Trade Policy Updates (From 1st February to 28th February 2019)
1) The Japanese government recently passed a plan to sign a revised free trade agreement (FTA) with the Association of Southeast Asian Nations (ASEAN).
The revised FTA, which includes liberalisation of investment and service fields, will be a huge step towards enhancing the economic partnership between Japan and ASEAN. The country is expected to sign the agreement on February 27 and seek approval from parliament this autumn, while ASEAN countries will start the signing procedure from March 2.
2) The India government released the draft national e-commerce policy proposing setting up a legal and technological framework for restrictions on cross-border data flow and also laid out conditions for businesses regarding collection or processing of sensitive data locally and storing it abroad.
3) Different types of tariff and non-tariff barriers imposed by India and Bangladesh are the major impediments to the growth of bilateral trade and textile-clothing value chain engagement between the two countries, according to a World Bank report.
4) Premium British brands are concerned that a no-deal Brexit could threaten a new free trade agreement with Japan, putting them at a disadvantage against their European Union competitors.
The EU and Japan’s Economic Partnership Agreement (EPA) came into force on 1 February. The new free trade agreement will reduce duty on most goods to Japan. The UK, as a member of the EU, is part of this trade agreement, however, in the event of a no-deal Brexit, the UK will be automatically excluded.
5) India and Peru will hold the next round of negotiations for a proposed freetrade agreement (FTA) in the South American nation next month.
In an FTA, two countries significantly reduce or eliminate duties on most of the goods traded between them besides relaxing norms and rules to promote trade in services and increase bilateral investments.
6) The Vietnamese ministry of industry and trade recently issued a circular stipulating the certificates of origin (C/O) rules in the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).
CPTPP has some different clauses compared to other free trade agreements (FTAs) that Vietnam has signed, according to the ministry’s import-export department.
7) The Chinese government recently announced its decision to cut taxes for a three-year period. This will see corporate-income, value-added and other corporate taxes for small and medium enterprises (SMEs) reduced, with the country’s Central Bank cutting bank reserves in order to release more money for lending.
The cuts come amid growing concerns over China’s slowing economic growth and its impact on the labour market, weakening domestic demand and a damaging trade war with the United States. The move will help to “support employment and economic stability, and will expand the country’s tax base over the long term.
8) The regional pact goes far beyond trade liberalisation to impose a common set of rules on investment and IPRs. India’s participation in the mega-trade agreement, Regional Comprehensive Economic Partnership (RCEP), has long been debated and sentiments around the subject are quite divided and divergent.
9) With India’s eligibility to extend direct sops to exporters coming under the World Trade Organisation (WTO) scanner, the government is examining the industry’s suggestion of expanding the scope and coverage of the Rebate of State Levies (RoSL), a scheme which does not flout global trade rules as it involves refund of taxes and levies paid by exporters, and is not a subsidy.
10) Mauritious enjoys the benefits of the yet untouched African Growth and Opportunity Act (AGOA), a trade privilege program that means it can ship product to the U.S. duty free. And Mauritius enjoys a similar perk with Europe, shipping goods duty free there under its Everything But Arms (EBA) trade program.
11) ASEAN and the EU confirmed their commitment to enhance bilateral cooperation at the 22nd ASEAN-EU Ministerial Meeting on in Brussels.
Both agreed to harness cooperation in shared fields of interest and concern like economy, trade, investment, connectivity, climate change, counter terrorism, cyber security, sustainable development, maritime security and trans-national crime prevention, at the meeting.
12) China has unveiled a draft foreign investment law, making provision for wholly foreign-owned enterprises with legal cover for overseas investments and technology which was the key demand of US President Donald Trump to end the trade war between the world’s two largest economies.