'Week Ahead' and trade agenda, LatAm & Caribbean, Mercosur, Mexico, World Trade Organization

Week ahead in EU trade: Mexico, Mercosur, steel forum, Africa summit, WTO

This is a big week for EU trade negotiators, who will be putting their collective noses to the grindstone as they work toward a year-end goal to clinch agreements with Mexico and Mercosur. Momentum is building for the parties to be able to announce at the World Trade Organization’s December ministerial meeting that a political agreement on at least one of the two deals has been reached.


The sixth round of talks to upgrade the 2001 EU-Mexico Global Agreement starts today and runs through Friday. Urva Palo, Estonia’s minister of entrepreneurship and information technology, said earlier this month that the EU is “entering the endgame” with both Mexico and Mercosur.


Brussels and Mexico City have made progress in areas including customs and trade facilitation, rules of origin, good regulatory practice, technical barriers to trade, digital trade and investment. Still, it’s unclear whether they will be able to overcome differences in tougher areas such as public procurement, dispute settlement, geographical indications and the sectoral annexes for automobiles, pharmaceuticals and wines.


The sixth round of negotiations between the EU and Mercosur starts on Wednesday and is scheduled to end on 5 December. But as one EU official told Borderlex: “It cannot be excluded that it will take a bit longer – something that is not unusual for the negotiations at this stage of advancement.”


Negotiators are hoping to make progress on rules of origin, which would allow for the export or import of products originating in the EU or Mercosur countries with a special zero rate of duty, and nontariff barriers such as export and import taxes. But discussions on rules of origin have been overshadowed by a battle over tariff cuts for the most sensitive products, including beef, sugar, ethanol and textiles. Sandra Gallina, the EU’s chief negotiator, said little progress was made on rules of origin during the last negotiating round, so the bloc will be keen to move the issue ahead during this week’s discussions.


Steel overcapacity


With steel overcapacity still hampering many nations – including EU steel-producing countries such as France, Germany, Italy, Poland and the UK – many eyes will be focused on this Thursday’s meeting of the Global Forum on Steel Excess Capacity in Berlin. The forum, established last December to address issues behind the overcapacity crisis, brings together more than 30 steel-producing countries that represent 90% of worldwide steel production.


The forum convened at the working-group level in September and outlined six “key principles” to be included in a report to the Group of 20 leading economies to help governments develop policy solutions. The US and the EU have been particularly vocal about the steel glut – pointing the finger at China – and have responded to a steep rise in exports by slapping tariffs on categories of steel deemed to be subsidised or dumped. EU trade chief Cecilia Malmström and US Trade Representative Robert Lighthizer will participate in the forum’s ministerial meeting in the German capital.


EU-Africa joint strategy


With the European Parliament calling for a new strategy on EU-Africa ties, amid a wave of immigration from the continent to Europe, the EU-Africa Summit may help policymakers find some answers. The summit takes place on Wednesday and Thursday in Abidjan, Ivory Coast.


Representatives from the EU and Africa intend to revise their joint strategy by next spring, and this will feed into a fresh treaty to replace the 2002 Cotonou Agreement. The parliament recently adopted a report from the European Commission’s Committee on Development whose demands are to be incorporated into this new strategy. Parliament President Antonio Tajani is scheduled to speak to journalists about the conference on Wednesday, and a post- summit press conference is planned for Thursday.


Fisheries subsidies


Fish will be on the menu at the WTO this week – well, fisheries subsidies, to be more precise. At the 13-17 November meeting in Geneva, trade negotiators produced a draft document that proposes to ban illegal, unreported and unregulated fishing as well as set new curbs on certain government subsidies that contribute to overfishing. The five-page working document is riddled with brackets, reflecting the various different approaches among members on how to deal with IUU fishing and aid for fishing of overfished stocks.


At this week’s round of talks, which run from today through Wednesday, negotiators are aiming to clean up other sections of the draft integrated text. Wayne McCook, the Jamaican ambassador who chairs the WTO’s rules negotiating group, said in his communication on the working documents that WTO members should put together “similar working texts and otherwise advance[e] work on additional prohibitions such as overcapacity and capacity-enhancing subsidies; special and differential treatment; transparency and notifications; standstill; preamble; scope; transitional provisions; and institutional arrangements.”




With the wide-ranging EU-Vietnam Free Trade Agreement expected to be ratified next year, Malmström will receive Tran Tuan Anh, Vietnam’s minister for industry and trade, in Brussels on Friday. Human-rights issues and creating a separate track for the ratification of the deal’s investment protection chapter have created some uncertainty over when the agreement can be put to the Council, the European Parliament and member states for a final nod. Once the trade deal with Vietnam takes effect in 2019, the bloc will scrap import duties on 85.6% of its tariffs lines on Vietnamese products. After seven years, 99% of EU tariffs will be removed for Vietnamese products. Vietnamese textiles, footwear and seafood products, excluding canned tuna and fish balls, will face no import duties in the first seven years of the pact.


The parliament’s international trade committee will meet Tuesday afternoon in Brussels, with agenda items including a discussion on WTO consultations on EU-UK tariff rate quotas following Britain’s planned March 2019 exit from the bloc. Lawmakers will also exchange views on macro-financial assistance, economic diplomacy and a report on implementation of free trade agreements.

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