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#WTO Trade Facilitation Agreement will bring major gains to developing countries

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170223WTOTradeFacilitAgreement2Ambassador François Xavier Ngarambe of Rwanda, Ambassador Malloum Bamanga Abbas of Chad, World Trade Organization Director General Azevêd, Ambassador Saja Majali of Jordan and Abdulla Nasser Musallam Al Rahbi of Oman presenting their countries’ TFA instruments of acceptance

The WTO has obtained the two-thirds acceptance of the agreement from its 164 members needed to bring the Trade Facilitation Agreement (TFA) into force. Rwanda, Oman, Chad and Jordan submitted their instruments of acceptance to WTO Director-General Roberto Azevêdo, bringing the total number of ratifications over the required threshold of 110.

The agreement will expedite the movement, release and clearance of goods across borders, launches a new phase for trade facilitation reforms all over the world and creates a significant boost for commerce and the multilateral trading system as a whole.

Full implementation of the TFA is forecast to slash members' trade costs by an average of 14.3 per cent, with developing countries having the most to gain, according to a 2015 study carried out by WTO economists. The TFA is also likely to reduce the time needed to import goods by over a day and a half and to export goods by almost two days, representing a reduction of 47% and 91% respectively over the current average.

DG Azevêdo welcomed the TFA's entry into force, noting that the Agreement represents a landmark for trade reform. He said: “This would boost global trade by up to $1 trillion each year, with the biggest gains being felt in the poorest countries. The impact will be bigger than the elimination of all existing tariffs around the world. It also means we can kick start technical assistance work to help poorer countries with implementation.”

EU plays leading role

EU customs authorities will play a leading role in the implementation of the agreement, acting both as an example to follow and as an engine for further progress in trade facilitation within the EU and at international level.

The agreement will also help improve transparency, increase possibilities for small and medium-sized companies to participate in global value chains, and reduce the scope for corruption. The deal was agreed during the WTO Ministerial Conference in Bali in 2013.

Trade Commissioner Cecilia Malmström said: "Better border procedures and faster, smoother trade flows will revitalise global trade to the benefit of citizens and businesses in all parts of the world. Small companies, that have a hard time navigating daily bureaucracy and complicated rules, will be major winners."

International Co-operation and Development Commissioner Neven Mimica added: "Trade is a key driver for sustainable development. The new agreement will help tapping the huge potential of trade. I am ready to assist our partner countries to make the most of this agreement."

The biggest scope for improvement - and thus the greatest potential to reap benefits - is in developing countries. The EU wants this agreement to play a significant role in increasing developing countries' involvement in global value chains. For that reason, the EU has committed €400 million to assist them with the reforms needed to comply with the rules set by the agreement.

In addition to its development dimension, the agreement also forms part of the EU's efforts to help small and medium-sized European companies use the untapped potential of global markets.

The EU has been one of the promoters of the deal and led the efforts towards its conclusion. Following the ratification of the deal by the Council and the European Parliament in 2015, the EU actively encouraged other WTO members to approve the deal without delay. While the critical mass has now been reached, allowing the agreement to become effective, the EU hopes the remaining WTO Members will ratify the agreement in the near future.

Belgium

Commission approves €2.2 million Belgian aid measures to support Flemish airports in the context of the coronavirus outbreak

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The European Commission has approved €2.2 million Belgian aid measures to support the operators of Flemish airports (Antwerp airport, Ostend airport and Kortrijk airport) in the context of the coronavirus outbreak. The measures were approved under the state aid Temporary Framework. The measures consist in: (i) an aid scheme, under which all Flemish airport operators will receive support in the form of a direct grant; and (ii) support to the operators of Antwerp and Ostend airports in the form of payment deferrals of certain costs and fees (namely annual compensation for the use of statutory staff of the Flemish Region and concession fee for the use of the airport infrastructure due for the year 2020).

The purpose of the aid measures is to help Flemish airport operators mitigating the liquidity shortages that they have been facing due to the coronavirus outbreak. The Commission found the measures to be in line with the conditions set out in the Temporary Framework. In particular, (i) the measures can only be granted until the end of this year; (ii) the direct grants do not exceed €800,000 per company, as provided by the Temporary Framework; and (iii) the payment deferrals will be granted by 31 December 2020, and will be due by no later than 31 December 2021 and involve minimum remuneration, in line with the Temporary Framework.

The Commission therefore concluded that the measures are necessary, appropriate and proportionate to remedy a serious disturbance in the economy of a member state, in line with Article 107(3)(b) TFEU and the conditions set out in the Temporary Framework. On this basis, the Commission approved the measures under EU state aid rules. More information on the Temporary Framework and other actions taken by the Commission to address the economic impact of the coronavirus pandemic can be found here.

The non-confidential version of the decision will be made available under the case number SA.58299 in the state aid register on the Commission's competition website once any confidentiality issues have been resolved.

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EU

Rule of law: First Annual Report on the Rule of Law situation across the European Union

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The European Commission has today published the first EU-wide report on the rule of law. It includes input from every member state and covers both positive and negative developments across the EU.

The report, including the 27 country chapters, shows that many member states have high rule of law standards, but important challenges to the rule of law exist in the EU. It also reflects relevant developments stemming from the emergency measures taken by member states due to coronavirus crisis.

It covers four main pillars with a strong bearing on the rule of law: national justice systems, anti-corruption frameworks, media pluralism and freedom, and other institutional issues related to the checks and balances essential to an effective system of democratic governance.

More information

Follow the press conference with Vice-President Jourová and Commissioner Reynders live on EbS.

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Electricity interconnectivity

Commission approves prolongation of two Greek measures to support transition towards new electricity market design

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The European Commission has approved, under EU state aid rules, the prolongation for a limited period of two Greek measures, a flexibility mechanism and an interruptability scheme, to support the transition to the new electricity market design. Under the flexibility mechanism, which was initially approved by the Commission on 30 July 2018 (SA 50152), flexible power capacity providers such as gas-fired power plants, flexible hydro plants and demand response operators can obtain a payment for being available to generate electricity or, in the case of demand response operators, for being ready to reduce their electricity consumption.

This flexibility in power capacity will allow the Greek transmission system operator (TSO) to cope with the variability in electricity production and consumption. Under the interruptibility scheme, which was initially approved by the Commission on 07 February 2018 (SA. 48780), Greece compensates large energy consumers for agreeing to be voluntarily disconnected from the network when security of electricity supply is at risk, as happened for example during the gas crisis in the cold winter of December 2016/January 2017.

Greece notified to the Commission its intention to prolong the flexibility mechanism until March 2021, and the interruptibility scheme until September 2021. The Commission assessed the two measures under the Guidelines on state aid for environmental protection and energy 2014-2020.

The Commission found that the prolongation of the two measures is necessary for a limited period of time, in view of the on-going reforms in the Greek electricity market. It also found that the aid is proportionate because the remuneration of beneficiaries is fixed through a competitive auction, and thus avoids overcompensation. On this basis, the Commission approved the measures under EU state aid rules. More information will be available on the Commission's competition website, in the public case register, under the case number SA.56102 and SA.56103.

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