Trade Deals Across the World: September Update
In our last update on Trade Deals and Trade Agreements we told you about some of the deals Trump is working on, the largest regional trade deal to date in Asia, Mercosur, and then some.
Ratification of the Mercosur Trade Deal is moving forward in Europe, albeit slowly. An EU official recently confirmed that the majority of the EU members is in favour of the deal. He also stated that the recent behaviour of the Brazil government when it comes to the current environmental issues is influencing the ratification, and not in a good way.
The European Union should be able to conclude a free-trade agreement with the Mercosur bloc of South American countries by late 2020 in an optimistic scenario, a senior EU trade official said, adding that much would ride on Brazil’s attitude.
Read more by Reuters here.
In the meantime, the European Free Trade Association, four European countries that are not part of the EU, have largely concluded a trade deal with the Mercosur countries.
The Swiss economy ministry said Saturday that the agreement “in substance” was reached in Buenos Aires Friday and ultimately will see some 95% of Switzerland’s exports to Argentina, Brazil, Paraguay and Uruguay free from tariffs. It said it also would prevent EFTA — whose other members are Iceland, Liechtenstein and Norway — being put at a disadvantage to the EU, which has reached its own trade deal with Mercosur.
Read more in the article in the Washington Post here.
South Korea with Israel and with the UK
South Korea and Israel have concluded negotiations on a trade deal, after three years of talks. It is the first trade deal Israel has closed with an Asian country. 95% of imports into South Korea will be exempt from customs duties and all imports into Israel.
Read the full story on Reuters here.
South Korea has also concluded negotiations on a free trade agreement with the UK, that will go into effect after Brexit.
In preparation for Brexit, the UK has signed 13 trade agreements with 38 countries so far, including Israel, Norway and Chile.
The agreement with South Korea is the first to be signed with an Asian country.
Read more in this article on BBC here.
Trump and Trade Deals
Trump is negotiating a post-Brexit Trade Deal with the UK as well.
On a recent visit to London, U.S. national security advisor John Bolton said the U.S. would enthusiastically support a no-deal Brexit should Prime Minister Boris Johnson pursue it, adding that Washington would be ready to work fast on a free trade agreement.
However, such an accord faces significant political hurdles on both sides of the Atlantic, while also falling short of the economic reprieve Britain will need to offset the loss of its existing trade arrangements with the EU, economists have argued.
Find out more in this article on CNBC here.
In the meantime, the Washington Post warns that the trade deal is facing resistance on both sides of the Atlantic and that the deal will not be possible at all if the UK remains part of the European Customs Union.
Read the full story here (sub. req.)
On a more positive note: there is an agreement (in principle) on a trade deal between the US and Japan. President Trump and Prime Minister Abe hope to sign the agreement next month.
“It’s a very big transaction, and we’ve agreed in principle. It’s billions and billions of dollars. Tremendous for the farmers,” Trump told reporters about the deal during a joint announcement with Abe at the G7 meeting in France.
“We still have some remaining work that has to be done at the working level, namely finalizing the wording of the trade agreement and also finalizing the content of the agreement itself,” [Abe] said.
Read more on this by Reuters here.
Serbia, the Eurasian Economic Union, and the EU
The EU is not happy about the trade deal that Serbia is about to close with the Eurasian Economic Union (EEU). The EEU is made up of Russia, Armenia, Belarus, Kazakhstan and Kyrgyzstan. Serbia wants to become a member of the EU, and signing this deal compromises that.
Lithuanian Foreign Minister Linas Linkevicius said that “if countries want to join the club they must comply with the rules, values, principles.”
He said every country has a right to take its own trade and economic decisions but that “preferably it would be good to have them in alignment with the policy of the Union they are going to join.”
Read more on AP News here.