Ex­perts: role of free trade agree­ments to in­crease – es­pe­cially with Asia

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Lat­vian busi­ness­men are al­ready suf­fi­ciently ac­tive in sev­eral Asian mar­kets. Their ex­pe­ri­ence shows – these mar­kets have great po­ten­tial, ac­cord­ing to rep­re­sen­ta­tives of the Euro­pean Par­lia­ment’s In­for­ma­tion Bureau.

In a dis­cus­sion or­ga­nized by EPIB in Latvia about EU free trade agree­ments, ex­perts said this po­ten­tial will only in­crease more with the sign­ing of new free trade agree­ments.

Dis­cus­sions on free trade are al­ready un­der­way with Ja­pan, Sin­ga­pore, Viet­nam and other coun­tries. Ac­tive work is per­formed on roughly 20 EU in­ter­na­tional trade agree­ments. Talks are led by the Euro­pean Com­mis­sion. The fi­nal de­ci­sions on those agree­ments will be made by the Euro­pean Par­lia­ment. It should be noted that EU has re­cently signed a free trade agree­ment with Canada.

EP’s In­ter­na­tional Trade Com­mit­tee deputy Ar­tis Pabriks says Latvia’s weak points in­clude rel­a­tively mea­gre ex­pe­ri­ence. «We are a small coun­try. Asian mar­kets of­fer ben­e­fits to those that work there. At the same time, these mar­kets of­fer great po­ten­tial for Latvia, es­pe­cially in food and lux­u­ri­ous goods seg­ment.» Pabriks also in­vited busi­ness­men to use fund­ing from Euro­pean funds for ad­ver­tise­ments to ex­plore mar­kets of third coun­tries. Ac­cord­ing to Pabriks, the fastest progress is ex­pected in re­la­tion to Ja­pan. He says the free trade agree­ment be­tween EU and Ja­pan may come in the next 1.5 years. An­dris Kuznieks, head of Euro­pean Com­mis­sion’s of­fice in Latvia, says EU Trade Com­mis­sar has met with Ja­pan’s For­eign Af­fairs Min­is­ter re­cently. The com­mis­sioner then said there has been good progress in talks re­gard­ing EU-Ja­pan free trade agree­ment.

The re­port de­tails Ja­pan specif­i­cally – in­tense talks are cur­rently be­ing per­formed in re­la­tion to the free trade agree­ment. Talks are planned to be fin­ished in the near­est fu­ture. Kuznieks notes that Ja­pan is the world’s fourth largest econ­omy and EU al­ready ex­ports goods to Ja­pan worth ap­prox­i­mately EUR 86 bil­lion an­nu­ally. Sin­ga­pore and Viet­nam are South-East Asian coun­tries with which talks on free trade agree­ments have fin­ished. Rat­i­fi­ca­tion of agree­ments is planned to take place soon.

«Both those coun­tries will serve as a cat­a­lyst for the devel­op­ment of free trade with As­so­ci­a­tion of South-East Asian Na­tions,» Kuznieks said after the dis­cus­sion.

Pabriks said the agree­ment with Sin­ga­pore is im­por­tant for the EU and Latvia be­cause this coun­try opens the way to the rest of the Asian mar­ket. So far Sin­ga­pore has in­vested ap­prox­i­mately EUR 5 bil­lion in EU’s econ­omy.

EP, EC and For­eign Af­fairs Min­istry’s rep­re­sen­ta­tives ad­mit – although the Asian mar­ket has great po­ten­tial, the over­all in­ter­est of Lat­vian busi­ness­men is low. An iden­ti­cal sit­u­a­tion was noted with CETA – just two years ago it was not in­ter­est­ing to any­one. Now that it has been signed it sweeps peo­ple off their feet with pos­si­bil­i­ties, said rep­re­sen­ta­tives of associated in­sti­tu­tions. Com­ment­ing the work on EU free trade agree­ments, Pabriks em­pha­sizes that these agree­ments have strate­gic im­por­tance – they not only con­trib­ute to busi­ness ties be­tween EU and global part­ners, and open the way or ex­pand op­por­tu­ni­ties for Lat­vian busi­nesses and state econ­omy. «Sim­pli­fi­ca­tion of trade rules with Asian coun­tries is im­por­tant for the devel­op­ment of Europe’s econ­omy and main­te­nance of com­pet­i­tive­ness in a global con­text. While USA main­tains a cau­tious po­si­tion in re­la­tion to sign­ing of new trade agree­ments, now is the time for EU to ac­ti­vate talks and prove it stands in favour of a free, hon­est and sus­tain­able trade,» says Pabriks. Con­tin­u­ing, he says: «Although Latvia’s trade vol­umes with Ja­pan, Sin­ga­pore and Viet­nam are small, liq­ui­da­tion of bar­ri­ers can help cre­ate new op­por­tu­ni­ties for busi­ness­men that have ma­tured enough to con­sider ex­plor­ing new mar­kets,» said the of­fi­cial. Martins Kre­i­tus, head of For­eign Af­fairs Min­istry’s Ex­ter­nal Trade and Ex­ter­nal Eco­nomic Con­tacts Depart­ment, says EU con­tin­ues the cre­ation of ac­tive trade pol­icy – CETA has been signed, talks have been con­cluded with Sin­ga­pore and Viet­nam, talks con­tinue with Ja­pan and other part­ners in Asia, Africa and South Amer­ica. EU pre­pares for talks with Aus­tralia and New Zealand.

He also notes that there is cur­rently a fight for ad­van­tages in in­ter­na­tional trade in the world. This is why it is im­por­tant for EU and Latvia to ac­tively re­act to trends in trade by cre­at­ing mod­ern and ben­e­fi­cial trade con­di­tions. This is why it is im­por­tant to form in­ter­na­tional trade re­la­tions in ac­cor­dance with Europe’s in­ter­ests and val­ues.

Kre­i­tus ad­mits that Latvia’s ex­porters have suc­cess­fully ex­plored new mar­kets in re­cent years. Ex­port vol­umes to new and more far­away mar­kets have also grown con­sid­er­ably. Many Lat­vian com­pa­nies have al­ready suc­cess­fully en­tered Asian mar­kets and have es­tab­lished a foothold there.

Kuiznieks also notes that EU has an ex­pan­sive and am­bi­tious trade pol­icy. It in­cludes part­ners and re­gions like USA, China, Canada, Ja­pan, South Africa, South-East Asia, Aus­tralia and New Zealand.

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