Strengthening
EU-Lebanon
trade and investment relations
EU hosted Workshop with
Lebanese private sector
Beirut, 26 October 2016:
How to Export Your
Product to the European
Union?
Monika Hencsey
European Commission
DG TRADE
[email protected]
EU-Lebanon Trade Relations
I.
EU engagement with neighbouring countries in
the region – Lebanon focus
II. EU-Lebanon trade and investment relations
III. Access to the EU market: opportunities and
challenges
EU-Lebanon Trade Relations
I.
EU engagement with neighbouring
countries in the region – Lebanon focus
II. EU-Lebanon trade and investment relations
III. Access to the EU market: opportunities and
challenges
Long standing relations between the EU and its
neighbours
• Privileged relations with its Mediterranean partners based
on preferential treatment
• Barcelona Process started in 1995
• European Neighbourhood Policy since 2004
Long standing relations between the EU and its
neighbours
• Regional approach alongside bilateral to bring stability
and growth:
• Euromed process between the EU and the region:
• Union for Mediterranean Ministerial launched 2008
• Technical working group on standards, anti-counterfeit
• Pan-Euromed Rules of Origin
• Bilateral agreements and instruments
• Turkey Custom Union 1995
• Association Agreements with Free Trade Area in force with most
Euromed countries: Palestinian Authority 1997, Tunisia 1998, Morocco
2000, Israel 2000, Jordan 2002, Egypt 2004, Algeria 2005, Lebanon
2006
• Syria initialled 2008, signature suspended; Libya negotiations
suspended
Renewed partnership
• Renewed European Neighbourhood Policy in 2016
• more targeted focus
• co-ownership
• Partnership Priorities
• Partners' commitments on regulatory reforms with a view to closer
integration into EU market (eg technical regulation, SPS etc.)
• EU commitment to support the reform process
• Lebanon: Four priorities incl. fostering growth and job opportunities
• Compacts – refugees
• Jordan and Lebanon
• More specific actions on both sides
• External Investment Fund
Interpretative Note:
8% of EU imports come from MED11.
46% of MED11 exports go to EU.
(likewise for all other figures)
€ 129 bn
8% 46%
€ 180 bn
10% 39%
2015: Goods
Data source: ITC / Eurostat
EU-Euromed Goods Trade Statistics in 2015
Reporter
Partner
Trade with Partner, € bn
Exports
Imports
Trade
Trade with World (EU: Extra-EU), € bn
Exports
Imports
Trade
EU market share in global trade
Exports
Imports
Trade
Morocco
EU
12.6
17.8
30.4
19.9
33.8
53.7
63.5%
52.7%
56.7%
Algeria
EU
20.8
23.0
43.8
31.3
46.7
78.0
66.3%
49.3%
56.1%
Tunisia
EU
9.5
10.2
19.6
12.7
18.2
30.9
74.6%
55.8%
63.5%
Libya
EU
7.5
4.3
11.9
9.2
10.4
19.7
81.4%
41.6%
60.3%
Egypt
EU
5.4
21.7
27.1
19.8
67.0
86.8
27.3%
32.4%
31.2%
Jordan
EU
0.2
4.0
4.2
6.0
18.4
24.4
3.4%
21.6%
17.2%
Israel
EU
14.5
20.3
34.8
50.3
55.9
106.2
28.8%
36.4%
32.8%
Palestine
EU
0.0
0.6
0.6
0.7
4.7
5.4
2.0%
11.7%
10.5%
Lebanon
EU
0.5
6.8
7.3
2.3
15.3
17.6
21.3%
44.4%
41.4%
Syria
EU
0.1
0.5
0.6
0.6
4.4
5.0
15.6%
11.7%
12.1%
Euromed10
EU
71.0
109.2
180.2
152.7
274.9
427.6
46.5%
39.7%
42.2%
Turkey
EU
57.7
70.9
128.5
129.6
186.7
316.3
44.5%
38.0%
40.6%
Euromed11
EU
128.7
180.1
308.8
282.3
461.6
743.9
45.6%
39.0%
41.5%
EU28
EM10
109.2
71.0
180.2
1,791.0
1,726.7
3,517.7
6.1%
4.1%
5.1%
EU28
EM11
180.1
128.7
308.8
1,791.0
1,726.7
3,517.7
10.1%
7.5%
8.8%
Source: ITC. Notes: Red figures based on counterpart reporting; blue figures are those presented on the previous slide.
€ 37 bn
6% 32%
€ 33 bn
4% 38%
2014: Services
Data source: ITC / Eurostat
No data for Syria
€ 5 bn
4% 52%
€ 9 bn
9% 33%
2014: FDI net flows
Data source: WB / Eurostat
No data for Syria
EU-Euromed Association Agreements
Market access
•Liberalisation of all industrial goods
•Degree of agricultural, processed agricultural and fishery products
varies by country:
• EU: around 80%
• Large scope: Morocco, Egypt, Jordan, Palestine, Lebanon
• More limited scope: Tunisia, Algeria
EU-Euromed Association Agreements
Market access (cont.)
•Asymmetric in favour of Euromed partners:
• Immediate dismantling of tariffs by the EU vs. progressive
dismantling of tariffs by Mediterranean countries
• Some preferences on agricultural produce from Mediterranean
partners but not full reciprocity with EU
• Rendez-Vous clause for agriculture & services
Rules
•Basic commitments on regulatory areas
Towards a full regional Free Trade Area
South-South FTAs
• Mediterranean countries offer one another similar concessions to
those granted to the EU in the Association Agreements (with
exceptions on agriculture)
• Incomplete network
PanEuroMed Rules of Origin
Rules as important as market access
• Enhancing economic integration beyond trade liberalisation, i.e.
creating a common regulatory platform amongst Euromed partners
• Euromed / Union for Mediterranean
• Agadir Process (Egypt, Jordan, Morocco, Tunisia + Palestine,
Lebanon)
Network of FTAs in the Euromed region
PanEuromed Rules of Origin (RoO)
Def.: Rules that determine the country of origin of a product for
the purpose of trade relations and tariff treatment.
Protocols attached to each Free Trade Agreement
•
similar rules but not identical
•
EU-Lebanon 2002
PanEuromed Rules of Origin (RoO)
Regional convention on PanEuroMed preferential RoO
•
common rules within Euromed and beyond (e.g. Western Balkan)
•
enlarged sourcing possibilities: incentive for investment and
economic integration
–
diagonal cumulation (between countries in the region with FTAs – eg
with EFTA for Lebanon)
–
duty drawback in bilateral trade with the EU
•
easier to modernise at once without disturbing trade
•
Lebanon signed in 2014 but not yet ratified by Lebanon
Modernization of PEM RoO on-going and almost finalised
Challenges for EU-Euromed trade
• Mediterranean exports are insufficiently diversified
• essentially energy (25%) and textile/clothing (30%)
• Some improvement since FTAs in Association Agreements:
share of chemicals, machinery, processed agriculture
increased
• South-south trade not yet liberalised: intra-med trade = 56% of total trade (among the lowest in the world, compared to for
example above 30% in Asia)
• economic complementarity or competition?
• infrastructure bottlenecks and trade barriers
Challenges for EU-Euromed trade (cont.)
• Lack of attractiveness to Foreign Direct Investment
• In 2014, EM11 held only 3% of EU's outward FDI stock*
• Size of the market: lack of a regional integrated market
• Transparency, business environment and investment climate
• Infrastructure (transport, electricity, telecom)
• Suppliers, services, logistics, customs
* Source: Eurostat
Ease of doing business: region ranks low
Source: World Bank, June 2016
EU-Lebanon Trade Relations
I.
EU engagement with neighbouring countries in
the region – Lebanon focus
II. EU-Lebanon trade and investment
relations
III. Access to the EU market: opportunities and
challenges
EU-Lebanon FTA: asymmetry
Coverage: 98% of products entering EU, less for those entering
Lebanon.
•Both sides to liberalise industrial goods
•EU to fully liberalise all but around 50 basic and processed agricultural
product lines
•Lebanon to only liberalise a limited list of agricultural products
Timeline: EU immediately open, Lebanon progressively
2003
EU fully opened its market upon entry into
force of interim Association Agreement
2015 Lebanon opened its market after 12 years
•5 year grace period
•progressively reducing tariffs afterwards
Ø growth rate: 7.7% 6.6%
Source: ITC (Reporter: EU)
Source: Eurostat; Note: Non-energy = all goods excluding HS 27.
EU-Lebanon trade relations (2014)
• The EU is the first trading partner for Lebanon, covering
• 38% of Lebanese trade*
• 43% of Lebanese imports*
• 11% of Lebanese exports*
• Lebanon exports to the EU consisted mainly of base metals and
articles thereof (20%), chemicals (13%), foodstuffs (12%) and
plastics (11%).**
• EU exports to Lebanon consisted mainly of mineral products
(32%), machinery and appliances (13%), chemicals (12%) and
foodstuffs (7%).**
Sources: * ITC, ** Eurostat
Top ten destinations for Lebanese exports in 2014
Export Partner
Value of Exports (bn
euros)
% of Exports
1
Saudi Arabia
284
11.4%
2
EU-28
277
11.1%
3
United Arab Emirates
241
9.7%
4
South Africa
223
9.0%
5
Iraq
193
7.7%
6
Syrian Arab Republic
182
7.3%
7
Turkey
109
4.4%
8
Jordan
98
3.9%
9
Qatar
70
2.8%
10
Switzerland
65
2.6%
Source: ITC (Reporter: Lebanon)
Source: ITC (Reporter: Lebanon)
Source: ITC (Reporter: Lebanon)
EU-Lebanon Trade Relations
I.
EU engagement with neighbouring countries in
the region – Lebanon focus
II.
EU-Lebanon trade and investment relations
III. Access to the EU market: opportunities
and challenges
Access to the EU market: opportunities and
challenges
• EU is an open market
• Rules of origin to ensure complementarity and that mainly
Lebanese products benefit from the agreement
• Mechanisms to protect public interest in the EU
• SPS for agro-food
• Technical regulations for industrial products
• Animal welfare, environment protection
• Transparent conditions
• No discrimination between EU or foreign producers
The EU market is largely open
% of total EU imports
from LB
% fully liberalised
trade
% under special
arrangements
Industrial Goods
78.4
100
0
Basic agri goods
17.3
87
13
89%
11%
Processed agri goods
4.3
95
4.3
Total
100
98
2.5
Source: Eurostat (COMEXT)
Source: Eurostat
EU-Lebanon Trade in Agricultural Goods
(in million euros, excl. processed agricultural products)
+59%
+43%
+61%
Source: Eurostat (COMEXT)
EU-Lebanon Trade in Agricultural Goods
(in million euros, incl. processed agricultural products)
+57%
+59%
+57%
Source: Eurostat (COMEXT)
EU-Lebanon Trade in Agricultural Goods
(in million euros)
(excl. processed agricultural products)
(incl. processed agricultural products)
-4.6%
-2.4%
+17%
+17%
-4.4%
Source: Eurostat (COMEXT)
-6.7%
EU Imports in 2015
EU Exports in 2015
86 Mio €
984 Mio €
Source: Eurostat (COMEXT)
EU Imports for specific products
(in thousand euros)
Source: Eurostat (COMEXT)
EU Exports for specific products
(in thousand euros)
Source: Eurostat (COMEXT)
The EU market is largely open
% of total EU imports
from LB
% fully liberalised
trade
% under special
arrangements
Industrial Goods
78.4
100
0
Basic agri goods
17.3
87
13
89%
11%
Processed agri goods
4.3
95
4.3
Total
100
98
2.5
Source: Eurostat (COMEXT)
13% of Lebanese trade of basic agric. products for
which there are special arrangements
(less than 30 product lines)
Under Tariff Rate
Under reduced duties
Under Most Favored
Quota (duty free)
(compared MFN rate)
Nation (MFN) duties
(15 product lines)
(9 product lines)
(3 product lines)
•Table grapes
•Oranges
•Flowers
•Olive oil
•Lemons
•Sugar
•Prepared/preserved
tomatoes
•Wine
Use of EU TRQ's by Lebanon in 2015 / 2016
(tonnes)
TRQ
in 2015
Used TRQ
2015
Used TRQ
%
(in 2015)
TRQ
in 2016
(Jan-Oct 2016)
(Jan-Oct 2016)
New potatoes, from 1 January to 31 May
22.000
0
0
23.000
0
0
New potatoes, from 1 June to 31 July
44.000
0
0
46.000
0
0
New potatoes, from 1 October to 31 December
44.000
0
0
46.000
0
0
Tomatoes
17.000
0
0
18.000
0
0
Garlic
5.000
0
0
5.000
0
0
Garlic
3.000
0
0
3.000
0
0
Olives for uses other than the production of oil
1.000
0
0
1.000
0
0
Preserved olives for uses other than the production of oil
1.000
0
0
1.000
0
0
Table grapes, from 1 October to 30 April and 1 June to 11 July
6.000
373
6
6.000
217
4
Table grapes, from 1 October to 30 April and 1 June to 11 July
4.000
0
0
4.000
24
1
Apples
10.000
0
0
10.000
0
0
Apricots
5.000
0
0
5.000
1
0
Cherries
5.000
0
0
5.000
0
0
Nectarines and other peaches
8.000
0
0
8.500
1
0
Plums and sloes, from 1 May to 31 August
5.000
2
0
5.000
4
0
Olive oil
1.000
420
42
1.000
82
8
Tomatoes prepared or preserved
1.000
6
1
1.000
18
2
%
Conclusion
• The EU is an open market, very few tariffs remaining – no
protectionism
• Lebanon has benefited from the liberalisation
• But is not fully utilising these opportunities
• Supply side issues e.g. competitiveness, infrastructure,
business climate
• Demand side: EU consumers want safe and quality products
• EU protects public and consumer interest (food safety,
environment, plant and animal health)
• Non-discriminatory – domestic and imports same rules
• Upgrading of Lebanese export capacities also useful to access
regional and global market – EU ready to assist
Ways forward: a Joint Working Group (JWG) to
facilitate trade and investment
• A flexible consultation mechanism
• Jointly analyzing the factors hindering trade – exports and
imports
• Designing together future trade related development actions
(horizontal reforms, sector reforms, business climate,
productive capacity, quality standards)
• Liaising and getting input from the private sector
• Benefiting from expertise (EU technical bodies, IOs)
• Targeting better EU's trade related assistance linking into
sector strategies and reforms, export opportunities
JWG: sectorial topics for discussion
• Analyze export potential
• Industrial sectors: pharmaceuticals, textiles, …
• Agriculture: fruits and vegetables, processed meat,
dairy, …
• Sector policies and strategies, reform agenda
• Improve Technical Regulation and SPS compliance
• Horizontal laws and regulations
• Manufacturing process
• Product quality
• Enhance services sector competitiveness
JWG: cross-cutting topics for discussion
• Statistics
• SMEs
• Awareness on market opportunities and import
requirements
• Business and investment climate
• Transparency and predictability
• Customs
• WTO accession
JWG: Implementation and planning of EU's
trade-related assistance to Lebanon – possible
areas
• Enhance services sector competitiveness
• Improve quality infrastructure for industrial products
• Food safety and SPS
• Agricultural value chains and rural development
• Increase value added of Lebanese products (Geographical
Indicators, organic, voluntary labelling)
• Technical assistance in developing proper statistics
• Support WTO accession
Information on export conditions and
opportunities
• Export helpdesk on how to export to EU
• Information helping to also reach third countries' markets Trade and Investment Facilitation Mechanism
• Specialised workshops
• SPS, food safety
• Medicines
• Other regulated products