EC updates rules of origin to boost trade

Origin Calculation | | MIC Customs Solutions |

New rules of origin now apply in the EU after a decision by the European Commission.

The European Commission is aiming to boost trade between the European Union and the pan-Euro-Mediterranean region by updating its rules of origin.

It has unveiled a package of new measures to make importing and exporting easier, as well as to help nations struggling with the economic effects of coronavirus to recover more quickly.

The move will update the EU's preferential trade agreements with 20 trading partners by making the rules of origin more "flexible and business-friendly", the council said in a statement.

This will affect bilateral agreements with countries including Norway, Turkey, Georgia, Ukraine, Serbia and Kosovo, among others.

Among the new terms are the elimination of cumulative requirements and thresholds for local value added to simplify product-specific rules.

There are also higher thresholds of tolerance for non-originating materials (up from ten per cent to 15 per cent), the possibility of duty-drawback to assist EU exporters with competitiveness, and new double transformation for textiles.

It is expected that the latter could prove to be a significant boost for textile producers like Turkey and Israel, with the European Apparel and Textile Confederation already having welcomed the news for its potential to ease the integration of textile and clothing supply chains.

"We need to do everything we can to facilitate trade and economic activity between the EU and our neighbours in the Euro-Mediterranean area, and to promote regional integration," said European commissioner for economy Paolo Gentiloni in a statement.

The new rules come after ten years of negotiations and apply alongside the Regional Convention on pan-Euro-Mediterranean preferential rules of origin (PEM Convention), pending the review of the convention.

They will be used to determine which goods are able to benefit from preferential treatment, since goods with preferential origin may be imported with lower or even zero duty rates depending on their tariff treatment.