What is Free Trade Agreement about

31 de Marzo de 2017 -

¨According to IMF estimates, over the next years, 90% of world demand will be generated outside the EU. That is why it is a key priority for the EU to open up more market opportunities for European business by negotiating new Free Trade Agreements with key countries. If we were to complete all our current free trade talks tomorrow, we could add 2.2% to the EU's GDP or €275 billion.

This is equivalent of adding a country as big as Austria or Denmark to the EU economy. In terms of employment, these agreements could generate 2.2 million new jobs or additional 1% of the EU total workforce. Below is an overview of the most important on-going and concluded free trade negotiations"  EU Commission memo about bilateral agreements

Preferential origin confers tariff benefits (reduced import duty rate or even zero import duty rate) on goods traded between countries which have concluded a Free Trade Agreement with the EU or when one part has granted autonomously a preferential duty treatment to the other part.

Although the objectives of all preferential origin arrangements are the same, the provisions of those arrangements may vary.

In order to have preferential origin, goods must fulfill certain requirements that are laid down by the Origin Protocols of the Free Trade Agreements or in the origin rules of the autonomous Arrangements.

In general terms the preferential origin of goods must be allocated taking into account different aspects as the raw materials or components used for the production of the exported goods and the kind of working or processing that took place in the beneficiary country.

In summary each preferential Agreement contains its own specific rules of origin and the type of cumulation of origin applied.

When the requirements are met under a Free Trade Agreement’s rules of origin or under specific system as the PanEuroMediterranean cumulation system, goods becomes an "originating product" and therefore eligible for preferential treatment.

It is important to note that the originating status of goods exported from the EU needs to be determined considering the Community as a whole, regardless the different Member States involved in the manufacture of the final product.

Customs authorities of the importing countries require a proof in order to be eligible for preferential origin treatment. Every Free Trade Agreement lays down the different ways of proofing origin.

Almost every Free Trade Agreement (with the exception of Korea) signed by the EU sets up three different ways of proofing preferential origin

Proof of preferential origin

The EU preferential origin of the goods can be proved by the following ways:

Using a Preferential Origin certificate. This Certificate is called EUR.1 or EUR MED[1].

By the means of a declaration on the invoice for shipments normally under 6.000€[2].

By the means of a declaration on the invoice or on any other commercial document for consignments under or above usually 6.000 € The declaration on the invoice or on any other commercial document for consignments above 6.000 €, requires a specific Authorization from the Customs Authorities called Approved Exporter.

Any EU Approved Exporter can include the origin declaration on the commercial invoice or on any other commercial document which describes the goods concerned in sufficient detail to enable them to be identified.