EC welcomes approval by council to create free trade zone between EU-Med

28 Oct '05

3 min read

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).

Laszlo Kovacs, 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.

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.

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