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EU Sees Mixed Results in Addressing Foreign Trade Barriers

Monday, June 22, 2020
Sandler, Travis & Rosenberg Trade Report

The European Union saw 40 foreign trade barriers fully or partially removed but another 43 imposed in 2019, illustrating that “protectionism is increasing and has become ingrained in trade relations,” according to a European Commission report. The report adds that these barriers are increasingly impacting sectors of high importance, spreading across regions, and difficult to resolve.

Highlights of the Commission report include the following.

Total barriers. In 2019 there were 438 active trade and investment barriers registered by the EU across 58 trading partners. The countries with the highest number of such barriers included China (38), Russia (31), Indonesia (25), the United States (24), and India and Turkey (23 each).

New barriers. There were 43 new barriers reported in 22 countries in 2019, led by the Mediterranean and Middle East (18) and China (17). The highest number of new barriers was in agriculture and fisheries (16), followed by horizontal or multi-sector measures (9) and information and communications technology and automotive (3 each). In terms of trade flows affected, ICT accounted for 43 percent of the total, followed by automotive (16 percent) and agriculture and fisheries (14 percent)

Types of barriers. Border measures (52 percent of the total) outnumbered behind-the-border measures (48 percent) for the first time in 2019 and accounted for 65 percent of new measures imposed in 2019. This illustrates that “partners appear to be more comfortable with these blatantly protectionist measures rather than counting solely on more sophisticated behind-the-border measures.”

Impact of barriers. Four barriers in China (on cybersecurity, personal information transfer, telecommunications market access, etc.) affect EU exports worth at least €15.5 billion, 20 barriers in the Mediterranean and Middle East (on customs surcharges, quotas, marking, tariffs, etc.) affect EU exports worth at least €11.9 billion, and two barriers in Australia (on fuel standards and vehicle design) affect EU exports worth €4.7 billion.

Barriers resolved. The EU saw 40 barriers in 22 markets affecting exports of at least €19.4 billion fully or partially removed in 2019. Saudi Arabia removed five, followed by Egypt, Singapore, and Russia with three each and Australia, Canada, China, Japan, South Korea, Mexico, Ecuador, and United Arab Emirates with two each. Particularly impactful barriers resolved included those covering food products in China, potatoes and infant formula in Egypt, additional duties in Turkey, labeling in Saudi Arabia, wines in Russia, beef and cosmetics in South Korea, and steel and cosmetics in Australia.

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