EU speeds up completion of free trade agreements – Atradius

The European Union and trading partners are speeding up the completion of free trade agreement negotiations, driven by the growing insecurity over US trade policy, according to credit insurer Atradius.

“Many say that the growing insecurity over the direction of US trade policy is a curse for international trade; however, it could turn out to be a boon for the EU and some of its trading partners. Currently it seems that the threat of growing global protectionism has spurred the efforts of Brussels and its negotiation partners to speed up the conclusion of ongoing free trade agreement (FTA) negotiations,” said Atradius.

It said the marked change in the US stance has increased the pressure on all parties involved to compromise, even on sensitive and contentious issues, after extensive talks and negotiation rounds. At the same time, the European Commission is trying to accelerate the necessary ratification of already-agreed FTAs by the European Parliament and the member states.

Bilateral negotiations on the agenda this year include finalising trade negotiations with Mexico and Mercosur (Argentina, Brazil, Paraguay and Uruguay) and obtaining the final ratification of key trade agreements with Japan, Singapore and Vietnam.

“As the US steps back from the world stage, the EU is extending FTAs around the world – benefiting not only EU exporters by slashing tariffs but extending the reach of standards and regulations,” said Atradius.

The EU is hoping to have most of the agreements in place by this summer, said Atradius. The EU-Japan Economic Partnership Agreement has been submitted for approval to the European Council and the European Parliament, which is expected in summer 2018. Similarly, the EU-Vietnam Free Trade Agreement submission for approval to the European Council and the European Parliament is expected in 2018.

As for the EU-Mercosur Association agreement, the intention on both sides is to finalise negotiations before summer 2018. The same is true of the extension of the current Free Trade Agreement with Mexico, although Atradius said that while negotiations have nearly been completed, the issue of the EU’s demand to recognise geographical indications for food products remains a stumbling block.

Negotiations for the EU-Singapore Free Trade Agreement were finalised in October 2014, but to enact, the agreement needs to be passed by the EU Council of Ministers and ratified by the European Parliament as well as parliaments of EU member states. The latter became necessary after the European Court of Justice ruled in May 2017 that any trade deal that includes a non-court dispute settlement system and non-direct foreign investment is a “mixed agreement” that requires ratification by the EU’s 38 national and regional authorities, Atradius explained.