Version: 1.0.20.21 (2020-10-12 14:45)

How to read a trade agreement

If you are looking to export your product or service, you might benefit from favourable treatment thanks to a trade agreement. Trade agreements make it easier and cheaper for you to export, giving your product a competitive advantage on the destination market. This section enables you to understand how EU trade agreements work and tells you how to find the information you need.

EU trade agreements might seem complicated documents, but they are based on an easy-to-follow logical structure. Below you can find the standard basic structure of a trade agreement, which will help you find the information that you need in your particular trade activity. This serves as a general guideline. Every agreement is different, depending on the situation of the signatory parties and their level of ambition to liberalise trade.

1. Preamble

The preamble mentions the Parties, affirms their common objectives regarding the development of their economic relations and recognises the foundation of these relations.

2. Definitions, objectives and initial provisions

This chapter explains the terms used in the agreement, to ensure a common understanding of the language.

3. National treatment and market access for goods

The chapter and its annexes usually describe the extent to which and how quickly the agreement will lower or remove duties, taxes or other import fees for goods traded between the parties. Here you will find the specific duties and tariffs for all goods covered by the Trade agreement. Usually, there is a separate annex containing specific commitments undertaken by each party for every category of goods.

4. Trade remedies

This chapter refers to counteracting measures that one party can take in response to the negative effects of unfair trade practices, such as dumping and illegitimate subsidies.

5. Technical Barriers to Trade

This chapter provides for the harmonisation of certain regulations and recognises some quality certification procedures as equivalent in specific sectors. It might provide for the mutual recognition of conformity assessment procedures, which means that products can be accepted for import in the destination country based on conformity assessment documents issued in the country of export.

6. Sanitary and phytosanitary measures

This chapter sets the rules for food safety and animal and plant health. It usually aims to simplify and harmonise compliance procedures, ensuring that legitimate measures for food safety and animal and plant health do not create unjustified barriers to trade. Here you can find the competent authorities in each country and the approval mechanisms that you need to fulfil to export.

7. Customs and trade facilitation

This chapter aims to streamline customs procedures and make them more efficient. Here you can find customs procedures that have not been mentioned elsewhere, requirements for documentation and methods of determining compliance with rules of origin, and other information related to customs valuation, fees and charges, and your right to appeal customs decisions.

8. Investment

This chapter sets out measures to open up investment and protect investors, ensuring their fair treatment. It might remove foreign equity caps or performance requirements, ease profit transfer, and put in place stable and predictable rules governing investment guarantees. It might also establish investment court systems that enable investors to resolve investment disputes with governments quickly and fairly.

9. Trade in services

This chapter refers to cross-border trade in services. It partially follows the structure of the General Agreement on Trade in Services, which sets the rules for trade in services between every country that is a member of the WTO. However, Trade agreements often contain additional commitments in sectors such as financial services, telecommunications, e-commerce and the temporary movement of natural persons. Specific commitments might be found in annexes, with a separate schedule, for each of the parties.

10. Government procurement

This chapter specifies the areas where businesses from each side can provide goods and services to each other's governments, including central, regional, provincial and local administrations. If the parties are already members of the WTO Government Procurement Agreement (GPA), the Trade agreement might deepen commitments in terms of the number of procurement entities covered, the number of goods and services covered, and value thresholds for tender eligibility.

11. Intellectual property

Usually building on existing international intellectual property (IP) conventions, this chapter outlines procedures and rules regarding copyright, trademarks, designs, patents, data protection, etc. It could also define new areas of cooperation, such as protection for geographical indications.

12. Competition and related matters

This section usually refers to competition law, investigations and sanctions related to trade cartels, abusive behaviour by companies with a dominant market position, and anti-competitive mergers. It might also stipulate rules on subsidies, state-owned enterprises and enterprises granted special privileges, to ensure a level playing field for private companies.

13. Dispute settlement and mediation

This chapter provides a system for resolving any disputes about the way in which the parties apply or interpret the agreement, and mentions the formal procedures both sides must follow if they cannot reach a mediated agreement.

14. Final provisions

This chapter usually establishes how the agreement enters into force, opens the possibility for new parties to join after it is signed and sets the procedures for amending the agreement in the future.

15. Other protocols

This might contain relevant information not included elsewhere, such as specific rules of origin for each product category.

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