On Monday, the European Union proposed new rules and more relaxed ones to increase trade with the neighboring Pan-Euro-Mediterranean (PEM) region, The new rules would also help the nations with economic recovery especially after being hit by the twin tragedy of global pandemic and economic recession. As per the Commission’s press releases, the new “proposals will modernize the EU’s preferential trade agreements with 20 PEM trading partners by making the relevant ‘rules of origin’ in those agreements more flexible and business-friendly.”
This amendment of rules would impact the EU’s bilateral agreements with the following countries: Iceland, Liechtenstein, Norway, Switzerland, Faroe Islands, Turkey, Egypt, Israel, Jordan, Lebanon, Palestine, Georgia, the Republic of Moldova, Ukraine, Albania, Bosnia and Herzegovina, North Macedonia, Montenegro, Serbia, and Kosovo. The EU’s trade with these nations amounted to about 677 billion euros (799 billion U.S. dollars) in 2019, which is almost half of the EU’s preferential trade.
Paolo Gentiloni, Commissioner for Economy, said: “We need to do everything we can to facilitate trade and economic activity between the EU and our neighbors in the Euro-Mediterranean area, and to promote regional integration. This will also help countries like Lebanon recover and rebuild, while at the same time supporting European businesses in accessing new markets.”
Few of the key aspects of the package, which had 21 proposals, included: product-specific rules making access to preferential treatment simpler; 10 to 15 percent increase in tolerance for non-originating materials; introduction of “full” cumulation of products wherein the manufacturing operations can split among several countries; and suggestion for repayment of duties on imported components. These would help the bloc in providing preferential treatment to its trading partners as the origin of the goods would help businesses to identify the economic nationality of a product. When all the basic requirements are met, goods with preferential origin would be eligible to be imported at lower duty rates, or even a zero rate, depending on the preferential tariff deal.
After the passing of new amendments in the European Council, the new rules are believed to come into effect sometime during the first half of 2021, depending on how individual nations proceed with the trade talks.
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