The Economic Partnership Agreement (CEPA) between the EFTA States (Switzerland, Iceland, Liechtenstein and Norway) and Indonesia entered into force on 1 November. It is intended to further expand trade relations between the partners.

According to EFTA, the agreement will give EFTA countries access to export products such as fish and marine products, agricultural and food industry products, industrial and technical products, machinery and watches, as well as chemicals and pharmaceuticals. The CEPA is also intended to promote trade in services, e.g. for energy-related services, telecommunication services, the financial industry or through access for maintenance personnel. It also provides an improved framework for cross-border investment.

Sustainable development is a special focus. The agreement includes commitments by the contracting parties in the areas of environmental protection, fundamental rights and the sustainable management of forest resources and vegetable oil.

Changes in customs law

For Switzerland, the agreement brings about a decisive change in terms of customs clearance: Indonesia will no longer be considered a developing country once it enters into force. As a result, in future preferential imports into Switzerland will no longer require the Form A or the declaration of origin on the invoice (GSP agreement), but only the declaration of origin under this free trade agreement in order to benefit from preferential treatment (preferential tariff treatment).

According to EFTA, trade in goods between the EFTA States and Indonesia amounted to more than €1.1 billion in 2020. The EFTA States exported goods worth €628 million. For imports, this value amounted to 518 million euros.

More information on the significance of the agreement for Switzerland can be found on the website of the State Secretariat for Economic Affairs.

Comprehensive agreement

The modernised Free Trade Agreement between the EFTA States and Turkey covers a comprehensive scope. For example, Turkey has granted Switzerland new trade concessions for Swiss imports of cheese, meat preparations, fruit juices, coffee, tobacco, chocolate, biscuits, muesli and certain baby foods.

The provisions in the chapter on trade and sustainable development establish a common frame of reference, and the contracting parties undertake to comply with it in their preferential economic relations in such a way that the economic objectives pursued by the free trade agreements are consistent with their objectives in the area of environmental protection and labour rights. Institutional mechanisms are provided for to verify the correct implementation of these provisions.

The modernised free trade agreement with Turkey was signed on 25 June 2018 and entered into force on 1 October 2021.

The European Free Trade Association (EFTA, or in French: Association européenne de libre-échange, AELE) was founded in 1960 by originally seven countries. Today’s members are Switzerland, Norway, Liechtenstein and Iceland.

Mexico is an important market for European and especially German companies. In 2020, the German-Mexican trade volume amounted to 19.1 billion euros, according to the Federal Ministry of Economics and Technology (BMWi). Mexico thus remains the most important recipient country of German exports in Latin America.

What was negotiated – details on the modernised agreement

First things first: With the modernisation of the existing trade agreement from the year 2000, the EU and Mexico have agreed to reduce further tariffs. For example, Mexico’s existing high tariffs on agricultural products are to be phased out. This means that under the modernised EU-Mexico Agreement, almost all trade in goods between the EU and Mexico will be duty-free in the future. This will create new export opportunities for high-value food and beverages, as well as EU exports from other sectors.

The new agreement will also introduce new rules regarding customs clearance to simplify and speed up “paperwork” and goods checks at Mexican customs.

The EUR.1 movement certificate used up to now will be abolished. In future, only the declaration of origin on the invoice or other commercial document will count as proof of preference. For consignments of preferential goods with a value of more than 6,000 euros, these may only be made in the EU by Registered Exporters (REX). Existing REX registrations (for example for Canada or Japan) can be used for Mexico. The authorisation as an approved exporter no longer applies to Mexico.

In Mexico, only exporters authorised by the local authorities may issue declarations of origin for consignments of preferential goods worth more than 6,000 euros.

Gerlach Zolldienste is happy to support companies in the process of obtaining “Registered Exporter (REX)” status. “We advise our customers and all companies in general not to miss out on these export opportunities arising from the modernisation of the EU-Mexico Agreement. With our extensive customs experience and expertise, we are here to help them not only with the REX procedure, but with all customs-related issues. Please feel free to contact us at any time,” says Thomas Weins, VP Customs & CEO Gerlach Germany.

In addition to trade in goods, the new agreement also offers new opportunities for the export of services in areas such as financial services, transport, e-commerce and telecommunications. It is also the first agreement between the EU and a Latin American country that also protects investments, and in which anti-corruption provisions and measures against bribery and money laundering have been agreed. In addition, 340 geographical indications (GIs) of European regional food and drink products will be protected in the Mexican market.

More details on the EU-Mexico agreement on the modernisation of the trade part of the Global Agreement can be found on the homepage of the European Commission “In focus EU-Mexico Trade Agreement“.