Latest Trade News and Agreements: March 2021

On February 5, the EU-India High-Level Dialogue on Trade Investment held its first meeting. The High-Level Dialogue, hosted on-line by India, was co-chaired on the EU side by Valdis Dombrovskis, Executive Vice-President and Commissioner for Trade, and on the Indian side by Shri Piyush Goyal, Hon’ble Minister for Commerce & Industry. The two sides had open and constructive exchanges on a broad range of issues with the aim of enhancing EU-India bilateral trade and investment relations.
 
The two sides exchanged views on the state of play of EU-India bilateral trade and investment relations, and possible ways forward, such as resuming negotiations for ambitious, comprehensive and mutually beneficial trade and investment agreements. Their discussion will feed into the preparation of the upcoming EU-India Leaders’ Meeting.
 
During the meeting, the EU side provided an update on the ongoing review of the Generalised Scheme of Preferences (GSP), which expires end of 2023, and on the work towards EU Carbon Border Adjustment Mechanism under the European Green Deal, while the Indian side provided an updated on the “Make in India” and “Self-Reliant India” initiatives. They also examined a selection of key market access issues to identify prospects for resolving them. 

New trade enforcement rules have entered into force that are deemed to further strengthen the EU's toolbox in defending its trade interests. The new Regulation (EU) 2021/167 amended the Regulation (EU) No 654/2014 concerning the exercise of the Union’s rights for the application and enforcement of international trade rules, entered into force on February 13.
 
The new rules upgrade the EU's enforcement by introducing the following changes:

According to a recent press release, Executive Vice-President and Commissioner for Trade, Valdis Dombrovskis, said: “The European Union must be able to defend itself against unfair trading practices. These new rules will help protect us from those trying to take advantage of our openness. We continue to work towards our first preference, which is a reformed and well-functioning multilateral rulebook with an effective Dispute Settlement System at its core. But we cannot afford to stand defenseless in the meantime. These measures allow us to respond resolutely and assertively.”
 
The proposal to amend the existing Enforcement Regulation came as a reaction to the blockage of the operations of the WTO Appellate Body. The current regulation –a basis under EU law for adopting trade countermeasures– requires that a dispute goes all the way through the WTO procedures, including the appeal stage, before the Union can react.
 
The revised Regulation enables the EU to react even if the WTO has not delivered a final ruling because the other WTO member blocks the dispute procedure by appealing to the non-functioning Appellate Body and by not agreeing to an alternative arbitration under the WTO Dispute Settlement Agreement.
 
This new mechanism also applies to the dispute settlement in relation to regional or bilateral trade agreements to which the EU is a party if a similar blockage arises. 

In a Federal Register Notice published on February 12, the Office of the U.S. Trade Representative (USTR) announced that it will not revise the US-EU dispute involving Large Civil Aircraft subsidies at this time.
 
As previously reported, EU Agriculture MEPs and trade associations from the EU and the US have been pushing for the removal, or at least a moratorium, on punitive tariffs affecting Trans-Atlantic trade in goods unrelated to the Airbus/Boeing and steel and aluminum disputes.

In recent news from the European Federation of the Trade in Dried Fruit & Edible Nuts, Processed Fruit & Vegetables, Processed Fishery products, Spices, Honey (FRUCOM), the European Parliament is currently considering the Commission’s proposed Delegated Regulation which would allow Uzbekistan to accede to the enhanced GSP+ regime. The Republic of Uzbekistan made a request for GSP+ treatment on June 9, 2020, which the Commission examined and concluded that the Republic of Uzbekistan meets the eligibility criteria for GSP+.
 
The proposed Delegated Regulation was adopted in November 2020, and on December 3, 2020 the Parliament was given a two month extension to scrutinize the measure. After receiving the assent of the Parliament and Council, the regulation will enter into force upon publication in the European Union’s legislative observatory.
 
Uzbekistan already has GSP status, and the GSP+ is designed to incentivize sustainable development and good governance by “providing additional tariff preferences to developing countries which are vulnerable due to a lack of diversification of exports and insufficient integration within the international trading system”. Accession to the GSP+ is conditional to the ratification and effective implementation of 27 core international conventions on human and labor rights, environmental protection, and good governance.
 
The EU's bilateral trade relations with Uzbekistan are governed by a Partnership and Cooperation Agreement (PCA), and the two parties are currently negotiating an Enhanced Partnership and Cooperation Agreement (EPCA), of which six rounds of negotiations have already taken place.