The Council of Ministers of the European Commission approved the proposal to create a Pan-Euro-Mediterranean zone of cumulation of origin. The new rules will result in the creation of a free trade agreement between the European Union and 16 trade partners.

The 16 countries are Algeria, Bulgaria, Egypt, Faeroe Islands, Iceland, Israel, Jordan, Lebanon, Morocco, Norway, Romania, Syria, Switzerland, Tunisia, Turkey, the West Bank and Gaza Strip.

In an announcing the new development, the EU Commission for Customs and Taxation said that the new 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 the participating countries”.

Cumulation of origin is an instrument that allows material and produce 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.

According to a statement issued by the Delegation of the European Commission to the State of Israel, the Council's decision opens the way for the extension of the system to those Mediterranean partners that participate in the Euro-Mediterranean Partnership (The Barcelona Process). It will make it possible, for example, for a Tunisian producer to source production in Turkey and to export the produce with preferential duty rates to the Community. Moreover, these products can be re-exported from the Community to Switzerland or to any other participating country and benefit from preferential tariff treatment.

The statement further says that 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 agreements."

The EU has already signed 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 origin, the statement concludes.

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