The EU says almost all the countries it has trade deals with are breaking those agreements and is stepping up pressure for them to comply as part of a more “assertive” trade policy.
All but one of the 67 countries with enhanced trade arrangements with the EU have put up barriers that contravene them, according to a report by the European Commission’s chief trade enforcement officer.
The report said Denis Redonnet, who was appointed last year, would use new tools to force changes to rules restricting trade. These restrictions include health controls, customs administrations fees and limits on the foreign ownership of companies.
“Following a 10-year period of intensive, successful negotiations expanding the EU’s network of preferential trade agreements, the EU now needs to increasingly focus on their full and effective implementation,” said the commission document published on Wednesday.
Most countries have progressively reduced import tariffs but often replaced them with non-tariff barriers that shut out foreign goods and services.
Under pressure from member states and companies, the EU has increasingly focused on removing these, notwithstanding its €217bn trade surplus in 2020.
“We defend our interests,” said an EU official. “The commission has adopted an open, sustainable and assertive trade strategy. This report is about the assertive part.”
The report gives examples of how the EU has overcome such barriers, including ending a ban on feta cheese imports in Egypt. Cairo had declared that the Greek cheese was a health threat because of its yeast content but changed its rules after lobbying by the commission.
Similarly, when Jordan announced plans to impose a 5 per cent customs “service fee” on EU imports, the commission pointed to economic support it could provide in other ways.
“It is about leveraging our entire relationship with a third country,” the official said.
In total, the EU found 462 barriers among the 67 countries at the end of 2020. China had the largest number with 40, followed by Russia, Indonesia and the US.
The report covers countries with preferential trading arrangements as well as full trade deals.
But there are problems even with longstanding partners. Norway, which is in the EU single market for goods, maintains high tariffs on processed foods.
The EU has adopted several new tools in the past year to improve trade enforcement. They include a new complaints process for companies and industry associations which believe they face illegal barriers and retaliatory measures.
It is also planning legal instruments to regulate trade. One will tackle distortions caused by state subsidies, aimed particularly at China, another intends to force open government procurement markets, and a third seeks to block imported products that rely on deforestation.
Some lawyers fear countries affected by these rules will retaliate, further gumming up global trade.
Source: Economy - ft.com
