RESTRICTED WT/TPR/S/357 17 May 2017 (17-2649) Page: 1/219 Trade Policy Review Body TRADE POLICY REVIEW REPORT BY THE SECRETARIAT THE EUROPEAN UNION This report, prepared for the thirteenth Trade Policy Review of the European Union, has been drawn up by the WTO Secretariat on its own responsibility. The Secretariat has, as required by the Agreement establishing the Trade Policy Review Mechanism (Annex 3 of the Marrakesh Agreement Establishing the World Trade Organization), sought clarification from the European Union on its trade policies and practices. Any technical questions arising from this report may be addressed to Messrs John Finn (tel: 022 739 5081), Mario Kakabadse (tel: 022 739 5172), Pierre Latrille (tel: 022 739 5266), Ms Denby Probst (tel: 022 739 5847), Ms Takako Ikezuki (tel: 022 739 5534) and Mr. Roger Kampf (tel: 022 739 6218). Document WT/TPR/G/357 contains the policy statement submitted by the European Union. Note: This report is subject to restricted circulation and press embargo until the end of the first session of the meeting of the Trade Policy Review Body on the European Union. This report was drafted in English. WT/TPR/S/357 • European Union - 2 - CONTENTS SUMMARY ........................................................................................................................ 9 1 ECONOMIC ENVIRONMENT ........................................................................................ 13 1.1 Recent Economic Developments.................................................................................. 13 1.1.1 Balance of payments .............................................................................................. 16 1.1.2 Monetary and exchange rate policies ........................................................................ 17 1.1.3 Fiscal position ....................................................................................................... 18 1.1.4 EU economic governance and structural reforms ........................................................ 19 1.2 Trade Performance ................................................................................................... 21 1.2.1 Goods .................................................................................................................. 21 1.2.2 Services ............................................................................................................... 25 1.3 Foreign Direct Investment ......................................................................................... 27 2 TRADE AND INVESTMENT REGIME ............................................................................ 31 2.1 Legal and Institutional Framework .............................................................................. 31 2.2 Trade Policy Objectives ............................................................................................. 32 2.3 Trade Agreements and Arrangements .......................................................................... 34 2.3.1 WTO .................................................................................................................... 34 2.3.2 Regional and preferential agreements ....................................................................... 34 2.3.2.1 Reciprocal preferences ......................................................................................... 34 2.3.3 Unilateral preferences ............................................................................................ 36 2.4 Foreign Investment Policy .......................................................................................... 37 2.5 Aid for Trade ............................................................................................................ 38 3 TRADE POLICIES AND PRACTICES BY MEASURE ........................................................ 39 3.1 Measures Directly Affecting Imports ............................................................................ 39 3.1.1 Customs procedures and requirements ..................................................................... 39 3.1.1.1 Trade facilitation ................................................................................................. 42 3.1.1.1.1 Advance rulings, i.e. Binding Tariff Information/Binding Origin Information ............... 43 3.1.1.1.2 Electronic systems ............................................................................................ 43 3.1.2 Customs valuation ................................................................................................. 44 3.1.3 Rules of origin ....................................................................................................... 46 3.1.4 Tariffs .................................................................................................................. 47 3.1.4.1 Nomenclature and WTO bindings ........................................................................... 47 3.1.4.2 Applied rates ...................................................................................................... 48 3.1.4.3 Duty suspensions and special tariff treatment ......................................................... 51 3.1.4.4 Tariff quotas (TQ) and administration ..................................................................... 52 3.1.4.5 Preferential tariffs ............................................................................................... 53 3.1.5 Other charges affecting imports ............................................................................... 53 3.1.6 Import prohibitions, restrictions, and licensing ........................................................... 57 3.1.7 Anti-dumping, countervailing, and safeguard measures ............................................... 58 3.1.7.1 Anti-dumping and anti-subsidy measures ............................................................... 58 WT/TPR/S/357 • European Union - 3 - 3.1.7.2 Safeguards ........................................................................................................ 62 3.2 Measures Directly Affecting Exports ............................................................................. 64 3.2.1 Export procedures and requirements ........................................................................ 64 3.2.2 Export taxes, charges and levies .............................................................................. 64 3.2.3 Export prohibitions, restrictions, and licensing ............................................................ 64 3.2.3.1 Dual-use items export control regime ..................................................................... 65 3.2.4 Export credit, insurance and promotion ..................................................................... 66 3.2.5 Waste shipment trade regime .................................................................................. 68 3.2.6 Other measures ..................................................................................................... 69 3.3 Measures Affecting Production and Trade ..................................................................... 70 3.3.1 Standards and other technical requirements .............................................................. 70 3.3.1.1 Institutional framework ........................................................................................ 73 3.3.1.1.1 ESOs .............................................................................................................. 73 3.3.1.1.2 European Commission ....................................................................................... 75 3.3.1.2 New Legislative Framework .................................................................................. 76 3.3.1.3 Conformity assessment ........................................................................................ 77 3.3.1.3.1 Product marking ............................................................................................... 77 3.3.1.4 Accreditation ...................................................................................................... 78 3.3.1.5 Transparency ..................................................................................................... 78 3.3.2 Sanitary and phytosanitary measures ....................................................................... 78 3.3.2.1 Plants and plant products ..................................................................................... 81 3.3.2.2 Live animals and animal products .......................................................................... 82 3.3.2.3 Rapid Alert System for Food and Feed .................................................................... 83 3.3.2.4 SPS Committee in the WTO .................................................................................. 84 3.3.3 Subsidies and other government assistance ............................................................... 84 3.3.3.1 EU level subsidies ............................................................................................... 84 3.3.3.2 State aid in the member States ............................................................................. 85 3.3.3.2.1 State aid reform: implementation phase .............................................................. 85 3.3.3.2.2 Non-crisis state aid ........................................................................................... 87 3.3.3.2.3 Crisis-related aid .............................................................................................. 89