EU Trade Ministers Prepare for MC11, Review FTA Negotiating Progress

16 November 2017

Trade negotiations in the WTO context and with major partners were high on the agenda as European trade ministers met within the EU Foreign Affairs Council last week in Brussels, Belgium. The 10 November meet was meant to review negotiating progress to date, as well as consider the bloc’s approach heading into key events during the final weeks of 2017.

The gathering marked the final such meeting before they reconvene on the sidelines of the Eleventh WTO Ministerial Conference (MC11) in Buenos Aires, Argentina. Along with reviewing MC11 preparations, ministers also took stock of progress in ongoing trade talks with various major players, and lent their political backing towards the prompt conclusion of agreements with Mexico and Mercosur, according to an outcome document circulated after the Council meet.

Preparations for MC11

Ministers discussed the role of the EU at MC11, agreeing on “the need for the EU to work towards a substantive and balanced outcome to the ministerial conference,” according to the summary of outcomes. The ministerial conference is the WTO’s highest decision-making body, usually taking place every two years.

Among EU priorities at MC11, “our main aim remains to confirm the central role of the WTO in the multilateral trading system,” saidUrve Palo, the Estonian Minister of Entrepreneurship and Information Technology, speaking at a press conference on Friday.

“The world must remain open for trade, and for that to happen we all need to play by fair rules,” she emphasised. The discussions in Brussels marked the first official gathering of EU trade ministers under the Estonian presidency.

“Member states are very engaged,” said Cecilia Malmström, EU Trade Commissioner, in remarks made alongside Palo. “The EU is trying to show as much leadership as possible in Geneva,” she added, referring to proposals on issues including domestic farm support reform, disciplines on fisheries subsidies, domestic regulation in services, and transparency in regulatory measures affecting small businesses.

“There is progress but there are lots of difficulties as well,” Malmström remarked, underlining the need to step up efforts and focus attention on certain pressing issues, including through engaging further with the US to overcome divisions with regard to filling empty seats in the WTO Appellate Body. (See Bridges Weekly, 2 November 2017)

Ongoing negotiations for free trade agreements

Ministers considered trade relations in Latin America, seeking to clarify their priorities and welcoming an accelerated momentum of talks with Mercosur and Mexico.

“Latin America is a key political and economic partner for Europe. We are committed to concluding far-reaching and mutually beneficial trade agreements with Mercosur and Mexico soon," said Palo.

EU ministers have set their sights on the end of the year to conclude negotiations for an update to the Global Agreement with Mexico, launched in May 2016. (See Bridges Weekly, 27 July 2017)

The fifth and most recent round of talks took place in September 2017 in Brussels, with the next scheduled to take place at the end of November in Mexico City. The trade aspects of the deal initially entered into force nearly two decades ago.

Since talks began, text-based proposals have been exchanged, while negotiators put forward first market access offers on goods, services, and public procurement in July.

Bilateral trade between the partners is substantial. Last year, the EU was Mexico’s second largest export market, behind the US, and third greatest source of imports.

Ministers further discussed the Association Agreement under negotiation with Mercosur, a regional grouping including Argentina, Brazil, Paraguay, and Uruguay. Talks for this accord, which includes a trade agreement, resumed in 2016 after years on hold. The EU already has bilateral strategic or framework partnership agreements with all four Mercosur countries involved in negotiations.

The most recent round of negotiations was concluded last week in Brasilia, where officials “confirmed their commitment to conclude an agreement that will be greatly beneficial for all before the end of the year,” according to an EU press release.

Negotiators reportedly made progress in preparing to exchange a new round of market access offers, and advanced textual deliberations on goods, services, government procurement, intellectual property, technical barriers to trade, sanitary and phytosanitary measures, trade and sustainable development, small and medium enterprises (SMEs), and dispute settlement, according to the press release.

Ministers meeting in Brussels highlighted the need to tackle sensitive issues in the near term, including thorny agricultural issues, in terms of possible impacts of exposing the EU beef and sugar industries to competition from the region. The EU most recently presented a tariff offer taking these concerns into consideration in October. In 2015, Mercosur’s key exports to the EU were dominated by agricultural products.

Last week, Jyrki Katainen, Vice-President of the European Commission, discussed progress in negotiations during a trip to Argentina and Brazil. In a speech before government officials in Buenos Aires, Argentina, last Thursday, Katainen underlined the potential role of the deal in strengthening the blocs’ mutual ability to contribute to sustainable development.

“At a global level, the EU and Mercosur together may implement stronger action on the Agenda 2030 for Sustainable Development, on [the] fight against climate change, and on issues such as international migration; peace and security, and development cooperation,” he said.

In addition, he highlighted the values that the regions have in common, citing a mutual “respect for human rights, democracy, and multilateralism,” and the imperative of strengthening the rules-based system towards these ends.

The potential agreement would be worth eight times as much as the EU-Canada Comprehensive Economic and Trade Agreement (CETA) in terms of tariffs alone, according to comments by Commissioner Malmström. CETA is a far-reaching deal which has been provisionally applied since late September. (See Bridges Weekly, 2 November 2017)

ICTSD reporting.

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