3rd Oct 2022

EU firms still face barriers despite free trade drive

  • EU firms still face restrictions on trading their goods imposed by the bloc's main trading partners. (Photo: Jim Bahn)

Many European firms are still subject to discrimination by the bloc’s main trading partners despite a recent drive to liberalise markets, according to a new report by the European Commission.

The annual ‘trade and barriers to investment’ report focuses on the EU’s six main trading partners: China, India, Japan, Mercosur (Brazil/Argentina), Russia and the United States, identifying nearly thirty major trade barriers that put EU firms and products at a disadvantage. T

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The report, published on Thursday (19 March), was presented to leaders at last week’s EU summit.

With seven cases mentioned in the report, Russia is the worst offender, followed by China with six cases. The report outlines also four barriers both for India and Brazil and three cases respectively for Argentina and the US.

“It's disappointing to see so many obstacles to trade and investment persist,” said trade commissioner Cecilia Malmstrom in a statement. “Determination is needed to level the playing field and get rid of barriers," she added.

Barriers identified in the report include requirements to use locally-produced goods or services, such as the ‘Buy American’ act, or for firms to be based in a country as a condition to obtain certain advantages.

For example, Brazil offers a string of tax perks and subsidies to domestic firms which export at least 50 percent of their production. Meanwhile, China, Brazil, the United States and Russia all have a series of import restrictions on food and dairy produce from Europe.

“Our strategic partners continue to maintain a variety of significant trade and investment barriers which are often difficult to tackle,” the report concludes, noting that “there is a great risk that many of these barriers will persist and new barriers will be established, to the detriment of all”.

Since the collapse in July 2008 of the Doha round of trade talks chaired by the World Trade Organisation aimed at reducing trade barriers across the world, the EU has opened talks with a view to striking free trade and investment agreements with a series of countries.

The most significant negotiations with G20 countries are with Japan, the US, China and Canada. Of these, EU leaders signed off on the draft EU-Canada trade agreement last September, while Commission trade officials have now completed eight rounds of talks with both Japan and the United States. The transatlantic trade and investment partnership - known as TTIP - with the United States is the Commission’s main priority, and negotiators have been given an end of 2015 deadline to agree a draft deal.

However, despite promoting free trade, the EU has been embroiled in a much-publicised trade battle with Russia, with Brussels and Moscow applying tit-for-tat sanctions in July as a result of Russia’s military interventions in the Ukraine.

Russia has maintained a ban on imports of many types of EU agricultural produce since last summer, imposed in response to EU curbs on financial services used by Russian banks and a ban on sales of high-end technology to Russian oil firms.

EU trade officials have also filed a series of complaints to the WTO in protest against Russian import duties on products including cars, paper products, and palm oil, while Moscow has filed complaints against the EU's energy rules and levies on steel and fertiliser products.

EU demands WTO ruling on Russian trade tariffs

The European Commission accused Russia of breaking its trade commitments on Thursday, urging the World Trade Organisation to arbitrate on illegal import duties on a range of products.

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