The European Commission on Monday adopted a series of proposals to make rules of origin in trade agreements with 20 partners of the European Union (EU) more flexible and business-friendly.
The aim is to enhance trade with partners in the neighboring Pan-Euro-Mediterranean (PEM) region and contribute to economic recovery in the wake of the COVID-19 outbreak, a Commission press release said.
Following adoption by the European Council, the new rules could take effect during the first half of 2021 subject to progress in the talks with the countries and regions concerned.
Under the new provisions, product-specific rules on access to preferential treatment would become simpler. Tolerance for non-originating materials (whose country of origin is not the same as the country in which that material is used in production) would increase from 10 percent to 15 percent.
Another new element is that the operations or “value-added” necessary for a good to be entitled to preferential origin can be split between several countries or regions. This “full cumulation” will facilitate the integration of supply chains within the PEM zone, said the Commission.
The new rules would apply alongside those of the current PEM Convention. A review of the Convention has been ongoing since 2012.
Business and industry will have the option to apply the new rules or the current PEM ones, whenever this suits them, the media release stated.
The proposals would impact the EU’s trade agreements with 20 regional partners from Iceland to Switzerland, from Turkey to Lebanon, as well as eastern European partners like Georgia and Ukraine.
The EU’s trade with these partners was worth 677 billion euros (799 billion U.S. dollars) in 2019, which is almost half of the EU’s preferential trade.