***** 1 - European Business Association

Report
EBA - Working meeting on the EUUkraine Association Agreement
implementation
1. The DCFTA structure
• Association agreement (486 articles)
– PREAMBLE
– Title I GENERAL PRINCIPLES
– Title II POLITICAL DIALOGUE AND REFORM, POLITICAL
ASSOCIATION, COOPERATION IN THE FIELD OF FOREIGN
AND SECURITY POLICY
– Title III JUSTICE AND FREEDOM
– Title IV TRADE AND TRADE RELATED MATTERS (art 25-336)
– Title V ECONOMIC AND SECTOR COOPERATION
– Title VI FINANCIAL COOPERATION
– Title VII INSTITUTIONNAL, GENERAL AND FINAL
PROVISIONS
– …and lots of annexes!
1. The DCFTA structure
• Title IV TRADE AND TRADE RELATED MATTERS
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Chapter 1 – National treatment and market access for goods
Chapter 2 – Trade remedies
Chapter 3 – Technical barriers to trade
Chapter 4 – Sanitary and phytosanitary measures
Chapter 5 – Customs and trade facilitation
Chapter 6 – Establishment, trade in services and electronic
commerce
– Chapter 7 – Current payments and movement of capital
1. The DCFTA structure
• Title IV TRADE AND TRADE RELATED MATTERS
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Chapter 8 – Public procurement
Chapter 9 – Intellectual property
Chapter 10 – Competition
Chapter 11 – Trade related energy
Chapter 12 – Transparency
Chapter 13 – Trade and sustainable development
Chapter 14 – Dispute settlement
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 products
– In an asymmetrical manner: Ukraine has usually more time to
adapt
– With quotas (tariff rate quotas / TRQs) for certain agricultural
products
– All 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
2. DCFTA – Tariff part
• Where to get information on tariffs?
– Texts of the AA/DCFTA
http://eeas.europa.eu/ukraine/assoagreement/assoagreem
ent-2013_en.htm
– European Commission "Export Helpdesk"
http://exporthelp.europa.eu/thdapp/index.htm
2. DCFTA – Tariff part
• How to use the annexes? There are several possible cases
for tariff:
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Set at 0 from day 1
Set at 0 progressively
Partial reduction from day 1 (and no further reduction)
Partial and progressive reduction
Set 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)
http://eeas.europa.eu/ukraine/assoagreement/assoagreement2013-annexes-to-title-iv_en.htm
2. DCFTA – Tariff part
2. DCFTA – Tariff part
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"
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 arrangements
Customs duties on goods originating in Ukraine shall be reduced or
eliminated in accordance with Annex I.
3. Autonomous trade
measures
• When and For how long? It is into force already, and will be
until 1st November:
Article 7
Entry into force and application
This 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.
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 redundant
• What 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.
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 standards
– The DCFTA foresees widespread alignment between Ukrainian and
EU standards, both for industrial goods and agricultural products.
– In 2005-2006, 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 standards
– The 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
4. Adressing non-tariff
barriers in the DCFTA
• Animals, animal products, plants and plant products –
SPS
– In 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 measures
– In addition, a special cooperation mechanism is foreseen to
monitor progress and make recommendations on changes to
UA's legislation in this field
– A number of trade facilitation measures are foreseen, e.g.
relating to listing of establishments, verification procedures etc.
4. Adressing non-tariff
barriers in the DCFTA
• Services
– In 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
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 use
– There 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 markets
– Competition 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
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)

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