EU Trade Policy: Looking East
Upcoming SlideShare
Loading in...5
×
 

EU Trade Policy: Looking East

on

  • 351 views

EU Trade Policy: Looking East

EU Trade Policy: Looking East
Isabelle Ramdoo, ECDPM
MEXA Workshop, 26th July 2012, Mauritius

Statistics

Views

Total Views
351
Views on SlideShare
351
Embed Views
0

Actions

Likes
0
Downloads
5
Comments
0

0 Embeds 0

No embeds

Accessibility

Categories

Upload Details

Uploaded via as Microsoft PowerPoint

Usage Rights

© All Rights Reserved

Report content

Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

Cancel
  • Full Name Full Name Comment goes here.
    Are you sure you want to
    Your message goes here
    Processing…
Post Comment
Edit your comment

EU Trade Policy: Looking East EU Trade Policy: Looking East Presentation Transcript

  • EU Trade Policy Looking EAST Isabelle Ramdoo, ECDPMMEXA Workshop, 26th July 2012, Mauritius
  • Structure of Presentation 1. A closer look at EU imports from main competitors 1. Countries having an FTA with the EU – The case of South Korea 1. Countries having no FTAs: Which regimes apply? 1. Country cases – exports to EU, tariffs, rules of originECDPM Page 2
  • 1. A closer look at EU imports from main competitors Cotton  Denim  T Shirts  T Shirts  Pull  Shirts    Yarn Pull Wool Trousers Fabric Fabric Cotton Man made Cotton Cotton Total  imports  103,954 214,680 388,905 14,211,039 4,788,144 9,272,782 143,103 11,939,600 5,549,936 (€’000) China 5.3% 10.0% 17.4% 29.2% 25.5% 18.2% 19.8% Bangladesh 21.9% 14.9% 4.8% 12.9% 9.1% Turkey 5.5% 13.9% 30.6% 13.4% 19.5% 7.3% 8.4% 8.5% 8.1% Germany 6.6% 5.2% 3.1% 6.1% 6.9% 6.5% 5.6% 6.8% 6.3% Netherlands 4.0% 4.9% 4.9% 3.7% 4.2% Italy  29.6% 32.0% 16.7% 4.1% 3.6% 12.6% 5.5% 5.5% Cambodia 3.3% France 3.4% 2.9% 4.0% 3.9% 5.0% 2.7% India 7.3% 2.6% 2.3% 10.5% tunisia 2.8% 5.8% 2.2% Pakistan 7.6% 5.4% Morocco 8.7% 1.7% 2.4% Vietnam 3.7% UK 11.1% Denmark 9.6% Belgium 7.6% 6.5% Mauritius 4.8% 1.8% Spain 4.3% 9.4% Austria 8.2% Portugal 7.8% 4.1% 4.8% Switzerland 6.2%ECDPM Page 3
  • Yarn and fabric 1. Yarn (HS 51.06.10) • Top EU importers: Italy, UK, Denmark Belgium • Top competitors: Turkey, China 2. Cotton Fabric (HS 52.08.49) • Top EU importers: Italy, France, Spain, Portugal • Top competitors: Turkey, China 3. Denim Fabric (HS 52.09.42) • Top EU importers: France, Italy • Top competitors: Turkey, Morocco, Pakistan. Tunisia Garments 4. T-Shirts (cotton) (HS61.09.10) • Top EU importers: Germany, France, UK, Belgium • Top competitors: Bangladesh, Turkey, China, India 5. T-Shirts (man made) (HS 61.09.90) • Top EU importers: France, Italy, Germany • Top competitors: Turkey, ChinaECDPM Page 4
  • 6. Pullovers (wool) HS (61.10.19) • Top EU importers: Italy, Germany, France • Top competitors: China, Bangladesh, Turkey 7. Pullovers (cotton) (HS 61.10.20) • Top EU importers: Germany, France, UK, Netherlands • Top competitors: China, Turkey, Bangladesh 8. Trousers (HS 62.03.42) • Top EU importers: Germany, UK, France, Italy • Top competitors: China, Bangladesh, Turkey, Tunisia 9. Shirts (cotton) (HS 62.05.20) • Top EU importers: Germany, France, UK, Italy • Top competitors: China, India, Bangladesh, TurkeyECDPM Page 5
  • Fish and Fish products Fish fillets, fresh,  fish prepared and    Tuna, skip jack frozen, chilled preserved Total imports (€ ‘000) 6,847,220 3,148,904 922,443 China 27.0% 3.5% Vietnam 21.7% Norway 8.4% Iceland 7.9% Germany 6.6% 10.9% Netherlands 5.7% 3.8% USA 5.2% Denmark 4.5% 3.0% Russia 4.3% Ecuador 16.6% 3.3% Thailand 10.9% 8.9% Mauritius 8.1% 1.5% Seychelles 7.4% Cote dIvoire 3.9% Ghana 3.9% Philippines 3.5% PNG 2.7% Spain 17.8% 10.2% Morocco 9.4% France  7.0% Lithuania 6.5% Belgium 6.0%ECDPM Page 6
  • Fish and fish products 1. Fish fillets, fresh, chilled or frozen (HS 03.04.29) • Top EU importers: Spain, UK, France • Top competitors: China, Vietnam, Russia 2. Prepared or preserved fish (HS 16.04.14) • Top EU importers: Spain, UK, France • Top competitors: Ecuador, Thailand, Seychelles 3. Other prepared or preserved fish (HS 16.04.20) • Top EU importers: Spain, UK, France • Top competitors: Morocco, Thailand, China, EcuadorECDPM Page 7
  • 2. Countries having an FTA – South Korea • South Korea signed an FTA with the EU in 2011. This FTA is considered as the most advanced trade agreement the EU has signed so far. S. Korea does not benefit from full duty free and quota free  market access to the EU. • On average, S. Korea is not a large trading partner to the EU: EU’s share of imports from S. Korea represents 2% of its total imports and EU’s share of exports to Korea also represents 2% of total EU export. • However, for specific sectors, such as automobile and machinery, S. Korea is an important playerECDPM Page 8
  • Overview of preferences granted to S. Korea in selected products • Textile products: South Korea is not a major exporter of textiles to the EU. Main markets are in Asia – Mainly Japan and China • FTA will open up EU market. However, RoO are quite strict for textile products • Fish and fish products – S. Korea is a large consumer and a producer of fish and fish products, in particular fresh fish (ch 03) • FTA does not confer improved benefits – no derogation provisionECDPM Page 9
  • Key elements of the EU – Korea FTA for textile products Korean exports of selected textile products by main markets (2011) T-shirts - Man  T Shirts -  Pullover -  Shirts -    made Cotton Cotton Cotton Yarn Total Exports to  world (€ 000) 99,151 54,855 17,445 8,313 7,291 EU 1.9% 1.9% 2.0% 10.4% 0.2% China 8.2% 17.6% 17.8% 28.2% 33.8% Japan 71.2% 40.7% 27.4% 12.3% 23.9% Pakistan 20.7% US 3.6% 5.0% 45.0% 30.2% Hongkong 13.4% Rules of origin for t-shirts and pullovers: Double stage transformation : (spinning of natural and/or man made staple fibres, or extrusion of man made filament yarn accompanied by knitting (knitted to shape products) Value tolerance: 10% of the weight of basic material used Double stage transformation: Knitting and making up including cutting (assembling two or more pieces of knitted or crocheted fabric which have been either cut to form or obtained directly to form Value tolerance: 8% of the weight of basic material usedECDPM Page 10
  • Rules of origin for shirts Double stage transformation: Weaving accompanied by making-up including cutting; or Value tolerance: 10% of the weight of basic material used • Embroidering accompanied by making up including cutting, provided that the value of the unembroided fabric used does not exceed 40% of ex-works price of the product, or • Coating accompanied by making up, including cutting, provided that the value of the uncoated fabric used does not exceed 40% of ex-works price of the product, or • Making up preceded by printing accompanied by at least 2 preparatory operations (such as scouring, bleaching, mercerising, heat setting, raising, calendaring, shrink resistance processing, permanent finishing, decatising, impregnating, mending and burling), provided that the value of the unprinted fabric used does not exceed 47,5% of the ex-works price of the product • Value tolerance: 8% of the weight of basic material usedECDPM Page 11
  • Rules of origin for yarn Manufacture from • - raw silk or silk waste, carded or combed or otherwise prepared for spinning; • - other natural fibres, not carded or combed or otherwise prepared for spinning; • - chemical materials or textile pulp; • - paper making materials Value tolerance: 10% of the weight of basic material usedECDPM Page 12
  • Fish and fish products Main exports of fish and fish products to main markets (2011) Fish fillets, fresh, fish prepared Tuna, skip jack frozen, chilled and preserved Total exports to world (€ 000) 221,167 14,127 34,846 EU 5.5% 0.9% 15.5% US 7.1% 25.6% 20.3% China 4.6% 52.2% 9.1% Japan 82.6% 32.9% Taipei 8.9% Vessels registered in Korea or EU and sail under their flags; and Crew requirements: At least 50 % owned by nationals of Korea or EU; or Vessels owned by companies with head office in Korea or EU and which are at least 50% owned by Korea or EU Value tolerance: 10% of ex-works price of productECDPM Page 13
  • Countries having no FTAs: What regimes apply? Philippine India Vietnam Thailand Pakistan Bangladesh China s GSP - but in GSP - some Special practice, most products are regime for 75 GSP - Special Regime GSP GSP GSP products are excluded from products, GSP LDC Scheme excluded from preferences for the rest preferences State of play of EU trade policy: -India and Vietnam: Currently negotiating FTAs -Thailand and Philippines: Considering negotiating FTAs - Pakistan: Special incentive - Bangladesh and China: no plans of FTAs so farECDPM Page 14
  • 4. What rules apply for those countries?ECDPM Page 15
  • 1. India: currently negotiating an FTA Why? - An important partner for the EU, in both strategic and economic terms. EU is also a major partner to India - It is a high potential emerging economy - Middle class is rising (currently 150 million, expected to reach 600 million in 2020) – HUGE market potential for EU products Current state of play: • India is a beneficiary of the EUs GSP scheme. In 2010, around 85% of Indian exports to the EU entered under a zero or a preferential tariff. But average tariffs is high in India for EU products (31.8 % for agric and 10.1% for industrial products) • FTA negotiations were launched in 2007 - expected to cover 25% of world population and 30% of world GDP • The negotiations have entered a crucial phase and intensive activity is expected ahead of the EU-India Summit to be held on 10 February 2012.Page 16ECDPM
  • • EU will not provide DFQF – will liberalise 95% of its market (with an exclusion list of 226 products, mostly chemicals, petrochemicals, plastics, ceramics and glassware. • India will liberalise 90%, with an exclusion list of about 150 agricultural goods (including dairy products, sugar, fruits and vegetables, meat products, fish and fish products) and 250 manufactured products such as some textiles and clothing, textile machinery, cars, and wines and spirits. Key challenges: • Tariffs: India is inflexible on tariffs on automobiles (peak of 60%) and want to exclude products where EU has subsidies. • Concerns regarding clauses on human rights, social and environmental as well as labour standards. • Strict requirements on Intellectual Property Rights issues, which may curtail the production of cheap generic drugs, especially AIDS drugs which India exports to Africa. • Concerns in Services – movement of people, liberalisation of services such as professional servicesECDPM Page 17
  • Indian exports of selected textile products to main markets (2010) T-Shirts T-Shirt Shirts - Denim Pull Cotton Pull Trousers man Yarn Cotton Cotton fabric Cotton Fabric Wool made Total Exports to 1,472,549 701,562 368,597 225,445 152,048 128,741 9,931 4,290 3,055 world (€ 000) EU 47.1 53.7 46.7 24.7 4.9 61.8 14.1 13.6 65.0 US 30.8 28.0 29.3 20.0 31.5 54.1 15.3 Tunisia 10.4 Togo 39.2 Brazil 12.8 Bangladesh 33.2 Turkey 17.0 UAE 7.3 6.0 11.6 30.1 Afghanistan 6.8 India is a major global player in the apparel sector ( t-shirts – 1.4 billion exports in 2011); EU is a major market for Indian apparel products. Most products exported under the GSP Scheme (see below). Note: fabric (denim and cotton) go to countries that benefit from duty free access to EU (and single transformation).ECDPM Page 18
  • Current duties applied to Indian textiles by EU India exports under the Generalised system of preferences, a Scheme providing trade preferences to all developing countries. Rate of duty applied to Indian textile products T-Shirt Shirts - T-Shirts Denim Pull Cotton Pull Trousers Yarn Cotton Cotton man made fabric Cotton Fabric Wool Duty applied to Indian 9.6% 9.6% 9.6% 9.6% 8.0% 9.6% 8.0% 3.8% 9.6% products Scheme GSP GSP GSP GSP MFN GSP MFN MFN GSP For textile products, GSP tariffs are 20% lower than the normal tariff that EU applies, without preferences (MFN rate). Although India is a large exporter, its volume of exports are not large enough to suspend it from preferences. GSP preferences are suspended for yarn and fabric because the value of EU imports from India for 3 consecutive years exceeded 14.5% of total EU imports of yarn and fabric from all GSP countries. Here India pays the normal tariff (non-preferential).ECDPM Page 19
  • Rules of origin applied to Indian textile products: For yarn and fabric, since India does not benefit from preferences, there are no specific rules of origin For textiles, the rules are as follows: Pulls and T – Shirts: Double stage transformation, i.e knitting and making up. Value tolerance: non-originating material should be classified under another heading and their value should not exceed 8% of ex-works price of product (e.x for trousers, it does not prevent the use of items such as buttons or zip fasteners) Shirts and trousers: Double stage transformation, i.e weaving accompanied by making up, including cutting; or making up preceded by printing accompanied by at least 2 preparatory finishing operations, provided unprinted fabric does not exceed 47.7% of ex works price of product Value tolerance: non-originating material should be classified under another heading and their value should not exceed 8% of ex-works price of productECDPM Page 20
  • Cumulation 1. Bilateral cumulation – applicable between EU and India 1. Cumulation with Norway, Switzerland and Turkey: If India is a beneficiary of Norway, Switzerland and Turkey GSP Scheme, and that the rules of origin are the same; there is sufficient processing; same treatment apply to Europe. Cumulation does not apply for agricultural products and fish and fish products. 2. Regional cumulation possible between Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan and Sri Lanka. Conditions countries should apply the GSP RoO among themselves if their RoO are not the same. Cumulation does not apply if tariffs are not the same for all countries involved in cumulation (eg. Between India and an LDC; for for fabric, where India does not benefit from preferences); Working and processing in beneficiary country should be further processed – otherwise the product will have the origin of the country with highest value of materials used.ECDPM Page 21
  • 4. Possibility for ASEAN (Brunei, Cambodia, Indonesia, Laos, Malaysia, Philippines, Singapore, Thailand, Vietnam) to cumulate with SAARC countries (Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan, Sri Lanka). This is also new and quite important. 5. Extended cumulation (NEW) At the request of a country, extended cumulation is possible between the country and another country with which the EU has signed an FTA, under the following conditions: - The request must contain a list of the materials concerned by cumulation. Each time a new material is used, a new request must be made. Each request will be examined by the Commission individually - Agricultural and fish and fish products are excluded from extended cumulationECDPM Page 22
  • 2. Viet Nam EU signed a Partnership and Cooperation Agreement with Vietnam in June 2012. This is a political agreement. Negotiations have started on a FTA in June 2012. EU is not the major market for Vietnamese products (US and Japan) but is quite significant. Main Vietnamese textile products are cotton pullovers, t-shirts (cotton, man made and trousers Pull T Shirt T Shirts Shirts Cotton Denim Trousers Pull Wool Cotton Cotton man made Cotton Fabric Fabric Total Exports to world (€ 754,470 577,876 236,752 171,346 169,290 13,000 5,262 2,158 000) EU 4.7% 7.0% 11.4% 25.4% 37.6% n/a 35.3% US 87.7% 67.9% 66.7% 41.9% 49.0% 57.1% Korea 52.8% UAE 10.9% Lao 9.5% Bangladesh 6.9% Japan 2.1% 15.4% 14.4% 9.0% 6.4%ECDPM Page 23
  • Vietnam is not an LDC but benefits from GSP Scheme. The same rules of origin and cumulation principles that apply to India also apply to Vietnam. Tariffs applied are a bit different, because the share of Vietnamese imports in the EU is lower than that of India Tariffs applied to Vietnam on selected textile products Pull T Shirt T Shirts Shirts Cotton Denim Trousers Pull Wool Cotton Cotton man made Cotton Fabric Fabric Tariff applied 9.6% 9.6% 9.6% 9.6% 9.6% 6.4% 9.6% 6.4% to Vietnam Regime GSP GSP GSP GSP GSP GSP GSP GSPECDPM Page 24
  • 3. Pakistan • Pakistan is an important partner for the EU, although trade and investment remain below its potential. • In 2011, after a severe flood resulting in a serious impact on Pakistans economy, EC agreed on a package of measures to assist in the recovery of Pakistans economy. • One element of this package is the granting of 2 years unilateral trade preferences on a number of goods (75 products) imported into the EU from Pakistan. • Most products are textile products. These include yarns, fabric and apparel – but most products on interest to Mauritius are NOT INCLUDED. The normal GSP applies to these products and Pakistan pays the same duties as Vietnam above.Page 25ECDPM
  • Pakistan’s exports to main markets in selected products T Shirt T shirt man Shirts Pull Cotton Trousers Denim Pull cotton Cotton made Cotton Wool fabric Total Exports to world (€ 636,390 348,889 265,714 58,889 39,979 13,482 802 251 000) EU 65.5 7.9 24.7 20.0 18.5 40.1 59.2 22.3 USA 23.2 69.2 70.1 78.0 40.7 23.9 South Africa 23.1 Turkey 32.9 Bangladesh 28.6 Egypt 5.6 With the exception of wool pullovers, Pakistan’s main market for the above selected products is in fact the US, with the EU representing less than 25% of Pakistan’s exports Note also that denim products are mainly exports to Turkey and BangladeshECDPM Page 26
  • Tariff applied to Pakistan Pull T Shirt Trouser T Shirts Shirts Cotton Pull Denim Cotton Cotton s man made Cotton Fabric Wool Fabric Tariff applied 9.6% 9.6% 9.6% 9.6% 9.6% 6.4% 9.6% 6.4% to Pakistan Regime GSP GSP GSP GSP GSP GSP GSP GSP For 75 products that benefit from special incentive package: duty free for 55 products; tariff rate quotas for 20 productsECDPM Page 27
  • 5. Bangladesh T Shirts T Shirts man Denim Cotton Cotton Trousers Pull Cotton made Pull wool fabric fabric There are no figures for Bangladesh exports to Europe - latest figures date back to 2007 Total exports to the world 3,831,138 3,293,836 1,954,133 161,288 7,626 1,293 251 EUs imports from Bangladesh 3,116,272 1,542,020 1,381,480 77,290 7,626 449 229 Data problems – no export figures before 2007 (no comparison with other markets) Key issues about Bangladesh – LDC Status and special preferencesECDPM Page 28
  • Tariff applied to all products from Bangladesh: 0% (duty free and quota on every thing except arms Rules of origin: More favourable than for other countries Yarn Weaving or printing accompanied by at least 2 preparatory or finishing options Value tolerance: 10% of total weight of basic material used Fabric Weaving or printing accompanied by at least 2 preparatory or finishing options Value tolerance: 10% of total weight of basic material used Apparel Single stage transformation – Manufacture from fabric applicable to t- shirts, pullovers, shirts and trousers Cumulation: Same rules as for IndiaECDPM Page 29
  • 6. Thailand and Philippines Important producer of numerous textile products EU is a main market T Shirts Shirts T shirts Pull Denim Cotton Pull man made cotton cotton Trousers cotton fabric fabric wool Total Exports to world (€ 000) 266,540 114,080 163,352 93,140 75,781 63,797 15,694 1,018 EU 52.8% 23.4% 17.1% 43.0% 37.2% 1.0% 58.0% 6.0% US 11.7% 28.8% 31.4% 17.0% 46.5% Japan 10.0% 6.2% 17.5% 43.1% Bangladesh 60.1% 4.7% Maldives 22.1% HKG 8.7% Vietnam 6.8% T Shirt T Shirts Shirts Cotton Denim Pull Cotton Trousers Pull Wool Cotton man made Cotton Fabric Fabric Tariff applied 9.6% 9.6% 9.6% 9.6% 9.6% 6.4% 9.6% 6.4% to Thailand Regime GSP GSP GSP GSP GSP GSP GSP GSPECDPM Page 30
  • Fish and fish products fish prepared and Fish fillets, fresh, Thailand Tuna, skip jack preserved frozen, chilled Total Exports to world (€ 2,297,696 228,203 174,055 000) EU 15.1% 17.6% 12.3% Japan 7.5% 21.0% 64.0% US 22.6% 11.7% 12.3% Australia 8.8% 8.3% 3.2% fish prepared and Fish fillets fresh, frozen Philippines Tuna, skip jack preserved and chilled Total Exports to world (€ 209,779 810 No exports 000) EU 46.5% 7.3% US 36.2% 29.3% Japan 3.3% 10.0% South Korea 12.7%ECDPM Page 31
  • fish prepared and Fish fillets, fresh, Tuna, skip jack preserved frozen, chilled Tariff applied to Thailand and Philippines 20.5% 20.5% 14.5% Regime GSP GSP GSP Rules of origin 1. Fish fillets: Wholly obtained 2. Tuna, skipjacks and prepared fish: all materials from fresh fish are wholly obtained Value tolerance: 15% ex-works price Derogations: No derogations Vessels: Registration and flag requirements; Either 50% owned by nationals or owned by company with head office in country or EU + at least 50% ownership Possibility to use Regional cumulation to vessels of different beneficiary countries (product will have origin of country which flag the vessels)ECDPM Page 32
  • 7. China• Since joining the WTO in 2001, China has emerged as the worlds third largest economy and the worlds leading exporter, as well as increasingly an important political power.• EU-China trade has grown significantly. China is now the EUs second trading partner after the USA and the EUs largest source of imports by far. The EU is also Chinas main trading partner.• In January 2007 the EU and China launched negotiations on a comprehensive Partnership and Cooperation Agreement (PCA). The aim is to further improve the framework for bilateral trade and investment relations and also to upgrade the 1985 EC- China Trade and Economic Cooperation Agreement.• However, positions remain far apart on many important chapters, and the EC has called upon China to demonstrate more ambition.Page 33ECDPM
  • Exports of selected textiles products from China to main markets T shirts Pull T shirts Shirts Denim Cotton Pull Trousers man Yarn cotton cotton cotton fabric fabric wool made Total Exports to 8,172,821 4,821,539 4,788,144 4,616,777 2,920,506 827,901 151,326 109,043 94,683 world (€ 000) EU 29.2 28.7 12.9 20.7 28.2 0.7 4.4 25.2 4.0 US 24.2 19.5 10.8 19.5 23.4 18.6 Japan 9.5 11.3 25.5 24.5 17.1 7.1 13.8 Hongkong 10.0 4.7 64.4 16.6 12.2 68.6 Macao 8.4 Bangladesh 15.9 22.3 Indonesia 14.7 Vietnam 8.8 T shirts Pull T shirts Shirts Denim Cotton Pull Trousers man Yarn cotton cotton cotton fabric fabric wool made Tariff applied to 12.0% 12.0% 12.0% 12.0% 12.0% 8.0% 8.0% 12.0% 3.8% China Regime MFN MFN MFN MFN MFN MFN MFN MFN MFN Note: China does not benefit from GSP preferences for the above products because of size of exports to EUECDPM Page 34
  • Fish and Fish products Fish fillets, fresh, fish prepared and China Tuna, skip jack frozen, chilled preserved Total Exports to world (€ 000) 4,157,982 241,130 417,453 EU 35.0% 15.8% 6.8% Japan 16.4% 9.2% 22.2% US 29.6% 22.3% 6.5% Thailand 19.5% Russia 8.7% Korea 11.7% Israel 9.9% Brazil 4.3% fish prepared and Fish fillets, fresh, Tuna, skip jack preserved frozen, chilled Tariff applied to China 20.5% 20.5% 14.5% Regime GSP GSP GSPECDPM Page 35
  • Rules of origin For textiles: Since China does not benefit from preferences for these products, it does not have to meet RoO For fish and fish products: China is beneficiary of GSP and subject to GSP RoO (see above)ECDPM Page 36
  • Thank you www.ecdpm.orgwww.slideshare.net/ecdpm Page 37