Last reviewed 4 July 2012

Henrietta Clarke reports on the new Euro-Mediterranean Convention on preferential rules of origin.

The new Convention

A Euro-Mediterranean Convention on preferential rules of origin was authorised by the Council in March 2012. It provides a single legal instrument to replace the current pan-Euro-Mediterranean (pan-Euro-Med) system of cumulation of origin based on individual protocols applicable between two partner countries. The Convention will address the difficulties in managing the current network of some 60 bilateral protocols on rules of origin among the countries or territories of the Euro-Mediterranean zone. It will facilitate the application of identical rules of origin for the purpose of diagonal cumulation of origin for goods traded in that zone. It should also help the contracting parties to react to rapidly changing economic realities and market conditions. A single legal instrument can be amended much more conveniently than a complex network of protocols.

The Convention was also seen as offering the opportunity to integrate the participants in the EU’s Stabilisation and Association process (Albania, Bosnia and Herzegovina, Croatia, the former Yugoslav Republic of Macedonia (FYROM), Kosovo, Montenegro and Serbia) into the pan-Euro-Med system of cumulation of origin. This should allow for the development of trade by offering new opportunities within an enlarged trade area and will promote regional integration.

The system of pan-Euro-Med cumulation

The system of pan-Euro-Med cumulation of origin is the extension of a previous system created in 1997. The system was then enlarged to the Faroe Islands and the Mediterranean countries. The Euro-Mediterranean Partnership was launched in Barcelona in 1995 to provide a framework for strengthened dialogue and comprehensive co-operation in the Mediterranean. The partners agreed to create an area of peace, stability and shared prosperity through the progressive establishment of free trade between the EU and its Mediterranean partners and amongst the partners themselves by 2010. The first step was the conclusion of a full set of Euro-Mediterranean association agreements between the EU and its partners in the Mediterranean, granting reciprocal trade preferences.

The pan-Euro-Med system of cumulation of origin was then created based on a network of preferential agreements, the origin protocols of which have to consist of identical rules. There are specific provisions on cumulation, the no drawback rule and proof of origin in the protocols. As long as those protocols are not in place between some countries of the zone, other rules apply.

Regional Convention

Several years ago, the Commission proposed to replace the network of about 60 bilateral protocols on rules of origin in force in the pan-Euro-Med zone with a single legal instrument in the form of a regional Convention.

The Convention was finally open for signature on 15 June 2011 and since then the EU, the European Free Trade Association (EFTA) States, FYROM, Montenegro, Croatia, Albania and Turkey have signed it. Following the ratification procedure, it has now entered into force in the EU, the EFTA countries, Albania and Croatia. The next step will be for contracting parties that have ratified the Convention to render it effective by referring to it in the origin protocols of their free trade agreements with their pan-Euro-Med partners that have completed their respective ratification procedures.

The contracting parties

The contracting parties to the Convention are: the European Union; the Faroe Islands; the EFTA states (Iceland, Liechtenstein, Norway and Switzerland); the participants in the “Barcelona process” (Algeria, Egypt, Israel, Jordan, Lebanon, Morocco, the Palestine Liberation Organisation for the benefit of the Palestinian Authority of the West Bank and the Gaza Strip, Syria, Tunisia and Turkey); the participants in the EU’s stabilisation and association process (Albania, Bosnia and Herzegovina, Croatia, FYROM, Kosovo, Montenegro and Serbia).