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In a significant move to bolster regional trade, the Pan-Euro-Mediterranean (PEM) Joint Committee, on 7 December 2023 adopted new and modernised rules of origin. This decision, set to be implemented from 1 January 2025, aims to enhance trade between the European Union and its neighbouring countries in the PEM region. The revised rules are designed to modernise all preferential trade agreements among the 24 PEM trading partners, making them more flexible and conducive to business needs.

The PEM Joint Committee's decision also includes the development of electronic certification of origin, aiming to simplify customs formalities further. This step towards digitisation aligns with contemporary global trade practices, facilitating smoother and more efficient trading processes. The updated rules encompass a range of provisions aimed at easing the trade flow. These include simpler product-specific rules, such as the elimination of cumulative requirements and more adaptable thresholds for local value added. Textiles will benefit from new double transformation rules. Additionally, the tolerance thresholds for non-originating materials will increase from 10% to 15%, and the introduction of “full” cumulation will allow manufacturing operations needed to acquire origin to be split among several countries. The possibility of duty-drawback for most products will enhance the competitiveness of EU exporters.

The new rules are the culmination of ten years of negotiations and will apply within the framework of the Regional Convention on pan-Euro-Mediterranean preferential rules of origin (PEM Convention). This change is not just a procedural update; it's a significant step towards realising the full potential of trade in the PEM region. The new framework acknowledges the evolving needs of the modern trade landscape and is a testament to the commitment of the EU and its partners to foster a more interconnected and prosperous trading environment.

The PEM convention contracting countries are: the European Union, Iceland, Liechtenstein, Norway, Switzerland, Faroe Islands, Türkiye, Morocco, Algeria, Tunisia, Egypt, Israel, Jordan, Lebanon, Palestine Georgia, the Republic of Moldova, Ukraine, Albania, Bosnia and Herzegovina, North Macedonia, Montenegro, Serbia and Kosovo.

Source: DG TAXUD