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European Union's Neighbourhood Programme for Moldova
This project is implemented by a GFA Consulting Group - led Consortium
This project is funded by the European Union
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IMPACT AFTER 2 YEARS OF DCFTA IMPLEMENTATION
BETWEEN THE EUROPEAN UNION AND THE REPUBLIC OF MOLDOVA ON
TRADE IN AGRICULTURAL AND AGRI-FOOD PRODUCTS
Chisinau
The views expressed in this publication do not necessarily reflect the views of the European Union.
IMPACT AFTER 2 YEARS OF DCFTA IMPLEMENTATION
BETWEEN THE EUROPEAN UNION AND THE REPUBLIC OF MOLDOVA ON
TRADE IN AGRICULTURAL AND AGRI-FOOD PRODUCTS
THE CONTENT OF THE STUDY:
" Impact after 2 years of DCFTA implementation between the European Union and the Republic of Moldova on trade in agricultural and agri-food products"
INTRODUCTION ..................................................................................................................................................... 3
SUMMARY ................................................................................................................................................................. 4
I. WHAT IS FREE THE DEEP AND COMPREHENSIVE FREE TRADE AREA BETWEEEN THE REPUBLIC OF MOLDOVA AND THE EU? ......................................................................................................... 7
II. WHAT PROVIDES THE DEEP AND COMPREHENSIVE FREE TRADE AREA FOR THE TRADEWITH AGRICULTURAL PRODUCTS AND AGRICULTURAL PRODUCTS? .............................................. 9
III. OBJECTIVES AND ADVANTAGES OF DCFTA IMPLEMENTATION FOR THE AGRICULTURALAND AGRI-FOOD SECTOR .................................................................................................................................. 10
IV. TRADE EXCHANGES BETWEEN THE REPUBLIC OF MOLDOVA AND THE EUROPEAN UNIONIN TERMS OF AGRICULTURAL AND AGRI-FOOD PRODUCTS ................................................................ 12
4.1. Export, import and trade balance in the foreign trade of the Republic of Moldova ....... 12
4.2. Export, import and trade balance in trade in agri-food and related products in agriculture between the Republic of Moldova and the European Union .................................... 14
V. GEOGRAPHICAL ORIENTATION OF EXPORTS AND IMPORTS OF AGRI-FOOD AND AGRICULTURAL PRODUCTS FROM THE REPUBLIC OF MOLDOVA IN THE EU ............................... 20
5.1. The geographical export orientation of agri-food products from RM to the EU countries ............................................................................................................................................................ 20
5.2. Geographical orientation of import of agri-food products from EU countries to RM .... 20
VI. IMPACT ASSESSMENT OF DCFTA - MODIFICATION OF EXPORTS AND IMPORTS OF THEREPUBLIC OF MOLDOVA ................................................................................................................................... 21
6.1. Impact of the DCFTA implementation on the changes in exports from RM to the EU ... 21
6.2. Impact of DCFTA implementation on changes in imports from the EU to Moldova ....... 24
VII. TARIFF BARRIERS TO EXTERIOR TRADE WITH AGRICULTURAL FOOD PRODUCTS IN THEREPUBLIC OF MOLDOVA TO THE EU ............................................................................................................ 26
7.1. Adjustment of foreign trade of agri-food products from the Republic of Moldova to tariffs and tariff quotas established by DCFTA .................................................................................... 27
7.2. Adjustment of the foreign trade with agri-food products from the Republic of Moldova to the implementation of the mechanism of protection against circumvention and tariff concessions established by DCFTA ........................................................................................................... 28
VIII. CONCLUSIONS AND RECCOMMENDATIONS ...................................................................................... 31
IX. BIBLIOGRAPHIC AND MEDIA SOURCES ................................................................................................. 33
ANNEX: Presentation "Impact after 2 years of implementation of the DCFTA between the EU and Moldova on trade in agricultural and agri-food products" .............................................. 34
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LIST OF ABBREVIATIONS
AA Association Agreement between the Republic of Moldova and the European Union
DCFTA Deep and Comprehensive Free Trade Agreement
ATP Agreement on Autonomous Trade Preferences
BNS National Bureau of Statistics
CE Council of Europe
CEFTA Central European Free Trade Agreement
CIS Commonwealth of Independent States
DCFTA Deep and Comprehensive Free Trade Area
Eurostat European Statistics Service
GATT General Agreement on Tariffs and Trade
GSP Plus Generalized System of Preferences
GD Government Decision
ACP Autonomous Commercial Preferences
GDP Gross domestic product
RM Republic of Moldova
CS of RM Customs Service of the Republic of Moldova
EU European Union
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INTRODUCTION
Foreign trade in agricultural and food products is a fairly important segment of Moldovan commodity trade whilst the global and regional market situation of agricultural products, due to the vertically growing population of the earth, creates favourable prerequisites for ascension in the near future.
At the Eastern Partnership Summit in Vilnius on November 29, 2013, the European Union (EU) offered the Republic of Moldova (RM), through the subsequent signing of the Association Agreement (AA) and the establishment of the DCFTA, all the instruments and necessary framework for diversification and modernization of trade relations, creating premises for economic growth and access to new markets, especially for the agricultural sector.
Over the past two years, since the signing of AA and DCFTA with the European Union, there has been a diversification and a massive reorientation of Moldovan agricultural and agri-food exports from traditional markets in the east to the European market. Trade between Moldova and the EU, in terms of agricultural and agri-food products, has evolved dynamically in the last decade. Since 2005, the EU has become the main trading partner of the Republic of Moldova, and by the end of 2016, the level of 65% of European-oriented exports have been reached. At the same time, the implementation of the DCFTA did not generate the increase of imports of agricultural and food products from the European Union to the Republic of Moldova (according to pessimistic forecasts), on the contrary, on many positions and market segments the stabilization or even the decrease of the imports have been registered.
Any large-scale reform, such as the establishment of DCFTA, poses major risks due to implementation and adaptation costs aimed to minimize sectoral damage, but after two years of DCFTA implementation, it can be noted that the changes have recovered their investment.
Section I of the present Study provides a brief description of the essence of the Deep and Comprehensive Free Trade Area (DCFTA) between the RM and the EU.
Section II of the Study describes the DCFTA requirements in terms of tariff quotas, specific import duties, the implementation of the anti-circumvention mechanism and tariff concessions to trade in agricultural and agri-food products in RM.
Section III presents, in general aspects, the objectives and benefits of the DCFTA implementation for the agricultural and agri-food sector.
Section IV provides an understanding of the export, import and trade balance in the trade of goods in general and of agricultural and food products related to agriculture, particularly between the Republic of Moldova and the European Union.
Section V highlights the geographical orientation of the export and import of agricultural and food products related to agriculture in the Republic of Moldova and the European Union.
The assessment of the impact of DCFTA implementation in the quantitative, qualitative and geographical adjustment of exports and imports of agricultural and food products related to agriculture in the Republic of Moldova and the European Union is presented in detail in Section VI.
The description of how to adjust Moldova's foreign trade in food products to tariffs, quotations and tariff concessions established by the DCFTA, are presented in Section VII.
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SUMMARY
By signing the Association Agreement (AA) between the European Union (EU) and the Republic of Moldova (RM) on June 27, 2014, a DCFTA was set up and implemented, which provides for gradual liberalization (during 2014-2024) of trade in goods and services, the reduction and gradual elimination of customs duties, the removal of technical and non-tariff barriers, the abolition of import quotas and the harmonization of the legislation of the Republic of Moldova to the EU acquis. Prior to the signing of the AA and the establishment of the DCFTA, the Republic of Moldova during 2006-2015 benefited from a preferential regime in trade with the EU Member States, which included: the Generalized System of Preferences (GSP Plus), the Central European Free Trade Agreement CEFTA) and the Agreement on Autonomous Trade Preferences (ATP).
Implementation of the DCFTA over the past two years, since the AA signing with the EU, has led to a quota of approx. 65% of goods exports from Moldova into the EU, the increase of approx. 16% of exports from Moldova and about. 8% of imports from the EU. As of September 1, 2014, RM exported goods and merchandise worth more than EUR 3.2 billion. The share of total exports of goods from the Republic of Moldova to the EU in the years 2011-2016 registered a dynamic and continuous increase from approx. 49% in 2011 (EUR 847.1 million) to 65.1% in 2016 (EUR 1317.2 million), while the share of imports from the EU had a more modest growth dynamics 43.5% (EUR 1862.2 million) to 49.1% (EUR 2026.1 million), respectively.
In the study for the analysis and evidence of the impact of DCFTA implementation between the RM and the EU, have been compared the trade between parties for two consecutive periods of 2013-2014 (before and at the beginning of DCFTA implementation) and 2015-2016 (after 2 years) Implementation of DCFTA). The basic sources of information are the statistical data officially provided by the National Bureau of Statistics and collected from the European Statistical Service (Eurostat). Analyses and interpretations of data in the agricultural and agri-food trade were made by sections, categories, groups and agri-food products, based on the Combined Goods Nomenclature of the Republic of Moldova and the Harmonized Commodity Description and Coding Systems (HS), in comparison with 2014 (beginning of DCFTA) and 2016 (2 years of implementation of DCFTA).
Between 2011 and 2016, the share of exports of agricultural and food products related to agriculture between the RM and the EU increased from EUR 278 million to EUR 504,2 million in 2016, registering an increase of over 45%, while imports registered a modest increase of only 22.3% - from EUR 265.6 million to EUR 330.3 million in 2016. The trade balance on agri-food and agriculture-related products between the RM and the EU recorded only negative values in the years 2012-2013, and after the implementation of DCFTA (2016 compared to 2014) its value increased more than 5 times, registering a positive surplus of approx. 174 million euros. In 2016, trade in agricultural and food products related to agriculture between the Republic of Moldova and the European Union reached a value of approx. EUR 834.5 million and represents approx. 25% of total trade between Moldova and the EU.
In the years 2015-2016, the largest increases in the volume of exports of agri-food products related to the Moldovan and EU agriculture and respectively with the highest growth rate of market penetration (in comparison with the years 2013-2014), have registered the following products: (i) beverages (increase from EUR 20,4 million in 2014 to EUR 50,5 million in 2016); (ii) sugar (increase from EUR 11,2 million in 2014 to EUR 40,1 million in 2016); (iii) oilseeds (increase from EUR 48,6 million in 2014 to EUR 100,9 million in 2016); (iv) cereals and milling products (rising from EUR 20.4 million in 2014 to EUR 50.5 million in 2016) and relatively the (v) fruits and vegetables (up from EUR 77.6
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million in 2014, with a jump to EUR 87 million in 2015 and decrease to EUR 80.3 million in 2016). Compared to the years 2014-2016, the volume of exports of agricultural and food products related to agriculture between the RM and the EU increased by 32% on average, registering a share of approx. 35-37% of all goods exported to the EU.
Imports of agri-food products and those related to agriculture from EU to the Republic of Moldova in the years 2013-2016, as opposed to exports, have undergone a dramatic and cardinal change by slowing down and stabilizing them, and in some groups of products and products even decreasing them. Imports of agricultural and food products related to agriculture in 2016 amounted to EUR 360.4 million, a 5.5% lower level compared to 2014 (EUR 381.5 million), i.e. at the beginning of the DCFTA implementation.
In the years 2015-2016, compared to the years 2013-2014, the imports of agricultural machinery decreased by approx. 16.5 million euros (-22.3%), vegetables and fruits with approx. EUR 8,7 million (-27,8), cereals and milling products with approx. EUR 2.1 million (-13%) and other agricultural and agri-food products with approx. EUR 15.8 million (-14.4%), thus influencing the decrease of the total imports in average with approx. 5.5%. There is a slight increase in imports from the EU for the product groups: live animals and animal products (+ 5.1%), oilseeds (+ 32.2%) and the mix of comestible products (+ 12% ).
After two years of DCFTA implementation, we can see important changes in the export - import relations between the RM and the EU, by significantly increasing with approx. 32% of exports of agri-food products and related to agriculture and the decrease of the import in average with approx. 5.5%. The structure of Moldovan exports to the EU denotes exports of approx. 70% of primary agricultural products and primary processed agri-food products (excluding raw materials and products with medium to low added value), and imports from the EU to approx. 75% represents the import of agricultural machinery, industrially processed agricultural products (excluding high added value products).
The geographical orientation of Moldovan exports and imports to the agri-food and agriculture-related trade with the 28 EU Member States is mainly taking place with the neighbouring countries of Romania, Bulgaria, Poland and the European countries with the strongest economies. In commercial relations between Moldova and the EU, approx. 90% of exports and approximately 86% of imports are provided by trade with 10 European countries: Romania, Germany, France, Italy, Poland, Spain, Greece, Austria, Netherlands, Czech Republic. After two years of implementation of the DCFTA, the composition of the main partners in the import relations did not change significantly, but their redistribution took place so that presently Romania is the main export-import market for agricultural products in trade between Moldova and EU.
Within two years of the DCFTA establishment, there have been significant qualitative and quantitative changes in exports and imports of agricultural and food products related to agriculture in trade and trade flows between the RM and the EU. The increase of export volumes of agri-food products and related to agriculture from Moldova to EU markets was directly influenced by the availability of qualitative, quantitative and homogeneous domestic products, the conjuncture and demand of the EU market and less the tariffs and tariff quotas provided by AA.
The import of agri-food and agriculture-related products to the EU from the Republic of Moldova, after 2 years of DCFTA implementation, diminished in the average with approx. 4-6% and has stabilized on most segments and trade flows. The increase of import volumes from the EU to some groups and / or products is determined by the increase of the consumption capacity of the Republic of Moldova market and the lack of local alternatives for their satisfaction.
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In conclusion, Moldova's foreign trade in commercial relations with the EU, under the DCFTA framework, needs to be adjusted for the gradual elimination of tariff, non-tariff and technical barriers to facilitate the free movement of indigenous goods on EU markets whereas the competition of products on the market and the intensification of Moldovan exports to the EU should aim to create the most favourable conditions for increasing the competitiveness of domestic products.
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I. WHAT IS FREE THE DEEP AND COMPREHENSIVE FREE TRADE AREA BETWEEEN THE REPUBLIC OF MOLDOVA AND THE EU?
On June 27, 2014, the European Union (EU) and the Republic of Moldova (RM) signed the Association Agreement (AA), which has been provisionally enacted as of 1 September 2014 - a preferential trade regime - Deep and Comprehensive Free Trade Area (DCFTA) between the Republic of Moldova and the European Union. The basic document governing the DCFTA application between the Republic of Moldova and the European Union is the Association Agreement (Title V of this Agreement - "Trade and Trade Related Aspects"1), which implies the transition from economic cooperation to economic integration by establishing preferential trade relations based on mutually advantageous conditions, giving each party fair, advantageous and clear market access than is offered to other trading partners.
Prior to signing the Association Agreement, the Republic of Moldova during 2006-2015 (including during the implementation of AA and DCFTA) benefited from a preferential trade regime with EU Member States, which included 3 bilateral agreements:
1. The Generalized System of Preferences (GSP Plus), in force from 1 January 2006 to 31 December 2012, based on the agreement with the EU, which was governed by the (EC) Council Regulation No 980/2005 of 27 June 2005 applying a scheme of generalized tariff preferences2. The application of the GSP Plus system allowed access to the zero customs tariff of about 88% of Moldovan exports to the EU;
2. Central European Free Trade Agreement (CEFTA3), in force since 19 December 2006 between the Republic of Moldova and the European countries: Albania, Bosnia and Herzegovina, the Republic of Macedonia, Montenegro, Croatia, Serbia, Kosovo) on free trade for Central Europe. CEFTA 2006 replaced CEFTA concluded in 1992 and bilateral free trade agreements. The agreement provides a legal framework for the development of bilateral and multilateral trade and economic relations between the RM and the Central European countries by excluding customs duties and the inclusion of tariff quotas for imports and exports of products from CEFTA member countries;
3. The Agreement on Autonomous Trade Preferences (ATP) was granted to the Republic of Moldova by the EU, following the approval of Council Regulation (EC) no. 55/2008 of 21 January 20084, starting from 1 March 2008 for the period 2008-2012 and then extended for the period 2013-2015 for all products originating in RM, except for sensitive products on the Community market. The European Commission has approved the increase of tariff quotas and the exemption of customs duties on exports from the Republic of Moldova for a series of sensitive agricultural products. The Republic of Moldova benefited from the EU's ATP, including 1.5 years after the enactment of AA and DCFTA.
1 Title V of the AA, http://www.mfa.gov.md/img/docs/Acordul-de-Asociere-RM-UE.pdf 2 Council Regulation (EC) No 980/2005 of 27 June 2005. www.mfa.gov.md/img/docs/regulament_consiliu_md.doc 3Central European Free Trade Agreement – http://www.mfa.gov.md/gae/ac.ACORDUL%20GENERAL%20PENTRU%20TARIFE%20VAMALE%20SI%20COMERT%20(%20GATT%201947%20).html 4 Council Regulation (EC) no. 55/2008 of 21 January 2008, http://www.mec.gov.md/sites/default/files/document/regulamentul-consiliului-din-21-ianuarie-2008-privind-introducerea-unor-preferinte-comerciale-autonome.pdf
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Thus, the implementation of the Deep and Comprehensive Free Trade Agreement (DCFTA) aims at eliminating customs duties on imports and exports in the trade of products between the 28 countries of the European Union and the Republic of Moldova, by removing barriers to trade in services and better access for domestic companies to EU markets.
On the other hand, the DCFTA RM-EU, in accordance with the provisions of AA and Article XXIV of the General Agreement on Tariffs and Trade 1994 (GATT 19945), implies the gradual liberalization of trade in goods and services, the free movement of labour, the reduction of technical and non-tariff barriers, the abolition of quantitative restrictions and the harmonization of Moldovan legislation with the EU Acquis.
The implementation aspects of the preferential trade relations between the European Union and the Republic of Moldova are stipulated in Title V of AA "Trade and Trade Related Aspects", comprising 15 chapters and 270 articles (pages 134-560 of the AA), which regulate:
(I) DCFTA's "Free" aspect: better access to the market, elimination of import and export duties, removal of other barriers to trade in products and services;
(II) DCFTA's "Deep" aspect: creating closer political and economic ties with the EU in the areas of food safety / sanitary and phytosanitary measures, technical regulations and standards for industrial goods, public procurement, trade and customs services and facilities;
(III) DCFTA's "Comprehensive" aspect, with an impact on: public procurement, competition policies, intellectual property protection and sustainable economic development.
Thus, the DCFTA brings together tariff and customs duties, harmonized with those of the EU, in a single legislative act. The basic implementation instruments – application of DCFTA, which ensure the economic sector of the Republic of Moldova to benefit fully from the opportunities offered by the preferential trade regimes with the EU, are:
1. National Action Plan for the Implementation of the Moldova-EU Association Agreement in the period 2014-2016 (GD No 808 of the 07.10.20146),
2. The Roadmap for Improving Competitiveness in the Republic of Moldova (GD No 4 of the 14.01.20147).
In this context, the DCFTA includes a series of structural economic changes aimed at reforming trade and trade policies of the Republic of Moldova, in line with the EU Acquis. DCFTA's ongoing implementation will ensure the restructuring and modernization of the economy, the attraction of EU investments in the RM, the enhancement of the quality and competitiveness of domestic products on the local and export markets and a more favorable environment for the development of foreign trade.
5 General Agreement on Tariffs and Trade 1994, http://www.mfa.gov.md/gae/ac.ACORDUL%20GENERAL%20PENTRU%20TARIFE%20VAMALE%20SI%20COMERT%20(%20GATT%201947%20).html 6 Government Decision No 808 of the 07.10.2014, http://lex.justice.md/index.php?action=view&view=doc&lang=1&id=354939 7 Government Decision No 4 of the 14.01.2014, http://lex.justice.md/viewdoc.php?action=view&view=doc&id=351253&lang=1
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II. WHAT PROVIDES THE DEEP AND COMPREHENSIVE FREE TRADE AREA FOR THE TRADE WITH AGRICULTURAL PRODUCTS AND AGRICULTURAL PRODUCTS?
The implementation of the DCFTA between the Republic of Moldova and the European Union implies the gradual liberalization of trade in goods and services, the reduction and elimination of customs duties, the removal of technical and non-tariff barriers, the abolition of import quotas and the harmonization of the legislation of the Republic of Moldova to Acquis Communautaire of the EU.
The application of DCFTA generally provides for the implementation of preferential aspects and liberalization of trade between the Republic of Moldova and the European Union. The relevance of the implementation of these provisions for the agri-food sector in the Republic of Moldova has the following specific elements:
1) Trade liberalization and the elimination of tariff obligations by excluding and immediately reducing all import duties for all Moldovan products on the EU market and vice versa. In accordance with Title V, Chapter 1 (National Treatment and Market Access of Goods) and Article 147 (p. 138) of the AA on the establishment of the DCFTA, "each Party shall reduce or eliminate the customs duties applied to goods originating in the other Party, in accordance with Annex XV to this Agreement" from the date of entry into force of the Agreement, except for the categories of goods indicated in that Annex. Some exceptions to this are provided in the AA by including: (i) the tariff quotas (export quotas), by quantitative restrictions on the volume of imports free of customs duties from the RM to the EU; (ii) the maintenance of some specific import taxes (entry-price) for Moldovan products in the EU; (iii) implementation of the mechanism of protection against the re-export of agricultural products considered sensitive in the EU; and (iv) tariff concessions on the RM’s domestic import for the EU goods under the duty free regime or the gradual reduction of import duties on certain sensitive products:
i. Tariff quotation (export quotas) set for certain products (apples, plums, tomatoes, garlic, table grapes, grape juice and grape must), which impose a quantitative restriction on import volumes in the EU, without the application of customs duties (Annex XV-A of AA8). Tariff quotation is a volume of goods expressed in quantity or in value, which may be released for free circulation, without application of the customs duty. Tariff quotation are set for a certain period of time, after the expiry of which, the goods can not benefit from a reduction or exemption from customs duties. The increase of the tariff quota quotation may be made by submitting the application by one of the parties and acceptance by the other party. Exports in larger volumes than those provided for in the tariff quotas will be subject to a most-favored-nation duty. For some sensitive products for the Republic of Moldova (wine, certain processed agricultural products, meat products, fruit and vegetables) there is a phase of liberalization of imports between 3 and 10 years, depending on the product. These products remain within the tariff quotas established in trade flows between the EU and the RM.
ii. Specific import taxes (entry-price) for a limited category of fruit, vegetables and unfermented grape must, the Republic of Moldova and the European Union have agreed to keep a price for entry into the EU (Annex XV-B of AA9). Imports of these sensitive products are exempt from import tax (ad valorem
8 RM-EU Association Agreement, Annex XV-A, pg. 683 9 RM-EU Association Agreement, Annex XV-B, pg. 685
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duty), but instead are subject to a specific entry tax (entry-price). Over time, there is a mechanism to liberalize trade flows on imports into the EU of these products.
iii. Implementing the mechanisms against anti-circumvention (re-export) of agricultural products considered sensitive in the EU (pork and poultry, eggs and egg albumin, grain and milling products, sugar, cigarettes, dairy products and sugary processed), which are subject to trade flows monitoring (see Annex C of AA10). This monitoring includes the implementation of the mechanism against DCFTA anti-circumvention and involves ensuring imports of products classified as manufactured in the Republic of Moldova that correspond to the country's production capacity and that re-exports of products originating in other countries do not take place.
iv. EU tariff concessions on imports into the local market of the Republic of Moldova, by applying (Annex XV-D of AA11): (a) a limited duty-free quota for certain domestically-sensitive products; and (b) in the form of a gradual liberalization or a gradual reduction of import duties (for a period from 3,5 to 10 years). Products included in this field are products of the animal domain (meat, by-products, dairy products), vegetables, fruits, berries, table grapes, sugar and sugar products, cereal products, juices, wines and cognacs.
2) The rules of origin contain provisions on the application of the procedure for the authentication and issuance by the customs authorities of certificates of origin of goods exported from the Republic of Moldova under DCFTA. Another part of this rule provides for the protection of geographical indications and designations of origin of agricultural and food products in the EU, as well as registration - protection of geographical indications and designations of origin in the Republic of Moldova.
3) Implementation of EU food safety norms and standards, sanitary and phytosanitary measures in the Republic of Moldova, thus enhancing the safety, harmlessness, competitiveness and penetration capacity of Moldovan products on the EU and world markets. In this context, the DCFTA provides for the establishment of expert-level committees to ensure co-operation and to resolve possible misunderstandings between the parties in different areas covered by the agreement.
III. OBJECTIVES AND ADVANTAGES OF DCFTA IMPLEMENTATION FOR THE AGRICULTURAL AND AGRI-FOOD SECTOR
The foreign trade of the Republic of Moldova with agricultural and food products is an important part of commodity trade with the European Union. The EU, with an increased consumption of agricultural and food products, is the main business partner and main outlet for goods in the Republic of Moldova. Starting with September 1, 2014, with the implementation of AA and DCFTA, only within 2 years, Moldova exported goods and merchandise worth over EUR 3.2 billion. There were intensified bilateral economic relations with all 28 EU states, and only in 2015 - the first year of implementation of DCFTA - direct investments were made in Moldova's economy worth more than EUR 215.5 million.
Exporters in the Republic of Moldova have direct and unlimited access to the largest market in the world, which includes 28 member countries, with over 500 million consumers and a gross domestic product (GDP) of over EUR 14 702.1 billion. The expected
10 RM-EU Association Agreement, Annex XV-C, pg. 688-708 11 RM-EU Association Agreement, Annex XV-D, pg.709-778
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benefits of the DCFTA are directly related to the specific objectives proposed for implementation.
The provisions of AA and DCFTA have as major objective to secure a multi-sectoral economic growth, favouring and intensifying the trade in goods and services between the Republic of Moldova and the EU through the gradual reduction and elimination of import customs duties, increased trade flows and competitiveness of domestic products. Implementation of DCFTA also ensures the achievement of specific objectives, such as:
1. Ensuring the free movement of goods and stimulating bilateral trade; 2. Increasing the quality of goods - services and their competitiveness in the local
market and exports towards the EU and world markets; 3. The bilateral reduction of customs duties and tariffs on imported products, and
consequently, more accessible products for Moldovan and EU consumers; 4. Adjusting national standards to European ones on several segments: sanitary -
veterinary and phytosanitary requirements for goods, services and investments, public procurement, etc.;
5. Ensuring fair competition on the internal market.
The advantages of the DCFTA implementation create favourable conditions for boosting the real sector of the Moldovan economy for the next 10 years and their impact is felt by the agricultural and agri-food sector, Moldovan exporters, EU importers and consumers on both sides. In particular, we will list for each group of actors in the real economy of the RM the advantages offered by the implementation of DCFTA.
Advantages of DCFTA for the agricultural and agri-food sector of the Republic of Moldova: 1. Increasing the competitiveness, accessibility and attractiveness of Moldovan
agricultural products on the EU market due to the elimination of EU import taxes; 2. New EU market opportunities and higher quality goods standards in the RM; 3. Increasing the investment attractiveness and business opportunities of the agri-
food sector in the Republic of Moldova; 4. Providing free technical and financial assistance to modernize agri-food sector of
agriculture; 5. Improving working conditions and increasing employment levels.
Advantages of DCFTA for exporters of the Republic of Moldova: 1. Unrestricted access, clear rules of play and no tariff restrictions on imports into the
Community market of agricultural and industrial products; 2. Free and unconditional access to the Community services market; 3. The elimination of customs duties, and with time, of the tariff contingencies; 4. Development and stimulation of joint business with EU partners; 5. Overtaking the European standards into product quality; 6. Fair market competition without political involvement; 7. Coverage and extension of protection on intellectual property objects.
Advantages of DCFTA for importers: 1. Access to national distribution networks and the launch of international business; 2. Increase in foreign direct investment in the economy; 3. Predictability of the bilateral legal framework and the liberalized market; 4. Removing tariff, non-tariff and technical barriers to trade; 5. Establish a viable dispute settlement mechanism.
Advantages of DCFTA for consumers: 1. Access to a wider and diversified range of products; 2. Lower prices as a result of increased competition; 3. Higher quality of both domestic and imported products.
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The implementation of the DCFTA led to the liberalization of foreign trade, access to a safe market and the disappearance and reduction of many taxes on the export of agri-food products from the Republic of Moldova. Trade with the European Union at the moment provides access to a wide variety of products available to local consumers and business opportunities and long-term investment. In view of the increasing importance of the national agricultural sector in the future, with the rising and still unexplored potential, due to the increase of world food demand, the deepening of trade relations with the EU is quite beneficial and guarantees a favourable position in the international market in the future.
IV. TRADE EXCHANGES BETWEEN THE REPUBLIC OF MOLDOVA AND THE EUROPEAN UNION IN TERMS OF AGRICULTURAL AND AGRI-FOOD PRODUCTS
4.1. Export, import and trade balance in the foreign trade of the Republic of Moldova
Over the past two years, since the signing of the AA and the DCFTA with the European Union, there has been a diversification of exports and a massive reorientation of Moldovan agricultural and agri-food exports from traditional Eastern markets to the European market. Trade between the Republic of Moldova and the EU in terms of agricultural and agri-food products has evolved dynamically over the last decade. Since 2005, the EU has become the main trading partner of the Republic of Moldova, and at the end of 2016 the level of 65% of exports oriented to the European market.
The intensification of trade relations between the Republic of Moldova and the EU in the last decade is based on the enactment of the Generalized System of Preferences (GSP Plus) as of January 1, 2006, by unilateral cancellation by the EU of customs duties for a number of Moldovan products) and the free and preferential trade regime introduced by DCFTA (since 1 September 2014), but also as a consequence of the introduction by Russia of tariff and non-tariff measures on products of Moldovan origin from 2006. The decline in trade with the traditional market of the Commonwealth of Independent States (CIS), and especially with the Russian Federation, has been more pronounced since 2014, when embargoes were applied to most of Moldovan exported products.
Table 1: Exports, imports and trade balance of the foreign trade of the Republic of Moldova in the years 2011-2016
Export - Import and Trade Balance
Year 2011
Year 2012
Year 2013
Year 2014
Year 2015
Year 2016
Exports - total (US $ million), of which in% 2216,8 2161,9 2428,3 2339,5 1966,8 2045,3 - CIS countries 41,5 42,9 38,0 31,4 25,0 20,3 - countries of the European
Union 48,9 46,9 46,8 53,3 61,9 65,1 - other countries of the world 9,7 10,2 15,1 15,3 13,1 14,6 Imports - total (US $ million), of which in% 5191,3 5212,9 5492,4 5317,0 3986,8 4020,3 - CIS countries 33,0 31,1 30,4 27,3 25,5 25,6 - countries of the European
Union 43,5 44,5 45,0 48,3 49,0 49,1 - other countries of the world 23,5 24,4 24,5 24,4 25,4 25,4 Trade Balance - total (US $ million), of which in% -2974,5 -3051,0 -3064,1 -2977,5 -2020,0 -1975,0 - CIS countries 26,7 22,8 24,4 24,0 26,0 31,0 - countries of the European
Union 39,4 42,8 43,6 44,4 36,5 32,5 - other countries of the world 33,9 34,4 32,0 31,6 37,5 36,5
Source: NBS and CS of RM
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The establishment of the embargo by the Russian Federation in 2014 by introducing requirements and exemptions from the free trade regime (the inspection of agricultural enterprises in Moldova by the Federal Service for Veterinary and Phytosanitary Surveillance, the registration and acceptance of processing products in Moldova by the Federal Service of Supervision in the field of Protection of Consumers' Rights and Social Protection, and based on them, the elaboration of lists of companies entitled to export) created artificial barriers in the trade relations between RM and CIS. These consequences have led to the fact that, since 2013, the share of exports to the CIS has decreased from 38% to 20.3% in 2016 and trade with the Russian Federation has decreased from 26% in 2013 to 12% in 2016 (Table 1). Imports from CIS in Moldova also registered a decline from 30.4% in 2013 to 25.6% in 2016.
The created conjuncture of the foreign markets determined a large part of the Moldovan economic agents to identify new markets and niches for export, mainly in the European markets but also in the previously unexplored region such as the Mediterranean, the Middle East and Asia, where some of the domestic products have penetrated these new markets.
As mentioned, the European Union since 2005 is the main trading partner for RM, after the CIS countries. The share of total exports of goods to the EU in the last six years has grown dynamically and continuously from approx. 49% in 2011 (EUR 847.1 million) to 65.1% in 2016 (EUR 1317.2 million), while the share of imports from the EU had a more modest growth - from 43.5% (EUR 1862.2 million) to 49.1% (EUR 2026.1 million), respectively. Generally, 2 years after the implementation of the DCFTA, the Republic of Moldova registered a significant increase of approx. 16% of exports to the EU and an increase of approx. 8% of imports from the EU.
As regards the trade balance, since 2005, after the EU was registered as the main trading partner of the Republic of Moldova, and during 2011-2016, the trade balance as a whole with the EU remains negative, but after the enactment of DCFTA, it decreased from EUR 1192 million in 2014, to EUR 709 million in 2016, registering a decrease of approx. 40%. Decreasing and stabilizing the trade balance in the last 2 years is due to the higher growth rate of exports and the same share of imports from the EU.
Figure 1: Export relations, import and trade balance in trade between the Republic of Moldova and the European Union in the years 2011-2016
Source: Author, based on NBS and Eurostat data
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4.2. Export, import and trade balance in trade in agri-food and related products in agriculture between the Republic of Moldova and the European Union
The Agreement establishing the DCFTA with the European Union, initiated on 29 November 2013 at the Eastern Partnership Summit in Vilnius and signed on 27 June 2014, provided the Republic of Moldova with the tools and framework necessary to diversify and modernize its trade relations, Prerequisites for economic growth and new outlets, especially for the agricultural sector. The agrarian sector has been and remains, the main pillar of the national economy of the Republic of Moldova, its contribution to GDP creation in the last 5 years being of approx. 12-13% and agricultural production and processing account for about 50% of export earnings.
The trade exchanges between the Republic of Moldova and the EU in terms of agricultural and agri-food products during 2011-2016 also had a dynamic rise, but unlike other sectors of the national economy, have registered the most significant changes in the structure of exports - imports and generated a positive net trade balance of approx. EUR 174 million in 2016.
Figure 2: Export relations, import and trade balance in trade of agri-food and agricultural products between the Republic of Moldova and the European Union in the years 2011-2016
Source: Author, based on NBS and Eurostat data
Thus, according to Fig. 2, we can see that in the period 2011-2016 the share of exports of agricultural and food products related to agriculture between the Republic of Moldova and the European Union increased from EUR 278 million to EUR 504,2 million in 2016, reaching a growth of over 45%, while imports grew by only 22.3% - from EUR 265.6 million to EUR 330.3 million in 2016. The trade balance on agri-food and agriculture-related products between the Republic of Moldova and the European Union recorded only negative values in the years 2012-2013, and after the implementation of the DCFTA (in 2016 compared to 2014) increased more than 5 times, registering a positive surplus of approx. EUR 174 million.
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In this Study, for a broader analysis and evidence of the impact of DCFTA implementation between the Republic of Moldova and the EU, have been assessed and compared the trade exchanges between the parties for two consecutive periods of 2013-2014 (prior the beginning of DCFTA implementation) and 2015-2016 (after 2 years of DCFTA implementation). Subsequently, the analysis and interpretations of trade data by product group are then carried out in comparisons between 2 years prior and the beginning of implementation and 2 years after the implementation of DCFTA. In the case of some products, there are presented the import-export tendencies for some years.
The analysis and interpretation of statistical data kindly provided by the National Bureau of Statistics and collected from the European Statistical Service (Eurostat - http://exporthelp.europa.eu/thdapp/display.htm?page=st%2fst_Statistics.html&docType=main&languageId=en), was carried out on the basis of the Combined Nomenclature of Goods of the Republic of Moldova (Law on the approval of the Combined Nomenclature of Commodities, No. 172 of 25.07.2014) and Harmonized Commodity Description and Coding Systems (HS), by sections and chapters, as well as on products which are part of the product group to which certain taxes, tariff quotas and anti-circumvention are applied.
To ensure a more efficient grouping of subgroups of agri-food and agricultural commodity subgroups and easier data analysis in the Study, two groups of combined products were indicated, such as: (i) the mix of edible products (includes subgroups of products such as: 09-coffee and tea; 16-meat and fish preparations; 18-cocoa and cocoa preparations; 19-cereal preparations; 20-vegetables and fruit preparations and 21 different food preparations) and (ii) other agri-food products (includes subgroups of products such as: 06-living trees and other plants; 14-braiding materials; 3310-essential oils; 23-food preparations for animals; 24 tobacco; 31-fertilizers and 41-hides). All these product sub-groups do not have an essential and major volume of trade between the RM and the EU but are of interest in the future as potential niches for penetration and diversification of the EU market.
According to Eurostat in 2016, trade in agri-food and agriculture-related products between the Republic of Moldova and the European Union reached a value of approx. EUR 834.5 million and represents approx. 25% of total trade between Moldova and the EU. The implementation of DCFTA has led to a significant increase in trade between the RM and the EU in general and in particular for agri-food and agriculture-related products. These changes are due both to the liberalization of trade and the elimination of tariff obligations, but also to the integration of the economic sectors between the parties, the improvement of the investment climate in the Republic of Moldova and the creation of several joint companies in the fields of production, services, processing and export - import with the EU partners. A conclusive example could be the increase in the number of exporting companies in the EU, from approx. 1000 units in 2013, up to approx. 1360 units in 2016. Attractiveness and clear playing rules on EU markets determine the choice made by local entrepreneurs.
Export of agri-food products and related to agriculture from RM to the EU
According to the statistical data provided by the National Bureau of Statistics and on the basis of data from the European Statistical Service (Eurostat) compared to the years 2013-2014, before and at the beginning of DCFTA implementation, and in 2015-2016, over 2 years of the implementation of DCFTA, we see a steep increase in exports for most product groups (Figure 3).
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In the years 2015-2016, the largest increases in the volume of exports of agricultural and food products related to agriculture in the Republic of Moldova and the EU (compared with the years 2013-2014), were registered with an increase of approx. EUR 3 million for the export of livestock and livestock products and up to EUR 49.8 million for cereals and milling products. The most exported product groups in EU trade and the highest rate of increase of market penetration were: (i) beverages (an increase from EUR 20.4 million in 2014 to EUR 50.5 million in 2016); (ii) sugar (an increase from EUR 11,2 million in 2014 to EUR 40,1 million in 2016); (iii) oilseeds (an increase from EUR 48.6 million in 2014 to EUR 100.9 million in 2016); (iv) cereals and milling products (an increase from EUR 20.4 million in 2014 to EUR 50.5 million in 2016) and relatively (v) fruit and vegetables (an increase from EUR 77.6 million in 2014, with a jump to EUR 87 million in 2015 and decrease to EUR 80.3 million in 2016). However, in the product groups, such as the mix of edible products and fats - animal fat and vegetable oils, there was a decrease in export volumes in the last years, namely by EUR 5 and 7 million (Figure 3).
Figure 3: Export and volume of growth or decrease of exports by agri-food and related agricultural products between the RM and the EU in the years 2013-2014 and 2015-2016
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Source: Author, based on NBS and Eurostat data Compared to the years 2014-2016, the volume of agricultural and food-related agricultural exports between the RM and the EU increased by 32% on average, and currently it has a share of approx. 35-37% of all goods exported to the EU.
In the structure of exports, comparing the years 2013-2014 and 2015-2016 (Figures 4-5), we notice essential changes in the increase of export quotas on Moldovan products in the EU - between 1.2-7%, - especially in cereals and milling products (an increase of 7%), oilseeds (5.3% increase), beverages (1.2% increase) and a decrease in the average from 0.3-5.7% for agricultural machines, fruits and vegetables, mix of edible products, fats and oils of animal and vegetable origin. The structure of Moldovan exports to the EU denotes exports of approx. 70% of primary agricultural products and primary processed agri-food products (excluding raw materials and medium-value added products), which does not allow a more efficient and higher yield to penetrate and explore the EU market.
Import of agri-food products and related to agriculture from Moldova to the EU
Imports of agricultural and food products from the EU to Moldova in the period 2013-2016, as opposed to exports, have undergone a dramatic and cardinal change by slowing down and stabilizing, and in some areas - groups of products - even declining. Imports of agri-food and agriculture-related products in 2016 amounted to EUR 360.4 million, down by 5.5%, compared to 2014 (EUR 381.5 million), thus – prior and at the beginning of the DCFTA implementation.
In the years 2015-2016, compared with the years 2013-2014, imports of agricultural machinery decreased by approx. EUR 16.5 million (-22.3%), vegetables and fruits with approx. The translation can be taken from above EUR 8,7 million (-27,8), cereals and milling products with approx. The translation can be taken from above EUR 2.1 million (-13%) and other agricultural and agri-food products with approx. EUR 15.8 million (-14.4%), thus influencing the decrease on the total imports in average by approx. 5.5% (Figure 6). There is a slight increase in imports from the EU to Moldova for the product groups: live animals and animal products (+ 5.1%), oilseeds (+ 32.2%) and the edible product mix (+12%).
Figure 4. Structure of exports by group of agri-food and agriculture-related products
between the RM and the EU in the years 2013-2014
Figure 5. Structure of exports by group of agri-food and agriculture-related products
between the RM and the EU in the years 2015-2016
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Figure 6: Import and volume of growth or decrease of imports by group of agri-food and agricultural products between the RM and EU in the years 2013-2014 and 2015-2016
Source: Author, based on NBS and Eurostat data
It is relevant that the decrease of EU imports into the RM by agri-food and agriculture-related product groups is directly proportional to the increase of Moldova's exports to the EU in some of these positions. However, the implementation of DCFTA has opened opportunities for Moldovan entrepreneurs not only to explore EU markets but also to produce and substitute similar agricultural products that were previously imported from the EU.
In the structure of imports, comparing the years 2013-2014 and 2015-2016 (Figures 7-8), there are no significant changes in the increase of the import quotas by EU product groups in the Republic of Moldova. Decreases were in the average between 1.9-3.5%, particularly for imports of fruit and vegetables (-1.9%), other food (-2.7%) and agricultural machinery and tractors (-3, 5%) and an average increase of 0.5-2.4% on imports of fats and oils (+0.5%), sugar and sugar products (+0.8%), live animals and livestock products, 6%), oilseeds (+ 1.9%) and the mix of edible products (2.4%).
The structure of imports from the EU to Moldova shows that approx. 75% represents the import of agricultural machinery and industrially processed agri-food products (excluding high added value products).
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In conclusion, after two years of DCFTA implementation, based on the export - import relations between the RM and the 28 EU states, we can notice significant changes in the significant increase by approx. 32% of exports of agri-food and agriculture-related products and the decrease of import in average by approx. 5.5%. The structure of Moldovan exports to the EU denotes exports of approx. 70% of primary agricultural products and primary processed agri-food products (excluding raw materials and products with medium-to-low added value), and imports from the EU to approx. 75%, representing the import of agricultural machinery and industrially processed agri-food products (excluding high added value products).
Source: Author, based on NBS and Eurostat data
Figure 7. Structure of imports by group of agri-food and agriculture-related products
to between the RM and the EU in the years 2013-2014
Figure 8. Structure of imports by group of agri-food and agriculture-related products
to between the RM and the EU in the years 2015-2016
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V. GEOGRAPHICAL ORIENTATION OF EXPORTS AND IMPORTS OF AGRI-FOOD AND AGRICULTURAL PRODUCTS FROM THE REPUBLIC OF MOLDOVA IN THE EU
The geographical orientation of Moldovan exports and imports in the agri-food and agriculture-related trade with the 28 EU member states is mainly directed with the neighbouring countries as Romania, Bulgaria, Poland and the European countries with the strongest economies. In trade relations between the RM and the EU, approx. 90% of the exports and approximately 86% of imports are provided by trade with 10 European countries: Romania, Germany, France, Italy, Poland, Spain, Greece, Austria, Netherlands, Czech Republic.
5.1. The geographical export orientation of agri-food products from RM to the EU countries
In 2014, until the implementation of DCFTA, the top 10 Moldovan export partners were Italy, Romania, Germany, France, Poland, Greece, Austria, Spain, Czech Republic and Belgium, of which the first five countries insured the import of cca. 70% of agri-food products and products related to agriculture (especially fresh agricultural products and raw materials) (Table 2). After two years of DCFTA implementation, exports of agri-food and agricultural products from the Republic of Moldova underwent a reorientation and diversification through the exploration of new markets. In 2016, the first 10 countries of destination for Moldovan exports were: Romania (with a share in total RM exports of 26.9%), Italy (15.1%), Greece (8.9%), Poland (6.6%), France (6.1%), Spain (6.0%), Germany (5.5%), Austria (4.1%), the cumulated share of these countries being of approx. 90% of the total export of agri-food and agriculture-related products in the Republic of Moldova.
Table 2: Exports of agri-food and agricultural products from the Republic of Moldova to European countries (2014 and 2016)
No Country
Exports from
Moldova in 2014 (EUR
million)
Share of total
exports (%) Country
Exports from
Moldova in 2016
(EUR million)
Share of total exports
(%) 1 Italy 106,0 28,1 Romania 134,7 26,9 2 Romania 65,0 17,2 Italy 75,8 15,1 3 Germany 31,1 8,2 Greece 44,6 8,9 4 France 29,5 7,8 Bulgaria 38,3 7,6 5 Poland 28,0 7,4 Poland 32,9 6,6 6 Greece 19,9 5,3 France 30,3 6,1 7 Austria 18,9 5,0 Spain 30,1 6,0 8 Spain 11,4 3,0 Germany 27,7 5,5 9 Czech Republic 8,8 2,3 Austria 20,5 4,1 10 Belgium 8,4 2,2 Ciprus 14,5 2,9
Source: Author, based on NBS and Eurostat data
5.2. Geographical orientation of import of agri-food products from EU countries to RM
Prior the implementation of the DCFTA, the main 10 partners in the import relations of agri-food products from EU countries to the Republic of Moldova were Italy, Romania, Germany, France, Poland, Greece, Austria, Spain, Czech Republic and Belgium, 3 countries ensured the import of approx. 52% of agri-food products and related to agriculture on the Moldovan market (Table 3).
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Table 3: Imports of agricultural and food products from European countries to the Republic of Moldova (2014 and 2016))
No Country
Import from the EU in
2014 (EUR
million)
Share of total imports
in Moldova (%) Country
Import from the
EU in 2014 (EUR
million)
Share of total imports in Moldova
(%) 1 Italy 64,3 18,5 Romania 77,7 23,5 2 Romania 60,9 17,5 Italy 52,5 15,9 3 Germany 55,8 16,0 Greece 37,0 11,2 4 France 23,2 6,7 Bulgaria 29,1 8,8 5 Poland 22,6 6,5 Poland 28,7 8,7 6 Greece 20,0 5,7 France 20,1 6,1 7 Austria 13,7 3,9 Spain 16,0 4,8 8 Spain 9,9 2,9 Germany 8,2 2,5 9 Czech Republic 8,8 2,5 Austria 7,9 2,4 10 Belgium 8,1 2,3 Ciprus 7,9 2,4
Source: Author, based on NBS and Eurostat data
After two years of implementation of the DCFTA, the composition of the main partners in import relations did not change significantly, but their redistribution took place so that at present Romania is the main European country from which the most massive imports of agri-food products are made in the Republic of Moldova.
VI. IMPACT ASSESSMENT OF DCFTA - MODIFICATION OF EXPORTS AND IMPORTS OF THE REPUBLIC OF MOLDOVA
6.1. Impact of the DCFTA implementation on the changes in exports from RM to the EU
Within two years from DCFTA enactment, there have been significant qualitative and quantitative changes in exports and imports of agricultural and food products related to agriculture in trade and trade flows between the Republic of Moldova and the European Union. Increasing the export volumes of agri-food and agriculture-related products from Moldova to the EU markets were directly influenced by the availability of qualitative, quantitative and homogeneous domestic products, the conjuncture and demand of the EU market, and less the tariffs and quotas foreseen and applied in accordance with AA.
In Moldovan exports to the EU by product and product groups in 2016, as compared to 2014, were highlighted the following key changes:
1. Products of the animal origin are explored by Moldovan exporters almost exclusively to honey: approx. 86% of the export is oriented to 4 European countries: Romania (EUR 2.1 million or about 30%); Italy (EUR 1.8 million or about 25%), Austria (EUR 1.2 million or about 17%) and France (EUR 1 million or about 14%);
2. Vegetables and fruits. Export of vegetables is quite modest, representing up to 2 million euros and approx. 90% export is oriented to 3 European countries, Romania (EUR 1.2 million or 60%); Bulgaria (EUR 0.5 million or about 25%) and Italy (about 5%).
The export of fruit and table grapes from Moldova to the EU in 2016 was worth 78.5 million euros or approx. 19% of total exports of agri-food and agriculture-related products, and approx. 87% export of these products are directed to 7 European
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countries, France (EUR 23.8 million or 30%), Romania (EUR 12.4 million or 16%); Austria (EUR 9.2 million or around 12%), Germany (EUR 9 million or about 11%), the Netherlands (EUR 5.2 million or around 7%), Italy (EUR 5.1 million) or around 6%) and the United Kingdom of Great Britain and Northern Ireland (EUR 5 million or 5%).
Unfortunately, the export of fruit and table grapes from Moldova to the EU is represented with cca. 96% only by 4 products: (i) husked walnuts with approx. 78-80% of fruit exports; (ii) table grapes, approx. 11-12% of fruit exports; (iii) plums, ca. 3-4% of fruit exports and (iv) dried plums, approx. 4-5% of fruit exports:
(i) Husked walnuts (nut core), in 2016 it registered an export value of EUR 60.9 million or approx. 12% of total exports of agri-food and agriculture-related products, and approx. 88% of exports are geared to 7 European countries, France (EUR 23.3 million or 38%), Austria (EUR 9.2 million or 15%), Germany (EUR 8.5 million or around 14%), the Netherlands (EUR 5 million or about 8%), Italy (EUR 4.1 million or around 7%) and the United Kingdom of Great Britain and Northern Ireland (EUR 3.9 million or about 6%). Good conjuncture and diversification of the walnut market are attested in the markets of Greece, Denmark, Belgium, Portugal, Spain and the Baltic States;
(ii) Table grapes, in 2016 the table grapes have an export value of approx. 8.8 million euros (in physical volume 6.129 million tons), cca. 94% of exports are directed to Romania (EUR 8.2 million). At the moment the export markets are diversified through promotional deliveries on the markets of Bulgaria, Poland, Spain and the Baltic Countries;
(iii) Plums delivered fresh, In 2016 they registered an export value of approx. 2.6 million euros (in physical volume 6.129 million tons), and approx. 93% export is geared to 2 countries: Romania (EUR 2.2 million or 83%) and the Czech Republic (EUR 0.26 million or 10%). Currently, the export markets are diversified by delivering small deliveries to the markets of Slovakia, Croatia, Poland and the Baltic Countries;
(iv) Dried plums, in 2016 they registered an export value of approx. EUR 3.3 million, ca. 84% of exports are geared towards 5 countries, Romania (EUR 0.9 million or about 28%), Bulgaria (EUR 0.48 million or around 15%), France (EUR 0.5 million or approx. 15%), Poland (0.48 million or 15%) and Germany (EUR 0.36 million or 11%). Earlier in the years 2013-2015, the main importing country of dried plums was Poland, but at the moment Polish importers have reoriented their import of dried plums from Serbia and Bosnia and Herzegovina. It is important to recapture this traditional market for the export of dried plums, with annual exports of over EUR 1-1.2 million. The export markets are currently diversifying through promotional deliveries to markets in Austria, the Czech Republic, Denmark, the Netherlands and the United Kingdom of Great Britain and Northern Ireland;
(v) As regards the export of fruit and, in particular, of the most produced fruit in the Republic of Moldova - apples (annually RM has capacities and possibilities to export over 150 thousand tons of apple) - in 2014 with the provisional entry of the DCFTA after the embargo to the majority of Moldovan products by the Russian Federation, there have been created favourable premises for exporting apples to the EU. The opening of EU markets to apples from the RM in 2014 was a time which saved the sector, with over 1600 tons of value over EUR 0.5 million (average 0.31 euro / kg) being exported. Subsequently, in the years 2015-2016,
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there was a drastic decline in exports, caused both by the lack of certification and adequate packaging, the ability to deliver large and homogeneous fruit lots and the poor penetration capacity - exploration of EU markets by indigenous producers.
3. Cereals and milling products. The export of primary cereals and milling products from RM to the EU in 2016 registered an equivalent of EUR 121.6 million, with approx. 97% export oriented to 5 European countries: Italy (EUR 46.3 million or 38.5%); Greece (EUR 33.9 million or about 28.2%), Cyprus (EUR 13.9 million or around 11.6%), Romania (EUR 12 million or about 10%) and Spain (EUR 10 million or about 8.3%). Within the structure of the export of cereals and milling products the export of primary cereals predominates to 99%: (i) wheat grains in the amount of EUR 75,9 million (483,4 thousand tons) or 62,4% of the total cereals; (ii) barley grains in the amount of EUR 11.3 million (74.2 thousand tons) or 9.3% of the total cereals, and (iii) maize grains in the amount of EUR 33 million (189 thousand tons) or 27%. 64% of wheat beans are exported to Italy (42%) and Greece (24%), barley grains in the proportion of 77% are exported to Cyprus (56%) and Greece (21%), and maize with 81% are exported to Italy (41%) and Greece (40%). The milling products in the external export are poorly capitalized by the Moldovan entrepreneurs, in 2016 only 6 thousand tons of flour are exported at the value of 1.3 million euros, in special to the neighbouring countries: Romania (72% of the export by product), Bulgaria (11%) and some modest deliveries in Germany and Austria. The limited number of partners in external trade in cereals and milling products limits the diversification of markets, creates risks, and the selling price is very dependent on market conditions.
4. Exports of oil seed crops registered a significant leap in 2016 compared to 2014, registering a double increase in both, in physical volume (263 thousand tons and 129 thousand tons respectively) and in value (respectively EUR 100, 9 million and EUR 48.6 million). The quantum leap is exclusively due to the export of sunflower seeds from EUR 32 million in 2014 to EUR 84 million in 2016 on the background of the reduction in the export of rape seeds (EUR 10.2 million and EUR 8.6 million) and with a slight increase in the export of soya beans (EUR 4.9 million and EUR 5.4 million respectively). The main partners in the trade of sunflower seeds are: Romania (EUR 48.7 million or about 57.9%), Bulgaria (EUR 15.9 million or about 18.9%), Poland (EUR 5.2 million or about 6.2%) and Germany (EUR 4.3 million or about 5.1%).
5. The export of fats and oils of animal and vegetable origin in 2016, compared to 2014, saw a dramatic decrease of approx. 44% - from EUR 65.3 million to EUR 36.8 million, respectively. The decrease is due to an increase in exports of oil seed crops, exports of raw materials to the detriment of industrially processed and added value products. The main export partners in this market segment are: Italy (47.9%), Spain (45.7%) and Romania (5.2%).
6. Exports of products from the mix of edible products registered a decrease of approx. 5% in 2016 compared to 2014, due to the fall in export volumes of canned vegetables and fruits juices (HS: 19 - vegetables and fruits): from EUR 31.3 million to EUR 26,9 million respectively, on the back of maintenance of the same export volumes of cereal preparations of approx. EUR 10.7 million. In the exports of vegetable and fruit preparations from RM to the EU, up to 83% are the export of fruit juices. In the export of vegetables and fruits, the main foreign trade partners are Poland (32.2%), Austria (25.5%) and Germany (25.3%). Domestic exporters try to diversify the market by penetrating the markets in Romania, the Czech Republic, Hungary and the Baltic Countries.
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7. Exports of sugar from RM to EU had the most spectacular increase in export volumes in 2016 compared to 2014, with a 3.6 times increase in monetary value (respectively EUR 40.1 million and EUR 11, 2 million) and 2.4 times in physical value (respectively 91.4 thousand tons and 38.4 thousand tons). This quantitative leap is due to an increase of nearly 19 times the volume of sugar exports in Bulgaria from EUR 0.25 million in 2014 to EUR 16.5 million in 2016. However, the market for this strategic product with plus added value is not diversified, 96% of exports are directed to Romania (EUR 21.9 million or 54.4%) and Bulgaria (EUR 16.5 million or 41.1%). The export and value of export transactions with sugar from Moldova into the EU depend very much on the EU market.
8. The export of beverages in 2016, as compared to 2014, shows an increase of over 43% in monetary value (EUR 50.5 million and EUR 28.7 million) and 2.1 times in physical value (respectively 5.31 million dekalitres and 2.52 million dekalitres). This quantitative and qualitative leap is due to an increase in the volume of wine exports from EUR 23.1 million to EUR 33.9 million (2014 and 2016 respectively), and in physical volume from 2.12 million dekalitres to 3, 23 million dekalitres and non-denatured ethyl alcohol from EUR 0.85 million to EUR 10.5 million, and in physical volume from 0.11 million dekalitres to 1.57 million dekalitres. Approx. 66% of exports are targeted at 4 European countries: Poland (EUR 12.1 million or around 24%), Romania (EUR 6.1 million or about 18.2%), Czech Republic (EUR 8.5 million or about 17%) and Germany (EUR 3.6 million or about 7%). Good premise and diversification of the wine and alcohol market are attested in the markets of Bulgaria, Greece, Hungary, Slovakia, the United Kingdom of Great Britain and Northern Ireland and the Baltic States.
9. Other agri-food products. Significant changes in the volume of Moldovan exports to the EU in 2016 compared to 2014 were recorded for the export of essential oils (an increase of over 33%, i.e. EUR 2.7 million and EUR 1.8 million respectively - the commercial partner being exclusively Austria), tobacco (an increase of more than 4.6 times, respectively EUR 3.7 million and EUR 0.8 million, the commercial partner exclusively in Greece) and prepared food for animals (an increase of over 14 , 6%, EUR 9.6 million and EUR 8.2 million respectively, trading partners: France, Italy, Romania and Spain).
6.2. Impact of DCFTA implementation on changes in imports from the EU to Moldova
Import of agri-food and agriculture-related products from EU to the Republic of Moldova, after 2 years of DCFTA establishment, diminished in average with approx. 4-6% and has stabilized on most segments and trade flows. The increase of import volumes from the EU to some groups and / or products is based on the increase of the consumption capacity of the Republic of Moldova market and the lack of local alternatives for market demand’s satisfaction. Either the development of capacities to produce and secure the local market with agri-food and agriculture-related products by local entrepreneurs is slower than the increase in demands of consumers and of the local consumer market.
Imports from the EU to the RM, by product and product group in 2016, as compared to 2014, revealed the following key changes:
1. Meat and edible offal, approx. 85.1% are imported from 4 European countries: Poland (EUR 7.1 million or 38.7%), Germany (EUR 3.1 million or 16.8%), Hungary (EUR 2,9 million or about 15.4%) and Romania (EUR 2.6 million or about 14.2%). The meat and edible meat offal of pork and cow are principally imported. Compared to 2014, until the DCFTA establishment, the volume of imports increased by 11%,
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the increase in imports was achieved in the import of meat and edible cows segment. The substitution of import of pork by domestic producers is gradually made, but progresses in the substitution of imports of cow meat are not identified;
2. Milk and dairy products. Over the past 2 years, the imports of whole milk and processed milk products from the EU to Moldova increased by more than 15%. The reduction in livestock and the decline of the domestic processing sector, which require modernization and increased competitiveness of the finished product, give way to important segments of the dairy market. There are massive imports of both, whole milk and processed products as cheeses, butter and yoghurts in a proportion of 78% of the total per product in the following 4 European countries: Romania (EUR 6.7 million or about 41.9% - on the basis of whole milk, cream and yogurt), Lithuania (EUR 2.5 million or about 15.7% - based on cheeses), Germany (EUR 2,2 million or about 13.4% - based on fermented dairy products) and Poland (EUR 1.1 million or about 7% - based on butter and cheeses).
3. Fish and crustaceans, in the last 2 years it has been imported more massively from EU countries, registering a 22% increase in 2016 compared to 2014, or a monetary value of EUR 13.1 million and EUR 10.2 million respectively. The most substantial imports of fish and crustaceans are made from: Romania (EUR 2.5 million or about 19% of the total product group), Spain (EUR 2.1 million / 15.7%), the Netherlands (EUR 1.8 million / 14%), Italy (EUR 1.5 million / 11.7%) and Estonia (EUR 1.5 million / 11.5%).
4. Imports of fruit and citrus fruits from the EU in the Republic of Moldova in 2016 registered a value of EUR 17.4 million or ca. 7.9% of total imports of agricultural and food products related to agriculture. In 2015 there was a substantial increase in EU fruit imports, which amounted to EUR 37.9 million, an increase of EUR 14.2 million compared to 2014. The increase in imports was due to more massive imports with the subsequent re-export of apples, apricots, peaches and nectarines, citrus fruits, table grapes and nuts in shell. The main European countries from which fruit imports are massive to Moldova are: France (about 18-19% on citrus fruits, peaches and nectarines, table grapes), the Netherlands (13-15% of the total product group, of apples and pears) and Spain (12-14% on the basis of citrus and table grapes).
5. The import of seed of oilseed crops registered a significant leap in 2016, compared with 2014, registering an increase of approx. 25% (2.4 thousand tons and 1.9 thousand tons respectively) and in value (respectively EUR 24.5 million and EUR 18.5 million). The quantum leap is due exclusively to the import of sunflower seeds from EUR 10.4 million in 2014 to EUR 16 million in 2016 for oil processing on the territory of the Republic of Moldova with subsequent export to other countries. The main partners in trade with sunflower seeds are: Romania (EUR 10.8 million or about 44.1%), Hungary (EUR 5.2 million or 21.2%), France (EUR 2.7 million or about 11%) and the Netherlands (EUR 1.7 million or about 6.8%).
6. The import of agricultural machinery and equipment in 2016, compared to 2014, registered a decrease of approx. 22%, with a value of EUR 74 million to EUR 57.7 million in 2016. The import of agricultural machinery and equipment into the domestic market is directly correlated with the needs of the agricultural sector and the purchasing power of agricultural producers. The import of machinery and agricultural equipment is based on EU partners: Germany (about 28-30% of total group imports), Italy (about 14-16%), Poland (about 11-14% ), Belgium (about 6-7%) and France (about 6-7%).
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7. In 2016, compared with 2014, there was an increase of approx. 22% of imports of prepared food for animals from EUR 14.1 million to EUR 18.1 million in 2016. The main imports to this group of products were made from the following EU countries: Romania (EUR 7 million or about 38.5%), Hungary (EUR 4.4 million or 24.5%), Denmark (EUR 2.4 million or 13.1%) and Germany (EUR 1.7 million or about 9.5%).
8. The import of beverages, from the EU to Moldova, registered an increase of approx. 9-13% in 2016, compared to 2014, in monetary value, respectively EUR 25.3 million and EUR 22.1 million, in physical volume - respectively 2.526 million dekalitres and 2.295 million dekalitres. The quantitative leap is exclusively due to the import of strong alcoholic beverages and beer. The main countries from which the massive imports of beverages are made to Moldova are: Germany (about EUR 8.5 million per year or 33.6% of total imports per product group, principally strong alcoholic beverages), the Netherlands (EUR 6.7 million or about 26.8%, beer and strong alcoholic beverages) and Romania (EUR 5.8 million or about 22.9%, beer).
9. Seeds of oilseed crops, Sunflower seed has been imported with an increase of approx. 35%, from EUR 10.4 million in 2014 to EUR 16 million in 2016, for oil processing on the territory of the Republic of Moldova with subsequent exports to other countries. The main partners in trade with sunflower seeds are: Romania (EUR 10.8 million or about 44.1%), Hungary (EUR 5.2 million or around 21.2%), France (EUR 2.7 million or about 11%) and the Netherlands (EUR 1.7 million or about 6.8%).
VII. TARIFF BARRIERS TO EXTERIOR TRADE WITH AGRICULTURAL FOOD PRODUCTS IN THE REPUBLIC OF MOLDOVA TO THE EU
The external trade of the Republic of Moldova in commercial relations with the EU within the DCFTA needs to be adjusted for the gradual elimination of tariff, non-tariff and technical barriers to facilitate the free movement of domestic goods to EU markets. Following the establishment of the DCFTA, the problems of barriers to the export of goods have been eliminated at around 99.2% and 99.9% in imports from both, the Republic of Moldova and the EU, and the import customs duties were entirely eliminated. However, tariff quotas (6 products and 9 tariff codes - Annex XV-A of the AA) were established on some sensitive products; specific entry-price fees for 17 products and 20 tariff codes (Annex XV-B of the AA); implementation of the anti-circumvention mechanism for 407 tariff codes (Annex XV-C of the AA) and the application of tariff concessions to imports from the EU on the local market of the Republic of Moldova (Annex XV-D of the AA). Their elimination or gradual reduction may arise, according to the AA, following the request of the Government of the Republic of Moldova addressed to the European Commission and the negotiation with all 28 EU member states. The establishment of the DCFTA provides for adjustment of the legislative, normative and technical framework of the Republic of Moldova to EU standards, and in this context the AA contains some provisions that need to be implemented in order to facilitate trade in goods. Taking into consideration that state institutions with regulatory and controlling rights and business did not succeed in the short term to implement and adjust the production process to these provisions, at the moment, the following points can be seen as non-tariff barriers to the trade of the Republic of Moldova with EU in particular: (i) sanitary and phytosanitary measures; (ii) rules of origin; (iii) registration and control of geographical indications; (iv) product certification and compliance; (v) product quality standards; (vi) packaging requirements and consumer information, and (vii) transport rules. Adjusting the national economy and local business environment to overcoming non-tariff barriers is a complex and long-term process that deserves a deeper particular study.
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Next, it will be described how the foreign trade in food products of the Republic of Moldova has been adjusted to tariffs, contingencies and tariff concessions established by DCFTA during the first two years of implementation.
7.1. Adjustment of foreign trade of agri-food products from the Republic of Moldova to tariffs and tariff quotas established by DCFTA
According to Annex XV-A of the AA, the Republic of Moldova has certain export limits within the EU for products which are exempt from customs duties within the limits of the established tariff quotas. Tariff quotas (export quotas) are set for the following products: apples, plums, tomatoes, garlic, table grapes, grape juice and grape must (Table 4).
For fresh tomatoes, neither before the establishment of the DCFTA in 2014 or after in 2016, the export quota established was not used except for a shipment of 19 tons of fruit exported in 2015 in Lithuania. RM annually imports from the EU around 900 tons of this product.
Garlic, similar with tomatoes, was exported in 2014 in a 10 tons lot in the Czech Republic, the export quota remaining untapped.
The tariff quota for table grapes in 2014 (worth EUR 2.3 million) was close to the full limit and in 2016 it was fully capitalized (worth EUR 8.7 million) with exclusive exports in Romania reaching a share of 94% of the total export by product, and a slight diversification with lots of 90-280 tons on the markets of Estonia, Lithuania, Bulgaria, Poland and Spain.
Table 4: Products subject to annual duty exemption for DCFTA tariff quotas and use of tariff quota in 2014 and 2016
No CN Code Name of the product Quota (tons)
Use of Quota in
2014 (tons)
Use of Quota in 2016 (tons)
1 07020000 Tomatoes, fresh or chilled 2000 0 19 (in 2015)
2 07032000 Garlic, fresh or chilled 220 10 0 3 08061010 Table grapes, fresh 10000 9235 11624 4 08081080 Apples, fresh 40000 1626 39 5 08094005 Plums, fresh 10000 3691 7534 6 20096110 Grape juice (4 types) 5000 9235 11624
Source: AA and Eurostat
Apple fresh fruit has penetrated the EU market in 2014 with an important lot of 1626 tons (EUR 0.5 million), with the country of destination Romania, and in the following years: 2015 (703 tons) and 2016 (39 tons ), the use of the tariff quota was practically not carried out.
The use of tariff quota for plums has grown significantly from 3.7 thousand tons in 2014 to 7.5 thousand tons (worth EUR 2.6 million) in 2016, with exports exclusively to Romania at a quota of 92% of the total export by product, and with a slight diversification with lots of 20-160 tons on the markets of Estonia, Poland, Croatia and Slovakia.
The tariff quota for grape juice in both years 2014 (EUR 2,33 million) and 2016 (EUR 2,33 million) has been fully used, with exports exclusively to Romania at a quota of 83%, and with 10% in the Czech Republic from the total export per product, and with a slight diversification on the markets of Bulgaria, Poland, Spain and the Baltic Countries.
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The tariff quotas established by the DCFTA are much higher than the existing export capacities in the RM, due to the lack of export volumes of homogeneous, conformable, packaged and certified product lots that would be accepted by importers in the EU.
Exports of products to which the entry-price import taxes apply in the EU market are sporadic, more often due to favorable market conditions or the marketing of samples. A minor progress was recorded only when 616 tons of apricots were exported in 2016 to Romania. The lack of certified, homogeneous, competitive and continuous deliveries does not give a boost to exporting these domestic products to EU markets.
In accordance with Annex XV-B of the AA, specific import duties (entry-price) are set for a limited category of fruits, unfermented grape juice and vegetables exported from the Republic of Moldova, while the import of these sensitive products is exempt from the import duty (Ad valorem free) (Table 5). Import duty rates in the EU according to AA vary between 6% for cucumbers and sour cherries and up to 20% for peaches.
Table 5: Products subject to an import entry price from Moldova to the EU and exports of these products in 2014 and 2016
CN Code 2012 Name of product
Rate of customs
duty according to
AA
Export to EU in 2014 (tons)
Export to EU in 2016 (tons)
07070005 Cucumbers, fresh or chilled 6% 20 0 07099310 Pumpkins, fresh or chilled 9% 0 1 08083090 pears 10-20% 0 22(2015) 08091000 Apricot, fresh 0% 0 616 08092100 Sweet, fresh 6-12% 0 0 08092900 Cherries, fresh 8-16% 0 64(2015) 08093010 Nectarines, fresh 6-12% 11 1 08093090 Peaches, fresh 10-20% 46 71 22043092 /94, /96, /98
Must, unfermented, concentrate of different density
0,3EUR/l 0 17
Source: AA, TARIM-CS and Eurostat
7.2. Adjustment of the foreign trade with agri-food products from the Republic of Moldova to the implementation of the mechanism of protection against circumvention and tariff concessions established by DCFTA
The mechanism of protection against circumvention (re-export) established by the DCFTA, includes a category of commodities deemed sensitive in the EU (Annex XV-C AA), for which are established annual average export quotas from Moldova to the EU. Products in this category may exceed export quotas in the EU, but provided that RM authorities can argue for increased domestic production potential (Table 6). Upon reaching 70% of the volume indicated for each product, the EU informs the RM authorities about the achievement of
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this quota, and when the 80% quota is reached, the RM authorities present a thorough justification of local production and origin and increase of the export quota12.
Out of all agricultural products that are part of the product group subject to the anti-circumvention mechanism, 7 did not register any exports during the years 2014-2016 (Table 6). The quotas offered by DCFTA are used to some extent for the following products:
(i) wheat and muslin, compared to 2014 and 2016 respectively, with a positive surplus of 8.1% (EUR 14.3 million) and over 6.3 times (EUR 73.4 million (25%), Spain (13.6%), Romania (11.1%) and Cyprus (5.5%).;
(ii) barley, with an export of 3.2 times less in 2014 (EUR 3.9 million) than the offered quota and with a positive surplus of 6% in 2016 (worth EUR 11, 3 million), with exports being carried out to: Cyprus (56%), Greece (21%) and Italy (9% of the exports per product);
(iii) maize, compared to 2014 and 2016 respectively, with a positive surplus of 2.4 times (worth EUR 53 million) and 1.5 times higher (worth EUR 11.3 million) than offered quota, with exports being carried out to: (44.1%), Italy (42.3%), Cyprus (11.1%) and Romania (5.5% of the exports per product);
(iv) sugar, a negative surplus of 2.1 times lower in 2014 (worth EUR 7.5 million) and a 1.8 times surplus in 2016 (worth EUR 36.5 million) than offered quota, with exports being carried out to: Romania (54.3%) and Bulgaria (45.2% of the exports per product);
(v) the export quota of cereals processed at the time of the DCFTA's implementation in 2014 was 59% (EUR 1.5 million) and in 2016 with a positive surplus of 6.5 times more (EUR 11.9 million) rather than the share given, with exports to countries: Poland (36.8%), Greece (22.8%), Hungary (20%), Bulgaria (16.7%) and Germany (11.5% of the export per product);
(vi) the export quota of corn in both years 2014 and 2016 has not been fully capitalized, reaching a value of up to 60% of the offered quota, with export destinations being Bulgaria (81%), Romania (12.5%) and Greece (5% of the export per product).
Table 6: Products subject to an anti-circumvention mechanism on imports from the Republic of Moldova into the EU and exports of these products in 2014 and 2016 No Name of product
(number of tariff codes) Trigger
volumes (tons)
Export to EU in 2014 (tons)
Export to EU in 2016 (tons)
1 Pork meat (16) 4500 0 0 2 Poultry meat (89) 600 0 0 3 Dairy products (9) 1700 0 0 4 Eggs in shell (4) 7000 0 0 5 Eggs and albumins (2) 400 0 0 6 Processed dairy products (5) 500 0 0 7 Wheat, flour and semolina - pellets (2) 75000 81128 474395 8 Barley and cereals (1) 70000 22125 74206 9 Corn, flour and semolina - pellets (1) 130000 305558 188807
10 Sugars (1) 37400 17343 66009 11 Processed grains (24) 2500 1476 16153 12 Cigarettes (1) 1 billion pc. 0 12000
12 Article 148 (2) of the AA
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EU quotas offered under the DCFTA for products subject to an anti-circumvention mechanism are entirely used only for processed cereals, sugars and cereals, and approx. 60% exports of sweet corn. For products of animal origin, the EU market is closed due to lack of traceability and compliance of products with EU veterinary requirements. The processed sugar products are also not exported due to the lack of processing capacities of the processing plants in the Republic of Moldova
13 Processed sugar (13) 4200 0 0 14 Sweet corn (5) 1500 860 901 Source: AA and Eurostat
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VIII. CONCLUSIONS AND RECCOMMENDATIONS
The DCFTA, established through the Association Agreement, by virtually excluding all customs duties and the inclusion of tariff quotas for the import and export of agri-food products, establishes fair and advantageous market access and qualities of equal partners in trade relations between the EU and RM. The DCFTA application is the most important step towards adherence and EU integration of the Republic of Moldova, which will allow the economic recovery and the increase of the competitiveness of the domestic products. The synthesis analysis of the implementation and piloting of the DCFTA in the last 2 years since the signing of the AA with the EU allows the following conclusions to be drawn on the trade with agricultural and agri-food products of the Republic of Moldova:
1. The elimination of customs duties and tariff measures, through DCFTA, for most of agri-food products has led to increased trade and a quota of approx. 65% of the total exports of goods from the RM to the EU, the increase by approx. 16% of exports from Moldova and about. 8% of imports from the EU;
2. The non-tariff measures established by DCFTA (sanitary, phytosanitary, quality standards, product certification and compliance) are currently the most serious barriers to increasing the export capacities of Moldovan agri-food products in the EU. The adjustment of the legislative - normative framework and the compliance of the local agricultural sector with these requirements and the exclusion of non - tariff measures in the future could have a much greater impact than the elimination of the import tariffs on both sides;
3. The growth potential of agricultural and agri-food exports from the Republic of Moldova could suddenly slow down in the short term if agricultural producers in Moldova do not adopt and do not meet the relevant EU standards. In this context, non-compliance with EU sanitary-veterinary requirements and the EU safety and quality standards could diminish competitiveness, penetration and slow down exports of domestic products to other world markets;
4. Trade with agri-food products and agriculture-related products between the RM and the EU is relatively largely dynamic and balanced, with a positive trade surplus of exports of 32%, due to the increase in the last 2 years of the trade balance of 5 times, stabilization and even a 5.5% decrease in imports from the EU to Moldova;
5. The structure of trade between the RM and the EU denotes exports of approx. 70% of commodities in the form of primary agricultural products and primary processed agri-food products (raw materials) from RM and imports from EU to Moldova at approx. 75% of agricultural machinery and agri-food products;
6. Due to the reduction of import tariffs and the establishment of DCFTA binding tariff quotas, the Republic of Moldova has been able to increase exports and penetrate the EU markets with a range of products such as: beverages, table grapes, sugar, bees honey, oilseeds, cereals and milling products, but modestly with fruits and vegetables. In this context, exports of live animals and products of the animal origin are totally lacking and will create future problems in penetrating the EU market as long as domestic producers fail to follow and comply with EU veterinary requirements;
7. The lack of homogeneous, compliant, packaged and certified domestic products that would be accepted by EU importers substantially reduces the capacities of Moldovan products to cover the contingencies and tariff concessions established by the DCFTA;
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8. Narrow geographic orientation at approx. 90% of Moldovan exports and approximately 86% of imports from the EU in agri-food and agriculture-related trade in only 10 EU member states out of the 28, is limiting the diversification of markets, create risks, narrowing the choice of market niches and reduce penetration capacity to new markets.
The challenges and opportunities of the Moldovan economy in general and of the agricultural and food sector, in particular, with the establishment of the DCFTA, create excellent prerequisites for increasing the upgrading, productivity and competitiveness of the production sub-sectors. In this context, some specific recommendations for adjustment and adaptation to AA and DCFTA can be suggested:
1) Carry out a wide-ranging analysis of the product and product categories subject to contingencies and tariff concessions, taking into account the sensitivities in the trade with these products with the EU, and based on this analysis, to elaborate and implement the sectoral agricultural restructuring and modernization policy;
2) Harmonization of national legislative and normative acts with EU standards, and on this basis, to ensure the implementation and compliance of agricultural producers and rural entrepreneurs with their provisions in order to produce competitive products;
3) Implementing specific technical assistance programs and other support tools from the Moldovan Government and EU projects to adjust the legislative and regulatory framework, quality and compliance standards, and campaigning to promote local products on foreign and national markets;
4) Enhancing competition in the local market, as a result of increasing EU imports of live animals, meat, fish and milk products, puts pressure on local producers and processors who abandon their businesses and, in this context, are required policies and mechanisms to ensure access to cheap sources of credit, information and advice, re-qualification and re-employment in other sectors;
5) Examination by the EU-Moldova Association Committee of the possibilities for reciprocal granting of additional tariff concessions in order to improve the liberalization of trade in sensitive agricultural products subject to tariff quotas;
6) Implementation of sanitary-veterinary requirements and compliance standards in line with EU requirements to harness the export potential on the EU market of products of animal origin, especially poultry meat and industrial eggs;
7) Develop strategies and implementation mechanisms for the development of the processing industries (including primary) and infrastructure in order to ensure increased production and to export high value-added competitive products;
8) The implementation of state subsidizing mechanisms of the economic sectors, which register the most dynamic exports, through direct access to cheap sources for investment and credit, information - advice and support in the promotion of products on foreign markets.
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IX. BIBLIOGRAPHIC AND MEDIA SOURCES
1. Association Agreement between the European Union and the European AtomicEnergy Community and its Member States with the Republic of Moldova.
2. The Fiscal Code of the Republic of Moldova Nr. 1163 of 24.04.1997;3. Ermurachi Adrian and Platon Mariana. Thematic Analysis "Horizontal Aspects for
the Implementation of the Deep and Comprehensive Free Trade Area with theEuropean Union - DCFTA", IPRE February 16, 2016, 26 pages.
4. Expert-Grup Infographic for AGORA.md, http://agora.md/stiri/4669/recomandari-pentru-ca-exporturile-in-ue-sa-mearga-ca-pe-banda-rulanta--infografic-primele-rezultate-ale-acordului-de-asociere-cu-ue .
5. Impact of the Deep and Comprehensive Free Trade Agreement between theRepublic of Moldova and the European Union in the Moldovan agri-food sector. Theproject "Strengthening the Capacities of the National Platforms of the EasternPartnership Civil Society Forum", Regional Environmental Center Moldova 2013, 59pages.
6. RM GD no. 93 of 01.02.2013 regarding the approval of the Regulation on the refundof the value added tax;
7. RM GD no. 970 of 17.11.2014 on the approval of the Regulation on theestablishment and operation of the one-stop shop for the issuance of thephytosanitary certificates for export / re-export;
8. RM GD no. 654 of 18 September 2015 on the approval of the Single WindowRegulation for the issuance of permissive documents for the export of products andanimal by-products;
9. Law no. 1380-XIII of 20.11.1997 on customs tariff;10. Law no. 1466 of 29.01.1998 regarding the regulation on repatriation of money
means, goods and services from external economic transactions;11. Mincu Georgeta. Trade Policy of the Republic of Moldova: import-export
requirements in trade with the EU. Independent Analytical Centre "Expert Grup",Chisinau 2008, 118 pag.
12. Prohnitchii Valeriu. DCFTA between the EU and the Republic of Moldova: assessingthe impact of the liberalization of trade in services on the Moldovan economy.Independent Analytical Centre "Expert Grup", 38 pages.
13. Council Regulation (EC) No 55/2008 of the Council of 21 January 2008 introducingautonomous trade preferences for the Republic of Moldova and amendingRegulation (EC) 980/2005 and Commission Decision 2005/924 / EC. - OfficialJournal of the European Union of 24.01.2008;
14. Council Regulation (EC) No. 980/2005 of 27 June 2005 on the application of ascheme of generalized tariff preferences;
15. National Strategy for Agricultural and Rural Development for 2014-2020, approvedby GD no. 409 of 04.06.2014
16. Tornea Ion, Comprehensive Free Trade Agreement between Moldova and the EU.Information guide for agricultural producers. IDIS Viitorul Library, 2013, 31 pages.
17. Trade Sector Briefs 2015, EU Project “Support to the DCFTA Process in the Republicof Moldova” 2015, 32 pages.
18. www.ansa.gov.md19. www.customs.gov.md20. www.lex.justice.md21. www.miepo.md22. http://exporthelp.europa.eu23. https://europa.eu
IMPACT OF TWO YEARS OF DCFTA IMPLEMENTATION ON MOLDOVAN
AGRICULTURAL AND AGRI - FOOD TRADE WITH EUROPEAN UNION
EU Project”Technical Assistance for the implementation of the DCFTA”
(SRC DCFTA TA Project)
Stefan cel Mare, 180, MD-2004, Chișinău, office 1318,Tel.: +(373 22) 292 211, 292 233 293 327, Fax: +(373 22) 293 307
E-mail: [email protected], Web: www.gfa-dcfta.md
Fala Anatolie,(GFA) Short Term Junior Expert
STRUCTURE AND STUDY LANDMARKS:
EU Project ”Technical Assistance for the implementation of the DCFTA” (SRC DCFTA TA Project)
I Section brief overview of what is DCFTA.
II Section DCFTA results, in terms of tariff quotas,import specific taxes, implementation of anti-circumvention mechanism and tariff concessions
III Section general aspects, objectives and advantages of DCFTA implementation
IV Section export, import and trade balance of Moldovan agri-food and agricultural trade with UE
V Section EU geographical direction for the Moldovan agri-food and agricultural products export and import
VI Section evaluation of impact of DCFTA implementation related to Moldovan agri-food and agricultural products export and import in line with quantitative, qualitative and geographical direction modification
VI Section overview of adjustment for external Moldovan agri-food trade to DCFTA tariff barriers
ANNEX: Presentation "Impact after 2 years of implementation of the DCFTA between the EU and Moldova on trade in agricultural and agri-food products"
METODOLOGYANALYSIS AND INTERPRETATION OF RESEARCH DATA :
EU Project ”Technical Assistance for the implementation of the DCFTA” (SRC DCFTA TA Project)
DATA SOURCES:
National Bureau of Statistics
European Service of Statistics (Eurostat)
Open sources – publications, researches and informations from relatedfields
EVALUATION, ANALYSIS AND INTERPRETATION OF RESEARCH DATA:
Combined Nomenclature of Goods of Republic of Moldova andHarmonized Commodity Description and Coding Systems (HS)
analytical comparison of EU – RM trade echange for 2 consecutiveperiods: 1) 2013-2014 - before and after the beginning of DCFTAimplementation; and 2) 2015-2016 - after 2 years of implementation).
sections, categories, groups and separate agri-food products, based onand compared to 2014 (DCFTA beginning of implementation) and 2016(after 2 years DCFTA implementation).
IMPACT OF TWO YEARS OF DCFTA IMPLEMENTATION:
EU Project ”Technical Assistance for the implementation of the DCFTA” (SRC DCFTA TA Project)
65% of exports to EU market
2,2 billion Euros form RM exports to EU
16% of RM exports growth, compared to 2014-2016:
Total export of goods - 1159,7 to 1317,2 mil. Euros (↑12%)
Agri-food products export - 278 to 504,2 mil. euro (↑45%)
8% of EU imports growth, compared to 2014-2016:
Total import of goods - 1862,2 to 2026,1 mil. Euros (↑8%)
Agri-food products import - 265,6 mil. euro la 330,3 mil. euro(↑19,6%)
Trade balance on agri – food products - approx. 174 mil. Euro, or ↑5times growth.
Exports, imports and trade balance for for 2011-2016 Moldovan external trade
EU Project ”Technical Assistance for the implementation of the DCFTA” (SRC DCFTA TA Project)
Export – import and trade balance 2011 2012 2013 2014 2015 2016
Total Exports (mil. US dollars), in % 2216,8 2161,9 2428,3 2339,5 1966,8 2045,3
‐ CIS countries 41,5 42,9 38,0 31,4 25,0 20,3‐ European Union countries 48,9 46,9 46,8 53,3 61,9 65,1
‐ Other countries 9,7 10,2 15,1 15,3 13,1 14,6
Total Imports (mil. US dollars), in % 5191,3 5212,9 5492,4 5317,0 3986,8 4020,3
‐ CIS countries 33,0 31,1 30,4 27,3 25,5 25,6‐ European Union countries 43,5 44,5 45,0 48,3 49,0 49,1
‐ Other countries 23,5 24,4 24,5 24,4 25,4 25,4
Total Trade Balance (mil. US dollars), in % -2974,5 -3051,0 -3064,1 -2977,5 -2020,0 -1975,0
‐ CIS countries 26,7 22,8 24,4 24,0 26,0 31,0
‐ European Union countries 39,4 42,8 43,6 44,4 36,5 32,5
‐ Other countries 33,9 34,4 32,0 31,6 37,5 36,5
2011 - 2016 EU –RM export, import and trade balance relations:
EU Project ”Technical Assistance for the implementation of the DCFTA” (SRC DCFTA TA Project)
export (↑36%) and import (↑8%) growth from total of goods;
Decrease of trade deficit↓30%
2011-2016 EU –RM export, import and trade balance relations for agricultural and agri-food trade
EU Project ”Technical Assistance for the implementation of the DCFTA” (SRC DCFTA TA Project)
export(↑45%) and import (↑19,6%) growth of agricultural goods;
Trade balance growth ↑15 times
In 2016 Moldovan agri-food trade to EU increased to approx. 834,5 mil. euro
2013-2014 and 2015-2016 export and Moldovan agricultural and agri-food groups export growth or deficit :
EU Project ”Technical Assistance for the implementation of the DCFTA” (SRC DCFTA TA Project)
Exports growth: (i) beverages ↑2,5 times (50,5 mil. €); (ii) sugar↑3,6 times (40,1 mil. €); (iii) oil seeds ↑2,1times (100,9 mil. €); (iv) cereals and products of the milling industry↑2,5 times (50,5 mil. €); (v) fruits andvegetables ↑4% (80,3 mil. €).
Exports deficit: (i) mix of food products ↓10% (44,8 mil. €); (ii) fats - Animal or vegetable oils↓14% (45,5 mil.€).
Analytical comparison of 2013-2014 and 2015-2016 exports structure of Moldovan agricultural and agri-food products to EU:
EU Project ”Technical Assistance for the implementation of the DCFTA” (SRC DCFTA TA Project)
Moldovan exports structure to EU, approx. 70% primary agricultural products andprimary processed agri-food products (exclusively raw material base and low-medium value added products).
2013-2014 and 2015-2016 import and Moldovan agricultural and agri-food groups import growth or deficit :
EU Project ”Technical Assistance for the implementation of the DCFTA” (SRC DCFTA TA Project)
Imports decrease of : (i) Live animals and animal products ↑5,1% (57,7 mil. €); (ii) oil seeds ↑32,2%(24,5 mil. €); (iii) mix of food products↑12% (53,8 mil. €);
Imports deficit: (i) agricultural machinery↓22,3% (57,5 mil. €); (ii) vegetables and fruits ↓27,8% (22,7mil. €); (iii) cereals and milling products↓13% (13,5 mil. €); (iv) other agricultural and agri-foodproducts↓14,4% (93,2 mil. €).
Analytical comparison of 2013-2014 and 2015-2016 imports structure of Moldovan agricultural and agri – food products to EU :
EU Project ”Technical Assistance for the implementation of the DCFTA” (SRC DCFTA TA Project)
EU imports structure to Moldova, approx. 75% are represented by agriculturalmachinery import and industrially processed agri-food products (exclusively highadded value products).
2014 and 2016 geographical direction exports and imports of Moldovan agricultural and agri-food products to EU:
EU Project ”Technical Assistance for the implementation of the DCFTA” (SRC DCFTA TA Project)
No Country Moldovan export in 2017
(în mil. €)Ratio of total exports
(%) Country Moldovan export in
2016 (în mil. €)Ration of total
exports (%)
1 Italy 106,0 28,1 Romania 134,7 26,9
2 Romania 65,0 17,2 Italy 75,8 15,1
3 Germany 31,1 8,2 Greece 44,6 8,9
4 France 29,5 7,8 Bulgaria 38,3 7,6
5 Poland 28,0 7,4 Poland 32,9 6,6
6 Greece 19,9 5,3 France 30,3 6,1
7 Austria 18,9 5,0 Spain 30,1 6,0
8 Spain 11,4 3,0 Germany 27,7 5,5
9 Czech Republic 8,8 2,3 Austria 20,5 4,1
10 Belgium 8,4 2,2 Cyprus 14,5 2,9
No Country
Moldovan import in 2017
(în mil. €)Ratio of total imports
(%) Country Moldovan import in
2016 (în mil. €)Ration of total imports
(%)
1 Italy 64,3 18,5 Romania 77,7 23,5
2 Romania 60,9 17,5 Italy 52,5 15,9
3 Germany 55,8 16,0 Greece 37,0 11,2
4 France 23,2 6,7 Bulgaria 29,1 8,8
5 Poland 22,6 6,5 Poland 28,7 8,7
6 Greece 20,0 5,7 France 20,1 6,1
7 Austria 13,7 3,9 Spain 16,0 4,8
8 Spain 9,9 2,9 Germany 8,2 2,5
9 Czech Republic 8,8 2,5 Austria 7,9 2,4
10 Belgium 8,1 2,3 Cyprus 7,9 2,4
TOP 10 EU COUNTRIES FOR MOLDOVAN EXPORT
TOP 10 EU COUNTRIES FOR IMPORT TO MOLDOVA
Impact of DCFTA implementation in the modification of Moldovan EXPORTS TO EU :
EU Project ”Technical Assistance for the implementation of the DCFTA” (SRC DCFTA TA Project)
Products of animal origin - 7,8 mil. € exclusively of honey (86% - 4countries): Romania, Italy, Austria, France;
Vegetables and fruits– 80,3 mil. € (90% of export to 3 counties):Romania (60%); Bulgaria (25%) and Italy (5%), approx. 96%export of 4 products:
i. Husked nuts (wallnuts) - approx. 78-80% from fruit export, 60,9 mil.€ worth: France, Austria, Germany, Holland, Italy;
ii. Grapes - approx. 11-12% from fruit export, 8,8 mil. € worth (in totalamount of 6,129 thousand tones), with approx. 94% of exportdirected to Romania (8,2 mil. €);
iii. Plums - approx. 3-4% from fruit export, 2,6 mil. € worth (in totalamount of 6,129 thousand tones), with approx. 93% of exportdirected to 2 countries: Romania (83%) and Czech Republic (10%)
iv. Prunes - approx. 4-5% from fruit export, 3,3 mil. € worth, withapprox. 84% of export directed to 5 counties: Romania, Bulgaria,France, Poland and Germany.
Impact of DCFTA implementation in the modification of Moldovan EXPORTS TO EU :
EU Project ”Technical Assistance for the implementation of the DCFTA” (SRC DCFTA TA Project)
Cereals and milling products- 121,6 mil. €, with approx. 97% ofexports directed to 5 countries: Italy, Greece, Cyprus, Romania andSpain:
i. Wheat - 483,4 thousands tones, representing 62,4% from the totalof exported cereals, and mainly directed to: Italy and Greece;
ii. Barley- 74,2 thouands tones, representing 9,3 from the total ofexported cereals, and mainly directed to: Cyprus and Greece;
iii. Corn - 189 thouands tones, representing 27% 9,3 from the total ofexported cereals, and mainly directed to: Italy and Greece;
Oils seeds – 100,9 mil. €, exports directed to: Romania, Bulgaria,Poland and Germany.
Fats and animal or plant origin oils –36,8 mil. €, exports directed to: Italy, Spain and Romania.
Impact of DCFTA implementation in the modification of Moldovan EXPORTS TO EU :
EU Project ”Technical Assistance for the implementation of the DCFTA” (SRC DCFTA TA Project)
Mix of edible products–26,9 mil. €, 40% of which are productsmade of cereals. 83% of exported vegetable and fruit products arefruit juices, export directed to: Poland, Austria and Germany
Granulated sugar- 3,6 times growth, with 40,1 mil. €, a growth ofvolume of 19 times of exports of sugar to Bulgaria. 16,5 mil. €,export to: Romania and Bulgaria.
Beverages – over 80% growth, 50,5 mil. €, of which are wines 33,9mil. € and non-denatured ethyl alcohol, 10,5 mil. € of export to:Poland, Romania, Czech Republic and Germany.
Other agri-food products- over 33% growth, important essentialoils 2,7 mil. € (Austria), tobacoo 3,7 mil. € (Greece) and fodder 9,6mil. € (France, Italy, Romania and Spain).
Impact of DCFTA implementation on the modification of IMPORTS to Moldova from EU :
EU Project ”Technical Assistance for the implementation of the DCFTA” (SRC DCFTA TA Project)
Meat and edible offal–16,9 mil. €, approx. 85,1% of imports fromdin 4 countries: Poland, Germany, Hungary și România.
Milk and dairy products - 15% growth, based on whole milk,cheese, butter and yogourts, 78% of imports from 4 countries:Romania, Lithuania, Germany and Poland.
Fish and and crustaceans - 22% growth, approx. 13,1 mil. €,massive imports from: Romania, Spain, Holand, Italy and Estonia.
Fruits and citrus fruits - 17,4 mil. €, which represents approx.7,9% from total import of agri-food products, originating from:France, Greece, Holand and Spain.
Impact of DCFTA implementation on the modification of IMPORTS to Moldova from EU :
EU Project ”Technical Assistance for the implementation of the DCFTA” (SRC DCFTA TA Project)
Oil seeds- approx. 25% growth, 24,5 mil. € (exclusively sunflower seeds) partner countries: Romania, Hungary, France andHoland.
Agricultural machinery and equipment– approx. 22% decrease,57,7 mil. €, partner countries: Germany, Italy, Poland, Belgiumand France.
Fodder - majorare cu cca. 22%, în valoare monetară de 18,1 mil.€, partner cpuntries: România, Ungaria, Danemarca şi Germania.
Beverages - creștere de cca. 13%, în valoare monetară de 25,3mil. €, partner countries: Germania, Olanda și România.
2014 and 2016 use of tariff quotas, and the DCFTA tariff quotas for products subject to annual duty relief :
EU Project ”Technical Assistance for the implementation of the DCFTA” (SRC DCFTA TA Project)
Tariff quotas fully integrated with export exclusively to Romania:
(i) grapes (8,7 mil. €), 94% of export to Romania;
(ii) plums (2,6 mil. €), 92% of export to Romania;
(iii) grapes juice (2,33 mil. €), of export exclusively to Romania, 83% and 10%to Czech Republic.
No NC Code Product name Quota (tones)
Quotas, used in 2014 (tones)
Quotas used in 2016 (tones)
1 07020000 Fresh or refrigerated tomatoes
2000 0 19 (în 2015)
2 07032000 Raw or refrigerated garlic 220 10 0
3 08061010 Fresh grapes 10000 9235 11624
4 08081080 Fresh apples 40000 1626 39
5 08094005 Fresh plums 10000 3691 7534
6 20096110 Grapes juice (4 types) 5000 9235 11624
Moldovan agri-food products, subject to import entry – price and their export for 2014 and 2016:
EU Project ”Technical Assistance for the implementation of the DCFTA” (SRC DCFTA TA Project)
There are specifically establishes import taxes (entry-price) for these products,and the import of these fragile products are import tax free (ad valorem free).Import customs taxes quotas to EU, in according to AA vary between 6% forcucumbers and sour cherries and up to 20% for peaches.
NC 2012 Code Product name
Customs tax quota in
according to AA
Export to EU in 2014 (tones)
Export to EU in 2016(tones)
07070005 Fresh or refrigerated cucumbers 6% 20 0
07099310 Fresh or refrigerated zucchini 9% 0 1
08083090 Pairs 10-20% 0 22(2015)
08091000 Fresh apricots 0% 0 616
08092100 Fresh sour cherries 6-12% 0 0
08092900 Fresh sweet cherries 8-16% 0 64(2015)
08093010 Fresh nectarines 6-12% 11 1
08093090 Fresh peaches 10-20% 46 71
22043092 /94, /96, /98
Unfermented grape must in differentconcentrated level
0,3 €/l 0 17
Moldovan agri-food products subject to a anti-circumvention mechanism to EU and their exports for 2014 și 2016:
EU Project ”Technical Assistance for the implementation of the DCFTA” (SRC DCFTA TA Project)
Different EU quotas within DCFTA, for products subject to a anti-circumventionmechanism, are used only for cereals, sugars and processed cereals and approx.60% for sweet corn export.
No Product name(no of tariff codes)
Trigger volume (tones)
Export to EU 2014 (tones)
Export to EU 2016 (tone)
1 Pork (16) 4500 0 02 Poultry (89) 600 0 03 Dairy products (9) 1700 0 04 Shell Eggs (4) 7000 0 05 Eggs and albumins (2) 400 0 06 Processed dairy products(5) 500 0 07 Wheat, flour and pellets(2) 75000 81128 4743958 Barley, flour and pellets(1) 70000 22125 742069 Corn, flour and pellets(1) 130000 305558 18880710 Sugars (1) 37400 17343 6600911 Processed cereals(24) 2500 1476 1615312 Cigarettes (1) 1 billion pieces. 0 1200013 Processed sugar(13) 4200 0 014 Sweet corn (5) 1500 860 901
EU Project ”Technical Assistance for the implementation of the DCFTA” (SRC DCFTA TA Project)
Recommendations:1. To carry out analyses on exported products and product categories subject to
tariff quotas and concessions; and based on these analyses, to elaborate andimplement restructuring and modernization agricultural sector policies;
2. Harmonisation of national legislative and normative acts to EU standards and,as a result, to ensure the agricultural producers to the conformity of the EUprovisions;
3. Implementation of support instruments, by Government of Moldova and EUprojects, in order to adjust to quality standards and to ensure with promotingcampaigns of the domestic products on the external and national markets;
4. Due to imports growth of livestock, meat and dairy products which imposespressure on local producers there is an increased competition on the localmarket that is why there is a need for re-engagement mechanisms in othersectors
5. Evaluation of possibilities for additional tariff concessions from both sidesduring the EU - RM trade association committee reunion;
6. Implementation of phytosanitary requirements – evaluation of export potentialto EU of products of animal origin (meat, chicken eggs;
7. Strategy and implementation mechanisms development for processingindustries (including primary industries) and infrastructure;
8. Implementation of state subsidy mechanisms for the most dynamic exports ofMoldovan economy.
EU Project ”Technical Assistance for the implementation of the DCFTA” (SRC DCFTA TA Project)
Thank you for your interest and attention!
EU Project ”Technical Assistance for the implementation of the DCFTA” (SRC DCFTA TA Project)
Stefan cel Mare, 180, MD 2004, Chișinău, office1318,
Tel.: +(373 22) 292 211, 292 233 293 327, Fax: +(373 22) 293 307
E-mail:[email protected], Web. www.gfa-dcfta.md
The European Union (EU) is made up of 28 Member States who have decided to gradually link together their know-how, resources and destinies. Together, during a period of enlargement of 50 years, they have built a zone of stability, democracy and sustainable development whilst maintaining cultural diversity, tolerance and individual freedoms.
The European Union is committed to sharing its achievements and its values with countries and peoples beyond its borders.
The European Commission is the EU's executive body.
Delegation of the European Union to Moldova
12 Kogalniceanu Street MD-2001 Chisinau, Republic of Moldova
Tel.: (+373 22) 50 52 10Fax: (+373 22) 27 26 22
E-mail: [email protected]
Lead Company
Project Office“Technical Assistance for the implementation of the DCFTA”
Republic of Moldova
180 Stefan cel Mare blvdoffice 1318
MD-2004, ChisinauRepublic of Moldova
Tel.: +(373 22) 292 211Fax: +(373 22) 293 307
E-mail: [email protected]
This project is funded by
the European Union