Trade agreements with countries outside the EU
If you do business with a country outside the European Union (EU), you may be able to benefit from a trade agreement. For example, by paying no or lower import duties, or by gaining better access to new markets. To benefit from a trade agreement, you will need to provide supporting documents.
What is a trade agreement?
A trade agreement is also known as a trade deal or a free trade agreement (FTA). Countries make agreements with one another about:
- trade in goods
- trade in services
- digital trade
- public procurement (international tenders)
- trade and sustainable development (labour rights, environment, and climate)
Trade agreements also often include a section on how to resolve trade disputes (dispute settlement).
Trade agreements make doing business easier
With a trade agreement, countries aim to increase trade between them. The agreements in the FTA make trading easier. This can have a positive impact on your business. For example, you may pay lower or even no import duties. But there are also other benefits to a trade agreement, for example:
- Better access to new markets: you can more easily sell your product or offer your service in another country. This gives you a larger market.
- Agreements on product requirements: this means that all parties know the standards for products they supply to each other.
- Acceptance of each other’s customs documents: this reduces paperwork and speeds up customs procedures.
- Easier investment in the partner country: there are rules to protect your business against unfair treatment, for example.
- Taking part in public procurement: you gain easier access to public procurement (tendering) in non-EU countries. And you are treated in the same way as a local company bidding for the contract.
How can you benefit from a trade agreement?
Follow the steps below to benefit from a trade agreement:
- Check whether a trade agreement exists.
- Check which supporting documents you need.
- Be sure to read the small print.
- Add the supporting documents to your shipment or customs declaration.
The Netherlands Enterprise Agency (RVO) has a Dutch-language guide to these 5 steps
Lower import duties can be very beneficial for businesses that import goods. Do you import products from outside the EU? Or do you export products to a non-EU country? In both cases, you will be subject to import duties. The amount of import duty varies depending on the product and country of origin.
Do you import from a country with which the EU has a trade agreement? If so, you will pay lower or even no import duties. For some products, you never pay import duties. Examples include books, laptops, and phones. When trading within the EU, you do not pay import duties, as there is free movement of goods.
Are you exporting to a country with which the EU has a trade agreement? In that case, your foreign customer may pay lower or no import duties. This usually means you can offer your products at a lower price than a competitor from a country without a trade agreement. The condition is that the products you export are of preferential EU origin.
Do you want to import products from Türkiye? The EU has a customs union (free trade area) with Türkiye so you pay no import duties on most products of Turkish origin. This means the product was made in Türkiye or was previously imported into Türkiye from a third country with all duties paid.
Supporting documents you need to provide
If you wish to benefit from a trade agreement, you will need to provide supporting documents. For example, an invoice declaration or EUR-1 movement certificate.
The documents you need to provide vary depending on the trade agreement. You can find the supporting documents required for each trade agreement on rvo.nl (in Dutch).
GSP country or Pan-Euromed country
Do you wish to benefit from an agreement with a GSP country or a Pan-Euromed (PEM) country? In that case, you must also submit supporting documents.
- A GSP country is a low- or middle-income country that benefits from the Generalised System of Preferences. This is a unilateral EU scheme. A GSP country can import goods into the EU at lower import duties. This stimulates trade with GSP countries.
- Pan-Euromed countries have agreed to promote trade with each other by agreeing on common preferential rules of origin.
With which countries does the EU have a trade agreement?
The EU has concluded trade agreements with many countries or groups of countries (trade blocs). Examples include the Mercosur agreement with Argentina, Brazil, Paraguay, and Uruguay; the CETA trade agreement with Canada; and the recently concluded trade agreement with Australia.
You can search for other trade agreements by country or region on the European Commission’s website.
RVO also has an overview of trade agreements (in Dutch) with information about what these trade agreements can mean for you.
Potential disadvantages of a trade agreement
A trade agreement does not only have benefits for the economies of countries, governments, and businesses. There can also be disadvantages. These might include increased administrative burdens or job losses due to greater foreign competition.
Read more on kvk.nl about the pros and cons of trade agreements.