1. "Looking for Eastern Partners' Potential to Enhance Trade and Economic Integration with the EU and within the Eastern Partnership Region" Factual Analysis
Ewa Synowiec, Principal Adviser
European Commission, DG Trade
Eastern Partnership Expert Panel
on Trade and Trade-Related Regulatory Cooperation
12 June 2017, Brussels

2. Trade aspects at the launch of Eastern Partnership in 2009
EU offer for all 6 Partners:
gradual political association & economic integration through Association Agreements/DCFTAs
EU suggestion for long-term:
(1) a network of DCFTAs among Partners or regional FTAs based on bilateral commitments in the DCFTAs with the EU
(2) EU & EaP Partners may reflect on a broader regional trade approach (NEC?)
Why we are making this analysis? Why we are making it now?
EU offer based on the Commission's Eastern Partnership Communication from 3 December 2008.
Neighbourhood Economic Community would in longer term:
-"offer full access to the single market"
"require the partners to develop the capacity of their economies to be able to fully withstand the competitive pressures of the single market and to demonstrate not only a willingness to adopt all relevant elements of the EU acquis, but also a capacity to implement them".
5th Eastern Partnership Summit scheduled for 24 November 2017; deliverables for the Summit + 20 "Deliverables for 2020"
8th year of Eastern Partnership implementation – looking for new ways of enhancing the initiative

3. Joint Declaration from EaP Summit, Riga, May 2015
While recognizing
different aspirations, interests and abilities of EaP Partners
Emphasis on the role of DCFTAs implementation in gradual integration of Partners in the EU internal market, and hence creation of an economic area
"This ambitious long-term vision for economic integration between the Partners concerned and the EU has been considered as desirable – contributing also to the longer-term goal of
wider area of economic prosperity based on WTO rules and sovereign choices through Europe and beyond."
Inspiration for a factual analysis on trade relations between the Partners and the EU but also among them - in the context of differentiation and inclusiveness principles. Worth to recall that all 6 partners have been offered "political association and economic integration" when the EaP was launched in 2009.
The time has shown that not all of them (for different reason) want to pursue the DCFTA model – these sovereign choices are fully respected.

4. EaP countries – EU in 2017 Mapping of trade agreements
Georgia, Moldova & Ukraine – DCFTAs applied from September 2014 (GE, MD)/January 2016 (UA)
Armenia – PCA (1999); Comprehensive & Enhanced Partnership Agreement (CEPA) – negotiations completed in February 2017; awaits signature
Azerbaijan – PCA (1999); negotiations on comprehensive agreement launched in February 2017; WTO accession pending
Belarus – EC-Soviet Union Trade and Cooperation Agreement (1989); Trade Dialog with the EU launched in October 2016; WTO accession pending
In our factual qualitative and quantitative analysis, the existing agreements between the EaP countries and EU and between themselves have been identified and their general contents described as well as the evolution of trade flows has been presented, with intention to find ways for intensification of trade and cooperation in the region, without prejudice to a different level, degree and an optimal scheme of economic integration in a long perspective.

5. EaP countries - mapping of trade agreements in the region
Armenia, Belarus, Moldova & Ukraine (2012) in new generation CIS FTA with: Kazakhstan, Kyrgyzstan, Russia & Uzbekistan (ratification by Tajikistan pending)
Georgia, Ukraine, Azerbaijan & Moldova (2003) – GUAM FTA
Around 27 bilateral FTAs between EaP countries
Belarus (2010), Armenia (2015) – Eurasian Economic (Customs) Union with: Kazakhstan, Kyrgyzstan, Russia
Around 27 bilateral FTAs – based on the questionnaire sent to EU Delegations

6. Bilateral FTAs between EaP countries
EaP country1
Armenia
Azerbaijan
Belarus
Georgia
Moldova
Ukraine
ARMENIA2 -
N/A
2000/2003
1995/1998
1993/1995
1994/1996
AZERBAIJAN
2004/2004
1996/1996
1995/1996
BELARUS
1993/1994
1992/2006
GEORGIA
1997/2007
MOLDOVA
2003/2005
UKRAINE
1 The 4 EaP countries highlighted in blue concluded also a regional FTA within GUAM Organization
2The EAP countries in red are parties to the CIS FTA; special status for Georgia – if it has no bilateral FTA with a given country, the 1994 CIS FTA applies

7. EaP countries in a network of bilateral and regional FTAs (1)
FTAs guided by GATT/WTO rules and principles
Market access (tariffs) liberalized only trade in industrial and agricultural products (some exceptions in quantitative restrictions, notably in CIS FTA (+ export duties))
No explicit liberalization of market access in services, public procurement & investment
Co-operation on TBT (GUAM, bilateral FTAs of UA)
Co-operation on SPS guided by WTO Agreement
The description of the content of regional and bilateral FTAs has been made on the basis of responses to the questionaire sent to EU Delegations
Services covered in MD-AZ FTA; public procurement and investment in MD-UA FTA
Suger exempted from tariff liberalization in CIS FTA
Freedom of transit exempted in case of pipelines in CIS FTA
Co-operation on TBT in bilateral FTAs of Ukraine (but not with BEL)

8. EaP countries in a network of bilateral and regional FTAs (2)
Cooperation on IPR (GUAM)
Provisions on rules of origin, customs procedures, freedom of transit, certain competition rules
Trade defence and safeguard measures
Dispute settlement
Cooperation bodies for implementation of bilateral FTAs
Declaration on ensuring "harmonization of the legislation" - only in GUAM FTA

9. EaP countries in a network of bilateral and regional FTAs (3)
Differentiation in implementation of some CIS FTA provisions between members of EAEU (Armenia, Belarus & Kazakhstan, Kirgizstan and Russia) and Moldova and Ukraine
Specific safeguard clause in CIS FTA for members of EAEU (Appendix 6)
GUAM FTA - reference to correlation with other obligations of the parties stemming from international agreements

10. DCFTAs as incentive to further integration in the region?
Trade in goods with the EU will be liberalized by
Once DCFTA partners achieve an advanced level of regulatory approximation with the EU acquis, they might be encouraged to conclude bilateral DCFTAs between them and/or a regional DCFTA
The DCFTA differ from the traditional free trade areas concluded by the EU so far, due to:
their depth and comprehensive coverage not only in terms of reciprocal market opening for goods, services and public procurement, but also
as concerns commitments on trade-related rules implemented by dynamic regulatory approximation to the EU acquis
The timetables for market opening (asymmetric) in trade in goods differ – GE the most open; UA has the longest transitional period);
The timetables for market opening in public procurement: between 2022 (GE, MD) and 2024 (UA)
In services – depending on the sector (4 sectors) –
A slightly different level of ambition as concerns a speed for regulatory approximation in TBT ( ) and bigger in SPS (between )
Moldova
Ukraine
Georgia

11. Intra-regional trade
Trade among EaP countries - relatively low despite the completed liberalization of trade in goods on the basis of regional (CIS FTA, GUAM FTA) and several bilateral FTAs concluded in the past
EU and Russia remain the main trading partners
EaP region accounts for 8% in total exports of EaP countries, and 7% in imports
EU is the main trade partner for all EaP countries with exception of Belarus (for which occupies the 2nd place after Russia). EU accounts for between 24% and 65% of total exports and between 20% and 49% of overall imports of individual EaP countries
For Russia these shares are between 4% and 46% (AZ followed by GE / and BE) in case of total exports and between 9% and 54% (GE followed by MD / and BE) in total imports of individual EaP states.

12. PERSPECTIVE Tools Objectives *Connectivity Stability *Approximation
*Proximity
Objectives
*Connectivity
Stability
*Approximation
*Functioning market economy
Resilience
Prosperity
*Business climate
Integration
*Trade facilitation
Ownership
Principles
Differentiation
Inclusiveness

13. Conclusions Eastern Partnership: a demand-driven process
DCFTAs between the EU and Georgia, Moldova and Ukraine only at the beginning of their implementation
Belarus and Azerbaijan not yet members of the WTO: the idea of a "wider economic area based on the WTO rules" appears to be a long- term perspective
What can be done to foster intra-regional trade?

14. Factual analysis - what next?
What is your general assessment of the analysis?
Do you see a need for any corrections and/or amendments?
Which aspects can be analysed further for guiding the discussion in the Trade Panel on possibilities & means of enhancing trade in the region?
Any other ideas?

15. Thank you!