European Preferential Trade Agreements
European Preferential Trade Agreements: What They Are and Why They Matter
The European Union (EU) is the world`s largest exporter of goods and services, and trade is essential for the Union`s economic growth and job creation. To ensure that European businesses can compete globally, the EU has established Preferential Trade Agreements (PTAs) with various countries around the world.
What Are Preferential Trade Agreements?
Preferential Trade Agreements are a type of free trade agreement that reduces or eliminates tariffs on certain goods and services between participating countries. This gives exporters from those countries a competitive advantage by making their products more affordable in the markets they are exporting to. In return, the participating countries agree to lower or remove tariffs on the goods offered by the other country, creating a mutually beneficial relationship.
Preferential Trade Agreements are designed to promote trade and investment between countries and to stimulate economic growth. They can also help to foster political and cultural ties between countries, as well as promote a more stable and peaceful global trading environment.
European Union Preferential Trade Agreements
The EU has signed numerous PTAs with countries around the world, including some of the biggest players in global trade. These agreements provide benefits for European businesses by lowering tariffs and other trade barriers, making it easier to access overseas markets and compete with other countries` businesses.
Some of the EU`s most significant PTAs include:
1. Free Trade Agreement with Canada (CETA)
The Canada-EU Comprehensive Economic and Trade Agreement (CETA) is one of the EU`s most significant PTAs. It provides EU businesses with duty-free access to the Canadian market, while Canadian businesses have similar access to the EU market.
CETA was signed in 2016 and came into force provisionally on September 21, 2017. The agreement eliminates or reduces tariffs on nearly all goods traded between Canada and the EU, as well as opening up services, procurement, and investment.
2. Trade Agreement with Japan
The EU and Japan signed a trade agreement in 2018, which is the largest bilateral trade deal ever negotiated by the EU. The agreement eliminates tariffs on a range of agricultural and industrial goods, opening up access to Japan`s lucrative markets.
The trade agreement also provides for greater cooperation between the EU and Japan on goods safety, intellectual property rights, and dispute settlement.
3. Economic Partnership Agreement with Southern Africa
The EU has signed various PTAs with regions rather than individual countries, including the Economic Partnership Agreement (EPA) with Southern African Development Community (SADC) countries. This agreement aims to promote sustainable development and poverty reduction in the region through increased trade and investment.
The EPA removes tariffs on a range of products traded between the EU and SADC countries and provides a framework for cooperation on issues such as trade, investment, and intellectual property rights.
Why Do PTAs Matter?
PTAs are essential for ensuring that European businesses can compete effectively in global markets, creating growth and jobs. By reducing or eliminating trade barriers, PTAs can make it easier for EU businesses to access overseas markets and sell their products abroad.
In addition to promoting economic growth, PTAs can also help foster political and cultural ties between countries and can promote a more stable and peaceful global trading environment.
Preferential Trade Agreements are an essential tool for the EU to promote economic growth, job creation, and international cooperation. By reducing or eliminating tariffs on goods and services traded between participating countries, PTAs make it easier for European businesses to compete in global markets and access overseas markets.
The EU has signed numerous PTAs with countries and regions around the world, including some of the largest players in global trade. These agreements provide EU businesses with significant benefits and are an essential part of the EU`s international trade strategy.