Brussels, 12 October 2005
The European Commission has welcomed the approval by the Council of Ministers of a Commission proposal to create a Pan-Euro-Mediterranean zone of cumulation of origin. The new rules will result in the creation of a free trade area between the European Union and 16 trade partners (Algeria, Bulgaria, Egypt, Faeroe Islands, Iceland, Israel, Jordan, Lebanon, Morocco, Norway, Romania, Syria, Switzerland, Tunisia, Turkey, West Bank and Gaza Strip).
László Kovács, European Commissioner for Customs and Taxation, said: "This new Pan-Euro-Mediterranean zone will make it easier for producers and traders within the zone to benefit from preferential customs tariffs. It is an ambitious project aimed at boosting the competitiveness in all participating countries."
Cumulation of origin is an instrument that allows material to be sourced and manufactured in a number of countries without the finished product losing the benefit of preferential customs tariffs when it enters the EU. The system has been successfully applied since 1997 between the EU and EFTA countries and those of central and eastern Europe and since 1999 with Turkey.
Today's Council decision opens the way for the extension of this system to those Mediterranean partners that participate in the Euro-Mediterranean Partnership (the Barcelona Process). It will make it possible, for example, for Tunisian garment manufacturers to source fabrics in Turkey and to export the garments with preferential duty rates to the Community. Moreover these garments can be re-exported from the Community to Switzerland or to any other participating country and benefit there from preferential tariff treatment.
The system will be effective among countries that have concluded free trade
agreements with the EU and EFTA countries and with each other. The prospect of
the entry into force of the scheme constitutes therefore a major incentive for
the conclusion of free trade agreements between the Mediterranean countries. The
system also harmonises among all participating countries the rules of origin
which determine which goods can benefit from the lower rates of customs duty
under the preferential trade arrangements. The EU has already signed agreements
with all Mediterranean countries concerned and therefore the EU's participation
in the scheme only requires the amendment of the rules of origin attached to
these agreements. As a result of the Council's decision, the EU now formally
proposes to the partner countries the adoption of the new rules of