EU Markets DCFTA – New trade opportunities Vasile PLAMADEALA, EU Delegation to the Republic of Moldova

The context Why should the EU update its trade strategy now? To respond to the trade debate To adjust to the new realities, in particular in the Global Value Chains To reassess the targets for access to markets To ensure we get the most out of the existing trade deals Why should the EU update its trade strategy now? To respond to the trade debate To adjust to the new realities, in particular in the Global Value Chains To reassess the targets for access to markets To ensure we get the most out of the existing trade deals

Key messages benefit of all Trade for all means for the benefit of all, including:  Consumers  Consumers: by allowing for increased but better informed choices  Workers:  Workers: by facilitating the creation of jobs but also the respect of labour rights and protection of communities when exposed to vulnerable situations  Citizens:  Citizens: by promoting engagement and transparency  SMEs:  SMEs: by taking into account SMEs' specificities/ vulnerabilities (eg higher cost of entering a new market)  People in developing countries:  People in developing countries: by using trade agreements and trade preference programmes as levers to promote European values benefit of all Trade for all means for the benefit of all, including:  Consumers  Consumers: by allowing for increased but better informed choices  Workers:  Workers: by facilitating the creation of jobs but also the respect of labour rights and protection of communities when exposed to vulnerable situations  Citizens:  Citizens: by promoting engagement and transparency  SMEs:  SMEs: by taking into account SMEs' specificities/ vulnerabilities (eg higher cost of entering a new market)  People in developing countries:  People in developing countries: by using trade agreements and trade preference programmes as levers to promote European values

AA/DCFTA Association Agreement (AA), including Deep and Comprehensive Free Trade Area (DCFTA); Provisionally entered into force 1 September 2014; Blueprint for reform; Make government more accountable and transparent; Make business environment more predictable

DCFTA in a nutshell Expected economic impact on Moldova is positive: +8% growth of Moldovan imports from the EU; +16% growth of Moldovan exports to the EU; Boost to GDP by +5.4% ; Exports to the EU: already 53% of total Moldovan exports to the world; But reforms are key to competitiveness

DCFTA in a nutshell : benefits Increased market access for industry, agriculture and services Reforms in many areas of economy Increased competitiveness, more investments Substantial assistance for modernization

DCFTA: an overview Relations with Russia; Comparison with Customs Union; Impact on agricultural sector; Impact on industry; Impact on services sector; Reforms Competitiveness; Assistance for modernization

Exporturile Republicii Moldova

Export dynamics

EU – Moldova, Trade figures % growth in total trade, to EUR 3.51 billion. Imports from Moldova grew in 2014 by an impressive 20%, to EUR 1.16 billion. In agriculture, very impressive growth of MD imports to the EU: 31% increase in value in EU exports, in turn, remained stable year on year, with a minor 3% or EUR 75 million of growth, totaling EUR 2.35 billion in value.

Relations with Russia AA/DCFTA fully compatible with CIS Free Trade Zone; Moldova can have free trade both with EU and Russia; Russian concerns: rules of origin, norms and standards; Politically-motivated embargo; Not compatible with Customs Union: leads to loss of trade sovereignty

Impact on agricultural sector Vast trade potential; Export already almost duty-free under ATP; Some entry prices + quotas remain  Quid 1: compliance with EU sanitary and phytosanitary norms;  Quid 2: further reductions of duties;  Quid 3: cost of reform

Impact on industries Under ATP already duty-free import to the EU; Under DCFTA –Moldova reduces its duties too; EU aware of development of Moldovan industry – gradual liberalisation in sensitive sectors; So no flooding of Moldovan market with EU products  Quid 1: competitiveness;  Quid 2: diverging standards, procedures, transparency

Impact on services sectors No open services market now; DCFTA offers a wide-ranging opening – almost all sectors; Modes 1 and 2 - cross-border services; Mode 4 - presence of natural persons for business purposes; Mode 3 – establishment – but opening goes beyond services, any company in any sector can set up in the EU or Moldova (except defence); Roadmap for reform: electronic commerce, postal and courier, transport, financial services

Competitiveness Will not destroy Moldovan industry, but will make industry more competitive; Protection of sensitive sectors: asymmetric opening of markets, transition periods; Specialization, based on comparative advantages; Integration into EU wide supply chains; Will bring more investments; EIB/EBRD: credits up to EUR 1 billion for SME's in EaP to adapt to new market requirements

Reforms: the comprehensive aspects (1) Competition policy Intellectual property Sustainable development and transparency

Reforms: the "deep" component (2) Food safety/ sanitary and phytosanitary measures Technical regulations and standards for industrial goods Public procurement Services Customs and trade facilitation

Assistance EU SRC - Support to the DCFTA Process in the Republic of Moldova; ESRA (Economic Stimulation of Rural Areas); ENPARD (European Neighbourhood Policy for Agricultural and Rural Development); EIB Filiere de vin; EIB Fruit Garden; Other EU funded projects.

The Export Helpdesk to the European Union What is the Export Helpdesk?: Website / interactive database Tariffs & import rules for the EU market for goods (not services) Free of charge and accessible from all over the world Available in 5 languages (English, French, Spanish, Portuguese and Russian) Especially created for developing countries

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Conclusion  DCFTA means: more trade better and cheaper products, quality services competitiveness through reform more transparency, predictable rules for business, better investment climate and competition framework boost to international position and more FDI financial support = Unique opportunity to boost trade and modernise the Moldovan economy

Questions?