Trade Deals Around the World: June Edition
Trade Deals Around the World is our periodic update, which gives you a quick and easy overview of what has been happening in the many trade deal negotiations worldwide.
We focus on the European Union and the United Kingdom and keep an eye on China and the United States.
The European Union and India
The word is that the European Union and India are getting the negotiations for a Free Trade Agreement back on track. Reuters reports:
Talks were put on hold in 2013 as both sides failed to bridge differences, such as over the extent of tariff reductions, patent protection, data security and the right of Indian professionals to work in Europe.
The draft statement also sets the stage for an agreement for the EU and India to build joint infrastructure projects around the world in the transport, energy and digital sectors.
The deal would follow a similar accord between the EU and Japan in 2019, seeking an alternative to Chinese largesse that raised suspicion in the West and Tokyo.
The European Union and Switzerland
Currently, there is (still) no trade agreement between the European Union and Switzerland. The economic relationship between the two is built up out of dozens of bilateral agreements. Some of these are beginning to go out of date, and one already is. Bloomberg reports:
Failure of the two sides to reach a new umbrella political treaty is turning into economic death by a thousand cuts for the Helvetian nation as it faces increasing barriers to the single market that surrounds it. A further deterioration in ties could hurt Switzerland’s electricity market, its industrial companies or its banking sector, which is keen to win more cross-border business with the EU.
The European Union and Malaysia
The EU has been active in the South Asian region with securing trade deals with Vietnam and Singapore. Other countries in the area are now also interested in opening trade talks again. One of them is Malaysia, as DW reports.
Now, there also appears to be some progress over a free-trade pact with Malaysia, after two key industry groups last month announced that they will work together to lobby both Brussels and Kuala Lumpur to restart talks that broke down in 2012.
Talks over a free-trade agreement began in 2010 but stalled two years later, after seven rounds, at the request of Malaysia. A "stocktaking exercise" was carried out by both sides in 2016, but Kuala Lumpur decided against restarting trade talks.
The European Union and China
Negotiations on an investment agreement between the European Union and China have been put on hold by the European Union. Politico reports:
The European Commission has temporarily put on hold efforts to ratify the investment agreement with China, EU Trade Commissioner Valdis Dombrovskis told Agence France-Presse Tuesday.
"We have ... for the moment suspended some efforts to raise political awareness on the part of the Commission, because it is clear that in the current situation, with the EU sanctions against China and the Chinese counter-sanctions, including against members of the European Parliament, the environment is not conducive to the ratification of the agreement," Dombrovskis told the French news agency.
China and the RCEP and TPP
In the meantime, China has signed the largest trade agreement in the world, the Regional Comprehensive Economic Partnership (RCEP). RCEP now consists of 15 Asian countries.
The Informant reports:
The signing of the Regional Comprehensive Economic Partnership (RCEP) at a regional summit in Hanoi is another blow to the agreement promoted by former US President Barack Obama, from which Trump left in 2017. The Regional Comprehensive Economic Partnership (RCEP) could strengthen China’s position as a partner country. Economic with Southeast Asia, Japan and Korea, which puts the second-largest economy in the world in a better position to dictate the rules of trade in the region.
It is also trying to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership members (TPP). Bloomberg reports:
The Trans-Pacific Partnership was envisioned by the U.S. as an economic bloc to balance China’s growing power, with then-President Barack Obama saying in 2016 that the U.S., not China, should write the regional rules of trade. His successor Donald Trump pulled out of the deal in 2017, with Japan leading the revised and renamed pact to a successful conclusion the following year.
Many of the CPTPP nations are heavily dependent on trade with China, but China’s increasingly poor image in some nations may make it harder to agree on entry. Concerns over labor practices, state-owned companies and its economic confrontation with America also loom as potential roadblocks for entry.
China and the United States
There is also still a trade war going on between the United States and China. There was a phase one agreement, but China still hasn’t held up their side of the deal. CNBC reports:
...the data showed China’s purchases of U.S. goods reached only 73% of the year-to-date target as of April, the report said.
Based on U.S. data, the level of progress falls to 60%, the institute said.
By category, agriculture came the closest to reaching the year-to-date target, at 79% based on U.S. data and 87% based on Chinese data.
The two-year agreement is set to end in December. Chinese purchases of U.S. goods fell more than 40% short in 2020, according to the institute.
Other News on Trade Agreements
- Boris Johnson is trying to close a trade deal with Australia. Read more about it in articles from Bloomberg and The Guardian.
- The United Kingdom has made a bid to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), which Japan has seconded, as Reuters reports.
- After the European Union, now the United Kingdom has also closed a trade deal with Vietnam, which increases their chances of joining CPTPP, as CGTN reports.
- The United Kingdom has also started negotiations with Saudi Arabia and the United Arab Emirates, as Arabian Business reports. According to Arab News, the UK wants to close trade deals with all Gulf Cooperation Council countries.