Update on Free Trade Agreement negotiations
April 8, 2009
World Trade\Interactive
Following is an update on efforts to conclude new free trade agreements around the world.
Chile, Turkey Conclude FTA Talks. Chile and Turkey concluded negotiations on a bilateral free trade agreement in late March. The FTA will eliminate duties on 98% of two-way trade when it takes effect, with remaining tariffs phased out over six years. International Trade Daily reports that the agreement also includes chapters on market access, sanitary measures, technical trade barriers, customs procedures, safeguard measures and conflict resolution and that services and investment will be incorporated later. Chilean Foreign Relations Minister Mariano Fernandez pointed out that the two countries concluded the FTA amid the ongoing global financial crisis, “reflecting the will of both governments to continue promoting trade and investment to benefit consumers and promote employment.”
Belarus Signs FTA with Serbia. The former Soviet republic of Belarus, which is not typically known for its openness, recently signed a bilateral FTA with Serbia. Mladjan Dinkic, Serbia’s minister of economy and regional development, said the FTA is part of his country’s economic development strategy of becoming an attractive market for producing goods that can be exported duty-free to developing countries. Press reports state that the agreement will remove duties and other taxes on all goods except sugar, alcohol, cigarettes, used cars, buses and tires.
Nicaragua Walks Out of Talks on EU-Central America FTA. Nicaragua walked out of negotiations on an FTA between the European Union and Central America last week, prompting EU officials to threaten to suspend the talks indefinitely. Nicaraguan officials reportedly said the agreement on the table does not do enough to expand Central American exports to Europe or aid anti-poverty efforts in the region. Nicaragua’s withdrawal is thought to be temporary, but Costa Rica’s trade minister said the remaining participants may consider adding Panama if that turns out not to be the case.
Korea-EU FTA Hung Up on Drawback. Korea and the EU will try to finalize a bilateral FTA in May after negotiators recently failed to overcome disagreements on duty drawback and other issues. Korea reportedly wants to retain drawback, which allows refunds of duties on imported goods used in the manufacture of goods for export, because its factories are heavily reliant on imported materials. But the EU typically does not allow drawback in its FTAs because of their supposed distortive effect. The two sides are also still discussing the agreement’s rules of origin.
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