How can trade deals affect a country

Current free trade negotiations

The European Commission is striving for a new generation of free trade agreements, particularly with growth regions, in order to strengthen the international competitiveness of the European economy and thus growth and employment in Europe.

Multilateral trade relations are a fundamental priority for Germany and the European Union. In view of the feared competitive disadvantages for European companies on the world markets due to bilateral agreement initiatives by important trading partners (including the USA, Japan), the EU's previously cautious position on bilateral free trade agreements (FTA) has changed since 2007.

The new generation of free trade agreements is broad and comprehensive. The agreements not only relate to tariff issues (e.g. questions of customs, export subsidies), but also contain provisions on services, the dismantling of non-tariff trade barriers and other trade-related aspects such as investments and competition issues. We therefore also speak of so-called "WTO plus agreements", as their content goes beyond the WTO agenda.

An overview of the EU's existing free trade agreements can be found here.

EU and Canada: Comprehensive Economic and Trade Agreement (CETA)

On February 15, 2017 the European Parliament approved the comprehensive economic and trade agreement CETA (Comprehensive Economic and Trade Agreement). In addition to the extensive dismantling of existing tariffs, the agreement improves mutual market access for goods and services. Through common rules and open markets, CETA helps to secure and expand the prosperity of its trading partners.

CETA not only improves the sales opportunities for European industrial goods, agricultural products and services, but also affirms social and ecological standards and anchors modern investment protection. As a modern agreement, CETA offers the great opportunity to give fair and good rules to advancing globalization and to actively shape them: The high standards that the EU and its member states have agreed on with Canada set standards for future trade agreements.

CETA provisionally entered into force on September 21, 2017. The provisional application only applies to those areas for which the EU is responsible. As a result, EU companies and EU citizens have been able to enjoy the direct benefits of CETA since September 21, 2017. Canada is abolishing tariffs on 98 percent of all goods traded between the EU and Canada (according to tariff lines). In this way, EU companies will be able to save around 590 million euros in customs duties each year. They also get instant access to the best public procurement Canada has ever given foreign companies, at the federal, provincial, and local levels. CETA will only come into full force once all member states have ratified the agreement in accordance with their respective constitutional requirements. The regulations that will only come into force after ratification by all member states include the regulations for the settlement of investor-state disputes by a publicly legitimized investment court.

Further information on CETA and the next steps can be found here and on the website of the EU Commission.

EU and USA

The EU is one of the USA's most important trading partners. For Germany, the USA is the most important export market outside of Europe and at the same time the most important investment location for German companies. The negotiations on the transatlantic trade and investment partnership (TTIP) between the EU and the USA have been suspended since the beginning of 2017 and will not be continued.

On July 25, 2018, the European Commission agreed a trade agenda with the then US government to address issues of mutual interest. The agreed cooperation covers several areas. This includes the mutual liberalization of trade in industrial goods - with the exception of motor vehicles. Both sides are also considering measures to facilitate trade in a number of specified industries (services, chemicals, pharmaceuticals, health products and soybeans).

In addition, the EU Commission and the US government agreed on closer cooperation in the field of standards and strategic cooperation in the energy sector. This also includes the goal of increasing imports of liquefied natural gas (LNG) from the USA. Both sides also agreed on an exchange on reform of the WTO and a joint approach to the global challenges of unfair trade practices. The US government and EU Commission also agreed not to take any action that would run counter to the spirit of their agreement while work on the common agenda continues. Further information on the status of the talks is available on the website of the European Commission.

Following this agreement, the Council of the European Union issued two negotiating mandates to the European Commission on April 15, 2019. These are mandates to start negotiations with the US on an agreement to eliminate tariffs on industrial products and an agreement on conformity assessment.

The joint communication for a new transatlantic agenda presented after the last US elections by the EU-COM and the European External Action Service (EEAS) on December 2, 2020 also identifies areas of trade policy in which EU-US cooperation would be particularly effective. The European Commission is in talks with the US government on this.

EU and ASEAN countries

The negotiations on free trade agreements between the EU and ASEAN (= Association of Southeast Asian Nations) are of great economic importance for Germany. The ASEAN region is growing dynamically and offers significant potential for economic cooperation with Europe. The EU is initially negotiating bilaterally with individual ASEAN states, since a regional negotiation approach has not led to concrete results in the past.

Singapore: The EU and Singapore have on 18./19. A free trade and investment protection agreement was signed at the ASEM summit in October 2018. The EU Parliament approved both agreements in February 2019. Germany warmly welcomes the agreements because despite its small size, the country is one of Germany's most important trading partners in the ASEAN area. The ratification of the free trade agreement was completed on November 8th by a Council decision; The agreement entered into force on November 21, 2019. The investment protection agreement has yet to be signed by all EU member states. In the investment protection agreement, high and precise protection standards for investments that uphold the law of regulation, as well as a reformed dispute settlement procedure based on the example of CETA, were agreed. You can find out more about the two agreements on the website of the European Commission.

Vietnam: The EU and Vietnam signed a free trade and investment protection agreement in Hanoi on June 30, 2019. As Vietnam's largest trading partner within the EU, Germany welcomes the signing. The free trade agreement improves access for German products to the increasingly important Vietnamese market. In the investment protection agreement, as in the agreement with Singapore, high and precise protection standards for investments and a reformed dispute settlement procedure were agreed. The European Parliament approved both agreements on February 12, 2020. The free trade agreement entered into force on August 1, 2020. The investment protection agreement still has to be ratified by all EU member states before it can come into force.

The bilateral trade volume between Germany and Vietnam amounted to 14 billion euros in 2019. German direct investments in Vietnam totaled around 840 million euros in 2017. There are currently more than 300 German companies present on the Vietnamese market.

Malaysia: Negotiations on a joint free trade agreement began with Malaysia in October 2010. Negotiations have been on hold since the 7th round of negotiations in 2012. The EU Commission is trying to resume them.

Thailand: The negotiations with Thailand, which began in May 2013, have been suspended since the fourth round of negotiations in April 2014 due to the takeover of power by the military. A conclusion of negotiations will only be possible with a democratically elected government in Thailand.

The Philippines and Indonesia started FTA negotiations with the EU in 2016. Text-based negotiations started in 2017.

EU and Australia

The EU is currently preparing to start negotiations on a free trade agreement with Australia. On May 22, 2018, the trade ministers of the EU member states decided to start free trade negotiations. The negotiations started in June 2018 (PDF, 704 KB).

The trade volume between the EU and Australia amounted to more than 53 billion euros in 2019 with a trade surplus of almost 18 billion euros on the EU side. EU exports to Australia are mainly manufactured goods, while Australia mainly exports mineral raw materials and agricultural products to Europe. EU companies deliver around € 20 billion worth of commercial services to Australia and invest more than € 160 billion in investments in the country. The EU is Australia's third largest trading partner.

EU and New Zealand

Negotiations on a free trade agreement are also currently being prepared with New Zealand. On May 22, 2018, the trade ministers of the EU member states decided to start free trade negotiations. Negotiations have been running since June 21, 2018.

With an annual trade volume of more than 9 billion euros in 2019, the EU is New Zealand's second largest trading partner. Agricultural products make up the largest share of New Zealand exports to the EU, while the EU mainly exports manufactured and industrial goods to New Zealand. The EU had a trade surplus of 2.7 billion euros in trade with New Zealand in 2019, while EU companies accounted for more than 10 billion euros in FDI in New Zealand.

EU and India

A free trade agreement between the EU and India could remove existing barriers to trade and give new momentum to bilateral cooperation. The country with the world's second largest population is of considerable importance for the export-oriented German economy. However, the Federal Government and the EU Commission are striving for a comprehensive and ambitious agreement.

The negotiations with India, which began in 2007, have been de facto interrupted since 2012 due to the strongly diverging views on both sides.

EU and Latin America

The oldest agreements with countries in the region are the Global Agreement with Mexico (in force since 2000, information in English) and the Association Agreement with Chile (in force since 2005, information in English). The Association Agreement and the Global Agreement each include a free trade agreement, but go far beyond that in terms of content and form a wide-ranging contractual basis for political dialogue, economic relations and economic cooperation. On April 28, 2020, the EU and Mexico reached their negotiations on the trade part of a modernized EU-Mexico global agreement (https://ec.europa.eu/commission/presscorner/detail/de/ip_20_756). The agreements include the future duty-free 99 percent of all goods traded between the EU and Mexico. For individual agricultural products, transition periods or quotas are initially provided. A total of 340 food products from the EU will be protected by geographical indications of origin in the future. Investor-state disputes should be settled by a publicly authorized investment court. In addition to market access regulations, topics such as sustainability, regulatory cooperation and the fight against corruption will also be included in the new agreement. After the legal examination and translation of the treaty texts into all EU languages, the modernized agreement still has to be signed, approved by the Council and the European Parliament and ratified by the member states.

The free trade part of the Association Agreement between the EU and Central America (information in English) has been provisionally in force since the end of 2013. It is the first agreement that the EU has concluded with a region. It includes the countries of Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua and Panama. The multiparty agreement between the EU and the EU member states with Colombia and Peru (information in English) has been provisionally applied since 2013. Ecuador joined the agreement in January 2017.

On June 28, 2019, after almost 20 years, the European Commission successfully concluded the political negotiations with the Mercosur countries Argentina, Brazil, Paraguay and Uruguay on the free trade part of the Association Agreement. Negotiations have been ongoing since 1999.

EU and Ukraine

The partnership and cooperation agreement that entered into force in 1998 forms the legal framework for relations between the EU and Ukraine. In 2014, the EU signed the Association Agreement with Ukraine, negotiated since 2008, which is intended to replace the existing partnership and cooperation agreement and which also provides for the establishment of a deep and comprehensive free trade area. The general political part of the agreement has been applied provisionally since November 1, 2014 in its parts that are within the EU's competence. The free trade part of the agreement has been applied on a provisional basis since January 1, 2016 in its parts that are within the EU's competence.

Trade in Service Agreement (TiSA)

TiSA (= Trade in Service Agreement) is a planned, plurilateral agreement for trade in services. The primary goals of the agreement are to improve market access in trade in services and to provide new impetus for the multilateral system. From the point of view of the EU and the federal government, the agreements to facilitate trade in services should also be transferred to the WTO in the long term. The EU is negotiating TiSA with 23 WTO states, which together cover around 70 percent of the global trade in services.

Here you will find further information on TiSA and frequently asked questions and answers.

Environmental Goods Agreement (EGA)

The Environmental Goods Agreement (EGA) is a planned agreement for the liberalization of environmental goods. The agreement will initially be negotiated plurilaterally, i.e. by some WTO member states - with the aim of extending the results multilaterally to all WTO member states. The initiative builds on the so-called APEC list, which was adopted in Vladivostok in September 2012. According to this, the tariffs for a total of 54 environmental goods are to be reduced to five percent of the goods value or less by 2015.

In addition to the EU, 13 other countries are sitting at the negotiating table. The first round of negotiations took place in. July 2014 in Geneva. After 17 rounds of negotiations, the aim is to reach a conclusion by the end of 2016. Further information on the planned agreement can be found on the website of the EU Commission.