EU - Japan trade agreement effective on Feb 1, 2019

On February 1, 2019 the European Union (EU) - Japan Economic Partnership Agreement (EPA) becomes effective. The EPA creates a trading area that covers 600 million people and close to a third of global gross domestic product.

“The EPA is the biggest trade agreement concluded to date by the EU. 99% of the tariffs applied on EU exports to Japan which currently amount to €1 billion, will be removed.”(1)

The EU exports more than €58 billion in goods and €28 billion in services to Japan each year.(2)

References

1. European Council Press Release - “EU-Japan trade agreement will enter into force on 1 February 2019” - 21/12/2018

2. European Commission - “EU-Japan Economic Partnership Agreement” - Official Page

3. European Commission - “Fact sheets about the agreement” - News archive

US Trade Representative Issues Trade Fact Sheet on US-MX Trade Agreement

The Office of the United States Trade Representative (USTR) recently published a fact sheet detailing the key components of the recently agreed upon US-Mexico Trade Agreement.  Some of the key changes proposed in the rule include:

• Auto sector: At least 75% of a vehicle must have been built in either the US or Mexico in order for the vehicle to sell in the US without tariffs.  The original NAFTA agreement only required 62.5%.
• Intellectual property: The agreement extends US copyright protection into Mexico and strengthens the patent protections in the pharmaceutical and agricultural sectors.  It also addresses digital trade, something that was not covered under NAFTA.
• Labor and Environmental: The agreement requires companies to "prohibit the importation of goods produced by forced labor, to address violence against workers exercising their labor rights, and to ensure that migrant workers are protected under labor laws.".  It also addresses air quality issues.
• Duty free limits: The agreement raises the "de minimis" level from $50 to $100 for duty free entry from the US into Mexico for Mexican citizens.  U.S. citizens are allowed to import up to $800 worth of goods duty free.
• Sunset Clause: The pact, if agreed upon would run for 16 years.  After 6 years both sides would met and decide if they wanted to renew for another 16 years.      

The deal requires approval from the US Congress before it can become law.  The Administration intends to submit the paperwork to get the process started in Congress as early as Friday.  This timeline potentially gives Canada only a week to sign-on to the deal.  

Click here for the full Fact Sheet.  

Key Link(s):

• USTR
• USTR: US-Mexico Trade Fact Sheet

WTO Trade Agreement enters into force

On February 22, 2017, the first multi-lateral trade agreement in the history of the World Trade Organization (WTO) was entered into force.  The 110 nation ratification threshold for triggering the Trade Facilitation Agreement ("Agreement") was reached with the ratification and submission of instruments of acceptance by Rwanda, Oman, Chad and Jordan.

While this is an important milestone, the hard work of implementation is just beginning.  Developed countries have in principle agreed to implement the Agreement immediately, while developing countries have a longer timetable to implement the provisions of the Agreement. 

The following members have accepted the TFA: Hong Kong, Singapore, the United States, Mauritius, Malaysia, Japan, Australia, Botswana, Trinidad and Tobago, the Republic of Korea, Nicaragua, Niger, Belize, Switzerland, Chinese Taipei, China, Liechtenstein, Lao PDR, New Zealand, Togo, Thailand, the European Union, the former Yugoslav Republic of Macedonia, Pakistan,  Panama,  Guyana, Cote d'Ivoire, Grenada, Saint Lucia, Kenya, Myanmar, Norway, Vietnam, Brunei Darussalam, Ukraine, Zambia, Lesotho, Georgia, Seychelles, Jamaica, Mali, Cambodia, Paraguay, Turkey, Brazil, Macao China, the United Arab Emirates, Samoa, India, the Russian Federation, Montenegro, Albania, Kazakhstan, Sri Lanka, St. Kitts and Nevis, Madagascar, the Republic of Moldova, El Salvador, Honduras, Mexico, Peru, Saudi Arabia, Afghanistan, Senegal, Uruguay, Bahrain, Bangladesh, the Philippines, Iceland, Chile, Swaziland, Dominica, Mongolia, Gabon, the Kyrgyz Republic, Canada, Ghana, Mozambique, Saint Vincent & the Grenadines, Nigeria, Nepal, Rwanda, Oman, Chad and Jordan.

Key Link(s):

• World Trade Organization
• WTO - Trade Facilitation