EU Gateway Programme

EU Gateway Programme

File:EU Gateway Participants by country.jpg

The EU Gateway | Business Avenues is an initiative funded by the European Union (EU), created and managed by the Service for Foreign Policy Instruments under the Partnership Instrument. The programme acts as a bridgehead to provide business support services to European enterprises interested to develop their business in Asia. The initiative is rebranded EU Gateway | Business Avenues following the successful implementation of a pilot to South East Asia. It organizes one-week business missions to Japan, Korea, Singapore, Malaysia, Vietnam, Thailand, Indonesia, Philippines and China, encouraging the establishment of long-lasting business collaborations with local companies. EU Gateway | Business Avenues focuses on five technological sectors: Environment & Water, Green Energy, Construction & Building, Healthcare & Medical, Information & Communication; and three other sectors: Contemporary European Design, Food & Beverage (processed organic only in Korea) and Services (China only).

History

File:EU Gateway Programme Historical Overview.jpg

Since 1979, through business support programmes such as the Executive Training Programme and the EU Gateway Programme, the European Commission encouraged European enterprises' efforts to penetrate the Japanese market. In 1990 the pilot EU Gateway Programme was created pursuing the European and Japanese resolve for equitable access to their respective markets and removing obstacles whether structural or other, impeding the expansion of trade and investment, on the basis of comparable opportunities.

In July 1991, the European Community member states and Japan, agreed to "pursuing their resolve for equitable access to their respective markets and removing obstacles whether structural or other, impeding the expansion of trade and investment, on the basis of comparable opportunities" through the Joint Declaration that was signed. As a result, combined efforts started to be made for rejecting protectionism, removing market barriers, implementing the General Agreement on Tariffs and Trade and OECD principles concerning trade and investment. In addition, were set the basis for an intensive interaction and cooperation in areas such as trade, investment, industrial co-operation, advanced technology, energy, employment, social affairs and competition rules. In the light of this diplomatic development, EU Gateway programme gained support and build a solid reputation both on the European and Japanese markets.

The democratic and economic drive of the Korean society started in 1992 after the election of Kim Young-sam, the first South Korean President with a civilian background. In 1995, European Union launched the negotiations for a Framework Agreement (FA) on Trade and Cooperation with the Republic of South Korea. In April 2001, the Framework Agreement entered into force committing both parties to foster bilateral trade and investment. In 2007, the Free Trade Agreement (FTA) negotiations between EU and South Korea started, entering into force in July 2011. The EU Gateway programme to South Korea was launched during the FTA consultations aiming to accompany the implementation of the agreement along the way.

Since the initial launch of the programme, over 30 business missions were organised by the EU Gateway initiative with more than 3000 European SMEs participants. From 2002 – 2007, the programme reduced its sectorial focus from 10 to 7, organising 30 business missions with close to 1000 participating companies.

2008 marked a new era in EU Gateway history as the programme was launched in another country, South Korea. All in all, from 2008 – 2014 more than 1500 companies participated in 31 business missions to Japan and 15 business missions to South Korea respectively.

EU Gateway as an instrument to foster bilateral trade relations: EU – Japan and EU – South Korea

EU - Japan Trade Relations

Main article: Japan-European Union relations

Over the past decades the EU and Japan have developed strong economic ties and Japan, the world’s third largest economy, is the EU’s 7th largest trading partner. Trade between the two partners is expected to increase by a prospective FTA for which the negotiations were launched during the EU-Japan summit in March 2013. Both parties aim to conclude a comprehensive agreement for goods, services and investment, eliminating tariffs, non-tariff barriers and covering other trade-related issues, such as public procurement. The Free Trade Agreement is expected to increase the EU’s GDP by 0.6 to 0.8% and EU export to Japan by more than 32,7%. Despite the joint efforts made to foster economic cooperation, SMEs are still encountering challenges when entering the Japanese market:

• High business costs related to: taxes, salaries, purchasing or renting office, social security;
• Legal restrictions and rigid/complicated administrative procedures required for business permits and licenses;
• Lack of mobility in the labor market leading to difficulties in finding human resources;
• Specificities of the Japanese market and difficulty in communicating in foreign languages.

EU – South Korea Trade Relations

Main article: South Korea-European Union relations

South Korea is the EU’s 8th largest trading partner and EU has become South Korea’s second largest trading partner and export destination. In 2011 – 2012, South Korea was one of EU’s main trading partners registering 16.2% exports’ growth rate. The EU – Republic of Korea Free Trade Agreement (FTA), which is applied since 1 July 2011, has marked an unprecedented step forward in trade relations between the EU and the Republic of Korea. The agreement eliminated tariffs for industrial and agricultural goods in a progressive, step-by-step approach, and on 1 July 2016, import duties will be eliminated on all products except for a limited number of agricultural products. The FTA also contains a number of specific commitments to eliminate and to prevent the emergence of non-tariff barriers to trade, notably in the automotive, pharmaceutical and electronic sectors.With the FTA, the bilateral trade in goods between the EU and the Republic of Korea has been constantly growing and reached the record level of more than 90 billion euros in 2015, with an increment of the EU export of 10,9% over 2014.The EU is also the largest investor in the country, ahead of the United States and Japan. The EU FDI stock in the Republic of Korea increased 35% from 2013 to 2014 (last data available) to reach 43.7 billion euros, accounting for over 20% of the FDI stock in the Republic of Korea.

For the third year, South Korea ranked first among all nations in the Global Innovation Index (Bloomberg), and second in High Tech density, which make the country an attractive business destination for European business, including SMEs, specializing in high technologies

It is estimated that just 9 months after the first tariff cuts took effect, EU companies exporting their products to Korea already made cash savings of €350 million in duties. Being recognized as one of the fastest growing hi-tech economies in the world, South Korea is an attractive business destination for European SMEs specializing in high technologies. Although significant progress has been made for overcoming market barriers, European companies are still facing challenges when acceding to the Korean market:

• Pricing and Marketing Arrangements;
• Standards and other technical requirements;
• Import licensing;
• Documentation and customs procedure;
• Complex distribution system.

EU - South East Asia Trade Relations

Following the identification of South East Asia as a priority region in 2006, the EU has been actively engaged with the Association of South East Asian Nations (ASEAN). Negotiations for a region-to-region Free Trade Agreement (FTA) with ASEAN were launched in 2007 and paused in 2009 to give way to a bilateral format of negotiation. The European Commission finalised the negotiation of a bilateral FTA with Singapore in October 2014 and with Vietnam in December 2015.

ASEAN is the EU's 3rd largest trading partner outside Europe (after the US and China) with more than €238 billion of trade in goods and services in 2014. EU-ASEAN trade in goods grew by 4.4% from 2013-2014 while bilateral trade in services increased by 6.5% over the same time (in value terms). The EU is by far the largest investor in ASEAN countries. EU companies have invested an average €14.8 billion annually in the region (2006-2013) with over €150 billion in FDI stock held in the region at the end of 2013.

Specific initiatives and instruments such as the EU Gateway | Business Avenues in South East Asia seek to facilitate business opportunities for European SMEs, boosting trade, investment and business ties with a region of over 600 million consumers.

EU - China Trade Relations

EU is the second largest trading partner of China, and China's largest trading partner is the EU. Most of this trade is in industrial and manufactured goods, with an expanding services component. The bilateral trade relations between China and the EU continues to grow. Both parties are members of the WTO, and share several plurilateral agreements. China is currently negotiating with the members that are part of the Government Procurement Agreement, including the EC, which will open China's lucrative procurement market to European companies and vice versa. Furthermore, given China's slow shift into a consumer-oriented economy and the EU's strength in the service and high-quality consumer goods industries, there will be many market opportunities in China in the future for discerning EU companies.

Some of the industries and sectors which could become important for EU companies in China include:

• Medical services and equipment
• Elder care
• Green buildings and green energy technologies
• Education and childcare services

How EU Gateway | Business Avenues helps European companies in Asia

• One week business missions to Asian target markets for European companies in the following sectors: Environment & Water Technologies, Green Energy Technologies, Construction & Building Technologies, Healthcare & Medical Technologies, Information & Communication Technologies, Contemporary European Design, Food & Beverage, Services:
• Two exhibition days (in the framework of the business week);
• Arranging individual business meetings between European companies and Asian business representatives;
• Customized business services;
• Advice on certifications and legal matters to be dealt with in Asian target markets;
• Company branding and promotion;
• Logistical and operational support (prior to, as well as during the business mission week).

Main Achievements and Results

In 2014, the EU Gateway programme reached 20 years of history in Japan and 6 years of presence in Korea. In this timespan, over 3750 European SMEs participated in 163 business missions successfully entering the Japanese or the Korean market. During the programme phase (2008 -2014), EU Gateway organised successfully 31 business missions to Japan and 15 business missions to Korea. Furthermore, from 2008 to 2014, about 1500 European SMEs from 28 EU Member States joined the programme with 94% of participants eager to enroll again. Engaged in the business support path, EU Gateway created long lasting business ties with Korean and Japanese representatives. In 2009, 51% of participants reported newly established business collaborations, a number which by 2014 increased to 82%. Programme results in financial terms are high, 97% of participants reported significant increase in their sales distribution figures. In addition, over 40% of EU Gateway’s attendees experienced revenue growth following the sector-related business missions.

Future EU Gateway initiatives

File:EU Gateway Programme Destination Countries.jpg

Due to outstanding performance, the EU Gateway Programme expands further than Japan and South Korea entering new markets such as: Singapore, Malaysia and Vietnam. In March 2014, the pilot programme, EU Business Avenues was launched in Southeast Asia. Between 2014 – 2015, three business missions to Singapore-Malaysia and Singapore-Vietnam will be organised focusing on two sectors: clean technologies and interior design. In the future, EU Gateway initiative will be continued under the Partnership Instrument (PI), as part of activities aiming at improving access to third country markets and boosting trade, investment and business opportunities for European companies. The Partnership Instrument will have a global reach, however with priority given to strategic partners, i.e. Mexico, Brazil, US, Canada, China, South Korea, Japan, India, Russia, and South Africa.

EU Gateway Partners

1. Japan External Trade Organization
2. EU-Japan Centre for industrial cooperation
3. Japan Consulting Office
4. Korea Trade Investment Promotion Agency
5. IPR-helpdesk China and ASEAN

External links

• EU Gateway Programme