89 bln USD lost in underuse of EU FTAs: UN-led report

GENEVA, Jan. 29 (Xinhua) -- The full potential of European Union free trade agreements (FTAs) remains untapped to the tune of almost 72 billion euros (89 billion U.S. dollars), said a new UN-led report Monday, noting that this results in higher prices for consumers.

The report by the United Nations Conference on Trade and Development (UNCTAD) and the National Board of Trade Sweden said the amount equates to what European exporters overpaid.

That is because they did not take full advantage of the reduced tariffs offered by the FTAs that the EU as a bloc has signed with a variety of both developed and developing countries, said the report.

"This report challenges some enduring myths on preference utilization in free trade agreements," UNCTAD Secretary-General Mukhisa Kituyi and Anna Stellinger, Director-General of the National Board of Trade Sweden, wrote in the preface to the report. "For example, it is commonly believed that FTAs, in general, are not used to a high degree."

This ultimately means higher prices for the manufacturing industry and for consumers, said the report.

As governments hurry to negotiate or review FTAs, the report said it is important to understand if businesses are fully using the agreements.

The report is the first to use the concept of utilization rates to systematically analyze FTAs entered into by the EU.

It concludes that while some potential in the agreements remains untapped, companies are for the most part making use of them.

The EU's exporters use the agreements for 67 percent of their exports to countries with which FTAs exist," said co-author Stefano Inama of UNCTAD. Enditem