Moldova

EFTA’s objectives in the free trade negotiations with the Republic of Moldova

General Overview

EFTA aims at concluding an ambitious and comprehensive free trade agreement with the Republic of Moldova covering the relevant fields on the free trade agenda and in line with the respective trade interests and sensitivities of all Parties. The goal is to conclude an agreement that grants EFTA States at least the same treatment as offered by Moldova to its other trading partners. This includes going beyond existing obligations in the WTO and other international agreements where appropriate and promoting preferential trade relations that contribute to sustainable development and are beneficial to all. These priorities are outlined below.

In 2016, the EU and Moldova had strengthened their relations by completing the implementation of the Association Agreement, which covers important elements of interest to EFTA and its business community. In 2017, EFTA and Moldova formalised their shared ambition of strengthening their economic relations by signing a Joint Declaration on Cooperation. They met in the Joint Committee the following year to review bilateral trade and investment flows and explore the possibilities for embarking on a free trade process.

Trade Picture

Exports from the EFTA States to Moldova have grown by an average rate of almost 20% over the last five years, while imports from Moldova have grown by over 12% on average in the same period. At the launch of negotiations in March 2021, total annual trade was valued at about EUR 60 million.

EFTA’s key exports to Moldova include vehicles and vehicle parts, pharmaceutical products and electrical machinery which counted for about two-thirds of the value in 2019. Other important sectors included machinery, fish products, clocks, and watches.

EFTA’s imports from Moldova record electrical machinery, textile articles such as men’s and women’s apparel, walnuts as well as fresh plums and sloes, followed by sleeping bags and footwear.

Trade in Goods

EFTA will work towards the elimination of all customs duties on non-agricultural products (i.e. industrial products, as well as fish and other marine products), as of entry into force of the agreement. For agricultural products, market access will be negotiated individually by each EFTA State and based on specific trade interests. The respective sensitivities related to domestic production and policies of the individual EFTA States will be considered. EFTA will work to exclude the possibility of using export duties and incorporate and build on the central GATT provisions concerning trade in goods.

Rules of Origin and Customs Cooperation

As both Moldova and the EFTA States are Parties to the Pan-Euro-Mediterranean Convention on preferential rules of origin, EFTA foresees a link to this convention with the option of using the revised (more trade-friendly) rules. Aiming at simplifying and harmonising origin requirements as much as possible for EFTA’s exporters, the process of implementing the same possibility for trade with the other free trade partners in the PEM zone is underway. Lastly, EFTA aims at the possibility of full cumulation for textiles between the Parties to the Central European Free Trade Agreement (CEFTA) and the EFTA States.

Trade Facilitation

To ease the movement of goods and reduce costs in trade between the Parties, EFTA will work for expedited procedures and transparent rules for trade in goods and related services. EFTA will aim for border and customs procedures in line with or exceeding relevant international standards and agreements. In particular, EFTA will seek to build on the WTO Agreement on Trade Facilitation and go beyond that agreement where possible to ensure rapid release of goods and effective and transparent cooperation between authorities and agencies concerned.

Technical Barriers to Trade (TBT) and Sanitary and Phytosanitary Measures (SPS)

In the fields of sanitary and phytosanitary (SPS) measures and of technical barriers to trade (TBT), EFTA aims at decreasing technical and sanitary hurdles for goods traded between the Parties. By negotiating provisions that build on the WTO agreements on SPS and TBT and considering agreements concluded with the EU, a certain degree of harmonisation can be achieved. The provisions shall go beyond the WTO obligations as appropriate.

Trade Remedies

Based on the WTO legal framework, EFTA aims to limit the possibility for all parties to take trade remedy measures between them to prohibit anti-dumping measures and to exclude products from global safeguard measures if they do not cause or threaten to cause a serious injury to the importing Party. EFTA further seeks to include elements going beyond the WTO obligations, for notifications and pre-emptive consultations.

Trade in Services

For the benefit of its Member States’ services providers, EFTA will seek to obtain market access equivalent to or better than that offered to its competitors on the Moldovan market in all sectors and modes of supply. The rules and disciplines in EFTA’s proposal are based on WTO’s GATS whereby additional disciplines going beyond the WTO are sought notably in financial services, telecommunications, maritime transport and the movement of natural persons.

Investment

EFTA aims at binding national treatment with regard to establishment of a commercial presence in non-services sectors based on the interests and relevant policies of the Parties, keeping reservations at a minimum. The chapter largely seeks to mirror provisions for investment in the services sectors provided by the Trade in Services chapter. EFTA does not negotiate investment protection provisions, which remain a prerogative of each individual EFTA State.

Intellectual Property Rights

EFTA’s objective is to ensure the protection and enforcement of intellectual property rights by building upon and where appropriate enhancing the standards of protection provided for by the WTO TRIPS agreement and other relevant international treaties within key substantive areas of IPR.

Competition

EFTA aims to negotiate disciplines that ensure that trade liberalisation will not be impaired by anti-competitive practices of private or public undertakings that may prevent, restrict, or distort competition.

Government Procurement

EFTA aims to facilitate its suppliers’ access to the government procurement market in Moldova based on the WTO revised Agreement on Government Procurement to which both the EFTA States and Moldova are party and will seek additional access where appropriate.

Trade and Sustainable Development

With the view to ensure preferential trade relations that contribute to all dimensions of sustainable development, EFTA aims to include a dedicated chapter on Trade and Sustainable Development (TSD) in which the Parties confirm their obligations under relevant international environmental agreements and labour instruments they have ratified.

The Parties shall further promote trade and investment favouring sustainable development and commit to the sustainable management of natural resources through specific provisions in areas such as forestry, biological diversity, fisheries and aquaculture, agriculture and food systems and associated trade, including a commitment to effectively implement the United Nations Framework Convention on Climate Change and the Paris Agreement.

The chapter shall provide the possibility for a Party to establish a panel of experts. The panel of experts shall issue a report with recommendations towards the resolution of a matter or dispute regarding the implementation of the TSD chapter. The panel’s report shall be publicly available and follow-up actions monitored by the Joint Committee. The panel of experts should seek information or advice from relevant international organisations or bodies.

Horizontal Issues, Institutional Provisions and Dispute Settlement

EFTA’s proposal for a Preamble (i.e. an introductory part) to the Agreement refers to general principles such as the relationship to WTO agreements and affirmation of the Parties’ commitments under relevant international instruments in the areas of human rights, labour standards and environment protection.

The agreement negotiated by EFTA seeks to establish a Joint Committee between the Parties that shall review the implementation and operation of the Agreement and to further develop and expand it as deemed appropriate. The Joint Committee shall make recommendations and take decisions by consensus. It shall be empowered to amend the annexes and appendices of the Agreement.

Lastly, a procedure shall be established allowing for consultations and amicable solutions in the Joint Committee, and for arbitration in the event of disputes which the Parties have not been able to resolve.