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Wednesday 19.09.2018 | Name days: Verners, Muntis

Experts: role of free trade agreements to increase – especially with Asia

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Baltic news, News from Latvia, BNN.LV, BNN-NEWS.COM, BNN-NEWS.RULatvian businessmen are already sufficiently active in several Asian markets. Their experience shows – these markets have great potential, according to representatives of the European Parliament’s Information Bureau.

In a discussion organized by EPIB in Latvia about EU free trade agreements, experts said this potential will only increase more with the signing of new free trade agreements.

Discussions on free trade are already underway with Japan, Singapore, Vietnam and other countries. Active work is performed on roughly 20 EU international trade agreements. Talks are led by the European Commission. The final decisions on those agreements will be made by the European Parliament. It should be noted that EU has recently signed a free trade agreement with Canada.

EP’s International Trade Committee deputy Artis Pabriks says Latvia’s weak points include relatively meagre experience. «We are a small country. Asian markets offer benefits to those that work there. At the same time, these markets offer great potential for Latvia, especially in food and luxurious goods segment.»

Pabriks also invited businessmen to use funding from European funds for advertisements to explore markets of third countries.

According to Pabriks, the fastest progress is expected in relation to Japan. He says the free trade agreement between EU and Japan may come in the next 1.5 years. Andris Kuznieks, head of European Commission’s office in Latvia, says EU Trade Commissar has met with Japan’s Foreign Affairs Minister recently. The commissioner then said there has been good progress in talks regarding EU-Japan free trade agreement.

The report details Japan specifically – intense talks are currently being performed in relation to the free trade agreement. Talks are planned to be finished in the nearest future. Kuznieks notes that Japan is the world’s fourth largest economy and EU already exports goods to Japan worth approximately EUR 86 billion annually. Singapore and Vietnam are South-East Asian countries with which talks on free trade agreements have finished. Ratification of agreements is planned to take place soon.

«Both those countries will serve as a catalyst for the development of free trade with Association of South-East Asian Nations,» Kuznieks said after the discussion.

Pabriks said the agreement with Singapore is important for the EU and Latvia because this country opens the way to the rest of the Asian market. So far Singapore has invested approximately EUR 5 billion in EU’s economy.

EP, EC and Foreign Affairs Ministry’s representatives admit – although the Asian market has great potential, the overall interest of Latvian businessmen is low. An identical situation was noted with CETA – just two years ago it was not interesting to anyone. Now that it has been signed it sweeps people off their feet with possibilities, said representatives of associated institutions.

Commenting the work on EU free trade agreements, Pabriks emphasizes that these agreements have strategic importance – they not only contribute to business ties between EU and global partners, and open the way or expand opportunities for Latvian businesses and state economy.

«Simplification of trade rules with Asian countries is important for the development of Europe’s economy and maintenance of competitiveness in a global context. While USA maintains a cautious position in relation to signing of new trade agreements, now is the time for EU to activate talks and prove it stands in favour of a free, honest and sustainable trade,» says Pabriks.

Continuing, he says: «Although Latvia’s trade volumes with Japan, Singapore and Vietnam are small, liquidation of barriers can help create new opportunities for businessmen that have matured enough to consider exploring new markets,» said the official.

Martins Kreitus, head of Foreign Affairs Ministry’s External Trade and External Economic Contacts Department, says EU continues the creation of active trade policy – CETA has been signed, talks have been concluded with Singapore and Vietnam, talks continue with Japan and other partners in Asia, Africa and South America. EU prepares for talks with Australia and New Zealand.

He also notes that there is currently a fight for advantages in international trade in the world. This is why it is important for EU and Latvia to actively react to trends in trade by creating modern and beneficial trade conditions. This is why it is important to form international trade relations in accordance with Europe’s interests and values.

Kreitus admits that Latvia’s exporters have successfully explored new markets in recent years. Export volumes to new and more far-away markets have also grown considerably. Many Latvian companies have already successfully entered Asian markets and have established a foothold there.

Kuiznieks also notes that EU has an expansive and ambitious trade policy. It includes partners and regions like USA, China, Canada, Japan, South Africa, South-East Asia, Australia and New Zealand.

Protocol and etiquette lecturer Jana Trahimovica says that when planning a business in the Asian region, it is important to understand not only the differences present in this region when compared with others, but also political legislative and cultural differences in each country – communication, traditions and cultural values.

This means insufficient knowledge of culture could be a reason for business failure altogether. Knowing fundamental cultural norms is vital for running a successful business in a different country. Business also serves as a bridge between people of different cultures and entire countries. In addition, traditions and values in the East play a significant role. Disrespecting them shows the attitude of the person towards their business, their business partner, their culture, family and country.


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