Presentation on theme: "1. The DCFTA structure Association agreement (486 articles) PREAMBLE"— Presentation transcript:
1 EBA - Working meeting on the EU-Ukraine Association Agreement implementation
2 1. The DCFTA structure Association agreement (486 articles) PREAMBLE Title I GENERAL PRINCIPLESTitle II POLITICAL DIALOGUE AND REFORM, POLITICAL ASSOCIATION, COOPERATION IN THE FIELD OF FOREIGN AND SECURITY POLICYTitle III JUSTICE AND FREEDOMTitle IV TRADE AND TRADE RELATED MATTERS (art )Title V ECONOMIC AND SECTOR COOPERATIONTitle VI FINANCIAL COOPERATIONTitle VII INSTITUTIONNAL, GENERAL AND FINAL PROVISIONS…and lots of annexes!
3 1. The DCFTA structure Title IV TRADE AND TRADE RELATED MATTERS Chapter 1 – National treatment and market access for goodsChapter 2 – Trade remediesChapter 3 – Technical barriers to tradeChapter 4 – Sanitary and phytosanitary measuresChapter 5 – Customs and trade facilitationChapter 6 – Establishment, trade in services and electronic commerceChapter 7 – Current payments and movement of capital
4 1. The DCFTA structure Title IV TRADE AND TRADE RELATED MATTERS Chapter 8 – Public procurementChapter 9 – Intellectual propertyChapter 10 – CompetitionChapter 11 – Trade related energyChapter 12 – TransparencyChapter 13 – Trade and sustainable developmentChapter 14 – Dispute settlement
5 2. DCFTA – Tariff part "FTA part" of the DCFTA: Liberalizes most tariffs both ways, in line with the provision of the WTO / GATT (elimination on "substantially all the trade")With delays for many productsIn an asymmetrical manner: Ukraine has usually more time to adaptWith quotas (tariff rate quotas / TRQs) for certain agricultural productsAll this being specified in the AA/DCFTA (in two annexes, one for Ukraine, one for the EU)A rather usual FTA (with the exception for the asymmetry) – whereas the "Deep and comprehensive" part is very specific to Ukraine
6 2. DCFTA – Tariff partWhere to get information on tariffs?Texts of the AA/DCFTAEuropean Commission "Export Helpdesk"
7 2. DCFTA – Tariff partHow to use the annexes? There are several possible cases for tariff:Set at 0 from day 1Set at 0 progressivelyPartial reduction from day 1 (and no further reduction)Partial and progressive reductionSet at 0 for a limited quota (TRQ) (and usual tariff beyond quota)This is fully detailed in the Annexes(one for the EU, one for Ukraine)
10 3. Autonomous trade measures Autonomous trade measures - what is it about?Key issue with the AA / DCFTA: this is an international treaty, which means that before entry into force it must be signed (e.g. by heads of states or any appointed authority) and then ratified by 30 parliaments (Ukraine, EU, Member States), which may take years…One option: provisional implementation (with consent of the European Parliament), which may reduce the delay to a few months.One other option: unilateral implementation by the EU of the trade part.We call this "autonomous trade measures"
11 3. Autonomous trade measures REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL on the reduction or elimination of customs duties on goods originating in Ukraine – 22 April 2014:Article 1 Preferential arrangementsCustoms duties on goods originating in Ukraine shall be reduced or eliminated in accordance with Annex I.
12 3. Autonomous trade measures When and For how long? It is into force already, and will be until 1st November:Article 7Entry into force and applicationThis Regulation shall enter into force on the day following that of its publication in the Official Journal of the European Union.It shall apply until Title IV of the Association Agreement enters into force or, where appropriate, is applied provisionally, and until 1 November 2014 at the latest. The Commission shall publish in the Official Journal of the European Union a notice in the event that this Regulation ceases to apply before that date.
13 3. Autonomous trade measures In exchange of what? Nothing: this is an autonomous EU regulation, Ukraine did not have to do anything beyond some administrative adaptation (in order to make sure that, through the system of rules of origin only Ukrainian goods benefit)And then what's next? By the 1st of November, we expect the AA/DCFTA to be provisionnally applied so this regulation would become redundantWhat about territorial application and Crimea? One key issue is to avoid that goods originating from Russia benefit form duty free access to the EU market, through Crimea.
14 4. Adressing non-tariff barriers in the DCFTA Industrial goods - Technical Barriers to Trade (TBTs)One of the most important problems that Ukrainian and European exporters face on a day-to-day is the problem of different technical norms and standardsThe DCFTA foresees widespread alignment between Ukrainian and EU standards, both for industrial goods and agricultural products.In , Ukrainian companies wishing to export to the EU faced additional production costs of about 14% on average in order to ensure that their products met EU standardsThe use of EU standards will not only make Ukrainian products more competitive on the EU market but also in the rest of the world – the growing markets of the Far East, Middle East, Africa and America
15 4. Adressing non-tariff barriers in the DCFTA Animals, animal products, plants and plant products – SPSIn parallel with its commitments on technical barriers to trade, Ukraine also commits itself in the DCFTA to align with EU legislation and standards on all animal health, food safety and plant health measuresIn addition, a special cooperation mechanism is foreseen to monitor progress and make recommendations on changes to UA's legislation in this fieldA number of trade facilitation measures are foreseen, e.g. relating to listing of establishments, verification procedures etc.
16 4. Adressing non-tariff barriers in the DCFTA ServicesIn the field of services, the DCFTA is unprecedented in the extent of its liberalisation.The services chapter is based on the services part of the association agreements that were concluded with countries acceding to the EU – for example with Croatia.It provides for a complete freedom of establishment in all services and non-services sectors (with a limited number of reservations). In other words, EU and Ukrainian service providers will be able to set up businesses in each others' territories and be treated like domestic service providers.Furthermore, the DCFTA foresees gradual legislative alignment in financial services, telecom services, postal and courier services, and maritime services
17 4. Adressing non-tariff barriers in the DCFTA Other fields (1/2)Provisions on freer capital movement will help to enhance economic growth by allowing easier access to capital and better allocation of capital to its most productive useThere will be gradual alignment of UA's legislation on public procurement with that of the EU. With the sole exception of the defence sector, this would allow mutual unrestricted access of EU and UA suppliers and service providers to each others public procurement marketsCompetition policy is another area which should see major improvements. UA has agreed to progressively align its legislation with that of the EU in a number of fields, including on state aid, subsidies, and transparency of decisions
18 4. Adressing non-tariff barriers in the DCFTA Other fields (2/2)There are very detailed provisions in the DCFTA regarding intellectual property rights, including a strong section on enforcement of legislation based on EU rules and detailed provisions on so-called geographical indications (GIs)Regarding customs, we already have relatively good cooperation but the DCFTA enhances this by establishing a framework for mutual administrative assistance to ensure the correct application of customs legislation, cooperation on customs irregularities and fraud etc.There are a number of trade related energy provisions which will establish rules on the pricing of energy goods (to let market prices prevail and to prohibit dual pricing)