Canada and Singapore FTA talks to be concluded by year’s end
By Lénaïc Vaudin d’Imécourt | Thursday 12 July 2012
Conclusion of trade negotiations with Canada and Singapore is expected to be the highlight of the second half of the year in terms of trade policy, as member states are urging the European Commission to finalise the talks as soon as possible.
According to the Commission, an ambitious trade agenda would not only help boost growth and employment within the EU, it would also be one of the answers to the financial crisis in Europe. “Robust external demand is the only reliable source of growth for the moment, as the domestic demand components remain weak,” a Commission staff working paper on EU trade argues. By focusing trade on reciprocal market opening, ie through the conclusion of free trade agreements (FTAs), the EU’s GDP could expand by over 2% or €275 billion and create more than two million jobs, the Commission says.
On trade, the Presidency’s role will be to find compromises, a Cypriot diplomat told
Europolitics. “We will try to reduce gaps between member states and find a compromise to move on,” the source explained, adding that Cyprus would act as an “honest broker” in Council negotiations, while still trying to finalise the EU’s trade agreements with Singapore and Canada.
The FTA with Singapore will be the second to be concluded by the EU in Asia, after South Korea in 2011. By finalising these trade talks, EU exporters would profit from a growing market of 600 million consumers. A rapid success of the FTA negotiations is a priority for the EU and the business sector, as the city-state attracted 55% of the EU’s foreign direct investment (FDIs) stocks in the region in 2010. Singapore is the EU’s largest economic partner in the ASEAN (Association of Southeast Asian Nations). Bilateral trade in goods was worth €46 billion in 2011 and trade in services represented €22.6 billion the previous year.
The Commission is aiming to conclude negotiations, launched in May 2009, on a comprehensive economic and trade agreement (CETA) with Canada, EU sources have confirmed. Several have, however, expressed their concern that these talks might still be difficult to end, since concluding negotiations by the end of the year will mean that both sides will have to find rapid solutions to the remaining issues in the areas of intellectual property, investment protection and rules of origin. “We will be very very ambitious,” a Presidency source told
Europolitics, but added that the Presidency would primarily work on promoting member states’ interests.
The EU is Canada’s second largest trading partner after the US, with a 10.5% share of its total external trade. On the other side, Canada represents the EU’s 11th most important trading partner, accounting for 1.6% of the EU’s total external trade in 2010, according to Commission figures. Overall bilateral trade, in 2011, stood at €52.5 billion. Implementation of the CETA between the two sides would bring overall gains of around €20 billion a year, the Commission estimates.
Negotiations for an FTA with Japan are expected to be launched in the second half of 2012, despite concerns by some member states – mainly Germany and France – over the real benefits such a trade deal would actually bring to the EU and its businesses.
An annual bilateral summit between the EU and Japan – originally scheduled to be held before the summer break – was cancelled in June over these concerns. “A summit will only be organised if there is something to announce,” a diplomat said, referring to the fact that the Commission had not yet asked the Council for a mandate to open the negotiations. The next bilateral summit is now expected to take place during the autumn, after the EU executive asks member states for a mandate in July.
EU-US COMPREHENSIVE AGREEMENT
The EU and the US will continue to work on preparing negotiations for a comprehensive trade agreement throughout 2012, and the high-level working group, co-chaired by Trade Commissioner Karel De Gucht, is expected to give its final recommendations at the end of the year. The working group will consult stakeholders in the run-up to the final report. While the economic stakes – should EU-US talks be finally launched – are huge, as the US is the EU’s largest trade partner with bilateral trade reaching €445 billion in 2011, the Presidency is not expecting “anything big” from the high-level working group’s final report.
European leaders, however, announced, on 29 June, their commitment “to working towards the goal of launching, in 2013, negotiations on a comprehensive transatlantic trade and investment agreement”.