EU-Tunisia / Steps ahead towards the Deep and Comprehensive Free Trade Area (DCFTA)
On 13 October 2015, the EU and Tunisia launched negotiations for a Deep and Comprehensive Free Trade Area (DCFTA) with the following overall goals:
(i) Create new trade and investment opportunities
(ii) bring about the better integration of Tunisia's economy into the EU single market;
(iii) support ongoing economic reforms in Tunisia and bring Tunisian legislation closer to that of the EU in trade-related areas.
The First Round was held in Tunis on 19-22 October 2015 assessing, among other issues, the relevant statements in the following sectors:
• Competition: the most challenging area for discussions has been envisaged in the “State aids, given the current regulatory and institutional Tunisian framework in this area”;
• Customs and Trade Facilitation: “no particular issues were identified in the discussions on customs and trade facilitation”;
• Existing Bilateral Cooperation: in this field was deemed to be “very well advanced”; and
• Technical Barriers to Trade (TBT): the need to assess the state of play on ACAA preparations in detail was identified, as regards both regulatory and institutional aspects.
On 25 February 2016 the European Parliament declared the Opening of negotiations for an EU-Tunisia Free Trade Agreement (European Parliament Resolution (2015/2791(RSP)) calling the parties to consider introducing a: “tax good governance clause, based on the work of the Commission’s Platform for Tax Good Governance, to rule out any instance of double non-taxation” (see, point 58).
On 28 to 31 May 2018 the Second Round was held in Tunis and the joint Report will be published shortly. While waiting for the relevant Report, we wish to draw your attention are the following aspects of the European 2016 proposal, stressing that we do reproduce also the French version since it is the official language for negotiations and all official documents are available exclusively in French.
CONCURRENCE ET AUTRES DISPOSITIONS ÉCONOMIQUES
Recognising the importance of fair trade between the EU and Tunisia, Article 1 of the proposal states that:
“Sont incompatibles avec le bon fonctionnement du présent accord, dans la mesure où elles sont susceptibles d'affecter les échanges entre l'Union et la Tunisie, les pratiques et transactions ci-après …:
(d) toute aide publique qui fausse ou menace de fausser la concurrence en favorisant certaines entreprises ou certaines productions”. State aid are expected to be fitted within the general guidelines under Article 1(2)(d) of the proposal.
To this token, it is worth to underline that Tunisia is expected to introduce a State aid legislation that fits within the EU standards (as per Article 3(1)(a) and (b) of the proposal). However, a temporary measure should be adopted, ensuring that “during the first five years following the conclusion of this Agreement, any public aid granted by Tunisia shall be assessed taking into account the fact that this country is considered as identical to the Union areas referred to in Article 107 (3) (a) of the Treaty on the Functioning of the European Union” (Article 3(1)(c) of the proposal).
Importantly, transparency shall be ensured so that, namely, “Chaque partie assure la transparence dans le domaine de l'aide publique, notamment en informant tous les deux ans l'autre partie de la base juridique, de la forme, du montant ou du budget et, si possible, du bénéficiaire des aides publiques octroyées pendant la période de reference” (Article 2(1) of the proposal) and “À la demande d'une partie, l'autre partie fournit des informations sur certains cas particuliers d'aide publique” (Article 2(3) of the proposal).
PROCEDURES DOUANIERES ET FACILITATION DES ÉCHANGES
Article 4 of the proposal is titled “Redevances et autres taxes”. The EU proposal is intended to lower all administrative inderhances and taxes of an equivalent effect as deterring access to the market, holding that “Les parties interdisent les redevances administratives ayant un effet équivalent à des droits ou autres taxes à l'importation ou à l'exportation ou constituant une protection indirecte des produits nationaux” (Article 4(1) of the proposal). Consistently, levies for “formalités consulaires, y compris le paiement de redevances et autres taxes, en relation avec l’importation ou l’exportation de marchandises en provenance ou à destination de l’autre partie” shall be eliminated (Article 4(2) of the proposal).
A Third full Round is expected to take place in autumn 2018 in Brussels.
Author: Roberto Scalia, Chairman JIACC Tax Commission
