The free movement of services within the EU

Intra-European trade in services is hampered by national regulatory differences for service markets. The European Commission has proposed a new directive to overcome these regulatory barriers. This document assesses the effects of this new directive on trade and investment in services. Read also the accompanying press release .We have developed an index for bilateral heterogeneity in product-market regulation, and apply it to the OECD Regulation Database. We show that the heterogeneity in regulation hampers bilateral service trade in the EU, and also bilateral direct investment. We investigate how the proposed EU directive could lower the intra-EU heterogeneity in product market regulation for services, and what effect this would have on bilateral trade and investment in the Internal Market for services. We find that commercial services trade in the EU might increase by 15-30%, while the foreign direct investment stock in services might rise by 20-35%.

Prospects for Future Euro-Mediterranean Trade

Initiatives and agreements between EU and Mediterranean countries aimed at establishing a free trade area. Indeed there has been a liberalization of trade in the last 10 years creating new trade flows, but trade integration still has to be developed further in order to make substantial differences for the Mediterranean countries.Mediterranean region, trade liberalisation, EU Free Trade Agreements

EU-India free trade agreement : a quantitative assessment

This report analyses the effects of a regional trade agreement (FTA) between the EU and India, for which negotiations are underway. The study starts with abrief overview of the key insights from the existing literature on FTAs and their relationship with multilateral negotiations. The remainder of the study is devoted to analysing the impact of tariff slashes under an FTA on merchandise trade between the EU and India. Of particular interest are the implications for agricultural markets, given the tension between agricultural liberalisation and India's policy goals relating to self-sufficiency in food grains and poverty reduction. The analysis employs GTAP, a global general equilibrium model using a recent database which has 2004 as its reference year. The results suggest that India's interests in a regional trade agreement with the EU are downplayed by the fact that India's economy is not well integrated in global markets. Impacts on the EU are minor and further reduced if a Doha agreement is in place when the FTA is implemented. Results indicate the rationale for a strongly asymmetric arrangement: it would be in the interest of both partners if the EU provides large concessions to India for market access, while India maintains the bulk of current border protection. An EU - India FTA delivers little scope for achieving efficiency gains via adjustments to the pattern of international specialisation. An EU - India agreement on merchandise trade is unlikely to embody substantial preferential treatment with regard to market access. Probably, India can find more suitable FTA partners. Agriculture is a key sector for India in the consideration of equity and growth purposes of a FTA with EU

Trade Impact Assessment of an EU-India Free Trade Agreement

We analyze the effects of potential measures to liberalize trade between the European Union and India using a computable general equilibrium (CGE) model of world trade. Overall, our analysis shows that there are potential gains to be reaped from signing a bilateral FTA between the EU and India. For all scenarios, the FTA is expected to yield positive real income effects for both economies, both in the short- and long-run. The effects are, however, quite small due to the low levels of bilateral trade. In the short run, the real income gains in the EU are expected to range between Û3 and Û4,4 billion (higher for more ambitious liberalization scenarios), which amount to less than 0.1 percent of GDP. In the long run, the effects of an FTA in the EU are much smaller. For the Indian economy, the short-term income effects in absolute measure are similar to those in the EU, but due to differences in the size of economies, the relative effect is bigger in India (ranging from 0.1 to 0.3 percent of GDP). In the long-run, the effects on the Indian economy are expected to be larger.CGE, EU-India Free Trade Area, GTAP

Labour rights in Peru and the EU trade agreement: compliance with the commitments under the sustainable development chapter

European Union (EU) trade policy has become increasingly contested and politicised. Citizens and politicians have become more and more concerned about the human rights and sustainable development implications of free trade. The European Commission in its ‘Trade for All’ Strategy has recognized the need for a more value-based trade policy. In the same vein, the EU has included a chapter on Trade and Sustainable Development in recent free trade agreements. However, there is still much uncertainty about the specifics of these legal commitments and about their implementation in practice. In this study, we aim to assess the labour rights commitments in the EU-Peru-Colombia agreement, with a specific focus on Peru and the agricultural sector. Based on an analytical framework that summarises the labour-related commitments of the sustainable development Title into three categories – upholding ILO Core Labour Standards, non-lowering domestic labour law, and promoting civil society dialogue – we conclude that Peru has failed to comply in a number of areas. We also make recommendations for the EU and civil society and suggestions for more profound and systematic research

Croatian Accession to the European Union: Economic and Legal Challenges

This paper identifies the degree to which the Republic of Croatia is prepared for EU integration in the area of trade and trade policy. According to a comparative analysis of the extent of integration into the European market, of Croatian trade policy and the policies of applicant countries, as well as of the conditions placed before the applicants by the EU, and the specific features of the EU trade regime, we determine where Croatia is relative to the other applicants. The next section identifies the key measures that need passing in the Republic of Croatia for adjustment to the EU and its trade institutions and to facilitate the free movement of goods between Croatia and the EU. The conclusion is that during the transition period, the reforms necessary for joining the EU were not carried out, and that progress is slower than in the other applicant countries. However, since Croatia started the EU convergence process at a higher level of development than some of the applicants, this lagging behind in the preparations for accession have not entirely wiped out the “first-mover” advantages of Croatia. The question arises, however, as to whether these will completely disappear with the first phase in the imminent enlargement of the EU.Croatia, EU, WTO, trade, tradepolicy, natural trading partner

The Economics of Duty-Free Shopping

In 1999 the EU abolished duty-free on intra-EU travel, whilst other countries still retain duty-free shopping for international travellers. We address several aspects of duty-free trade, including effects on consumption, revenue and price-setting. From a global perspective we identify the distortions generated by duty-free trade. We review, and dismiss, various arguments that might conceivably support a role for duty-free in promoting global economic welfare. The existence of duty-free trade is explained as a phenomenon that individual countries find in their national self interest as seen both from the arrival and the departure end, i.e. countries have reasons both to admit duty-free goods and to permit their sale to departing passengers.

Lessons of the 1999 Abolition of Intra-EU Duty Free Sales for Eastern European EU Candidates

At the end of June 1999 the intra-EU duty free shopping was abolished among the fifteen member nations. The opponents of this resolution argued that such a tax-free sales sector created jobs EU-wide and hardly reduced the value added and excise tax revenue of individual countries. In their opinion, duty free trade not only contributed to the reduction of travel fare within the EU but could also be characterised as a supplement to the normal retail trade for some products. Such ‘old’ ideas are increasingly popular in some Eastern European EU candidates where they are preparing for the introduction of the Single Market and EU membership in the near future. This study primarily shows that the arguments mentioned above were neither significant enough nor conclusive to maintain the intra-EU duty free shopping. Furthermore, the abolition of such tax free sales was approved in the EU in order to ensure the allocation efficiency of the VAT and excise tax system within a single market. Several arguments against the intra-EU tax free shop-ping examined in the study provide some helpful policy orientations for EU membership candidates.

Lessons of the 1999 Abolition of Intra-EU Duty Free Sales for Eastern European EU Candidates

At the end of June 1999 the intra-EU duty free shopping was abolished among the fifteen member nations. The opponents of this resolution argued that such a tax-free sales sector created jobs EU-wide and hardly reduced the value added and excise tax revenue of individual countries. In their opinion, the duty free trade not only contributed to the reduction of the travel fare within the EU but also could be characterised as a supplement to the normal retail trade for some products. Such ‘old’ ideas are increasingly gaining popularity in some Eastern European EU candidates in the context of the preparation process for the introduction of the Single Market and the EU membership in the near future. This study primarily shows that the arguments mentioned above were neither significant enough nor conclusive to maintain the intra-EU duty free shopping. Furthermore, the abolition of such tax free sales was approved in the EU in order to ensure the allocation efficiency of the VAT and excise tax system within a single market. Several arguments against the intra-EU tax free shopping examined in the study provide some helpful policy orientations for EU membership candidates.duty free shopping, EU single market, value added and excise tax harmonisation, eastern european candidates

After the negotiations: assessing the impact of free trade agreements in Southern Africa

After protracted and difficult negotiations, agreement was recently reached on the dimensions of a South African-EU free trade deal. Because of South Africa's prominence in the sub-region, implementation of this agreement will have an impact not only on South Africa, but on all the SADC economies. This paper traces how this impact may be felt over time, using a multi-region model constructed to focus on the determination of sectoral and geographic trade patterns. By separatelymodeling South Africa and the rest of southern Africa, the model can be used to evaluate how alternative SADC regional trade strategies can influence how the EU deal affects the region's economies; by distinguishing among major trading partners (EU, North America, East Asia), the simulations can help illuminate how the trade deal will likely affect current trade patterns The empirical results lead to a number of conclusions: (1) trade creation dominates trade diversion for the region under all FTA arrangements; (2) the rest of southern Africa benefits from an FTA between the EU and South Africa — the recently signed bilateral agreement is not a “beggar thy neighbor” policy; (3) the rest of southern Africa gains more from zero-tariff access to EU markets than from a partial (50 percent) reduction in global tariffs; and (4) the South African economy is not large enough to serve as a growth pole for the region. Access to EU markets provides substantially bigger gains for the rest of southern Africa than does access to South Africa.Trade policy Africa., Free trade., South Africa.,