Member States’ Customs and the Palestinian Customs 
on valuation and revenue collection has started in 2018. 

5. 

PROGRESS MADE, MAIN OPEN ISSUES AND FOLLOW-UP ACTIONS 

The ongoing situation with Israel remains a key factor in EU-Palestinian trade. The Union for 
Mediterranean Trade Ministerial in 2010 adopted a package of measures to facilitate trade 
in  Palestinian  products  with  other  Euro-Mediterranean  partners  on  a  bilateral  and  regional 
basis  and  was  followed  by  an  informal  Trade  Trilateral  Working  Group  (European 
Commission,  Israel  and  Palestine).  It  is  planned  to  continue  this  work  to  facilitate  trade  of 
Palestinian products.  

In March 2018 at the Union for the Mediterranean (UfM) Trade Ministerial Conference, the 
EU presented a Technical Programme Report on the implementation of the 2010 Package of 
Measures.  Ministers  called  for  rapid  and  substantial  progress  in  the  implementation  of  the 
2010  Package  of  measures  to  facilitate  trade  of  Palestinian  products  with  other  Euro-
Mediterranean partners. Ministers thanked the EU for preparing a Technical Progress Report74 
and noted that the EU shall prepare updates of this report working for concrete actions taken 
to  facilitate  Palestinian  trade,  including  a  report  to  be  presented  at  the  2019  Ministerial 
Conference. 

6. 

CONCLUSIONS AND OUTLOOK 

Overall the value of trade between the EU and Palestine has increased with  the Agreement. 
The EU trade surplus  continues to  increase since the value of Palestinian exports to the EU 
remains negligible. The continuation of the trade restrictions applied by Israel remains a key 
issue in EU-Palestinian trade relations and continues to be addressed in the trade discussions 
with  both  parties.  The  EU  promotes  trilateral  discussions  on  trade  to  facilitate  progress  and 
will continue to engage with both sides to remove the obstacles to Palestinian trade. 

7. 

STATISTICS 

Merchandise trade EU28 2014-2018 

EU28 trade with Occupied Palestinian Territory (mio €) 

Imports 
Exports 
Balance 

Share Occupied Palestinian Territory in EU28 trade with Extra-EU28 

Imports 
Exports 
Total (I+E) 

2014 

2015 

2016 

2017 

2018 

14 
141 
127 

0,0% 
0,0% 
0,0% 

16 
195 
179 

0,0% 
0,0% 
0,0% 

19 
254 
235 

0,0% 
0,0% 
0,0% 

16 
261 
245 

0,0% 
0,0% 
0,0% 

18 
243 
225 

0,0% 
0,0% 
0,0% 

74  For more information see http://trade.ec.europa.eu/doclib/docs/2018/june/tradoc_156946.pdf 

166 

 
 
 
  
  
  
  
  
  
  
 
  
  
  
  
 
  
  
  
  
                                                 
Imports 
Exports 
Total (I+E) 

Share EU28 in trade Occupied Palestinian Territory with world 
11,7% 
1,6% 
10,1% 

9,0% 
2,1% 
8,1% 

Source Trade G2 Statistics/ISDB  
Trade EU28: Eurostat COMEXT;  Trade Occupied Palestinian Territory: IMF Dots 

12,4% 
1,9% 
10,8% 

13,7% 
1,6% 
11,8% 

15,0% 
2,5% 
11,5% 
25-mars-19 

Total merchandise trade EU28 with Occupied Palestinian Territory (mio €) 

Occupied Palestinian Territory 

2017 

2018 

Growth 

Imports 
Exports 
Balance 
Total trade 
Source Trade G2 Statistics/ISDB from Eurostat COMEXT 

16 
261 
245 
278 

mio € 

2 
-19 
-21 
-17 

18 
243 
225 
261 

Agrifood trade EU28 with Occupied Palestinian Territory (mio €) 

Occupied Palestinian Territory 

2017 

2018 

Growth 

Imports 
Exports 
Balance 
Total trade 
Source Trade G2 Statistics/ISDB from Eurostat COMEXT 

13 
60 
46 
73 

mio € 

3 
0 
-3 
3 

17 
60 
43 
77 

NAMA trade EU28 with Occupied Palestinian Territory (mio €) 

Occupied Palestinian Territory 

2017 

2018 

Growth 

EU28 imports 
EU28 exports 
Balance 
Total trade 
Source Trade G2 Statistics/ISDB from Eurostat COMEXT 

3 
202 
199 
204 

mio € 

-1 
-19 
-17 
-20 

1 
183 
182 
184 

Services trade EU28 with Occupied Palestinian Territory (mio €) 

Occupied Palestinian Territory 

2016 

2017 

Growth 

Imports 
Exports 
Balance 
Total trade 
Source Trade G2 Statistics/ISDB from Eurostat BOP statistics 

98 
70 
-28 
168 

mio € 

-62 
8 
70 
-54 

36 
78 
42 
113 

annual 
% 
12,3% 
-7,1% 

-6,0% 

annual 
% 
25,2% 
0,1% 

4,7% 

annual 
% 
-49,2% 
-9,2% 

-9,8% 

annual 
% 
-63,3% 
11,2% 

-32,3% 

Services trade EU28 with Occupied Palestinian Territory (mio €) 

Imports 
Exports 
Balance 
Total trade 
Source Trade G2 Statistics/ISDB from Eurostat BOP statistics 

2013 

2014 

2015 

2016 

2017 

37 
47 
10 
84 

31 
58 
28 
89 

39 
73 
35 
112 

98 
70 
-28 
168 

36 
78 
42 
113 

FDI EU28 with Occupied Palestinian Territory (mio €) 
2014 

2013 

2015 

2016 

2017 

Inward 
Outward 

Inward 
Outward 
Source Trade G2 Statistics/ISDB from Eurostat BOP statistics 

3 
15 

-1 
-91 

5 
16 

-0 
0 

13 
17 

2 
0 

14 
24 

2 

15 
28 

1 
14 

FDI Stocks 

FDI Flows 

167 

 
 
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
 
 
 
ANNUAL  INFO  SHEET  ON  THE  IMPLEMENTATION  OF  THE  EU-TUNISIA 
ASSOCIATION AGREEMENT 

1. 

INTRODUCTION 

The  EU  and  Tunisia  established  a  free  trade  area  as  part  of  the  EU-Tunisia  Association 
Agreement, signed on 17 July 1995 and entered into force on 1  March 1998. The free trade 
area provided for a reciprocal liberalisation of trade in goods, with elements of asymmetry in 
favour of Tunisia: since the day of entry into force of the Agreement, all industrial products 
covered  by  the  Agreement  can  be  exported  by  Tunisia  to  the  EU  tariff-free,  while  Tunisia 
benefited from a transitional period of 12 years. Tunisia started implementing the agreement 
in 1996, i.e. 2 years before its official entry into force, and all tariffs and non-tariff measures 
mentioned  in  the  Association  Agreement  were  entirely  dismantled  by  2008:  so  the  EU-
Tunisia  free  trade  area  was  even  fully  implemented  two  years  ahead  of  schedule.  Trade  of 
industrial  products  is  entirely  liberalised,  while  market  opening  of  agricultural  products  has 
been more limited. As regards fisheries’ products, the EU opened its market (with only one 
product subject to tariff rate quota) while the Tunisian market remains closed. In 2011, the EU 
and Tunisia signed a protocol establishing a Dispute Settlement Mechanism, which came into 
force. Both sides are currently discussing the steps to undertake in order to make the system 
operational. 

The  Regional  Convention  on  Pan-Euro-Mediterranean  preferential  rules  of  origin  (PEM 
convention) was  signed  by Tunisia on 16 January  2013. The Convention seeks to  provide a 
more  unified  framework  for  origin  protocols.  The  EU  hopes  that  Tunisia  will  grasp  this 
opportunity and join the PEM revised rules that will strongly benefit Tunisian companies and 
help them to hook into new and profitable regional value chains. 

Negotiations  on  a  Deep  and  Comprehensive  Free  Trade  Area  (DCFTA)  with  Tunisia  were 
launched in Tunis in October 2015 and the first full round of negotiations took place in April 
2016.  

One of the main objectives of the negotiations is to support economic reforms in Tunisia and 
to  bring  Tunisian  legislation  closer  to  EU  legislation  in  trade-related  areas.  This  means 
atypical trade negotiations where the principles of asymmetry and progressiveness in favour 
of Tunisia guide both market  access (especially in agriculture, services and investment) and 
regulatory approximation.  

The  first  two  rounds  covered  all  chapters  and  were  very  constructive,  which  reaffirms  the 
Tunisian commitment to the DCFTA. Ahead of the 2nd and the 3rd negotiating rounds, the EU 
submitted a number of new or updated negotiating texts, modified to take account of the latest 
legislative and policy developments. 

The negotiations have been carried out in utmost transparency both on the EU side and on the 
Tunisian side. All  EU initial  proposals  are public and civil  society  consultations are held  in 
the margins of negotiating rounds, including jointly. Joint reports are also published after each 
round, including in Tunisia. After the third round (which took place in December 2018), good 
progress was made.   

168 

 
 
 
 
 
 
 
2.  

EVOLUTION OF TRADE 

2.1 Trade in Goods 

The EU is Tunisia’s main trading partner and Tunisia is the 33rd trading partner for the EU – 
4th in the Euro-Med region. In 2018, the EU accounted for 73% of Tunisian total exports of 
goods,  and  53%  of  its  total  imports.  Overall  the  EU  accounted  for  61%  of  Tunisia’s  total 
trade. 

EU-Tunisia trade in goods (thousands of euro) 

14.000

12.000

10.000

8.000

6.000

4.000

2.000

0

EU Exports

EU Imports

EU imports of agricultural
products

EU imports of other products
(excl. fuels and minerals)

2
0
0
2

3
0
0
2

4
0
0
2

5
0
0
2

6
0
0
2

7
0
0
2

8
0
0
2

9
0
0
2

0
1
0
2

1
1
0
2

2
1
0
2

3
1
0
2

4
1
0
2

5
1
0
2

6
1
0
2

7
1
0
2

8
1
0
2

Trade in goods between the EU and Tunisia has increased significantly over the period since 
the Agreement entered into force: between 2002 and 2018, the total trade in goods increased 
by 58%, from €13.9 billion to €21.9 billion. 

EU  exports  rose  by  52%  between  2002  and  2018,  up  to  €11.7 billion.  Between  2017  and 
2018,  they  increased  by  5%.  In  2018,  the  EU  mainly  exported  machinery  and  transport 
equipment (33%), manufactured products (23%), and fuels and mining products (15%).  

EU  imports  rose  by  65%  since  2002,  reaching  €10.2 billion  in  2018.  Year-on-year,  they 
increased  by  8%  in  2018.  Tunisia’s  exports  of  non-fuel  industrial  products  (machinery, 
transport  equipment,  textiles  and  clothing)  increased  steadily  over  the  period,  while  the 
exports of agricultural products have remained at a comparatively low level, even though they 
have  quadrupled  since  2002.  In  2018,  EU  imports  consisted  mainly  of  machinery  and 
transport equipment (39%), miscellaneous manufactured articles (mainly textiles) at 34% and 
mineral fuels (7%).  

Overall, the agreement has proven mutually beneficial. Tunisia’s trade deficit with the EU is 
relatively small when compared to the one Tunisia has with China, Russia or Turkey – three 
countries, which make up for a far smaller share of Tunisia’s total trade. Following a dip in 
2008  due  to  the  financial  crisis,  trade  flows  between  the  EU  and  Tunisia  reached  a  plateau 
between 2011 and 2016, and then picked up more vigorously. Ongoing negotiations for the 
DCFTA  aim  at  making  room  for  further  progress  in  trade  between  the  EU  and  Tunisia, 
including further liberalisation of agricultural and fisheries’ trade, two areas only covered in a 
limited way by the current Agreement. 

169 

 
 
 
 
 
 
 
 
2.2 Trade in agricultural goods 

Total trade in agricultural products between the EU and Tunisia increased by 140% between 
2003 and 2018, from €0.5 billion to nearly €1.2 billion.  

Year-on-year, EU agricultural exports slightly decreased by 1.3%, from €555 million in 2017 
to  €547 million  in  2018.  The  decrease  was  mainly  due  to  a  €39 million  decrease  in  wheat 
exports,  but  exports  grew  for  various  other  agricultural  goods  such  as  other  cereals,  live 
animals and beef. 

Tunisia is by far the main origin for olive oil imports into the EU (69% of olive oil imports in 
2018). EU agricultural imports increased by 44% from €459 million in 2017 to €662 million 
in  2018,  driven  by  dynamic  olive  oil  imports.  Despite  that  increase,  agri-food  imports 
remained well below their 2015 level (€811 million). 

The  56 700 tonne  tariff  rate  quota  (TRQ)  for  olive  oil  imports  from  Tunisia  set  out  in  the 
bilateral agreement was almost filled in 2018 (fill rate of 98%). The fill rate was intermediate 
for  fresh  oranges  (31%)  and  low  for  prepared  tomatoes  (12%),  wine  and  cut  flowers  (4%). 
Several  quotas  for  Tunisian  products  were  not  utilised  at  all  in  2018  (including  wine  with 
geographical indication, apricot pulp, new potatoes, natural honey and truffles). 

2.4 Trade in Services and Investment75 

Total trade in services between the EU and Tunisia decreased between 2010 and 2017, from 
€5.9 billion  to  €3.8 billion,  mainly  owing  to  the  weak  performance  of  the  tourism  sector, 
mostly  due  to  security  issues.  Both  Tunisia  and  the  EU  suffered  from  this  decrease,  with 
Tunisian exports of services to the EU falling by 43% between 2010 and 2017 and EU exports 
of  services  to  Tunisia  falling  by  20%  over  the  same  period.  In  2017,  the  EU  exported 
€ 1.3 billion  in  services  to  Tunisia,  compared  to  € 1.4 billion  in  2016  and  Tunisia  exported 
€ 2.5 billion in services to the EU compared to € 2.3 billion in 2016. 

FDI flows remained relatively steady between 2013 and 2017, despite a slowdown of EU FDI 
in Tunisia, resulting in the total EU FDI stock of € 4.0 billion in Tunisia at the end of 2017. 
The  EU  remains  the  first  foreign  investor  in  Tunisia,  accounting  for  over  85%  of  FDIs 
entering  the  country.  In  2015,  3,100  EU  companies  were  present  in  Tunisia,  employing 
around 327 000 persons.76   

The  business  environment  was  affected  by  the  instability  prevailing  after  the  2011  Arab 
Spring Revolution, even though Tunisia enacted a new Investment Law in 2017, which also 
led to the establishment of a Tunisian Investment Authority in 2018. Tunisia remained ranked 
80th out of 190 in the Doing Business 2018 ranking – up from the 88th place in 2017– with a 
distance  to  frontier  (DTF)77  score  of  66.11  out  of  100  –  an  improvement  from  the  score  of 
2018 (64.60). 

75  For more information see http://trade.ec.europa.eu/doclib/docs/2006/september/tradoc_111593.pdf. 
76  Tunisian Foreign Investment Promotion Agency, 2017. 
77  The  DTF  score  is  a  measurement  used  by  the  World  Bank  to  assess  the  absolute  level  of  regulatory 

performance in economies over time.  

170 

 
 
 
 
 
 
 
                                                 
3. 

ISSUES ADDRESSED IN THE JOINT COMMITTEE MEETINGS  

The last  Sub-Committee on Agricultural and Fisheries  Products met in  December 2017. 
Tunisia  and  the  EU  exchanged  trade  statistics  on  bilateral  trade  in  agricultural  and  fishery 
products and updated each other on their agricultural and fishery policies. Tunisia expressed 
the wish  for cooperation between the EU and Tunisia on quality policies, notably  regarding 
organic  agriculture  and  geographical  indications  (GIs).  Both  Parties  discussed  Tunisian 
requests for a reintegration into the Generalized System of Preferences, an additional olive oil 
quota and a possibility to renew a quota for eels. The EU raised several SPS issues, notably 
regarding  the  exports  of  apples,  live  plants,  and  poultry  products  from  the  EU  to  Tunisia. 
Tunisia touched on the SPS issues related to its exports of fishery products and inquired about 
a possibility to export dairy products to the EU. The EU raised concerns about the increase of 
customs duties by Tunisia on some agricultural products and import restrictions on red meat 
and live animals.  

The Tunisian authorities did not follow up in 2018 on the issue of exporting dairy products to 
the EU. 

The Sub-Committee on Customs Cooperation and Taxation met in February 2017. Several 
issues  were  discussed  covering  both  customs  and  taxation.  On  customs,  the  main  issues 
considered were the modernisation of the Tunisian customs administration, the evolution  of 
the legislation of both parties since the previous meeting, border management (especially the 
challenge met by Tunisian customs at the border with Libya), the fight against counterfeiting 
goods, methods of mutual administrative assistance and preferential origin, including a state 
of  play  of  the  revision  of  the  pan-euro-Mediterranean  preferential  rules  of  origin.  On 
Taxation,  Tunisia  informed  about  the  reform  of  its  taxation  rules.  In  general,  both  Parties 
agreed  on  the  need  to  support  Tunisian  customs  in  preparing  projects  relating  to  customs 
legislation, as well as modernisation.  

4. 

SPECIFIC AREAS OF IMPORTANCE 

Tunisia’s  economic  situation  remains  fragile.  Multiple  shocks,  including  the  fall  in  EU 
demand  for  Tunisian  products  because  of  the  economic  crisis,  the  2011  Revolution  and  the 
political transition that ensued, led to a sharp drop in growth, a deterioration of the balance of 
payments,  increasing unemployment and poverty, and a growing informal  sector. To ensure 
this  fragility  does  not  compromise  the  democratic  transition  unfolding  in  Tunisia,  the  EU 
continues  to  provide  support  to  Tunisia  and  its  authorities,  and  has  been  stepping  up  its 
political and financial support considerably since 2011.  

Tunisia benefits from a ‘special relationship’ with the EU, which since 2012 takes the shape 
of  a  ‘Privileged  Partnership’  detailed  in  an  ambitious  ENP  (European  Neighbourhood 
Policy)  Action  Plan.  Additionally,  and  in  complement  to  external  support  from  the  IMF, 
Tunisia  has  benefitted  from  a  first  Macro-Financial  Assistance  (MFA)  operation  between 
2014 and 2017, and is currently implementing a second MFA operation aimed at alleviating 
balance  of  payment  issues  as  well  as  promoting  growth-stimulating  social  and  economic 
reforms.  In  2016,  the  EU  reaffirmed  its  support  to  Tunisia  through  a  joint  communication, 
‘Strengthening  EU  support  for  Tunisia’,78  detailing  the  areas  in  which  EU  support  is  to  be 
provided, including a number of trade-related measures as well as the launch of a ‘Partnership 
for  growth’  initiative.  These  include  a  possible  early  entry  into  force  of  the  EU’s  trade 

78  http://europa.eu/rapid/press-release_IP-16-3192_en.htm  

171 

 
 
 
 
 
                                                 
concessions on agricultural market access under a future DCFTA (on a temporary basis), the 
possible  advanced  implementation  of  the  new  the  Pan-Euro-Mediterranean  (PEM)  rules  of 
origin  as  well  as  temporary  flexibility  for  certain  products,  the  setting  up  of  a  structured 
regulatory dialogue to facilitate and speed up the negotiation of an Agreement on Conformity 
Assessment and Acceptance (ACAA) of industrial products that still needs key legislation to 
be adopted (i.e. laws on security of industrial and food products). Discussions are ongoing on 
several of these issues. 

Following a preparatory process ahead of the launch of DCFTA negotiations, which included 
an  analysis  of  the  Tunisian  regulatory  framework  in  the  economic  field,  the  Commission 
concluded that Tunisia has achieved considerable progress in terms of regulatory alignment in 
the areas to be covered by the future DCFTA. Nevertheless, some challenges remain in terms 
of  implementation  of  some  key  and  of  institutional  capacity,  such  as  for  meeting  the 
obligations in the field of competition and public aid, including transparency on the latter.  

In  addition  to  the  benefits  emitted  from  the  deeper  economic  exchange,  the  EU  provides 
substantial trade-related assistance to help Tunisia adjust to the new conditions of competition 
following the signature of the EU-Tunisia Association Agreement, as well as to adapt to the 
possible  impact  of  the  DCFTA  agreement.  Ongoing  European  projects  provide  not  only 
assistance to wide range of Tunisian companies to increase their competitiveness on the local 
and  international  markets,  but  equally  favour  reforms  and  help  upgrading  the  quality 
infrastructure  which  benefits  Tunisian  consumers.  The  signature  of  a  new  programme 
“Programme  d’appui  à  la  compétitivité  et  aux  exportations  (PACE)”  in  November  2018 
shows  ongoing  European  support  to  the  industrial  and  agriculture  sectors  and  complements 
another  programme,  the  “Programme  d’Appui  à  la  Compétitivité  des  Services  (PACS)" 
launched in 2016 which focuses mainly on the services sector. Upon request by the Tunisian 
authorities, the European Union also provides financial resources to hire technical expertise in 
order to understand the gap between the EU and the Tunisian legislation, the potential effect 
of  the  conclusion  of  the  DCFTA  agreement  and  the  strategic  orientations  and  eventual 
reforms  to  undertake.  Current  and  recent  projects  include  studies  on  public  procurement, 
competition and state aid, postal services, the EU sanitary and phytosanitary requirements to 
protect  human  and  animal  health,  Conformity  Assessment  and  Acceptance  of  Industrial 
Products in the sectors identified by the Tunisian authorities. 

5. 

PROGRESS, MAIN OPEN ISSUES AND FOLLOW-UP ACTIONS 

Since  the  end  of  last  year  contentious  trade  issues  between  the  EU  and  Tunisia  have 
substantially  increased.  On  29  November  2018,  without  prior  notice  to  private  operators, 
Tunisia enforced by surprise a new restrictive measure imposing import authorizations on a 
very long list of products. The import authorizations should in theory be guided by objective 
technical specifications ("cahier des charges") but these have not  yet been defined and the 
Ministry of Trade intends to evaluate and decide on importation requests on a  case-by-case 
basis in the absence of specific criteria. Quantitative restrictions are also being applied.  
The  measure  imposes  de  facto  non-automatic  import  licenses  and  appears  to  be  a  clear 
violation  of  Article  19  of  the  EU-Tunisia  Association  Agreement  which  prohibits 
quantitative  restrictions.  The  new  measure  has  not  been  notified to  the  WTO  and  appears 
contrary to WTO provisions.  

The  list  includes  many  agricultural  and  agri-food  products,  textiles  &  clothing,  cosmetics, 
leather products, shoes, toys, electrical goods.  

172 

 
 
 
 
 
  The  products  affected  represent  roughly  4%  of  total  EU  exports  to  Tunisia  (€398 

million in 2017). 

  Key  sectors  affected  (2017  EU  export  data):  clothing  €155  million,  cosmetics 
€94 million,  agri-food  products  €35  million,  cleaning  products  €26  million,  toys  & 
sports €21 million, textile €17 million. 

  Member  States  most  affected:  France  €126  million  (including  €49  million  in 

cosmetics); Italy €115 million (incl. €65 million in clothing), Spain €44 million.  

All  affected  EU  Member  States  clearly  voiced  their  concerns  and  asked  for  a  prompt 
resolution of this issue. A letter by Commissioner Malmström was addressed to the Tunisian 
Minister of Trade on 19/12/2018, calling for the elimination of the new measure as soon as 
possible. In his reply Tunisia trade minister reaffirms the compatibility of these measures with 
WTO rules and underlines the necessity of these measures for ensuring consumer protection. 
A  reply  to  the  Minister's  letter  has  been  sent  on  12/02/2019  dismissing  the  Minister's 
arguments and suggesting in the immediate term ways to except EU exports in the application 
of the erga omnes measure (e.g. considering the CE mark as sufficient as well as suggesting 
discussions on other technical options for products not covered by CE mark).  

This issue was also debated at length during the trade sub-committee meeting that took place 
on  28  February  2019  in  Tunis,  during  the  WTO  licence  committee  meeting  on  4  April  in 
Geneva and during the Association committee meeting on 11 April. The EU raised again the 
issue during the Association Council meeting in May 2019. In July 2019, following bilateral 
cooperation  efforts  and  extensive  calls  for  the  withdrawal  of  these  measures,  the  Tunisian 
government informed that it cancelled the import restrictive authorisation measures as of 26 
July 2019). 

Several other open issues include:  

  technical  and  administrative  difficulties  met  by  EU  exporters  on  pharmaceutical 

products, ceramic tiles, tyres and cars  

  Export declaration requested to EU operators.  
  longstanding SPS issues related to exports of apples. 

The EU is pursuing a resolution of these issues through regular dialogue, in the framework of 
the Sub-Committee Meetings, and in view of the negotiations of the DCFTA.  

6. 

CONCLUSIONS AND OUTLOOK 

The overall impact of the free trade area on EU-Tunisia trade has been positive. Both Tunisia 
and the EU benefitted from the dismantling of bilateral tariffs and non-tariff barriers. It seems, 
however, that the EU-Tunisia Association Agreement, the first signed by the EU in the region, 
has reached its limits (notably related to the exlusion of agricultural products), and needs to be 
upgraded in order to continue to deliver positive results. This means both extending the scope 
and  deepening  the  provisions  of  the  free  trade  area  in  the  future  DCFTA  for  which 
negotiations started in October 2015.  

DCFTA  talks  take  place  at  delicate  political  times  in  Tunisia  ahead  of  two  elections  in 
Tunisia:  parliamentary  and  presidential  elections.  These  are  scheduled  for  October  and 
December 2019, respectively. After four full rounds some texts have been practically closed 
at  technical  level  (GIs  and  most  of  the  IP  text),  while  for  other  texts  more  than  60%  of 
provisions have been agreed (this is the case for sustainable development, competition, digital 

173 

 
 
 
 
 
trade). Good progress has also been made on TBT, SPS and trade facilitation. In other areas, 
progress  is  slower,  (e.g.  public  procurement).  Some  texts  have  led  to  intense  debates  with 
civil society in Tunisia (e.g. intellectual property).  

7.   STATISTICS 

Merchandise trade EU28 2014-2018 
2014 

2015 

2016 

2017 

2018 

EU28 trade with Tunisia (mio €) 

Imports 
Exports 
Balance 

Share Tunisia in EU28 trade with Extra-EU28 

Imports 
Exports 
Total (I+E) 

Imports 
Exports 
Total (I+E) 

Source Trade G2 Statistics/ISDB  
Trade EU28: Eurostat COMEXT;  Trade Tunisia: IMF Dots 

9.365 
10.992 
1.627 

0,6% 
0,6% 
0,6% 

9.506 
10.758 
1.252 

0,6% 
0,6% 
0,6% 

Share EU28 in trade Tunisia with world 

52,5% 
77,8% 
62,4% 

55,2% 
78,1% 
64,3% 

9.309 
10.550 
1.241 

0,5% 
0,6% 
0,6% 

54,4% 
77,5% 
63,7% 

9.433 
11.163 
1.731 

0,5% 
0,6% 
0,6% 

54,0% 
74,3% 
62,3% 

10.179 
11.676 
1.497 

0,5% 
0,6% 
0,6% 

53,4% 
73,3% 
61,5% 
25-mars-19 

Total merchandise trade EU28 with Tunisia (mio €) 

Tunisia 

2017 

2018 

Imports 
Exports 
Balance 
Total trade 
Source Trade G2 Statistics/ISDB from Eurostat COMEXT 

9.433 
11.163 
1.731 
20.596 

10.179 
11.676 
1.497 
21.855 

Agrifood trade EU28 with Tunisia (mio €) 

Tunisia 

2017 

2018 

Imports 
Exports 
Balance 
Total trade 
Source Trade G2 Statistics/ISDB from Eurostat COMEXT 

459 
555 
96 
1.014 

662 
547 
-114 
1.209 

NAMA trade EU28 with Tunisia (mio €) 

Tunisia 

2017 

2018 

EU28 imports 
EU28 exports 
Balance 
Total trade 
Source Trade G2 Statistics/ISDB from Eurostat COMEXT 

8.974 
10.609 
1.635 
19.582 

9.517 
11.129 
1.611 
20.646 

Services trade EU28 with Tunisia (mio €) 

Tunisia 

2016 

2017 

Imports 
Exports 
Balance 
Total trade 
Source Trade G2 Statistics/ISDB from Eurostat BOP statistics 

2.253 
1.359 
-895 
3.612 

2.451 
1.329 
-1.121 
3.780 

174 

Growth 

mio € 

747 
513 
-234 
1.260 

annual 
% 
7,9% 
4,6% 

6,1% 

Growth 

mio € 

203 
-7 
-210 
195 

annual 
% 
44,2% 
-1,3% 

19,3% 

Growth 

mio € 

544 
520 
-24 
1.064 

annual 
% 
6,1% 
4,9% 

5,4% 

Growth 

mio € 

197 
-29 
-227 
168 

annual 
% 
8,8% 
-2,1% 

4,7% 

 
 
 
  
  
  
  
  
  
  
 
  
  
  
  
 
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
Services trade EU28 with Tunisia (mio €) 

Imports 
Exports 
Balance 
Total trade 
Source Trade G2 Statistics/ISDB from Eurostat BOP statistics 

2013 

2014 

2015 

2016 

2017 

3.630 
1.492 
-2.138 
5.122 

3.511 
1.135 
-2.376 
4.646 

3.310 
1.401 
-1.909 
4.711 

2.253 
1.359 
-895 
3.612 

2.451 
1.329 
-1.121 
3.780 

Inward 
Outward 

Inward 
Outward 
Source Trade G2 Statistics/ISDB from Eurostat BOP statistics 

FDI EU28 with Tunisia (mio €) 
2014 

2015 

2016 

2017 

2013 
FDI Stocks 
170 
2.945 
FDI Flows 
-92 
92 

248 
4.307 

-25 
754 

246 
4.026 

-43 
503 

284 
4.181 

39 
734 

357 
4.019 

52 
351 

175 

 
 
  
  
  
  
  
  
  
  
  
  
  
  
 
 
 
 
FIRST  GENERATION  FREE  TRADE  AGREEMENTS  WITH  THE  WESTERN 
BALKAN PARTNERS 

176 

 
 
 
 
ANNUAL  INFO  SHEET  ON  THE  IMPLEMENTATION  OF  THE  TRADE  PILLAR 
OF THE EU-ALBANIA STABILISATION AND ASSOCIATION AGREEMENT 

1. 

INTRODUCTION 

On  12  June  2006,  the  EU  and  Albania  signed  a  Stabilisation  and  Association  Agreement 
(SAA).  The  SAA  is  the  prime  instrument  of  the  EU’s  overall  policy  towards  the  Western 
Balkan  countries’  Stabilisation  and  Association  process79.  Under  this  process,  all  Western 
Balkans countries, including Albania, have a common future as EU Member States.   

The full SAA entered into force on 1 April 2009, however, the trade-related part of the SAA 
already  entered  into  force  through  an  Interim  Agreement  on  1  December  2006  (hereinafter 
‘the Agreement’). This  Agreement established a free-trade area over a transitional period of 
ten  years.  As  regards  the  EU,  in  2006,  98.7%  of  its  tariff  lines  were  already  duty-free, 
representing 100% of the value of imports from Albania. By 2010, Albania liberalised 92.7% 
of tariff lines for imports from the EU.  

The  Agreement  covers  products  in  all  Chapters  of  the  Harmonised  System.  Regarding 
agricultural  products  the  agreement  is  largely  asymmetrical.  EU  agricultural  imports  from 
Albania are almost completely liberalised (with very few exceptions). On the other hand, EU 
agricultural exports to Albania are subject to tariffs and tariff rate quotas (TRQs).    

The  Agreement  also  includes  provisions  concerning  competition  matters,  investment  and 
related  payments,  a  high  level  of  protection  of  intellectual  property  rights  and  strengthened 
co-operation in customs matters. Since the entry into force of the full SAA on 1 April 2009, a 
number  of  additional  disciplines  are  being  implemented  concerning,  notably,  government 
procurement,  legislative  approximation  in  many  areas  including  standardisation,  as  well  as 
provisions regarding services and establishment. 

2. 

EVOLUTION OF TRADE 

2.1 Trade in Goods 

Total bilateral trade between the EU and Albania increased by 10% between 2017 and 2018 
reaching  a  total  of  €5  billion.  This  represents  a  150%  increase  in  trade  since  the 
implementation  of  the  trade  agreement  in  2006.  The  EU  remains  Albania’s  first  trading 
partner  accounting  for  76%  of  total  exports  and  62%  of  total  imports  of  goods.  More 
specifically, Germany, Greece, Italy, and Spain are responsible for 73% of the EU’s exports 
to Albania and 85% of the EU’s imports from Albania. The main traded products concern the 
following sectors: machinery and appliances; footwear; hats and other headgear; textiles and 
textile articles and mineral products. The overall trade balance is in favour of the EU, which 
has enjoyed a stable surplus of €1.4 billion over the last 3 years, which is partly offset by a 
small surplus in the balance of services. 

79 See http://ec.europa.eu/trade/policy/countries-and-regions/regions/western-balkans/ for more information 

177 

 
 
 
 
 
 
                                                 
2.2 Trade in agricultural goods 

In  2018,  trade  in  agricultural  products  increased  by  8%  reaching  a  total  of  €500  million, 
which represents 10% of the total bilateral trade. Only 5% of Albania’s exports to the EU are 
agricultural  products  versus  13%  of  all  EU’s  exports  to  Albania.  However,  another  5%  of 
Albania’s  exports  include  fishery  products  versus  only  2%  for  the  EU.  The  EU  imported 
mainly edible vegetables, fruits and nuts, and oil seeds and oleaginous fruits from Albania and 
exported primarily beverages, food preparations and tobacco to Albania. 

A limited share of the EU-Albania agricultural trade is subject to duty-free Tariff Rate Quotas 
(TRQs).    Three  out  of  five  TRQs  granted  by  Albania  were  fully  utilised  by  EU  exporters 
whereas  two  were  not  used  or  almost  not  used  in  2018.  On  the  EU  side,  the  two  TRQs  in 
place for wine and sugar suffered again  a low uptake from  Albanian exporters in  2018 (see 
table below. 

TRQ identification 

TRQ availability 

TRQ use 

Code 

Description of goods 

Weight 

Weight 

Milk and cream, not concentrated nor 
containing added sugar or other sweetening 
matter, of a fat content, by weight, not 
exceeding 1 %, in immediate packings of a net 
content not exceeding two litres 

Milk and cream, not concentrated nor 
containing added sugar or other sweetening 
matter, of a fat content, by weight, not 
exceeding 3 %, in immediate packings of a net 
content not exceeding two litres 

04011010 

04012011 

Milk and cream, not concentrated nor 
containing added sugar or other sweetening 
matter, of a fat content, by weight, exceeding 
3 %, in immediate packings of a net content 
not exceeding two litres 

04012091 
10019120  Common wheat and meslin 
10019900  Other 
10059000  Maize  (except seeds) 
220410 
220421 
21032000  Tomato ketchup and other tomato sauces 

Sparkling wine 
In containers holding 2 litres or less 

790 tonnes 

789.80 tonnes 

42,000 ton 

471.61 tonnes 

10,000 ton 

0 tonne 

10,000 HL 

10,000 HL 

60 tonnes 

60 tonnes 

2.3 Trade in Services and Foreign Direct investment (FDIs) 

Total  bilateral  trade  in  services  increased  by  4%  in  2017,  reaching  a  total  of  €1.6  billion. 
Albania  enjoys  a  small  surplus  of  €78  million  in  its  trade  in  services  with  the  EU,  mainly 
resulting  from  a  continued  solid  growth  of  its  foreign  tourism.  This  is  also  reflected  in  the 
increasing share of services in Albania’s total trade of goods and services with the EU, which 

178 

 
 
 
 
 
grew from 28% in 2016 to 33% in 2017. In contrast, trade in services only make up 20% of 
the EU’s total trade in goods and services with Albania. 

The EU remains the main source of Foreign Direct investment into Albania holding over half 
of  the  total  FDI  stock  (€5.5  billion)  by  end  of  2017.  The  main  EU  countries  investing  in 
Albania  are  Greece,  the  Netherlands,  Italy,  Austria  and  France.  EU  FDI  inflows  to  Albania 
were modest in 2017, reaching only just €100 million. 

3. 

ISSUES ADDRESSED IN THE JOINT COMMITTEE MEETINGS 

Commercial issues are discussed on an annual basis in the context of the Sub-Committee on 
Trade,  Industry,  Customs  and  Taxation.  The  last  meeting  took  place  on  18  January  2018, 
during which the doubling of the trade volume between the EU and Albania was highlighted, 
with the EU remaining Albania’s first trade partner representing over 66% of its global trade. 
Albania’s overall smooth implementation of the trade agreement was welcome as well as its 
good  co-operation  in  the  context  of  WTO-related  activities.  Other  trade  issues  addressed 
included the importance for Albania to deliver on the implementation of its national plan on 
trade  facilitation,  with  a  particular  focus  on  border  measures  and  the  improvement  of  risk-
based inspections by customs authorities. 

4. 

SPECIFIC AREAS OF IMPORTANCE 

The key factors with negative impact on trade are unfair competition and lack of transparency, 
especially in the public procurement process, as well as non-compliance with the rule of law, 
including the judicial system. 

5. 

MAIN OPEN ISSUES AND FOLLOW-UP ACTIONS 

Enhancing transparency  and accountability in  particular ensuring the  effective, efficient and 
transparent  functioning  of  the  public  procurement  system-  and  the  fight  against  corruption 
remain  essential  issues  that  affect  EU  companies  doing  business  in  Albania.  Although  the 
procurement  legislation  improved  over  the  last  period,  the  implementation  of  public 
procurement  still  needs  to  be  improved  and  be  made  more  transparent.  In  addition,  the 
enforcement  of  competition  rules  needs  to  be  enhanced,  and  significant  efforts  are  needed 
with  regards  to  the  adoption  of  legislation  and  enforcement  in  the  field  of  state  aid  control, 
including transparency of aid granted. 

Equally, progress of the ongoing judicial and institutional reforms has yet to be translated into 
a more favourable business environment.  In spite of measures taken to  address the informal 
economy, it is estimated to account for about one third of GDP causing unfair competition in 
the  market.  Lack  of  effective  regulatory  implementation  of  legislation,  ad-hoc  regulatory 
changes are also major concerns raised by the business community. 

Some positive outcome is expected from the ongoing implementation of the activities planned 
in  the  country’s  National  Plan  on  Trade  Facilitation.  Furthermore,  the  acceleration  of  the 
European integration progress is also expected to give further impetus to major reforms and 
consequently have a positive impact on the investment and business climate in Albania in the 
following years.  

179 

 
 
 
 
 
6. 

CONCLUSIONS  

Albania and the EU are very close and growing trade partners having more than doubled their 
total trade since the entry into force of the trade agreement. The EU is Albania’s main trading 
partner,  accounting  for  76%  of  total  exports  and  62%  of  total  imports  of  goods.  While  the 
trade  agreement  is  generally  implemented  smoothly  by  Albania,  the  business  climate  is 
negatively affected by the large size of its informal economy and shortcomings in the rule of 
law,  which  are  a  strong  deterrent  to  investments.  Overall,  it  is  expected  that  the  renewed 
momentum of the European integration process will have a positive impact on the investment 
and  business  climate  in  Albania  in  the  coming  period.  Similarly,  the  development  of  a 
Regional  Economic  Area  based  on  EU  rules  and  standards,  to  which  all  Western  Balkan 
economies  have  committed, has the potential to  generate untapped  growth. A big milestone 
was in fact reached on 4 April 2019 when Ministers of Telecommunications from the Western 
Balkans signed a Regional Roaming Agreement that envisages a roaming-free region across 
the Western Balkans in 2021, also paving the way for further reductions of the roaming costs 
between the Western Balkans economies and the European Union. 

7. 

STATISTICS 

Merchandise trade EU28 2014-2018 
2014 

2015 

2016 

2017 

2018 

EU28 trade with Albania (mio €) 

Imports 
Exports 
Balance 

Share Albania in EU28 trade with Extra-EU28 

Imports 
Exports 
Total (I+E) 

Imports 
Exports 
Total (I+E) 

Source Trade G2 Statistics/ISDB  
Trade EU28: Eurostat COMEXT;  Trade Albania: IMF Dots 

1.246 
2.468 
1.222 

0,1% 
0,1% 
0,1% 

1.165 
2.519 
1.355 

0,1% 
0,1% 
0,1% 

Share EU28 in trade Albania with world 

60,5% 
73,8% 
64,8% 

61,1% 
72,1% 
64,5% 

1.290 
2.706 
1.415 

0,1% 
0,2% 
0,1% 

63,2% 
77,9% 
67,5% 

1.503 
2.989 
1.486 

0,1% 
0,2% 
0,1% 

61,5% 
77,2% 
66,2% 

1.757 
3.195 
1.438 

0,1% 
0,2% 
0,1% 

61,6% 
76,4% 
66,5% 
25-mars-19 

Total merchandise trade EU28 with Albania (mio €) 

Albania 

2017 

2018 

Growth 

Imports 
Exports 
Balance 
Total trade 
Source Trade G2 Statistics/ISDB from Eurostat COMEXT 

1.503 
2.989 
1.486 
4.492 

1.757 
3.195 
1.438 
4.952 

mio € 

253 
206 
-48 
459 

Agrifood trade EU28 with Albania (mio €) 

Albania 

2017 

2018 

Growth 

Imports 
Exports 
Balance 
Total trade 
Source Trade G2 Statistics/ISDB from Eurostat COMEXT 

79 
389 
310 
468 

mio € 

12 
28 
17 
40 

90 
417 
327 
508 

annual 
% 
16,9% 
6,9% 

10,2% 

annual 
% 
14,7% 
7,3% 

8,5% 

NAMA trade EU28 with Albania (mio €) 

Albania 

2017 

2018 

EU28 imports 

1.424 

1.666 

242 

mio € 

180 

Growth 

annual 
% 
17,0% 

 
 
  
  
  
  
  
  
  
 
  
  
  
  
 
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
EU28 exports 
Balance 
Total trade 
Source Trade G2 Statistics/ISDB from Eurostat COMEXT 

2.600 
1.176 
4.025 

2.778 
1.112 
4.444 

178 
-64 
419 

6,8% 

10,4% 

Services trade EU28 with Albania (mio €) 

Albania 

2016 

2017 

Imports 
Exports 
Balance 
Total trade 
Source Trade G2 Statistics/ISDB from Eurostat BOP statistics 

813 
764 
-49 
1.577 

858 
780 
-78 
1.638 

mio € 

45 
16 
-29 
61 

Growth 

annual 
% 
5,6% 
2,1% 

3,9% 

Services trade EU28 with Albania (mio €) 

Imports 
Exports 
Balance 
Total trade 
Source Trade G2 Statistics/ISDB from Eurostat BOP statistics 

2013 

2014 

2015 

2016 

2017 

686 
629 
-57 
1.315 

730 
722 
-8 
1.452 

723 
724 
1 
1.446 

813 
764 
-49 
1.577 

858 
780 
-78 
1.638 

Inward 
Outward 

Inward 
Outward 
Source Trade G2 Statistics/ISDB from Eurostat BOP statistics 

FDI EU28 with Albania (mio €) 
2014 

2015 

2016 

2017 

2013 
FDI Stocks 
-21 
2.504 
FDI Flows 
-84 
266 

50 
5.723 

21 
162 

-109 
5.920 

-160 
189 

198 
5.430 

243 
-177 

168 
5.456 

1 
96 

181 

 
 
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
 
 
ANNUAL  INFO  SHEET  ON  THE  IMPLEMENTATION  OF  THE  TRADE  PILLAR 
OF THE EU-BOSNIA AND HERZEGOVINA STABILISATION AND ASSOCIATION 
AGREEMENT 

1. 

INTRODUCTION 

On 16 June 2008, the EU and Bosnia and Herzegovina signed a Stabilisation and Association 
Agreement (SAA). The SAA is the prime instrument of the EU’s overall policy towards the 
Western  Balkan  countries’  Stabilisation  and  Association  process.  Under  this  process,  all 
Western Balkans countries, including Bosnia and Herzegovina, have a common future as EU 
Member States. 

The  SAA  entered  into  force  on  1  June  2015,  however,  the  trade-related  part  of  the  SAA 
already  entered  into  force  through  an  Interim  Agreement  on  1  July  2008.  This  Agreement 
established  a  free-trade  area  over  a  transitional  period  of  five  years.  The  Agreement  covers 
products  in  all  Chapters  of  the  Harmonised  System.  Regarding  agricultural  products,  the 
agreement is largely asymmetrical. EU agricultural imports from Bosnia and Herzegovina are 
almost completely liberalised (with very few exceptions). On the other hand, EU agricultural 
exports to Bosnia and Herzegovina are subject to tariffs and tariff rate quotas (TRQs).  

The  Agreement  also  includes  provisions  concerning  competition  and  State  aid,  investment 
and  related  payments,  a  high  level  of  protection  of  intellectual  property  rights  and 
strengthened co-operation in customs matters. Since the entry into force of the full SAA on 1 
June  2015,  a  number  of  additional  disciplines  are  being  implemented  concerning,  notably, 
government procurement, legislative approximation in many areas including standardisation, 
as well as provisions regarding services and establishment. 

2. 

EVOLUTION OF TRADE 

2.1 Trade in Goods 

Total bilateral trade between the EU and Bosnia and Herzegovina increased by 5% between 
2017 and 2018 reaching a total amount of  €11 billion. This represents a modest increase of 
38% since the implementation  of the  trade agreement in  2008. The EU remains  Bosnia and 
Herzegovina’s  first  trading  partner  accounting  for  73%  of  total  exports  and  61%  of  total 
imports of goods. More specifically, Croatia, Italy, Germany and Slovenia are responsible for 
67% of the EU’s exports to Bosnia and Herzegovina and for 68% of the EU’s imports from 
Bosnia and Herzegovina. The main traded products concern the following sectors: machinery 
and  appliances;  base  metals  and  articles  thereof  and  mineral  products.  The  overall  trade 
balance is in favour of the EU, however, last year Bosnia and Herzegovina reduced the deficit 
to its lowest since 2008 at €1.45 billion. 

2.2 Trade in agricultural goods 

In  2018,  trade  in  agricultural  products  increased  by  2.6%  -  on  both  imports  and  exports  - 
reaching a total of €1.1 billion, which represents 10% of the total bilateral trade. Only 4.5% 
of  Bosnia  and  Herzegovina’s  exports  to  the  EU  are  agricultural  products  versus  14%  of  all 
EU’s exports to Bosnia and Herzegovina. The EU imported mainly fruits and vegetables; raw 
hides,  skins  and  fur  and  waters  and  soft  drinks  while  its  main  exports  to  Bosnia  and 

182 

 
 
 
 
Herzegovina  included  meat,  chocolate,  confectionary  and  ice  cream;  food  preparations; 
cheese and wheat. 

A limited share of EU-Bosnia and Herzegovina agricultural trade is subject to duty-free Tariff 
Rate Quotas (TRQs).   

Data  on  the  utilisation  of  the  TRQs  have  been  provided  by  Bosnia  and  Herzegovina 
authorities and are included in Section 7 Statistics. 

The  EU  grants  very  few  agricultural  TRQs  to  Bosnia  and  Herzegovina:  beef  (not  used  by 
exporters from the country, mainly due to SPS reasons: Bosnia and Herzegovina is indeed not 
authorised  to  export  beef  to  the  EU),  sugar  (37%  used  in  2018)  and  wine  (85%  used  for 
sparkling wine and 62% for fresh wine in 2018). 

2.3 Trade in Services and Foreign Direct investment (FDIs) 

In  2017,  Bosnia  and  Herzegovina’s  exports  of  services  to  the  EU  dropped  by  nearly  11% 
since 2016 causing it to lose its positive balance with the EU. Overall total bilateral trade in 
services dropped by 5% from €2.2 billion to €2.1 billion. 

Nearly 63% of the country’s stock in FDI is originating from EU countries with total stocks 
amounting to €2.1 billion. Most of the investment is concentrated in the financial sector, retail 
and  tourism.  The  biggest  EU  investors  in  2017  were  Austria  (24%),  followed  by  Croatia 
(13%)  and  Slovenia  (13%).  Recently,  inflows  increasingly  consisted  of  reinvested  earnings 
while  the  net  EU  outflows  show  a  divestment  of  up  to  €0.9  billion.  The  legal  framework 
provides  in  principle  favourable  treatment  and  protection  guarantees  for  FDI.  There  are  no 
restrictions on FDI entry and few limitations on foreign ownership; however, the low level of 
FDI flows (the lowest in the Western Balkans) reflects the reality of the country’s poor and 
fragmented business environment. 

3. 

ISSUES ADDRESSED IN THE ANNUAL COMMITTEE MEETINGS 

Commercial issues are discussed on an annual basis in the context of the Sub-committee on 
Trade,  Industry,  Customs  and  Taxation.  The  latest  meeting  took  place  on  18  October  2018, 
during  which  the  13%  growth  of  the  bilateral  trade  in  2017  was  welcome,  particularly  as 
bilateral  trade  for  the  first  time  reached  the  €10  billion  threshold.  The  main  trade  issues 
addressed during the meeting concerned:  

  Excise duties on beer: the country was requested to expedite alignment of the current 
excise structure for small breweries with the threshold set by the acquis (200 000 hl).   
  Excise  duties  on  spirits:  the  EU  reminded  Bosnia  and  Herzegovina  that  applicable 
provisions on excise duties on spirits do not comply with Article 35 of the SAA on the 
prohibition of fiscal discrimination and the EU acquis that foresees a single rate for all 
spirits. 

  WTO  accession:  the  EU  encouraged  Bosnia  and  Herzegovina  to  intensify  efforts  to 

conclude its pending bilateral negotiations.  

  Business  environment:  the  EU  urged  the  country  to  address  key  issues  faced  by 
businesses: tackling infrastructure bottlenecks; improving the complex and inefficient 
administrative  structures,  in  particular  to  unify  the  fragmented  economic  space,  and 
also curbing the high political and regulatory uncertainty. 

183 

 
 
 
 
 
 
Commission  took  note  of  Bosnia  and  Herzegovina’s  concerns  regarding  the  EU  steel 
provisional  safeguard  measures  and  reiterated  that  the  key  objective  was  to  avoid  any 
disruption  of  the  traditional  trade  flows.  It  indicated  that  bilateral  consultations  in  the 
framework of the SAA would be held before the end of 2018.  

4. 

SPECIFIC AREAS OF IMPORTANCE 

The business environment is a key area of importance, in particular: 

  Market entry and exit regulations are lengthy and cumbersome, in particular, as the 
high  degree  of  regional  fragmentation  leads  to  a  high  number  of  different  rules  and 
different interpretations. 

  The  large  size  of  the  informal  economy  - estimated  at  25%  of  GDP -  distorts 

competition and has a negative impact on the business environment.  

  The  institutional  and  regulatory  environment  is  unstable  and  unpredictable. 
Contract  enforcement  is  a  very  time  consuming  procedure  and  settling  commercial 
disputes remains difficult, partly due to the missing possibilities of alternative dispute 
resolution methods but also due to a lack of courts specialised on commercial disputes.  

  Public procurement procedures are complex and prone to corruption.  
  Lack of adequate enforcement of State aid control. 

5. 

MAIN OPEN ISSUES AND FOLLOW-UP ACTIONS 

Enhancing transparency and accountability - in particular ensuring the effective, efficient and 
transparent functioning of the public procurement system - and the fight against corruption 
and  the  informal  economy  are  essential  issues  that  affect  EU  businesses  doing  business  in 
Bosnia  and  Herzegovina  that  are  part  of  the  regular  follow-up  done  under  the  SAA 
multidisciplinary  subcommittee  structures.  In  line  with  SAA  obligations,  enforcement  of 
competition  rules  needs  to  be  enhanced,  and  significant  efforts  are  needed  with  regards  to 
adoption of legislation and enforcement in the field of state aid control.  

Furthermore, in November 2018, Kosovo imposed a 100% import tariff for goods originating 
from  Serbia  and  Bosnia  and  Herzegovina,  indirectly  affecting  EU  businesses  operating  in 
Bosnia and Herzegovina and trading in the region. These measures are politically motivated 
and the EU has repeatedly called on their termination. 

6. 

CONCLUSIONS 

While  the  trade  agreement  is  generally  implemented  smoothly  by  Bosnia  and  Herzegovina, 
the  business  climate  is  negatively  affected  by  the  large  size  of  its  informal  economy. 
However, it is expected that the renewed momentum of the European integration process will 
give  further  impetus  to  major  reforms  and  consequently  have  a  positive  impact  on  the 
investment  and  business  climate  in  the  coming  period.  Similarly,  the  development  of  a 
Regional  Economic  Area  based  on  EU  rules  and  standards,  to  which  all  Western  Balkan 
economies have committed, has the potential to generate untapped growth. Despite the 100% 
tariffs  imposed  by  Kosovo,  which  have  recently  undermined  regional  cooperation  efforts,  a 
big milestone was reached on 4 April 2019 when Ministers of Telecommunications from the 
Western  Balkans  signed  a  Regional  Roaming  Agreement.  This  Agreement  envisages  a 
roaming-free  region  across  the  Western  Balkans  in  2021,  also  paving  the  way  for  further 

184 

 
 
 
reductions  of  the  roaming  costs  between  the  Western  Balkans  economies  and  the  European 
Union.   

7. 

STATISTICS 

EU28 trade with Bosnia-Herzegovina (mio €) 

Merchandise trade EU28 2014-2018 

2014 

2015 

2016 

2017 

2018 

Imports 
Exports 
Balance 

Share Bosnia-Herzegovina in EU28 trade with Extra-EU28 

3.330 
5.024 
1.694 

3.493 
5.077 
1.584 

Imports 
Exports 
Total (I+E) 

Imports 
Exports 
Total (I+E) 

0,2% 
0,3% 
0,2% 

0,2% 
0,3% 
0,2% 
Share EU28 in trade Bosnia-Herzegovina with world 
60,7% 
73,3% 
65,1% 

58,7% 
73,4% 
63,8% 

Source Trade G2 Statistics/ISDB  
Trade EU28: Eurostat COMEXT;  Trade Bosnia-Herzegovina: IMF Dots 

3.782 
5.254 
1.473 

0,2% 
0,3% 
0,3% 

61,7% 
71,5% 
65,3% 

4.256 
5.921 
1.665 

0,2% 
0,3% 
0,3% 

61,2% 
71,2% 
64,9% 

4.629 
6.083 
1.454 

0,2% 
0,3% 
0,3% 

60,6% 
72,9% 
65,3% 
25-mars-19 

Total merchandise trade EU28 with Bosnia-Herzegovina (mio €) 

Bosnia-Herzegovina 

2017 

2018 

Imports 
Exports 
Balance 
Total trade 
Source Trade G2 Statistics/ISDB from Eurostat COMEXT 

4.256 
5.921 
1.665 
10.178 

4.629 
6.083 
1.454 
10.712 

Agrifood trade EU28 with Bosnia-Herzegovina (mio €) 

Bosnia-Herzegovina 

2017 

2018 

Growth 

mio € 

373 
161 
-211 
534 

annual 
% 
8,8% 
2,7% 

5,2% 

Growth 

Imports 
Exports 
Balance 
Total trade 
Source Trade G2 Statistics/ISDB from Eurostat COMEXT 

203 
829 
627 
1.032 

208 
851 
643 
1.059 

mio € 

5 
22 
16 
27 

NAMA trade EU28 with Bosnia-Herzegovina (mio €) 

Bosnia-Herzegovina 

2017 

2018 

Growth 

EU28 imports 
EU28 exports 
Balance 
Total trade 
Source Trade G2 Statistics/ISDB from Eurostat COMEXT 

4.054 
5.092 
1.038 
9.146 

4.421 
5.232 
811 
9.653 

mio € 

367 
140 
-228 
507 

Services trade EU28 with Bosnia-Herzegovina (mio €) 

Bosnia-Herzegovina 

2016 

2017 

Growth 

Imports 
Exports 
Balance 
Total trade 
Source Trade G2 Statistics/ISDB from Eurostat BOP statistics 

1.138 
1.099 
-39 
2.237 

1.014 
1.108 
94 
2.122 

mio € 

-124 
9 
133 
-115 

annual 
% 
2,6% 
2,6% 

2,6% 

annual 
% 
9,1% 
2,7% 

5,5% 

annual 
% 
-10,9% 
0,8% 

-5,1% 

Services trade EU28 with Bosnia-Herzegovina (mio €) 

2013 

2014 

2015 

2016 

2017 

185 

 
 
 
  
  
  
  
  
  
  
 
  
  
  
  
 
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
Imports 
Exports 
Balance 
Total trade 
Source Trade G2 Statistics/ISDB from Eurostat BOP statistics 

835 
1.034 
200 
1.869 

901 
980 
78 
1.881 

895 
945 
51 
1.840 

1.138 
1.099 
-39 
2.237 

1.014 
1.108 
94 
2.122 

FDI EU28 with Bosnia-Herzegovina (mio €) 

2013 

2014 

2015 

2016 

2017 

Inward 
Outward 

Inward 
Outward 
Source Trade G2 Statistics/ISDB from Eurostat BOP statistics 

FDI Stocks 

FDI Flows 

64 
3.059 

30 
70 

102 
2.455 

7 
-414 

174 
3.395 

38 
465 

89 
3.410 

64 
574 

81 
2.161 

60 
-941 

Fill rates of Bosnia-Herzegovina TRQs (all TRQs are duty free).  

Agricultural TRQs 

Product codes 

Size of the TRQ (tonnes) 

TRQ usage (2017) 

TRQ usage 
(2018) 

Beef 

Pork 

Lamb 

Poultry 

Fish  

As of 
1.1.2017 

As of 
1.1.2018 

0102 10 10 

0102 29 61 

0102 29 91 

0102 90 49 

0202 30 90 

0103 91 90 

0103 92 11 

0103 92 19 

0103 92 90 

0203 19 15 

0203 22 11 

0203 29 55 

0209 00 11 

0210 19 81 
0104 10 30 

2200 

1935 

190 

2600 

4000 

700 

575 

1755 

195 

1200 

300 

2000 

100 

600 
450 

2200 

1935 

190 

2600 

4000 

700 

575 

1755 

195 

1200 

300 

2000 

100 

600 
450 

0105 94 00 

1455 

1455 

0207 12 90 

0207 13 10 

0207 13 30 

0207 13 60 

0207 13 99 

0207 14 20 

80 

90 

55 

320 

25 

30 

ex 0207 14 10 

6000 

0207 14 60 

0207 14 99 

0301 93 00 

130 

50 

75 

80 

90 

55 

320 

25 

30 

6000 

130 

50 

75 

11% 

51% 

15% 

8% 

56% 

90% 

0% 

20% 

29% 

56% 

0% 

80% 

82% 

68% 
110% 

0% 

10% 

0% 

0% 

0% 

0% 

0% 

78% 

0% 

58% 

Milk and cream 

0401 20 11 

5432 

9506 

65% 

186 

9% 

33% 

21% 

32% 

51% 

91% 

33% 

0% 

73% 

0% 

80% 

71% 

71% 

157% 

72% 

52% 

100% 

51% 

 
 
  
  
  
  
  
  
  
  
  
  
  
 
 
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
0401 20 91 

720 

1440 

0401 40 10 

0401 50 11 

0402 21 18 

0403 10 11 

0403 10 13 

0403 10 91 

0403 10 93 

0403 10 99 

0403 90 51 

0403 90 53 

80 

30 

25 

1515 

1520 

480 

130 

25 

500 

290 

80 

30 

25 

3030 

3040 

480 

130 

25 

500 

290 

0403 90 59 

1762,5 

3525 

0403 90 91 

0403 90 93 

0405 10 11 

0405 10 19 

0406 10 30 

0406 10 50 

0406 10 80 

0409 00 00 

0701 90 50 

0701 90 90 

0704 90 10 

0706 10 00 

0806 10 10 

0809 21 00 

0811 90 75 

1601 00 91 

530 

55 

160 

200 

355 

165 

165 

50 

1265 

280 

50 

45 

410 

70 

285 

530 

55 

160 

200 

355 

165 

165 

50 

1265 

280 

50 

45 

410 

70 

285 

1601 00 99 

1692,5 

3385 

1602 10 10 

1602 20 90 

1602 31 19 

1602 32 11 

1602 32 19 

1602 32 30 

1602 32 90 

1602 41 10 

1602 49 15 

1602 49 30 

1602 49 50 

1602 50 31 

1602 50 95 

1701 91 00 

75 

140 

40 

130 

30 

170 

230 

360 

150 

445 

60 

70 

295 

55 

75 

140 

40 

130 

30 

170 

230 

360 

150 

445 

60 

70 

295 

55 

1701 99 10 

3470 

3470 

187 

26% 

220% 

347% 

40% 

134% 

28% 

176% 

98% 

124% 

41% 

264% 

97% 

254% 

172% 

494% 

24% 

347% 

85% 

71% 

1300% 

75% 

26% 

542% 

4637% 

10% 

141% 

107% 

61% 

7% 

86% 

8% 

0% 

303% 

78% 

2% 

21% 

0% 

93% 

0% 

21% 

56% 

360% 

56% 

18% 

100% 

100% 

30% 

70% 

15% 

71% 

76% 

61% 

48% 

100% 

39% 

71% 

88% 

88% 

45% 

94% 

53% 

50% 

0% 

56% 

0% 

0% 

15% 

67% 

100% 

74% 

41% 

0% 

59% 

37% 

83% 

41% 

0% 

13% 

0% 

66% 

28% 

24% 

94% 

74% 

Butter 

Cheese 

Honey 

Potatoes 

Cabbage 

Carrots and turnips 

Grapes 

Cherries 

Sausages 

Sugar 

 
 
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
Biscuits 

1905 31 19 

1905 31 99 

1905 32 19 

1905 90 45 

Vegetables, fruits and nuts 

2001 10 00 

365 

600 

300 

35 

265 

70 

245 

40 

365 

600 

300 

35 

265 

70 

245 

40 

92% 

73% 

49% 

811% 

9% 

1% 

52% 

98% 

13765 

19530 

110% 

2001 90 70 

2005 99 50 

2005 99 60 
ex 2204 10 

ex 2204 21 

ex 2208 20 29 

85 

2402 20 90 

3200 

85 

3200 

6% 

30% 

18% 

46% 

47% 

59% 

19% 

6% 

30% 

5% 

85% 

24% 

Wine (hl) 

Spirits 

Tobacco 

Source: Bosnia and Herzegovina authorities 

188 

 
 
  
  
  
  
  
  
  
  
  
 
 
ANNUAL  INFO  SHEET  ON  THE  IMPLEMENTATION  OF  THE  TRADE  PILLAR 
OF THE STABILISATION AND ASSOCIATION AGREEMENT BETWEEN THE EU 
AND NORTH MACEDONIA 

1. 

INTRODUCTION 

On  9  April  2001,  the  EU  and  North  Macedonia  signed  a  Stabilisation  and  Association 
Agreement (SAA). The SAA is the prime instrument of the EU’s overall policy towards the 
Western  Balkan  countries’  Stabilisation  and  Association  process.  Under  this  process,  all 
Western Balkans countries have a common future as EU Member States.   

The  SAA  entered  into  force  on  1  April  2004,  however,  the  trade-related  part  of  the  SAA 
already entered into force through an Interim Agreement on 1 June 2001. Trade liberalisation 
between  the  EU  and  North  Macedonia  was  completed  over  a  period  of  ten  years.  The 
Agreement covers products in all Chapters of the Harmonised System.   

Regarding  agricultural  products  the  agreement  is  largely  asymmetrical.  EU  agricultural 
imports from North Macedonia are almost completely liberalized (with very few exceptions). 
On  the  other  hand,  EU  agricultural  exports  to  North  Macedonia  are  subject  to  tariffs  and 
Tariff Rate Quotas (TRQs).  

The  Agreement  also  includes  provisions  concerning  competition  matters,  investment  and 
related  payments,  a  high  level  of  protection  of  intellectual  property  rights  and  strengthened 
co-operation  in  customs  matters.  Since  the  full  entry  into  force  of  SAA,  a  number  of 
additional disciplines are being implemented concerning, notably,  government procurement, 
legislative  approximation  in  many  areas  including  standardisation,  as  well  as  provisions 
regarding services and establishment. 

2. 

EVOLUTION OF TRADE 

2.1 Trade in Goods 

Total bilateral trade between the EU and North Macedonia increased by 14% between 2017 
and  2018  reaching  a  total  amount  of  €10.5  billion.  This  represents  a  significant  increase  of 
128%  in  the  last  ten  years.  The  EU  remains  North  Macedonia’s  first  trading  partner 
accounting  for  82%  of  total  exports  and  62%  of  total  imports  of  goods.  More  specifically, 
Bulgaria, Germany, Greece and Hungary are responsible for 71% of the EU’s imports from 
North Macedonia and for 51% of the EU’s exports to North Macedonia. The United Kingdom 
accounts for less than 2% of the EU’s imports from North Macedonia but makes up 17% of 
total  EU  exports  to  the  country,  behind  Germany  (22%).  The  main  imported  products  from 
North Macedonia are machinery and appliances; products of the chemical or allied industries 
and  mineral  products.  The  EU  mainly  exports  machinery  and  appliances;  pearls,  precious 
metals and articles thereof and mineral products. The overall trade balance is in favour of the 
EU, however, it is gradually decreasing: from a peak of €1.3 billion in 2012 it is now around 
€0.6 billion. 

2.2 Trade in agricultural goods 

In  2018,  trade  in  agricultural  products  increased  by  5%  reaching  a  total  of  €700  million, 
representing  6%  of  the  total  bilateral  trade.  Trade  in  agricultural  products  has  gradually 

189 

 
 
 
 
 
decreased since the application of the trade agreement when it represented nearly 12% of the 
total bilateral trade. The individual share of agricultural exports over total exports in 2018 was 
about 6% on both sides. Tobacco, vegetables, wine and preparations of cereals, flour, starch 
were  the  EU's  key  import  products.  The  EU  exported  primarily  meat  followed  by  food 
preparations to North Macedonia. 

For a number of agricultural products, EU exports to North Macedonia are subject to Tariff 
rate  quotas  (TRQs),  either  duty-free  or  at  a  reduced  customs  duty  rate.  No  information  was 
provided  by  North  Macedonia  on  the  use  of  the  quotas.  The  EU  grants  three  agricultural 
TRQs to North Macedonia (wine, beef and sugar) which were almost fully used for wine but 
unused for sugar and beef by exporters from North Macedonia in 2018. 

2.3 Trade in Services and FDI 

In  2017,  total  bilateral  trade  in  services  dropped  by  8%  from  €2.1  billion  to  €1.9  billion.  
While the services sector accounts for over half of the country’s employment and over 60% of 
GDP, it only represents 13% of the value of North Macedonia’s export basket to the EU and 
has remained stable over the past two years at around €750 million. The main services sectors 
exported  by  North  Macedonia  are  tourism  and  transport,  followed  by  services  to 
manufacturing companies, telecommunications and computer and other information services.  
On the other hand, in 2017, the EU’s exports of services to North Macedonia contracted by 
more  than  12%  levelling  at  €1.2  billion,  which  represents  18%  of  the  EU’s  total  trade  in 
goods and services with the country. 

In  the  past  two  years,  EU  firms  increased  their  share  in  the  country's  stock  of  foreign 
investment from 79% in 2016 to 82% in 2017 reaching a combined total stock of €2.5 billion. 
However,  in  2017,  the  country  experienced  a  slump  in  investment  spending  (-€2  million) 
impacted by a decline in confidence, resulting from the prolonged political crisis. The large 
informal  economy  and  challenges  in  the  labour  market,  including  insufficiently  high 
managerial skills negatively affect private investment behaviour.   

3. 

ISSUES ADDRESSED IN THE ANNUAL COMMITTEE MEETINGS 

Commercial issues are discussed on an annual basis in the context of the Sub-committee on 
Trade, Industry, Customs and Taxation. The last meeting took place on  13 November 2018, 
during which the continuing growth of the bilateral trade was positively noted as well as the 
very  high  level  of  utilisation  of  quotas.  Information  was  exchanged  on  the  legislative 
alignment  to  the  external  trade  acquis,  on  the  administrative  capacity  for  various  trade 
competencies and on relevant WTO matters. The country’s overall smooth implementation of 
the  trade  agreement  was  again  welcome  as  well  as  its  good  co-operation  in  the  context  of 
WTO-related activities.   

Commission  took  note  of  North  Macedonia’s  concerns  regarding  the  EU  steel  provisional 
safeguard  measures  and  reiterated  that  the  key  objective  was  to  avoid  any  disruption  of  the 
traditional trade flows. It indicated that bilateral  consultations in the framework of the SAA 
would be held before the end of 2018.  

4. 

SPECIFIC AREAS OF IMPORTANCE 

The business environment is a key area of importance. Challenges for doing business in North 
Macedonia include frequent legal changes to the regulatory framework, a lack of transparency 

190 

 
 
 
 
 
of  public  procurement  procedures,  a  lack  of  systematic,  efficient  and  transparent  law 
enforcement  including  in  inspections  and  commercial  dispute  settlement,  and  many  para-
fiscal charges at different administrative levels. In addition, the size of the informal economy, 
-estimated  at  about  17%  of  total  output  in  2016-  which  creates  unfair  competition  from 
unregistered  companies  and  the  entrenched  corruption  are  defined  by  companies  as  major 
obstacles to doing business.   

5. 

MAIN OPEN ISSUES AND FOLLOW-UP ACTIONS 

The  main  open  issues  are  linked  to  non-tariff  barriers,  including  technical  standards  and 
administrative obstacles. Barriers also include relatively high logistical and customs costs. In 
its  2019-2021  Economic  Reform  Programme,  the  government  rolled  over  the  measure  on 
trade  facilitation  aimed  at  simplifying  inspections  and  clearance  procedures,  which  has  the 
potential  to  improve  competitiveness.  Actions  include  the  speeding  up  of  all  trade  that 
requires  veterinary  and  phytosanitary  certificates  issued  through  the  EU  Trade  Control  and 
Expert  System  (TRACES).  The  resulting  improved  data  exchange  between  customs 
authorities would lead to faster and cheaper trade flows. 

In  addition,  the  new  Public  Procurement  Law,  enacted  early  2019,  is  expected  to  increase 
transparency  and  predictability  on  the  market.  By  publishing  public  procurement  plans 
electronically and in  advance, the number of bidders per tender is  expected to  rise allowing 
for better quality and increasing competition. Finally, enforcement of competition rules needs 
to be enhanced, and significant efforts are needed with regards to adoption of legislation and 
enforcement in the field of state aid control, including transparency of aid granted. 

6. 

CONCLUSIONS 

North  Macedonia  and  the  EU  are  very  close  and  growing  trade  partners  having  more  than 
doubled their total  trade in  the last ten  years. The EU is  the country’s main trading partner, 
accounting for 82% of its total exports and 62% of its total imports of goods. While the trade 
agreement  is  generally  implemented  smoothly  by  North  Macedonia,  the  business  climate  is 
negatively affected by the large size of its informal economy and shortcomings in the rule of 
law, which are a strong deterrent to investments. On the other hand, the renewed momentum 
of the European integration process, and the possible opening of EU accession negotiations in 
the  summer  2019,  are  expected  to  give  further  impetus  to  major  reforms  and  consequently 
have  a  positive  impact  on  the  investment  and  business  climate  in  North  Macedonia  in  the 
coming period. Similarly, the development of a Regional Economic Area based on EU rules 
and standards, to which all Western Balkan economies have committed to, has the potential to 
generate  untapped  growth.  A  big  milestone  was  in  fact  reached  on  4  April  2019  when 
Ministers  of  Telecommunications  from  the  Western  Balkans  signed  a  Regional  Roaming 
Agreement  that  envisages  a  roaming-free  region  across  the  Western  Balkans  in  2021,  also 
paving  the  way  for  further  reductions  of  the  roaming  costs  between  the  Western  Balkans 
economies and the European Union. 

7. 

STATISTICS 

Merchandise trade EU28 2014-2018 

2014 

2015 

2016 

2017 

2018 

EU28 trade with North Macedonia (mio €) 

Imports 
Exports 
Balance 

3.019 
3.818 
800 

3.365 
4.114 
749 

3.722 
4.450 
727 

4.251 
4.970 
719 

4.928 
5.564 
635 

191 

 
 
 
  
  
  
  
  
  
  
 
  
  
  
  
Share North Macedonia in EU28 trade with Extra-EU28 

Imports 
Exports 
Total (I+E) 

Imports 
Exports 
Total (I+E) 

0,2% 
0,2% 
0,2% 

0,2% 
0,2% 
0,2% 
Share EU28 in trade North Macedonia with world 
61,7% 
75,7% 
67,5% 

63,1% 
75,5% 
68,1% 

Source Trade G2 Statistics/ISDB  
Trade EU28: Eurostat COMEXT;  Trade North Macedonia: IMF Dots 

0,2% 
0,3% 
0,2% 

62,0% 
79,9% 
69,4% 

0,2% 
0,3% 
0,2% 

62,9% 
81,2% 
70,6% 

0,2% 
0,3% 
0,3% 

62,4% 
82,3% 
71,0% 
25-mars-19 

Total merchandise trade EU28 with North Macedonia (mio €) 

North Macedonia 

2017 

2018 

Imports 
Exports 
Balance 
Total trade 
Source Trade G2 Statistics/ISDB from Eurostat COMEXT 

4.251 
4.970 
719 
9.221 

4.928 
5.564 
635 
10.492 

Agrifood trade EU28 with North Macedonia (mio €) 

North Macedonia 

2017 

2018 

Growth 

mio € 

677 
594 
-83 
1.271 

annual 
% 
15,9% 
11,9% 

13,8% 

Growth 

Imports 
Exports 
Balance 
Total trade 
Source Trade G2 Statistics/ISDB from Eurostat COMEXT 

276 
369 
93 
645 

mio € 

8 
26 
18 
34 

284 
395 
112 
679 

NAMA trade EU28 with North Macedonia (mio €) 

North Macedonia 

2017 

2018 

Growth 

EU28 imports 
EU28 exports 
Balance 
Total trade 
Source Trade G2 Statistics/ISDB from Eurostat COMEXT 

3.975 
4.601 
625 
8.576 

4.644 
5.168 
524 
9.813 

mio € 

669 
567 
-102 
1.236 

Services trade EU28 with North Macedonia (mio €) 

North Macedonia 

2016 

2017 

Growth 

Imports 
Exports 
Balance 
Total trade 
Source Trade G2 Statistics/ISDB from Eurostat BOP statistics 

754 
1.353 
599 
2.107 

747 
1.186 
438 
1.933 

mio € 

-6 
-167 
-161 
-174 

annual 
% 
2,9% 
7,1% 

5,3% 

annual 
% 
16,8% 
12,3% 

14,4% 

annual 
% 
-0,8% 
-12,4% 

-8,2% 

Services trade EU28 with North Macedonia (mio €) 

Imports 
Exports 
Balance 
Total trade 
Source Trade G2 Statistics/ISDB from Eurostat BOP statistics 

2013 

2014 

2015 

2016 

2017 

507 
739 
232 
1.246 

567 
857 
290 
1.424 

608 
1.008 
400 
1.616 

754 
1.353 
599 
2.107 

747 
1.186 
438 
1.933 

Inward 
Outward 

Inward 
Outward 

FDI EU28 with North Macedonia (mio €) 
2014 

2013 

FDI Stocks 

2015 

2016 

2017 

FDI Flows 

-154 
1.967 

-0 
232 

-51 
2.050 

92 
112 

-21 
2.636 

4 
110 

-37 
2.468 

-24 
206 

-40 
2.449 

16 
-2 

192 

 
 
 
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
Source Trade G2 Statistics/ISDB from Eurostat BOP statistics 

193 

 
 
  
  
  
  
  
 
 
 
ANNUAL INFO SHEET ON THE IMPLEMENTATION OF THE TRADE PILLAR 
OF THE EU-KOSOVO80 STABILISATION AND ASSOCIATION AGREEMENT 

1. 

INTRODUCTION 

On 27 October 2015, the EU and Kosovo signed a Stabilisation and Association Agreement 
(SAA).  The  SAA  is  the  prime  instrument  of  the  EU’s  overall  policy  towards  the  Western 
Balkan  countries’  Stabilisation  and  Association  process.  Under  this  process,  all  Western 
Balkans partners, including Kosovo, have a European perspective.  

The SAA - including the trade-related part - entered into force on 1 April 2016 and foresees:  

  Upgrading  the  existing  trade  relations  by  gradual  establishment  of  a  free  trade  area 

over a period lasting a maximum of 10 years.  

  Almost  unrestricted  market  access  to  the  EU  for  Kosovo  products:  the  EU  has 
abolished  all  customs  duties  with  Kosovo  upon  entry  into  force  of  the  SAA  with 
exception of a few product lines in the agricultural sector, which are subject to specific 
duties or tariff-quotas.  

  Kosovo  has  abolished  the  customs  duties  on  a  number  of  tariff  lines  (industrial, 
agricultural  and  fishery  products)  while  for  the  rest  it  will  reduce  the  duties 
progressively over 10 years.  

The SAA also includes Kosovo’s commitment to ensure the gradual approximation of its laws 
with EU acquis in a number of important areas, such as public procurement, standardisation, 
consumer  protection,  working  conditions  and  equal  opportunities.  It  also  provides  for  a 
gradual liberalisation in the areas of rights of establishment, supply of services and movement 
of  capital;  and  it  includes  provisions  on  competition  matters,  state  aid,  and  intellectual 
property rights. 

2. 

EVOLUTION OF TRADE 

2.1 Trade in Goods 

Total bilateral trade between the EU and Kosovo increased by 15% between 2017 and 2018 
reaching a total  amount of  €1.1 billion. Since the implementation  of the trade agreement in 
2016,  total  bilateral  trade  has  increased  by  32%  but  only  to  the  advantage  of  the  EU  as 
Kosovo’s trade with the EU was lower in 2018 (€101 million) than in 2015 (€104 million).  
The EU is Kosovo’s first trading partner accounting for 31% of total exports and 43% of total 
imports of goods. More specifically, Germany, the Netherlands and Poland absorb 53% of the 
EU’s  imports  from  Kosovo  while  Germany,  Slovenia,  Italy  and  Croatia  are  responsible  for 
54% of the EU’s exports to Kosovo. The main imported products from Kosovo are plastics, 
rubber and articles thereof; vegetable products and mineral products. The EU mainly exports 
machinery  and  appliances;  foodstuffs,  beverages,  tobacco  and  transport  equipment.  The 
overall trade balance is overwhelmingly in favour of the EU, and further increasing from €0.8 
billion in 2016 to €0.9 billion in 2018. 

80   The designation is without prejudice to position on status and is in line with UNSCR 1244/1999 and the ICJ 

Opinion on the Kosovo Declaration of independence.  

194 

 
 
 
                                                 
2.2 Trade in agricultural goods 

In 2018, 25% of all EU’s imports from Kosovo were agricultural products versus 24% of all 
EU’s  exports  to  Kosovo.  While  the  EU  exports  increased  by  9%,  imports  from  Kosovo 
remained  unchanged  from  the  previous  year.  Fruits  and  non-edible  products  such  as  raw 
hides, skins and fur-skins were the EU’s key import products from Kosovo, on the other hand 
the  EU  exported  primarily  meat  and  meat  preparations,  dairy  products,  cigarettes  and 
beverages. 

The EU grants two tariff rate quotas (TRQs) to Kosovo (wine and beef) which in the case of 
beef was not used by Kosovo's exporters as the country is not yet authorised to export beef to 
the  EU  for  SPS  reasons;  while  in  the  wine  quota  was  taken  up  by  57%  for  still  wine  but 
almost unused for sparkling wine. 

2.4 Trade in Services and Foreign Direct investment (FDIs) 

The service sector continues to  dominate the economy in  terms  of GDP and it is  the fastest 
growing  export  sector  for  Kosovo.  Export  of  services  are  dominated  by  travel  services  to 
diaspora,  but  the  role  of  IT  and  other  business  services  increased,  reaching  almost  10%  of 
total service exports in 2018. 

The EU remains the main investor in Kosovo. The EU share stood at 36% of net FDI stock in 
the third quarter of 2018. Germany, which has a large Kosovar diaspora - accounted for 11% 
of the total. In terms of FDI flows, the share of the EU was at 47% of the total inflow in 2018, 
followed by 30% from Switzerland. 

3. 

ISSUES ADDRESSED IN THE ANNUAL COMMITTEE MEETINGS 

Commercial issues are discussed on an annual basis in the context of the Sub-committee on 
Trade, Industry, Customs and Taxation. The last meeting took place on 14 June 2018, during 
which  trading  trends  were  discussed  as  well  specific  issues  such  as  the  need  for  Kosovo  to 
adopt  legislation  taking  into  account  losses  during  the  transportation  of  goods,  in  particular 
related to the evaporation of petroleum.   

4. 

SPECIFIC AREAS OF IMPORTANCE 

The  business  environment  is  struggling  with  a  weak  rule  of  law  and  corruption,  a  lack  of 
transparency of public procurement procedures, slow and inconsistent  contract enforcement, 
and a widespread informal economy. 

5. 

MAIN OPEN ISSUES AND FOLLOW-UP ACTIONS 

The  21  November  2018  decision  by  Kosovo  to  impose  100%  import  tariffs  for  goods 
originating  in  Serbia  and  Bosnia  and  Herzegovina  is  indirectly  affecting  EU  businesses 
established in these two countries and trading with Kosovo. These tariffs are in violation of 
the  Central  European  Free  Trade  Agreement  (CEFTA)  and  of  the  spirit  of  the  Stabilisation 
and  Association  Agreement  between  the  European  Union  and  Kosovo.  The  EU  has  been 
calling on Kosovo to urgently lift these measures, while also proposing its support to mediate 
in the resolution of the regional trade issues.   
On  9  October  2018,  Kosovo  government  adopted  a  decision,  which  introduced  a  double 
excise  tax  regime  for  cigarettes,  differentiating  between  domestically  produced  and 

195 

 
 
 
 
imported  products.  This  new  excise  regime  is  in  clear  violation  of  Article  39  of  the  SAA 
prohibiting  fiscal  discrimination  and  is  being  addressed  in  the  different  SAA  subcommittee 
structures with a call on Kosovo to bring the legislation in line with the SAA. 

Enforcement  of  competition  rules  also  needs  to  be  enhanced,  and  significant  efforts  are 
needed  with  regards  to  adoption  of  legislation  and  enforcement  in  the  field  of  state  aid 
control. 

Finally,  the  high  administrative  costs  linked  to  procedural,  quality,  logistical  and  border 
barriers are affecting EU businesses doing business in Kosovo and are closely monitored and 
followed up through the SAA multidisciplinary subcommittee structures. 

6. 

CONCLUSIONS 

Even though Kosovo is yet to reap the full benefits of its trade liberalisation with the EU, the 
EU  remains  its  main  trading  partner,  accounting  for  30%  of  total  exports  and  43%  of  total 
imports of goods. Kosovo’s business environment is hampered by the large informal economy 
which results in unfair competition from unregistered companies. However, it is expected that 
the  renewed  momentum  of  the  European  integration  process  will  give  further  impetus  to 
major  reforms  and  consequently  have  a  positive  impact  on  the  investment  and  business 
climate in the coming period. Similarly, the development of a Regional Economic Area based 
on EU rules and standards, to which all Western Balkan economies have committed, has the 
potential to  generate untapped  growth.  Despite the 100% tariffs imposed by Kosovo, which 
have  recently  undermined  regional  cooperation  efforts,  a  big  milestone  was  reached  on  4 
April  2019  when  Ministers  of  Telecommunications  from  the  Western  Balkans  signed  a 
Regional  Roaming  Agreement.  This  Agreement  envisages  a  roaming-free  region  across  the 
Western  Balkans  in  2021,  also  paving  the  way  for  further  reductions  of  the  roaming  costs 
between the Western Balkans economies and the European Union. 

7. 

STATISTICS 

Merchandise trade EU28 2014-2018 
2014 

2015 

2016 

2017 

2018 

EU28 trade with Kosovo (mio €) 

Imports 
Exports 
Balance 

Share Kosovo in EU28 trade with Extra-EU28 

Imports 
Exports 
Total (I+E) 

Imports 
Exports 
Total (I+E) 

Source Trade G2 Statistics/ISDB  
Trade EU28: Eurostat COMEXT;  Trade Kosovo: IMF Dots 

96 
728 
632 

0,0% 
0,0% 
0,0% 

104 
764 
660 

0,0% 
0,0% 
0,0% 

Share EU28 in trade Kosovo with world 

43,4% 
25,0% 
41,3% 

43,5% 
24,8% 
41,4% 

72 
854 
782 

0,0% 
0,0% 
0,0% 

43,1% 
22,6% 
41,0% 

89 
906 
818 

0,0% 
0,0% 
0,0% 

43,1% 
25,0% 
41,1% 

101 
1.044 
944 

0,0% 
0,1% 
0,0% 

43,0% 
30,6% 
41,8% 
25-mars-19 

Imports 
Exports 
Balance 

Total merchandise trade EU28 with Kosovo (mio €) 

Kosovo 

2017 

2018 

89 
906 
818 

101 
1.044 
944 

196 

Growth 

annual 
% 
13,0% 
15,2% 

mio € 

12 
138 
126 

 
 
 
 
  
  
  
  
  
  
  
 
  
  
  
  
 
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
Total trade 
Source Trade G2 Statistics/ISDB from Eurostat COMEXT 

995 

1.145 

149 

15,0% 

Agrifood trade EU28 with Kosovo (mio €) 

Kosovo 

2017 

2018 

Growth 

Imports 
Exports 
Balance 
Total trade 
Source Trade G2 Statistics/ISDB from Eurostat COMEXT 

25 
233 
207 
258 

mio € 

0 
21 
22 
21 

25 
254 
229 
279 

NAMA trade EU28 with Kosovo (mio €) 

Kosovo 

2017 

2018 

Growth 

EU28 imports 
EU28 exports 
Balance 
Total trade 
Source Trade G2 Statistics/ISDB from Eurostat COMEXT 

63 
674 
610 
737 

mio € 

12 
116 
104 
128 

75 
790 
715 
865 

annual 
% 
-0,8% 
9,2% 

8,2% 

annual 
% 
18,6% 
17,3% 

17,4% 

Services trade EU28 with Kosovo (mio €) 

Kosovo 

2016 

2017 

Imports 
Exports 
Balance 
Total trade 
Source Trade G2 Statistics/ISDB from Eurostat BOP statistics 

Growth 

mio € 

annual 
% 
#DIV/0! 
#DIV/0! 

#DIV/0! 

Services trade EU28 with Kosovo (mio €) 

2013 

2014 

2015 

2016 

2017 

Imports 
Exports 
Balance 
Total trade 
Source Trade G2 Statistics/ISDB from Eurostat BOP statistics 

Inward 
Outward 

FDI EU28 with Kosovo (mio €) 
2014 

2013 
FDI Stocks 

FDI Flows 

Inward 
Outward 
Source Trade G2 Statistics/ISDB from Eurostat BOP statistics 

2015 

2016 

2017 

11 
341 

2 
-23 

2 
519 

-7 
-1 

0 
492 

4 
-2 

197 

 
 
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
 
 
 
ANNUAL INFO SHEET ON the IMPLEMENTATION OF THE TRADE PILLAR OF 
THE EU-MONTENEGRO STABILISATION AND ASSOCIATION AGREEMENT 

1. 

INTRODUCTION 

On  15  October  2007,  the  EU  and  Montenegro  signed  a  Stabilisation  and  Association 
Agreement (SAA). The SAA is the prime instrument of the EU’s overall policy towards the 
Western  Balkan  countries’  Stabilisation  and  Association  process.  Under  this  process,  all 
Western  Balkans  countries,  including  Montenegro,  have  a  common  future  as  EU  Member 
States. 

The  SAA  entered  into  force  on  1  May  2010,  however,  the  trade-related  part  of  the  SAA 
already entered into force through an Interim Agreement on 1 January 2008. This Agreement 
established  a  free-trade  area  over  a  transitional  period  of  five  years.  From  the  date  of  the 
Interim  Agreement,  the  EU  granted  permanent  liberalisation  of  97.3%  of  tariff  lines, 
representing  almost  duty  free  treatment  to  all  imports  from  Montenegro.  By  2013, 
Montenegro  liberalised  95%  of  its  tariff  lines,  representing  99%  of  EU  imports  during  the 
three preceding years of the entry into force of the agreement. The Agreement covers products 
in  all Chapters of the Harmonised System. Only a few  agricultural  and  fishery products  are 
not fully liberalised and subject to preferential quantitative concessions (TRQs).   

The  Agreement  also  includes  provisions  concerning  competition  matters,  investment  and 
related  payments,  a  high  level  of  protection  of  intellectual  property  rights  and  strengthened 
co-operation in customs matters. Since the entry into force of the full SAA on 1 May 2010, a 
number  of  additional  disciplines  are  being  implemented  concerning,  notably,  government 
procurement,  legislative  approximation  in  many  areas  including  standardisation,  as  well  as 
provisions regarding services and establishment. 

2. 

EVOLUTION OF TRADE 

2.1 Trade in Goods 

In 2018, total  bilateral  trade between the EU and Montenegro increased by  13% reaching  a 
total amount of nearly €1.4 billion, for the first time matching the total trade pre-dating the 
trade  agreement  in  2008.  The  overall  stagnation  of  the  bilateral  trade  can  be  partially 
explained  by  the  fact  that  the  structure  of  Montenegrin  exports  in  the  last  ten  years  has 
substantially changed in favour of exports of services, which increased to over 70% of total 
exports of goods and services in 2017.  

The  EU  is  Montenegro’s  main  trading  partner,  accounting  for  45%  of  its  total  exports  and 
48%  of  its  total  imports  of  goods.  More  specifically,  Belgium,  Germany,  Hungary,  Poland 
and  Slovenia  absorb  64%  of  the  EU’s  imports  from  Montenegro  while  Croatia,  Germany, 
Greece, Italy and Slovenia are also responsible for 64% of the EU’s exports to Montenegro. 
The main imported products from Montenegro are base metals and articles thereof, transport 
equipment, mineral products and machinery and appliances. The EU mainly exports mineral 
products,  transport  equipment  and  machinery  and  appliances.  The  overall  trade  balance  is 
overwhelmingly in favour of the EU, exceeding €1 billion in 2018. 

198 

 
 
 
 
 
2.2 Trade in Agricultural Goods 

Trade  in  agricultural  products  represents  around  15%  of  the  total  bilateral  trade  and  has 
remained  stable  over  the  last  five  years.  In  2018,  only  4%  of  all  EU’s  imports  from 
Montenegro were  agricultural  products  versus 17% of all EU’s exports to  Montenegro. The 
EU  imported  mainly  fruits  and  vegetables  from  Montenegro  and  exported  meat  and  food 
preparations to Montenegro. 

For a number of agricultural products (poultry, cheese, meat products, waters and wine) EU 
exports to Montenegro are subject to tariff rate quotas (TRQs), either duty-free or at a reduced 
customs duty rate.  All of these quotas - except those for certain fish products, namely trout, 
sea bream as well as prepared or preserved anchovies – were fully or nearly fully used by EU 
exporters.    The  EU  also  grants  two  agricultural  TRQs  to  Montenegro  (beef  and  wine).    In 
2018, the beef quota was not used by Montenegro's exporters and the wine quota was used at 
19%.  

2.3 Trade in Services and Foreign Direct investment (FDIs) 

In 2017, services represented over 34% of the total bilateral trade of goods and services with a 
share of 69% for EU imports and a much more modest 19% share for EU exports. This large 
imbalance  allows  Montenegro  to  run  a  surplus  in  its  services  trade  with  the  EU,  mainly 
focussed on the travel and hospitality area. 

Financial integration with the EU remains substantial, as the EU accounted for 86% of capital 
in local banks and 46% of total FDI inflows during the first nine months of 2018. The total 
EU FDI stocks in Montenegro exceeded €1.5 billion by end of 2017. 

3. 

ISSUES ADDRESSED IN THE ANNUAL COMMITTEE MEETINGS 

Commercial issues are discussed on an annual basis in the context of the Sub-committee on 
Trade,  Industry,  Customs  and  Taxation.  The  last  meeting  of  the  Sub-committee  on  Trade, 
Industry,  Customs  and  Taxation  took  place  on  23  October  2018,  during  which  the  further 
recovery of the 2017 bilateral  trade was positively noted, highlighting the benefits  from  the 
national  policy with  regard to  services  and sustainable tourism. The Commission  welcomed 
the  absence  of  trade  irritants  with  Montenegro  as  well  as  efforts  to  improve  the  business 
environment, in particular its plans to cut border clearance time by 50% and related costs by 
20%.  

4. 

SPECIFIC AREAS OF IMPORTANCE 

The business environment is a key area of importance, in particular unfair competition from 
the  informal  economy  and  deficiencies  of  the  regulatory  environment.  Businesses  are 
negatively affected by inconsistent and arbitrary law enforcement as well as by inefficiencies 
and weak capacity in the public administration. In line with SAA obligations, enforcement of 
competition  rules  needs  to  be  enhanced,  and  significant  efforts  are  needed  with  regards  to 
adoption  of  legislation  and  enforcement  in  the  field  of  state  aid  control,  including 
transparency of aid  granted. Public procurement is another area of concern. Under the SAA 
(Article 76) the respective public procurement markets are in principle opened on the basis of 
non-discrimination  and  reciprocity  (no  less  favourable  treatment).  Despite  a  broad  level  of 
alignment with the EU acquis in the area of classical and utilities procurement, Montenegro 
needs to bring up implementation and enforcement capacities at all levels.  

199 

 
 
 
 
5. 

MAIN OPEN ISSUES AND FOLLOW-UP ACTIONS 

Enhancing transparency and accountability - in particular ensuring the effective, efficient and 
transparent functioning of the public procurement system- and the fight against corruption are 
essential issues that affect EU businesses doing business in Montenegro. They are part of the 
regular follow-up done under the SAA multidisciplinary subcommittee structures. 

6. 

CONCLUSIONS 

Montenegro  and  the  EU  are  very  close  trading  partners,  even  though  Montenegro  is  yet  to 
reap  the  full  benefits  of  trade  liberalisation  with  the  EU.  As  a  small  country  with  an  open 
economy,  it  needs  to  diversify  and  steer  its  goods-export  base  away  from  low  value-added 
sectors, which are exposed to volatile commodity prices, and from competition in low value- 
added sectors. While the trade agreement is generally implemented smoothly by Montenegro, 
the  business  climate  is  negatively  affected  by  the  large  size  of  its  informal  economy  and 
shortcomings in  the rule of law, which are a strong deterrent  to  investments.  However, it is 
expected  that  the  renewed  momentum  of  the  European  integration  process  will  give  further 
impetus  to  major  reforms  and  consequently  have  a  positive  impact  on  the  investment  and 
business  climate  in  the  coming  period.  Similarly,  the  development  of  a  Regional  Economic 
Area  based  on  EU  rules  and  standards,  to  which  all  Western  Balkan  economies  have 
committed,  has  the  potential  to  generate  untapped  growth.  A  big  milestone  was  in  fact 
reached on 4 April 2019 when Ministers of Telecommunications from  the Western Balkans 
signed  a  Regional  Roaming  Agreement  that  envisages  a  roaming-free  region  across  the 
Western  Balkans  in  2021,  also  paving  the  way  for  further  reductions  of  the  roaming  costs 
between the Western Balkans economies and the European Union. 

7. 

STATISTICS 

Merchandise trade EU28 2014-2018 
2015 

2014 

2016 

2017 

2018 

EU28 trade with Montenegro (mio €) 

Imports 
Exports 
Balance 

Share Montenegro in EU28 trade with Extra-EU28 

251 
973 
722 

144 
877 
733 

Imports 
Exports 
Total (I+E) 

Imports 
Exports 
Total (I+E) 

0,0% 
0,1% 
0,0% 

0,0% 
0,0% 
0,0% 
Share EU28 in trade Montenegro with world 
41,2% 
35,8% 
40,4% 

46,5% 
36,1% 
44,8% 

Source Trade G2 Statistics/ISDB  
Trade EU28: Eurostat COMEXT;  Trade Montenegro: IMF Dots 

151 
994 
843 

0,0% 
0,1% 
0,0% 

48,2% 
37,7% 
46,8% 

166 
1.067 
902 

0,0% 
0,1% 
0,0% 

47,4% 
34,5% 
45,6% 

189 
1.207 
1.017 

0,0% 
0,1% 
0,0% 

48,3% 
44,7% 
47,8% 
25-mars-19 

Total merchandise trade EU28 with Montenegro (mio €) 

Montenegro 

2017 

2018 

Imports 
Exports 
Balance 
Total trade 
Source Trade G2 Statistics/ISDB from Eurostat COMEXT 

166 
1.067 
902 
1.233 

189 
1.207 
1.017 
1.396 

mio € 

24 
139 
116 
163 

Growth 

annual 
% 
14,4% 
13,1% 

13,2% 

Agrifood trade EU28 with Montenegro (mio €) 

Montenegro 

2017 

2018 

Growth 

mio € 

annual 

200 

 
 
  
  
  
  
  
  
  
 
  
  
  
  
 
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
Imports 
Exports 
Balance 
Total trade 
Source Trade G2 Statistics/ISDB from Eurostat COMEXT 

6 
184 
178 
189 

7 
200 
192 
207 

NAMA trade EU28 with Montenegro (mio €) 

Montenegro 

2017 

2018 

EU28 imports 
EU28 exports 
Balance 
Total trade 
Source Trade G2 Statistics/ISDB from Eurostat COMEXT 

160 
884 
724 
1.044 

182 
1.007 
825 
1.189 

mio € 

22 
123 
102 
145 

Services trade EU28 with Montenegro (mio €) 

Montenegro 

2016 

2017 

Growth 

Imports 
Exports 
Balance 
Total trade 
Source Trade G2 Statistics/ISDB from Eurostat BOP statistics 

264 
214 
-50 
479 

mio € 

113 
41 
-72 
154 

377 
256 
-122 
633 

% 

34,1% 
8,7% 

9,4% 

2 
16 
14 
18 

Growth 

annual 
% 
13,7% 
14,0% 

13,9% 

annual 
% 
42,7% 
19,3% 

32,3% 

Services trade EU28 with Montenegro (mio €) 

Imports 
Exports 
Balance 
Total trade 
Source Trade G2 Statistics/ISDB from Eurostat BOP statistics 

2013 

2014 

2015 

2016 

2017 

218 
217 
-1 
434 

231 
266 
36 
497 

216 
203 
-13 
418 

264 
214 
-50 
479 

377 
256 
-122 
633 

FDI EU28 with Montenegro (mio €) 
2014 

2013 
FDI Stocks 

2015 

2016 

2017 

Inward 
Outward 

Inward 
Outward 
Source Trade G2 Statistics/ISDB from Eurostat BOP statistics 

-32 
1.799 

FDI Flows 

1 
196 

-3 
1.663 

-29 
128 

99 
2.926 

82 
129 

5 
1.512 

-72 
160 

14 
1.544 

8 
188 

201 

 
 
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
 
 
 
ANNUAL  INFO  SHEET  ON  THE  IMPLEMENTATION  OF  THE  TRADE  PILLAR 
OF THE EU-SERBIA STABILISATION AND ASSOCIATION AGREEMENT 

1. 

INTRODUCTION 

On  29  April  2008,  the  EU  and  Serbia  signed  a  Stabilisation  and  Association  Agreement 
(SAA).  The  SAA  is  the  prime  instrument  of  the  EU’s  overall  policy  towards  the  Western 
Balkan  countries’  Stabilisation  and  Association  process.  Under  this  process,  all  Western 
Balkans  countries,  including  Serbia,  are  granted  a  clear  perspective  to  become  EU  Member 
States.   

The SAA entered into force on 1 September 2013, however, the trade-related part of the SAA 
already applied, through an Interim Agreement, as of 1 February 2009 for Serbia, and as of 8 
December  2009  for  the  EU  side.  This  Agreement  established  a  free-trade  area  over  a 
transitional period of six years.  

The  Agreement  covers  products  in  all  Chapters  of  the  Harmonised  System.  Only  a  few 
exceptions,  concerning  a  limited  number  of  agricultural  and  fishery  products  were  not  fully 
liberalised and are still subject to preferential quantitative concessions (TRQs).   

The  Agreement  also  includes  provisions  concerning  competition  and  State  aid,  investment 
and  related  payments,  a  high  level  of  protection  of  intellectual  property  rights  and 
strengthened  co-operation  in  customs  matters.  Since  the  entry  into  force  of  the  full  SAA  in 
2013, a number of other legislation approximations with impact on trade were put in place in 
the fields of public procurement, standardisation and the right of establishment. 

2. 

EVOLUTION OF TRADE 

2.1 Trade in Goods 

Total  bilateral  trade  between  the  EU  and  Serbia  increased  by  10%  between  2017  and  2018 
reaching a total  amount of  €26 billion. This  represents  a significant  increase of 110% since 
the  start  of  implementation  of  the  trade  agreement.  The  EU  remains  Serbia’s  first  trading 
partner  accounting  for  71%  of  total  exports  and  61%  of  total  imports  of  goods.  More 
specifically,  Germany,  Hungary,  Italy,  and  Slovenia  are  responsible  for  50%  of  the  EU’s 
imports  and  exports  from  and  to  Serbia.  The  main  imported  products  are  machinery  and 
appliances; base metals and articles thereof; plastics, rubber and articles thereof; and transport 
equipment.  The  EU  mainly  exports  machinery  and  appliances;  products  of  the  chemical  or 
allied industries; base metals and articles thereof; and transport equipment. The overall trade 
balance is in favour of the EU, it increased by 10% in 2018 reaching €3.7 billion. 

2.2 Trade in agricultural goods 

Serbia has traditionally recorded a surplus in its agricultural trade with the EU, however, in 
2018, due to a bad agricultural season for Serbia in the previous year, the balance turned in 
favour of the EU who enjoyed a small surplus of €34 million. Trade in agricultural products 
represents around 9% of the total bilateral trade. In 2018, Serbia’s agricultural exports to the 
EU dropped by nearly 5% but still represented over 10% of all its exports to the EU; while the 
EU’s agricultural exports to Serbia increased by nearly 3% and represented 8% of the EU’s 
total  exports  to  Serbia.  The  EU  imported  mainly  fruits  &  vegetables,  cereals  and  vegetable 

202 

 
 
 
 
 
oils  (other  than  palm  and  olive  oils)  from  Serbia,  while  its  main  export  products  to  Serbia 
were meat and food preparations. 

Part of the agricultural trade between the EU and Serbia is subject to TRQs, either duty-free 
or at  a reduced customs  duty rate. The majority  of agricultural  quotas were fully utilised or 
almost  fully  utilised  (wine  quota  used  at  92%)  by  EU  exporters.  Whereas  quotas  for  wheat 
and  cigars  were  underutilised  at  43%  and  33%  respectively  and  the  maize  and  fruit  juices 
quotas remained completely unused by EU exporters in 2018. 

The EU grants tariff quota to Serbia for beef, sugar and wine. Only 16.5% of the sugar quota 
and 5% of the beef quota were used by Serbian exporters in 2018, while the utilisation rate for 
sparkling wine was at 6.5% and for fresh wine only over 2%. 

2.3 Trade in Services and Foreign Direct investment (FDIs) 

In  2017,  total  trade  in  services  represented  16%  of  the  total  bilateral  trade  of  goods  and 
services with an equal share between imports and exports. Overall, the EU records a surplus 
in its trade in services with Serbia, on average around €0.5 billion over the last 5 years.  

Serbia’s  financial  system  is  dominated  by  commercial  banks,  and  banks  with  majority 
ownership from EU countries hold more than 70% of all banking system assets.  

The  EU  is  also  by  far  Serbia’s  biggest  investment  partner,  accounting  for  more  than  three 
quarters of net foreign direct investment inflows over the past eight years – amounting to over 
€13 billion in total. 

3. 

ISSUES ADDRESSED IN THE ANNUAL TRADE COMMITTEE MEETING 

Commercial issues are discussed on an annual basis in the context of the Sub-committee on 
Trade,  Industry,  Customs  and  Taxation.  The  latest  meeting  took  place  on  17  October  2018, 
during  which  the  Commission  expressed  its  satisfaction  that  in  May  2018,  after  a  series  of 
bilateral  consultations  over  several  months,  Serbia  lifted  its  restrictions  on  the  issuing  of 
export licences for metal waste. In this context, the Commission highlighted the importance of 
respecting  Article  36(2)  of  the  SAA  - standstill  clause -  to  ensure  the  necessary  legal 
predictability for investors in the country. 

During  the  discussions,  the  Commission  identified  as  a  main  obstacle  to  trade  the 
unpredictable  technical  and  phyto-sanitary  controls.  It  asked  Serbia  for  explanations  how 
these  controls  are  conducted  and  asked  several  questions  on  the  draft  law  on  sanitary 
inspections.  

The Commission also pleaded that more administrative capacity be deployed in the Ministry 
of trade in view of growing challenges – WTO accession, Regional Economic Area agenda, 
increasing  volumes  of  trade.  In  this  regard,  the  Commission  expressed  concerns  about  the 
slow pace of Serbia’s accession negotiations to WTO.   

Furthermore, it was noted with regret that Serbia continues to apply a discriminatory excise 
on grain-based spirits, which favours fruit based spirits at the expense of grain-based spirits. 
Serbia was  asked for a  date when this excise could  be changed.  In reply, Serbia announced 
that it was studying effects of such a change, but did not commit to any date.  

203 

 
 
 
 
 
 
 
 
 
Lastly,  on  Serbia’s  request,  the  Commission  explained  the  ongoing  procedures  regarding 
temporary  safeguards  on  steel  and  announced  that  bilateral  consultations  with  Serbia  would 
be organised by the end of 2018 in line with the SAA requirements.  

4. 

SPECIFIC AREAS OF IMPORTANCE 

Despite  an  overall  improvement  of  the  business  environment,  which  had  led  Serbia  to 
improve its standing in various international business rankings, further efforts are required to 
improve  the  predictability  of  the  business  environment,  with  the  emphasis  on  involving 
business  more  closely  into  the  process  of  regulation.  The  institutional  and  regulatory 
environment  remains  weak.  Business-related  laws  continue  to  be  adopted  under  urgent 
procedure without the necessary consultation of interested groups, reducing predictability and 
quality of legislation. Delays in the adoption of secondary legislation continue hampering the 
implementation  of  adopted  laws.  In  addition,  fair  competition  is  negatively  affected  by  the 
large informal economy.  

5. 

MAIN OPEN ISSUES AND FOLLOW-UP ACTIONS 

Although  Serbia  has  continued  to  build  a  record  of  accomplishment  in  implementing  the 
interim  agreement  and  then  the  SAA  provisions  since  their  entry  into  force,  some  non-
compliance issues remain. These concern mainly fiscal discrimination on alcohol (article 37); 
restrictions  to  free  movement  of  capital  -  in  particular  restrictions  to  the  acquisition  by 
foreigners,  including  EU  citizens,  of  agricultural  land  -  (article  63)  and  the  respect  for  the 
transparency and non-discrimination principals in public procurement procedures (article 73). 
In  line  with  SAA  obligations,  enforcement  of  competition  rules  needs  to  be  enhanced,  and 
significant efforts are needed with  regards to adoption of legislation and enforcement in the 
field  of  state  aid  control,  including  transparency  of  aid  granted.  In  particular,  Serbia  should 
ensure  that  intergovernmental  agreements  concluded  with  third  countries  and  their 
implementation do not unduly restrict competition, comply with the basic principles of public 
procurement,  such  as  transparency,  equal  treatment  and  non-discrimination,  and  are  in  line 
with the EU acquis. 

All these pending issues were raised in the relevant EU-Serbia Sub-committee meetings held 
or planned in 2019. 

Lastly, in November 2018, Kosovo imposed a 100% import tariff for goods originating from 
Serbia (and Bosnia and Herzegovina), indirectly affecting EU businesses operating in Serbia 
and trading in the region. These measures are politically motivated and the EU has repeatedly 
called for their termination. 

6. 

CONCLUSIONS 

Serbia  and  the  EU  have  a  very  close  and  growing  trade  partnership,  which  increased  their 
total trade by 110% since the entry into force of the trade agreement end of 2009. The EU is 
Serbia’s  first  trading  partner  accounting  for  71%  of  its  total  exports  and  61%  of  its  total 
imports  of  goods.  The  EU  continued  to  be  the  main  source  of  foreign  investment  too,  with 
total FDI flows reaching €1.2 billion in 2017.   

Despite  very  good  trade  and  investment  dynamics,  companies  still  face  a  number  of 
challenges,  including  an  unpredictable  business  environment  and  issues  of  non-compliance 

204 

 
 
 
 
 
 
with  the  SAA,  regarding  in  particular  a  lack  of  transparency  of  public  procurement 
procedures,  restrictions  on  capital  movements,  state  aid  control,  fiscal  discrimination  on 
imported spirits.   

Overall, it is expected that the renewed momentum of the European integration process and 
progress  in  accession  negotiations  will  give  further  impetus  to  major  reforms  and 
consequently have a positive impact on the investment and business climate in Serbia in the 
coming  period.  Similarly,  the  development  of  a  Regional  Economic  Area  in  the  Western 
Balkans  based  on  the  CEFTA  agreement  and  on  the  EU  rules  and  standards,  to  which  all 
regional economies have committed, has the potential  to  generate untapped growth.  Despite 
the 100% tariffs imposed by Kosovo, which have recently undermined regional cooperation 
efforts, a big milestone was reached on 4 April 2019 when Ministers of Telecommunications 
from the Western Balkans signed a Regional Roaming Agreement. This Agreement envisages 
a  roaming-free  region  across  the  Western  Balkans  in  2021,  also  paving  the  way  for  further 
reductions  of  the  roaming  costs  between  the  Western  Balkans  economies  and  the  European 
Union. 

7. 

STATISTICS 

Merchandise trade EU28 2014-2018 
2014 

2015 

2016 

2017 

2018 

EU28 trade with Serbia (mio €) 

Imports 
Exports 
Balance 

Share Serbia in EU28 trade with Extra-EU28 

Imports 
Exports 
Total (I+E) 

Imports 
Exports 
Total (I+E) 

Source Trade G2 Statistics/ISDB  
Trade EU28: Eurostat COMEXT;  Trade Serbia: IMF Dots 

7.109 
10.357 
3.247 

0,4% 
0,6% 
0,5% 

7.880 
11.145 
3.265 

0,5% 
0,6% 
0,5% 

Share EU28 in trade Serbia with world 

63,5% 
64,7% 
64,0% 

62,5% 
65,8% 
63,9% 

8.721 
11.668 
2.947 

0,5% 
0,7% 
0,6% 

61,0% 
66,1% 
63,3% 

9.998 
13.390 
3.392 

0,5% 
0,7% 
0,6% 

62,3% 
67,6% 
64,5% 

11.007 
14.742 
3.735 

0,6% 
0,8% 
0,7% 

60,0% 
67,0% 
63,0% 
25-mars-19 

Total merchandise trade EU28 with Serbia (mio €) 

Serbia 

2017 

2018 

Imports 
Exports 
Balance 
Total trade 
Source Trade G2 Statistics/ISDB from Eurostat COMEXT 

9.998 
13.390 
3.392 
23.389 

11.007 
14.742 
3.735 
25.749 

Agrifood trade EU28 with Serbia (mio €) 

Serbia 

2017 

2018 

Imports 
Exports 
Balance 
Total trade 
Source Trade G2 Statistics/ISDB from Eurostat COMEXT 

1.190 
1.138 
-53 
2.328 

1.133 
1.167 
34 
2.299 

mio € 

-58 
29 
87 
-29 

Growth 

mio € 

1.008 
1.352 
343 
2.360 

annual 
% 
10,1% 
10,1% 

10,1% 

Growth 

annual 
% 
-4,8% 
2,6% 

-1,2% 

NAMA trade EU28 with Serbia (mio €) 

Serbia 

2017 

2018 

Growth 

mio € 

annual 
% 

205 

 
 
 
  
  
  
  
  
  
  
 
  
  
  
  
 
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
EU28 imports 
EU28 exports 
Balance 
Total trade 
Source Trade G2 Statistics/ISDB from Eurostat COMEXT 

8.808 
12.253 
3.444 
21.061 

9.874 
13.575 
3.701 
23.449 

1.066 
1.322 
257 
2.388 

12,1% 
10,8% 

11,3% 

Services trade EU28 with Serbia (mio €) 

Serbia 

2016 

2017 

Imports 
Exports 
Balance 
Total trade 
Source Trade G2 Statistics/ISDB from Eurostat BOP statistics 

1.781 
2.284 
503 
4.065 

1.966 
2.530 
563 
4.496 

mio € 

185 
246 
60 
431 

Growth 

annual 
% 
10,4% 
10,8% 

10,6% 

Services trade EU28 with Serbia (mio €) 

Imports 
Exports 
Balance 
Total trade 
Source Trade G2 Statistics/ISDB from Eurostat BOP statistics 

2013 

2014 

2015 

2016 

2017 

1.583 
2.300 
717 
3.882 

1.820 
2.507 
687 
4.326 

1.990 
2.315 
325 
4.304 

1.781 
2.284 
503 
4.065 

1.966 
2.530 
563 
4.496 

FDI EU28 with Serbia (mio €) 
2014 

2013 
FDI Stocks 

2015 

2016 

2017 

Inward 
Outward 

Inward 
Outward 
Source Trade G2 Statistics/ISDB from Eurostat BOP statistics 

-118 
12.501 
FDI Flows 
6 
577 

1 
12.564 

142 
12.883 

188 
12.486 

267 
13.162 

185 
151 

72 
366 

50 
957 

38 
1.194 

206 

 
 
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
 
 
 
FIRST  GENERATION  FREE  TRADE  AGREEMENTS  WITH  LATIN  AMERICAN 
COUNTRIES 

207 

 
 
 
 
ANNUAL  INFO  SHEET  ON  IMPLEMENTATION  OF  THE  TRADE  PILLAR  OF 
THE EU-CHILE ASSOCIATION AGREEMENT 

1. 

INTRODUCTION 

The trade pillar of the EU-Chile Association Agreement (‘the Agreement’) entered into force 
on  1  February  2003  and  was  fully  implemented  after  finalisation  of  all  ratifications  on  1 
March 2005. During the following 15 years there has been continuous work and cooperation 
by both sides to implement the agreement. The Agreement with Chile is one of the EU’s first 
generation FTAs and was considered highly ambitious at the time of its conclusion. It was the 
first trade agreement subjected to an ex-post evaluation study to analyse its impact. This study 
was concluded in 2012. Another study conducted in 2017 showed the need for modernising 
the  agreement,  to  avoid  the  EU  losing  further  ground  to  other  partners  trading  with  Chile, 
such as the US and China.   

Against this  background, at  the EU-CELAC (Community of  Latin American and Caribbean 
States) summit in Santiago in January 2013, the EU and Chile agreed to explore options for a 
comprehensive  modernisation  of  the  Agreement.  The  2015  Trade  for  All  Communication 
highlighted the objective of pursuing a modernisation of the Agreement. A scoping exercise 
was  successfully  concluded  with  Chile  in  January  2017.  Negotiations  for  modernising  the 
Agreement were launched on 16 November 2017 in  Brussels,  following the adoption of the 
negotiating  directives  by  the  Council.  The  EU  and  Chile  are  now  engaged  in  a  negotiation 
process  for  an  ambitious,  comprehensive  and  progressive  modernised  agreement.  The  most 
important areas include (1) further liberalisation in agriculture and food products, (2) rules of 
origin, customs and trade facilitation provisions, (3) non-tariff barriers for industrial and agri-
food  products,  (4)  market  access  for  services  sectors  of  key  EU  and  Chile  interest,  (5) 
comprehensive  investment  liberalisation  and  protection  disciplines,  (6)  improved  public 
procurement  rules  and  coverage  in  terms  of  entities,  (7)  improved  rules  on  intellectual 
property  rights,  including  the  protection  of  GIs  on  foodstuffs,  (8)  Trade  and  Sustainable 
Development,  (9) competition and subsidies disciplines and (10) for the first  time trade and 
gender equality, which is a pilot case for the EU with the aim of identifying and addressing 
those  barriers  faced  by  women  to  benefit  from  trade  opportunities,  building  on  sustainable 
development goals and reaffirming commitments of international conventions. 

2. 

EVOLUTION OF TRADE 

Bilateral  merchandise  trade  between  2014  and  2018  increased  15%.  Overall,  the  rise  is 
substantially sharper for EU exports, which increased 35% over the period, compared to a 2% 
decrease in EU imports from Chile, mainly due to copper price fluctuations. Chile’s share in 
total EU trade has remained stable since 2014, at around 0.5% of total EU trade. In 2018 EU-
Chile bilateral trade grew by 8% in value compared to 2017, reaching €18.3 billion, the EU 
had a positive trade balance of around €1.5 billion. This is the most important trade surplus 
for  the  EU  with  Chile  since  the  signing  of  the  Agreement.  However,  Chile  still  has  an 
accumulated trade surplus of €41.8 billion (2003-2018). 

In 2018, the EU was Chile's third trade partner representing 13% of trade (behind China and 
the US). 

208 

 
 
 
 
2.1 

Trade in Goods 

In  2018,  EU-Chile  bilateral  trade  grew  by  8%  in  value  compared  to  2017,  reaching  €18.3 
billion. The EU experienced a trade surplus worth €1.5 billion. While EU exports increased 
13%  year-on-year,  EU  imports  grew  by  2%.  The  largest  trade  surpluses  of  the  EU  are  in 
machinery and motor vehicles.  

EU exports concentrate in three HS sections: 

  Machinery and appliances, which increased 14% from 2017 reaching €3.2 billion. 
  Transport equipment EU exports reached €2.2 billion, increasing more than 27% from 

2017. 

  Products  of  the  chemical  or  allied  industries,  which  in  2018  reached  €1.2  billion, 

increasing 9% from 2017.  

Chilean exports concentrate in two HS sections: 

  Mineral products, whose value decreased 6.7% to €1.8 billion from 2017 to 2018, 

having increased by almost 40% in the previous year.  

  Base metals and articles thereof, whose value decreased almost 22% between 2017 

and 2018, to €1.3 billion. 

2.2 

Trade in agricultural products 

In  2018,  EU-Chile  bilateral  trade  grew  by  6%  in  value  compared  to  2017,  reaching  €3.3 
billion.  The  EU  experienced  a  trade  deficit  worth  €1.7  billion.  While  EU  exports  increased 
8.6% year-on-year, EU imports grew by 5.6%. The largest trade deficits of the EU are in fruit 
and  vegetables  and  beverages  (wine).  Exports  of  agricultural  products  represented  30%  of 
Chile’s exports to the EU and are overwhelmingly dominated by fruit (notably coutner-season 
temperate  fruit)  and  wines,  which  represent  respectively  40%  and  24%  of  Chile  agro-food 
exports to the EU. EU agricultural exports only represented 8% of the EU’s exports to Chile. 
Chilean exports to the EU were concentrated in two main categories: 

  Vegetable products, which reached a value of €1.6 billion, increasing almost 3% from 

2017. 

  Foodstuffs, beverages and tobacco, whose value increased 5% from 2017, reaching a 

value of € 0.9 billion out of which more than €500 million of wine. 

Regarding Tariff Rates Quotas, Chile used 100% of its TRQ for poultry meat (18,000 tonnes), 
27% of its TRQ for sheep meat (8,000 tonnes), 24% of its TRQ for pig meat (8,750 tonnes), 
7% of the sheep meat TRQ (8,000 tonnes). The rest of the TRQs were either not used at all 
(cheese and curd, cereal grains, mushrooms, cherries and swine products) or very little used 
(garlic – 0.25%). The EU also used 100% its cheese TRQs. 

2.3 

Trade in Services and Foreign Direct investment (FDIs) 

Bilateral trade in services in 2017 stood at €6.4 billion (€4.5 billion in exports and €1.9 billion 
in imports), compared to €5.7 billion in 2016. Between 2013 and 2017, EU exports of services 
increased 47%, while EU imports increased 18%. 

The EU remains  Chile’s first  FDI provider, with outward FDI stocks worth €51.8 billion in 
2017 but EU FDI flows in 2016 (€4 billion) represented half the outward flows registered in 
2014. In addition, EU outward FDI flows in 2017 were negative (€1.2 billion). This is the first 
time  since  2013  that  EU  outward  FDI  flows  are  negative,  although  the  same  result  is 
observable for the US in 2017 (€1.6 billion). 

209 

 
 
 
 
The  decrease  in  outflows  is  largely  due  to  the  evolution  in  the  mining  industry,  which  has 
historically  represented  over  45%  of  total  FDI  in  Chile.  In  quantities,  mining  production  in 
2017  dropped  for  the  second  consecutive  year.  Mining  output  in  2017,  compared  to  2016, 
contributed negatively to the Chilean GDP with -2%, and with -1.6% for copper alone. 

With 2016 data, in 2017 Chile remained the third recipient of FDI in Latin America overall, 
after Mexico and Brazil, according to UNTACD. However, with 2017 data, in the 2018 report 
Chile is not among the top 5 host regional economies81 . 

Since  1998,  Chile  has  been  the  World  Economic  Forum’s  most  competitive  nation  in  the 
Latin American region (in 2018 it ranked 32 of 138 globally)82 . Chile also used to be regional 
leader on the World Bank Doing Business Report (DB) but it is now second after Mexico. In 
2019  Chile  ranks  56  of  190  on  DB  and  71.81  on  the  distance  to  frontier  (DTF)  measure 
(Mexico ranks 54 and 72.09 respectively)83. 

3. 

ANNUAL  TRADE  COORDINATORS  MEETING  AND  TRADE-RELATED  SUB-
COMMITTEES 

Both  sides  have  invested  the  necessary  resources  in  the  institutional  work  under  the 
Agreement. Consequently, the meetings under the Agreement have been very regular since it 
came into force, the 15th EU-Chile Association Committee was held in Brussels on 22 June 
2018. The Trade Coordinators meeting and Subcommittees on trade related matters were so 
far  organised  practically  every  year.  The  Joint  Committee  on  Trade  in  Wine  and 
Spirits/Aromatised  drinks  met  in  2018  but  there  was  no  Trade  Coordinators  meeting  of  the 
EU-Chile  Association  Agreement  in  2018  mainly  due  to  the  on-going  negotiations  for  the 
modernisation of the Agreement. 

The Joint Committee on Trade in Wine and Spirits/Aromatised drinks  

During  the  Joint  Committee  on  Trade  in  Wine  and  Spirits/Aromatised  drinks  the  EU  and 
Chile continued to discuss the textual modifications of the wine and spirits agreement and the 
update of the list of EU GIs 

4. 

PROGRESS MADE, MAIN OPEN ISSUES AND FOLLOW-UP ACTIONS 

The  market  access  procedure  derived  from  the  SPS  provisions  of  the  Agreement  has  been 
beneficial for Member States. Chile applies the same import requirements to the entire EU. In 
addition,  the  market  access  procedure  has  been  simplified,  once  the  market  is  open  for  a 
commodity from one or more Member States and another Member State wants to export for 
the  first  time,  Chile  evaluates  the  information  already  provided  by  the  Commission  in  the 
context  of  the  first  approval.  Further  information  is  only  needed  when  Chile  has  doubts  on 
specific aspects. Chile rarely requires to carry out on-the-spot verifications of the information 
provided. In such cases, Chile visits selected EU Member States and extends the conclusions 
to  the  entire  European  Union.  For  certain  commodities  such  as  gelatine,  collagen,  egg 

81   UNCTAD,  World  Investment  Report  2018  https://unctad.org/en/PublicationsLibrary/wir2018_en.pdf  page 
50.  Top  5  economies  in  hosting  FDI  flows  in  2017  in  Latin  America  were  Brasil,  México,  Colombia, 
Argentina and Peru. However, Chile was top economy on FDI outflows in 2017. 

82   https://www.weforum.org/reports/the-global-competitveness-report-2018 
83   http://www.doingbusiness.org/en/data/exploreeconomies/chile# 

210 

 
 
 
 
 
 
 
                                                 
 
products, prepared meals and meat extract; all interested Member States are authorised. Chile 
approves  the  EU  exporting  establishments  with  a  pre-listing  procedure  in  a  very  short 
timeframe (within days). 

In 2018, Chile opened its dairy market for four additional Member States (20 Member States 
authorised  now),  two  additional  Member  States  for  beef  (total  authorised  10),  one  for  pork 
(total  12  Member  States),  four  for  meat  products  (total  12  Member  States),  one  for  bovine 
semen (total 14 Member States) and one more for casing (total 10 Member States).  Chile also 
harmonised the certificate for hatching eggs and egg products. 

However,  similar  progress  has  not  yet  been  achieved  for  the  export  of  EU  fruits  and 
vegetables to Chile in 2018, but work continues to allow the export of EU apples to Chile.  

The 2002 Wine and Spirits Agreements  were amended for the last time in  2009. Therefore, 
they need to be up-dated to add the new wine and spirits geographical indications that have 
been protected in the EU and Chile since then. This process continues to be dependent on the 
lengthy Chilean internal assessment procedures. 

In 2018, the longstanding swordfish issue was resolved. After Chile joined the IATTC (Inter-
American  Tropical  Tuna  Commission)  as  a  cooperating  non-contracting  party  in  July  2017 
there  were  no  longer  any  restrictions  on  EU  swordfish  vessels  to  access  Chilean  ports.  In 
January  2018,  Chile  further  specified  that  EU  vessels  are  required  to  comply  with  certain 
administrative requirements, including the provision of VMS (vessel monitoring system) data. 
These  conditions  are  applied  in  a  non-discriminatory  manner  to  all  vessel  disembarking 
swordfish in Chile and are in line with the FAO Agreement on Port State Measures.  

On  1  January  2018,  the  EU-Chile  Agreement  on  Mutual  Recognition  of  Organic  Products 
entered into force. 

5. 

CONCLUSIONS AND OUTLOOK 

The  EU  and  Chile  decided  to  replace  the  existing  EU-Chile  trade  agreement  with  a 
completely new and ambitious framework for bilateral trade and investment. This process is 
under way and four rounds of negotiations have already taken place. The latest one took place 
in Santiago in April 2019 and the next round is scheduled for July 2019. 

Current  work  on  the  implementation  of  the  current  agreement  continues.  The  various  trade 
related sub-committees and the Trade Coordinators Meeting did not meet in 2018 (except for 
the Joint Committee on Trade in Wine and Spirits/Aromatised drinks) but the dialogue with 
Chile remains fluid. 

6. 

STATISTICS 

Merchandise trade EU28 2014-2018 
2015 

2014 

2016 

2017 

2018 

EU28 trade with Chile (mio €) 

Imports 
Exports 
Balance 

Share Chile in EU28 trade with Extra-EU28 

Imports 
Exports 

7.338 
8.590 
1.252 

0,4% 
0,5% 

8.178 
8.786 
607 

0,4% 
0,5% 

8.439 
9.977 
1.539 

0,4% 
0,5% 

8.626 
7.391 
-1.235 

0,5% 
0,4% 

8.199 
8.353 
154 

0,5% 
0,5% 

211 

 
 
 
 
 
 
 
 
 
  
 
  
  
  
  
 
  
  
  
  
Total (I+E) 

Imports 
Exports 
Total (I+E) 

0,5% 

0,5% 
Share EU28 in trade Chile with world 
15,6% 
13,2% 
14,4% 

15,3% 
14,4% 
14,9% 

Source Trade G2 Statistics/ISDB  
Trade EU28: Eurostat COMEXT;  Trade Chile: IMF Dots 

0,5% 

0,5% 

0,5% 

17,1% 
12,9% 
15,0% 

15,1% 
12,8% 
13,9% 

14,9% 
11,6% 
13,2% 
25-mars-
19 

Total merchandise trade EU28 with Chile (mio €) 

Chile 

2017 

2018 

Imports 
Exports 
Balance 
Total trade 
Source Trade G2 Statistics/ISDB from Eurostat COMEXT 

8.178 
8.786 
607 
16.964 

8.439 
9.977 
1.539 
18.416 

Agrifood trade EU28 with Chile (mio €) 

Chile 

2017 

2018 

Imports 
Exports 
Balance 
Total trade 
Source Trade G2 Statistics/ISDB from Eurostat COMEXT 

2.372 
714 
-1.657 
3.086 

2.505 
776 
-1.729 
3.281 

NAMA trade EU28 with Chile (mio €) 

Chile 

2017 

2018 

EU28 imports 
EU28 exports 
Balance 
Total trade 
Source Trade G2 Statistics/ISDB from Eurostat COMEXT 

5.807 
8.071 
2.265 
13.878 

5.934 
9.201 
3.267 
15.135 

Services trade EU28 with Chile (mio €) 

Chile 

2016 

2017 

Imports 
Exports 
Balance 
Total trade 
Source Trade G2 Statistics/ISDB from Eurostat BOP statistics 

1.843 
3.892 
2.048 
5.735 

1.878 
4.541 
2.664 
6.419 

Services trade EU28 with Chile (mio €) 

Growth 

mio € 
260 
1.192 
931 
1.452 

annual 
% 
3,2% 
13,6% 

8,6% 

Growth 

mio € 
133 
62 
-72 
195 

annual 
% 
5,6% 
8,6% 

6,3% 

Growth 

mio € 
127 
1.130 
1.003 
1.257 

annual 
% 
2,2% 
14,0% 

9,1% 

Growth 

mio € 
34 
650 
615 
684 

annual 
% 
1,9% 
16,7% 

11,9% 

Imports 
Exports 
Balance 
Total trade 
Source Trade G2 Statistics/ISDB from Eurostat BOP statistics 

2013 

2014 

2015 

2016 

2017 

1.586 
3.080 
1.494 
4.666 

1.684 
3.414 
1.729 
5.098 

1.909 
3.735 
1.826 
5.644 

1.843 
3.892 
2.048 
5.735 

1.878 
4.541 
2.664 
6.419 

Inward 
Outward 

FDI EU28 with Chile (mio €) 

2013 
FDI Stocks 

2014 

2015 

2016 

2017 

998 
29.174 

1.710 
42.760 

1.961 
47.937 

1.794 
55.830 

1.860 
51.863 

FDI Flows 

Inward 
Outward 
Source Trade G2 Statistics/ISDB from Eurostat BOP statistics 

845 
5.759 

466 
8.208 

-705 
2.139 

223 
4.000 

-170 
-1.185 

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213 

 
 
 
 
ANNUAL  INFO  SHEET  ON  IMPLEMENTATION  OF  THE  TRADE  PILLAR  OF 
THE EU-MEXICO ASSOCIATION AGREEMENT  

1. 

INTRODUCTION 

Mexico is the second biggest trading partner of the EU in Latin America, after Brazil. In 1997 
Mexico was  the first  country in  Latin America to sign an  Economic  Partnership, Political 
Coordination and Cooperation Agreement with the EU (‘Global Agreement’), which came 
into force in 2000. Its trade provisions were later developed into a comprehensive Free Trade 
Agreement  that  entered  into  force  in  October  2000  for  goods  and  2001  for  services 
(hereinafter called ‘the FTA’).  

Over  the  close  to  twenty  years  of  its  operation,  this  ambitious  agreement  has  yielded  very 
positive results for both parties. Bilateral goods trade between the EU and Mexico has more 
than  tripled  with  exports  from  the  EU  to  Mexico  growing  slightly  faster  than  exports  from 
Mexico  to  the  EU.  Bilateral  trade  in  services  has  also  significantly  expanded  and  the  EU 
remains the main investor in Mexico, after the US.  

In order to  adapt  the Global  Agreement to  the new realities  of  global trade and investment, 
negotiations on its modernisation were launched in 2016. On 21 April 2018, after nine rounds 
of  negotiations,  an  ‘agreement 
the  numerous 
improvements  to  the  legal  framework  of  EU-Mexico  bilateral  trade  relations.  This 
modernisation will bring the trade and investment framework into the 21st century on a basis 
of reciprocity and  promote new opportunities for business,  while including strong  and clear 
commitments on human rights, sustainable development and the fight against corruption. The 
trade part of the agreement is broadly described in section 5.  

in  principle’  was  reached  outlining 

2. 

EVOLUTION OF TRADE 

2.2 Trade in goods 

In 2018, bilateral trade in goods between the EU and Mexico totalled €65.4 billion, increasing 
by 5.8% compared to 2017 and tripling trade if compared to 2000 (€21.7 billion). Differently 
from  the  trend  in  2017,  EU  exports  to  Mexico  (€39.4  billion)  grew  faster  than  Mexican 
exports to the EU (€26 billion), that is, 8.8% and 3.9%, respectively.  

The  EU  continues  to  register  a  trade  surplus  with  Mexico,  slightly  decreasing  from  €14  to 
€13.4 billion in 2018. In 2018, the EU remains Mexico’s second largest export market, with a 
share of 6% of total exports and totalling €26 billion.  

The structure of Mexico’s trade with the EU maintains a coherent pattern with the respective 
share of the bilateral trade increasing at similar rates over the years resulting in a rather stable 
trade  balance.  Moreover,  as  explained  below,  bilateral  trade  is  concentrated  in  a  number  of 
sectors. 
Imports into the EU from Mexico: Mexican goods imported into the EU totalled €26 billion 
and import increases were observed across most sectors, following the same trend as in 2017. 
The largest export categories of products imported from Mexico to the EU were: 

214 

 
 
 
transport equipment (€6.4 billion – 24.5% of EU imports from Mexico); 
  machinery and appliances (€6.3 billion – 24.3% of EU imports from Mexico); 
  mineral products (€4.8 billion – 18.7% of EU imports from Mexico); 
  optical/photographic  instruments  (€3billion  –  11.9%  of  EU  imports  from  Mexico 

11.9%). 

EU  Exports  to  Mexico:  European  exports  to  Mexico  totalled  €39.4  billion,  with  increase  in 
exports  widespread  throughout  the  different  sectors.  The  main  export  categories  remain  the 
same in comparison to previous years, namely:  

  machinery and appliances (€13.5 billion – 34.3% of EU exports to Mexico); 
 
  products  of  the  chemical  or  allied  industries  (€5.3  billion  –  13.5%  of  EU  exports  to 

transport equipment (€7 billion – 17.9% of EU exports to Mexico); 

Mexico); 

  base metals (€3.4 billion – 8.7% of EU exports to Mexico). 

2.2 Trade in agricultural goods 

Trade in agricultural and fisheries products totalled €2.8 billion, consisting of €1.3 billion EU 
imports from Mexico and €1.5 billion EU exports to Mexico.  

EU  imports  of  agricultural  and  fisheries  products  from  Mexico  were  stable  and  were 
dominated by: 

  Beverages and spirits  at  €353 million  increased by  13.9%, now representing 27% of 

EU imports of agricultural and fisheries products from Mexico;  

  Fruits  and  nuts  at  €294  million,  or  22%  of  EU  imports  of  agricultural  and  fisheries 

products from Mexico;  

  Fish  and  crustaceans  at  €73  million  increasing  by  97%  compared  to  2017,  now 
representing 13% of EU imports of agricultural and fisheries products from Mexico. 

EU  exports  to  Mexico  of  agricultural  products  increased  by  4.2%  in  2018,  and  were 
dominated by: 

  Beverages and spirits at  €443 million increased by 10.6% in 2018, now representing 

29% of EU exports of agricultural products to Mexico;  

  Oil  seeds  &  oleaginous  fruit  at  €137  million,  or  9%  of  EU  exports  of  agricultural 

products to Mexico;  

  Miscellaneous edible preparations at €102 million, or 7% of EU exports of agricultural 

products to Mexico.  

Three  of  the  tariff  rate  quotas  (TRQs)  opened  under  the  agreement  by  the  EU  for  imports 
from Mexico were filled completely, namely those for bananas, asparagus and orange juice. 
For both frozen orange juice and for natural honey, the fill rate was around two thirds. Precise 
numbers  are  not  given  for  these  quotas,  since  the  quota  years  do  not  coincide  with  the 

215 

 
 
calendar year. For egg albumin, the fill rate was 11% for the quota year 2017-2018. For other 
quotas, the fill rate was below 3%. 

2.3 Trade in services and Foreign Direct investment (FDIs) 

In terms of services, EU imports from Mexico are dominated by travel services, and transport 
services.  EU  services  exports  to  Mexico  consist  mainly  of  business  services,  transport 
services,  travel  services  and  telecommunications,  computer  and  information  services.  Latest 
statistics in trade in services show that Trade in services increased from €15.7 billion in 2016 
to €16.9 billion in 2017 (+7.4%), in fact growing faster than trade in goods (+5.8%). The EU 
has a trade surplus with Mexico that has slightly decreased in 2017 (latest data available) as 
the  EU  registered  a  €4.9  billion  surplus  with  Mexico  in  2017  compared  to  €5.3  billion  in 
2016.  

As  for  foreign  direct  investment,  according  to  Eurostat  statistics,  the  Mexican  investment 
stock to the EU accounts for €48.4 billion and EU investment stock to Mexico accounts for 
€154.5 billion in 2017. This positions the EU as the second largest investor in Mexico behind 
the US. 

According to report on investment of the Mexican Ministry of Economy84, the EU contributed 
to  28.3%  (€7.6  billion)  of  the  total  FDI  flows  in  2017.  Over  60%  of  the  EU’s  contribution 
came from two Member States (Spain and Germany). 

3. 

ISSUES ADDRESSED IN THE JOINT COMMITTEE MEETINGS 

In  2018,  the  EU  and  Mexico  focussed  their  efforts  in  advancing  in  the  negotiations  for 
modernising  the  existing  Global  Agreement.  No  joint  committee  meeting  was  held  in  2018 
but the EU and Mexico were also able to address some existing trade irritants in the regular 
negotiation meetings. A meeting of the Joint Committee has been scheduled for 2019. 

4. 

PROGRESS MADE, MAIN OPEN ISSUES AND FOLLOW-UP ACTIONS 

This  section  presents  the  evolution  of  the  barriers  registered  under  the  EU  market  access 
database85. The  Commission  continued  to  monitor  trade  barriers  and  address  bilateral  issues 
with Mexican authorities as appropriate.   

On  SPS  matters,  during  2018  regular  exchanges/meetings  took  place  between  the  EU  and 
Mexico to progress on pending market access issues. Since 2018, Mexico started to forgo to 
apply  costly  pre-shipment  inspections  in  the  country  of  origin  to  be  paid  by  the  industry 
(preclearance) to new Member States authorisation.  

In  relation  to  imports of meat  and meat  products, Mexico applies a burdensome application 
procedure. When market access is granted for a limited number of approved establishments, 
further on-the-spot inspections have to be carried out by Mexico for each new establishment 
with the costs of this procedure to be covered by the EU establishments visited. In 2018, the 
EU  has  continued  to  carry  out  regular  meetings  with  the  competent  Mexican  authorities, 
SENASICA,  in  order  to  speed  up  the  approval  of  pending  applications  by  Member  States. 
This  method  has  proved  successful  with  many  applications  approved,  some  of  which  were 
longstanding.  These  applications  related  to  some  key  EU  exports  such  as  pork  (The 

84 “Inversion Extranjera Directa en Mexico y en el Mundo” 4 June 2018 Secretaria de Economia 
85  See: http://madb.europa.eu/madb/barriers_crossTables.htm?isSps=false 

216 

 
 
 
                                                 
Netherlands  was  added  to  the  list  of  Member  States  already  authorised,  and  additional 
establishments  were  approved  for  already  authorised  Member  States).  However,  some 
authorized  Member  States  still  do  not  export  due  to  strict  requirement  on  post-mortem 
inspection or non-application of regionalisation on African Swine Disease by Mexico.  Also 
in 2018, some EU Member States were granted market access for some products such as fruit, 
dairy, and other animal products. 

5. 

CONCLUSIONS AND OUTLOOK 

In 2018, EU trade relations with Mexico confirmed their positive trends with both goods and 
services showing an upward trend.  

In  2018,  the  EU  and  Mexico  focussed  on  concluding  the  negotiations  for  modernising  the 
Global  Agreement  and  reached  an  ‘agreement  in  principle’  on  21  April  2018  on  the  trade 
part.86. The rest of the year was used to finalise the technical details of the deal. The EU and 
Mexico have started the process for legal revision of the political, cooperation and trade parts 
of the modernised Agreement.  

The  outcome  of  negotiations  is  highly  satisfactory  given  that  the  level  of  ambition  of  the 
modernised Agreement is very high and in line with the most ambitious FTAs signed by the 
EU. As a result, the modernised Agreement will bring improvements across the board of EU-
Mexico trade and investment relations, notably as regards: 

  Goods: the EU has obtained significant market access on key EU exports (e.g. pork, 
poultry, Processed Agricultural Products and dairy products, the latter benefitting from 
large TRQs), resulting in the eventual liberalisation of 99% of tariff lines.  

  Services: Mexico committed to open up its services market with comprehensive and 
ambitious  concessions,  including  on  Maritime  Transport,  Financial  Services  and 
Telecommunication, thereby making it easier for EU companies to make business in 
Mexico. 

  Investment  protection:  Mexico  has  agreed 

investor-State  disputes  are 
adjudicated  under  an  Investment  Court  System  and  to  the  substantive  rules  for 
protection and to replace the existing 16 bilateral investment traties with EU Member 
States by the agreement with the EU. 

that 

  Energy:  Mexico  has  accepted  commitments  in  several  chapters  (Energy  and  Raw 
Material,  Services,  Investment,  State  owned  enterprise)  which  will  give  the  EU 
important market access.  

  SPS: the agreed texts established a high level of cooperation between the Mexican and 
EU  administrations, 
regarding  pre-listing,  pre-clearance  and 
regionalisation,  in  reducing  the  number  of  audits  and  the  timeframe  to  process  an 
application and will shift the burden of cost to the auditing Party. 

in  particular 

  Public Procurement: the outcome is also very ambitious and include commitments at 

sub central level, the details of which are still being finalised.  

  Competition, subsidies and State owned Enterprises (SOEs): Mexico has to ensure 
that  companies  have  to  respect  competition  principles.  It  also  agreed  to  provisions 
enhancing  the  level  playing  field  between  private  companies  and  SOEs,  as  well  as 
between  all  companies  when  it  comes  to  subsidies,  in  particular  through  more 
transparency. 

86 http://trade.ec.europa.eu/doclib/docs/2018/april/tradoc_156791.pdf  

217 

 
 
 
 
 
                                                 
  Geographical Indications (GIs): Mexico has agreed to protect the shortlist of 340 EU 
GIs with a high level of protection, and to incorporate the Spirits Agreement under the 
modernised  Agreement  with  the  same  level  of  protection  for  EU  spirits  GIS  therein 
recognised,  that  includes  allusions  and  evocations.  Enforcement  is  provided  by 
administrative  and  judicial  measures,  at  the  request  of  an  interested  party  and  ex 
officio.   

  Trade  and  Sustainable  Development  (TSD):  the  modernised  FTA  will  contain  a 
fully-fledged  TSD  Chapter  in  which  Mexico  committed  to  effectively  implement 
labour and environmental standards and agreements.  

  Anti-corruption: for the first time ever in an EU agreement there will be a protocol 
on  anti-corruption  to  fight  against  bribery  and  money  laundering  in  trade  and 
investment, including a mechanism for the resolution of disputes.  

  Civil society mechanism: the civil society consultation mechanism, which previously 
was  limited  to  the  TSD  chapter  will  be  extended  to  the  whole  agreement.  This  will 
allow  the  civil  society  on  both  sides  (but  in  particular  in  Mexico)  to  make  its  voice 
heard also on the human rights provisions of the political pillar. 

6. 

STATISTICS 

Merchandise trade EU28 2014-2018 
2014 

2015 

2016 

2017 

2018 

EU28 trade with Mexico (mio €) 

Imports 
Exports 
Balance 

Share Mexico in EU28 trade with Extra-EU28 

Imports 
Exports 
Total (I+E) 

Imports 
Exports 
Total (I+E) 

Source Trade G2 Statistics/ISDB  
Trade EU28: Eurostat COMEXT;  Trade Mexico: IMF Dots 

17.978 
28.439 
10.461 

1,1% 
1,7% 
1,4% 

19.487 
33.620 
14.133 

1,1% 
1,9% 
1,5% 

Share EU28 in trade Mexico with world 

11,1% 
5,1% 
8,2% 

11,1% 
4,8% 
8,1% 

20.744 
33.867 
13.123 

1,2% 
1,9% 
1,6% 

11,0% 
5,1% 
8,2% 

23.896 
37.916 
14.020 

1,3% 
2,0% 
1,7% 

11,6% 
5,7% 
8,8% 

26.002 
39.384 
13.381 

1,3% 
2,0% 
1,7% 

11,4% 
5,6% 
8,6% 
25-mars-19 

Total merchandise trade EU28 with Mexico (mio €) 

Mexico 

2017 

2018 

Imports 
Exports 
Balance 
Total trade 
Source Trade G2 Statistics/ISDB from Eurostat COMEXT 

23.896 
37.916 
14.020 
61.812 

26.002 
39.384 
13.381 
65.386 

Agrifood trade EU28 with Mexico (mio €) 

Mexico 

2017 

2018 

Imports 
Exports 
Balance 
Total trade 
Source Trade G2 Statistics/ISDB from Eurostat COMEXT 

1.305 
1.446 
141 
2.751 

1.312 
1.507 
195 
2.820 

mio € 

7 
61 
54 
69 

Growth 

mio € 

2.106 
1.468 
-639 
3.574 

annual 
% 
8,8% 
3,9% 

5,8% 

Growth 

annual 
% 
0,6% 
4,2% 

2,5% 

NAMA trade EU28 with Mexico (mio €) 

Mexico 

2017 

2018 

Growth 

mio € 

annual 
% 

218 

 
 
  
  
  
  
  
  
  
 
  
  
  
  
 
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
EU28 imports 
EU28 exports 
Balance 
Total trade 
Source Trade G2 Statistics/ISDB from Eurostat COMEXT 

22.591 
36.470 
13.878 
59.061 

24.690 
37.876 
13.186 
62.566 

2.099 
1.406 
-693 
3.505 

9,3% 
3,9% 

5,9% 

Services trade EU28 with Mexico (mio €) 

Mexico 

2016 

2017 

Imports 
Exports 
Balance 
Total trade 
Source Trade G2 Statistics/ISDB from Eurostat BOP statistics 

5.196 
10.498 
5.302 
15.694 

5.935 
10.920 
4.985 
16.855 

Services trade EU28 with Mexico (mio €) 

Growth 

mio € 

739 
423 
-316 
1.162 

annual 
% 
14,2% 
4,0% 

7,4% 

Imports 
Exports 
Balance 
Total trade 
Source Trade G2 Statistics/ISDB from Eurostat BOP statistics 

2013 

2014 

2015 

2016 

2017 

3.749 
7.884 
4.135 
11.634 

4.032 
8.282 
4.250 
12.315 

4.954 
9.730 
4.775 
14.684 

5.196 
10.498 
5.302 
15.694 

5.935 
10.920 
4.985 
16.855 

FDI EU28 with Mexico (mio €) 
2014 

2013 
FDI Stocks 

2015 

2016 

2017 

Inward 
Outward 

Inward 
Outward 
Source Trade G2 Statistics/ISDB from Eurostat BOP statistics 

25.119 
110.424 
FDI Flows 
1.834 
22.873 

31.002 
135.168 

32.166 
162.287 

36.091 
142.830 

48.367 
154.483 

7.569 
24.441 

3.498 
16.728 

9.072 
-10.703 

1.800 
12.957 

219 

 
 
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
 
 
 
FIRST  GENERATION  FREE  TRADE  AGREEMENTS  WITH  THE  EFTA 
COUNTRIES NORWAY AND SWITZERLAND 

220 

 
 
 
 
ANNUAL  INFO  SHEET  ON  IMPLEMENTATION  OF  THE  EU-NORWAY  FREE 
TRADE AGREEMENT 

1. 

INTRODUCTION 

On 1 July 1973, a Free Trade Agreement between Norway and the EU entered into force. 
It concerns goods only and is one of the oldest trade agreements signed by the EU.  

Although still in force, it has been in practice superseded in many respects by the Agreement 
on the European Economic Area (EEA), which entered into force on 1 January 1994, and 
brings  together  the  EU  Member  States  and  the  three  EEA  EFTA  States  —  Iceland, 
Liechtenstein  and  Norway  —  in  the  Internal  Market.  The  EEA  agreement  ensures  the  free 
movement  of  goods,  services,  capital  and  persons  between  Norway  and  the  EU  and  is  the 
backbone  of  EU-Norway  cooperation.  Members  of  the  EEA  fully  apply  the  whole  acquis 
communautaire related to the "four freedoms" through dynamic incorporation of the relevant 
legislative  acts  into the  Protocols  and Annexes  of the EEA Agreement  via Joint Committee 
Decisions. 

The  EEA  Agreement  does  not  cover  the  common  agricultural  and  fisheries  policies,  which 
means that agricultural and fisheries products are not in free circulation between the EU and 
Norway and quotas exist in a number of areas. Processed agricultural products are covered by 
a dedicated protocol to the EEA agreement but are not in free circulation neither.  

2. 

EVOLUTION OF TRADE 

2.1 Trade in Goods 

The EU remains the first import and export partner for Norway, capturing 74% of the latter’s 
trade.  Norway  is  the  6th  trading  partner  for  goods  of  the  EU.  Norway’s  trade  with  the  EU 
shows a surplus that has doubled in value terms from 2016 to 2018. The Member States that 
import  the  most  from  Norway  are  the  United  Kingdom,  followed  by  the  Netherlands, 
Germany and Sweden. The greatest exporters to Norway are Sweden, Germany and Denmark. 
Mineral products represents more than half of EU imports from Norway, with an increase of 
14%  between  2017  and  2018.  The  largest  share  of  exports  in  value  are  represented  by 
“machinery  and  mechanical  appliances”,  followed  by  “motor  vehicles”  and  “electrical 
machinery and equipment”. Trade is dynamic and continues its expansion both ways. Exports 
to Norway increased by 6% between 2017 and 2018 while imports increased by 13%.  

2.2 Trade in agricultural goods 

Trade in agricultural goods clearly presents a surplus for the EU that exports eight times the 
value of the agricultural goods it imports from Norway.  The EU exports for more than €4.5 
billion agricultural products to Norway – a level that has been stable in the last three years – 
and imports for half a billion euros. 

Agriculture  is  not  covered  by  the  EEA  agreement,  which  however  encourages  further 
liberalisation  of  agricultural  trade  through  its  Article  19.  Negotiations  based  on  this  Article 
started in 2015 and were concluded successfully at negotiators' level in April 2017. Signed on 
4 December 2017, this agreement87 entered into force on 1 October 2018. The concessions 

87   Agreement in the form of an Exchange of Letters between the European Union and the Kingdom of Norway concerning additional trade 

preferences in agricultural products, OJ L 129/3, 25.05.2018 

221 

 
 
                                                 
consist of 36 fully liberalised tariff lines and tariff rate quotas (TRQs) to be opened by both 
sides,  opening  new  trade  opportunities  for  EU  and  Norwegian  exporters  of  agricultural 
products.  

Overall, trade in agricultural products is partially liberalised on both sides.  

In  general,  Norway  makes  little  use  of  the  agri-food  TRQs  granted  by  the  EU.  Out  of  28 
TRQs in operation prior to 1 October 2018, 14 are completely or largely unused (below 3%). 
Only four TRQs are fully or nearly fully used (feedingstuff for fish, potatoe slices, sheep or 
goat  meat  and  waters  with  sugar,  without  milk)  followed  by  boneless  sheep  meat,  (used  at 
75%), chocolate and other food preparations containing cocoa (used at 67%) and dog or cat 
put up for retail sale (used at 53%).  

The  EU  makes  good  use  of  the  Norwegian  TRQs,  but  with  large  discrepancies  with  TRQs 
used  above  90%  (16  out  of  40  TRQs)  and  a  few  TRQs  not  been  used  at  all  or  barely  used 
(fruit and nuts, meat and edible offal - bovine and poultry). Data on TRQ fill rates provided 
by Norwegian authorities are included in Section 7 “Statistics”.  

2.3 Trade in Services and Foreign Direct investment (FDIs) 

With approximately €44 billion of services exchanges between the parties in 2017 (€16 billion 
of services imported and €29 billion exported), Norway and the EU are very important trading 
partners  when  it  comes  to  services.  Norway  is  in  fact  the  6th  trading  partner  of  the  EU  for 
services. The balance for trade in services between Norway and the EU is positive for the EU 
– and rather stable over the last years. 

FDI between the EU and Norway  are  at  a high  level  – and rather balanced  - on both  sides: 
Norwegian  FDI  stock  in  the  EU  in  2017  represents  €94  billion  while  EU  investment  in 
Norway is worth €90 billion. 

3. 

ISSUES ADDRESSED IN THE EEA AND FTA JOINT COMMITTEES 

In  practice,  since  the  signing  of  the  EEA  agreement,  the  bilateral  FTA  has  been  less  active 
and  no  FTA  Joint  Committee  meetings  have  been  called  in  the  last  years.  Joint  committee 
decisions,  often  of  technical  nature  and  limited  in  number,  are  taken  by  written  procedure. 
Bilateral trade issues such as trade irritants are discussed on a case-by-case basis, at technical 
and political level. 

The  EEA  Joint  Committee,  where  the  European  External  Action  Service  represents  the  EU 
side,  meets  six  to  eight  times  per  year88.  Four  subcommittees  assist  the  Joint  Committee89. 
They mainly deal with the incorporation of the EU acquis into the legal system of Norway.  

The EEA Council meets twice a year to discuss at political level a series of issues related to 
the EEA agreement. 

https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=uriserv:OJ.L_.2018.129.01.0003.01.ENG&toc=OJ:L:2018:129:TOC 

88   https://eeas.europa.eu/diplomatic-network/european-economic-area-eea/348/european-economic-area-eea_en 

89   on the free movement of goods, the free movement of capital and services including company law, the free 

movement of persons and horizontal and flanking policies 

222 

 
 
 
 
                                                                                                                                                         
 
 
At  the  occasion  of  the  25th  anniversary  of  the  entry  into  force  of  the  EEA  agreement  on  1 
January  2019,  the  EEA  Council  confirmed  its  “support  for  the  EEA  agreement  as  the 
continued basis for future relations between the EU and EEA EFTA States”. 

On a more specific and trade-related issue, the EEA Council “acknowledged the importance 
of  predictable  trade  conditions  for  economic  operators  within  the  EEA.  In  this  regard,  the 
EEA Council welcomed the exemption of Iceland, Liechtenstein and Norway from the EU’s 
provisional  safeguard  measures  concerning  imports  of  a  number  of  steel  products,  which 
came into effect on 19 July 2018”90. 

4. 

SPECIFIC AREAS OF IMPORTANCE 

The integration in the Internal Market via the EEA agreement is a main achievement of EU-
Norway  relation  and  the  main  driver  of  the  bilateral  trade  relations.  Norwegian  companies 
participate  in  the  Single  Market  almost  under  the  same  conditions  as  Member  States,  and 
vice-versa.  The  same  rules  apply  to  ensure  a  level-playing  field,  such  as  technical 
requirements  of  certain  products  or  competition  rules.  EU  Internal  Market  rules  are 
dynamically integrated into Norwegian law through the EEA agreement. This creates a stable 
and predictable environment. Norway has a say in the EEA decision-shaping process,  albeit 
without  a  vote  on  the  final  decision.  A  relatively  high  number  of  legal  acts  pending 
incorporation  into  the  EEA  Agreement  has  created  the  so-called  "backlog"  in  this  dynamic 
approximation. A joint effort of both the EU and the EEA EFTA States resulted in historical 
reduction  of  the  backlog  by  234  acts  in  March  2019,  especially  in  the  area  of  financial 
services, where the backlog was particularly high.  

As  Norway  is  not  part  of  the  EU  Customs  Union  neither  linked  with  the  EU  by  a  customs 
union,  customs  procedures  apply  to  goods  exchanged  between  EU  Member  States  and 
Norway.  Norway  is  free  to  negotiate  its  own  trade  agreements  and  is  not  bound  by  the 
European  Common  Customs  Tariff.  If  goods  originating  in  third  countries  are  imported  in 
Norway before being re-exported to the EU, the customs procedure in place between Norway 
and the EU will ensure that the duties applicable to the end-destination are being levied.  

5. 

PROGRESS MADE, MAIN OPEN ISSUES AND FOLLOW-UP ACTIONS 

Processed agricultural products 

Trade in processed agricultural products is regulated by Protocol 3 to the EEA agreement and 
to a certain extent by Protocol 2 to the FTA91. Protocol 3 of the EEA foresees the possibility 
to levy customs duties based on the cost of the basic agricultural products in the EU and in 
Norway.  In  practice,  EU  exports  of  processed  agricultural  products  are  hindered  by  high 
customs tariffs and this has been a long-standing trade barrier.  

In 2018, the EEA Council encouraged EEA members to continue the dialogue on the review 
of the trade regime for processed agricultural products within the framework of Article 2(2) 
and Article 6 of Protocol 3 to the EEA Agreement, in order to further promote trade in this 
area92. The EU expects the discussions with Norway, stalled in 2014, to resume. 

90  https://www.consilium.europa.eu/fr/press/press-releases/2018/11/20/conclusions-of-the-50th-meeting-of-the-

eea-council/pdf 

91   which still offers a more preferential treatment than the EEA for a few products 
92  https://www.consilium.europa.eu/fr/press/press-releases/2018/11/20/conclusions-of-the-50th-meeting-of-the-

eea-council/pdf 

223 

 
 
                                                 
Geographical Indications 

The  EU-Norway  committed  themselves  to  encourage  trade  in  agricultural  products  with 
Geographical Indications (GIs). The GIs negotiations were launched in 2013 and suspended at 
the request  of the Norwegian  side in  April 2016. The Council of the European Union in  its 
Conclusions of December 2018 calls on Norway to “resume the negotiations on the protection 
of  geographical  indications,  which  is  an  important  element  of  international  trade  in 
agricultural products and foodstuffs93”. The EU is ready to resume these negotiations. 

Trade irritants  

A recurring trade irritant since 2012 was linked to the reclassification and tariff switch by the 
Norwegian  Customs  Authorities  of  several  agricultural  products  under  different  HS  tariffs 
codes.  These  issues  were  successfully  addressed  in  the  framework  of  the  latest  Article  19 
agreement  between  the  EU  and  Norway,  which  entered  into  force  in  October  2018  as 
mentioned above. 

6. 

CONCLUSIONS AND OUTLOOK 

Politically, Norway and the EU are close allies. Norway notably actively aligns itself with EU 
foreign  policy  instruments,  including  the  EU's  sanction  policy  towards  Russia,  and  is  also 
subject  to  the Russian agricultural  ban.  In multilateral  trade fora, notably the WTO, the EU 
and Norway very often defend the same position. 

Institutionally,  through  the  EEA  agreement,  Norway  is  as  closely  linked  to  the  Internal 
Market  as  a  third  country  can  be.  There  is  however  room  for  further  strengthening  trade  in 
basic and processed agricultural products, where the EU hopes to see progress in the coming 
months.  

7. 

STATISTICS 

Merchandise trade EU28 2014-2018 
2014 

2015 

2016 

2017 

2018 

EU28 trade with Norway (mio €) 

Imports 
Exports 
Balance 

Share Norway in EU28 trade with Extra-EU28 

85.107 
50.199 
-34.908 

74.156 
48.782 
-25.374 

63.336 
48.322 
-15.014 

73.757 
50.659 
-23.099 

83.837 
53.867 
-29.970 

Imports 
Exports 
Total (I+E) 

Imports 
Exports 
Total (I+E) 

5,0% 
2,9% 
4,0% 

4,3% 
2,7% 
3,5% 

Share EU28 in trade Norway with world 

64,9% 
83,0% 
76,1% 

63,6% 
81,0% 
73,8% 

Source Trade G2 Statistics/ISDB  
Trade EU28: Eurostat COMEXT;  Trade Norway: IMF Dots 

3,7% 
2,8% 
3,2% 

63,5% 
79,1% 
72,1% 

4,0% 
2,7% 
3,3% 

61,4% 
80,9% 
72,3% 

4,2% 
2,8% 
3,5% 

63,6% 
81,8% 
74,2% 
25-mars-19 

Total merchandise trade EU28 with Norway (mio €) 

Norway 

2017 

2018 

Imports 
Exports 
Balance 

73.757 
50.659 
-23.099 

83.837 
53.867 
-29.970 

Growth 

annual 
% 
13,7% 
6,3% 

mio € 
10.080 
3.208 
-6.872 

93   https://www.consilium.europa.eu/en/press/press-releases/2018/12/11/council-conclusions-on-a-

homogeneous-extended-single-market-and-eu-relations-with-non-eu-western-european-countries/ 

224 

 
 
  
  
  
  
  
  
  
 
  
  
  
  
 
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
                                                 
Total trade 
Source Trade G2 Statistics/ISDB from Eurostat COMEXT 

124.416 

137.704 

13.288 

10,7% 

Agrifood trade EU28 with Norway (mio €) 

Norway 

2017 

2018 

Imports 
Exports 
Balance 
Total trade 
Source Trade G2 Statistics/ISDB from Eurostat COMEXT 

575 
4.474 
3.899 
5.049 

579 
4.496 
3.917 
5.075 

mio € 

4 
22 
18 
26 

Growth 

annual 
% 
0,7% 
0,5% 

0,5% 

NAMA trade EU28 with Norway (mio €) 

Norway 

2017 

2018 

EU28 imports 
EU28 exports 
Balance 
Total trade 
Source Trade G2 Statistics/ISDB from Eurostat COMEXT 

73.182 
46.185 
-26.997 
119.367 

83.258 
49.371 
-33.888 
132.629 

Services trade EU28 with Norway (mio €) 

Norway 

2016 

2017 

Imports 
Exports 
Balance 
Total trade 
Source Trade G2 Statistics/ISDB from Eurostat BOP statistics 

15.868 
28.497 
12.629 
44.364 

15.553 
28.720 
13.167 
44.273 

Services trade EU28 with Norway (mio €) 

Growth 

mio € 
10.076 
3.186 
-6.890 
13.262 

annual 
% 
13,8% 
6,9% 

11,1% 

Growth 

mio € 

-315 
223 
538 
-91 

annual 
% 
-2,0% 
0,8% 

-0,2% 

Imports 
Exports 
Balance 
Total trade 
Source Trade G2 Statistics/ISDB from Eurostat BOP statistics 

2013 

2014 

2015 

2016 

2017 

14.396 
27.050 
12.653 
41.446 

16.526 
28.131 
11.605 
44.657 

16.046 
30.479 
14.434 
46.525 

15.868 
28.497 
12.629 
44.364 

15.553 
28.720 
13.167 
44.273 

Inward 
Outward 

Inward 
Outward 
Source Trade G2 Statistics/ISDB from Eurostat BOP statistics 

FDI EU28 with Norway (mio €) 
2014 

2015 

2016 

2017 

2013 
FDI Stocks 
68.282 
72.212 
FDI Flows 
938 
9.202 

73.807 
81.414 

4.964 
5.052 

89.838 
90.716 

103.251 
102.962 

94.452 
90.293 

3.361 
8.114 

1.868 
4.022 

2.794 
4.478 

Fill rates of Norwegian TRQs (Source Norwegian authorities) 

Norwegian customs tariff 
2012 

Description of products 

Quota volume 
2018 

Fill rate 
2018 

Fill rate 
2017 

02.01 

02.01.1000 

02.01.2001 

02.01.2002 
02.01.2003 
02.01.2004 
02.02 
02.02.1000 

Meat of bovine animals, fresh or chilled. 
 - Carcasses and half-carcasses 
 - Other cuts with bone in : 
 - - "Compensated quarters", i.e. forequarters and the 
hindquarters of the same animal are presented at the 
same time 
 - - Other forequarters 
 - - Other hindquarters 
 - - So-called "Pistola cuts" 
Meat of bovine animals, frozen. 
 - Carcasses and half-carcasses 

225 

1300 

93% 

100% 

 
 
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
 
 
  
02.02.2001 

02.02.2002 
02.02.2003 
02.02.2004 
02.03 

02.03.1101 

02.03.2101 
02.03 

02-03-1904 
02.06 

02.06.4100 
02.07 

02.07.1100 
02.07.1200 

02.07.2400 
02.07.2500 
02.07 

02.07.4401 
02.10 

02.10.1101 
04.06 

04.06.1001 
04.06.1009 
04.06.2000 
04.06.3000 

04.06.4001 
04.06.4005 

04.06.4008 
04.06.4009 

04.06.9030 

 - Other cuts with bone in : 
 - - "Compensated quarters", i.e. forequarters and the 
hindquarters of the same animal are presented at the 
same time 
 - - Other forequarters 
 - - Other hindquarters 
 - - So-called "Pistola cuts" 
Meat of swine, fresh, chilled or frozen. 
 - Fresh or chilled : 
 - - Carcasses and half-carcasses : 
 - - - Of domestic swine 
 - Frozen : 
 - - Carcasses and half-carcasses : 
 - - - Of domestic swine 

Meat of swine, fresh, chilled or frozen. 
 - Fresh or chilled : 
 - - Other: 
 - - - Of domestic swine : 
 - - - - Bellies (streaky) and cuts thereof : 
 - - - - - With bone in 
Edible offal of bovine animals, swine, sheep, goats, 
horses, asses, mules or hinnies, fresh, chilled or 
frozen. 
 - Of swine, frozen : 
 - - Livers 

Meat and edible offal, of the poultry of heading 01.05, 
fresh, chilled or frozen. 
 - Of fowls of the species Gallus domesticus : 
 - - Not cut in pieces, fresh or chilled 
 - - Not cut in pieces, frozen 
 - Of turkeys : 
 - - Not cut in pieces, fresh or chilled 
 - - Not cut in pieces, frozen 

Meat and edible offal, of the poultry of heading 01.05, 
fresh, chilled or frozen. 
 - Of ducks : 
 - - Other, fresh or chilled : 
 - - - Breasts and cuts thereof 
Meat and edible meat offal, salted, in brine, dried or 
smoked; edible flours and meals of meat or meat 
offal. 
 - Meat of swine: 
 - - Hams, shoulders and cuts thereof, with bone in : 
 - - - Containing 15 % or more by weight of bones 
Cheese and curd. 

 - Fresh (unripened or uncured) cheese, including whey 
cheese and curd : 
 - - Whey cheese 
 - - Other   
 - Grated or powdered cheese, of all kinds 
 - Processed cheese, not grated or powdered 

 - Blue-veined cheese and other cheese containing veins 
produced by Penicillium roqueforti : 
 - - Roquefort 
 - - Gorgonzola 
 - - Other : 
 - - - Unpasteurized 
 - - - Other 
 - Other cheese : 
 - - Feta and similar cheeses 
 - - White-veined cheese : 

226 

600 

83% 

98% 

75 

99% 

350 

0% 

0% 

837,5 

63% 

62% 

125 

3% 

8% 

450 

96% 

99% 

7500 

98% 

100% 

 
 
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
04.06.9082 
04.06.9084 
04.06.9089 

04.06.9091 
04.06.9099 
04.07 

04.07.1100 

04.07.2100 
ex 04.07.9000 
05.11 

05.11.9911 

06.02 

06.02.1021 

06.02.1024 
06.02 

ex 06.02.9043 

06.02.9044 

06.02 

06.02.9031 

 - - - Camembert 
 - - - Brie 
 - - - Other 
 - - Other : 
 - - - Unpasteurized 
 - - - Other 
Birds' eggs in shell, fresh preserved or cooked. 
 - Fertilised eggs for incubation : 
 - - Of fowls of the species Gallus domesticus 
 - Other fresh eggs : 
 - - Of fowls of the species Gallus domesticus 
 - Other 
Animal products not elsewhere specified or included; 
dead animals of Chapter 1 or 3, unfit for human 
consumption. 
 - Other : 
 - - Other : 
 - - - Blood powder, unfit for human consumption : 

 - - - - For feed purpose 

Other live plants (including their roots), cuttings and 
slips; mushroom spawn. 
 - Unrootened cuttings and slips : 

 - - Cuttings for nursery or horticultural purposes, except 
of green plants from 15 December - 30 April : 

 - - - Begonia, all sorts, Campanula isophylla, Euphorbia 
pulcherrima, Poinsettia pulcherrima, Fuchsia, Hibiscus, 
Kalanchoe and Petunia-hanging (Petunia hybrida, 
Petunia atkinsiana) 
 - - - Pelargonium 

Other live plants (including their roots), cuttings and 
slips; mushroom spawn. 
 - Other : 
 - - With balled roots or other culture media : 
 - - - Other pot plants or bedding plants : 
 - - - - Pot plants or bedding plants, in flower : 

 - - - - - Begonia x cheimantha, Begonia x semperflorens, 
Begonia x tuberhybrida, Bidens, Brachycome, 
Callistephus, Cyclamen persicum, Dahlia, Dianthus, 
Fuchsia, Gerbera, Hydrangea macrophylla, Impatiens, 
Lobelia, Lobularia, Petunia (all species), Scaevola, 
Senecio cineraria, Senecio bicolor, Tagetes, Tropaeolum, 
Verbena, Viola and Zinnia, also when imported as part 
of mixed groups of plants 

 - - - - - Achimenes, Aster novi-belgii, Calceolaria 
herbeohybrida, Capsicum annum, Catharanthus roseus, 
Vinca rosea, Dipladenia, Nematanthus, Hypocyrta, 
Osteospermum, Schlumbergera, Senecio x hybridus, 
Cineraria, Sinningia speciosa, Gloxinia, Solanum and 
Streptocarpus, also when imported as part of mixed 
groups of plants 

Other live plants (including their roots), cuttings and 
slips; mushroom spawn. 
 - Other : 
 - - With balled roots or other culture media : 
 - - - Other pot plants or bedding plants : 

290 

57% 

65% 

350 

Duty free 
access granted 
01.10.2018 

2 million 

Duty free 
access granted 
01.10.2018 

0% 

0% 

100% 

100% 

11 million 

89% 

99% 

 - - - - Green pot plants from 1 May to 14 December :  

4,75 million 

90% 

100% 

 - - - - - Condiaeum, Croton, Dieffenbacchia, 
Epipremnum, Scindapsus aureum, Hedera, Nephrolepis, 
Peperomia obtusifolia, Peperomia rotundifolia, 
Schefflera, Soleirolia and Helxine, also when imported 
as part of mixed groups of plants 

227 

 
 
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
06.02 

06.02.9091 
07.01 

07.01.9022 
07.05 

07.05.1112 

07.05.1122 
07.05 

07.05.1112 
07.05.1119 
07.12 

07.12.9011 

08.08 

ex 08.08.1011 
08.10 

08.10.1023 
08.10.1024 
08.11 

08.11.1000 

08.11 

08.11.2091 
08.11.2092 
08.11.2093 
08.11.2094 
08.11.2095 

4 million 

64% 

0% 

2500 

12% 

19% 

600 

74% 

60% 

400 

78% 

88% 

300 

35% 

36% 

2000 

50% 

98% 

300 

72% 

77% 

2200 

97% 

95% 

950 

99% 

99% 

Other live plants (including their roots), cuttings and 
slips; mushroom spawn. 
 - Other : 
 - - Other : 
 - - - Grass in rolls or plates (lawn) 
Potatoes, fresh or chilled. 
 - Other : 
 - - From 16 July to 14 May : 
 - - - New potatoes imported 1 April - 14 May 

Lettuce (Lactuca sativa) and chicory (Cichorium 
spp.), fresh or chilled. 
 - Lettuce : 
 - - Cabbage lettuce (head lettuce) : 
 - - - Iceberg lettuce : 
 - - - - From 1 March to 31 May : 
 - - - - - Whole 
 - - - - From 1 June to 30 November : 
 - - - - - Whole 

Lettuce (Lactuca sativa) and chicory (Cichorium 
spp.), fresh or chilled. 
 - Lettuce : 
 - - Cabbage lettuce (head lettuce) : 
 - - - Iceberg lettuce : 
 - - - - From 1 March to 31 May : 
 - - - - - Whole 
 - - - - - Other 

Dried vegetables, whole, cut, sliced, broken or in 
powder, but not further prepared. 
 - Other vegetables; mixtures of vegetables : 
 - - Potatoes : 
 - - - Whether or not cut or sliced but not further 
prepared 
Apples, pears and quinces, fresh. 
 - Apples : 
 - - From 1 May to 1. August 
Other fruit, fresh. 

 - Strawberries : 
 - - From 9 June to 31 October : 
 - - - From 9 June to 30 June 
 - - - From 1 July to 9 September 

Fruit and nuts, uncooked or cooked by steaming or 
boiling in water, frozen, whether or not containing 
added sugar or other sweetening matter. 
 - Strawberries : 

Fruit and nuts, uncooked or cooked by steaming or 
boiling in water, frozen, whether or not containing 
added sugar or other sweetening matter. 

 - Raspberries, blackberries, mulberries, loganberries, 
black, white or red currants and gooseberries : 
 - - Other : 
 - - - Raspberries 
 - - - Blackberries, mulberries or loganberries 
 - - - Black currants 
 - - - White or red currants 

 - - - Gooseberries 

228 

 
 
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
08.12 

08.12.1000 
10.01 

10.01.1900 
10.02 
ex 10.02.1000 
10.05 

10.05.9010 
11.03 

11.03.1310 
12.09 

12.09.2300 
12.09 

12.09.2300 
12.09 

12.09.2400 

12.09 

12.09.2400 
12.09 

12.09.2500 

12.14 

12.14.9091 
16.01.0000 

16.02 

16.02.4910 
16.02 

16.02.5001 

20.05 

20.05.2091 
20.09 

Fruit and nuts, provisionally preserved (for example, 
by sulphur dioxide gas, in brine, in sulphur water or 
in other preservative solutions), but unsuitable in 
that state for immediate consumption. 
 - Cherries 
Wheat and meslin. 
 - Durum wheat : 
 - - Other 
Rye. 
 - Autumn rye 
Maize (corn). 
 - Other : 
 - - For feed purpose 
Cereal groats, meal and pellets. 
 - Groats and meal : 
 - - Of maize (corn) : 
 - - - For feed purpose 
Seeds, fruit and spores, of a kind used for sowing. 
 - Seeds of forage plants : 
 - - Fescue seeds 
Seeds, fruit and spores, of a kind used for sowing. 
 - Seeds of forage plants : 
 - - Fescue seeds 
Seeds, fruit and spores, of a kind used for sowing. 
 - Seeds of forage plants : 

 - - Kentucky blue grass (Poa pratensis L.) seeds 
Seeds, fruit and spores, of a kind used for sowing. 
 - Seeds of forage plants : 
 - - Kentucky blue grass (Poa pratensis L.) seeds 
Seeds, fruit and spores, of a kind used for sowing. 
 - Seeds of forage plants : 

 - - Rye grass (Lolium multiflorum Lam., Lolium 
perenne L.) seeds 
Swedes, mangolds, fodder roots, hay, lucerne 
(alfalfa), clover, sainfoin, forage kale, lupines, vetches 
and similar forage products, whether or not in the 
form of pellets. 
 - Other : 
 - - Other : 
 - - - Hay 

Sausages and similar products, of meat, meat offal or 
blood; food preparations based on these products. 
Other prepared or preserved meat, meat offal or 
blood. 
 - Of swine : 
 - - Other, including mixtures : 
 - - - "Bacon crisp" 
Other prepared or preserved meat, meat offal or 
blood. 
 - Of bovine animals 

 - - Meatballs, each of a weight of 25 grams or less, 
diameter 3 cm or less and containing 18% fat or less 

Other vegetables prepared or preserved otherwise 
than by vinegar or acetic acid, not frozen, other than 
products of heading 20.06. 
 - Potatoes : 
 - - Other : 
 - - - Semi-manufactures for the production of snacks 

Fruit juices (including grape must) and vegetable 
juices, unfermented and not containing added spirit, 
whether or not containing added sugar or other 
sweetening matter. 

229 

100 

0% 

0% 

5000 

24% 

30% 

1000 

24% 

27% 

11250 

97% 

100% 

10000 

98% 

100% 

400 

95% 

89% 

75 

92% 

96% 

200 

74% 

77% 

50 

53% 

92% 

700 

99% 

87% 

35000 

53% 

52% 

450 

91% 

88% 

350 

32% 

30% 

200 

50% 

43% 

3000 

58% 

57% 

3300 

99% 

100% 

 
 
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
20.09.7100 
20.09.7900 

20.09 

20.09.8911 

20.09.8919 

20.09 

ex. 20.09.8999 

 - Apple juice : 
 - - Of a Brix value not exceeding 20 

 - - Other 

Fruit juices (including grape must) and vegetable 
juices, unfermented and not containing added spirit, 
whether or not containing added sugar or other 
sweetening matter. 
 - Unmixted juices of other fruites and vegetables: 

 - - Other : 
 - - - Black currant juice: 
 - - - - Containing added sugar or other sweetening 
matter 

 - - - - Other 
Fruit juices (including grape must) and vegetable 
juices, unfermented and not containing added spirit, 
whether or not containing added sugar or other 
sweetening matter. 
 - Unmixted juices of other fruites and vegetables: 
 - - Other : 
 - - - Other : 
 - - - - Bilberry concentrate 

100% 

200 

Duty free 
access granted 
01.10.2018 

25% 

58% 

230 

 
 
  
  
  
  
  
  
  
  
  
 
 
 
 
ANNUAL  INFO  SHEET  ON  IMPLEMENTATION  OF  THE  EU-SWITZERLAND 
FREE TRADE AGREEMENT 

1. 

INTRODUCTION 

The  EU-Swiss  trade  relations  are  among  the  deepest  worldwide  outside  the  context  of  a 
customs union/internal market. For Switzerland, the EU is by far the most important trading 
partner. For the EU, Switzerland is the third overall trading partner, number 2 for services.  

The cornerstone of EU-Swiss trade relation is the EU-Switzerland Free Trade Agreement of 
197294. It concerns goods only and is one of the oldest trade agreements signed by the EU. It 
does  not  contain  provisions  on  services,  investment,  Intellectual  Property  Rights  (IPR), 
government  procurement  or  social  and  environmental  values.  No  dispute  settlement 
mechanism is foreseen beyond the regular annual dialogue at Joint Committee meetings. As a 
consequence of the rejection of EEA membership in 1992 by the Swiss people, Switzerland 
and  the  EU  agreed  on  a  package  of  seven  sectoral  agreements  signed  in  1999  (known  in 
Switzerland as ‘Bilaterals I’). Some of them are relevant from a trade perspective:  

 

 

 

 

 

The  Free  Movement  of  Persons  Agreement95  allows  for  the  provision  of  services, 
limited in time.  
The  Mutual  Recognition  Agreement  in  relation  to  conformity  assessment96  ensures 
that, in twenty regulated sectors, the conformity assessment provided by one party is 
recognised by the other, which of course facilitates trade between the parties.  
The  Public  Procurement  Agreement97,  that  builds  on  the  WTO  Government 
Procurement Agreement. 
The  Agreement  on  trade  in  agricultural  products98,  which  includes  sanitary  and 
phytosanitary rules, as  well as tariffs and quotas  for agricultural products, except for 
cheese that is liberalised.  
A protocol on processed agricultural products (protocol 2) was also added to the Free 
Trade Agreement, in 2004. It includes a mechanism whereby in practice Switzerland 
receives  compensation  for  the  very  significant  price  differential  of  basic  agricultural 
products - which serve as inputs to processed agricultural products  - between the EU 
and Switzerland. 

In the last two decades, there was no major evolution to this rather complex setting. The gap 
is growing between the current legal arrangements of EU and Switzerland and the standards 
of  modern  and  comprehensive  FTAs  concluded  by  the  EU  and  Switzerland/EFTA, 
respectively.  A  modernisation  of  the  FTA  is  needed  to  unlock  potential  for  further  bilateral 
trade. 

Between  2014  and  2018,  both  parties  have  been  negotiating  an  Institutional  Framework 
Agreement to streamline the operation of some of these agreements. The aim is to provide an 
overarching  framework  with  clear  mechanisms  for  dynamic  acquis  take-over,  uniform 

94  https://eur-lex.europa.eu/legal-content/en/ALL/?uri=OJ:L:1972:300:TOC  
95  https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A22002A0430%2801%29  
96  http://trade.ec.europa.eu/doclib/docs/2013/december/tradoc_152006.pdf  
97  https://eur-lex.europa.eu/legal-content/EN/ALL/?uri=CELEX:22002A0430(06)  
98  https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=uriserv:OJ.L_.2002.114.01.0132.01.ENG 

231 

 
 
 
 
 
 
                                                 
interpretation of rules and an efficient dispute settlement mechanism as well as State aid rules. 
The negotiation was concluded in November 2018 and was subject to a public consultation in 
Switzerland in Spring 2019. The Commission  expects  the consultation to be swift and hope 
that  its  outcome  will  be  positive,  as  this  is  necessary  to  put  relations  between  the  EU  and 
Switzerland on a solid institutional footing. A Joint declaration is annexed to the International 
Framework Agreement, where both parties commit to modernise the trade-related agreements, 
with negotiations starting in 2020.  

2. 

EVOLUTION OF TRADE 

2.1. 

Trade in Goods 

Trade in goods is very dynamic between the EU and Switzerland, amounting to €265 billion 
in 2018. The EU is Switzerland’s main trading partner by far, representing, in 2018, 62% of 
its  exports  of  goods,  and  44%  of  its  imports.  Overall,  the  EU  concentrated  53%  of 
Switzerland’s  trade  in  goods,  followed  by  the  United  States  (with  approximately  10%)  and 
China (with around 8%). Switzerland is the EU’s third trading partner, representing 7% of its 
trade  in  goods,  after  the  USA  (17%)  and  China  (15%).  Trade  grew  by  almost  2%  between 
2017  and  2018,  whereby  European  exports  to  Switzerland  grew  by  4%  and  its  imports 
decreased by almost 2%. The trade balance has been positive for the EU in the last years, and 
amounted to almost €48 billion in 2018.  

71% of EU imports from Switzerland are directed to Germany, France, Italy and the United 
Kingdom. The biggest exporters to Switzerland are Germany, Italy, the United Kingdom and 
France, representing 72% of EU exports.  

Chemicals and related products represent 39% of EU imports from Switzerland, followed by 
miscellaneous manufactured articles (20%) and machinery and transport equipment (18%).  

EU  exports  to  Switzerland  concentrate  on  the  same  product  categories:  machinery  and 
transport  equipment  (23%);  chemicals  and  related  products  (22%)  and  miscellaneous 
manufactured articles (20%).  

2.2. 

Trade in agricultural goods 

With  almost  €5  billion  agri-food  products  imported  in  2018  from  Switzerland,  representing 
4%  of  the  goods  imported,  and  €8  billion  exported  from  the  EU  to  the  Swiss  market, 
representing 5% of exported goods, the Swiss and European markets for agricultural products 
are closely linked. 

The EU imports mainly coffee and tea (HS 09), which represent 30% of the agri-food imports, 
followed  by  beverages  (HS  22)  and  edible  preparations  (HS  21).  The  EU  exports  mainly 
beverages (HS 22), fruits & nuts (HS 08) and cereals, flour and starch (HS 19). Between 2017 
and  2018,  EU  agri-food  exports  to  Switzerland  grew  by  1%  whereas  EU  imports  from 
Switzerland declined by 1%. 

In general, Switzerland makes little use of the agri-food tariff rate quotas (TRQs) granted by 
the  EU  and  the  use  has  been  decreasing  compared  to  2017.  Out  of  32  TRQs,  27  are 
completely or largely unused (below 10%). The five quotas that are used most are the one for 
beef  (91%  fill  rate),  potatoes  (35%),  cherries  (21%),  hams  or  domestic  swine  (20%)  and 
cream and yogurt (15%).  

232 

 
 
 
 
 
 
 
 
In  2018,  the  EU  fully  (100%)  utilised  28  out  of  50  Swiss  agricultural  TRQs  (including  EU 
key export products such as cured ham & pork products) while the fill rate exceeded 50% for 
a  further  12  of  these  50  Swiss  TRQs.  Five  TRQs  were  utilised  between  35-49%,  and  the 
remaining five were utilised at a rate below 35%.  

2.3. 

Trade in Services and Foreign Direct investment (FDIs) 

Switzerland is the second trading partner of the EU when it comes to services. The value of 
the  services  provided  by  the  EU  in  Switzerland  has  been  on  a  constant  rise  in  the  past  five 
years, reaching €119 billion  in  2017, which represent  an increase of 2% compared to  2016. 
The  services  provided  by  Switzerland  in  the  EU  were  worth  €72  billion  in  2017,  which 
represented a decrease of 23% compared to the previous year. The balance of trade in services 
is positive for the EU.  

The stocks of FDI in the EU held by Switzerland reached in 2017 €802 billion, with an annual 
average increase of 15% over the past four years. The stocks of FDI of the EU in Switzerland 
amount to €979 billion in 2017, with an average annual increase of 10%. Switzerland gathers 
about 13% of the total EU28 stocks invested outside the EU28. 

3. 

ISSUES ADDRESSED IN THE ANNUAL JOINT COMMITTEE MEETING 

Two FTA Joint Committee meetings took place in 2018 chaired by the Swiss party.  

At  the  Joint  committee  meeting  of  17  September  2018,  the  EU  presented  the  on-going 
investigation  on  certain  steel  products  and  discussed  with  its  Swiss  partners  how  EU 
safeguard measures should be shaped to be least distortive to bilateral trade, if such measures 
were deemed necessary to prevent trade distortion worldwide.  

At the FTA Joint Committee on 13 November 2018, a wider range of topics were discussed, 
including  the  latest  price  references  for  processed  agricultural  products,  the  Company  tax 
reform and some market access issues.  

Joint  committees  under  other  bilateral  agreements  of  trade  relevance  also  take  place  on  a 
regular basis. The Annual Joint Committee meeting on agriculture took place on 11 October 
2018  and  several  working  group  met  on  technical  issues  such  as  Geographical  Indications, 
organics and wine & spirits drinks. 

4. 

SPECIFIC AREAS OF IMPORTANCE 

Unlike the three EEA EFTA countries (Norway, Iceland and Liechtenstein), Switzerland does 
not  have  full  access  to  the  four  freedoms  of  the  Internal  market  and  does  not  dynamically 
integrate  the  EU  acquis.  On  the  basis  of  the  sectoral  bilateral  agreements,  Switzerland  has 
however  access,  to  a  certain  extent,  to  two  pillars  of  the  internal  market:  free  movement  of 
goods (with the exception of most agricultural products and approximately half of processed 
agricultural products, where access is limited), and free movement of persons (which includes 
also  cross-border provision of services limited in  time). The sectoral  agreements are largely 
static: the arrangements between Switzerland and the EU are usually based on recognition of 
the identical or equivalent nature of the EU and Swiss legislation in the sectors. However, the 
Swiss  are taking over  –  on a  contractual  or  even on an  autonomous basis  - parts of the EU 
acquis, for example in the area of recognition of professional qualifications. Hence, the need 
for an Institutional Framework Agreement mentioned above.  

233 

 
 
 
 
 
 
5. 

PROGRESS MADE, MAIN OPEN ISSUES AND FOLLOW-UP ACTIONS 

Progress was made on several issues: the long-awaited Company tax reform, modifying the 
discriminatory cantonal fiscal status of companies, which was also problematic from a State 
aid point of view, was approved by the Swiss Parliament in September 2018 and should enter 
into force on 1 January 2020. 

In the context of the WTO Nairobi decision on export subsidies, Switzerland abolished by a 
decision  of  the  Federal  Council  of  September  2018,  its  agricultural  export  subsidies  laid 
down in the "loi chocolatière", as of January 2019. 

The  process  of  adapting  the  price  reference  of  basic  agricultural  products  needed  in  the 
context of the price compensation mechanism for processed agricultural products (protocol 
2  to  the  FTA)  ran  particularly  smoothly  this  year  so  parties  agreed  to  further  develop  their 
methodology, in a spirit of greater transparency and simplicity.  

Progress  was  made  towards  solving  the  issue  related  to  the  Swiss  reclassification  of 
“seasoned  meat”,  which  resulted  in  significantly  higher  import  tariffs  for  seasoned  meat, 
affecting  particularly  EU  exporters.  In  2018,  Switzerland  notified  in  WTO  its  intention  to 
launch  negotiations  to  modify  the  tariff  concessions  for  'meat  not  further  prepared  than 
seasoned'.  The  EU  negotiating  directives  were  adopted  in  December  2018,  so  that  progress 
can be expected in 2019.  

Negotiations to extend the scope of the  SPS rules currently applicable between Switzerland 
and  the  EU  made  progress  in  2018.  A  new  agreement  addressing  notably  labelling  or  food 
safety issues could facilitate trade between the parties.  

The  shaping  of  the  EU  safeguard  measures  on  certain  products  of  steel  was  subject  to 
intense  discussions  with  Switzerland  in  order  to  find  a  solution  that  is  as  least  distortive  to 
trade as possible. Their implementation will be closely monitored in the coming months.  

When  it  comes  to  market  access  barriers,  the  Parliament  of  the  Ticino  region  abolished  in 
November  2018  the  law  on  artisanal  enterprises,  which  was  welcomed  by  the  EU  as  it 
represented  a  trade  barrier  to  European  cross-border  service  providers.  However,  the  issue 
will  have  to  be  monitored  closely  since  there  have  been  voices  in  Ticino  asking  for  similar 
measures to be reintroduced. 

Access  to  market  in  the  services  sector  remains  however  a  major  issue.  The  so-called 
“flanking measures” that the Swiss put in place to accompany the implementation of the EU-
Switzerland  Free  Movement  of  Persons  Agreement99  are  a  long-standing  issue,  as  the  EU 
considers  them  burdensome  and  disproportionate.  A  compromise  solution  was  found  in  the 
context  of the EU-Swiss  Institutional Framework Agreement, which the  EU side hopes will 
be endorsed politically in Switzerland at the end of the consultation process.  
The  lack  of  a  level  playing  field  as  regards  State  aid  also  remains  an  issue,  as  existing 
agreements  between  the  EU  and  Switzerland  do  not  include  effective  State  aid  rules.  A 
solution was found in the context of the EU-Swiss Institutional Framework Agreement, which 
includes State aid rules for existing and future market access agreements between the EU and 
Switzerland. 

99  https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A22002A0430%2801%29 

234 

 
 
 
 
 
 
 
 
 
                                                 
CONCLUSIONS AND OUTLOOK 

6. 
The  Council  adopted  on  19  February  2019  the  following  conclusions100  that  summarise  the 
situation and will guide Commission work in the coming months. 

On the Institutional Framework:  
“In  May  2014,  the  EU  and  Switzerland  have  entered  into  negotiations  on  a  common 
institutional framework for existing and future agreements, with a view to consolidating the 
bilateral  approach  and  to  developing  the  EU-Swiss  comprehensive  partnership  to  its  full 
potential. After more than four years, negotiations have come to a close at the end of 2018. 
Negotiators  have  found  fair  and  balanced  solutions  in  areas  such  as  the  rules  for  dynamic 
take-over of EU acquis by Switzerland, the mechanism for independent dispute settlement and 
the  provisions  to  ensure  increased  legal  certainty,  as  well  as  a  level  playing  field  for  our 
citizens and economic operators. The Council strongly regrets that the Swiss Federal Council 
did  not  endorse  this  outcome  in  December  2018  and  calls  on  the  Federal  Council  to  stand 
behind  the  negotiated  text  of  the  Institutional  Framework  Agreement  and  submit  it  for 
adoption to the Federal Assembly as soon as the consultation of stakeholders is completed in 
spring  2019.  The  Council  emphasises  that  the  conclusion  of  the  Institutional  Framework 
Agreement on the basis of the present text is a precondition for the EU for the conclusion of 
future  agreements  on  Swiss  participation  in  the  EU's  internal  market  and  also  an  essential 
element for deciding upon further progress towards mutually beneficial market access. This 
will  allow  for  a  consolidation  of  the  bilateral  approach,  in  such  a  way  as  to  ensure  its 
sustainability and further development”.  

On the trade relationship:  
“The EU and Switzerland  continue to  enjoy a strong and stable trading relationship,  to  the 
benefit of both sides. However, the free trade agreement of 1972, which is at the basis of our 
close  economic  relationship,  has  not  been  adjusted  to  developments  in  international  trade 
rules  since.  The  Council  therefore  calls  for  embarking  on  a  path  of  modernising  the 
agreements  governing  the  trade  relations  between  Switzerland  and  the  European  Union,  in 
particular the free trade agreement. Enhanced access to the Swiss market for operators from 
the EU, notably in the agri-food and services sectors, should be urgently addressed”. 

7. 

STATISTICS 

Merchandise trade EU28 2014-2018 

EU28 trade with Switzerland (mio €) 

Imports 
Exports 
Balance 

Share Switzerland in EU28 trade with Extra-EU28 

2014 

2015 

2016 

2017 

2018 

96.546 
140.288 
43.742 

102.356 
150.513 
48.157 

121.371 
142.218 
20.847 

110.728 
150.245 
39.517 

108.980 
156.484 
47.504 

Imports 
Exports 
Total (I+E) 

Imports 
Exports 
Total (I+E) 

5,7% 
8,2% 
7,0% 

5,9% 
8,4% 
7,2% 
Share EU28 in trade Switzerland with world 
64,6% 
43,5% 
53,3% 

66,3% 
45,2% 
55,1% 

Source Trade G2 Statistics/ISDB  
Trade EU28: Eurostat COMEXT;  Trade Switzerland: IMF Dots 

7,1% 
8,1% 
7,6% 

55,8% 
48,4% 
51,9% 

6,0% 
8,0% 
7,0% 

59,7% 
45,3% 
52,1% 

5,5% 
8,0% 
6,7% 

63,0% 
44,4% 
53,1% 
25-mars-
19 

100  https://www.consilium.europa.eu/en/press/press-releases/2019/02/19/council-conclusions-on-eu-relations-

with-the-swiss-confederation/ 

235 

 
 
 
 
  
 
  
  
  
  
 
  
  
  
  
  
  
  
  
  
  
  
  
  
                                                 
Total merchandise trade EU28 with Switzerland (mio €) 

Switzerland 

2017 

2018 

Imports 
Exports 
Balance 
Total trade 
Source Trade G2 Statistics/ISDB from Eurostat COMEXT 

110.728 
150.245 
39.517 
260.973 

108.980 
156.484 
47.504 
265.464 

Agrifood trade EU28 with Switzerland (mio €) 

Switzerland 

2017 

2018 

Imports 
Exports 
Balance 
Total trade 
Source Trade G2 Statistics/ISDB from Eurostat COMEXT 

4.660 
8.204 
3.543 
12.864 

4.593 
8.254 
3.661 
12.847 

NAMA trade EU28 with Switzerland (mio €) 

Switzerland 

2017 

2018 

EU28 imports 
EU28 exports 
Balance 
Total trade 
Source Trade G2 Statistics/ISDB from Eurostat COMEXT 

106.068 
142.041 
35.973 
248.110 

104.387 
148.230 
43.843 
252.617 

Services trade EU28 with Switzerland (mio €) 

Switzerland 

2016 

2017 

Imports 
Exports 
Balance 
Total trade 
Source Trade G2 Statistics/ISDB from Eurostat BOP statistics 

93.080 
116.568 
23.487 
209.648 

71.676 
118.986 
47.309 
190.662 

Services trade EU28 with Switzerland (mio €) 

Growth 

mio € 
-1.749 
6.239 
7.988 
4.490 

annual 
% 
-1,6% 
4,2% 

1,7% 

Growth 

mio € 
-67 
51 
118 
-17 

annual 
% 
-1,4% 
0,6% 

-0,1% 

Growth 

mio € 
-1.681 
6.189 
7.870 
4.507 

annual 
% 
-1,6% 
4,4% 

1,8% 

Growth 

mio € 
-21.404 
2.418 
23.822 
-18.986 

annual 
% 
-23,0% 
2,1% 

-9,1% 

Imports 
Exports 
Balance 
Total trade 
Source Trade G2 Statistics/ISDB from Eurostat BOP statistics 

2013 

2014 

2015 

2016 

2017 

54.252 
101.554 
47.302 
155.806 

62.897 
107.363 
44.465 
170.260 

73.017 
115.139 
42.122 
188.155 

93.080 
116.568 
23.487 
209.648 

71.676 
118.986 
47.309 
190.662 

FDI EU28 with Switzerland (mio €) 

Inward 
Outward 

Inward 
Outward 
Source Trade G2 Statistics/ISDB from Eurostat BOP statistics 

2013 

2014 

2015 

2016 

2017 

FDI Stocks 

503.054 
709.272 

516.232 
731.320 

685.515 
894.365 

762.270 
984.936 

802.444 
978.969 

FDI Flows 

24.911 
35.934 

38.329 
-30.615 

121.712 
56.335 

100.848 
98.349 

28.383 
18.315 

236 

 
 
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
 
 
THE CUSTOMS UNION WITH TURKEY 

237 

 
 
 
 
ANNUAL INFO SHEET ON IMPLEMENTATION OF THE EU-TURKEY CUSTOMS 
UNION AND TRADE AGREEMENTS 

The contractual relations between the EU and Turkey date back to 1963 when the European 
Economic  Community  (i.e.  the  EU’s  predecessor)  and  Turkey  signed  an  Association 
Agreement (the ‘Ankara Agreement’), in which both parties agreed to progressively establish 
a  Customs  Union  over  a  period  of  several  years.  An  Additional  Protocol  was  signed  in 
November  1970,  setting  out  a  timetable  for  the  abolition  of  tariffs  and  quotas  on  industrial 
goods circulating between the parties. The final phase of the Customs Union was completed 
on  1  January  1996  in  the  shape  of  the  EU-Turkey  Association  Council  Decision  No  1/95, 
which is currently in force.101 

The Customs Union ensures the free movement of all industrial goods and certain processed 
agricultural  products  between  the  EU  and  Turkey.  It  also  established  a  requirement  for 
Turkey’s alignment to the EU’s customs tariffs and rules, commercial policy, competition and 
State  aid  policy  and  intellectual  property  rights,  as  well  as  to  the  EU’s  technical  legislation 
related to  the scope of the Customs Union. The Customs Union with  Turkey therefore  goes 
well beyond the traditional free trade agreements which the EU has concluded with other third 
countries.  

In  addition  to  the  Customs  Union,  the  EU  and  Turkey  concluded  two  further  bilateral 
preferential  trade  agreements.  The  Agreement  between  the  European  Coal  and  Steel 
Community (ECSC) and Turkey on trade in products covered by the Treaty establishing the 
ECSC  established  a  Free  trade  agreement  for  coal,  iron  and  steel  products102  in  1996, 
along  with  relevant  competition  rules.  The  Association  Council  Decision  No  1/98103 
(amended by Decision No 2/2006104) provides for preferential concessions on trade in certain 
agricultural and fishery products. 

On 21 December 2016, the European Commission adopted its Recommendation for a Council 
Decision  authorising  the  opening  of  negotiations  with  Turkey  on  an  Agreement  on  the 
extension  of  the  scope  of  the  bilateral  preferential  trade  relationship  and  on  the 
modernisation of the Customs Union. The negotiations can start once the Council adopts the 
related  negotiating  directives.  The  proposal  is  pending  authorisation  by  the  Council.  In  that 
respect, the conclusions  of the General  Affairs Council meeting of 26 June 2018 noted that 
"Turkey  has  been  moving  further  away  from  the  European  Union.  Turkey's  accession 
negotiations  have  therefore  effectively  come  to  a  standstill  and  no  further  chapters  can  be 
considered for opening or closing and no further work towards the modernisation of the EU-
Turkey Customs Union is foreseen." 

1. 

EVOLUTION OF TRADE 

The Customs Union has led to substantial increase in trade between the EU and Turkey. Since 
its entry into force in 1996, the value of bilateral trade increased more than fourfold105. The 
rise in Foreign Direct investment (FDI) to Turkey from the EU has been similarly significant, 
as  has  been  the  deeper  integration  in  production  networks  between  Turkish  and  European 

101  http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:21996D0213(01):EN:HTML  
102  http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:21996A0907(01):en:HTML  
103  http://eur-lex.europa.eu/legal-content/en/ALL/?uri=OJ:L:1998:086:TOC  
104  http://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:22006D0999&from=EN  
105  World Bank: Evaluation of the EU - Turkey Customs Union, March 2014  

238 

 
 
 
 
 
                                                 
firms. In 2018, Turkey remained the EU’s 5th largest trading partner overall (it is the EU’s 5th 
biggest  export  market  as  well  as  source  of  imports),  while  the  EU  is  by  far  Turkey’s  most 
important trading partner. The share of Turkish exports going to the EU increased from 47% 
to  50%,  while  the  share  of  Turkish  imports  coming  from  the  EU  declined  marginally  from 
36.4% to 36.2% between 2017 and 2018. 

1.1 

Trade in Goods 

While  EU-Turkey  bilateral  trade  in  goods  increased  rapidly  in  recent  years,  in  2018  trade 
showed  a  mixed  picture,  in  particular  due  to  the  Turkish  lira  losing  as  much  as  40%  of  its 
value  against  the  euro  over  summer  -  before  recovering  some  of  its  losses.  This  lead  to  an 
overall decrease in Turkish imports while at the same time facilitating exports, resulting in an 
improvement  in  the  Turkish  current  account  deficit.  According  to  Eurostat  data,  EU  goods 
exports to Turkey hence fell by 9% to €77 billion while imports from Turkey rose by 9% to 
€76 billion. Overall trade in goods thus amounted to €153 billion in 2018, down slightly from 
€154.5 billion in 2017. 

Regarding  the  sectoral  split,  the  EU’s  biggest  export  category  in  2018  was  machinery  and 
appliances (26% of overall EU exports), followed by transport equipment (14%), base metals 
and  article  thereof  (13%)  and  chemical  products  (12%).  Turkey’s  biggest  export  sector  was 
transport equipment (26%), followed by textiles and textile articles (19%) and machinery and 
appliances (17%). 

On the basis of this diverse set of goods, Turkey has a significant trade relationship with many 
Member States, almost all of which were affected by the general trend reflected in the overall 
figure in 2018, i.e. falling exports to and increasing imports from Turkey.  

1.2 Trade in agricultural goods 

In 2018, Turkey was the EU’s 7th largest supplier of agricultural goods, but is no longer in the 
top 10 export destination countries. The EU had a trade deficit in agriculture with Turkey of 
€1.3 billion,  considerably  widened  from  €823  million  in  2017  due  to  a  sharp  decline  in 
exports. 

EU agri-food exports to Turkey are well diversified, with only one category exceeding 10% of 
all extra-EU agri-food exports in  2018, namely live animals  (13%). Agri-food imports from 
Turkey  are  also  diverse,  with  the  top  category  ‘preparations  of  vegetables,  fruits,  nuts  and 
plants’ accounting for 19% of all imports.  

1.3 

Trade in Services and Foreign Direct investment (FDIs) 

The EU-Turkey Customs Union only covers trade in  industrial  goods and certain  processed 
agricultural products. Services and investment are not covered under the current agreement.  

As  regards  trade  in  services,  the  latest  data  available  cover  the  year  2017.  As  the  table  in 
Section  7  sets  out,  data  continue  to  show  a  substantial  trade  surplus  for  Turkey,  although 
down  from  earlier  years  in  large  part  due  to  the  decrease  in  Turkey-bound  tourism  in  the 
aftermath  of  the  attempted  coup  and  terrorist  attacks.  These  will  therefore  likely  show  a 
rebound  in  2018.  Besides  the  importance  of  the  tourism  sector,  however,  the  figures  also 
reflect the high barriers to enter the Turkish services market. 

239 

 
 
 
 
 
 
 
As for foreign direct investment (FDI), the EU remained by far the biggest source in Turkey, 
though the total FDI stock shrank significantly to €69 billion in 2017. While FDI flows with 
Turkey  are  relatively  volatile,  some  of  the  decrease  in  stock  is  likely  due  to  the  same 
instability  factors  that  affected  trade  in  2016  and  2017.  In  2017,  European  investment  in 
Turkey  was  along  the  same  limited  lines  as  in  the  previous  year  at  €1 billion,  down 
significantly  from  the  previous  trend.  Another  notable  development  over  the  longer  term  is 
the sustained increase of Turkish FDI in the EU, with stocks at €19 billion in 2017. 

ISSUES ADDRESSED IN THE COMMITTEE MEETINGS 

2 
The  36th  Customs  Union  Joint  Committee  (CUJC)  meetings  took  place  on  16  and  17  May 
2018  in  Ankara,  and  was  already  included  in  the  2018  FTA  Implementation  Report.  The 
parties discussed issues linked to the proper functioning of the Customs Union, including the 
following: 

  The  state  of  play  of  the  Commission’s  proposal  in  the  Council,  as  regards  future 

negotiations on the modernisation of the EU-Turkey Customs Union.  

 

Increasing  number  of  trade  barriers  and  breaches  of  the  Customs  Union by  Turkey, 
including  measures  such  as  additional  duties  imposed  on  imports  of  products  from 
third  countries  which,  however,  are  already  put  into  free  circulation  in  the  EU, 
surveillance  measures  of  certain  products,  export  restrictions  of  copper  and 
aluminium,  unnecessary  testing  requirements  and  customs  procedures,  Turkey’s 
localisation policy in the pharmaceutical sector, IPR enforcement, etc.  

  The  shortcomings  of  the  Intellectual  Property  Rights  (IPR)  enforcement  regime  in 
Turkey  and  the  new  international  exhaustion  regime  while  participating  in  the 
Customs Union with the EU. 

  Turkey’s  alignment  to  EU  technical  legislation  in  areas,  which  are  essential  for  the 

functioning of the Customs Union such as State aid. 

  Update on recent EU trade policy developments, in particular as regards negotiations 
of  free  trade  agreements  with  third  countries,  linked  to  Turkey’s  obligation  to  align 
with the EU’s commercial policy.  

  The non-discriminatory implementation of the Additional Protocol to the Association 

Agreement towards all Member States including the Republic of Cyprus. 

In addition, the 49th meeting of the EU-Turkey Customs Co-operation Committee (CCC) took 
place in Ankara on 29 November 2018. The main topics addressed by the Committee were the 
following: 

  Recent developments in relation to customs legislation. 

  Updates regarding rules of origin, including the state of play regarding their internal 
procedures  for  the  linkage  to  the  Regional  Convention  on  pan-Euro-Mediterranean 
preferential rules of origin. 

 

Implementation  issues  around  the  electronic  issuance  of  movement  certificates 
(A.TR, EUR.1, and EUR-MED). 

240 

 
 
 
 
  Trade  barriers  and  breaches  of  the  Customs  Union  by  Turkey  that  affect  customs, 
including  in  particular  the  requirement  of  proof  of  origin  applied  by  Turkey  and 
additional documentation requirements at customs.  

 

Information  exchange  on  recent  legislative  developments  and  on  the  risk  analysis 
customs enforcement of IPR in Turkey and in the EU. 

3 

SPECIFIC AREAS OF IMPORTANCE 

Turkey  had  a  difficult  year  2018,  as  the  economy  slowed  markedly  during  the  year  after 
strong growth in the preceding years. From 2013 to 2017, GDP grew by 5% a year on average 
and per capita income converged significantly with EU levels, from 52% in 2010 to 65% in 
2017.  However,  against  the  backdrop  of  Turkish  public  policy  choices,  investors  lost 
confidence  in  the  sustainability  of  this  boom,  which  led  to  a  sharp  deterioration  in  external 
financing conditions, and in turn to a rapid depreciation in the Turkish lira, high inflation and 
a  technical  recession  from  the  third  quarter  of  2018.  In  line  with  this,  the  current  account 
reversed to a surplus as imports contracted and exports increased. Over the entire year 2018, 
Turkey  still  recorded  a  current  account  deficit  of  3.6%  of  GDP,  but  the  trade  balance  in 
particular with the EU changed drastically to a now quite balanced relationship. 

Of  particular  importance  regarding  the  implementation  of  both  the  Customs  Union  and  the 
ECSC-Turkey  free  trade  agreement  for  coal,  iron  and  steel  products  in  2018  was  the 
imposition of safeguard measures. As a response to the 25% import duties on steel applied by 
the  United  States  from  23  March  2018,  both  Turkey  and  the  EU  initiated  a  safeguard 
procedure.  After  concluding  its  investigation,  the  European  Commission  instated  first  a 
provisional measure on 17 July 2018, and then definitive safeguard measures that entered into 
force on 2 February 2019. These take the form of a Tariff Rate Quota and a 25% out-of-quota 
duty  on  certain  steel  products,  and  were  designed  to  be  the  least  disturbing  to  trade  in 
accordance  with  WTO  rules  and  bilateral  agreements.  Turkey  on  20  September  2018  also 
adopted provisional safeguard measures and continued its investigation. A series of exchanges 
and consultations took place in 2018 in that regard. 

4 

PROGRESS MADE, MAIN OPEN ISSUES AND FOLLOW-UP ACTIONS 

As regards the implementation of the existing bilateral preferential trade framework, limited 
progress  was  achieved  in  2018  on  several  relatively  minor  issues,  such  as  the  rules  on 
management of tariff quotas.  

However, on balance Turkey created further market access barriers in breach of the Customs 
Union rules, and aggravated previous open issues in 2018. Overall, Turkey thus continued its 
course of maintaining and introducing trade barriers that also affect European companies.  

Turkey  has  notably  upheld  trade  barriers  that  breach  the  Customs  Union  agreement  in 
continuing  -  and  broadening  -  its  deviation  from  the  common  customs  tariff  through 
additional  duties  on  products  originating  outside  the  EU  or  Turkey’s  FTA  partners.  These 
additional duties by now cover a large part of all product lines that are subject to the Customs 
Union,  including  more  sophisticated  products  that  potentially  affect  not  only  logistics  and 
distribution,  but  also  assembly  in  the  EU.  In  addition,  given  this  practice  as  well  as  other 
documentation  requirements,  Turkey  imposes  a  proof  of  origin  contrary  to  Customs  Union 
rules. Other main open issues concern the continued localisation policy in the pharmaceutical 

241 

 
 
 
 
 
sector,  discrimination  against  EU  exports  of  tractors  and  export  restrictions  on  leather 
products. 

As reflected in the above, the European Commission has raised concerns about these barriers 
in various fora, including the Customs Union Joint Committee and other bilateral meetings as 
well as in written exchanges. It will continue to follow up on these and any arising issues in 
detail  with  the  Turkish  authorities,  as  well  as  all  relevant  stakeholders.  In  the  case  of  the 
localisation  requirements  in  the  pharmaceutical  sector  imposed  by  Turkey  that  are  in  clear 
breach not only of bilateral agreements, but also WTO rules, the European Commission, as a 
last resort, after repeated warnings, decided to bring this case to WTO dispute settlement and, 
on 2 April 2019, requested WTO consultations with Turkey. The case is ongoing. 

Finally,  another  area  of  concern  is  state  aid  control.  Turkey  has  not  adopted  the  necessary 
secondary  legislation,  and  therefore  there  is  no  control  of  state  aid,  contrary  to  Turkey’s 
obligations under the Customs Union Agreement. 

5 

CONCLUSIONS AND OUTLOOK 

Turkey’s obligation to align to the EU’s common customs tariff, as well as to EU technical 
legislation which are important for the free movement of goods, go much beyond classic trade 
agreements  and  thus  make  the  bilateral  trade  relationship  unique.  The  Customs  Union  has 
therefore led not only to significant increase in bilateral trade over the last 20 years, but also 
to important investment and production links between the two parties. However, the economic 
and trading environment has changed substantially since the  creation of the Customs Union 
and  it  has  become  less  well  equipped  to  deal  with  the  modern  day  challenges  of  trade 
integration. This is reflected in the open issues discussed above. The European Commission 
had therefore adopted on 21 December 2016 a proposal to modernise the Customs Union to 
improve  its  functioning  and  to  further  extend  the  scope  of  the  bilateral  preferential  trade 
arrangements in line with its approach to modern free trade agreements, also covering areas 
such as services, public procurement, specific rules for SMEs and sustainable development, as 
well  as  further  liberalisation  of  agricultural  products.  A  modernised  Customs  Union  would 
also  need  to  contain  an  effective  dispute  settlement  mechanism  to  address  the  increasing 
number of trade and market access problems faced by European companies.  

While  the  Commission  proposal  is  pending  adoption  by  the  Council  given  political 
circumstances, Turkish measures diverging from the present agreements have to be remedied, 
and in particular the present trend of increasing market access barriers has to be reversed. 

6. 

STATISTICS 

Merchandise trade EU28 2014-2018 
2015 

2014 

2016 

2017 

2018 

EU28 trade with Turkey (mio €) 

Imports 
Exports 
Balance 

Share Turkey in EU28 trade with Extra-EU28 

54.409 
74.757 
20.347 

61.696 
78.964 
17.269 

66.592 
77.919 
11.327 

69.784 
84.827 
15.043 

76.139 
77.270 
1.131 

Imports 
Exports 
Total (I+E) 

Imports 
Exports 
Total (I+E) 

3,2% 
4,4% 
3,8% 

3,6% 
4,4% 
4,0% 
Share EU28 in trade Turkey with world 
38,0% 
44,5% 
40,6% 

36,7% 
43,5% 
39,3% 

3,9% 
4,5% 
4,2% 

3,8% 
4,5% 
4,1% 

3,8% 
4,0% 
3,9% 

39,0% 
48,0% 
42,8% 

36,4% 
47,1% 
40,7% 

36,2% 
50,0% 
42,1% 

242 

 
 
 
 
 
  
 
  
  
  
  
 
  
  
  
  
Source Trade G2 Statistics/ISDB  
Trade EU28: Eurostat COMEXT;  Trade Turkey: IMF Dots 

Total merchandise trade EU28 with Turkey (mio €) 

Turkey 

2017 

2018 

Imports 
Exports 

Balance 
Total trade 
Source Trade G2 Statistics/ISDB from Eurostat COMEXT 

69.784 
84.827 

76.139 
77.270 

15.043 
154.610 

1.131 
153.409 

Agrifood trade EU28 with Turkey (mio €) 

Turkey 

2017 

2018 

Imports 
Exports 
Balance 
Total trade 
Source Trade G2 Statistics/ISDB from Eurostat COMEXT 

4.492 
3.669 
-823 
8.161 

4.482 
3.147 
-1.335 
7.629 

NAMA trade EU28 with Turkey (mio €) 

Turkey 

2017 

2018 

EU28 imports 
EU28 exports 

Balance 
Total trade 
Source Trade G2 Statistics/ISDB from Eurostat COMEXT 

65.292 
81.158 

71.657 
74.123 

15.866 
146.450 

2.466 
145.780 

Services trade EU28 with Turkey (mio €) 

Turkey 

2016 

2017 

Imports 
Exports 
Balance 
Total trade 
Source Trade G2 Statistics/ISDB from Eurostat BOP statistics 

14.041 
12.644 
-1.398 
26.685 

14.109 
12.557 
-1.552 
26.666 

Services trade EU28 with Turkey (mio €) 

25-mars-
19 

Growth 

mio € 
6.355 
-7.556 
-
13.912 
-1.201 

annual 
% 
9,1% 
-8,9% 

-0,8% 

Growth 

mio € 
-10 
-522 
-512 
-531 

annual 
% 
-0,2% 
-14,2% 

-6,5% 

Growth 

mio € 
6.365 
-7.035 
-
13.400 
-670 

annual 
% 
9,7% 
-8,7% 

-0,5% 

Growth 

mio € 
68 
-87 
-155 
-19 

annual 
% 
0,5% 
-0,7% 

-0,1% 

Imports 
Exports 
Balance 
Total trade 
Source Trade G2 Statistics/ISDB from Eurostat BOP statistics 

2013 

2014 

2015 

2016 

2017 

15.295 
10.387 
-4.908 
25.682 

15.890 
10.662 
-5.228 
26.551 

16.725 
13.055 
-3.670 
29.780 

14.041 
12.644 
-1.398 
26.685 

14.109 
12.557 
-1.552 
26.666 

FDI EU28 with Turkey (mio €) 

Inward 
Outward 

Inward 
Outward 
Source Trade G2 Statistics/ISDB from Eurostat BOP statistics 

2013 

2014 

2015 

2016 

2017 

FDI Stocks 

7.977 
62.288 

9.210 
66.889 

12.200 
77.723 

21.733 
75.921 

19.477 
68.701 

FDI Flows 

3.095 
5.947 

1.743 
4.727 

1.522 
12.364 

867 
1.132 

303 
1.042 

PART  IV:  ANNUAL  INFO  SHEET  ON  THE  IMPLEMENTATION  OF  THE 
(EPAs)  WITH  AFRICAN, 
ECONOMIC  PARTNERSHIP  AGREEMENTS 
CARRIBEAN AND PACIFIC COUNTRIES 

243 

 
 
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
244 

 
 
 
 
ANNUAL  INFO  SHEET  ON  THE  IMPLEMENTATION  OF  THE  ECONOMIC 
PARTNERSHIP  AGREEMENT  (EPA)  BETWEEN  THE  EU  AND  THE  SOUTHERN 
AFRICAN DEVELOPMENT COMMUNITY (SADC) 

1. 

INTRODUCTION 

The  EU-SADC  EPA  is  an  agreement  between  the  EU  and  six  countries  from  the  Southern 
African  Development  Community  (SADC):  Botswana,  Eswatini,  Lesotho,  Mozambique, 
Namibia  and  South  Africa.  It  was  signed  on  10  June  2016  and  entered  into  provisional 
application on 10 October 2016 for  all Parties to  the Agreement  except  for Mozambique.  It 
entered into provisional  application for Mozambique on 4 February 2018. Hence, 2018  was 
the first year in which all SADC EPA states fully implement the agreement.  

The EU-SADC EPA ("the Agreement") is the first and only regional EPA in Africa to be fully 
operational  (all  partners  are  implementing  the  tariff  cuts  foreseen  by  the  EPA).  The 
Agreement  replaces  all  the  trade  provisions  of  the  former  bilateral  Trade  and  Development 
Cooperation Agreement (TDCA) between the EU and South Africa. 

Under the EU-SADC EPA, the Southern African Customs Union (SACU)106 grants duty free 
and quota free treatment to 84.9% of products exported by the EU to the region. An additional 
12.9% of EU exports benefits from partial liberalisation (reduced tariffs or tariff rate quotas). 
As a least  developed country, Mozambique liberalises a smaller percentage of  exports from 
the EU. All SADC EPA States except South Africa receive duty free and quota free treatment 
for all their goods (except arms and ammunition) imported into the EU. South Africa receives 
such treatment for 96% of its exports to the EU and an additional 2.7% of exports from South 
Africa benefits from reduced tariffs or from preferential tariff rate quotas.  

2. 

EVOLUTION OF TRADE 

2.1 Trade in goods 

The EU remains the main trading partner for the six SADC EPA States, accounting for 24% 
of their exports (ahead of China with 8.5%, the US with 6% and India with 5.8%) and 25% of 
their imports (ahead of China with 16% and South Africa with 9.7%).  

Main destination for SADC EPA States’ exports within the EU are the UK (25%), Germany 
(24%),  Belgium  (18%)  and  the  Netherlands  (10%),  followed  by  Italy  (7.5%)  and  Spain 
(5.6%).  EU  exports  to  SADC  EPA  States  come  from  Germany  (36%),  the  Netherlands 
(9.5%), the UK (9%), Italy (8.2%) and France (6.8%).  

Total  trade  between  the  EU  and  SADC  EPA  States  has  been  increasing  since 
implementation of the EPA. In particular, EU imports from SADC EPA states have increased 
continuously over the past five years, while EU exports have evolved irregularly with a slight 
decrease  since  November  2016.  The  balance  of  trade  is  positive  for  SADC  EPA  states,  for 
both agrifood and non-agricultural trade, and even increasing since the implementation of the 
EPA. South Africa accounts for 83% of EU imports from and 94% of EU exports to SADC 
EPA  States.  The  trade  balance  with  South  Africa  is  positive  for  the  EU  but  the  surplus  has 
been shrinking (down to €100 million in 2018).   

106 Botswana, Eswatini, Lesotho, Namibia and South Africa 

245 

 
 
 
 
 
 
                                                 
In  2018,  EU  imports  from  SADC  EPA  States  increased  by  €1.5  billion  or  5.5%  to  €28.9 
billion, while EU exports to SADC EPA States slightly contracted by €98 million or 0.4% to 
€25.7 
EU 
billion. 
imports  from  Lesotho, 
Africa, 
South 
Mozambique 
and 
Namibia 
increased  or 
remained  stable,  while 
imports  from  Botswana 
and Eswatini  decreased. 
EU exports to Botswana 
Mozambique 
and 
increased, while exports 
to  Lesotho,  Namibia, 
South 
and 
Africa 
Eswatini decreased. 

In  2018,  imports  from  Botswana  decreased  by  €90  million  (-6.5%)  to  €1.3  billion  due  to  a 
decrease  in  diamond  exports  (-€101  million  or  -7.5%),  offset  only  slightly  by  re-exports  of 
aircraft (+€12 million). Exports of the only other significant export to the EU, fresh or frozen 
beef, decreased by €2 million to €28 million.  

EU  imports  from  Mozambique  increased  by  €203  million  (+12%)  to  €1.7  billion,  mostly 
fueled by increasing raw material exports, such as aluminium (+9.7%), mineral fuels (+25%), 
ores  (+30%)  and  salt  (+40%).  Main  exports  in  2018  were  aluminium  (€1  billion),  mineral 
fuels  (€431  million)  and  tobacco  products  (€120  million).  Other  agri-food  exports  in  2018 
were  crustaceans  (€31  million,  -17%),  sugar  (€16  million,  -46%)  and  cashew  nuts  (€11 
million, +76%).  

EU  imports  from  Namibia  have  increased  continuously  over  the  past  years  (from  €963 
million in 2014 to €1.3 billion in 2018). Most important exports in 2018 were copper (€528 
million,  +6%),  fish  and  crustaceans  (€341  million,  +6%),  diamonds  (€114  million,  -10%), 
zinc  (€110  million,  +9%)  and  grapes  (€65  million,  +28%).  Exports  of  inorganic  chemicals 
(Uranium) are down €61 million or 92%.  

Both  Lesotho  and  Eswatini  trade  mostly  with  South  Africa.  EU  imports  of  diamonds  from 
Lesotho increased by €81 million (or 30%) to €345 million in 2018 – accounting for 98% of 
Lesotho's total exports to the EU. The remaining exports are mostly apparel and clothing, and 
some  tropical  fruits.  EU  imports  of  sugar  from  Eswatini  (accounting  for  50%  of  total  EU 
imports) decreased for the fifth year in a row, by €24million or -42.6%. However, Eswatini is 
slowly diversifying its exports to the EU, with increasing exports of citrus fruit (+€3 million, 
+72%),  rum  (+€4  million,  +435%)  and  exports  of  prepared  or  preserved  fruits  and  nuts, 
including fruit juices (+€2 million, +21%). 

EU imports from South Africa continued to increase in 2018, by €1.3 billion or 6% to a new 
total  of  €24  billion.  Main  imports  in  2018  were  precious  stones  and  metals  (€8  billion, 
+6.4%), motor vehicles (€5.2 billion, +24%), edible fruits and nuts (€1.9 billion, +5%), ores, 
slag and ash (€1.5 billion, +4%), machinery and mechanical appliances (€1.2 billion, +2.8%) 
and iron and steel (€1.1 billion, -9.7%) 

246 

 
 
 
 
 
 
 
 
Strongest  increases  in  absolute  terms:  motor  vehicles  (+€1  billion  or  24%),  precious  stones 
and  metals  (+€481  million  or  6%)  and  chemical  products  (+€146  or  159%).  Strongest 
decreases  in  absolute  terms:  mineral  fuels  (-€218  million  or  33%),  iron  and  steel  (-€117 
million or 10%) and electrical machinery and equipment (-€40 million or 25%).  

Main agri-food imports from South Africa in 2018 were fresh grapes (€471 million, -1.5%), 
wine (€405 million, +7.2%) and fresh sweet oranges (€333 million, -5.2%).  

Cuttle  fish  and  squid  (+€45  million), 
maize (+€41), lemons (+€32 million), 
avocados  (+€26)  and  apples  (+€25 
million) saw the strongest increases in 
absolute  values.  In  relative  terms107, 
exports of maize (+1413%), fresh cut 
flowers 
juice 
(+118%) and citrus fruit (+72%) went 
up the most. South Africa faced slight 
losses 
its 
exports  of  oranges  (-€18  million), 
fresh  pears  (-€15  million)  and  other 

in  absolute  values  for 

(+472%),  grapefruit 

fresh tropical fruits (-€12 million). 

South Africa has benefited from new and additional preferences for a number of its agri-
food  exports  to  the  EU.  Exports  of 
wine  have  increased  strongly  to  €405 
million in 2018, due to expanded tariff 
rate  quotas.  Fill  rates  for  2018  were 
95%.  Sugar  exports 
from  South 
Africa  have  considerably  increased 
due to new zero duty tariff rate quotas: 
while  there  were  only  2,400  tonnes 
imported  in  2016,  in  2018  the  tariff 
rate  quotas  of  150,000  tonnes  were 
fully used by South African operators. 
Export  earnings 
in  values  have 
decreased  slightly  in  2018  compared 
to 2017 (from €57 million to €50 million) due to market prices. Finally, South Africa fully or 
nearly  fully  used  the  EU  tariff  rate  quotas  for  frozen  orange  juice  and  apple  juice.  Other 
tariff rates quotas were not used or used only partially. 

TRQs granted and TRQ usage for South African exports to the EU in 2018 

Description 

Volume of TRQ in 2018 
(t) 

Imports in 2018 
(t) 

2018 quota fill  

Skimmed milk powder 

Butter 

Strawberries, frozen 

Cane sugar for refining and white sugar 
Cane sugar for refining 

White cristalline powder 

500 

500 

392,5 

50.000 
100.000 

500 

0 

0 

0 

49.725 
100.000 

0 

0,0% 

0,0% 

0,0% 

99,4% 
100,0% 

0,0% 

107 For South African exports with a value above €10 million 

247 

 
 
 
 
 
 
                                                 
White cristalline powder 

Citrus jams  
Canned fruit, except tropical canned fruit 

Tropical canned fruit 

Frozen orange juice 

Apple juice 

Active yeast 

Wines - quota A (in hectolitres) 
Wines - quota B  (in hectolitres) 
Source: DG AGRI, DG TAXUD 

500 

100 
57.156 

3.080 

1.078 

3.712 

350 

784.826 
336.354 

0 

0 
25.406 

237 

1.078 

3.199 

74 

722.816 
336.354 

0% 

0% 
44,5% 

7,7% 

100% 

86,2% 

21,2% 

92,1% 
100% 

Exports  of  SADC  EPA  States  to  the  EU  are  still  little  diversified.  The  share  of  fuels, 
mining products and precious stones and metals in total SADC exports to the EU has slightly 
since 
decreased 
implementation  of 
the 
EPA,  but  nevertheless 
dominant. 
remains 
Exports 
largely 
are 
concentrated  in  a  few 
products:  the  share  of 
the 
export 
products  in  their  total 
exports  to  the  EU  is 
relatively  low  for  South 
but 
Africa 
extremely 
for 
(99.7%), 
Botswana 
(99.9%)  and 
Lesotho 
Mozambique 
(94.2%). 
Eswatini  (88.8%)  and 

(46.4%), 
high 

top 

10 

Namibia (87.3%) are showing signs of diversification. 

Preference  utilization  rates  (PUR)  for  exports  to  the  EU  are  in  the  92-99%  range  for 
Botswana, Lesotho, Mozambique and Namibia. They were a bit lower for Eswatini and South 
Africa in 2018 where they stood at about 86%. 

In 2018, total EU exports to SADC EPA States were €25.7 billion. EU exports to Botswana, 
Eswatini,  Lesotho,  Mozambique  and  Namibia  increased  by  €159  million  (12%)  to  €1.51 
billion, while EU exports to  South  Africa decreased by €257 million  to  €24.2 billion. Main 
exports were machinery and mechanical appliances (€5.3 billion, -2%), motor vehicles (€4.5 
billion, -3.6%), electrical machinery and equipment (€2.5 billion, -1.4%) and pharmaceutical 
products (€1.2 billion, +0.3%).  

Main  increases  in  exports  to  SADC  EPA  States  in  absolute  terms:  mineral  fuels  (+€125 
million, +13%), precious stones and metals (+€92 million, +29%), inorganic chemicals (+€55 
million, +15%), plastics (+€49 million, +5%) and iron and steel (+€47 million, +16%). Main 
increases in relative terms108: ships, boats and floating structures (+102%), live trees and other 
plants  (+94%),  pulp  of  wood  (+57%),  fish  (+41%),  precious  stones  and  metals  (+29%)  and 
sugar (+22.5%)  

108 For EU exports of products/product groups with a value of at least €10 million or more 

248 

 
 
 
 
 
 
                                                 
Exports of aircraft (-€200 million, -61%), motor vehicles (-€166 million, -3.6%), machinery 
and mechanical appliances (-€108 million, -2%) and cereals (-€84 million, -34%) have shown 
the largest absolute losses in 2018. In relative terms109, exports of aircrafts (-61%), products 
of animal origin (-40%), animal feed (-32%) and diary produce (-23%) decreased the most.  

According to South African statistics, preference utilization rates (PUR) for EU exports to 
South  Africa  (hence  to  SACU  overall)  stood  at  around  64%  in  2018  compared  to  60%  in 
2017.  

EU agri-food exports account  for 7.7% of total  exports to SADC EPA states. EU agrifood 
exports to SADC EPA states shrank by €94 million or 4.8% in 2018. Main agri-food exports 
in 2018 were wheat (€160 million), whiskies (€154 million), food preparations (€100 million), 
frozen chicken parts (€80 million) and sunflower oil (€73 million).  

Export increases in absolute values were highest for beer (+€32 million), spirits obtained by 
distilling  grape  wine  or  marc  (+€13  million)  and  food  preparations  (+€12.5  million).  In 
relative terms, apple juice (+1113%), gin (+191%) and beer (+158%) increased the most.  

Export decreases in absolute terms were highest for wheat (-€78 million, -33%), animal feed 
(-€34 million, -32%), whiskies (-€17 million, -10%), sunflower oil (-€14 million, -65%) and 
cheese (-€12 million, -46%). In relative terms, sunflower oil (-65%), milk and cream (-63%) 
and crude soya oil (-51%) decreased the most.  

Since 2015, SADC EPA States poultry imports from the EU have decreased dramatically by 
more than 72%. The adoption of anti-dumping and safeguard measures by SADC against EU 
imports,  as  well  as  bans  by  South  Africa  allegedly  based  on  SPS  considerations  are  behind 
this trend.  

Even though the available data for the use of TRQs granted by SACU to the EU do not cover 
the whole year 2018, they indicate high use of the quotas for pork, pig fat, butter and wheat.  

Usage of TRQs granted by SACU to the EU from 1 January to 31 August 2018 

Product 

Annual quota in 2018 (t) 

Quota fill till 31 August 2018 (t) 

Pork 
Pig fat 
Butter 
Cheese 
Wheat 
Barley 
Cereal Based Food Preparations 
Ice cream 
Mortadella Bologna 
Source: Ministry of Investment, Trade and Industry, Republic of Botswana 

1 500 
200 
500 
7 700 
300 000 
10 000 
2 300 
150 
100 

2.2 Trade in services 

1 275 
140 
350 
2 377 
264 495 
0 
0 
80 
0 

The EPA does not cover trade in services. Total services trade with  South Africa increased 
by  8.7%  to  €14.5  billion  in  2017  (latest  year  for  which  data  is  available),  with  EU  imports 

109 For EU exports of products/product groups with a value of at least €10 million or more 

249 

 
 
 
 
 
 
 
 
 
 
                                                 
from South Africa increasing by 5% to €5.4 billion and EU exports increasing by 11% to €9.1 
billion. The balance of trade is positive for the EU and increasing.  

Trade  in  services  with  Botswana,  Eswatini,  Lesotho,  Mozambique  and  Namibia  is 
marginal: €583 million with Botswana (+58%), €153 with Eswatini (-7%), €12 million with 
Lesotho  (+66.5%),  €716  million  with  Mozambique  (-5.5%)  and  €669  million  with  Namibia 
(+15%) (Figures for 2017). EU services imports from Botswana and Namibia are increasing 
(mostly tourism), albeit from very low levels.  

2.3 Foreign Direct Investment (FDI) 

The  EU-SADC  EPA  does  not  contain  provisions  on  investment.  Most  EU  investment  is 
concentrated in  South Africa, with  current  stocks of  €59.8 billion.  EU investment  in  South 
Africa  has  slowed  down  since  2013.  According  to  Eurostat,  FDI  inflows  in  2017  were 
negative,  at  -€8.4  billion  (taking  into  account  de-commitments).  New  commitments, 
according  to  South  African  national  statistics,  amounted  to  €1.16  billion  in  2017  and  €6.2 
billion in 2018.   

EU presence (more than 2,000 companies) is spread over almost all sectors of the economy. 
The  largest  shares  of  FDI  stock  are  in  finance  (45%),  mining  (20%),  manufacturing  (20%) 
and transport (10%).  FDI stock in  finance and mining has stalled in  recent  years due to  the 
economic  situation  and  legislative  uncertainty;  most  new  investment  has  taken  place  in 
manufacturing (mainly in the automotive, machinery and food sectors). 

A number of new investments were announced in 2017-2019, including:  

  BMW completed a €350 million (ZAR 6.2 billion) investment in its assembly plant 

towards the X3 model which launched in 2018. 

  Mercedes-Benz announced in 2018 that it will invest €600 million (ZAR 10 billion) in 
expanding its South African plant to accommodate production of the new generation 
of C-Class model that will now be exported to the EU instead of the United States. 

  VW invested € 350 million  (ZAR 6.1 billion) in its  new plant to launch in  2018 the 

 

new Polo. 
In the renewables sector, 27 new projects  were signed in  2018 under the 4th bidding 
round  of  the  South  African  Renewable  Energy  Independent  Power  Producer 
Procurement  Programme  (REIPPP),  with  a  total  planned  investment  of  €3.3  billion 
(ZAR 56 billion) – an important part of which is European direct investment.  

Since 2011, a total of 92 projects, amounting to €17 billion, have been signed, with a 
number of prominent EU contractors (often setting up subsidiary companies in South 
Africa),  including:  Vestas  (Denmark);  Acciona,  ACS  Cobra,  Abengoa,  Iberdrola, 
Gestamp  (Spain);  Juwi  Renewable  Energies  and  Nordex  Energy  (Germany),  Enel 
Green  Power  and  Temi  Energia  (Italy).  The  main  suppliers  of  wind  towers  and 
turbines  and  PV  equipment  include  Vestas  (Denmark),  Siemens,  SMA  Solar  Tech, 
AEG and Nordex (German), ABB (Sweden), 3 Sun (UK). 

The penetration of small and medium sized companies (SMEs) in the South African economy 
is  still  low.  Nevertheless,  in  2018  different  EU  SMEs  have  again  announced  investment  in 
South Africa:  

250 

 
 
 
 
 
 
 

Industrial  silicon  tubes:  Spanish  company  Venair  has  opened  in  2018  its  first 
subsidiary in South Africa. 

  Spunmelt  nonwoven:  Czech  company  Pegas  Nonvwovens,  the  largest  producer  of 
spunmelt  nonwovens  in  Europe,  the  Middle  East  and  Africa,  is  investing  ZAR  1.3 
billion (production to start in 2019). 

  PV  module  manufacturing:  In  2018,  Seraphim  Southern  Africa,  a  joint  venture  by 
Chinese Jiangsu Seraphim Solar System Co. Ltd. and Spanish ILB Helios (with IDC 
collaboration), will establish a €12.3 billion new PV module manufacturing factory in 
East London IDZ. 

  Automotive components: Austrian automotive supplier the Polytec Group is investing 
€10m  in  a  new  parts  production  plant  in  South  Africa  to  supply  German  OEM. 
Production is scheduled to start in for 2021. 

South African FDI in the EU stood at €12.1 billion in 2017, with  also negative inflows of -
€31 million. 

FDI stocks in Botswana, Eswatini, Lesotho, Mozambique and Namibia are mostly tied to 
extractive  industries.  EU  FDI  stocks  are  highest  in  Mozambique,  at  €1.9  billion,  with  new 
inflows of  €84 million  in  2017. Dominant  investment partner for all five countries  is  South 
Africa.  In  Namibia  (EU  investment  stock  in  2017  was  €283  million),  Spain  is  mostly 
investing  in  the  fishery  sector  and  the  UK  in  extractives  (zinc  and  copper).  Recent  EU 
investments  were  also  in  renewable  energy,  such  as  the  Ombepo  wind  farm  and  two  major 
solar  plants,  funded  by  a  French-Namibian  joint  venture.  French  Peugeot  built  an  assembly 
plant, inaugurated in 2018; Namibian-assembled vehicles will be sold mainly within SACU. 

The  EU-SADC  EPA  facilitating  the  localisation  and  transformation  of  the  South  African  automotive 
sector 
South Africa  is the dominant  vehicle producer on the African continent, with an automotive industry 
that  is  highly  export  oriented  and  FDI  dependant;  thus  strategically  relying  on  modern  free  trade 
agreements to flourish. 

South Africa now produces more than 600,000 vehicles annually, of which more than half are exported. 
Exports  of  motor  vehicles,  parts  and  accessories  contribute  more  than  13%  to  the  national  export 
basket.  More  than  half  of  South  African  vehicles  exports  are  to  the  EU  (66%  in  2018).  EU  imports  of 
motor  vehicles  and  components  from  South  Africa  increased  to  €5.1  billion  in  2018  (up  from  €1.8 
billion in 2014). Motor cars for passenger transport account for €4.1 billion of this sum.  

The automotive sector is therefore highly anchored in the EU-SADC EPA which provides for duty free 
export of cars and components to the EU. Four of the seven Original Equipment Manufacturers (OEM) 
present in South Africa are European (see newly announced investments above). 

The  automotive  industry  not  only  impacts  directly  on  the  GDP  (7%  GDP)  and  employment  (+110,000 
jobs),  it  increasingly  plays  an  important  strategic  and  catalytic  role  in  the  overall  South  African 
economy.  Through  its  integration  into  the  global  supply  chains  of  OEMs,  the  sector  contributes  to 
overall skills development, technology penetration and innovation intensity in the economy. 

A  number  of  initiatives  are  underway  to  strengthen  the  localisation  and  foster  transformation  of  the 
automotive industry in the country. The Automotive Supply Chain Competitiveness Initiative (ASCCI) is 
a collaborative initiative between the OEMs, suppliers, government and labour, with the specific task of 
coordinating  supply  chain  development  activities  in  the  South  African  auto  industry,  to  increase  the 
share  and  value  added  of  locally  based  suppliers.  In  Gauteng  province,  the  automotive  incubation 
centres  create  hubs  linked  to  a  single  OEM  where  the  participants  are  subcontracted  to  Tier  1 

251 

 
 
 
 
 
 
 
component  suppliers  who  provide  technical  mentoring  for  black  entrepreneurs  or  black-owned 
suppliers until they are ready to supply directly to the OEM’s production line. 

3. 

ISSUES ADDRESSED IN THE ANNUAL EPA COMMITTEE MEETING 

Since the EPA entered into force in October 2016, the Trade and Development Committee 
(at senior official level) has met five times (in February 2017, October 2017, February 2018, 
November 2018 and February 2019). Moreover, on 19 February 2019 the first meeting of the 
EU-SADC EPA Joint Council (at ministerial level) took place. This first meeting of the Joint 
Council in particular allowed for the adoption of the ‘institutional set-up’ of the Agreement, 
notably the rules of procedure for the bodies under the agreement and the procedural rules for 
dispute  settlement.  Moreover,  at  its  latest  meeting,  the  Trade  and  Development  Committee 
also adopted the list of arbitrators for dispute settlement.  

Other issues discussed at the first meeting of the Joint Council and the different meetings of 
the  Trade  and  Development  Committee  included:  differences  of  interpretation  on  specific 
provisions of the Agreement (in particular on the bilateral safeguard measure against imports 
of  EU  poultry  products  and  on  tariff  dismantling  concerning  certain  textile  products),  the 
setting  up  of  annual  meetings  with  non-state  actors  on  the  implementation  of  the  EPA, 
monitoring  of  the  EPA,  tariff  rate  quota  management,  cumulation  of  origin110,  trade-related 
development cooperation  and the agricultural safeguard.  

Since the entry into provisional application, there have also been two meetings of the Special 
Committee  on  Trade  Facilitation  and  Customs  Cooperation  (SCTFCC),  three  meetings 
of the Special Committee on Geographical Indications and Trade in Wines and Spirits (a 
bilateral  Committee  with  South  Africa  only)  and  one  meeting  of  the  Agricultural 
Partnership. The meeting of the SCTFCC allowed partners to advance preparatory work for 
the start of diagonal cumulation of origin, but this work is not finalised yet. The meetings of 
the  Special  Committee  on  Geographical  Indications  and  Trade  in  Wines  and  Spirits  in 
particular discussed updates on protection of different Geographical Indications (GIs) and on 
the  divergent  interpretation  concerning  the  laws  and  regulations  governing  oenological 
practices and restrictions in South Africa. 

In November 2018, non-state actors from both the EU and SADC held a second Civil Society 
Dialogue  Meeting  in  Windhoek,  Namibia.  Stakeholders  elaborated  recommendations  on  a 
range of trade and EPA related topics relevant to EPA implementation and monitoring.  

4. 

SPECIFIC AREAS OF IMPORTANCE 

Sanitary  and  Phytosanitary  Standards:  SPS  issues  concern  primarily  EU  trade  with  South 
Africa  and  are  discussed  mostly  bilaterally  with  South  Africa.  Foremost  among  the  issues 
related to the EU exports was the suspension of nearly all exports of EU poultry (which had 
reached over €200 billion in  2015 and 2016) by  South  Africa following the avian influenza 
(HPAI) outbreaks of the winter of 2016-2017. The Commission has been actively pressuring 
the  South  African  authorities  to  recognise  the  HPAI-free  status  of  Member  States  and  to 

110 SADC EPA States have the possibility to use non-originating materials through the rules on cumulation of origin. This 
means  that  in  certain  circumstances,  a  factory  in  for  example  Botswana  can  use  materials  from  another  country  and 
further  process  them.  In  calculating  whether  the  final  product  can  be  considered  to  originate  in  Botswana  within  the 
meaning of the EPA, the materials from the other country are considered to be Botswana inputs and count towards the 
originating status of the final product. The SADC EPA allows SADC EPA States to cumulate with originating materials 
products from other countries party to the EPA, as well as many other countries (ACP and others). 

252 

 
 
 
 
 
                                                 
recognise  regionalisation  in  future  outbreaks  instead  of  imposing  country-wide  bans. 
However, South Africa has made the re-opening of market conditional on audit visits to EU 
Member States, some of which took place in 2018. On that basis, South Africa has reopened 
trade  from  two  of  the  eight  banned  Member  States,  but  it  has  not  indicated  how  it  plans  to 
proceed  for  the  remaining  six  Member  States.  As  regards  to  South  African  exports,  South 
Africa regained market access on the EU territory for Ostrich meat in March 2019 (Annex of 
Decision 2011/163). 

Development  Cooperation:  Trade-related  technical  assistance  and  other  relevant  support 
measures  are  an  integral  part  of  the  EPA.  Regional  economic  integration  was  a  key  focal 
sector  under  the  10th  European  Development  Fund  (EDF)  for  the  SADC  region.111  In  2018, 
implementation  of  the  Trade  Related  Facility  (TRF)  (€32  million)  continued,  supporting 
national  administrations  to  better  implement  regional  integration  policies  at  national  level, 
such as the SADC Trade Protocol. 

SADC  Member  States  currently  also  implement  the  Eastern  and  Southern  Africa 
Transport and Transit Facilitation Programme (€18 million): This programme promotes 
the  implementation  of  harmonised  road  transport  policies,  laws,  regulations,  systems  and 
standards in the countries of the EA-SA region with the aim to facilitate increased trade. 

2018 was a transition phase, with the Regional Integration Support Programme (€20 million) 
under the 10th EDF coming to an end and a number of regional programmes to support trade 
and investment in the SADC region under the 11th EDF currently in the pipeline:  

EU-SADC  Support  to Improving  the  Investment  and  the  Business  Environment  in  the 
SADC region (SIBE) (€14 million): The programme will support the implementation of the 
SADC protocol on investment  and finance. This  programme will target  the improvement of 
the investment policy framework and harmonisation in the region to facilitate and enhanced 
integration of financial markets.  

EU- SADC Support to Industrialisation and Productive Sectors in SADC Region (SIPS) 
(€18  million):  This  programme  will  support  the  development  of  two  regional  value  chains 
(leather  and  anti-retroviral)  through  the  enhancement  of  the  policy  and  regulatory 
environment  along  these  two  value  chains  and  the  improvement  of  the  private  sector 
participation.  

EU-SADC Trade Facilitation Programme (TFP) (€15 million): this programme will aim at 
reducing  the  cost  of  intraregional  trade  by  enhancing  the  efficiency  of  border  posts.  It  will 
harness the benefits from the EU-SADC Economic Partnership Agreement (EPA) as well as 
support implementation of trade facilitation measures at corridor level  

Furthermore, national programmes to support EPA implementation more specifically are also 
under preparation: 

Each SADC EPA State has drawn up, jointly with the EU,  National EPA Implementation 
Plans  (NEIPs)  (some  are  still  in  the  process  of  being  finalized).  The  purpose  is  to  identify 
necessary steps and measures to fully implement the EPA and maximize the contribution of 
the EPA to long-term sustainable development. Under the 11th EDF, the EU will support the 

111  More 

on 

the  European  Development  Fund: 

https://ec.europa.eu/europeaid/funding/funding-instruments-

programming/funding-instruments/european-development-fund_en  

253 

 
 
 
 
 
 
 
 
 
 
                                                 
operationalization  of  the  NEIPs  with  €30  million  in  Botswana,  Eswatini,  Lesotho, 
Mozambique  and  Namibia.  Under  the  Development  Cooperation  Instrument  (DCI),  €10 
million have been earmarked for the same purpose to South Africa.  

An EPA outreach project in South Africa ended in February 2018 with great results, such as 
the SADC EPA outreach website, bringing together user-friendly and up-to-date information 
on  the  EPA  from  the  different  South  African  implementing  institutions.  The  project  also 
successfully  organized  the  first  civil  society  forum  in  2017.  A  follow-up  project  (EU  SA 
Partners  for  Growth,  €3.5  million)  was  launched  in  October  2018,  aiming  at  maximising 
bilateral trade and investment flows and strengthening EPA implementation.  

Finally, the EU maintains strong support to economic development at bilateral level in all six 
SADC  EPA  States.  The  large  bilateral  portfolios  in  the  six  countries  include  projects  on 
employment  promotion,  vocational  education,  private  sector  development,  SME  promotion, 
agricultural  value  chains,  as  well  as  renewable  energy  and  transport  infrastructure,  among 
others. 

5. 

PROGRESS MADE, MAIN OPEN ISSUES AND FOLLOW-UP ACTIONS 

2018  marks  the  first  year  in  which  the  Agreement  was  provisionally  applied  between  all 
parties, including Mozambique. Moreover, in the beginning of 2019, the Joint Council and the 
Trade and Development Committee adopted the institutional set-up of the Agreement. There 
are a number of outstanding issues with regard to the implementation of the EU-SADC EPA, 
as well as challenges ahead. 

The possibility to 'cumulate origin' between SADC EPA States, one of the key benefits of the 
Agreement,  is  not  active  yet.  Cumulation  of  origin  will  allow  SADC  EPA  states  to  fulfil 
origin requirements jointly and hence boost regional value chains. SADC EPA States have to 
notify  (orally  or  in  writing)  the  administrative  cooperation  agreements  (a  prerequisite  for 
cumulating origin) that they have already put in place.  

In  addition,  differences  of  views  about  the  interpretation  of  certain  provisions  of  the 
Agreement  will  need  to  be  resolved,  particularly  on  a  SACU  safeguard  measure,  based  on 
Article 34 of the EPA, on poultry imports from the EU and on the SACU tariffs that apply to 
specific textiles imports from the EU. The fact that the EPA’s chapter on dispute settlement 
and avoidance is now fully operational may be helpful in this regard. 

On  SPS  issues,  South  Africa  regained  market  access  on  the  EU  territory  for  Ostrich  meat 
(Annex of Decision 2011/163). 

Finally,  work  is  ongoing  to  agree  a  mechanism  to  monitor  the  operation  and  impact  of  the 
Agreement  and  on  a  way  to  regularly  involve  non-state  actors  from  all  Parties  in  the 
monitoring process. 

6. 

CONCLUSIONS AND OUTLOOK 

Implementation of the EU-SADC EPA has reached full speed, with the parties progressing on 
multiple issues from the institutional set-up of the agreement to monitoring and civil society 
involvement.  Trade  figures  are  also  positive,  as  SADC  EPA  States'  exports  to  the  EU  are 
mostly increasing. In particular, South Africa is clearly benefitting from newly granted tariff 
and TRQ concessions. However, there are trade irritants particularly for EU exports to South 

254 

 
 
 
 
 
 
 
 
Africa,  poultry  being  the  main  priority,  which  the  parties  will  need  to  resolve  for  the 
agreement to become successful.  In June 2019, the EU decided to request consultation with 
SACU under the bilateral dispute settlement regime to address the poultry issue.  

7. 

STATISTICS 

SADC EPA States (aggregate): 

Merchandise trade EU28 with SADC EPA States 2014-2018 

2014 

2015 

2016 

2017 

2018 

EU28 trade with SADC EPA States (mio €) 
Imports 
Exports 
Balance 
Share SADC EPA States in EU28 trade with Extra-EU28 
Imports 
Exports 
Total (I+E) 

Source Trade G2 Statistics/ISDB  
Trade EU28: Eurostat COMEXT;  Trade EPA SADC: IMF Dots 

23.088 
25.124 
2.036 

1,4% 
1,5% 
1,4% 

23.769 
27.164 
3.395 

1,4% 
1,5% 
1,4% 

27.917 
24.442 
-3.475 

1,6% 
1,4% 
1,5% 

27.436 
25.800 
-1.636 

1,5% 
1,4% 
1,4% 

28.952 
25.702 
-3.251 

1,5% 
1,3% 
1,4% 
25-mars-19 

Growth of merchandise trade EU28 with SADC EPA States (mio €) 

EPA SADC 

Imports 
Exports 
Balance 
Total trade 
Source Trade G2 Statistics/ISDB from Eurostat COMEXT 

2017 

2018 

27.436 
25.800 
-1.636 
53.235 

28.952 
25.702 
-3.251 
54.654 

Growth 

mio € 

1.516 
-98 
-1.614 
1.418 

annual % 
5,5% 
-0,4% 

2,7% 

Agrifood trade EU28 with SADC EPA States (mio €) 

EPA SADC 

Imports 
Exports 
Balance 
Total trade 
Source Trade G2 Statistics/ISDB from Eurostat COMEXT 

2017 

2018 

3.078 
1.941 
-1.138 
5.019 

3.254 
1.847 
-1.407 
5.101 

Growth 

mio € 

176 
-94 
-269 
82 

annual % 
5,7% 
-4,8% 

1,6% 

NAMA trade EU28 with SADC EPA States (mio €) 

EPA SADC 

EU28 imports 
EU28 exports 
Balance 
Total trade 
Source Trade G2 Statistics/ISDB from Eurostat COMEXT 

South Africa:  

2017 

2018 

24.357 
23.859 
-499 
48.216 

25.698 
23.854 
-1.843 
49.552 

Growth 

mio € 

1.340 
-4 
-1.345 
1.336 

annual % 
5,5% 
0,0% 

2,8% 

Merchandise trade EU28 with South Africa 2014-2018 

2014 

2015 

2016 

2017 

2018 

EU28 trade with South Africa (mio €) 
Imports 
Exports 
Balance 
Share South Africa in EU28 trade with Extra-EU28 
Imports 
Exports 
Total (I+E) 
Share EU28 in trade South Africa with world 
Imports 
Exports 
Total (I+E) 

Source Trade G2 Statistics/ISDB  
Trade EU28: Eurostat COMEXT;  Trade South Africa: IMF Dots 

18.538 
23.331 
4.794 

1,1% 
1,4% 
1,2% 

27,9% 
20,0% 
24,2% 

19.399 
25.455 
6.056 

1,1% 
1,4% 
1,3% 

29,5% 
20,8% 
25,3% 

22.970 
22.995 
25 

1,3% 
1,3% 
1,3% 

31,0% 
22,9% 
27,1% 

22.722 
24.447 
1.725 

1,2% 
1,3% 
1,3% 

30,9% 
22,2% 
26,5% 

24.070 
24.190 
120 

1,2% 
1,2% 
1,2% 

29,0% 
23,3% 
26,3% 
25-mars-19 

Total merchandise trade EU28 with South Africa (mio €) 

South Africa 

2017 

2018 

Growth 

mio € 

annual 
% 

255 

 
 
 
  
 
  
  
  
  
 
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
 
  
 
  
  
  
  
 
  
  
  
  
  
  
  
  
  
  
  
  
  
Imports 
Exports 
Balance 
Total trade 
Source Trade G2 Statistics/ISDB from Eurostat COMEXT 

22.722 
24.447 
1.725 
47.169 

24.070 
24.190 
120 
48.260 

1.348 
-257 
-1.605 
1.090 

5,9% 
-1,1% 

2,3% 

Agrifood trade EU28 with South Africa (mio €) 

South Africa 

2017 

2018 

Imports 
Exports 
Balance 
Total trade 
Source Trade G2 Statistics/ISDB from Eurostat COMEXT 

2.705 
1.780 
-925 
4.485 

2.898 
1.711 
-1.187 
4.609 

NAMA trade EU28 with South Africa (mio €) 

Growth 

mio € 

193 
-69 
-262 
124 

annual 
% 
7,1% 
-3,9% 

2,8% 

South Africa 

EU28 imports 
EU28 exports 
Balance 
Total trade 
Source Trade G2 Statistics/ISDB from Eurostat COMEXT 

2017 

2018 

20.017 
22.667 
2.650 
42.684 

21.171 
22.479 
1.307 
43.650 

Growth 

mio € 

1.155 
-188 
-1.343 
966 

annual 
% 
5,8% 
-0,8% 

2,3% 

Growth of Services trade EU28 with South Africa (mio €) 

South Africa 

Imports 
Exports 
Balance 
Total trade 
Source Trade G2 Statistics/ISDB from Eurostat BOP statistics 

2016 

2017 

5.109 
8.207 
3.099 
13.316 

5.387 
9.086 
3.699 
14.473 

Growth 

mio € 

278 
879 
600 
1.157 

annual 
% 
5,4% 
10,7% 

8,7% 

Total Services trade EU28 with South Africa (mio €) 

Imports 
Exports 
Balance 
Total trade 
Source Trade G2 Statistics/ISDB from Eurostat BOP statistics 

2013 

2014 

2015 

2016 

2017 

4.449 
7.232 
2.783 
11.681 

4.361 
7.180 
2.818 
11.541 

5.310 
8.446 
3.136 
13.757 

5.109 
8.207 
3.099 
13.316 

5.387 
9.086 
3.699 
14.473 

Foreign Direct Investment (FDI) EU28 with South Africa (mio €) 

Inward 
Outward 

Inward 
Outward 
Source Trade G2 Statistics/ISDB from Eurostat BOP statistics 

Botswana:  

FDI Stocks 

FDI Flows 

2013 

2014 

2015 

2016 

2017 

7.698 
58.872 

12.014 
59.946 

11.521 
96.298 

11.796 
70.081 

-404 
2.046 

698 
4.034 

4 
22.611 

4.988 
-10.865 

12.116 
59.787 

-31 
-8.433 

Merchandise trade EU28 with Botswana 2014-2018 
2015 

2014 

2016 

2017 

2018 

EU28 trade with Botswana (mio €) 
Imports 
Exports 
Balance 
Share Botswana in EU28 trade with Extra-EU28 
Imports 
Exports 
Total (I+E) 
Share EU28 in trade Botswana with world 
Imports 
Exports 
Total (I+E) 

Source Trade G2 Statistics/ISDB  
Trade EU28: Eurostat COMEXT;  Trade Botswana: IMF Dots 

1.822 
273 
-1.549 

0,1% 
0,0% 
0,1% 

6,5% 
28,0% 
17,3% 

1.503 
275 
-1.228 

0,1% 
0,0% 
0,1% 

5,5% 
22,2% 
13,0% 

2.198 
331 
-1.868 

0,1% 
0,0% 
0,1% 

6,7% 
21,0% 
14,5% 

1.384 
267 
-1.117 

0,1% 
0,0% 
0,0% 

5,1% 
23,3% 
14,6% 

1.294 
329 
-966 

0,1% 
0,0% 
0,0% 

4,4% 
17,4% 
11,4% 
25-mars-19 

Growth of merchandise trade EU28 with Botswana (mio €) 

256 

 
 
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
 
  
 
  
  
  
  
 
  
  
  
  
  
  
  
  
  
  
  
  
  
  
Botswana 

Imports 
Exports 
Balance 
Total trade 
Source Trade G2 Statistics/ISDB from Eurostat COMEXT 

2017 

2018 

1.384 
267 
-1.117 
1.652 

1.294 
329 
-966 
1.623 

Growth 

mio € 

-90 
61 
151 
-28 

annual % 
-6,5% 
23,0% 

-1,7% 

Agrifood trade EU28 with Botswana (mio €) 

Botswana 

2017 

2018 

Imports 
Exports 
Balance 
Total trade 
Source Trade G2 Statistics/ISDB from Eurostat COMEXT 

30 
3 
-27 
34 

28 
2 
-26 
30 

NAMA trade EU28 with Botswana (mio €) 

Growth 

mio € 

-2 
-1 
1 
-4 

annual % 
-7,9% 
-38,9% 

-11,0% 

Botswana 

EU28 imports 
EU28 exports 
Balance 
Total trade 
Source Trade G2 Statistics/ISDB from Eurostat COMEXT 

2017 

2018 

1.354 
264 
-1.090 
1.618 

1.266 
327 
-940 
1.593 

Growth 

mio € 

-87 
63 
150 
-25 

annual % 
-6,5% 
23,8% 

-1,5% 

Growth of Services trade EU28 with Botswana (mio €)  

Botswana 

2016 

2017 

Imports 
Exports 
Balance 
Total trade 
Source Trade G2 Statistics/ISDB from Eurostat BOP statistics 

77 
292 
216 
369 

97 
486 
390 
583 

Services trade EU28 with Botswana (mio €) 

Growth 

mio € 

20 
194 
174 
214 

annual % 
26,3% 
66,3% 

58,0% 

Imports 
Exports 
Balance 
Total trade 
Source Trade G2 Statistics/ISDB from Eurostat BOP statistics 

2013 

2014 

2015 

2016 

2017 

88 
171 
84 
259 

80 
198 
118 
277 

79 
417 
338 
496 

77 
292 
216 
369 

97 
486 
390 
583 

Foreign Direct Investment (FDI) EU28 with Botswana (mio €) 

2013 

2014 

2015 

2016 

2017 

Inward 
Outward 

Inward 
Outward 
Source Trade G2 Statistics/ISDB from Eurostat BOP statistics 

Eswatini: 

FDI Stocks 

FDI Flows 

9 
238 

1 
64 

4 
305 

0 
39 

0 
299 

-6 
-18 

5 
236 

2 
-2 

17 
247 

12 
5 

Merchandise trade EU28 with Eswatini 2014-2018 
2015 

2014 

2016 

2017 

2018 

EU28 trade with Eswatini (mio €) 
Imports 
Exports 
Balance 
Share Eswatini in EU28 trade with Extra-EU28 
Imports 
Exports 
Total (I+E) 
Share EU28 in trade Eswatini with world 
Imports 
Exports 
Total (I+E) 

Source Trade G2 Statistics/ISDB  
Trade EU28: Eurostat COMEXT;  Trade Eswatini: IMF Dots 

151 
29 
-122 

0,0% 
0,0% 
0,0% 

2,0% 
8,0% 
5,2% 

139 
35 
-104 

0,0% 
0,0% 
0,0% 

4,0% 
6,7% 
5,5% 

124 
51 
-73 

0,0% 
0,0% 
0,0% 

3,8% 
7,3% 
5,7% 

87 
49 
-38 

0,0% 
0,0% 
0,0% 

3,5% 
4,3% 
3,9% 

64 
46 
-18 

0,0% 
0,0% 
0,0% 

2,6% 
3,5% 
3,0% 
25-mars-19 

Total merchandise trade EU28 with Eswatini (mio €) 
2017 

Eswatini 

2018 

Growth 

257 

 
 
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
 
  
 
  
  
  
  
 
  
  
  
  
  
  
  
  
  
  
  
  
  
  
Imports 
Exports 
Balance 
Total trade 
Source Trade G2 Statistics/ISDB from Eurostat COMEXT 

Agrifood trade EU28 with Eswatini (mio €) 

87 
49 
-38 
136 

mio € 

-23 
-3 
20 
-26 

annual % 
-26,5% 
-5,8% 

-19,1% 

64 
46 
-18 
110 

Eswatini 

Imports 
Exports 
Balance 
Total trade 
Source Trade G2 Statistics/ISDB from Eurostat COMEXT 

2017 

2018 

70 
5 
-65 
75 

56 
5 
-51 
61 

Growth 

mio € 

-14 
0 
14 
-14 

annual % 
-20,2% 
-0,9% 

-18,8% 

NAMA trade EU28 with Eswatini (mio €) 

Eswatini 

2017 

2018 

EU28 imports 
EU28 exports 
Balance 
Total trade 
Source Trade G2 Statistics/ISDB from Eurostat COMEXT 

17 
44 
26 
61 

8 
41 
32 
49 

Growth of Services trade EU28 with Eswatini (mio €) 

Growth 

mio € 

-9 
-3 
6 
-12 

annual % 
-52,1% 
-6,4% 

-19,5% 

Eswatini 

Imports 
Exports 
Balance 
Total trade 
Source Trade G2 Statistics/ISDB from Eurostat BOP statistics 

2016 

2017 

65 
100 
35 
165 

61 
92 
31 
153 

Growth 

mio € 

-4 
-8 
-3 
-12 

annual % 
-6,4% 
-7,5% 

-7,1% 

Services trade EU28 with Eswatini (mio €) 

Imports 
Exports 
Balance 
Total trade 
Source Trade G2 Statistics/ISDB from Eurostat BOP statistics 

2013 

2014 

2015 

2016 

2017 

67 
86 
19 
153 

29 
57 
28 
86 

24 
72 
47 
96 

65 
100 
35 
165 

61 
92 
31 
153 

Foreign Direct Investment (FDI) EU28 with Eswatini (mio €) 

2013 

2014 

2015 

2016 

2017 

Inward 
Outward 

Inward 
Outward 
Source Trade G2 Statistics/ISDB from Eurostat BOP statistics 

Lesotho:  

FDI Stocks 

FDI Flows 

155 
580 

-16 
-3 

42 
578 

19 
18 

128 
606 

4 
30 

130 
608 

69 
-194 

68 
601 

-283 
7 

Merchandise trade EU28 with Lesotho 2014-2018 

2014 

2015 

2016 

2017 

2018 

EU28 trade with Lesotho (mio €) 
Imports 
Exports 
Balance 
Share Lesotho in EU28 trade with Extra-EU28 
Imports 
Exports 
Total (I+E) 
Share EU28 in trade Lesotho with world 
Imports 
Exports 
Total (I+E) 

Source Trade G2 Statistics/ISDB  
Trade EU28: Eurostat COMEXT;  Trade Lesotho: IMF Dots 

247 
11 
-237 

0,0% 
0,0% 
0,0% 

1,0% 
46,2% 
16,7% 

254 
12 
-242 

0,0% 
0,0% 
0,0% 

0,9% 
14,6% 
4,4% 

208 
12 
-196 

0,0% 
0,0% 
0,0% 

0,9% 
13,4% 
5,1% 

271 
12 
-259 

0,0% 
0,0% 
0,0% 

0,9% 
34,9% 
13,2% 

352 
10 
-343 

0,0% 
0,0% 
0,0% 

0,7% 
34,0% 
13,7% 
25-mars-19 

Total merchandise trade EU28 with Lesotho (mio €) 

Lesotho 

2017 

2018 

Growth 

258 

 
 
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
 
  
 
  
  
  
  
 
  
  
  
  
  
  
  
  
  
  
  
  
  
  
Imports 
Exports 
Balance 
Total trade 
Source Trade G2 Statistics/ISDB from Eurostat COMEXT 

271 
12 
-259 
282 

mio € 

81 
-2 
-83 
80 

annual % 
30,1% 
-16,4% 

28,2% 

352 
10 
-343 
362 

Agrifood trade EU28 with Lesotho (mio €) 

Lesotho 

2017 

2018 

2 
1 
-1 
3 

2 
0 
-2 
3 

NAMA trade EU28 with Lesotho (mio €) 

Growth 

mio € 

0 
0 
0 
-1 

annual % 
-9,3% 
-49,9% 

-21,3% 

2017 

2018 

268 
11 
-258 
279 

350 
9 
-341 
359 

Growth 

mio € 

82 
-1 
-83 
80 

annual % 
30,4% 
-13,3% 

28,8% 

Imports 
Exports 
Balance 
Total trade 
Source Trade G2 Statistics/ISDB from Eurostat COMEXT 

Lesotho 

EU28 imports 
EU28 exports 
Balance 
Total trade 
Source Trade G2 Statistics/ISDB from Eurostat COMEXT 

Growth of Services trade EU28 with Lesotho (mio €)  

Lesotho 

2016 

2017 

Imports 
Exports 
Balance 
Total trade 
Source Trade G2 Statistics/ISDB from Eurostat BOP statistics 

4 
13 
10 
17 

15 
14 
-0 
29 

Services trade EU28 with Lesotho (mio €) 

Growth 

mio € 

11 
1 
-10 
12 

annual % 
271,8% 
6,7% 

66,5% 

Imports 
Exports 
Balance 
Total trade 
Source Trade G2 Statistics/ISDB from Eurostat BOP statistics 

2013 

2014 

2015 

2016 

2017 

7 
20 
14 
27 

31 
13 
-19 
44 

3 
15 
13 
18 

4 
13 
10 
17 

Foreign Direct Investment (FDI) EU28 with Lesotho (mio €) 

2013 

2014 

2015 

2016 

2017 

Inward 
Outward 

Inward 
Outward 
Source Trade G2 Statistics/ISDB from Eurostat BOP statistics 

Mozambique: 

FDI Stocks 

FDI Flows 

3 
3 

6 

3 
10 

-1 

4 
16 

0 
11 

5 
-2 

0 
-4 

15 
14 
-0 
29 

6 
-3 

0 
10 

Merchandise trade EU28 with Mozambique 2014-2018 
2015 

2014 

2016 

2017 

2018 

EU28 trade with Mozambique (mio €) 
Imports 
Exports 
Balance 
Share Mozambique in EU28 trade with Extra-EU28 
Imports 
Exports 
Total (I+E) 
Share EU28 in trade Mozambique with world 
Imports 
Exports 
Total (I+E) 

Source Trade G2 Statistics/ISDB  
Trade EU28: Eurostat COMEXT;  Trade Mozambique: IMF Dots 

1.366 
895 
-472 

0,1% 
0,1% 
0,1% 

19,1% 
38,5% 
25,8% 

1.435 
983 
-452 

0,1% 
0,1% 
0,1% 

22,5% 
45,9% 
29,2% 

1.320 
681 
-638 

0,1% 
0,0% 
0,1% 

19,5% 
32,0% 
24,3% 

1.664 
532 
-1.132 

0,1% 
0,0% 
0,1% 

22,5% 
27,2% 
24,6% 

1.867 
697 
-1.170 

0,1% 
0,0% 
0,1% 

18,1% 
31,6% 
24,0% 
25-mars-19 

Total merchandise trade EU28 with Mozambique (mio €) 

Mozambique 

2017 

2018 

Growth 

259 

 
 
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
 
  
 
  
  
  
  
 
  
  
  
  
  
  
  
  
  
  
  
  
  
Imports 
Exports 
Balance 
Total trade 
Source Trade G2 Statistics/ISDB from Eurostat COMEXT 

1.664 
532 
-1.132 
2.196 

1.867 
697 
-1.170 
2.564 

mio € 

203 
165 
-38 
368 

annual % 
12,2% 
31,0% 

16,8% 

Agrifood trade EU28 with Mozambique (mio €) 

Mozambique 

2017 

2018 

Imports 
Exports 
Balance 
Total trade 
Source Trade G2 Statistics/ISDB from Eurostat COMEXT 

175 
105 
-70 
280 

166 
88 
-79 
254 

NAMA trade EU28 with Mozambique (mio €) 

Growth 

mio € 

-8 
-18 
-9 
-26 

annual % 
-4,7% 
-16,7% 

-9,2% 

Mozambique 

EU28 imports 
EU28 exports 
Balance 
Total trade 
Source Trade G2 Statistics/ISDB from Eurostat COMEXT 

2017 

2018 

1.489 
427 
-1.062 
1.916 

1.700 
609 
-1.091 
2.310 

Growth 

mio € 

211 
183 
-29 
394 

annual % 
14,2% 
42,8% 

20,6% 

Growth of Services trade EU28 with Mozambique (mio €) 

Mozambique 

Imports 
Exports 
Balance 
Total trade 
Source Trade G2 Statistics/ISDB from Eurostat BOP statistics 

2016 

2017 

177 
580 
403 
757 

245 
471 
226 
716 

Growth 

mio € 

68 
-109 
-176 
-41 

annual % 
38,1% 
-18,8% 

-5,5% 

Services trade EU28 with Mozambique (mio €) 

Imports 
Exports 
Balance 
Total trade 
Source Trade G2 Statistics/ISDB from Eurostat BOP statistics 

2013 

2014 

2015 

2016 

2017 

225 
600 
375 
825 

264 
718 
454 
983 

327 
970 
643 
1.297 

177 
580 
403 
757 

245 
471 
226 
716 

Foreign Direct Investment (FDI) EU28 with Mozambique (mio €) 

Inward 
Outward 

Inward 
Outward 
Source Trade G2 Statistics/ISDB from Eurostat BOP statistics 

Namibia: 

EU28 trade with Namibia (mio €) 
Imports 
Exports 
Balance 
Share Namibia in EU28 trade with Extra-EU28 
Imports 
Exports 
Total (I+E) 
Share EU28 in trade Namibia with world 
Imports 
Exports 
Total (I+E) 

Source Trade G2 Statistics/ISDB  
Trade EU28: Eurostat COMEXT;  Trade Namibia: IMF Dots 

FDI Stocks 

FDI Flows 

2013 

2014 

2015 

2016 

2017 

11 
1.463 

10 
132 

388 
1.869 

-1 
202 

21 
2.572 

-405 
223 

-309 
2.367 

-255 
67 

-105 
1.879 

175 
84 

Merchandise trade EU28 2014-2018 

2014 

2015 

2016 

2017 

2018 

963 
586 
-378 

0,1% 
0,0% 
0,0% 

9,6% 
11,9% 
10,6% 

1.039 
404 
-635 

0,1% 
0,0% 
0,0% 

6,8% 
15,0% 
10,0% 

1.097 
372 
-725 

0,1% 
0,0% 
0,0% 

6,6% 
17,3% 
11,2% 

1.308 
493 
-815 

0,1% 
0,0% 
0,0% 

13,5% 
20,5% 
16,5% 

1.305 
430 
-875 

0,1% 
0,0% 
0,0% 

12,3% 
37,4% 
24,1% 
25-mars-19 

Total merchandise trade EU28 with Namibia (mio €) 

Namibia 

2017 

2018 

Growth 

260 

 
 
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
 
  
  
  
  
 
  
  
  
  
  
  
  
  
  
  
  
  
  
  
Imports 
Exports 
Balance 
Total trade 
Source Trade G2 Statistics/ISDB from Eurostat COMEXT 

1.308 
493 
-815 
1.800 

1.305 
430 
-875 
1.735 

mio € 

-3 
-63 
-60 
-65 

annual % 
-0,2% 
-12,7% 

-3,6% 

Agrifood trade EU28 with Namibia (mio €) 

Namibia 

2017 

2018 

96 
46 
-50 
142 

104 
41 
-63 
144 

NAMA trade EU28 with Namibia (mio €) 

Growth 

mio € 

8 
-5 
-13 
3 

annual % 
8,2% 
-11,5% 

1,8% 

2017 

2018 

1.212 
447 
-765 
1.659 

1.201 
390 
-812 
1.591 

Growth 

mio € 

-11 
-57 
-47 
-68 

annual % 
-0,9% 
-12,8% 

-4,1% 

Imports 
Exports 
Balance 
Total trade 
Source Trade G2 Statistics/ISDB from Eurostat COMEXT 

Namibia 

EU28 imports 
EU28 exports 
Balance 
Total trade 
Source Trade G2 Statistics/ISDB from Eurostat COMEXT 

Growth of Services trade EU28 with Namibia (mio €)  

Namibia 

Imports 
Exports 
Balance 
Total trade 
Source Trade G2 Statistics/ISDB from Eurostat BOP statistics 

2016 

2017 

399 
184 
-216 
583 

478 
192 
-286 
669 

Growth 

mio € 

78 
8 
-71 
86 

annual % 
19,6% 
4,2% 

14,8% 

Services trade EU28 with Namibia (mio €) 

Imports 
Exports 
Balance 
Total trade 
Source Trade G2 Statistics/ISDB from Eurostat BOP statistics 

2013 

2014 

2015 

2016 

2017 

305 
215 
-90 
519 

387 
202 
-185 
589 

276 
255 
-20 
531 

399 
184 
-216 
583 

478 
192 
-286 
669 

Foreign Direct Investment (FDI) EU28 with Namibia (mio €) 

2013 

2014 

2015 

2016 

2017 

Inward 
Outward 

Inward 
Outward 
Source Trade G2 Statistics/ISDB from Eurostat BOP statistics 

FDI Stocks 

FDI Flows 

115 
344 

-20 
-974 

149 
240 

-19 
223 

187 
668 

-40 
37 

167 
351 

3 
137 

390 
283 

5 
75 

261 

 
 
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
 
 
ANNUAL  INFO  SHEET  ON  THE  IMPLEMENTATION  OF  THE  INTERIM 
ECONOMIC  PARTNERSHIP  AGREEMENT  BETWEEN  THE  EU  AND  EASTERN 
AND SOUTHERN AFRICAN STATES 

1. 

INTRODUCTION 

Pending  an  EPA  with  the  full  Eastern  and  Southern  African  region,  an  interim  EPA  was 
signed  in  2009  by  four  ESA  countries  (Madagascar,  Mauritius,  Seychelles  and  Zimbabwe). 
This ESA-EU interim EPA (iEPA) has been provisionally applied since 14 May 2012 for the 
four  countries.  Comoros  signed  the  EPA  in  2017,  ratified  it  in  December  2018  and 
implements it since 7 February 2019. Zambia took part in the negotiations of the interim EPA 
and it may decide to sign the agreement in the near future.  

The interim EPA offers duty free quota free access in the EU for all imports from ESA as of 
1st January 2008. ESA partner countries are in the process of liberalising their market to EU 
imports  in  line  with  the  individual  schedules  of  each  ESA  partner  country,  annexed  to  the 
interim  EPA.112  By  2022,  Madagascar  and  Zimbabwe  will  liberalise  around  80%  of  their 
trade,  while  Mauritius  and  Seychelles  will  liberalise  96  and  98%,  respectively.  Goods 
excluded from liberalisation vary according to the individual offer but include predominantly 
agricultural products and some industrial goods such as plastics, paper, or textiles.113 Comoros 
will liberalise over a period of 9 years, after a 5 year preparatory period.  

An  established,  functioning  EPA  Committee  serves  as  a  platform  for  dialogue  in  a  spirit  of 
partnership  to  oversee  and  monitor  the  agreement's  implementation  and  to  take  appropriate 
decisions.  In  2017,  the  four  ESA  partner  countries  expressed  their  interest  to  deepen  the 
agreement  beyond  trade  in  goods.  Scoping  missions  conducted  in  2018  made  substantial 
progress.  A  joint  scoping  paper  was  concluded  in  May  2019  and  negotiations  may  be 
launched in due time. 

2. 

EVOLUTION OF TRADE 

2.1 Trade in Goods 

In  2018,  the  EPA  was  implemented  by  Madagascar,  Mauritius,  Seychelles  and  Zimbabwe. 
While  the  EU’s  share  as  a  destination  for  ESA4  exports  has  been  shrinking  over  the  past 
decade,  the  bloc  remains  the  second  largest  trade  partner  for  ESA4  after  South  Africa.  In 
2018,  the  main  export  destination  of  ESA4  was  South  Africa  (27%),  followed  by  the  EU 
(26%), the United Arab Emirates (11%) and the US (8%). In 2008, the EU still accounted for 
51% of ESA4 exports. ESA4 imports in 2018 mainly came from South Africa (30%), the EU 
(16%),  China  (12%)  and  India  (9%).  Within  the  EU,  France  accounts  for  almost  half  of 
imports from ESA4, followed by the UK, Germany and Belgium.  

In  2018,  total  trade  between  the  EU  and ESA4  is  highest  with  Madagascar  (€1.9  billion) 
and  Mauritius  (€1.8  billion),  followed  by  Zimbabwe  (€689  million)  and  Seychelles  (€596 
million).  

112  The ESA countries were not in a position to table a common regional market access offer and each country 

presented an individual offer based on its specificities. 

113  More details can be found here: http://trade.ec.europa.eu/doclib/docs/2012/march/tradoc_149213.pdf  

262 

 
 
 
 
 
                                                 
Although total trade with ESA4 decreased by €173 million (-3.3%) in 2018, the trade balance 
remains  positive  for  ESA4.  EU  imports  from  ESA4  decreased  by  €100  million  (-3.5%)  to 
€2.75 billion and EU exports to ESA4 decreased by €73 million (-3.1%) to €2.26 billion.  

regional 
However, 
figures 
aggregated 
differences 
mask 
four 
the 
between 
ESA  partner  states: 
EU 
Importantly, 
from 
imports 
Madagascar 
increased 
€62 
million  (5.3%)  and 
imports 
from 
Seychelles  are  up  €8 
million  (2.8%).  By 
imports 
contrast, 
Mauritius 
from 
decreased  by  €168  million  (18%)  and  imports  from  Zimbabwe  are  relatively  unchanged  (-
0.3%).  EU  exports  to  Madagascar  (-1.8%),  Mauritius  (-8.7%)  and  Seychelles  (-0.4%) 
decreased, but exports to Zimbabwe increased (+€42 million or 22%). 

by 

The overall decrease in EU imports from ESA4 in 2018 is mainly caused by a sharp fall in 
sugar imports from Mauritius (-€101 million or 56%) and Zimbabwe (-€25 million or 100%), 
as well as declining imports of tobacco from Zimbabwe (-26 million or 23%) and nickel from 
Madagascar (-€25 million or 33%).  

EU imports have risen  for iron  and steel  from  Zimbabwe (+€30 million  or 27%), vanilla 
from Madagascar (+€50 million or 12.7%) and apparel and clothing from Madagascar (+€25 
million  or  7.3%).  At  the  same  time,  Mauritius’  exports  of  apparel  and  clothing  decreased 
slightly by €16 million or 7%. 

For Mauritius and Seychelles, exports of fresh or frozen fish to the EU increased (Mauritius 
+€4 million or 21%, Seychelles +€8 million or 18.5%). However, export values of prepared 
and  preserved  fish  increased  for  Seychelles  (+€6.3  million  or  2.8%)  but  decreased  for 
Mauritius (-€13 million or 5.2%).  

Preference utilisation rates for ESA4 exports to the EU are high, ranging from 92-98% for the 
four countries.  

Exports  are  becoming  increasingly  diversified  for  Madagascar  and  Mauritius,  but 
diversification  is  stagnating  for  Zimbabwe  and  Seychelles.  In  2018,  the  top  10  export 
products  (HS  6-digit)  accounted  for  63%  of  Madagascar’s  total  exports to  the  EU,  62%  for 
Mauritius,  64%  for  Zimbabwe,  but  98%  for  Seychelles.  Looking  at  the  number  of  different 
products exported to the EU with a minimum value of €1 million: in 2018, the EU imported 
100  different  products  from  Madagascar  (up  from  69  in  2008;  mostly  different  textile 
products, however), 75 from Mauritius (up from 69), 25 from Zimbabwe (26 in 2008) and 9 
from Seychelles (up from 6).  

263 

 
 
 
 
 
 
 
 
 
A number of structural problems impact the (diminishing) competitiveness of the economy of 
Mauritius. Traditional export sectors are breaking away. For example, the end of the sugar 
quota in the EU is causing a heavy contraction in sugar exports to the EU of almost all ACP 
countries;  and  the  Mauritian  textile  industry  is  endangered  by  increasing  labour  costs  and 
strong  competitors  such  as  Bangladesh,  Vietnam  and  even  Madagascar  now.  Recently, 
Mauritius  has  taken  important  steps  towards  an  economy  based  on  more  sophisticated  and 
high-tech manufacturing and services. For example, exports of medical devices are growing. 
According to Mauritian national statistics, global exports of medical devices (HS 9018) have 
reached  €25.9  million  in  2018,  €17  million  of  which  are  going  to  the  EU.  According  to 
Eurostat data, EU imports of medical devices from Mauritius stood at €12 million in 2018, a 
strong increase from €4 million in 2008, but still small compared to the earnings in the “old” 
export sectors such as textile and sugar.  

For Madagascar, the outlook is brighter; exports could accelerate even more with changes in 
the overall business environment and investment climate. Similarly, Zimbabwe has enormous 
export  potential  but  as  long  as  the  economic  situation  remains  uncertain,  with  no  serious 
business climate reforms and no foreign capital inflows, necessary investments will not take 
place. For Seychelles, the lack of diversification is serious; the country is aiming at exporting 
more  fisheries  by-products  and  processed  fish  products  but  is  hindered  by  human  resource 
limitations.  

Top 10 EU imports from ESA4 in 2018 

1 

2 

3 

4 

5 

6 

7 

8 

9 

Madagascar 
Vanilla 

Cobalt matters 

Frozen shrimps and 
prawns 

Jerseys, pullovers, 
cardigans, waistcoats 
(etc.) of Kashmir 
Nickel 

Shawls, scarves (etc.) of 
silk 
Vegetables saps and 
extracts 
Fresh tamarinds, cashew 
apples, jackfruit, lychees, 
passion fruit, other 
Prepared or preserved 
tunas, skipjack, etc. 

Mauritius 
Prepared or preserved 
tunas, skipjack etc. 
T-shirts, singlets and 
other vests of cotton 
Cane sugar (170199) 

Raw cane sugar not 
containing flavouring or 
colouring (170114) 
Men’s or boys’ trousers, 
bib and brace overalls 
(etc.) of cotton 
Men's or boys' shirts of 
cotton 
Articles of jewellery 

Jerseys, pullovers, 
cardigans, waistcoats 
etc., of cotton 
T-shirts, singlets and 
other vests of textile 
materials 

10 

Jerseys, pullovers, 
cardigans, waistcoats 
(etc.) of wool 

Women's or girls' 
trousers, bib and brace 
overalls (etc.) of cotton 

Source: Eurostat, product names partly simplified 

Seychelles 
Prepared or preserved 
tunas, skipjack etc. 
Frozen yellowfin tunas   Diamonds, unsorted 

Zimbabwe 
Tobacco 

Frozen skipjack or 
stripe-bellied bonito 

Light oils and 
preparations 

Frozen bigeye tunas 

Prepared or preserved 
fish  
Fresh or chilled fillets 
of fish, n.e.s. 
Fresh or chilled 
yellowfin tunas 

Instruments and 
appliances used in 
medical, surgical or 
veterinary sciences, 
n.e.s. 
Fats and oils of fish 

Ferro-chromium, 
containing by weight > 
4% of carbon 
Fresh or dried oranges 

Raw hides and skins of 
reptiles 

Fresh or chilled peas 

Black tea 

Granite, crude or 
roughly trimmed 

Arsenic sulfides, 
alunite, pozzuolana, 
earth colours and 
other mineral 
substances, n.e.s. 
Leather further 
prepared after tanning 
or crusting, of reptiles 

264 

 
 
 
 
 
 
Decreasing  EU  exports  to  ESA4  (-€73  million)  can  be  explained  by  the  unusual  spike  in 
aircraft  exports  in  2017  which  did  not  happen  in  2018  (a  decrease  of  €179  million). 
Disregarding the aircraft sector, EU exports to ESA4 actually increased by 0.5% in 2018.  

Main export increases  in 2018 are mineral  fuels  and oils (€45 million  or 574%), machinery 
and  mechanical  appliances  (€28  million  or  8%),  textiles  (€15  million  or  10%),  silk  (€14 
million  or  84%)  and  cereals  (€14  million  or  68%).  Besides  aircraft  and  aircraft  parts,  main 
export  decreases  concern  frozen  fish  (-€26  million  or  -20%)  and  chemical  products  (-€19 
million or -38%). 

In  2018,  the  agri-food  trade  balance  was  positive  for  ESA4  (€504  million).  While  EU 
imports of sugar shrunk by 62% (from €204 million in 2017 to €78 million in 2018), imports 
of  tropical  fruits  increased  (from  €350  million  in  2017  to  €392  million  in  2018),  which 
however  did  not  offset  the  decrease  of  sugar  imports.  EU  exported  mainly  wheat  (€33 
million),  followed  by  pet  food,  food  preparation  not  specified,  pasta  and  pastry,  and  infant 
food and other cereals, starch or milk preparations.  

Jewellery exported from Mauritius and Zimbabwe – Patrick Mavros  
Jewellery  exports  from  Mauritius  to  the  EU  have  increased  by  30%  from  2008  to 
2018, reaching €20.1 million (3% of total exports to the EU). For Zimbabwe, jewellery 
exports are still a niche product, with exports worth around €400,000 in 2018.  
Patrick Mavros is a self-taught jewellery artist from Zimbabwe. He started up in the 
1970s and, against all odds, runs a successful company with 60 employees in Harare, 
producing  nature-inspired  jewellery  pieces  and  sculptures,  exported  to  overseas 
markets.  
His son, Forbes Mavros, migrated to Mauritius in the early 2000s and started up his 
own  jewellery  workshop,  slowly  growing  form  a  one-person  business  into  a  large 
open-space  atelier  with  a  factory,  employing  50  persons.  He  has  invested  in  a 
Swedish  purification  system  to  guarantee  environmentally  friendly  production  and 
donates part of the proceeds to the Mauritian Wildlife Foundation.  
Both ateliers sell more than 60% of their products abroad, including particularly the 
EU, which offers both Mauritius and Zimbabwe duty free quota free market access 
for their products under the EPA. Patrick Mavros also has a physical store in London. 
Another  target  audience  are  tourists  visiting  the  country,  which  goes  in  line  with 
joint  efforts  of  the  EU  and  Mauritius  and  Zimbabwe  to  further  boost  sustainable 
tourism and increase local value added in the tourism value chain.  

2.2 Trade in Services  

The interim EPA does not include provisions on services. In 2017 (latest year for which data 
is available), total EU services imports from ESA4 decreased by €176 million to €2.2 billion, 
The change was driven by a decrease of services imports from Mauritius (the most important 
services trade partner among ESA4) by €143 million or 9.5%, to €1.4 billion.  

Services imports from Madagascar are growing, albeit from low levels – total imports reached 
€376 million in 2017 (+13.2%). Services imports from Seychelles decreased by 16%; services 
imports from Zimbabwe are marginal and decreased by 6.6%.  

265 

 
 
 
 
 
 
 
 
On the other hand, EU services exports to ESA4 in total increased to €2.6 billion in 2017, an 
increase  of  43.8%  over  2016.  The  EU  runs  a  surplus  with  Zimbabwe  and  Mauritius,  but  a 
deficit with Madagascar and Seychelles.  

The  four  ESA  countries  are  very  keen  on  negotiating  provisions  on  trade  in  services;  in 
particular  Mauritius  hopes  to  find  a  new  growth  engine  in  services  exports.  Mauritius  took 
part in the WTO’s negotiations for a Trade in Services Agreement (TISA) and now would be 
interested to use the ESA EPA opportunities, as TISA is not going forward. Financial services 
and tourism are the main sectors of interest.  

2.3 Foreign Direct investment (FDI) 

Current  EU  FDI  stocks  in  ESA4  stand  at  €23.2  billion  for  Mauritius,  €982  million  for 
Seychelles, €457 million for Zimbabwe and €55 million for Madagascar. 

FDI inflows in 2017 amounted to €1.3 billion for Mauritius, €26 million for Zimbabwe, €17 
million for Madagascar and €9 million for Seychelles.  

According to Mauritian national statistics, investment inflows from the EU amounted to Rs. 
10.6 billion (approx. €271 million) in 2017 and  Rs 8.4 billion (approx. €2 million) in 2018. 
While in 2017, the EU accounted for about half of Mauritius’s gross direct investment flows, 
this figure was down to one quarter in 2018.114 

Mauritius stands out as the single most important jurisdiction in Africa offering a stable legal 
environment. In particular, Mauritius has gathered a reliable reputation regarding its banking 
structures and increasingly expanded its financial sector. As such, Mauritius is the largest EU 
FDI recipient among the ESA4 partners but also a partner to work within the context of anti-
money laundering and taxation policy.  

FDI in Mauritius is mostly in financial sector and real estate. The same is true for Seychelles 
where the financial/offshore sector is growing rapidly; the government considers the financial 
sector  as  the  third  pillar  of  economic  development  after  tourism  and  fisheries.  Productive 
investment in both countries can be found in tourism, but also in manufacturing for Mauritius. 
For Seychelles, an example for productive investment is a German-Seychelles joint venture, 
Sun Tech Seychelles115, which provides solar photovoltaic technology and after sales services 
in the Seychelles.   

ISSUES ADDRESSED IN THE ANNUAL EPA COMMITTEE MEETING 

3. 
The  main  issues  addressed  by  the  7th  Meeting  of  the  EPA  Committee  in  January  2019  (in 
Brussels) were: 

  Agreement on modernisation of rules of origin  and adoption by the EPA Committee 

by mid-2019; 

  Agreement  to  put  in  place  a  Monitoring  and  Evaluation  Mechanism  to  ensure  an 

 

effective implementation of the interim EPA;  
Initiated  discussions  on  the  scope  and  objectives  of  the  envisioned  deepening  of  the 
agreement (covering additional topics) which the ESA4 have asked for. The deepening 

114Government of Mauritius, https://www.bom.mu/sites/default/files/di_2018q4_website.pdf 
115 https://sts.sc/index.html  

266 

 
 
 
 
 
 
 
                                                 
will  evolve  around  the  issues  mentioned  in  the  rendez-vous  clause  of  the  interim 
agreement; 

  Progress  on  the  support  to  EPA  implementation  under  both  the  10th  and  the  11th 

European Development Fund (EDF); 

  Agreement to setup a coordination mechanism financed by the EU to assist ESA side 
in the negotiations that may be launched in 2019 after conclusion of the joint scoping 
paper, which the Parties are currently discussing; 

  Discussion  on  the  ESA  commitments  to  the  development  of  internationally  agreed 

standards for cooperation between tax jurisdictions. 

4. 

DEVELOPMENT COOPERATION 

Development cooperation is essential for EPA implementation and for ensuring the long-term 
sustainable  development  impact  of  the  agreement.  Each  of  the  four  ESA  EPA  countries 
benefits from an envelope of €10 million under the SADC regional programme to support 
EPA  implementation  and  export  competitiveness.  The  respective  technical  assistance 
programmes  are  currently  in  different  states  of  preparation  or  implementation.  Comoros 
having recently joined the EPA will also benefit from similar support measures.   

Under  the  EPA-dedicated  programmes,  Mauritius  is  already  implementing  a  project  to 
improve  the  ease-of-doing-business  and  investment  regulatory  framework.  An  e-licensing 
platform  has  been  developed  as  a  single  point  of  entry  for  business  licenses  and  permits, 
shortening and simplifying the application procedure. In addition, technical assistance will for 
the  implementation  of  Intellectual  Property  Rights  (IPR),  a  key  reform  to  support  the 
transformation to a knowledge-based economy. 

Under the intra-ACP TRADECOM programme, 32 SMEs benefitted from capacity building 
in  2018  in  the  area  of  productivity  and  marketing,  which  has  enabled  a  number  of  them  to 
start exporting to regional markets. Furthermore, from its national envelope, Mauritius and the 
EU  are  preparing  a  programme  on  tertiary  education  and  innovation  that  may  launch  next 
year.  

In  Seychelles,  the  EPA-related  project  is  focusing  on  trade  policy  capacity  building  (long-
term  technical  assistance  for  the  Trade  Ministry)  and  private  sector  development  in 
manufacturing  and  agriculture  &  fisheries,  with  an  emphasis  on  niche  sectors  that  could 
generate exports. The project will support the realisation of the EPA Implementation Strategy, 
the  first  of  its  kind  in  the  trade  domain  in  Seychelles,  formulated  with  active  participation 
from public and private sector actors.  

In Zimbabwe, the inception phase of a project that will focus on capacity development for the 
Trade  Ministry,  as  well  as  SME  development  in  selected  value-chains,  was  successfully 
concluded  in  2018.  Capacity  building  measures  for  the  government  are  ongoing,  while  the 
work on SME development will start in 2019.   

In Madagascar, a project focusing on trade facilitation and export promotion (establishment 
of  an  export  promotion  agency)  is  under  preparation  but  delayed  due  to  the  on-going 
government  formation  process  after  the  2018  presidential  elections.  The  project  should  also 
support competitiveness in tourism, IT and textile sectors. With EU support, Madagascar has 
already  successfully  set  up  a  well-functioning  dialogue  platform  where  business  and 

267 

 
 
 
 
 
 
 
government come together to discuss issues surrounding the EPA, export performance and the 
business  climate.  The  annual  roundtables  organised  by  the  delegation  are  also  important 
dialogue platforms for private business and the government. 

For the upcoming negotiations to deepen the EPA, the EU supports ESA4 (or in future ESA5) 
with an EPA Coordination Hub (€1 million) to facilitate the preparations of the negotiations. 

Furthermore,  there  are  currently  two  infrastructure  sector  blending  projects  on-going  or 
under preparation, that would strongly facilitate trade opportunities, namely the extension of 
Port  Victoria  in  Seychelles  (€5  million)  and  the  extension  of  the  airport  in  Rodrigues  in 
Mauritius (€10 million grant).  

In addition to EPA specific programmes, the EU and the four ESA countries have embarked 
on a number of cooperation initiatives in the area of sustainable economic development. The 
EU in particular provides funding to the Indian Ocean Commission (IOC), to a total amount 
of  €107  million  under  the  10th  European  Development  Fund  (EDF).  Some  key  projects 
include:  

  SMARTFISH (€37 million): the project supported the implementation of the ESA-IO 
fisheries strategic priorities for sustainable management and development of the inland 
and marine fisheries and aquaculture sector. (Project activities ended in April 2018)  
  ISLANDS (€17.5 million): the project addressed specific development constraints of 
Small  Islands  Developing  States  (SIDS)  beneficiary  countries  (their  natural 
characteristics  linked  to  insularity,  relative  smallness,  proneness  to  natural  disasters 
and  limited  access  to  capital)  and  fostered  regional  and  global  SIDS-SIDS  cross-
fertilisation. (Project ended in December 2017) 

  Regional  Integration  Support  Programme  (€6.15  million):  objective  is  to 

contribute to deepened integration and competitiveness of the ESA-IO region. 

New projects under the 11th EDF on competitiveness and business facilitation (€8 million), 
natural  resource  management/climate  change  and  disaster  risk  management  (€16 
million) and regional food security (€16 million) are currently under preparation. 

As  all  ESA4  states  are  also  members  of  the  Southern  African  Development  Community 
(SADC),  they  benefit  from  significant  development  assistance  provided  to  regional 
integration and private sector development in the SADC region (more details see chapter on 
the SADC EPA).  

5. 

PROGRESS MADE, MAIN OPEN ISSUES AND FOLLOW-UP ACTIONS 

All ESA4 countries are implementing the Agreement and have made tariff cuts according to 
their liberalisation schedule. Nevertheless, Zimbabwe has recently paused the implementation 
of new tariff cuts; discussions are ongoing to find a solution.  

Following  the  ESA  States’  expressed  interest  in  "deepening"  (new  issues)  and  "widening" 
(new  members)  the  existing  iEPA116,  both  sides  undertook  to  jointly  define  the  scope  and 

116 The full name of the agreement, "Interim Economic Partnership Agreement" reflects the fact that the objective on both 
sides for an agreement in Eastern and Southern Africa was a comprehensive, regional agreement. However, negotiations 
for a regional EPA with the ESA4 and seven other ESA countries have come to a halt, and the Commission focused its 
efforts on the agreement already implemented by the ESA4. 

268 

 
 
 
 
 
 
 
                                                 
objectives of the deepening before launching the negotiation process. A joint scoping paper 
has been concluded in May 2019 and the launch of negotiations is expected shortly.  

As for widening, Comoros has already joined the EPA (it signed the agreement in July 2017, 
ratified it in January 2019 and deposited the instrument of ratification on 7 February 2019). 
Zambia can, at any time, also sign and ratify the agreement that it initialled in 2007. As for the 
other ESA States117, the EPA is open for accession by all of them but they will first need to 
submit market access offers before eventually joining the agreement. 

There  are  challenges  raised  by  non-tariff  measures  that  need  to  be  tackled  by  constructive 
dialogue between the competent services and by appropriate EU support. The prospects of an 
ESA5 Business Forum, an awareness-raising EPA seminar in Zimbabwe and specific training 
on geographical indications have been raised.  

6. 

CONCLUSIONS AND OUTLOOK 

In  2018,  EU  imports  from  Madagascar,  Seychelles  and  Zimbabwe  increased,  while  imports 
from Mauritius decreased, as did overall EU exports to ESA4. Comoros joined the EPA on 7 
February  2019.  Zambia  may  follow  in  2019.  The  year  2019  may  see  the  launch  of 
negotiations  to  deepen  the  EPA  towards  a  comprehensive  agreement  covering  a  range  of 
modern trade policy topics.  

implementation  and  negotiation  challenging.  Nevertheless, 

Overall, the very different economic profiles and levels of development of ESA4, now ESA5, 
render 
there  are  natural 
complementarities and the countries see the potential for cooperation among themselves, both 
in  the  context  of  the  EPA  and  beyond:  Labour  shortages  in  Mauritius  can  be  addressed  by 
employing Malagasy and by delocalising e.g. textile production to Madagascar. Madagascar 
can  supply  Mauritius  and  Seychelles  with  needed  fruits  and  vegetables,  if  SPS  issues  are 
resolved. Mauritius experience in reforming the business environment is key for Madagascar, 
Seychelles  and  Zimbabwe  in  unblocking  their  development  prospects.  Zimbabwe,  finally, 
features high in Mauritius’ Africa Strategy, as a close partner to invest in.  

7. 

STATISTICS 

Merchandise trade EU28 with ESA4 States 2014-2018 

EU28 trade with ESA4 States (mio €) 
Imports 
Exports 
Balance 
Share ESA4 States in EU28 trade with Extra-EU28 
Imports 
Exports 
Total (I+E) 

2014 

2015 

2016 

2017 

2018 

2.580 
1.865 
-715 

0,2% 
0,1% 
0,1% 

2.450 
1.981 
-469 

0,1% 
0,1% 
0,1% 

2.470 
1.955 
-514 

0,1% 
0,1% 
0,1% 

2.853 
2.332 
-521 

0,2% 
0,1% 
0,1% 

2.754 
2.259 
-494 

0,1% 
0,1% 
0,1% 

Source Trade G2 Statistics/ISDB                                                                                                                                                                                                                  25-mars-19 
Trade EU28: Eurostat COMEXT;  Trade EPA (interim) Eastern and Southern Africa (ESA): IMF Dots 

Growth of merchandise trade EU28 with ESA4 States (mio €) 

Growth 

EPA (interim) Eastern and Southern Africa (ESA) 

2017 

2018 

Imports 

2.853 

2.754 

-100 

mio € 

annual 
% 
-3,5% 

117  Djibouti, Ethiopia, Eritrea, Sudan and Malawi 

269 

 
 
 
 
 
  
  
  
  
  
  
  
 
  
  
  
  
 
  
  
  
  
  
  
  
  
  
  
  
                                                 
Exports 
Balance 
Total trade 
Source Trade G2 Statistics/ISDB from Eurostat COMEXT 

2.332 
-521 
5.185 

2.259 
-494 
5.013 

-73 
26 
-173 

-3,1% 

-3,3% 

Agrifood trade EU28 with ESA4 States (mio €) 

EPA (interim) Eastern and Southern Africa (ESA) 

2017 

2018 

Imports 
Exports 
Balance 
Total trade 
Source Trade G2 Statistics/ISDB from Eurostat COMEXT 

924 
308 
-616 
1.233 

839 
335 
-504 
1.174 

NAMA trade EU28 with ESA4 States (mio €) 

EPA (interim) Eastern and Southern Africa (ESA) 

2017 

2018 

EU28 imports 
EU28 exports 
Balance 
Total trade 

1.929 
2.024 
95 
3.953 

1.915 
1.924 
9 
3.839 

Growth 

mio € 

-86 
27 
113 
-59 

annual 
% 
-9,3% 
8,7% 

-4,8% 

Growth 

mio € 

-14 
-100 
-86 
-114 

annual 
% 
-0,7% 
-4,9% 

-2,9% 

Imports 
Exports 
Balance 
Total trade 
Source Trade G2 Statistics/ISDB from Eurostat BOP statistics 

Imports 
Exports 
Balance 
Total trade 
Source Trade G2 Statistics/ISDB from Eurostat BOP statistics 

Growth in Services trade EU28 with ESA4 (mio €) 

2016 

2017 

2.381 
1.962 
-419 
4.343 

2.205 
2.569 
365 
4.774 

Growth 

mio € 

annual % 

-176 
607 
784 
431 

-7,4% 
30,9% 

9,9% 

Total Services trade EU28 with ESA4 (mio €) 

2013 

2014 

2015 

2016 

2017 

2.051 
1.425 
-627 
3.476 

2.348 
1.804 
-544 
4.151 

2.602 
1.730 
-872 
4.332 

2.381 
1.962 
-419 
4.343 

2.205 
2.569 
365 
4.774 

Foreign Direct Investment (FDI) EU28 with ESA4 (mio €) 

2013 

2014 

2015 

2016 

2017 

Inward 
Outward 

Inward 
Outward 
Source Trade G2 Statistics/ISDB from Eurostat BOP statistics 

Madagascar 

FDI Stocks 

2.568 
15.223 

FDI Flows 

1.878 
1.706 

5.811 
21.518 

1.328 
210 

4.422 
21.815 

-1.839 
1.412 

8.843 
21.099 

678 
-5.496 

6.710 
24.671 

-1.240 
1.331 

Merchandise trade EU28 2014-2018 
2014 

2015 

2016 

2017 

2018 

EU28 trade with Madagascar (mio €) 

Imports 
Exports 
Balance 

Share Madagascar in EU28 trade with Extra-EU28 

840 
532 
-309 

0,0% 
0,0% 
0,0% 

904 
560 
-344 

0,1% 
0,0% 
0,0% 

988 
552 
-436 

0,1% 
0,0% 
0,0% 

1.181 
674 
-507 

0,1% 
0,0% 
0,0% 

1.243 
662 
-581 

0,1% 
0,0% 
0,0% 

Share EU28 in trade Madagascar with world 

15,5%  16,5%  16,3%  17,0% 
51,9%  47,2%  46,9%  43,2% 
29,7%  29,1%  29,2%  28,2% 

16,9% 
33,5% 
24,1% 

270 

Imports 
Exports 
Total (I+E) 

Imports 
Exports 
Total (I+E) 

 
 
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
 
 
 
  
  
  
 
  
  
  
  
  
  
  
  
 
 
  
  
  
  
  
  
  
  
 
  
  
  
  
 
  
  
  
  
Source Trade G2 Statistics/ISDB  
Trade EU28: Eurostat COMEXT;  Trade Madagascar: IMF Dots 

25-mars-
19 

Total merchandise trade EU28 with Madagascar (mio €) 

Madagascar 

Imports 
Exports 
Balance 
Total trade 
Source Trade G2 Statistics/ISDB from Eurostat COMEXT 

2017 

2018 

1.181 
674 
-507 
1.855 

1.243 
662 
-581 
1.905 

Growth 

mio € 
62 
-12 
-74 
50 

annual 
% 
5,3% 
-1,8% 

2,7% 

Agrifood trade EU28 with Madagascar (mio €) 

Madagascar 

2017 

2018 

Imports 
Exports 
Balance 
Total trade 
Source Trade G2 Statistics/ISDB from Eurostat COMEXT 

477 
72 
-405 
549 

533 
65 
-468 
598 

NAMA trade EU28 with Madagascar (mio €) 

Growth 

mio € 
56 
-6 
-62 
49 

annual 
% 
11,6% 
-9,0% 

8,9% 

Madagascar 

EU28 imports 
EU28 exports 
Balance 
Total trade 
Source Trade G2 Statistics/ISDB from Eurostat COMEXT 

2017 

2018 

704 
602 
-101 
1.306 

710 
596 
-114 
1.307 

Growth 

mio € 
6 
-6 
-12 
1 

annual 
% 
0,9% 
-1,0% 

0,1% 

Services trade EU28 with Madagascar (mio €) 

Madagascar 

2016 

2017 

Imports 
Exports 
Balance 
Total trade 
Source Trade G2 Statistics/ISDB from Eurostat BOP statistics 

332 
192 
-141 
524 

376 
266 
-110 
641 

Services trade EU28 with Madagascar (mio €) 

Growth 

mio € 
44 
74 
30 
118 

annual 
% 
13,2% 
38,7% 

22,5% 

Imports 
Exports 
Balance 
Total trade 
Source Trade G2 Statistics/ISDB from Eurostat BOP statistics 

2013 

2014 

2015 

2016 

2017 

254 
183 
-70 
437 

374 
226 
-148 
600 

419 
187 
-232 
606 

332 
192 
-141 
524 

376 
266 
-110 
641 

FDI EU28 with Madagascar (mio €) 

FDI Stocks 

FDI Flows 

2013 

2014 

2015 

2016 

2017 

5 
206 

-19 
-36 

4 
460 

2 
469 

10 
145 

-3 
37 

-1 
-116 

2 
-129 

-11 
55 

-21 
17 

Inward 
Outward 

Inward 
Outward 
Source Trade G2 Statistics/ISDB from Eurostat BOP statistics 

Mauritius 

Merchandise trade EU28 2014-2018 

2014 

2015 

2016 

2017 

2018 

271 

 
 
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
 
  
EU28 trade with Mauritius (mio €) 

Imports 
Exports 
Balance 

Share Mauritius in EU28 trade with Extra-EU28 

960 
875 
-85 

895 
899 
4 

861 
950 
89 

0,1% 
0,1% 
0,1% 

0,1% 
0,1% 
0,1% 

0,1% 
0,1% 
0,1% 

925 
1.169 
244 

0,0% 
0,1% 
0,1% 

756 
1.067 
310 

0,0% 
0,1% 
0,0% 

23,0% 
47,7% 
29,0% 
25-mars-
19 

Share EU28 in trade Mauritius with world 

20,8% 
49,4% 
30,0% 

20,3% 
43,4% 
28,1% 

22,8% 
48,4% 
31,0% 

23,5% 
51,5% 
31,5% 

Imports 
Exports 
Total (I+E) 

Imports 
Exports 
Total (I+E) 

Source Trade G2 Statistics/ISDB  
Trade EU28: Eurostat COMEXT;  Trade Mauritius: IMF Dots 

Total merchandise trade EU28 with Mauritius (mio €) 

Mauritius 

Imports 
Exports 
Balance 
Total trade 
Source Trade G2 Statistics/ISDB from Eurostat COMEXT 

2017 

2018 

925 
1.169 
244 
2.093 

756 
1.067 
310 
1.823 

Growth 

mio € 
-168 
-102 
66 
-270 

annual 
% 
-18,2% 
-8,7% 

-12,9% 

Agrifood trade EU28 with Mauritius (mio €) 

Mauritius 

2017 

2018 

Growth 

annual 
% 
-48,0% 
16,4% 

-18,9% 

Imports 
Exports 
Balance 
Total trade 
Source Trade G2 Statistics/ISDB from Eurostat COMEXT 

mio € 
-102 
29 
131 
-74 

111 
204 
94 
315 

213 
176 
-38 
389 

NAMA trade EU28 with Mauritius (mio €) 

Mauritius 

EU28 imports 
EU28 exports 
Balance 
Total trade 
Source Trade G2 Statistics/ISDB from Eurostat COMEXT 

Services trade EU28 with Mauritius (mio €) 

Mauritius 

Imports 
Exports 
Balance 
Total trade 
Source Trade G2 Statistics/ISDB from Eurostat BOP statistics 

2017 

2018 

711 
993 
281 
1.704 

646 
862 
217 
1.508 

Growth 

mio € 
-66 
-131 
-65 
-197 

annual 
% 
-9,3% 
-13,2% 

-11,5% 

2016 

2017 

1.512 
1.356 
-156 
2.868 

1.369 
1.688 
320 
3.057 

Growth 

mio € 
-143 
332 
476 
189 

annual 
% 
-9,5% 
24,5% 

6,6% 

Services trade EU28 with Mauritius (mio €) 

Imports 
Exports 
Balance 
Total trade 
Source Trade G2 Statistics/ISDB from Eurostat BOP statistics 

2013 

2014 

2015 

2016 

2017 

1.403 
901 
-502 
2.305 

1.522 
1.161 
-361 
2.683 

1.563 
1.010 
-553 
2.572 

1.512 
1.356 
-156 
2.868 

1.369 
1.688 
320 
3.057 

Inward 

FDI EU28 with Mauritius (mio €) 

2013 

2014 

2015 

2016 

2017 

1.843 

5.039 

3.643 

6.706 

4.494 

FDI Stocks 

272 

 
 
 
  
  
  
  
 
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
Outward 

14.507  20.475  20.109  19.541 

23.177 

FDI Flows 

Inward 
Outward 
Source Trade G2 Statistics/ISDB from Eurostat BOP statistics 

2.004 
1.795 

1.356 
166 

-1.824 
1.322 

613 
-5.391 

-1.265 
1.280 

Seychelles 

Imports 
Exports 
Balance 

Imports 
Exports 
Total (I+E) 

Imports 
Exports 
Total (I+E) 

Merchandise trade EU28 2014-2018 
2014 

2015 

2016 

2017 

2018 

EU28 trade with Seychelles (mio €) 

Share Seychelles in EU28 trade with Extra-EU28 

Share EU28 in trade Seychelles with world 

270 
238 
-32 

249 
302 
53 

282 
279 
-2 

291 
298 
7 

299 
297 
-2 

0,0% 
0,0% 
0,0% 

0,0% 
0,0% 
0,0% 

0,0% 
0,0% 
0,0% 

0,0% 
0,0% 
0,0% 

0,0% 
0,0% 
0,0% 

33,7%  30,5%  24,6%  34,4% 
58,9%  57,1%  58,1%  50,3% 
42,3%  39,2%  32,2%  39,3% 

27,3% 
54,5% 
34,6% 
25-mars-
19 

Source Trade G2 Statistics/ISDB  
Trade EU28: Eurostat COMEXT;  Trade Seychelles: IMF Dots 

Total merchandise trade EU28 with Seychelles (mio €) 

Seychelles 

2017 

2018 

Growth 

Imports 
Exports 
Balance 
Total trade 
Source Trade G2 Statistics/ISDB from Eurostat COMEXT 

mio € 
8 
-1 
-9 
7 

299 
297 
-2 
596 

291 
298 
7 
589 

Agrifood trade EU28 with Seychelles (mio €) 

Seychelles 

2017 

2018 

Growth 

Imports 
Exports 
Balance 
Total trade 
Source Trade G2 Statistics/ISDB from Eurostat COMEXT 

mio € 
0 
-9 
-9 
-9 

0 
36 
36 
37 

0 
45 
45 
46 

NAMA trade EU28 with Seychelles (mio €) 

Seychelles 

2017 

2018 

Growth 

EU28 imports 
EU28 exports 
Balance 
Total trade 
Source Trade G2 Statistics/ISDB from Eurostat COMEXT 

Services trade EU28 with Seychelles (mio €) 

Seychelles 

Imports 
Exports 
Balance 
Total trade 
Source Trade G2 Statistics/ISDB from Eurostat BOP statistics 

273 

mio € 
8 
8 
-1 
16 

299 
261 
-38 
560 

291 
253 
-38 
544 

2016 

2017 

447 
236 
-212 
683 

376 
235 
-141 
611 

Growth 

mio € 
-71 
-1 
70 
-71 

annual 
% 
-15,9% 
-0,2% 

-10,5% 

annual 
% 
2,8% 
-0,4% 

1,2% 

annual 
% 
-14,6% 
-19,7% 

-19,7% 

annual 
% 
2,8% 
3,0% 

2,9% 

 
 
  
  
  
  
  
 
  
 
  
  
  
  
 
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
Services trade EU28 with Seychelles (mio €) 

Imports 
Exports 
Balance 
Total trade 
Source Trade G2 Statistics/ISDB from Eurostat BOP statistics 

2013 

2014 

2015 

2016 

2017 

255 
140 
-115 
394 

305 
206 
-99 
512 

426 
301 
-126 
727 

447 
236 
-212 
683 

376 
235 
-141 
611 

FDI EU28 with Seychelles (mio €) 

FDI Stocks 

FDI Flows 

2013 

2014 

2015 

2016 

2017 

712 
313 

-104 
-73 

759 
304 

-23 
-29 

730 
321 

2.124 
1.060 

2.218 
982 

-11 
30 

107 
6 

32 
9 

Inward 
Outward 

Inward 
Outward 
Source Trade G2 Statistics/ISDB from Eurostat BOP statistics 

Zimbabwe 

Merchandise trade EU28 2014-2018 

2014  2015  2016  2017 

2018 

EU28 trade with Zimbabwe (mio €) 

Imports 
Exports 
Balance 

Share Zimbabwe in EU28 trade with Extra-EU28 

510 
221 
-290 

402 
220 
-182 

0,0% 
0,0% 
0,0% 

0,0% 
0,0% 
0,0% 

339 
174 
-165 

0,0% 
0,0% 
0,0% 

3,5% 
2,2% 
3,0% 

456 
192 
-265 

0,0% 
0,0% 
0,0% 

3,7% 
2,1% 
3,1% 

455 
234 
-221 

0,0% 
0,0% 
0,0% 

4,6% 
1,7% 
3,4% 
25-mars-
19 

Share EU28 in trade Zimbabwe with world 

4,8% 
5,0% 
4,9% 

4,3% 
1,0% 
3,1% 

Imports 
Exports 
Total (I+E) 

Imports 
Exports 
Total (I+E) 

Source Trade G2 Statistics/ISDB  
Trade EU28: Eurostat COMEXT;  Trade Zimbabwe: IMF Dots 

Total merchandise trade EU28 with Zimbabwe (mio €) 

Zimbabwe 

Imports 
Exports 
Balance 
Total trade 
Source Trade G2 Statistics/ISDB from Eurostat COMEXT 

2017 

2018 

456 
192 
-265 
648 

455 
234 
-221 
689 

Growth 

mio 
€ 

-2 
42 
44 
41 

annual 
% 
-0,3% 
22,1% 

6,3% 

Agrifood trade EU28 with Zimbabwe (mio €) 

Zimbabwe 

Imports 
Exports 
Balance 
Total trade 
Source Trade G2 Statistics/ISDB from Eurostat COMEXT 

NAMA trade EU28 with Zimbabwe (mio €) 

Zimbabwe 

EU28 imports 
EU28 exports 
Balance 

274 

2017 

2018 

234 
15 
-218 
249 

195 
29 
-166 
223 

Growth 

mio 
€ 
-39 
14 
53 
-25 

annual 
% 
-16,7% 
88,8% 

-10,2% 

2017 

2018 

223 
176 
-47 

260 
205 
-55 

Growth 

annual 
% 
16,8% 
16,3% 

mio 
€ 
38 
29 
-9 

 
 
  
  
  
  
  
  
  
  
  
  
  
  
 
  
 
  
  
  
  
 
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
Total trade 
Source Trade G2 Statistics/ISDB from Eurostat COMEXT 

399 

465 

66 

16,6% 

Services trade EU28 with Zimbabwe (mio €) 

Zimbabwe 

Imports 
Exports 
Balance 
Total trade 
Source Trade G2 Statistics/ISDB from Eurostat BOP statistics 

2016 

2017 

90 
179 
89 
269 

84 
381 
297 
465 

Growth 

mio 
€ 

-6 

annual 
% 
-6,6% 
201  112,2% 
207 
195 

72,5% 

Services trade EU28 with Zimbabwe (mio €) 

Imports 
Exports 
Balance 
Total trade 
Source Trade G2 Statistics/ISDB from Eurostat BOP statistics 

2013 

2014 

2015 

2016 

2017 

140 
200 
61 
340 

147 
211 
64 
358 

195 
233 
38 
427 

90 
179 
89 
269 

84 
381 
297 
465 

FDI EU28 with Zimbabwe (mio €) 

Inward 
Outward 

Inward 
Outward 
Source Trade G2 Statistics/ISDB from Eurostat BOP statistics 

FDI Stocks 

FDI Flows 

2013 

2014 

2015 

2016 

2017 

9 
199 

10 
279 

-4 
19 

-1 
37 

46 
916 

-3 
175 

3 
353 

-44 
18 

9 
457 

14 
26 

275 

 
 
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
 
 
 
ANNUAL  INFO  SHEET  ON  THE  IMPLEMENTATION  OF  THE  ECONOMIC 
PARTNERSHIP AGREEMENT (EPA) BETWEEN THE EU AND COTE D’IVOIRE 

1. 

INTRODUCTION 

Pending  an  Economic  Partnership  Agreement  (EPA)  with  the  West  African  region,  Côte 
d’Ivoire concluded a stepping stone or interim Economic Partnership Agreement with the EU 
in  November  2008.118  The  stepping  stone  EPA  with  Côte  d’Ivoire  was  signed  on  26 
November 2008, approved by the European Parliament on 25 March 2009 and ratified by the 
Ivorian Parliament on 12 August 2016. It entered into provisional application on 3 September 
2016. The stepping stone or interim EPA (iEPA) will be substituted by the regional EU-West 
Africa EPA once the latter enters into force.119 By the end of 2018, 14 out of 15 members of 
the Economic Community of Western African States (ECOWAS), as well as Mauritania, had 
signed the regional EPA which now misses only Nigeria’s signature.   

Côte d'Ivoire has announced it will start to liberalize its market for a range of EU products. 
Agricultural products, including fruit and vegetables, are mostly excluded for liberalisation.  

2. 

EVOLUTION OF TRADE 

2.1 Trade in goods 

The EU continues to be the most important trade partner for Côte d’Ivoire: in 2018, 37% of 
Ivorian  exports  went  to  the  EU,  18%  to  the  West  African  region,  9%  to  the  US  and  6%  to 
Vietnam. While 18% regional exports is still a low amount, it is above the average of 10% in 
the ECOWAS region. Two thirds of these regional exports go Burkina Faso, Mali and Ghana. 
Regarding imports, the EU accounted for 41% of Ivorian imports from the world, followed by 
China  (13%)  and  Nigeria  (10%).  Around  15%  of  Ivoirian  imports  come  from  the  West 
African  region,  two  thirds  of  it  from  Nigeria  (mostly  mineral  fuels  and  other  petrol-based 
products). Within the EU, the Netherlands, France and Germany are the main trading partners 
of Côte d’Ivoire.  

Total trade with Côte d’Ivoire has decreased by €342 million or 4.6% in 2018. EU imports 
from  Côte  d’Ivoire  decreased  by  €238  million  (-5%)  and  EU  exports  to  Côte  d’Ivoire 
decreased  by  €105  million  (-3.7%).  The  trade  balance  remains  strongly  in  favour  of  Côte 
d’Ivoire (€1.7 billion), due to a large surplus in agrifood trade (€2.8 billion); however, Côte 
d’Ivoire runs a deficit for non-agricultural trade (-€1.1 billion).  

The decrease in EU imports from Côte d’Ivoire in 2018 can be attributed to a decrease in 
value of imports of raw and processed cocoa products by €175 million or 5.6%, as well as a 
decrease in imports of rubber products by €79 million or 20%. EU imports of all main Ivorian 
export products have decreased in 2018, except for imports of mineral fuels (+ 7%) and coffee 
(+ 0.7%) which have slightly increased. The decrease in cocoa and rubber exports was caused 

118 The official name of the agreement ("stepping-stone agreement") reflects the fact that the initial and ultimate 
objective for economic partnership in West Africa is a comprehensive, regional agreement. It is also called 
"interim EPA".  

119 The  Economic  Partnership  Agreement  was  signed  in  December  2014  by  the  European  Union  and  13  West 
African  Countries.  In  2018,  the  Gambia  and  Mauretania  signed  the  agreement,  making  Nigeria  the  only 
remaining country opposed to the EPA. The agreement will enter into provisional application if the 16 West 
African Countries sign the agreement and 2/3 of these countries ratify it.  

276 

 
 
 
 
 
                                                 
by  a  drop  in  global  market  prices.  The  transmission  of  these  external  shocks  to  domestic 
prices has been significant due to inadequate institutional mechanisms to deal with such price 
fluctuations for its major commodities (e.g. in comparison to Ghana, where the value of both 
raw and processed cocoa exports increased in 2018).  

Nevertheless,  cocoa  and  transformed  cocoa  products  remain  Côte  d’Ivoire’s  main  export 
products, accounting for 64% of total EU imports from Côte d’Ivoire in 2018. Ivorian exports 
of cocoa paste, butter and powder, as well as chocolate, have continuously increased in recent 
years and, being less sensitive to price fluctuations, are supporting the creation of a local agro-
industry.  Other  imports  from  Côte  d’Ivoire  are  mineral  fuels,  rubber  and  articles  thereof, 
edible fruits and nuts (primarily bananas) and prepared fish products (mainly canned tuna).  

Preference  utilisation  rates  for  Côte  d’Ivoire  are  continuously  in  the  98-99%  range. 
Preferences  are  used  in  particular  for  cocoa  and  cocoa  products,  vegetables,  prepared 
foodstuffs and wood products.  

EU imports from Côte d’Ivoire are still little diversified. The total number of product lines a 
value  of  imports  of  at  least  €1  million  was  46  in  2018,  basically  the  same  as  in  2014  (49 
product lines). The share of the top 10 products in total EU imports from Côte d’Ivoire is 91% 
in 2018.  

2018 top 10 EU imports from Côte d’Ivoire 
Product 
180100 

Description 
Cocoa beans, whole or 
broken, raw or roasted 

Volume 
2,031,132,131 

Share 
46.1 % 

270900 

Petroleum oils  

439,047,913 

10 % 

2018 top 10 EU exports to Côte d’Ivoire 
Product  Description 
300490  Medicaments for 

therapeutic or prophylactic 
purposes (…) 
271019  Medium oils, of petroleum 

(…) 

Volume 
115,742,480 

Share 
4.2 % 

81,087,801 

3 % 

180400 

180310 

400122 

080390 

160414 

180620 

180320 

Cocoa butter, fat and 
oil 
Cocoa paste (excl. 
defatted) 
Technically specified 
natural rubber "TSNR" 
Fresh or dried bananas 
(excl. plantains) 

Prepared or preserved 
tunas, skipjack and 
Atlantic bonito 
Chocolate and other 
food preparations 
containing cocoa (…) 
Cocoa paste, wholly or 
partly defatted 

359,104,444 

8.2 % 

240120  Tobacco 

79,088,806 

2.9 % 

342,331,572 

7.8 % 

100199  Wheat and meslin  

72,127,390 

2.6 % 

262,330,162 

6 % 

271012  Light oils, of petroleum 

69,299,221 

2.5 % 

(…) 

237,878,059 

5.4 % 

870323  Motor cars / vehicles for 

51,493,053 

1.9 % 

120,405,890 

2.7 % 

112,232,097 

2.5 % 

the transport of <10 
persons 

851762  Machines for the reception, 
conversion, transmission of 
voice (…) 
870120  Road tractors for semi-

trailers 

36,035,865 

1.3 % 

34,100,342 

1.2 % 

82,022,685 

1.9 % 

190190  Malt extract; food 

33,099,317 

1.2 % 

preparations of flour, 
groats, meal, starch or malt 
extract, (..) food 
preparations of milk, 
cream, butter milk, sour 
milk, sour cream, whey, 
yogurt, kephir (…) 

400129 

Natural rubber in 
primary forms or in 
plates, sheets or strip 
(…) 
Total top 10 products 

43,454,296 

1 % 

870210  Motor vehicles for the 

32,157,382 

1.2 % 

transport of >= 10 persons 
(…) 

4,029,939,200 

91.6 % 

Total top 10 products 

604,231,680 

22 % 

Source: Eurostat (Product descriptions are partly shortened) 

277 

 
 
 
 
 
 
 
 
The decrease in EU exports to Côte d’Ivoire in 2018 can be explained by an unusual spike in 
exports of aircrafts and aircraft parts in 2017. As part of its expansion, the national carrier Air 
Côte d’Ivoire is  expanding  and has made purchases  of  €123 million in  2017  – a figure that 
went down to €7 million in 2018. Disregarding the aircraft sector, EU exports to Côte d’Ivoire 
actually continue to increase, namely by 0.5% in 2018.  

Main export increases in 2018 concern machinery and mechanical appliances (+€66 million, 
+16%),  motor  vehicles,  particularly  cars  (+€48  million,  +24%),  and  articles  of  iron  or  steel 
(+€28 million, +22%). Main export decreases concern pharmaceutical products (-€77 million, 
-34%),  ships  and  boats  (-€30  million,  -64%)  and  electrical  machinery  and  equipment  (-€22 
million, -10%).  

In the agri-food trade, Côte d’Ivoire continued enjoying huge surplus of €2.8 billion due to 
significant  exports  of  cocoa  products,  followed  by  tropical  fruits,  mainly  bananas.  EU  agri-
food exports to Côte d’Ivoire are at much lower level (€584 million, compared to €3.4 billion 
of  agri-food  imports  from  Côte  d’Ivoire)  and  diversified,  with  wheat  being  the  lead  export 
product, followed by tobacco, infant food and other cereals, starch or milk preparation, wine, 
vegetables and offal, animal fats and other meats. 

2.2 Trade in services 

The interim  EPA  with  Côte d’Ivoire does not  cover services.  Trade in  services between the 
EU and Côte d’Ivoire increased by 2.8% in 2017, due to an increase of EU exports by 9.8% or 
€84 million. EU services imports from Côte d’Ivoire decreased by 7.7% or €44 million. Total 
services trade balance is positive for the EU. 

2.3 Foreign Direct investment (FDI) 

The interim  EPA  with Côte d’Ivoire does not  include provisions on investment.  EU foreign 
direct  investment  stocks  in  Côte  d’Ivoire  stood  at  €3.3  billion  in  2017.  New  outward 
investment in Côte d’Ivoire was €263 million in 2017.  

Côte  d’Ivoire  is  the  second  largest  EU  investment  destination  in  West  Africa  after  Nigeria. 
EU FDI accounted for over half of total FDI stocks in Côte d’Ivoire in 2016 (other important 
investors are Switzerland and the US; Chinese stocks are still rather limited even if inflows 
are  increasing).  The  activities  of  the  180  European  companies,  represented  by  European 
Chamber of Commerce in Côte d’Ivoire, account together for 26% of GDP and have created 
100,000 jobs in the country.120 

Gas-operated minivans for public transport, assembled in Abidjan 

One  of  the  objectives  of  the  EPA  is  to  contribute  to  a  stable  and  conducive 
investment climate in the country, attracting foreign investors to produce for local, 
regional  and  international  markets.  EU  investment  in  Côte  d’Ivoire  has  been 
increasing over the past decade, reflecting the decisions of EU companies to locate 
assembly  or  production  lines  in  the  country  to  increase  their  market  share  in  the 

120 Eurocham Côte d’Ivoire, 2019: https://eurochamci.com/assets/files/livre-blanc-2019-version-numerique.pdf   

278 

 
 
 
 
 
 
 
 
                                                 
domestic and regional market – or even export to Europe.  

In  2018,  the  Italian  automotive  company  IVECO  has  been  the  latest  European 
company  to  announce  an  investment  into  an  assembly  line  in  Abidjan.  The 
announcement to invest locally follows a first agreement for the acquisition of 450 
gas-powered  busses  and  105  waste  management  vehicles  between  IVECO,  the 
Moroccan  Premium  Group,  the  city  of  Abidjan  and  Abidjan’s  public  transport 
company (SOTRA).  

Thanks  to  this  partnership  with  SOTRA  and  the  Ivorian  government,  IVECO  is  now 
investing in a local assembly plant with an initial capacity of 500 vehicles per year 
(minivans for urban and interurban transport) to serve the local market. In a second 
phase, special purpose minivans are foreseen to be produced, such as vans for cold-
chain transportation. This would be the first ever car assembly plant in the country. 
The construction of the plant was launched in August 2018 – production is expected 
to  start  in  the  first  half  of  2019.  The  investment  of  CFA  2  billion  (€3  million)  is 
expected to create around 500 jobs in a first phase.  

The Ivorian government is supporting the project in order to contribute to a renewal 
of the Ivorian car fleet. The new minivans will also make transport in Côte d’Ivoire 
more sustainable and efficient, with lower emission rates and noise disturbance, as 
they will mostly operate with natural gas – a novelty in Sub-Saharan Africa.  

ISSUES ADDRESSED IN THE ANNUAL EPA COMMITTEE MEETING 

3. 
The 3rd EPA Committee meeting between Côte d’Ivoire and the EU took place in April 2019. 
The  parties  took  stock  of  the  liberalisation  process  in  Côte  d’Ivoire,  which  started  on  1st 
January 2019, as well as the preparation of the dispute settlement framework under the EPA. 
The parties also discussed the first joint monitoring report on the implementation of the EPA 
and  agreed  to  finalize  the  report  in  the  second  half  of  2019.  The  parties  furthermore 
exchanged  views  on  an  on-going  study  to  assess  the  impact  of  the  iEPA  on  regional 
integration in the West African region.  

In  Côte  d’Ivoire,  a  technical  group  on  sustainable  development  was  established  under  the 
presidency  of  civil  society  groups,  to  promote  feedback  from  civil  society  on  EPA 
implementation and impact. The group is formally part of the “Commission Nationale APE”, 
the governing body in charge of implementing the iEPA in Cote d’Ivoire. The technical group 
on sustainable development reported to the EPA Committee on its first meeting and provided 
a number of recommendations on how to tackle questions of sustainable development in the 
framework  of  the  EPA  and  how  to  organise  future  collaboration  between  the  Ivorian  and 
European civil society.  

4. 

DEVELOPMENT COOPERATION 

Development  cooperation,  particularly  trade-related  assistance,  is  an  important  pillar  of  the 
EPA, as it contributes to operationalizing the development dimension of the partnership.  

279 

 
 
 
 
 
 
 
In 2018, the EU already supported Côte d’Ivoire in undertaking an impact study to determine 
the  potential  effects  of  the  interim  EPA  on  regional  integration  and  regional  trade  in  West 
Africa, and suggest mediation measures.  

The EU provides budget support to Côte d’Ivoire under a good governance budget support 
contract  (€60  million,  2016-2020)  with  the  aim  to  improve  economic  governance  and  the 
investment  climate  overall.  Another  budget  support  operation  on-going  is  the  Programme 
d'appui au foncier rural (PAFR) (€41 million 2016-2022) which aims at investing in rural 
infrastructure, agricultural modernisation and security in rural areas.  

The  Côte  d’Ivoire  EPA  Implementation  Strategy  was  adopted  in  October  2017.  A 
dedicated  EU-financed  programme  (€5  million  in  support  of  EPA  implementation)  and 
hence  the  operationalisation  of  the  strategy,  is  currently  under  preparation.  It  will  promote 
customs cooperation on tariff and non-tariff issues and provide support to reduce barriers to 
trade. The programme will also assist relevant government actors with other reforms related 
to  the  implementation  of  the  EPA,  including  transition  in  taxation  (diversification  of  fiscal 
revenues away from customs income) and the establishment of trade defence instruments.    

Côte d'Ivoire is benefiting from the regional West Africa Competitiveness programme that 
aims  at:  (1)  Upgrading  and  supporting  consortia  of  companies  in  target  sectors  and  value 
chains; (2) Strengthening the capacities of the Private Sector Intermediary Organizations that 
will serve as a lever for modernization, competitiveness and growth for SMEs; (3) Improving 
the  overall  business  regulatory  environment.  The  national  component  for  Côte  d'Ivoire 
(PACIR  II)  is  €9  million  and  will  further  consolidate  results  achieved  under  the  previous 
Trade and Regional Integration support programme (PACIR I, €16 million, 2010-2015). The 
project will start operations in 2019.  

Côte  d’Ivoire  will  also  benefit  from  the  other  regional  programmes,  including  the  West 
Africa  Trade  Facilitation  Programme  (€20  million  EU  contribution)  that  aims  at 
improving regional trade measures and movement of goods along selected priority corridors 
including the Abidjan - Ouagadougou corridor and also regional infrastructure investment 
programmes that foresee an investment of €28.6 million on the Bamako-San Pedro corridor 
between Mali and Côte d’Ivoire, as well as €9.43 million for pre-studies on the construction 
of a motorway between Abidjan and Lagos.  

5. 

PROGRESS MADE, MAIN OPEN ISSUES AND FOLLOW-UP ACTIONS 

Côte d’Ivoire is becoming the driving force behind trade integration and liberalisation in West 
Africa. It is implementing the EPA despite a difficult regional situation, with Nigeria blocking 
progress towards both the regional EPA, as well as free movement of goods within ECOWAS 
itself.  

As  mentioned  above,  Côte  d’Ivoire  commissioned  a  study  with  the  financial  support  of  the 
EU to measure the impact of the interim EPAs (Côte d’Ivoire and Ghana) on regional trade. A 
technical  workshop  took  place  in  Abidjan  on  7-8  May  2019  to  present  its  results  and 
recommendations  to  EPA  stakeholders  in  Côte  d'Ivoire,  Ghana,  Burkina,  Mali  and  to  the 
regional  organisations  West  African  Economic  and  Monetary  Union  (WAEMU)  and  the 
Economic Community of West African States (ECOWAS).  

The study shows that the possible impact is limited in terms of trade flows (affecting 2% of 
regional  trade),  products  (about  15  products)  and  affected  countries  (2  countries).  Trade 

280 

 
 
 
 
 
 
 
distortions  might  thus  occur  but  focused  on  few  products  and  with  limited  scale.  The  study 
provides  pragmatic  solutions  to  mitigate  the  risk  of  distortion.  Due  to  the  progressive 
liberalisation, effects may become more significant as from 2024 for Côte d'Ivoire and 2026 
for Ghana.  In the medium  and long term, the best  solution  would be of course to  adopt  the 
regional EPA.  

CONCLUSIONS AND OUTLOOK 

6. 
Côte d'Ivoire started the liberalisation of its market for EU exporters on 1st of January 2019. 
This  is  an  important  step  in  EU  trade's  relationship  with  Côte  d’Ivoire,  making  it  the  first 
country  in  West  Africa  to  open  its  market  in  the  context  of  the  EPAs.  Both  parties  are 
engaged  to  closely  monitor  and  evaluate  the  process,  including  in  cooperation  with  the 
regional  organisations  West  African  Economic  and  Monetary  Union  (WAEMU)  and 
Economic Community of West African States (ECOWAS). The EU will support Côte d'Ivoire 
in the implementation of the EPA through trade related development assistance. 

7. 

STATISTICS 

Merchandise trade EU28 with Côte d'Ivoire 2014-2018 

2014 

2015 

2016 

2017 

2018 

EU28 trade with Côte d'Ivoire (mio €) 
Imports 
Exports 
Balance 
Share Côte d'Ivoire in EU28 trade with Extra-EU28  
Imports 
Exports 
Total (I+E) 
Share EU28 in trade Côte d'Ivoire with world 
Imports 
Exports 
Total (I+E) 
Source Trade G2 Statistics/ISDB,  
Trade EU28: Eurostat COMEXT;  Trade Ivory Coast: IMF Dots 

3.256 
2.310 
-946 

0,2% 
0,1% 
0,2% 

26,9% 
35,3% 
31,4% 

4.255 
2.672 
-1.583 

0,2% 
0,1% 
0,2% 

33,1% 
42,1% 
38,1% 

4.573 
2.437 
-2.136 

0,3% 
0,1% 
0,2% 

31,1% 
40,7% 
36,4% 

4.641 
2.846 
-1.795 

0,2% 
0,2% 
0,2% 

37,2% 
40,7% 
39,2% 

4.404 
2.742 
-1.662 

0,2% 
0,1% 
0,2% 

37,2% 
41,2% 
39,3% 

Growth of merchandise trade EU28 with Côte d'Ivoire (mio €) 

Côte d'Ivoire 

2017 

2018 

Imports 
Exports 
Balance 
Total trade 
Source Trade G2 Statistics/ISDB from Eurostat COMEXT 

4.641 
2.846 
-1.795 
7.488 

4.404 
2.742 
-1.662 
7.145 

Agrifood trade EU28 with Côte d'Ivoire (mio €) 

Côte d'Ivoire 

2017 

2018 

Imports 
Exports 
Balance 
Total trade 
Source Trade G2 Statistics/ISDB from Eurostat COMEXT 

3.543 
575 
-2.968 
4.118 

3.361 
584 
-2.777 
3.944 

NAMA trade EU28 with Côte d'Ivoire (mio €) 

Côte d'Ivoire 

2017 

2018 

EU28 imports 
EU28 exports 

1.098 
2.271 

1.043 
2.158 

281 

Growth 

mio € 

-238 
-105 
133 
-342 

annual 
% 
-5,1% 
-3,7% 

-4,6% 

Growth 

mio € 

-183 
8 
191 
-174 

annual 
% 
-5,2% 
1,5% 

-4,2% 

Growth 

mio € 

-55 
-113 

annual 
% 
-5,0% 
-5,0% 

 
 
  
 
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
 
  
  
  
  
  
  
  
  
  
Balance 
Total trade 
Source Trade G2 Statistics/ISDB from Eurostat COMEXT 

1.173 
3.369 

1.115 
3.201 

-58 
-168 

-5,0% 

Growth of Services trade EU28 with Côte d'Ivoire (mio €) 

Côte d'Ivoire 

2016 

2017 

Growth 

annual 
% 
-7,7% 
9,8% 

2,8% 

Imports 
Exports 
Balance 
Total trade 
Source Trade G2 Statistics/ISDB from Eurostat BOP statistics 

579 
854 
275 
1.433 

534 
938 
404 
1.472 

mio € 

-44 
84 
128 
40 

Services trade EU28 with Côte d'Ivoire (mio €) 

2013 

2014 

2015 

2016 

2017 

Imports 
Exports 
Balance 
Total trade 
Source Trade G2 Statistics/ISDB from Eurostat BOP statistics 

410 
928 
518 
1.338 

478 
793 
315 
1.271 

673 
827 
154 
1.500 

579 
854 
275 
1.433 

534 
938 
404 
1.472 

Foreign Direct Investment (FDI) EU28 with Côte d'Ivoire (mio €) 

Inward 
Outward 

2013 
FDI Stocks 

-4 
2.875 

FDI Flows 

Inward 
Outward 
Source Trade G2 Statistics/ISDB from Eurostat BOP statistics 

-195 
125 

2014 

2015 

2016 

2017 

3 
3.695 

35 
-75 

-215 
3.817 

-232 
729 

-231 
3.616 

-96 
106 

582 
3.364 

668 
263 

282 

 
 
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
   
 
 
 
ANNUAL  INFO  SHEET  ON  THE  IMPLEMENTATION  OF  THE  ECONOMIC 
PARTNERSHIP AGREEMENT (EPA) BETWEEN THE EU AND GHANA 

1. 

INTRODUCTION 

Pending an EPA with the West African region, Ghana concluded a stepping stone (or interim) 
Economic Partnership Agreement with the EU in December 2007.121 The stepping stone EPA 
with  Ghana  was  signed  on  28  July  2016,  ratified  on  3  August  2016  by  the  Ghanaian 
Parliament  and  approved  by  the  European  Parliament  on  1  December  2016.  It  entered  into 
provisional  application  on  15  December  2016.  This  agreement  will  be  substituted  by  the 
regional EU-West Africa EPA once the latter enters into force.122  

2. 

EVOLUTION OF TRADE 

2.1 Trade in goods 

The EU is still Ghana’s largest trading partner, accounting for 21% of Ghana’s exports (ahead 
of India with 19% and China with 17% in 2018) and 31% of Ghana’s imports (ahead of China 
with 16% and the US with 8%). Only 13% of Ghana’s exports go to the West African region 
and less than 4% of Ghana’s imports come from the region.  

Total trade between the EU and Ghana increased by 15% in 2018. This is mostly due to an 
increase in EU imports from Ghana by €1 billion or 48% to €3.1 billion. EU exports to Ghana 
decreased by €218 million or 7% to €2.8 billion. The overall trade balance is negative for the 
EU, for both agricultural and non-agricultural goods.  

The strong increase in EU imports from Ghana has much to do with an increase in mineral oil 
imports  by  €833  million  (+180%).  But  beyond  oil,  EU  imports  of  raw  cocoa  beans  from 
Ghana increased by €86 million (+14%) and imports of cocoa paste and butter increased by 
€25  million  (+5.6%).  Even  though  imports  of  further  transformed  cocoa  powder  and 
chocolate  slightly  decreased  in  2018,  processed  cocoa  products  (paste,  butter,  powder  and 
chocolate) now account for 42% of the overall value of Ghanaian cocoa exports to the EU.  

In  addition,  EU  imports from  Ghana  of  aluminium  (+€38  million,  78%), vegetable  fats  and 
oils (+ €10 million or 31%), prepared or preserved tuna (+€8.6 million or 6.7%), copper (+€5 
million, 20%), and edible fruits and nuts (+4 million or 3%; mostly coconut and bananas) also 
increased in 2018. Some emerging sectors showed high growth rates, for example exports of 
fresh coconuts (+230%) or perfumes and “Eaux de toilette” (+100%). 

On the other hand, EU imports of rubber from Ghana decreased by 30% and imports of fruit 
juices decreased by 40%.  

Main  destination  of  Ghanaian  exports  in  the  EU  are  the  Netherlands,  the  UK,  France, 
Germany and Spain. Preference utilisation rates for EU imports from Ghana are continuously 
around 98 or 99%.  

121 The official name of the agreement ("stepping-stone agreement") reflects the fact that the initial and ultimate objective for 

an economic partnership in West Africa is a comprehensive, regional agreement. It is also called "interim EPA" 

122  The  Economic  Partnership  Agreement  was  signed  in  December  2014  by  the  European  Union  and  13  West  African 
Countries. The agreement will enter into provisional application if the 16 West African Countries sign the agreement and 
2/3 of these countries ratify it. In 2018, both the Gambia and Mauritania signed the agreement, which means that only 
Nigeria’s signature is still missing. 

283 

 
 
 
 
 
 
 
                                                 
EU imports from Ghana are diversifying only slowly. The 10 main EU import products (at HS 
6-digit level), accounting for 89.8% of total imports, were petroleum oils, cocoa beans, cocoa 
butter, cocoa paste, prepared or preserved tuna, raw aluminium, bananas, vegetable fats and 
oils, cocoa powder, and finally wholly or partly defatted cocoa paste.  

2018 top 10 EU imports from Ghana  
Product  Description 
270900  Petroleum 

Volume 
1,287,586,845  41.2 

Share  Product  Description 

271019  Medium oils  

2018 top 10 EU exports to Ghana 

oils  

180100  Cocoa beans  700,951,960 

180400  Cocoa 
butter, 
and oil 

fat 

260,675,615 

271012  Light  oils  and 

% 
22.4 
% 
8.3 %  630900  Second  hand 

preparations 

textiles 

Volume 
301,419,989  10.7 

Share 

% 

181,013,501  6.4 % 

105,027,696  3.7 % 

180310  Cocoa  paste 

172,870,574 

5.5 %  020714  Frozen chicken  104,132,301  3.7 % 

(excl. 
defatted) 

160414  Prepared  or 

137,899,394 

4.4 %  300490  Medicaments  

72,103,801 

2.6 % 

80,526,891 

2.6 %  843041  Self-propelled 

41,208,810 

1.5 % 

or 

boring 
sinking 
machinery  for 
boring earth or 
extracting 
minerals 
ores  
1.8 %  843143  Parts 

or 

for 
or 

boring 
sinking 
machinery 

33,874,967 

1.2 % 

151590  Fixed 

44,059,240 

1.4 %  170199  Cane  or  beet 

32,118,832 

1.1 % 

sugar  

preserved 
tunas 

760110  Aluminium, 
not  alloyed, 
unwrought 

or 

57,073,806 

080390  Fresh 
dried 
bananas 
(excl. 
plantains) 

vegetable 
fats and oils  

180500  Cocoa 

37,839,836 

powder 

31,836,485 

180320  Cocoa 
paste, 
wholly 
partly 
defatted 
Total top 10  2,811,320,576  89.8 

or 

1.2 %  830710  Flexible  tubing 
of iron or steel, 
with 
or 
without fittings 
for 

870410  Dumpers 

1 % 

27,758,778 

1 % 

26,942,320 

1 % 

off-highway 
use 

Total  top  10  925,601,024  32.9 

284 

 
 
 
 
 
 
products 

% 

products 

% 

Source: Eurostat (product names partly shortened) 

In  2018,  the  EU  imported  58  different  products  (at  HS  6-digit  level)  with  a  value  of  above 
€1 million  from  Ghana  (compared  to  65  products  in  2014).  However,  the  degree  of 
diversification  is  significantly  higher  than  with  other  export  partners  (e.g.  China  imported 
only 14 products with a value of above €1 million from Ghana in 2017)123. 

The  decrease  in  EU  exports  to  Ghana  was  mostly  driven  by  a  decrease  in  exports  of 
miscellaneous  articles  of  base  metal  (-€119  million,  -72%),  as  well  as  machinery  and 
mechanical  appliances  (-€48  million,  -8.7%),  motor  vehicles  (-€33  million,  -17.6%)  and 
optical, medical or surgical instruments (-€22 million, -27%).  

On the other hand, EU exports of pharmaceutical products (+€42 million, +51%), sugar (+€16 
million, 95.2%) and chicken meat (+€14 million, +9.5%) increased in 2018. 

EU imports of agri-food products from Ghana have increased by €118 million or 9% in 2018 
to a total of €1.4 billion, while EU agri-food exports to Ghana increased by €5 million to €460 
million.  While,  as  mentioned  above,  Ghana´s  agri-food  exports  are  by  far  concentrated  in 
cocoa products, followed by tropical fruits, EU exported to Ghana mainly poultry meat (25% 
of  EU  agri-food  exports  to  Ghana),  followed  by  sugar,  vegetable  oils,  offal,  animal  fat  and 
other meats. Ghana is not yet liberalizing its market for EU imports under the EPA, and most 
agricultural products will remain excluded from liberalization.  

2.2 Trade in services 

The interim EPA with Ghana does not cover trade in services. Total EU services trade with 
Ghana  decreased  by  50%  in  2017.  EU  imports  of  services  from  Ghana  decreased  by  €845 
million or 45% to 568 million. EU exports of services to Ghana decreased by €777 million or 
58% to €1.022 billion. Overall balance is positive for the EU.  

2.3 Foreign Direct investment (FDIs) 

The  interim  EPA  with  Ghana  does  not  contain  provisions  on  investment.  EU  foreign  direct 
investment  stocks  in  Ghana  stood  at  €1.7  billion  in  2017,  down  from  €2.5  billion  in  2016. 
New EU FDI flows to Ghana amounted to €74 million in 2017, also down from €201 million 
in 2016.  

Ghana  remains  a  popular  destination  for  doing  business  in  West  Africa  due  to  its  political 
stability, relatively open democratic institutions, free media and a fairly vibrant civil society. 
The  2018  Mo  Ibrahim  Index  on  African  Governance  ranks  Ghana  6  out  of  54  African 
countries  with  increasing  improvement  in  such  indicators  as 
'Sustainable  Economic 
Opportunities' and 'Safety and Rule of Law'.124 Ernst and Young, assessing attractiveness of 
countries  as  a  FDI  destination,  rank  Ghana  7th  out  of  54  African  countries  in  2017.125 
European  businesses  are  very  interested  in  using  Ghana  as  a  gateway  for  the  region.  Large 

123 Source: COMTRADE, Reporter data for China, accessed May 2019 
124 Mo Ibrahim Index on African Governance 2018. Available at: http://iiag.online/  
125 Ernst and Young, 'Turning tides EY Attractiveness Program Africa, 2018'. Available at: https://www.ey.com/Publication/vwLUAssets/ey-

Africa-Attractiveness-2018/$FILE/ey-Africa-Attractiveness-2018.pdf  

285 

 
 
 
 
 
 
 
                                                 
companies, such as Volkswagen and Bosch, have expressed interest in investing in assembly 
lines in Ghana.   

The current Ghanaian administration appears determined to tackle increasing imports through 
nationwide policies as 'One District One Factory', attempting to boost private investment and 
local production capacity for local consumption and increased exports. 

3. 

ISSUES ADDRESSED IN THE FIRST MEETING OF THE JOINT EPA COMMITTEE 

After Ghana's ratification in 2016, the preparatory work for implementation commenced. As a 
result,  the  first  meeting  of  the  EPA  Committee  was  held  in  Accra,  Ghana,  on  24  January 
2018.  The  EPA  Committee  adopted  its  rules  of  procedures  governing  the  Joint  EPA 
committee. The Parties exchanged information on the state of play in the implementation of 
the  EPA  with  Côte  d’Ivoire  and  the  process  of  adoption  of  the  regional  EPA  with  West 
Africa.  

The  Parties  met  again  in  a  technical  meeting  in  December  2018  to  continue  discussions  on 
Ghana’s updated liberalization schedule. The interim EPA was negotiated back in 2007 and 
was only signed and ratified in 2016, therefore a certain number of dates in the market access 
offer  are  in  the  past  and  have  to  be  updated.  The  Parties  made  substantial  progress  in  the 
transposition  of  Ghana’s  market  access  commitments  from  HS2002  (in  which  it  was 
originally drafted) to HS2017 and which has been now fully endorsed. The Parties also agreed 
on the rules of origin and the institutional set up for the implementation of the EPA.  

Following this meeting, Ghana made an announcement at the meeting of the WTO committee 
for regional trade agreement in late 2018 that it will start the liberalisation of its market to EU 
products by the beginning of 2020.   

4. 

DEVELOPMENT COOPERATION 

Development cooperation, particularly trade-related assistance, is an important pillar of EPA, 
as it contributes to operationalizing the development dimension of the partnership.  

Ghana  adopted  an  EPA  Accompanying  Measures  Strategy  in  2015  to  facilitate  EPA 
implementation. The EU will support the implementation of the strategy with €12 million for 
2018-2023 through the following projects: i) support to  the Ministry of  Trade to  implement 
the  EPA  and  to  engage  on  EPA-related  issues;  ii)  support  to  the  Ghana  Export  Promotion 
Authority and the Ghana Investment Promotion Centre in promoting local SMEs to upgrade 
along  value  chains  and  improve  the  quality  of  their  products;  and  iii)  overall  support  to 
improving the business policy and regulatory environment. 

The  first  action,  Support  to  the  Ministry  of  Trade  (€4.1  million,  2019-2021)  aims  at 
information  dissemination, awareness  raising  and mainstreaming the EPA across public and 
private  sector,  as  well  as  capacity  building  for  EPA  implementation  and  monitoring. 
Implementation will start in 2019.    

In  2018,  the  EU  already  launched  the  Ghana  Employment  and  Social  Protection 
Programme  (GESP)  –  Investment  Promotion  Component  (€2.8  million,  2018-2021) 
which aims at fostering access to business development services (BDS), promoting structured 
business  advocacy initiatives and supporting investment  promotion  and business linkages in 
selected  value  chains.  The  project  will  undertake  a  structured  sequence  of  investment 

286 

 
 
promotion  activities,  such  as  identifying  potential  investors,  lead  companies  and  local 
suppliers,  preparing  investment  briefs  to  key  target  investors,  supporting  promotion 
campaigns  and  providing  investor  management.  In  2018,  the  project  organised  six  large 
workshops across the country to identify SMEs in the agribusiness sector to be included in the 
business linkages and investment promotion activities.  

Under the regional West Africa Competitiveness Programme, the national component in 
Ghana  (€6.35  million,  2019-2022)  will  focus  on  value  chain  development  in  the  fruits 
(pineapple and mango), cassava and cosmetics sector. Planned activities include value chain 
diagnostics,  strengthening  of  intermediary  organizations,  and  specific  training  of  brokers, 
cluster  development  agents  and  micro,  small  and  medium  sized  enterprises  (MSMEs). 
Implementation  has  started  in  2019.  Ghana  will  also  benefit  from  the  other  regional 
programmes,  including  the  West  Africa  Trade  Facilitation  Programme  (€20  million  EU 
contribution), that aims at improving regional trade measures and movement of goods along 
selected priority corridors including the Tema - Ouagadougou corridor.  

The  EU  further  supports  Ghana's  agricultural  sector  through  the  Market  Oriented 
Agricultural programme (MOAP) (€35 million, 2017-2024) and the programme to promote 
productive  investments  for  sustainable  agriculture  in  Northern  Ghana  (2018-2025, 
102M€).  

The EU is also implementing the Budget Support Programme to Promote Investment and 
Job  Creation  (SDG-Contract,  45  M€,  2019-2021)  which  aims  at  promoting  domestic  and 
foreign  investment  and  strengthening  public  financial  governance  and  fight  against 
corruption, as well as boosting domestic revenue mobilisation.  

5. 

FOLLOW-UP ACTIONS 

In relation to the next steps for the iEPA, EU and Ghana agreed to:  

a)  Review and endorse the updated liberalization schedule; 
b)  Set up an appropriate mechanism to monitor the operation and impact of the EPA;  
c)  Start negotiating the dispute settlement mechanism. 

6. 

CONCLUSIONS AND OUTLOOK 

The  implementation  of  the  iEPA  with  Ghana  is  in  its  early  stages.  As  Ghana  moves  to 
implement its market access commitments, close attention will be paid to the effects the iEPA 
might have for Ghana's economy in terms of trade and investment flows, government revenue 
and sustainable development. In the coming years, the implementation of iEPA should also be 
impacted by the ongoing business climate and fiscal reforms in Ghana and by the EU support 
to various aspects of iEPA implementation.  

7. 

STATISTICS 

Merchandise trade EU28 with Ghana 2014-2018 

EU28 trade with Ghana (mio €) 
Imports 

2014 

2015 

2016 

2017 

2018 

2.885  2.645  2.301  2.119 

3.126 

287 

 
 
  
 
  
  
  
  
Exports 
Balance 
Share Ghana in EU28 trade with Extra-EU28 
Imports 
Exports 
Total (I+E) 
Share EU28 in trade Ghana with world 

Imports 

Exports 

Total (I+E) 

3.116  3.061  2.888  3.042 
923 

416 

231 

587 

0,2% 
0,2% 
0,2% 

0,2% 
0,2% 
0,2% 

0,1% 
0,2% 
0,2% 

0,1% 
0,2% 
0,1% 

33,8
% 
21,2
% 
27,5
% 

30,3
% 
14,4
% 
22,3
% 

31,2
% 
13,3
% 
22,6
% 

31,8
% 
17,5
% 
24,2
% 

Source Trade G2 Statistics/ISDB  
Trade EU28: Eurostat COMEXT;  Trade Ghana: IMF Dots 

2.824 
-302 

0,2% 
0,1% 
0,2% 

31,0% 

21,3% 

25,4% 
25-
mars-
19 

Growth of merchandise trade EU28 with Ghana (mio €) 

Growth 

Ghana 

2017 

2018 

Imports 
Exports 

Balance 
Total trade 
Source Trade G2 Statistics/ISDB from Eurostat COMEXT 

mio € 
2.119  3.126  1.007 
-218 
3.042  2.824 
-
1.225 
789 

-302 
5.161  5.951 

923 

annual 
% 
47,5% 
-7,2% 

15,3% 

Agri-food trade EU28 with Ghana (mio €) 

Ghana 

Imports 
Exports 
Balance 
Total trade 
Source Trade G2 Statistics/ISDB from Eurostat COMEXT 

2017 

2018 

1.314  1.431 
460 
455 
-859 
-971 
1.769  1.892 

Growth 

annual 
% 
9,0% 
1,2% 

7,0% 

mio € 
118 
5 
-112 
123 

NAMA trade EU28 with Ghana (mio €) 

Ghana 

2017 

2018 

EU28 imports 
EU28 exports 

Balance 
Total trade 
Source Trade G2 Statistics/ISDB from Eurostat COMEXT 

805  1.695 
2.587  2.364 

1.782 
669 
3.393  4.059 

Growth 

annual 
% 
110,4
% 
-8,6% 

19,6% 

mio € 

889 
-223 
-
1.113 
666 

Services trade EU28 with Ghana (mio €) 
Ghana 

2016 

2017 

Growth 

288 

 
 
 
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
Imports 
Exports 
Balance 

1.346 
568 
1.866  1.022 
454 

521 

Total trade 
Source Trade G2 Statistics/ISDB from Eurostat BOP statistics 

3.212  1.590 

Services trade EU28 with Ghana (mio €) 

annual 
% 
-57,8% 
-45,2% 

-50,5% 

mio € 
-777 
-845 
-67 
-
1.622 

Imports 
Exports 
Balance 
Total trade 
Source Trade G2 Statistics/ISDB from Eurostat 
BOP statistics 

2013 

2015 

2014 

2016 
577  1.171  1.361  1.346 
992  1.541  2.004  1.866 
521 
415 
1.568  2.712  3.365  3.212 

370 

643 

2017 
568 
1.022 
454 
1.590 

Foreign Direct Investment (FDI) EU28 with Ghana (mio €) 

2013 

2014 

2015 

2016 

2017 

FDI Stocks 

Inward 
Outward 

Inward 
Outward 
Source Trade G2 Statistics/ISDB from Eurostat BOP statistics 

-
1.074 

-426 
-639 
1.999  2.665  4.855  2.536 

-567 

-924 
1.709 

FDI Flows 

-62 
837 

-41 
69 

-424 
335 

-291 
201 

-605 
74 

289 

 
 
  
  
  
  
  
  
  
  
  
  
  
  
  
 
 
 
 
ANNUAL  INFO  SHEET  ON  THE  IMPLEMENTATION  OF  THE  ECONOMIC 
PARTNERSHIP AGREEMENT (EPA) BETWEEN THE EU AND CAMEROON 

1. 

INTRODUCTION 

On 17 December 2007, Cameroon and the EU initialled a stepping-stone EPA. They signed it 
on 15 January 2009. The European Parliament approved this agreement on 13 June 2013 and 
the Parliament of Cameroon proceeded to its ratification on 22 July 2014. On 4 August 2014, 
the agreement entered into provisional application. This EPA is a regional agreement and is 
open to the accession of other Central African countries. 

In  August  2016,  Cameroon  started  reciprocating  its  preferential  access  to  the  EU.  After  3 
years,  the  liberalisation  process  has  now  reached  cruising  speed.  Cameroon  will  liberalize 
80% of imports from the EU over 15 years. Products under liberalization are mainly industrial 
machines  (pumps,  generators,  turbines,  etc.),  electrical  equipment  (transformers,  capacitors, 
resistors, etc.) and certain chemicals. These are mostly inputs used by Cameroon's industries 
which are not produced locally. Eliminating import duties will reduce the costs of inputs for 
local businesses and will also benefit consumers.  

Cameroon has excluded a number of agricultural and non-agricultural processed goods from 
liberalisation of EU imports, mainly to ensure the protection of certain sensitive agricultural 
markets  and  industries  but  also  to  maintain  fiscal  revenues.  The  excluded  products  include 
most types of meat, wines and spirits, malt, milk products, flour, certain vegetables, wood and 
wood products, used clothes and textiles, paintings, and used tyres. 

2. 

EVOLUTION OF TRADE 

2.1 Trade in goods 

The EU is by far the most important trade partner of Cameroon: 48% of Cameroon's exports 
go  to  the  EU,  followed  by  China  (19%),  India  (8%),  as  well  as  the  Central  African  region 
(7%) and Nigeria (5%). In total 32% of Cameroon's imports come from the EU (followed by 
China with 19%).  

has 

trade 

with 
Total 
Cameroon 
been 
relatively  stable  over  the 
last  decade.  In  2018,  EU 
imports 
from  Cameroon 
decreased  by  €146  million 
(-7.6%) 
to  €1.8  billion, 
back  to  the  level  of  2016 
after  a  spike 
in  2017. 
Exports  from  the  EU  to 
increased  by 
Cameroon 
€106  million  or  7.2%  to 
€1.6  billion, 
recovering 
from a pronounced drop in 
2017. The balance of trade 

is positive for Cameroon. All exports from Cameroon enter the EU duty free and quota free. 

290 

 
 
 
 
 
The decrease in EU imports from Cameroon in 2018 can be attributed to a decrease in the 
value  of  imports  of  mineral  fuels  (-€63  million,  -7.7%),  cocoa  beans  (-€46  million,  -15%), 
bananas (-€41 million, -19%) and rubber (-€25 million, -50%).  

On  the  other  hand,  EU  imports  of  aluminum  from  Cameroon  increased  by  €18  million 
(+15.5%).  Similarly,  imports  of  wood  and  wood  articles  increased  by  €15  million  (+6%). 
While  still  fairly  limited  in  value  compared  to  imports  of  raw  cocoa  beans,  EU  imports  of 
processed cocoa paste and cocoa butter, fat and oils from Cameroon amounted to €31 million 
(+10%) and 72 million (+27%), respectively. Main destination for Cameroonian exports in the 
EU are France, Italy, the Netherlands and Spain.  

Imports from Cameroon are still little diversified. Main products exported from Cameroon to 
the  EU  are  oil  and  gas  (43%  of  total  exports  in  value),  cocoa  beans  (15%),  wood  (12%), 
bananas  (10%)  and  aluminium  (7%)  (Figures  for  2018).  The  top  10  products  accounted  for 
91.4%  of  total  imports  in  2018,  almost  the  same  figure  as  in  2008.  The  total  number  of 
products exported with an exporting value of at least €1 million was 29 in 2018 (32 in 2008), 
while the number of products exported valued at least €500,000 was 44 (42 in 2008).  

2018 top 10 EU imports from Cameroon  
Product  Description 
270900  Petroleum 

Volume 
717,045,244 

oils and oils 
obtained 
from 
bituminous 
minerals, 
crude 

180100  Cocoa beans, 

262,462,852 

whole or 
broken, raw 
or roasted 

080390  Fresh or 

175,086,969 

122,580,425 

dried bananas 
(excl. 
plantains) 

440729  Tropical 

wood, sawn 
or chipped 
lengthwise, 
sliced or 
peeled (…) 
760110  Aluminium, 
not alloyed, 
unwrought 

2018 top 10 EU exports to Cameroon 

Volume 
70,644,051 

Share 
4.5 % 

Share  Product  Description 
40.3 
% 

630900  Worn clothing 

and clothing 
accessories, 
showing signs 
of appreciable 
wear and 
presented in 
bulk (…) 

14.8 
% 

300490  Medicaments 
(…) 

65,669,391 

4.2 % 

9.8 
% 

6.9 
% 

271012  Light oils, of 

61,976,452 

3.9 % 

petroleum (…) 

730890  Structures and 

49,996,245 

3.2 % 

parts of 
structures, of 
iron or steel, 
n.e.s. (…) 

120,386,985 

6.8 
% 

252310  Cement 
clinkers 

33,464,651 

2.1 % 

180400  Cocoa butter, 

71,687,151 

4 % 

870323  Motor cars / 

33,419,018 

2.1 % 

fat and oil 

vehicles 
principally 
designed for 
the transport 

291 

 
 
 
 
 
440727  Sapelli, sawn 

53,178,607 

3 % 

or chipped 
lengthwise, 
sliced or 
peeled (…) 
271111  Natural gas, 

liquefied 

440728 

Iroko, sawn 
or chipped 
lengthwise, 
sliced or 
peeled (…) 
090111  Coffee (…) 

40,177,738 

37,204,358 

25,010,253 

2.3 
% 

2.1 
% 

1.4 
% 

Total top 10 
products 

1,624,820,608  91.4 

% 

Source: Eurostat (product names partly shortened) 

of <10 persons 
(…) 

870422  Motor vehicles 
for the 
transport of 
goods (…) 

330210  Mixtures of 
odoriferous 
substances and 
mixtures (…) 

30,543,146 

1.9 % 

27,430,209 

1.7 % 

110710  Malt (excl. 

24,295,260 

1.5 % 

roasted) 

100199  Wheat and 
meslin (…) 
Total top 10 
products 

23,176,612 

1.5 % 

420,615,040  26.6 

% 

Considering  the  high  share  of  raw  materials  in  Cameroon’s  exports,  most  of  Cameroon's 
exports to the EU are free of duty on an MFN basis. The remainder, mainly bananas but also 
aluminium,  processed  cocoa  and  wood  are  exported  under  EPA  preferences.  Preference 
utilisation rates are high, at 98% in 2018.  

The increase in EU exports to Cameroon in 2018 can be attributed to an increase in exports 
of  iron  and  steel  (+€59  million  or  166%),  mineral  fuels  (+€51  million  or  142%)  and  motor 
vehicles (+€30 million or 22.5%). Exports of cement increased from €3 million to €18 million 
(+494%) in 2018, while exports of cement clinkers decreased by €12 million or 26%. Exports 
of machinery and mechanical appliances decreased by €30 million or 12%.  

The  EPA  foresees  that  Cameroon  successively  liberalizes  80%  of  imports  from  the  EU. 
Effective liberalization started on 4 August 2016 for 1st category products (1727 tariff lines) 
and  on  4  August  2017  for  2nd  category  products  (985  tariff  lines).  The  two  first  categories 
consist mainly of necessities, industrial and agricultural inputs, machines, chemicals, vehicles 
and spare parts, computers, papers, consumer products for households. 

The  total  value  of  goods  imported  into  Cameroon  under  EPA  preferences  from  August 
2016  to  January  2019  is  estimated  at  €335  million  (Source:  Cameroon  customs).  The  main 
products imported under EPA preferences according to Cameroon customs were clinker (28% 
of  total  value  of  imports  under  EPA  preferences),  chemical  industries  (24%),  electrical 
machinery  and  equipment  (17%),  vehicles  and  transport  equipment  (16%),  paper  and 
cardboard  (7,5%),  fertilizers  (5%).  Over  the  period  August  2016  –  January  2019,  the  total 
value  of  forgone  customs  revenue  due  to  liberalisation  of  tariff  rates  under  the  EPA  was 
€10.68 million.126 (Source: Cameroon Customs). 

126 The 2018 Budget law estimate total yearly customs revenue at €670 million, including exports and imports 
taxes, stamp duties, etc. This would mean that losses due to EPA preferences amount to only 1.6% of total 

292 

 
 
 
 
 
 
 
 
                                                 
For agri-food trade, Cameroon continued enjoying a surplus (€330 million) with the EU in 
2018, albeit smaller than in previous years. While the exports by Cameroon (€590 million) are 
heavily  concentrated  in  cocoa  products  and  tropical  fruits,  EU  exports  (€260  million)  are 
much  more  diversified  with  malt  (see  below  the  case  of  brewery),  wheat,  milk  powder  and 
whey, infant food and other cereals, starch and milk preparation, and wines on top of the list.  

2.2 Trade in services 

The EPA does not include provisions on trade in services. Trade in services between the EU 
and Cameroon shows little variation over the last years. EU services imports from Cameroon 
decreased slightly in 2017 to €312 million, while EU services exports to Cameroon increased 
to €661 million. The trade balance in services is positive for the EU.  

2.3 Foreign Direct investment (FDI) 

The  investment  stock  has  been  stable  over  the  last  four  years,  it  currently  stands  at  €1.3 
billion.  Inflows  in  2017  have  been  lower  than  in  previous  years,  at  €2  million  according  to 
Eurostat  statistics.  The  EU  investment  stock  remains  largely  tied  in  extractive  industries, 
although  recent  EU  investments  in  Cameroon  are  diversified  across  various  sectors  such  as 
infrastructure 
(bananas,  sugar),  communication  and 
distribution.  The  main  investor  is  France  with  about  300  companies  established  that  are 
estimated to contribute to about 30% of the government's corporate tax revenue.  

(transport,  energy),  agriculture 

In  2018,  the  French  Development  Fund,  the  World  Bank’s  IFC,  the  European  Investment 
Bank  and  the  Cameroon  government  signed  the  final  and  binding  agreements  for  the 
construction  of  the  Nachtigal  Hydroelectric  plant.  The  €1.2  billion  project  consists  of 
designing, constructing and operating a dam and a 420MW power plant. The plant will cover 
30% of the country’s energy needs. The project is expected to create up to 1,500 direct jobs, 
65% of the local. Construction has started in 2019 and operation is foreseen in 2023.  

Also in 2018, French retail company Carrefour announced its intention to construct its second 
supermarket in the country, representing a €46 million investment; however, there seem to be 
some difficulties related to the land ownership title for the allocated lot. Together, the existing 
supermarket in Douala and the new one in Yaoundé together would employ about 500 people. 
Cimencam  (controlled  by  a  Franco-Swiss-Moroccan  consortium)  opened  its  second  cement 
factory  in  the  country,  an  investment  of  €35  million.  Brasserie  du  Cameroun,  part  of  the 
French Castel group, invested in  new bottling chains  at  three of its production locations, an 
investment estimated at €15 million (more below). 

Cheaper inputs boosting local production and employment  

La Société Anonyme des Brasseries du Cameroun (SABC), part of the French Castel group, is a 
brewing  company  in  Cameroun.  It  is  the  largest  private  sector  employer  in  the  country, 
employing about 10,000 people across the group and its subsidiaries. Brasseries du Cameroun 
holds a 75% share of the Cameroonian market for beer and soft drinks.  

customs  revenue.  The  IMF  estimates  customs  revenues  at  €1.14  billion  in  2017,  also  including  VAT  on 
imports.0 

293 

 
 
 
 
 
 
 
 
                                                                                                                                                         
SABC is to date the single biggest beneficiary of EPA preferences, accounting for one eight of 
the total fiscal gain of Cameroonian companies due to lower import tariffs. It imports a range 
of  products  from  the  EU,  e.g.  larger  machinery  used  to  bottle  its  beverages,  as  well  as 
ingredients such as yeast, hop, aromas or colorants used it their production. 

While benefiting from EPA preferences, SABC is also increasingly trying to source locally. The 
company has a local subsidiary producing bottles and is also buying 100% of Maïscam’s (one 
of the large agro-industrial companies of the country) production of corn every year (10.000 
tons).  

3. 

ISSUES ADDRESSED IN THE ANNUAL EPA COMMITTEE MEETING 

The fourth EPA Committee meeting between Cameroon and the EU took place in February 
2019  in  Yaoundé.  During  this  meeting,  the  parties  signed  a  Decision  on  the  accession  of 
Croatia to the EU and initialled two draft decisions on dispute settlement (procedures and list 
of  arbitrators).  These  signatures  and  initials  marked  the  end  of  the  negotiations  of  the 
corresponding files.  

Since the beginning of provisional application, an important issue consisted in adjusting the 
liberalization  timetable  (2008-2023)  of  the  EU  products  to  the  delay  in  implementation 
resulting  from  Cameroon's  EPA  ratification  in  2014.  During  the  last  EPA  Committee,  the 
parties reached an agreement on the implementation of the liberalisation schedule until 2029. 
This  new  schedule  takes  into  account  current  Cameroon  security  and  economic  constraints. 
Cameroon  official  commitment  to  the  schedule  will  provide  predictability  for  parties  and 
particularly for economic operators. 

One  of  the  main  points  of  discussion  was  the  assessment  of  the  tariff  dismantling  process 
monitored  by  the  Cameroon  Customs  and  its  impact  in  terms  of  products  concerned  and 
customs revenue losses (see 2.1 Trade in goods). However, we are still at the beginning of the 
process and the real impact of the liberalisation, the final beneficiaries and the effects on the 
economy remain to be identified. 

Two projects currently in progress are the elaboration of an EPA Implementation Plan and a 
study  on  overall  fiscal  impact,  both  to  be  concluded  during  the  second  half  of  2019.  The 
EPA Implementation Plan aims to identify accompanying measures, particularly in terms of 
development cooperation and domestic reforms, to ensure that the country reaps full benefits 
from the EPA. The study on fiscal impact will help to define priority actions in the field of 
fiscal transition, to diversify revenue away from tariff duty collection.  

A common  protocol  of rules of origin was not included in  the EPA at  the time the parties 
concluded the negotiations  of the agreement in  2007. Negotiations of a protocol started end 
2016  and  are  still  ongoing.  After  conclusion  of  the  negotiations,  the  parties  will  annex  the 
protocol to the agreement. In the meantime, Cameroon benefits from the general EPA rules of 
origin  included  in  EU  Market  Access  Regulation  2016/1076.  Before  starting  liberalization, 
Cameroon published a decree on rules of origin applicable to products imported from the EU 
(Decree 2016/367, 3 August 2016).  

294 

 
 
 
 
 
 
 
 
 
 
During the last EPA committee meeting, the parties took stock of the current negotiations on 
the protocol on Rules of Origin. The negotiations between experts should resume soon and a 
conclusion is foreseen before the next EPA Committee.  

The parties agreed to develop a monitoring system for the agreement. This monitoring will 
make  it  possible  to  monitor  the  implementation  of  the  agreement,  identify  its  impacts  on 
Cameroon  value  chains  and  consumers,  and  will  contribute  to  the  identification  of  political 
correction or incentive measures. 

The parties also discussed trade barriers, Cameroonian export taxes and internal taxes/levies 
on imports. 

4. 

DEVELOPMENT COOPERATION 

In 2018, the EU supported Cameroun in elaborating a National EPA Implementation Strategy 
that will guide future EPA-related support. The EU also facilitated a study on evaluating the 
net fiscal impact of the EPA, thereby strengthening the economic modelling competences of 
principal  government  actors  and  supporting  the  identification  of  possible  compensation  and 
absorption measures. Both projects will be completed in 2019.  

Development  assistance  from  the  EU  in  recent  years  focussed  particularly  on  strengthening 
productivity  and  competitiveness.  In  2018,  the  programme  Programme  d'appui  à 
l'amélioration  de  la  compétitivité  de  l'économie  camerounaise  (PACOM)  (€10  million 
2014-2018),  which  supported  Cameroonian  firms  in  upgrading  their  productive  equipment 
and production processes and in acquiring international quality certifications (ISO, OHSAS), 
as well as improving the overall business environment, came to an end. Some results achieved 
by the end of the programme include:  

  The creation of an e-registration portal for companies (mybusiness.cm); 
  The establishment and operationalization of the Centre technique agro-alimentaire du 
Cameroun  (http://cta-cameroun.org/),  including  training  of  staff,  purchasing  of 
equipment and international standardization;  

  Capacity  building  for  the  National  Standards  Agency  (ANOR),  resulting  in  30 
companies accompanied in  the process  for achieving  ISO certification, 8 companies 
ISO-certified, over 30 information session organised, and an increase in the number 
of international norms transposed in Cameroun from 850 in 2013 to 2,600 in 2018. 

As a follow up, Dispositif d'appui à la compétitivité du Cameroun (DACC), a €10 million 
programme under the 11th European Development Fund (EDF), has been launched mid-2018. 
It will provide direct support to companies, start-ups and intermediary organizations and will 
improve the provision of business services.  

In  the  agricultural  sector,  the  EU  provides  budget  support  (€24  million  in  2018,  out  of  a 
total €100 million for the period 2017-2019) to improve the distribution and access to seeds 
and fertilizers, to improve agricultural productivity and competitiveness.  Support measures 
for  the  banana  sector  are  also  still  in  place  (€48  million,  2015-2020).  EU  Member  States 
provide support to individual value chains (e.g. beef, chicken) and France in particular started 
in  2018  a  €30  million  project  (TRANSFAGRI),  combining  budget  support  and  technical 
assistance to strengthen financial and non-financial services to SMEs in the agri-food sector.  
In  2018,  preparations  started  for  the  regional  project  Programme  d’Appui  à  l’Intégration 
Régionale  et  à  l’Investissement  en  Afrique  Centrale  (PAIRIAC)  (€19  million)  which  will 

295 

 
 
 
 
 
 
include  support  to  EPA implementation  and  outreach  in  Cameroun,  along  with  for  example 
capacity  development  on  the  implementation  and  monitoring  of  SPS  and  private  standards 
such as GlobalGAP.  

Finally,  throughout  2018,  the  Cameroonian  Administration  and  the  EU  Delegation  to 
Cameroon  organized  various  outreach  and  awareness  raising  events  on  the  EPA  with  civil 
society, media, academia and private sector representatives.  

5. 

MAIN OPEN ISSUES AND FOLLOW-UP ACTIONS 

The main important ongoing files are: 

  Rules of origin: A conclusion on a common protocol is foreseen before the next EPA 

Committee; 

  Monitoring  of  the  Agreement:  Parties  are  planning  to  intensify  discussion  on  the 

development of a monitoring system;  

  Accompanying measures: On the basis of the ongoing studies and in the post-Cotonou 
perspective, the parties will reflect on accompanying measures, including development 
cooperation and reforms; 

  Two decisions of the EPA Committee on Dispute Settlement will be signed during the 

next EPA Committee foreseen in December 2019. 

In  March  2017,  the  ministers  in  charge  of  EPA  of  the  Central  African  region  declared  the 
availability  of  their  countries  to  study  their  possible  accession  to  the  stepping  stone 
agreement. Contacts are open between the regional organisations and the EU on accession by 
other Central Africa States to this EPA. 

6. 

CONCLUSIONS AND OUTLOOK 

In 2018, Cameroon took again important steps in implementing its commitments, culminating 
in significant tariff cuts. While it is too early to discern any impact on trade and investment 
flows in 2018, there was a clear increase in the number of import declarations from the EU in 
Cameroon, without major additional revenue losses.  

The  implementation  of  the  agreement  is  now  in  its  cruising  phase.  Several  cases  have  been 
completed recently (Croatia accession, liberalisation schedule, dispute settlement) and others 
are  expected  to  be  launched  soon  (accompanying  measures,  monitoring).  The  discussion  on 
rules of origin should be concluded by the end of 2019. 

Uncertainty  remains  as  to  the  effective  resumption  of  negotiations  and  the  possibility  of 
extending the agreement to other Central Africa countries. 

7. 

STATISTICS 

Merchandise trade EU28 with Cameroon 2014-2018 

2014 

2015 

2016 

2017 

2018 

EU28 trade with Cameroon (mio €) 
Imports 
Exports 
Balance 
Share Cameroon in EU28 trade with Extra-EU28 

2.150 
1.631 
-520 

1.799 
1.581 
-218 

1.771 
1.564 
-207 

1.924 
1.471 
-452 

1.778 
1.577 
-201 

296 

 
 
 
 
 
 
  
  
  
  
  
  
  
 
  
  
  
  
  
  
  
Imports 
Exports 
Total (I+E) 
Share EU28 in trade Cameroon with world 
Imports 
Exports 
Total (I+E) 

0,1% 
0,1% 
0,1% 

26,7% 
51,8% 
36,9% 

0,1% 
0,1% 
0,1% 

27,7% 
47,6% 
35,7% 

0,1% 
0,1% 
0,1% 

32,1% 
53,6% 
38,7% 

0,1% 
0,1% 
0,1% 

31,9% 
54,8% 
40,7% 

0,1% 
0,1% 
0,1% 

32,0% 
48,3% 
38,6% 

Source Trade G2 Statistics/ISDB                                                                                                                                                                    25-mars-19 
Trade EU28: Eurostat COMEXT;  Trade Cameroon: IMF Dots 

Growth of merchandise trade EU28 with Cameroon (mio €) 

Cameroon 

2017 

2018 

Imports 
Exports 
Balance 
Total trade 
Source Trade G2 Statistics/ISDB from Eurostat COMEXT 

1.924 
1.471 
-452 
3.395 

1.778 
1.577 
-201 
3.355 

Agri-food trade EU28 with Cameroon (mio €) 

Cameroon 

2017 

2018 

Imports 
Exports 
Balance 
Total trade 
Source Trade G2 Statistics/ISDB from Eurostat COMEXT 

674 
267 
-407 
941 

590 
260 
-330 
850 

NAMA trade EU28 with Cameroon (mio €) 

Cameroon 

2017 

2018 

Growth 

mio € 

-146 
106 
251 
-40 

annual 
% 
-7,6% 
7,2% 

-1,2% 

Growth 

mio € 

-84 
-7 
77 
-91 

annual 
% 
-12,5% 
-2,7% 

-9,7% 

Growth 

EU28 imports 
EU28 exports 
Balance 
Total trade 
Source Trade G2 Statistics/ISDB from Eurostat COMEXT 

1.250 
1.204 
-45 
2.454 

1.188 
1.317 
129 
2.505 

mio € 

-61 
113 
174 
52 

Services trade EU28 with Cameroon (mio €) 

Cameroon 

2016 

2017 

Growth 

Imports 
Exports 
Balance 
Total trade 
Source Trade G2 Statistics/ISDB from Eurostat BOP statistics 

349 
641 
292 
990 

mio € 

-37 
20 
57 
-17 

312 
661 
349 
972 

annual 
% 
-4,9% 
9,4% 

2,1% 

annual 
% 
-10,7% 
3,1% 

-1,7% 

Services trade EU28 with Cameroon (mio €) 

Imports 
Exports 
Balance 
Total trade 
Source Trade G2 Statistics/ISDB from Eurostat BOP statistics 

2013 

2014 

2015 

2016 

2017 

459 
677 
218 
1.136 

399 
931 
532 
1.331 

425 
643 
218 
1.068 

349 
641 
292 
990 

312 
661 
349 
972 

Foreign Direct Investment (FDI) EU28 with Cameroon (mio €) 
2015 

2014 

2013 
FDI Stocks 

2016 

2017 

Inward 
Outward 

Inward 
Outward 
Source Trade G2 Statistics/ISDB from Eurostat BOP statistics 

25 
1.353 

43 
1.281 

FDI Flows 

105 
100 

1 
44 

-16 
1.134 

-48 
42 

40 
1.281 

46 
1.316 

18 
67 

6 
2 

297 

 
 
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
298 

 
 
 
 
 
ANNUAL  INFO  SHEET  ON  THE  IMPLEMENTATION  OF  THE  ECONOMIC 
PARTNERSHIP AGREEMENT (EPA) BETWEEN THE EU AND CARIFORUM 

1. 

INTRODUCTION 

The EU-CARIFORUM EPA is a regional agreement between the EU and its Member States 
and  15  Caribbean  countries.  The  negotiations  were  concluded  in  December  2007.  The 
agreement  was  signed  in  October  2008  and  it  entered  into  provisional  application  on  29 
December 2008. In 2018, this agreement was provisionally applied by the EU and its Member 
States  and  by  14  Caribbean  States.127  Haiti  still  needs  to  ratify  the  agreement  in  parliament 
before applying it. By the end of 2018, 23 EU Member States and 10 Caribbean States had 
ratified the EPA.  

The  EU-CARIFRUM  EPA  is  ‘comprehensive’  both  in  the  geographic  and  thematic  sense, 
covering the whole region and including not only provisions on trade in goods, but also trade 
in  services  and  provisions  on  trade-related  issues  (including  competition,  innovation  and 
intellectual  property,  transparency  in  public  procurement  and  trade  and  sustainable 
development).  Furthermore,  like  all  EPAs,  the  EU-CARIFORUM  EPA  is  a  development-
oriented trade agreement, geared towards fostering long-term sustainable economic growth in 
the Caribbean.  

This means market liberalisation is asymmetric: while the EU provides immediate duty free 
quota  free  access  for  Caribbean  exporters  (all  products  except  arms  and  ammunition), 
Caribbean  states  have  up  to  25  years  (until  2033)  to  cut  import  tariffs.  They  have  excluded 
from  these  cuts  around  17%  of  goods  and  services,  which  they  consider  sensitive.128  The 
exclusion list includes fresh fruit and vegetables, most alcoholic beverages, some garments, a 
number of processed agricultural products, fish, chemicals and furniture. In general, 75% of 
CARIFORUM's  agricultural  and  fisheries  products  have  been  excluded  from  liberalisation 
under EPA. 

2. 

EVOLUTION OF TRADE 

2.1 Trade in goods 

The  EU  is  the  third  largest  importer  of  Caribbean  goods,  accounting  for  8.5%  of  total 
Caribbean exports (after the U.S. (28%) and Uruguay (9%)). EU exports, in turn, account for 
10% of Caribbean imports, making the EU the second largest exporter to the region after the 
U.S. (41%), followed by China (9.7%). Intra-regional trade between the Caribbean countries 
is  low:  only  7%  of  the  region’s  imports  originate  from  another  Caribbean  state.  Similarly, 
only 5.5% of Caribbean exports go to the region.  

Total  trade  between  the  EU  and  the  CARIFORUM  increased  by  €614  million  or  7.3%  in 
2018, to €9 billion. Importantly, in 2018 the EU imported €3.9 billion worth of goods from 

127  Antigua  and  Barbuda,  Bahamas,  Barbados,  Belize,  Dominica,  Dominican  Republic,  Grenada,  Guyana, 
Jamaica,  St.  Kitts  and  Nevis,  Saint  Lucia,  St.  Vincent  and  the  Grenadines,  Suriname,  and  Trinidad  and 
Tobago. 

128  Note  that  the  CARIFORUM  countries  submitted  individual  market  access  schedules  and  not  one  single 
regional  offer.  Hence  figures  and  information  provided  here  are  an  average  over  all  14  market  access 
schedules. 
here: 
EU-CARIFORUM 
http://trade.ec.europa.eu/doclib/docs/2012/april/tradoc_149286.pdf 

factsheet 

found 

EPA 

can 

the 

on 

be 

A 

299 

 
 
 
 
 
                                                 
the  Caribbean  region,  a  €387  million  (11%)  increase  compared  to  2017.  EU  exports  to  the 
CARIFORUM states rose by €227 million (4.6%) to €5.1 billion. The overall trade balance is 
positive for CARIFORUM for agricultural goods but negative for non-agricultural goods. 

The largest EU trade partner in the Caribbean is the Dominican Republic (total trade of €2.9 
billion),  followed  by  Trinidad  and  Tobago  (€2.1  billion),  Bahamas  (€1.45  billion)  and 
Jamaica (€727 million). 

Main EU imports from CARIFORUM countries in 2018 were mineral fuels (€792 million), 
organic  chemicals  (€569  million,  most  of  it  methanol),  ships,  boats  and  floating  structures 
(€483  million),  edible  fruits  and  nuts  (€333  million,  most  of  it  bananas),  and  inorganic 
chemicals (€296 million, most of it aluminium oxide and ammonia).  

Rising EU imports from CARIFORUM countries were caused by increases in  mineral  fuels 
imports (+71%), organic chemicals (+80%), inorganic chemicals (+32%), as well as increases 
in certain agri-food imports from the Caribbean: fish and crustaceans (+€13 million or 18%), 
tobacco  (+€12  million  or  25%)  and  beverages  and  spirits  (+€9  million  or  6%).  Imports 
decreased for sugar  (-€54 million  or  -44%), gold (-€48 million  or  -23%)  and  bananas  (-€47 
million or -12%). The preference utilisation rates of the CARIFORUM EPA averaged 86% in 
2018, down from 91% in 2017. 

CARIFORUM countries exports to  the EU show little  diversification. The share of top  ten 
products in total exports is above 90% for most States, with exports concentrated in very few 
commodities.  Trinidad  and  Tobago  exports  mostly  natural  gas,  rum,  and  ammonia.  For 
Jamaica,  it  is  largely  aluminium  oxide  (70%  of  its  exports),  followed  by  rum.  For  the 
Bahamas and  Barbados,  the dominant export are boats  and ships (re-exports/sales, not  local 
production) and rum. Guyana and Suriname export predominantly gold (accounting for 23% 
and  42%  of  their  exports  in  2018,  respectively);  Guyana  also  exports  aluminium  ores  and 
brown rice, while Suriname exports mainly bananas and frozen shrimps and prawns.  

The  Dominican  Republic  represents  an  exception,  where  the  share  of  top  10  products  is 
70.4% and exports are diversified beyond natural resources to include certain manufacturing 

300 

 
 
 
 
 
 
 
 
goods.  Top  10  products  exported  by  the  Dominican  Republic  to  the  EU are  bananas,  cocoa 
beans,  medical,  surgical  and  veterinary  instruments,  rum  and  other  spirits  based  on  sugar 
cane,  ferro-nickel,  appliances  for  ostomy  use  (i.e.  medical  products),  electro-diagnostic 
apparatus (i.e. medical instruments), cigars, tobacco, and fresh or dried guavas, mangoes and 
mangosteens. The total number of products imported from Dominican Republic (at HS 6-digit 
level) with a value of more than €1 million grew from 53 in 2008 to 62 in 2018 (i.e. a 17% 
increase).  

Main EU exports  to Cariforum  in  2018 were  machinery and mechanical  appliances  (€730 
million,  +9%),  mineral  fuels  (€672  million,  +57%),  ships  and  boats  (€520  million,  -30%), 
electrical machinery and equipment (€316 million, +30%) and motor vehicles (€221 million, 
+1%). Railway equipment exports saw a spike in 2018 (€42 million, +560%), as well as art 
exports (€14 million, +660%). 

In  the  agri-food  trade,  the  EU  negative  balance  of  the  previous  years  turned  into  a  small 
surplus  (€12  million)  in  2018.  Main  EU  export  products  to  the  CARIFORUM  EPA  states 
were  beverages  and  spirits  and  liqueurs  (€189  million,  -2%),  diary  produce  (mostly  milk 
powder) (€181 million, +8%), preparations of cereals, flour and starch (€70 million, +2%) and 
preparations of vegetables, fruits, nuts and plants (€65 million, -8%).  

2.2 Trade in services 

The CARIFORUM EPA provides  for services liberalisation.  In 2017, total  trade in  services 
decreased slightly by €147 million (-3%) to €4.7 billion in 2017. EU services exports to the 
CARIFORUM  countries  grew  by  €42  million  (+2%),  whereas  imports  of  services  from  the 
Caribbean region dropped by €189 million (-7.1%). 

Total value of trade in services with Dominican Republic grew by  €34 million (2%) to €1.7 
billion  in  2017,  with  imports  increasing  by  €57  million  (6%)  and  exports  falling  by  €23 
million (-4%). 

2.3 Foreign Direct investment (FDI) 

The CARIFORUM EPA contains provisions on investment  liberalisation. EU FDI stocks in 
the Caribbean region stood at €112 billion in 2017, up from €85 billion in 2016 (+32%). The 
lion’s share of these stocks are held  in  Bahamas (€54.5 billion) and Barbados  (€41 billion), 
which  have  large  financial  sectors,  followed  by  Trinidad  and  Tobago  (€7.2  billion)  and 
Dominican Republic (€6.5 billion). New EU FDI flows to CARIFORUM amounted to €38.5 
billion  in  2017,  with  most  investments  going  to  Barbados  (€38.5  billion)  and  Trinidad  and 
Tobago (€1.4 billion).  

Outside  the  financial  sector,  EU  investment  is  found  in  fuel  import  and  distribution  (e.g. 
French  company  RUBIS),  and  in  the  rum  industry,  e.g.  with  Gruppo  Campari  (Italian) 
recently  acquiring  the  Jamaican  rum  maker  Lascelles  de  Mercado,  whose  brands  include 
Appleton Estate and Wray and Nephew. Rum production of Appleton Estate has increased to 
over 2 million bottles a year and 500 new jobs have been added.   

In the Dominican Republic, according to  data presented by the Central  Bank, the EU is  the 
fourth largest investor for the period 2010-2018, after the US, Canada and Brazil, accounting 
for about 10% of FDI or €2 billion. The largest EU investor is Spain, accounting for around 

301 

 
 
 
 
 
 
 
6%  of  total  FDI  in  the  Dominican  Republic  between  2010  and  2018.129  According  to  the 
Dominican Republic Central Bank, there are currently around 70 EU companies present in the 
country, including from Germany (18), Italy (13), the Netherlands (10), Spain (7) and UK (7). 
EU  investment  in  the  Dominican  Republic  is  mostly  in  tourism  and  manufacturing  and 
services  for  exports  (so  called  free  zones,  zonas  francas).  Examples  for  recent  investments 
include:  

 

Increasing  European  investment  in  renewable  energy:  for  example,  French  Akuo 
Energy  is  building  a  windfarm  with  an  installed  capacity  of  50MW  in  Monte 
Cristi; operations are expected to start in 2019. There is also Spanish investment in 
a wind park (Dominicana Renovables INVERAVANTE) with 37MW capacity in 
Matafongo, Bani province, with operations starting in June 2019. 

  Vinci  Airports  (French)  acquired,  for  approximately  USD  500  million,  100%  of 
Aerodom, holder of a concession until 2030 for the operation of 6 of the 9 airports 
in the country (around 40% of air traffic), including the Las Americas Airport in 
the  capital  city  of  Santo  Domingo.  Vinci  is  now  planning  an  extension  of  the 
concession in exchange for an investment plan of approximately USD 400 million.  

3. 

ISSUES ADDRESSED IN THE EPA COMMITTEE MEETINGS 

The  EPA  establishes  a  full  institutional  structure  to  manage  the  implementation  of  the 
agreement,  including  the  Joint  Council  (Ministerial  level),  the  Trade  and  Development 
Committee  (Senior  Officials),  the  Parliamentary  Committee  (Parliamentarians  from  the 
European  Parliament  and  the  Caribbean  state’s  parliaments),  the  Consultative  Committee 
(civil  society  representatives  from  the  EU  and  the  Caribbean);  and  Special  Committees  on 
Agriculture and Fisheries and Customs Cooperation and Trade Facilitation, which meet on an 
ad hoc basis.  

The  8th  meeting  of  the  Trade  and  Development  Committee  (TDC)  took  place  in  Saint 
Lucia  in  December  2018.  The  parties  discussed,  among  other,  the  implementation  of  the 
CARIFORUM's  tariff  liberalisation  schedule,  transposition  of  the  harmonised  Commodity 
Coding Systems by CARIFORUM countries, participation of CARIFORUM countries in EU 
framework programmes, activation of the provisions on the technology transfer, as well as the 
Protocol on the cultural cooperation. The Parties also discussed the establishment of the joint 
monitoring system under the EPA and the way forward for development cooperation. It was 
agreed to establish a special committee on Trade in Services and the draft decision to establish 
the committee was exchanged prior to the meeting for discussion. The TDC also decided on 
the  establishment  of  a  joint  EU-CARIFORUM  Task  Force  for  the  next  5  years  review  of 
EPA,  due  in  2020.  On  Agriculture,  the  Parties  referred  to  the  progress  achieved  in  the 
negotiations for the CARIFORUM-EU Geographical Indications Agreement.  

The  4th  meeting  of  the  Consultative  Committee  took  place  in  December  2018  in  Saint 
Lucia,  and  its  recommendations  and  conclusions  were  presented  to  the  TDC  meeting.  The 
recommendations include the need to increase visibility and awareness of EPA and the need 

129  According to the Central Bank of the Dominican Republic, total investment from Spain has been USD 292.4 
million;  however,  the  Spanish  Embassy  recorded  only  €50.6  million  due  to  different  accounting 
methodologies e.g. the embassy only takes into account direct flows from companies in Spain and excludes 
investment in real estate.  

302 

 
 
 
 
 
                                                 
 
to  analyse  further  any  social  and  environmental  implications  of  the  implementation  of  the 
EPA.  The  committee  stated  its  readiness  to  contribute  to  the  2020  review  of  the  EPA.  The 
Consultative  Committee  also  expressed  concern  about  the  lack  of  implementation  of  the 
regional preference clause under the EPA, as well as the adverse effects of the application of 
the  ‘Octroi  de  Mer’  in  EU  outermost  regions.  The  committee  also  called  for  the  timely 
adoption of a monitoring mechanism.  

The  5th  meeting  of  the  Special  Committee  on  Customs  Cooperation  and  Trade 
Facilitation (SCCCTF) took place in March 2018 in the Dominican Republic. The SCCCTF 
agreed that the Parties should establish a working group to carry out a comprehensive review 
of Protocol I on Rules of Origin to Annex III at triggered by CARIFORUM with the objective 
to simplify the some concepts and methods. In November 2018, the 2nd Meeting of the Special 
Committee on Agriculture and Fisheries (SCAF) was held in Barbados, together with the 3rd 
round of GI negotiations. 

4. 

SPECIFIC AREAS OF IMPORTANCE 

Agriculture: Parties are intensifying their cooperation on agricultural trade and development. 
The Special Committee on Agriculture and Fisheries held its second meeting in  Barbados in 
November 2018. The meeting had a substantive agenda, discussing cooperation in agricultural 
research, use of new technologies in agriculture, food and nutrition security, creation of value 
addition  in  agri-food  and  rural  employment,  as  well  as  the  sustainable  use  of  natural 
resources. CARIFORUM stressed its concerns with two specific matters, namely the rules of 
cumulation  for  sugar-based  products  (Annex  X  to  Protocol  I)  and  the  revision  of  the  EU 
spirits definition, which includes the proposed restriction on the use of the word “agricultural” 
(e.g.  agricultural  rum).  Both  regions  underlined  the  expectations  for  the  agricultural 
partnership  to  work  more  closely  on  policy  issues  of  relevance  for  the  development  of  the 
agricultural sector.  

Geographical indications: A negotiation directive to negotiate an agreement on Geographical 
Indications  (GI)  under  the  CARIFORUM  EPA  was  adopted  by  the  Council  of  the  EU  in 
November  2017  and  the  3rd  round  of  GI  negotiations  took  place  in  November  2018.  The 
parties progressed on establishing a list of GIs to be protected under the EPA. Currently the 
Parties  are  exchanging  information  at  technical  level  to  clarify  the  outstanding  issues.  In 
parallel, the EU delegations in the region are actively promoting awareness on geographical 
indications  through  tailor-made  events  and  workshops  with  business  community,  producer 
groups and other farmers' organizations. 

Services:  The  Services  chapter,  and  in  particular  Mode  4  (movement  of  natural  persons  for 
business purposes), is considered one of the key elements of the EPA and of particular interest 
for  CARIFORUM  countries.  Going  beyond  the  remit  of  the  EPA,  the  Commission  is 
preparing  to  extend  the  EU  Immigration  Portal  to  cover  all  categories  of  Mode  4  service 
suppliers.  When  completed,  this  will  provide  additional  transparency  as  regards  applicable 
rules. With regard to the institutional set up, both Parties agreed in 2017 to establish a Special 
Committee  on  Services.  In  2018,  the  Parties  further  progressed  with  the  legal  work  to 
establish the committee, with the aim to concluding the necessary decision in 2019.  

Monitoring: Both Parties continued working on the establishment of a monitoring mechanism 
for the EPA, exchanging documents and suggestions about the type of monitoring mechanism 
to be put in place. As a result of this work, a joint monitoring mechanism seems achievable.   

303 

 
 
 
 
 
 
 
Launching  of  an  ex-post  evaluation,  10  years  after  the  agreement  entered  into  force:  In 
February  2019,  the  Commission  launched  an  ex-post  evaluation  to  evaluate  the  level  of 
implementation and the impact on sustainable development, 10 years after entering into force 
of the agreement. Consultations are on-going throughout 2019. Results are expected in 2020 
and will feed into the Joint Review, as well as the next EU-CARIFORUM Joint Council, both 
foreseen for 2020. 

Development cooperation: The EPA is a genuinely pro-development agreement and the EU 
provides  considerable  support  to  CARIFORUM  and  Caribbean  governments  for  EPA 
implementation and export development. Under the 11th European Development Fund (EDF) 
(2014-2020),  the  total  allocation  for  the  Caribbean  region  is  approximately  €1  billion,  of 
which  €326  million  is  allocated  to  the  Regional  Programme.  Under  this  envelope,  the  EU 
supports  Regional  Economic  Cooperation  and  Integration  in  the  Caribbean,  including  EPA 
implementation,  trade-related  capacity  building  and  private  sector  development,  with  €102 
million (33% of total allocations to the region).  

Out  of  the  €102  million,  the  Caribbean  Export  Development  Agency  (CEDA)  currently 
implements a Regional Private Sector Development Programme (RPSDP) (€27.2 million, 
2017-2022).  In  2018,  CEDA  awarded  mini-grants  to  53  SMEs  across  all  CARIFORUM 
countries to  help  firms  get  ready to  export or expand their exports;  a number of firms  were 
also  invited  to  attend  business  fairs  in  Europe  which  resulted  in  new  business  contracts.  In 
addition,  20  women-owned  businesses  benefitted  from  specific  coaching  on  growing  their 
business and attracting angel investment. 2018 also saw the launch of the Caribbean Export 
Intelligence portal of Caribbean Export, which should become an important provider of data 
in support of business decisions and for business support organizations in the delivery of their 
services. 

Other  projects  under  the  11th  EDF  are  currently  under  preparation  (€21  million)  and  will 
include capacity building in the area of innovation and Intellectual Property Rights, technical 
barriers  to  trade,  sanitary  and  phyto-sanitary  measures,  as  well  as  competition,  public 
procurement, customs and trade facilitation. The projects will build on the results achieved in 
these areas under the 10th EDF, which included, for example, improved ability of national and 
regional  regulatory  bodies  and  the  private  sector  to  comply  with  the  EU’s  Sanitary  and 
Phytosanitary  (SPS)  measures,  as  well  as  improved  capacity  for  developing  regionally 
harmonized SPS measures.  

Under  the  11th  EDF,  the  EU  is  also  directly  supporting  the  CARIFORUM  Directorate 
(€6.2  million)  to  fulfill  its  role  in  coordinating  and  facilitating  EPA  implementation  in 
CARIFORUM Member States.  

Caribbean swimwear – soon available in Europe 

Vincentian-born,  Trinidadian-raised  and  a  citizen  of  the  Caribbean,  Kimya  Glasgow,  the 
CEO  and  head  designer  of  her  self-named  clothing  and  lifestyle  brand,  aims  to  bring  a 
modern version of classic Caribbean style to the world. 

Her high-quality resort and swimwear pieces are currently delivered to Caribbean-based 
customers  via  LIAT  Quick  Pack  or  couriered  by  willing  travelers. But  she’s  focused  on 
building a sustainable production model to gain a foothold in overseas markets such as 
EU and UK, as well as the US and Dubai, where she has captured the attention of buyers. 

304 

 
 
 
 
 
 
 
 
 
“We have exceptional talent in St. Vincent that often does not go beyond our shores.  So 
I’m working on raising the capital to enable me to partner with local artisans.” she said. 

Glasgow  credits  programmes  such  as  Women  Empowered  through  Export  (WE-Xport) 
with creating a space where  women can access the mentorship, technical and financial 
support  needed  to  grow  their  businesses.  Through  the  programme,  she  successfully 
scaled  up  her  business  and  is  getting  export  ready. The  programme  is  part  of  the  EU’s 
trade-related  development  assistance  provided  under  the  EU-CARIFORUM  Economic 
Partnership Agreement.  

The  2009  Caribbean  Fashion  Awards  winner  has  shown  at  fashion  weeks  in  Miami, 
Jamaica,  Trinidad  &  Tobago,  Barbados,  St.  Kitts  and  St.  Vincent.   Mustique,  Bequia, 
Grenada  and  New  York  have  also  featured  her  collections.   As  she  gears  up  for  more 
meaningful export in 2019, the Kimya Glasgow brand is shaping up to be one to watch. 

In  the  Dominican  Republic,  the  EU  currently  supports  a  project  on  Quality  Strengthening 
for  Micro,  Small  and  Medium-sized  Enterprises(MSMEs)  Development  (€11  million, 
2014-2019),  to  strengthen  the  national  quality  system  and  improve  quality  orientation  of 
MSMEs in order to access national, regional and international markets. Under the project, the 
EU  supported  the  creation  of  a  “chemical  metrology  and  laboratories  network”  which  will 
allow exporters and producers to benefit from local analysis and testing, as well as reducing 
costs  of  chemical  calibration.  Furthermore,  more  than  300  enterprises  were  selected  to 
participate  in  a  comprehensive  initiative  for  implementing  standards  and  quality  assurance 
systems such as ISO/9001, ISO/27001, ISO/22000), as well as good practices and food safety 
measures. The results are expected by late 2019. In 2018, around 25 MSME dairy producers 
were  supported  to  achieve  conformity  with  the  national  normative  RTD  53  related  to 
labelling.  This  measure  allowed  such  producers  to  access  public  procurement  under  the 
national programme for “school breakfast”. 

The  EU  financed  Banana  Accompanying  Measures  for  the  Dominican  Republic  (€19.3 
million,  2013-2018)  ended  last  year  with  some  impressive  results.  Around  2,000  banana 
producers in Dominican Republic sustain the livelihood of around 300,000 people directly or 
indirectly,  including  nearly  25,000  Haitian  immigrant  workers.  The  sector  exports  around 
300,000  tonnes  annually  (80%  organic).  95%  of  organic  banana  export  goes  to  Europe, 
meaning  around  50%  or  the  organic  banana  in  Europe  is  from  Dominican  Republic.  The 
project  trained  4,600  producers  and  technicians  and  6,000  workers  on  environmental 
management, sustainable production and quality management. It also trained 1,000 producers 
on  organic  and  fair  trade  certification,  labour  rights  and  social  security  to  improve  the 
working  conditions  of  banana  workers.  1,500  farm  development  plans  were  designed  and 
implemented.  The  use  of  pesticides  and  fungicides  decreased  by  80%  over  the  project 
duration. A credit revolving fund operated by a local microcredit bank was operationalised to 
improve  access  to  finance  for  banana  small  and  medium  farmers.  2,500  people  completed 
literacy courses  and 15,800 Haitian workers were supported in their application for national 
regularization.  

5. 

PROGRESS MADE, MAIN OPEN ISSUES AND FOLLOW-UP ACTIONS 

Discussions are ongoing on the monitoring system that needs to be agreed by CARIFORUM 
countries and established according to the EPA. Negotiations on geographical indications are 

305 

 
 
 
 
 
 
 
ongoing.  Parties  also  need  to  achieve  progress  on  effective  implementation  of  all  tariff  and 
regulatory provisions and making use of the Services chapter under EPA.  

6. 

CONCLUSIONS AND OUTLOOK 

In 2018, progress was achieved in the implementation of the agreement, including notably on 
agriculture issues including geographical indications and progress on setting up the Services 
Committee and further work on customs cooperation and facilitation. Productive meetings of 
all  EPA  bodies  took  place.  Continuous  effort  of  all  partners  will  be  needed  to  ensure  that 
benefits  of  the  agreement  fully  materialize  and  in  particular  to  raise  awareness  among  EU 
companies to make a full use the agreement and business opportunities with this region.  

7. 

STATISTICS 

Merchandise trade EU28 and CARIFORUM EPA States, 2014-2018 
2016 

2014 

2015 

EU28 trade with CARIFORUM EPA States (mio €) 
Imports 
Exports 
Balance 
Share CARIFORUM EPA States in EU28 trade with Extra-EU28  
Imports 
Exports 
Total (I+E) 

4.025 
3.970 
-56 

0,2% 
0,2% 
0,2% 

Source Trade G2 Statistics/ISDB  
Trade EU28: Eurostat COMEXT;  Trade EPA Cariforum: IMF Dots 

4.009 
5.084 
1.075 

0,2% 
0,3% 
0,3% 

3.194 
4.750 
1.555 

0,2% 
0,3% 
0,2% 

Growth of merchandise trade EU28 with CARIFORUM EPA States  (mio €) 

EPA Cariforum 

2017 

2018 

2017 

2018 

3.522 
4.896 
1.374 

0,2% 
0,3% 
0,2% 

3.909 
5.123 
1.213 

0,2% 
0,3% 
0,2% 
25-mars-19 

Growth 

Imports 
Exports 
Balance 
Total trade 
Source Trade G2 Statistics/ISDB from Eurostat COMEXT 

3.522 
4.896 
1.374 
8.418 

3.909 
5.123 
1.213 
9.032 

mio € 

387 
227 
-161 
614 

Agrifood trade EU28 with CARIFORUM EPA States (mio €) 

EPA Cariforum 

2017 

2018 

Growth 

Imports 
Exports 
Balance 
Total trade 
Source Trade G2 Statistics/ISDB from Eurostat COMEXT 

910 
784 
-126 
1.694 

839 
811 
-28 
1.651 

mio € 

-71 
27 
98 
-44 

NAMA trade EU28 with CARIFORUM EPA States (mio €) 

EPA Cariforum 

2017 

2018 

Growth 

EU28 imports 
EU28 exports 
Balance 
Total trade 
Source Trade G2 Statistics/ISDB from Eurostat COMEXT 

2.612 
4.112 
1.500 
6.724 

3.070 
4.311 
1.241 
7.381 

mio € 

458 
199 
-259 
657 

annual 
% 
11,0% 
4,6% 

7,3% 

annual 
% 
-7,8% 
3,5% 

-2,6% 

annual 
% 
17,5% 
4,8% 

9,8% 

Growth in Services trade EU28 with CARIFORUM EPA States (mio €) 

CF14 

Imports 

Exports 

2016 

2017 

18.818 

3.608 

18.000 

4.220 

Growth 

mio € 

-818 

612 

annual % 
-4,3% 

17,0% 

306 

 
 
  
 
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
Balance 

Total trade 
Source Trade G2 Statistics/ISDB from Eurostat BOP statistics 

-15.210 

22.427 

-13.780 

22.220 

1430 

-206 

-0,9% 

Total Services trade EU28 with CARIFORUM EPA States (mio €) 

Imports 

Exports 

Balance 

Total trade 
Source Trade G2 Statistics/ISDB from Eurostat BOP statistics 

2013 

2014 

2015 

2016 

2017 

3.365 

3.385 

20 

6.751 

13.529 

3.276 

-10.253 

16.805 

21.150 

3.145 

-18.005 

24.295 

18.818 

3.608 

-15.210 

22.427 

18.000 

4.220 

-13.780 

22.220 

Foreign Direct Investment (FDI) EU28 with CARIFORUM EPA States (mio €) 

Inward 

Outward 

Inward 

Outward 
Source Trade G2 Statistics/ISDB from Eurostat BOP statistics 

2013 
FDI Stocks 
57.968 

18.235 

FDI Flows 
-8.988 

2.174 

2014 

2015 

2016 

2017 

80.216 

22.452 

4.851 

5.063 

76.794 

68.572 

-6.970 

1.275 

87.235 

84.653 

2.413 

50.618 

142.106 

111.880 

42.323 

38.525 

307 

 
 
  
 
  
  
  
  
  
  
  
  
  
  
  
  
  
  
 
 
ANNUAL  INFO  SHEET  ON  THE  IMPLEMENTATION  OF  THE  ECONOMIC 
PARTNERSHIP AGREEMENT (EPA) BETWEEN THE EU AND PACIFIC STATES 

1. 

INTRODUCTION 

Negotiations for an EU-Pacific EPA were concluded on 23 November 2007 with Papua New 
Guinea (PNG) and Fiji – two of the 14 Pacific countries130, representing the vast majority of 
regional exports to the EU.  

The  EU  and  PNG  signed  the  EPA  on  30  July  2009  and  Fiji  on  11  December  2009.  The 
European  Parliament  approved  the  Agreement  on  19  January  2011  and  PNG’s  Parliament 
ratified it on 25 May 2011. Fiji is still to ratify the Agreement but has notified the Council of 
its  provisional  application  as  of  28  July  2014.  Samoa  acceded  to  the  Agreement  on  21 
December 2018 and is implementing it since 31 December 2018. 

The  objectives  of  this  Agreement  are  to  promote  sustainable  development  and  the  gradual 
integration of Pacific States into the world economy. The EPA aims to establish a free trade 
area  between  the  parties,  through  progressive  liberalisation,  taking  into  account  the  specific 
needs and capacity constraints of the Pacific States. The EPA only covers trade in goods. 

Since 1 January 2008, all exports from PNG and Fiji enter the EU market duty-free and quota-
free, so do all the exports from Samoa since 31 December 2018, on a permanent basis. Taking 
full account of differences in levels of development and sensitive sectors, PNG has liberalised 
88% of EU imports from day one (i.e. since 1 January 2008). Fiji is liberalising 87% of EU 
exports over 15 years, while Samoa is liberalising 80% of EU exports over 20 years.  

This  asymmetric  and  gradual  liberalisation  enables  the  countries  to  protect  local  producers; 
they  keep  tariffs  on  sensitive  goods,  such  as  foodstuffs.  Indeed,  Fiji,  PNG  and  Samoa  have 
excluded  from  liberalisation  some  products  from  sensitive  sectors  and/or  important  for 
revenue  such  as  meat,  fish,  fruits  and  vegetables,  etc.  Should  imports  of  other  liberalised 
goods suddenly surge, the countries can apply safeguards. 

The  Agreement  is  open  for  accession  of  other  Pacific  Island  States.  Interested  Parties  will 
need to submit a market access offer that is compliant with GATT 1994 Article XXIV. Samoa 
joined at the end of 2018, and procedures are underway for the accession of Solomon Islands 
and Tonga to the EPA. 

2. 

EVOLUTION OF TRADE 

2.1 Trade in goods 

In  2018,  the  EPA  was  implemented  between  the  EU  and  Fiji  and  PNG.  Due  to  the 
geographical  distance,  the  EU  is  only  fifth  largest  destination  for  exports  from  PNG  (after 
Australia,  Singapore,  China  and  Japan)  and  the  third  largest  for  Fiji,  accounting  for  around 
10-11%  of  the  two  Pacific  states’  exports.  The  EU  only  accounts  for  about  3%  of  their 
imports, far behind Australia, China and Singapore. For Fiji, about 16% of its exports go to 

130  The  other  countries  of  the  region  are:  Cook  Islands,  Kiribati,  Marshall  Islands,  Micronesia,  Nauru,  Niue, 

Palau, Samoa, Solomon Islands, Tonga, Tuvalu, and Vanuatu. 

308 

 
 
 
 
 
 
 
                                                 
the Pacific region, but for PNG the share is lower than 1%. For both countries, less than 1% of 
their imports come from the region.  

PNG  accounts  for  66%  of  the  Pacific  region’s  exports  to  the  EU.  Fiji  and  PNG  together 
account for 69% of Pacific states’ exports to the EU (Figures for 2018).  

The  EU’s  total  trade  with  Fiji  and  PNG  decreased  by  €111  million  (-9.1%)  in  2018.  EU 
imports  from  these  two  Pacific  states  decreased  by  €77  million  (-7.7%)  to  €915,  while  EU 
exports to the two Pacific states dropped by €34 million (-14.9%) to €194 million. The overall 
trade  balance  is  positive  for  the  Pacific  countries,  for  both  agricultural  and  non-agricultural 
goods.  

EU imports from Fiji dropped by more than half in 2018, from €95 million in 2017 to €36 
million in 2018. The decrease is almost entirely due to sugar exports, which contracted by €63 
million or 76%.  

EU imports from PNG only decreased slightly, by 2%, to €879 million. Palm oil exports (by 
far  the  main  agri-food  export  to  the  EU)  dropped  by  €81  million  or  16%,  while  exports  of 
coffee decreased by €20 million or 28.6%. Exports of prepared or preserved tuna continued to 
increase,  albeit  at  a  slower  rate  than  in  previous  years  (+€4  million  or  2.6%).  Exports  of 
copper ores  and precious metal  ores increased strongly by €91 million  or 160%, while gold 
exports decreased by €16 million or 30%.  

Main destinations for the Pacific EPA countries’ exports are the Netherlands, Germany, Spain 
and the UK. Preference utilisation rates for EU imports from the Pacific states have risen from 
85% in 2014 to 99% in 2018.  

EU  imports  from  the  Pacific  EPA  States  show  little  signs  of  diversification.  The  top  10 
export products accounted for 97.2% of total exports from Papua New Guinea and 88.4% of 
total  exports  from  Fiji  to  the  EU.  The  main  export  products  were  palm  oil,  prepared  or 
preserved tuna, copper ores and coffee from Papua New Guinea (see table below); and sugar 
(€20 million), mineral water (€4 million) and frozen tuna (€7 million) from Fiji. Additionally, 
the number of products (at HS 6-digit level) imported from Papua New Guinea with a value 
of above €1 million increased marginally over a 10-year period (from 16 to 17). For Fiji, the 
number stayed at four. 

309 

 
 
 
 
 
 
 
 
 
 
The  EU  mostly  exports  machinery  and  mechanical  appliances,  electrical  machinery  and 
equipment, optical, medical or surgical instruments, certain chemicals, as well as aircrafts and 
motor vehicles to the two Pacific states. These exports are crucial for the local industry, which 
uses  them  as  production  inputs.  Eliminating  import  duties  on  these  items  would  reduce  the 
costs of inputs for local  businesses and would benefit consumers.  The 2018 decrease in  EU 
exports to the two Pacific countries in 2018 was mostly due to a decrease in aircraft exports.  

EU agri-food exports to the EPA Pacific states are low (€22 million compared to €539 million 
of imports from these countries), with preparations of vegetables, fruits or nuts, and cigars and 
cigarettes leading the EU exports. 

2018 top 10 EU imports from PNG  
Product  Description 
151110  Crude palm oil 

Volume 
298,196,281 

Share 
33.9 % 

Product  Description 
151110 

2018 top 10 EU exports to PNG 

160414 

Prepared or 
preserved tunas, 
skipjack and Atlantic 
bonito 
260300  Copper ores and 

concentrates 

157,011,754 

17.9 % 

160414 

99,517,525 

11.3 % 

260300 

151190 

Palm oil and its 
fractions 
151321  Crude palm kernel 

and babassu oil 

78,556,162 

8.9 % 

151190 

59,746,205 

6.8 % 

151321 

090111  Coffee (excl. roasted 

51,057,024 

5.8 % 

090111 

and decaffeinated) 

261690 

Precious-metal ores 
and concentrates 
710812  Gold, incl. gold 

plated with platinum 

48,925,760 

5.6 % 

261690 

39,088,492 

4.4 % 

710812 

090510  Vanilla, neither 

12,755,856 

1.5 % 

090510 

crushed nor ground 
180100  Cocoa beans, whole 

9,652,498 

1.1 % 

180100 

or broken, raw or 
roasted 
Total top 10 
products 

854,507,584 

97.2 
% 

Generating sets with 
spark-ignition internal 
combustion piston engine 
Parts of gas turbines, n.e.s. 

Parts suitable for use 
solely or principally with 
electric motors and 
generators, electric 
generating sets and rotary 
converters, n.e.s. 
Vaccines for human 
medicine 
Prepared or preserved 
meat and offal of swine, 
incl. mixtures  
Self-propelled mechanical 
shovels, excavators and 
shovel loaders 
Parts of steam and other 
vapour turbines, n.e.s. 
Potatoes, prepared or 
preserved, frozen 
Parts of aeroplanes or 
helicopters, n.e.s.  
Appliances for pipes, 
boiler shells, tanks, vats or 
the like  
Total top 10 products 

Volume 
12,528,955 

Share 
9.8 % 

9,854,441 

7.7 % 

5,831,377 

4.6 % 

4,836,443 

3.8 % 

4,089,829 

3.2 % 

4,003,760 

3.1 % 

3,806,844 

3 % 

2,603,110 

2 % 

2,136,026 

1.7 % 

2,091,399 

1.6 % 

51,782,184 

40.5 % 

Source: Eurostat (HS code product descriptions have been partly simplified) 

2.2 Trade in services 

The EPA with the Pacific states does not cover services. In 2017, total trade in services with 
Papua New Guinea grew by €123 million or 45.9%, and with Fiji by €89 million or 44.2%. 
EU  exports  to  Papua  New  Guinea  and  Fiji  rose  by  €101  million  (45.3%)  and  €9  million 
(5.9%)  respectively,  while  imports  increased  by  €21  million  (49.1%)  and  €80  million 
(162.8%). The total services trade balance is positive for the EU with Papua New Guinea and 
negative with Fiji. 

310 

 
 
 
 
 
 
2.3 Foreign Direct investment (FDI) 

The EPA with the Pacific countries does not include provisions on investment. In 2017, EU 
foreign  direct  investment  stocks  in  Papua  New  Guinea  stood  at  €1.680  billion,  with  new 
outward investments of €737 million. FDI stocks in Fiji were €169 million, with outward FDI 
flows of -€43 million, in 2017. 

In  PNG,  most  EU  FDI  remains  tied  to  the  mining  and  petroleum  sector,  as  well  as  the 
construction sector. However, in the past 10 years, FDI in manufacturing has risen, as well as 
wholesale  and  retail.  The  main  investors  are  from  the  Netherlands,  UK,  France,  Spain  and 
Denmark (Source: PNG Investment Promotion Authority). In 2018, a new investment project 
in  liquid  natural  gas  (LNG)  was  announced,  led  by  French  company  Total.  A  formal 
agreement was signed in April 2019 with total investment of around €13 billion. Production is 
expected to start in 2024.131  

As identified in previous reports, the EPA has given rise to significant foreign and domestic 
investment in the fish processing sectors in PNG. A number of new and expanded canneries 
are making use of the global sourcing provision in the EPA, which allows PNG to source fish 
(mostly tuna) from third countries, process it on its shores (mostly canning) and export it duty 
free to the EU. According to the government, investment in factories and other facilities have 
greatly increased the volume of production with capacity now at 2,000 metric tons of fish per 
day, contributing to around 40,000 jobs; women accounting for 90% of these jobs.132 

In Fiji, there is significant French investment, mostly in banking and retail services, as well as 
fuel supply, storage and distribution.  

3. 

ISSUES ADDRESSED IN THE EPA COMMITTEE MEETINGS 

Six  meetings  of  the  Trade  Committee  established  under  the  EPA  have  taken  place  between 
the  Parties  to  the  Agreement.  During  the  latest  Committee  meeting  in  October  2018,  the 
parties discussed the state of play of EPA implementation (particularly PNG and Fiji's tariff 
schedules) and ratification, the rules of procedure and the arbitrators’ code of conduct. Parties 
also  examined  other  outstanding  decisions,  namely  on  the  accession  of  Croatia  and  rules  of 
origin (amendments of Annexes II and VIII to Protocol II as regards the update of the tariff 
classification  and  the  list  of  OCTs).  Other  topics  under  discussion  were  monitoring  and 
evaluation, trade and sustainable development issues (fisheries management and regulations, 
progress  on  labour  issues,  environmental  protection  reforms,  etc.)  and  possible  areas  for 
deepening  cooperation  under  the  EPA  on  these matters.  Communication  (dissemination  and 
outreach) and development cooperation were also discussed.   

Parties furthermore  exchanged views on the way forward  of developing the EPA,  including 
current and future accessions of other interested parties, and related technical modifications to 
the Agreement. Solomon Islands and Tonga were invited and participated as observers to the 
Committee meeting. 

131  https://www.total.com/en/media/news/press-releases/total-and-state-papua-new-guinea-sign-gas-agreement-

papua-lng-project  

132  PNG Trade Report 2018, p. 4 

311 

 
 
 
 
 
 
                                                 
4. 

DEVELOPMENT COOPERATION 

Development cooperation is essential for EPA implementation, although it is not formally part 
of  the  Pacific-EU  EPA.  Under  the  Pacific  Regional  Indicative  Programme  of  the  11th 
European  Development  Fund  (EDF),  €37  million  were  allocated  to  trade  and  private  sector 
development,  aiming  at  strengthening  the  business  enabling  environment  and  regional 
economic  integration  in  the  Pacific,  through  trade  facilitation  in  particular.  Acceding  and 
implementing EPA countries will be supported to take advantage of the EPA opportunities. 

At  bilateral  level,  focal  areas  of  EU  Aid  for  Trade  include  agriculture  (mainly  Melanesian 
countries),  energy  (Micronesian  countries),  fisheries  and  waste  management.  In  Fiji,  focal 
areas include agriculture/sugar, with a budget support sector reform contract, also contributing 
to trade-related adjustment. 

In  PNG,  the  second  phase  of  a  Trade  Related  Assistance  Programme  finished  in  2018.  The 
project  focused  on  institutional  reform  and  capacity  building,  trade  policy  development  and 
trade facilitation. The project  supported the PNG government  to  draft its first  national  trade 
policy paper, as well as a range of trade legislation, such as on trade defence. In 2017-2018, 
450  public  and  private  stakeholders  attended  training  courses  on  topics  ranging  from  trade 
policy analysis to export promotion and SPS measures. For example, a training course for 44 
food safety inspectors lead to a review of existing legislation on food safety and the drafting 
of Memorandum of Understandings between implementing agencies. The project has started 
supplying  five  public  laboratories  with  specialised  equipment  to  improve  effectiveness  and 
efficiency of food quality and food safety testing.   

In  the  past  years,  the  EU  also  provided  assistance  on  customs  and  trade-related  matters  via 
intra-ACP  programmes  (Hub  &  Spokes  II  and  TradeCom  II),  helping  Pacific  countries  for 
example to conduct trade needs assessments and develop trade policy frameworks as well as 
national  trade  policy  consultation  mechanisms.  The  EU  provided  targeted  support  to  the 
authorities  of  Samoa,  Solomon  Islands  and  Tonga  during  the  process  of  accession  and 
preparation for EPA implementation, with a view to extending EPA benefits to them. 

5. 

PROGRESS MADE, MAIN OPEN ISSUES AND FOLLOW-UP ACTIONS 

Samoa acceded the EPA at the end of 2018 and the procedures for the accession of Solomon 
Islands and Tonga are expected to be completed by the end of 2019.  

Vanuatu will graduate from Least Developed Countries (LDC) status in 2020, and the date of 
graduation of Kiribati and Tuvalu will be decided in 2021. Upon graduation from LDC status, 
these  countries  will  lose  the  EU's  Everything-But-Arms  (EBA)  preferences.  They  will  fall 
under the less generous General Scheme of Preferences (GSP) unless they decide to accede to 
the  current  EU  EPA  with  PNG,  Fiji  and  Samoa.  The  Parties  to  the  Agreement  are  open  to 
consider each country's accession. Vanuatu has already indicated its interest to join the EPA if 
there is a Services Chapter. 

The Pacific countries have raised the importance of services for their economies and asked to 
initiate  discussions  to  examine  the  specific  market  access  commitments  for  a  possible 
Services  Chapter.  The  Parties  are  open  to  consider  the  issue  once  the  ongoing  accession 
procedures are over. 

312 

 
 
 
 
 
 
 
6. 

CONCLUSIONS AND OUTLOOK 

EPA  implementation  and  accession  are  top  priorities,  with  Fiji  still  to  ratify,  PNG  having 
made all its tariff cuts and now seeking to extend export diversification beyond the fisheries 
sector, Samoa following suite and other Pacific States (Solomon Islands and Tonga) seeking 
to accede to the Agreement.  

7. 

STATISTICS 

EU28 trade with EPA (interim) Pacific countries (mio €) 

Merchandise trade EU28 2014-2018 
2014 

2015 

2016 

2017 

2018 

Imports 
Exports 
Balance 

Share EPA (interim) Pacific countries in EU28 trade with Extra-EU28 

Imports 
Exports 
Total (I+E) 

Source Trade G2 Statistics/ISDB  
Trade EU28: Eurostat COMEXT;  Trade EPA (interim) Pacific countries: IMF Dots 

893 
235 
-658 

0,1% 
0,0% 
0,0% 

833 
342 
-491 

0,0% 
0,0% 
0,0% 

746 
279 
-468 

0,0% 
0,0% 
0,0% 

992 
228 
-764 

0,1% 
0,0% 
0,0% 

915 
194 
-721 

0,0% 
0,0% 
0,0% 
25-mars-19 

Total merchandise trade EU28 with EPA (interim) Pacific countries (mio €) 

EPA (interim) Pacific countries 

2017 

2018 

Imports 
Exports 
Balance 
Total trade 
Source Trade G2 Statistics/ISDB from Eurostat COMEXT 

992 
228 
-764 
1.220 

915 
194 
-721 
1.109 

Agrifood trade EU28 with EPA (interim) Pacific countries (mio €) 

EPA (interim) Pacific countries 

2017 

2018 

Growth 

mio € 

-77 
-34 
43 
-111 

annual 
% 
-7,7% 
-14,9% 

-9,1% 

Growth 

Imports 
Exports 
Balance 
Total trade 
Source Trade G2 Statistics/ISDB from Eurostat COMEXT 

699 
18 
-681 
717 

mio € 

-160 
5 
164 
-155 

539 
22 
-517 
562 

NAMA trade EU28 with EPA (interim) Pacific countries (mio €) 

EPA (interim) Pacific countries 

2017 

2018 

Growth 

EU28 imports 
EU28 exports 
Balance 
Total trade 
Source Trade G2 Statistics/ISDB from Eurostat COMEXT 

FIJI 

293 
210 
-83 
503 

mio € 

83 
-39 
-122 
44 

376 
171 
-204 
547 

Merchandise trade EU28 2014-2018 

2014  2015  2016  2017 

2018 

EU28 trade with Fiji (mio €) 

Imports 
Exports 
Balance 

Share Fiji in EU28 trade with Extra-
EU28 

99 
100 
1 

86 
177 
90 

61 
64 
3 

95 
64 
-31 

36 
67 
31 

313 

annual 
% 
-22,8% 
25,6% 

-21,6% 

annual 
% 
28,3% 
-18,4% 

8,8% 

 
 
 
  
 
  
  
  
  
 
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
 
 
  
 
  
  
  
  
 
  
  
  
  
Imports 
Exports 
Total (I+E) 

Imports 
Exports 
Total (I+E) 

0,0% 
0,0% 
0,0% 

0,0% 
0,0% 
0,0% 

0,0% 
0,0% 
0,0% 

0,0% 
0,0% 
0,0% 

0,0% 
0,0% 
0,0% 

Share EU28 in trade Fiji with world 

7,2% 
10,5% 
8,0% 

5,1% 
9,8% 
6,3% 

3,8% 
3,2% 
7,4%  12,1% 
5,4% 
4,7% 

2,9% 
9,6% 
4,2% 
25-mars-
19 

Source Trade G2 Statistics/ISDB  
Trade EU28: Eurostat COMEXT;  Trade Fiji: IMF Dots 

Growth 

mio € 
-59 
2 
61 
-57 

annual 
% 
-62,1% 
3,5% 

-35,7% 

Growth 

mio € 
-62 

annual 
% 
-71,8% 
7  113,2% 

69 
-56 

-59,8% 

Growth 

annual 
% 
42,5% 
-7,8% 

-1,7% 

Total merchandise trade EU28 with Fiji (mio €) 

Fiji 

2017 

2018 

Imports 
Exports 
Balance 
Total trade 
Source Trade G2 Statistics/ISDB from Eurostat COMEXT 

95 
64 
-31 
159 

36 
67 
31 
103 

Agrifood trade EU28 with Fiji (mio €) 

Fiji 

2017 

2018 

Imports 
Exports 
Balance 
Total trade 
Source Trade G2 Statistics/ISDB from Eurostat COMEXT 

87 
6 
-81 
93 

25 
13 
-12 
37 

NAMA trade EU28 with Fiji (mio €) 

Fiji 

2017 

2018 

EU28 imports 
EU28 exports 
Balance 
Total trade 
Source Trade G2 Statistics/ISDB from Eurostat COMEXT 

mio € 
3 
-5 
-8 
-1 

11 
54 
42 
65 

8 
58 
50 
66 

Services trade EU28 with Fiji (mio €) 

Fiji 

2016 

2017 

Growth 

mio € 

annual 
% 

Imports 
Exports 
Balance 
Total trade 
Source Trade G2 Statistics/ISDB from Eurostat BOP statistics 

49 
153 
104 
202 

130 
162 
32 
292 

Services trade EU28 with Fiji (mio €) 

80  162,8% 
5,9% 

9 
-71 
89 

44,2% 

Imports 
Exports 
Balance 
Total trade 
Source Trade G2 Statistics/ISDB from Eurostat BOP 
statistics 

2013 

2014 

2015 

2016 

2017 

100 
66 
-35 
166 

91 
40 
-51 
131 

58 
233 
175 
291 

49 
153 
104 
202 

130 
162 
32 
292 

FDI EU28 with Fiji (mio €) 

2013 
FDI Stocks 

2014 

2015 

2016 

2017 

Inward 
Outward 

Inward 
Outward 
Source Trade G2 Statistics/ISDB from Eurostat BOP 
statistics 

159 

195 

185 

0 
146 

FDI Flows 

-15 
12 

19 

-2 

44 

-3 
169 

-2 
-34 

314 

 
 
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
PAPUA NEW GUINEA 

Merchandise trade EU28 2014-2018 

EU28 trade with Papua New Guinea (mio €) 

Imports 
Exports 
Balance 

Share Papua New Guinea in EU28 trade with Extra-
EU28 

Share EU28 in trade Papua New Guinea with world 

2014  2015  2016  2017 

2018 

794 
135 
-659 

747 
165 
-582 

685 
214 
-471 

897 
164 
-733 

879 
127 
-752 

0,0% 
0,0% 
0,0% 

0,0% 
0,0% 
0,0% 

0,0% 
0,0% 
0,0% 

0,0% 
0,0% 
0,0% 

0,0% 
0,0% 
0,0% 

3,2% 
13,2% 
8,1% 

3,7% 
9,4% 
6,8% 

5,3% 
4,0% 
9,2%  11,5% 
8,3% 
7,5% 

3,1% 
11,2% 
7,7% 
25-mars-
19 

Imports 
Exports 
Total (I+E) 

Imports 
Exports 
Total (I+E) 

Source Trade G2 Statistics/ISDB  
Trade EU28: Eurostat COMEXT;  Trade Papua New Guinea: IMF Dots 

Total merchandise trade EU28 with Papua New Guinea (mio €) 

Papua New Guinea 

Imports 
Exports 
Balance 
Total trade 
Source Trade G2 Statistics/ISDB from Eurostat COMEXT 

2017 

2018 

897 
164 
-733 

879 
127 
-752 
1.060  1.006 

Growth 

mio € 
-18 
-36 
-19 
-54 

annual 
% 
-2,0% 
-22,2% 

-5,1% 

Agrifood trade EU28 with Papua New Guinea (mio €) 

Papua New Guinea 

2017 

2018 

Imports 
Exports 
Balance 
Total trade 
Source Trade G2 Statistics/ISDB from Eurostat COMEXT 

612 
12 
-600 
624 

515 
10 
-505 
524 

NAMA trade EU28 with Papua New Guinea (mio €) 

Papua New Guinea 

2017 

2018 

EU28 imports 
EU28 exports 
Balance 
Total trade 
Source Trade G2 Statistics/ISDB from Eurostat COMEXT 

285 
152 
-133 
437 

364 
118 
-246 
482 

Services trade EU28 with Papua New Guinea (mio €) 

Papua New Guinea 

2016 

2017 

Imports 
Exports 
Balance 
Total trade 
Source Trade G2 Statistics/ISDB from Eurostat BOP statistics 

43 
224 
180 
267 

65 
325 
260 
390 

Services trade EU28 with Papua New Guinea (mio €) 

Growth 

mio € 
-97 
-2 
95 
-99 

annual 
% 
-15,9% 
-18,8% 

-15,9% 

Growth 

mio € 
79 
-34 
-114 
45 

annual 
% 
27,9% 
-22,4% 

10,4% 

Growth 

mio € 
21 
101 
80 
123 

annual 
% 
49,1% 
45,3% 

45,9% 

Imports 
Exports 

2013 

2014 

2015 

2016 

2017 

43 
482 

42 
176 

68 
265 

43 
224 

65 
325 

315 

 
 
 
 
 
  
 
  
  
  
  
 
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
Balance 
Total trade 
Source Trade G2 Statistics/ISDB from Eurostat BOP statistics 

439 
525 

134 
217 

197 
332 

180 
267 

260 
390 

FDI EU28 with Papua New Guinea (mio €) 

2013 

2014 

2015 

2016 

2017 

Inward 
Outward 

FDI Stocks 

FDI Flows 

2 

2 
660  1.056  1.441 

4 

4 
1.014 

13 
1.680 

Inward 
Outward 
Source Trade G2 Statistics/ISDB from Eurostat BOP statistics 

-1 
133 

1 
-87 

-1 
192 

1 
80 

8 
737 

316