The recently published 4th Annual Report on the implementation of EU trade agreements in 2019 highlights the benefits of expanding the global trade network through agreements and treaties. While there is no lack of tension in the global trading environment, the study shows that EU trade agreements have paved the way for fair and sustainable trade by consolidating the framework of international rules.
It should be recalled that Malta currently has, thanks to the EU, the largest trade network in the world, with 45 trade agreements in place covering 77 partner countries. The fourth annual report, which covers the period from 1 January to 31 December 2019, covers the 36 most important trade agreements implemented at European level with 65 different countries.
The report, therefore, focused on the analysis of trade with these 65 partners, including Malta, which last year recorded an average growth in their trade flows of 3.4%, while the EU’s overall external trade grew by 2.5%. The EU’s trade agreements with Canada and Japan, in particular, have given a particular boost to trade, around 25% and 6% respectively since their entry into force.
According to the report, the EU’s trade agreements cover one third of external trade with third countries, and in 2019 they reached €1,345 billion, contributing €113 billion to the EU’s overall trade surplus of €197 billion, and proving particularly important for European SMEs trading outside the EU, which grew by an average of 6% between 2014 and 2017.
Let’s look at other significant numbers in brief:
- EU agri-food exports to trading partners increased by 8.7% compared to the previous year. Exports of agri-food products to Japan even increased by 16%.
- EU industrial goods exports rose from +1.9% in 2018 to +3.7% in 2019.
- The first three categories, which include machinery, chemicals and transport equipment, recorded growth rates of 1.5%, 6.3% and 5.7% respectively.
- EU exports of machinery and pharmaceuticals to Canada grew at an impressive 15% and 18% respectively.
On Canada, the report also shows that in 2019, during the second year of its entry into force, the EU-Canada Agreement (CETA) increased bilateral trade by 24.5% compared to pre-CETA trade between 2015 and 2017; pushed industrial goods such as machinery and pharmaceuticals up 15% and 18% in the last year alone; and moved Canada from ninth to eighth place in the EU’s agri-food destination markets. Facilitated access to the Canadian market under the CETA duty-free quotas has also seen the value of EU cheese exports to Canada increase by 15% in 2019, compared to 2018.
At the same time, the implementation of the EPA between the EU and Japan, one of Malta’s most important trading partners, increased bilateral trade in goods by 6% in all sectors compared to 2018; favoured in particular EU exports in categories with high tariff cuts, such as textiles, clothing and footwear, which grew by an average of 10%; and supported a surge of 16% of EU agro-food exports, representing 12% of total EU exports to Japan.
In conclusion, as pointed out by European Trade Commissioner Valdis Dombrovskis, at a time of crisis for the European economy, international trade is becoming increasingly essential, and trade agreements facilitate the growth of European SMEs through access to new markets with a net cut in customs duties. The agreements with Canada and Japan are just one example of a model to be followed in order to enter definitively into a well regulated global trade network that can open the doors of the world to our companies.