Trade Policy in the EU’s Neighbourhood. Ways forward for the Deep and Comprehensive Free Trade Agreements

This study assesses the trade policy of the European Union (EU) in its neighbourhood
and formulates proposals for the “Deep and Comprehensive Free Trade Agreements”
(DCFTAs) that the EU is currently offering to Ukraine, Moldova, Georgia, Armenia, Jordan,
Egypt, Tunisia and Morocco, as part of the European Neighbourhood Policy and in
response to the democratisation processes in the region.

The study puts DCFTAs in context by taking stock of the trade policy arrangements
currently in place with all its neighbours. It also benchmarks the DCFTA projects against
the Free Trade Agreements (FTAs) the EU has signed in recent years with emerging
markets outside its neighbourhood. The fundamental issue at stake is how far the EU
should push the EU acquis communautaire in particular in the field of technical and
sanitary standards. Another important issue is the need to foster investment in the
partner economies. Also DCFTAs should be considered a means to foster industrial
renewal on both sides.

The proposals revolve around an ambitious mutual trade and investment liberalisation
agenda, an alternative solution to regulatory alignment in standards, and a customs
union to both achieve the goals of regional economic integration and reduce the
distortions coming from rules of origin in FTAs