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A BASIS FOR NEW GENERATION OF FREE TRADE AGREEMENTS

Deep and C omprehensive F ree T rade A reas with Eastern Partnership C ountries Presentation at the European Security and Defen c e College by Ewa Synowiec, Head of the European Commission Representation Warsaw, 10 March 2011. A BASIS FOR NEW GENERATION OF FREE TRADE AGREEMENTS.

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A BASIS FOR NEW GENERATION OF FREE TRADE AGREEMENTS

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  1. Deep and Comprehensive Free Trade Areas with Eastern Partnership CountriesPresentation atthe European Security and Defence College by Ewa Synowiec, Head of the European Commission RepresentationWarsaw, 10 March 2011

  2. A BASIS FOR NEW GENERATION OF FREE TRADE AGREEMENTS Commission Communications: Global Europe: Competing in the World(October 2006) Eastern Partnership(December 2008) Trade, Growth and World Affairs (November 2010)

  3. New generation: deep and comprehensive free trade agreements • A stronger engagement in FTAs with major emerging economies/regions and neighborhood countries • Broader scope & sharper focus on behind the border barriers to trade (regulatory issues) - Technical, sanitary and phyto-sanitary regulations - Services and investments - Customs and trade facilitation - Intellectual property rights (IPR) - Public procurement - Competition (State aid, antitrust) - Trade related energy issues - Trade and sustainable development

  4. EU - Eastern Partnership countries Current legal framework for trade relations • WTO rules • Non-preferential Partnership and Cooperation Agreements concluded in the 1990s • General System of Preferences (or GSP+) 2009-2011(Autonomous Trade Preferences (ATP) for Moldova) • ENP Action Plans(Association Agenda for Ukraine)+ Eastern Partnership actions/instruments • In future: Association Agreementswith deep and comprehensive free trade areas (PCA+ & WTO+) →political association + economic integration

  5. Association Agreements (AA) Deep and comprehensive free trade area as a core economic part of AA • Should be in full compliance with WTO rules (art. XXIV GATT): - to cover substantially all trade in goods (at least 95% of trade value & tariff lines); - no sectors excluded (even if coverage is met); - reasonable transitional periods; - maximum front loading as concerns tariff liberalization; - neutrality towards 3rd countries (no increase in barriers)

  6. D&C Free Trade Area • Regulatory approximationin trade related areas as a crucial component of FTA: - law harmonization - law implementation - law enforcement - institutional capacity building • Regulatory approximation as a pre-condition for market opening

  7. D&C Free Trade Area Regulatory approximation: • gradual but focused(priorities!) • triggering short to medium term adjustment costs for: - public administration, - business community • in the form of binding provisions & cooperation provisions • monitoringof implementation & enforcement + problem solving(dispute settlement)

  8. D&C Free Trade Area Free movement of goods • Trade in goods • Rules of origin • Trade Defence Instruments • Technical regulations on industrial products, standards & conformity assessment procedures; market surveillance • Sanitary & phytosanitary measures • Trade facilitation & customs • Anti-fraud measures/customs cooperation

  9. D&C Free Trade Area Services and investment • Freedom to provide services • Right of establishment(liberalized with only small amount of exclusions)and self-employment without a possibility to look for a job at EU market • Movement of workers (key personnel; self-employed) • Recognition of qualifications • Capital movement & payments • Full regulatory approximation as a precondition for opening of the EU market (e.g. financial services!)

  10. D&C Free Trade Area Institutional provisions • Dispute settlement/mediation mechanism (WTO-like; specific for disputes related to regulatory approximationandenergy) • Institutional bodies • Advanced implementationwithout waiting for full ratification (Interim Agreement)

  11. D&C Free Trade Area Stages needed to embark on the negotiationprocess • WTOmembership (for Belarus and Azerbaijanstill pending) • Results and recommendation of the FTA feasibility study • Shared objective by the partner country to negotiate deep and comprehensive FTA • Present ability to negotiate, implement and sustain the ambitious FTA • Preparatory process supported by the EU(„key recommendations”related to the crucial reformsas a follow up of the Commission’s fact-finding missions, prepared by the COM and endorsed by EU Member States and partner country)

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