BACKGROUND 1 FOREIGN AFFAIRS COUNCIL - TRADE ISSUES Thursday 8 May in Brussels

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1 Brussels, 5 May 2014 BACKGROUND 1 FOREIGN AFFAIRS COUNCIL - TRADE ISSUES Thursday 8 May in Brussels The Council will take note of progress on the remaining technical issues to be resolved on a comprehensive economic and trade agreement with Canada. It will discuss implementation by Japan of commitments on the elimination of non-tariff barriers in the context of negotiations on a free trade agreement. The Council will also discuss the Doha Development Agenda following the WTO ministerial conference in Bali. It is expected to adopt conclusions and negotiating directives on the multilateral "green goods initiative" for the liberalisation of trade in environmental goods. Over lunch, ministers will take stock of progress made in negotiations on a transatlantic trade and investment agreement with the United States. The Council will start at A presidency press conference will be held at the end of the Council (after lunch). * * * Press conferences and public deliberations: Video coverage: Photo library: * * * 1 This note has been drawn up under the responsibility of the press office. P R E S S Council of the European Union - Press Office Rue de la Loi 175 B 1048 BRUSSELS Tel.: +32 (0)

2 EU-Canada trade negotiations The Commission will report on latest developments in negotiations on a comprehensive economic and trade agreement (CETA) with Canada. The Council will discuss progress on the agreement, which will remove more than 99% of tariffs that are currently imposed on trade between the two economies. In October 2013, Commission President José Manuel Barroso and Canadian Prime Minister Stephen Harper reached a political agreement on the key elements of the CETA, with technical issues remaining to be settled. Work on the remaining technical issues has continued since then, and is expected to be concluded ahead of the Council meeting. In particular, work has accelerated with respect to provisions on investment protection and investor-state dispute settlement (ISDS). The Council is expected to support an alignment of the CETA text with the outcome of negotiations within the EU on a regulation on ISDS financial responsibility. Ministers are likely to raise questions regarding the implications of a recently launched public consultation on the ISDS chapter of the transatlantic trade and investment partnership (TTIP) currently being negotiated with the United States. The agreement with Canada is expected to include provisions on market access for goods, services and investment, government procurement, investment protection, intellectual property rights, sanitary and phytosanitary measures, sustainable development, regulatory cooperation, mutual recognition, trade facilitation, cooperation on raw materials, dispute settlement and technical barriers to trade. Issues raised at a recent meeting of the Trade Policy Committee related to tariff rate quota management; intellectual property rights for pharmaceuticals; financial services; feedering; the protection of geographical indications, investment protection and rules of origin. The talks with Canada have been on-going for more than three years, on the basis of a mandate agreed by the Council in April 2009 In September 2011, the Council authorised the Commission to start talks on investment protection within the framework of the CETA. In 2011 Canada was the EU's 11th most important trading partner while the EU was Canada's second-largest trading partner, with 1.8 % and 12 % respectively of each other's external trade. EU-Japan trade negotiations The Commission will brief the Council on the main elements of a report on implementation by Japan of its commitments on the elimination of non-tariff barriers in the context of on-going negotiations on a free trade agreement. The Council will hold a preliminary discussion and will call on the Trade Policy Committee (TPC) to examine the report when it becomes available. The Commission is expected to finalise the report in the week following the Council meeting. 2

3 When the Council in November 2012 approved a mandate for the Commission to negotiate a free trade agreement with Japan, it included a review clause specifying that one year after the beginning of the negotiations, the Commission would report on implementation by Japan of its commitments on the elimination of non-tariff barriers. The Commission would determine, in consultation with the TPC, whether implementation is "fully satisfactory". If it were found not to be satisfactory, the negotiations would be suspended. The Council's negotiating directives foresee a free trade agreement providing for the progressive and reciprocal liberalisation of trade in goods and services and investment, as well as rules on trade-related issues and the elimination of non-tariff barriers. Along with the negotiating mandate, the Council in November 2012 authorised the opening of negotiations with Japan on a framework agreement, covering political, global and sectorial cooperation. The agreements are being negotiated in parallel and will create a strengthened overall framework for the EU's relations with Japan. An EU-Japan summit will be held in Brussels on 7 May, the day before the Council. Japan is the EU's seventh-largest trading partner while the EU is Japan's third-largest trading partner, with 3.6 % and 11 % respectively of each other's trade in goods in Doha Development Agenda - Environmental goods The Council will discuss, on the basis of a note from the Commission, the EU's "post-bali" agenda following the WTO ministerial conference held at the end of It is expected to adopt conclusions on a multilateral "green goods initiative", welcoming the announcement made by 14 WTO members, in Davos on 24 January 2014, on achieving global free trade in environmental goods and calling for a rapid start of negotiations as the first step in a process towards a multilateral outcome. Building on a commitment made in 2012 by the Asia-Pacific Economic Cooperation to reduce tariffs on 54 environmental goods, the Council is expected to express its support for the elimination of tariffs on a broad range of additional products that directly and positively contribute to green growth, environmental protection and sustainable development. It will further emphasise the need to explore the ground for the liberalisation of environmental services, including trade-related services, and to address non-tariff barriers to environmental goods and services. The Council is also expected to adopt negotiating directives on environmental goods in order to guide the Commission in its negotiations. The Council already authorised the Commission to negotiate on green goods as part of the Doha Development Agenda (DDA) mandate adopted in

4 At the WTO ministerial conference in Bali, Indonesia, in December 2013, agreement was reached on a package of measures covering trade facilitation, development/least developed countries (preferential rules of origin for LDCs 2, operationalization of LDCs services waiver, duty-free and quota-free market access for LDCs, monitoring mechanism on special and differential treatment) and agricultural issues (general services, food security, tariff-rate quota administration, export competition, cotton). Ministers also issued a statement instructing the WTO trade negotiations committee to prepare within 12 months a clearly defined work programme on remaining DDA issues. In its note, the Commission presents the main outcomes and challenges following the first phase of the post-bali process, the main elements of the EU s position for the next phase of that process, and the possible contents of the post-bali work programme. The Commission also addresses a series of questions to delegations on how the EU should review its negotiating strategy in order to achieve a realistic level of ambition, and on how DDA texts negotiated in 2008 could be revisited so as to improve the balance in the contributions of WTO members. According to the Commission's paper, WTO members have reached an implicit understanding that negotiations should aim for an agreement on the overall DDA. Moreover, they acknowledge that while all issues remain on the table at this stage, it will not be possible to obtain a meaningful outcome for all of them. However, a balance needs to be achieved between the three main pillars: Agriculture, non-agricultural market access and services. Following the breakdown in 2008 of negotiations on the DDA, several attempts were made to restart the talks. Stalemate was reached in 2011, leading ministers to admit at a ministerial conference in Geneva in December 2011 that the Doha round was in an impasse. Ministers nevertheless agreed to pursue negotiations in areas where progress could be achieved, and talks continued on trade facilitation and on development issues, as well as on agriculture and export competition, leading up to the agreement at Bali. EU-US trade negotiations Over lunch, ministers will take stock of progress in negotiations with the United States on a transatlantic trade and investment partnership (TTIP). The talks with the US have been on-going on the basis of a mandate agreed by the Council in June last year. A first negotiating round was held in Washington D.C. in July. The fourth and latest round of talks took place in Brussels on March. The agreement is expected to be structured around three main components: market access; regulatory issues and non-tariff barriers; and rules. The next round of negotiations is scheduled to take place in Washington during the week starting 19 May. 2 Least developed countries. 4

5 Other issues The Council will discuss, under "other business": - Economic partnership agreements: It will take stock of progress in negotiations on economic partnership agreements, focusing on those closest to finalisation, i.e. with West Africa, the East African Community and the South African Development Community. - Implementation of trade preferences for Croatia: The Council will take note of issues relating to the extension of trade preferences to Croatia by third countries that have free trade agreements with the EU. 5

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