M. Isabel García Catalán The EU Reform of the Rules of Origin M. Isabel García Catalán European Commission DG TRADE G/3

New aspects Comparison with other Rules of Origin with a development perspective The new FTAs

Conflict rule: Ownership The ROO of the reform Main features: Wholly obtained products Fish products : Relaxation of the vessels criteria: the crew requirement is eliminated Possibility to apply cumulatively the other requirements (flag, registration, ownership) between countries involved in regional cumulation. Sufficiently transformed products List of rules of origin product by product An across-the-board Value Added criterion + alternative CTC (with exceptions, i.e. T&C) - Tolerance rule fixed at 15% (with exception for textiles and agriculture?) Certificates of origin Self certification No rules for agricultural and processed agricultural products yet Conflict rule: Ownership

The ROO of the reform Fisheries: the vessels conditions Captures outside of territorial waters of the beneficiary country: Fish will be originating if the vessels fulfill the following criteria: Current rules Reform Flag Flag Registration Registration Ownership Ownership Officer+ Crew requirement

The ROO of the reform Main features: CTC or local content criterion 30% local content threshold. Exceptions LDCs A short list of industrial products: 50% local content T&C: single transformation Other cases: iron and steel,… Non-LDCs A longer list of industrial products: 50% local content T&C: double transformation Other cases: iron and steel,…

The ROO of the reform + + + Textiles and clothing Current situation Reform Double transformation (non-LDCs) Double transformation Single transformation (LDCs) Manufacture from yarn Manufacture from fabric + + + Combination of processing operations that confer origin: Spinning, weaving, printing,..

The ROO of the reform Main features: Self certification To request certificates of origin to the exporting customs administration is not any longer needed: exporters can issue their statements on origin In order to do so, exporters need to be registered The customs administration of the exporting country should put in place registration systems and ensure the correct functioning

The ROO of the reform Main features: Cumulation Cumulation within regions: Central America-Andean-Community-Panama ASEAN SAARC Requirement on a 50% VA in the last country of processing Cumulation between LDCs and non-LDCs even if different ROO apply. Placeholder: Cumulation between GSP countries and countries with which the EU has signed FTAs

The ROO of the reform GSP system and the Market Access Regulation GSP Vessels: No crew requirement T&C: Single transformation: LDCs T&C: Double transformation: Non-LDCs PSR: 30% local content: LDCs PSR: between 30% and 50% non-LDCs Tolerance: 15% (exceptions?) Cumulation: Diagonal within regions MAR Vessels: No crew requirement Processed Fish: global sourcing (Pacific) T&C: single transformation PSR: 50% and 75% local content Tolerance: 15% Cumulation: All ACPs = single territory + full with OCTs + diagonal neighbouring

The ROO for the new FTAs Groups of beneficiary countries by zones of cumulation Chile Mexico Reciprocal Preferences Balkans Pan-Euro-Med EU South Africa Autonomous Preferences GSP countries XS XK ME BA EPAs/OCTs

The ROO for the new FTAs Groups of beneficiary countries by zones of cumulation Chile Korea India GCC CA CAN ASEAN Mexico Reciprocal Preferences Ukraine Pan-Euro-Med EU Balkans South Africa Autonomous Preferences GSP countries XS XK ME BA EPAs/OCTs

The rules of origin of the new FTAs Three methods depending on the products Value added: between 50% and 75% local content in the country of the preference Double transformation (from yarn to fabric and from fabric to clothing) Tolerance of 10% Bilateral or diagonal cumulation Introduction of a revision clause to move to the rules of the reform