OPENING TOWARDS NEW TRADE PARTNERS NEIGHBOURING POLICY AND FREE TRADE AGREEMENTS Sofia 10th November 2005 By Thomas Nietsch Expert of foreign trading 2018.11.11. Sofia

MAIN TOPICS The European Neighbourhood Policy Euro-Mediterranean Partnership 2018.11.11. Sofia

What is the European Neighbourhood Policy? Commissioner Benita Ferrero-Waldner: „The European Neighbourhood Policy is a new policy that invites our neighbours to the East and to the South to share in the peace, stability and prosperity that we enjoy in the European Union and which aims to create a ring of friends around the borders of the new enlarged EU.” It does not imply EU membership! That’s why does not cover candidate countries, like Bulgaria 2018.11.11. Sofia

Countries Covered by the ENP UA MD GE AZ AM SY LB MA IL TN PS DZ LY EG JO 2018.11.11. Sofia

The Beginning of the ENP Commission’s „Communication on Wider Europe” in March 2003 „to avoid the emergence of new dividing lines on our continent” after the enlargement (Ms. Ferrero-Waldner) Commission’s „Strategy Paper and Country Reports” on 12th May 2004 Co-operation in economic and social development, trade and energy Regional integration Commission’s first set of „Draft Action Plans” with partner countries on 9th December 2004 Key priorities, to be monitored regularly Action plans country by country, with different issues 2018.11.11. Sofia

The Objectives of ENP Sharing the benefits of the 2004 enlargement Strengthening stability, security and well-being Greater political, security, economic and cultural co-operation Reduction of trade barriers, stimulating investment and economic growth Common values: Rule of law, good governance, respect for human rights, incl. minority rights, promotion of good neighbourly relations, principles of market economy and sustainable development In case of significant progress in the ENP countries, European Neighbourhood Agreements 2018.11.11. Sofia

Parts of the ENP Northern Dimension policy of the EU Co-operation between EU – EEA – Russia Eastern countries: Partnership and Co-operation Agreements Euro-Mediterranean Partnership (Barcelona process) Association agreements with ENP countries in the Mediterranean and the Middle East Trade preferences 2018.11.11. Sofia

European Neighbourhood and Partnership Instrument Financial assistance within the ENP Replacing TACIS and MEDA programmes from 2007 TACIS: a programme of technical assistance to 12 CIS countries, launched in 1991 Supporting the process of transition to market economies and democratic societies MEDA The principal financial instrument of the Euro-Mediterranean Partnership programme, launched in 1995 For the ENP countries + Russia 2018.11.11. Sofia

ENPI 2018.11.11. Sofia

Present Situation of ENP 2018.11.11. Sofia

Euro-Mediterranean Partnership The start: The Euro-Mediterranean Conference of Ministers of Foreign Affairs Barcelona, 27-28 November 1995 25 EU members + 10 Mediterranean countries (incl. Turkey) Libya is an observer since 1999 2018.11.11. Sofia

The Barcelona Declaration Objectives: Common area of peace and stability Free-trade area Understanding between cultures and exchanges between civil societies Dimensions: Bilateral dimension Association agreements country by country Regional dimension Dealing with common problems 2018.11.11. Sofia

Euro-Mediterranean Free Trade Area Decided in Barcelona Target date 2010 Means: Individual association agreements between the EU and the partner countries Bilateral free trade of manufactured goods Liberalisation of the trade of agricultural products Free trade agreements between the partner countries EU – Turkey Association Agreement, 1995 Customs union 2018.11.11. Sofia

Association Agreements Lebanon: Interim AA – 2003, Syria: AA – 2004 not yet ratified 2018.11.11. Sofia

Importance of EMFTA EMFTA + EFTA = free trade zone of About 40 countries About 6-800 million consumers The world’s biggest marketplace South-South integration Arab Maghreb Union Morocco, Algeria, Tunisia, Mauritania, Libya Agadir Agreement Morocco, Tunisia, Egypt, Jordan 2018.11.11. Sofia

Pan-Euro-Mediterranean cumulation of origin Product of country A (originating) Export to country B Production with country A’s product Product of country B has an originating status, too Country B’s product gets the free trade treatment in the EMFTA 2018.11.11. Sofia

Pan-Euro-Mediterranean cumulation of origin The system will be extended to the Faeroe Islands, too All the bilateral association agreements and free trade agreements should be amended Identical protocols on rules of origin „variable geometry”: a minimum of three countries can apply the new system, without waiting for the others 2018.11.11. Sofia

Partial Drawback of Import Duties Drawback of import duty: An import product is used for a production and the finished product is exported General rule: No drawback of import duties from third countries (out of the Pan-Euro-Med region) Exception for the Mediterranean countries: Partial drawback of duties in case of exporting manufactured products A flat rate of e.g. 5-10% remains, the rest of the import duty is reclaimed With the exception of agricultural products (HS 1-24) 2018.11.11. Sofia

Pan-Euro-Med Rules of Origin Bilateral trade with bilateral cumulation No prohibiton of drawback New proofs of origin, due to variable geometry Movement certificate EUR-MED Invoice declaration type EUR-MED Both will show the originating status of the material used for production EUR.1 remains for Pan-European trade and bilateral trade (e.g. EU – Morocco) 2018.11.11. Sofia

Example Fabrics from Turkey to Tunisia A Tunisian company produces garment from it Garment exported to the EU Garment re-exported from the EU to Switzerland Without the new cumulation rules the Swiss importer should pay import duties With the new cumulation rules there will be preferential duty in Switzerland 2018.11.11. Sofia

Summarising New events will have a great effect on the European trade European Neighbourhood Policy Action Plans, country reports Resulting in bilateral agreements, preferential trade Euro-Mediterranean Partnership Within a short time Pan-Euro-Med cumulation, EUR-MED movement certificate Till 2010 Pan-Euro-Med free trade area 2018.11.11. Sofia

Further Information My contacts: http://europa.eu.int/comm/world/enp/index_en.htm http://europa.eu.int/comm/europeaid/projects/index_en.htm http://europa.eu.int/comm/external_relations/ My contacts: +36(30)350-7536 +36(1)370-4104 tnietsch@mail.datanet.hu 2018.11.11. Malta, 14 October 2005

THANK YOU! 2018.11.11. Sofia