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EU Trade Policy

        EFTA,
Turkey and EUROMED
     Agreements
                  Isabelle Ramdoo, ECDPM


 MEXA Workshop, 27 July 2012
     Labourdonnais Hotel
Overview of Presentation

        1. European Free Trade Area
            a) EFTA and the EU
            b)EFTA as a potential market

        2. Turkey
            a)EU – Turkey Customs Union
            b)Turkey Mauritius FTA
            c)Turkey safeguard on woven fabrics and apparel

        3. Euromed Agreements
            a)Tunisia – Morocco – Egypt

        4. EU – South Africa : TDCA


ECDPM                                                         Page 2
European Free Trade Association

        1. EFTA and the EU

        •   The 4 EFTA countries are Iceland, Liechtenstein, Norway and
            Switzerland
        •   They signed an European Economic Area Agreement in 1994 with the
            EU, allowing them to participate in EU’s internal market
        •    It covers free movement of goods for industrial products. Tariff
            reductions are applicable for agriculture and fish and fish products

                                    Fish fillets, fresh,                     fish prepared and
            Tariffs applied by EU                          Tuna, skip jack
                                      frozen, chilled                            preserved
                   EEA                     5.4%                 7.2%               7.2%
                   MFN                    18.0%                24.0%              24.0%
               EPA Mauritius               0.0%                 0.0%               0.0%

        •   EEA is not a customs union, and therefore each EFTA country applies
            its own rate of duty to all third countries.



ECDPM                                                                                       Page 3
EFTA as a potential market: trade relations with third countries

  •     EFTA has concluded 24 FTAs with a total of 33 partner countries and
        territories outside the EU: Albania, Canada, Chile, Colombia, Croatia,
        Egypt, the Gulf Cooperation Council (Bahrain, Kuwait, Oman, Qatar, Saudi
        Arabia and the United Arab Emirates), Hong Kong, Israel, Jordan, Korea,
        Lebanon, Macedonia, Mexico, Montenegro, Morocco, Palestinian Authority,
        Peru, Serbia, Singapore, the Southern African Customs Union
        (Botswana, Lesotho, Namibia, South Africa and Swaziland), Tunisia,
        Turkey and Ukraine.

  •     Negotiations are on going with Bosnia, Central American States, India and
        Indonesia, Russia, Belarus and Kazakhstan. Negotiations are expected to
        be launched with Vietnam.

  •     EFTA has signed a Joint Declaration on Cooperation with Mauritius. This is
        not an FTA

  •     FTAs provides for free trade in industrial goods, including fish and
        other marine products; and tariff reductions in processed agricultural
        products;

ECDPM                                                                          Page 4
•     Imports of textiles from selected EFTA countries :Norway

                                                            T Shirts
                               Cotton   Denim    T Shirts              Pull     Pull                Shirts
         Norway        Yarn                                   Man                        Trousers
                               Fabric   Fabric   Cotton                Wool    Cotton               Cotton
                                                             made

       Total imports
                       2,543    109      27      105,447    148,432    2,520   138,633   146,051    73,272
         ('€ 000)
          China        1.5%    18.3%    18.5%    32.0%      34.1%      35.8%   61.3%      25.3%     41.0%
       Bangladesh                                           25.2%              13.1%      11.1%     5.8%
          Turkey                                 14.4%      18.4%               7.1%      15.7%     6.7%
         Germany       48.6%
          Italy        18.6%            18.5%     5.3%                 12.6%              11.2%     2.0%
          tunisia                                                                         6.4%
         Pakistan                                                                         6.0%
          India                                              5.1%               1.9%      2.8%      14.6%
            UK         13.0%   16.5%
        Lithuania                                12.1%       1.6%
           Peru        6.0%
            US                 15.6%
         Sweden                13.8%                                   3.7%                         8.3%
        Hong Kong                                                      18.0%




ECDPM                                                                                                        Page 5
Tariffs applied by Norway on textile products

                                                    T shirts
    Norway             Cotton   Denim    T Shirts                           Pull               Shirts
                Yarn                                  man      Pull wool            Trousers
    Tariffs            Fabric   Fabric   Cotton                            cotton              cotton
                                                     made

        MFN     0.0%   0.0%     0.0%     10.7%      10.7%       10.7%      10.7%     10.7%     10.7%

    GSP Rate
   (including   0.0%   0.0%     0.0%     10.7%      10.7%       10.7%      10.7%      0%        0%
      MRU)

        LDCs    0.0%   0.0%     0.0%      0.0%       0.0%        0.0%      0.0%      0.0%      0.0%

 Countries having FTAs with Norway

     Egypt      0.0%   0.0%     0.0%      0.0%       0.0%        0.0%      0.0%      0.0%      0.0%

   Morocco      0.0%   0.0%     0.0%      0.0%       0.0%        0.0%      0.0%      0.0%      0.0%

        Peru    0.0%   0.0%     0.0%      0.0%       0.0%        0.0%      0.0%      0.0%      0.0%

    Mexico      0.0%   0.0%     0.0%      0.0%       0.0%        0.0%      0.0%      0.0%      0.0%

     SACU       0.0%   0.0%     0.0%      0.0%       0.0%        0.0%      0.0%      0.0%      0.0%

    Tunisia     0.0%   0.0%     0.0%      0.0%       0.0%        0.0%      0.0%      0.0%      0.0%

    Turkey      0.0%   0.0%     0.0%      0.0%       0.0%        0.0%      0.0%      0.0%      0.0%




ECDPM                                                                                                   Page 6
Norway GSP Scheme and Rules of Origin
  • GSP applies to all developing countries
  Coverage:
  • Prepared or preserved fish benefit from 100% reduction from MFN
  • T-shirts, jerseys and pulls (Ch 61.09; 69.10) are excluded from GSP
  • Trousers and shirts (Ch 62) : GSP = 0%
  • LDCs have duty free, including from excluded products

  General Rules
  - Change in tariff heading – i.e when all the imported materials (non-
    originating materials) used are classified in a HS tariff heading (4 digits)
    different from the tariff heading under which the exported product is
    classified, except when specified in the specific rule
  -   Chapter 3 : fresh fish – wholly obtained;
  -  Chapter 16: Canned tuna, prepared, preserved fish: fish to be wholly
    obtained.
  - Yarn: silk – manufacture from raw silk;
  - Woven fabric – manuf. from natural fibres (double stage transformation)
  - T shirts & pull (Ch 61) – Manufacture from natural fibres
  - Shirts (Ch 62) – Manufacture from yarn (double stage transformation)
ECDPM                                                                              Page 7
  -
Value tolerance – 10% of ex works price (except where specified
        otherwise)

        Cumulation: All countries must be GSP beneficiary; 3 types:
        1.Bilateral – with Norway
        2.Regional – between developing countries forming a regional grouping,
        at the request of the country and upon approval.
        3.Diagonal – between Norway, EU and Switzerland and beneficiary
        country (except in Ch 1 – 24). It implies that materials originating in
        Norway, EU and Switzerland can be incorporated in goods produced in a
        GSP country, when the final product is exported to Norway, EU and
        Switzerland.

        Derogation possible for LDCs only, if justified for economic
        development purposes




ECDPM                                                                             Page 8
Switzerland – Textile imports from main markets

                           Cotton   Denim    T Shirts    T Shirts   Pull     Pull                Shirts
    Switzerland    Yarn                                                               Trousers
                           Fabric   Fabric   Cotton     Man made    Wool    Cotton               Cotton

   Total imports
                   3,172   9,427     314     190,532     114,052    5,453   409,445   379,964    165,403
     (€ '000)
       China                        6.4%      4.5%        4.3%      8.0%    12.4%      11.2%      7.8%
    Bangladesh                                9.2%                          11.2%       8.4%      7.1%
      Turkey                4.5%              4.5%        5.1%               3.4%                 9.9%
     Germany       30.6%   11.6%    44.9%    38.7%       55.0%              26.4%      36.8%     29.2%
       Italy        3.0%   44.1%              7.9%        6.0%      53.1%              12.4%     21.1%
     Belgium       13.7%
      France               22.5%                          4.2%      3.7%     7.7%                 5.7%
    Madagascar                                                      3.8%
       Japan                        17.8%
       Spain                         7.3%
      Austria              13.5%
       India                                  4.8%                           8.8%                 4.5%
     Pakistan                                                                          3.7%
         UK                                                         5.8%
     Denmark       26.5%
        Peru                                                        4.0%
      Estonia      19.1%




ECDPM                                                                                                 Page 9
Tariffs applied by Switzerland: Note duties are specific

                            Cotton     Denim     T Shirts   T Shirts Man   Pull    Pull               Shirts
  Switzerland     Yarn                                                                     Trousers
                            Fabric*    Fabric*   Cotton        made        Wool   Cotton              Cotton


                                                                        CHF
                 CHF 26 -   CHF130/1    CH        CHF     CHF 391/100            CHF        CHF        CHF
  MFN Duty                                                            306/100
                46/100 kg     00 kg  75/100 kg 152/100 kg      kg             120/100 kg 182/100 kg 200/100 kg
                                                                         kg

                                       CHF                             CHF
                 CHF 13      CHF                 CHF        CHF                 CHF    CHF 91/100    CHF
     GSP                            37.5/100k                        153/100
                23/100 kg 65/100 kg           76/100 kg 195.5/100 kg         60/100 kg     kg     100/100 kg
                                        g                               kg

    China         MFN         MFN       MFN        MFN          MFN        MFN     MFN       MFN       MFN
                                      Countries having an FTA with Switzerland
   Morocco         0           0          0         0            0          0       0         0         0
    Tunisia        0           0          0         0            0          0       0         0         0
    Turkey         0           0          0         0            0          0       0         0         0
    Egypt          0           0          0         0            0          0       0         0         0
    SACU           0           0          0         0            0          0       0         0         0



 * for fabric, when manufactured from handlooms from Pak, Sri Lanka, India and China, Duty =0%




ECDPM                                                                                                          Page 10
Rules of origin applied by Switzerland

    •   Since 2011, Swiss RoO for industrial products are identical to EU
        RoO; i.e differentiation between developing countries and LDCs
    •   For agricultural products (HS chapters 1 to 24), the rules of origin are
        specific to the Swiss GSP and apply the method of tariff heading
        change (HS 4-digit level) with the exception of four products, i.e. HS
        1108 (starches), 1901 (malt extract), 1904 (cereal products), and 1905
        (bread, pastry, cakes).
    •   General value tolerance: 15% ex-works price, with the exception of
        textile and clothing, where specific rules apply

    Derogation possible for LDCs only, if justified for economic development
      purposes




ECDPM                                                                        Page 11
Cumulation:

  - Bilateral, between Switzerland and beneficiary country;
  - Diagonal, with Norway, EU and Turkey (with Turkey, not yet in force) -
  limited to industrial products of HS Chapters 25-97
  - Regional – between countries belonging to same regional group provided
  that a request is made and approved by Switzerland and there is sufficient
  processing. Products of chapters 50 to 63 and HS 6401 to 6405 are excluded
  from regional cumulation .




ECDPM                                                                     Page 12
Imports from Norway and Switzerland – Fish and Fish products

                    Fish                                           Fish
                                          fish                                            fish
                  fillets,                                       fillets,
                              Tuna,    prepared                             Tuna, skip prepared
    Norway        fresh,                           Switzerland    fresh,
                             skip jack    and                                 jack        and
                 frozen,                                         frozen,
                                       preserved                                       preserved
                 chilled                                         chilled
     Total                                           Total
    imports      49,917       10,649    31,503     Imports (€    79,270       8,509     16,779
    (€’000)                                          ‘000)
     China       34.4%
                                                    Vietnam      17.2%
        Russia   13.9%
    Thailand     12.3%        85.9%     0.3%        Germany      10.6%        34.0%     16.2%
        Poland    6.8%                             Denmanrk       9.2%                  5.9%
    Faroe Isl     5.8%                               Russia       9.2%
    Vietnam       3.5%        4.8%
                                                     China        8.7%
        Italy                 2.7%
   Philippines                2.5%                    Italy                   17.0%     15.9%
    Portugal                  1.0%                   Spain                    36.8%
    Sweden                              71.9%
                                                    Morocco                   7.4%
        France                          8.6%
                                                     France                   2.5%      23.2%
    Denmark                             4.6%
        Japan                           3.3%       Netherlands                          16.8%




ECDPM                                                                                       Page 13
Tariffs applied by Switzerland and Norway

                                 Fish fillets, fresh,                        fish prepared and
              Norway                                      Tuna, skip jack
                                   frozen, chilled                               preserved
                MFN                     0.0%                   0.0%                0.0%

    GSP Rate (including MRU)            0.0%                   0.0%                0.0%

               LDCs                     0.0%                   0.0%                0.0%

        Countries havinf FTA            0.0%                   0.0%                0.0%



                                   Fish fillets, fresh,                       fish prepared and
              Switzerland                                  Tuna, skip jack
                                     frozen, chilled                              preserved
                 MFN                      None                   None         CHF 0 -13.00/100kg
                 GSP                      None                   None               None

         Countries having FTAs            None                   None               None



        Rules of origin:
        fish fillets: Wholly obtained
        Tuna and prepared fish: fish must be wholly obtained




ECDPM                                                                                              Page 14
2. TURKEY

            1. EU – Turkey Customs Union
        •     A Customs Union between Turkey and the EU entered into force in
              December 1995.

        •     The scope of the customs union with Turkey is limited to industrial
              products and processed agricultural products.

        •     Some products do not fall within the scope of the customs union: they
              remain subject to a preferential treatment based on origin. These are
              agricultural products and coal and steel

        •     In a nutshell: Turkey – EU CU covers textile and apparel but does
              not cover fish and fish products




ECDPM                                                                               Page 15
Exports of Turkish textile products to main markets

        Tariffs: duty free

                    T Shirts    T Shirts             Pull     Shirts    Denim    Cotton           Pull
                                         Trousers                                         Yarn
                    Cotton     Man Made             Cotton    Cotton    Fabric   Fabric           Wool

    Total Exports
                  1,951,195 1,102,113 1,034,069     674,244   494,457   316,756 53,916    6,170   5,241
    to world (€
    '000)
          EU        87.1%     82.1%     81.7%       86.0%     74.0%     35.5%    53.9% 84.5% 66.1%
        Hong Kong                                                                         8.3%
        Freezones                                                                21.7%
         Morocco                                                                 4.3%
         Tunisia                                                        17.9%
          Egypt                                                         10.9%
         Russia      1.1%                 2.8%                           8.7%
           US        0.9%        1.1%                          4.3%
          Iraq                  10.9%




ECDPM                                                                                                 Page 16
Fish and fish products: Exports from Turkey to main markets
   Tariffs: Duty free

                                     Fish fillets, fresh, frozen,                     fish prepared and
                                                                    Tuna, skip jack
                                                chilled                                   preserved


   Total Exports to world (€ '000)             43,720                    291               6,190

                EU                             86.7%                    55.3%              80.4%
                US                              7.6%                    20.3%               5.5%
             Azerbaijan                                                                    13.0%




ECDPM                                                                                                     Page 17
Rules of origin:
 For industrial products – Movement of goods within customs unions
    is not based on their originating status but on the fact that they
    comply with provisions on free circulation

 For agricultural products – pan-Euro-Mediterranean Protocol
 Vessel requirements (all conditions must be fulfilled):
 - Registration and flag
 - Ownership: 50% by nationals; or companies headquarted in Turkey
    or EU where executive staff (managers, board members etc) must
    be nationals;
 - Masters and officials are nationals
 - At least 75% of crew must be nationals
 Value tolerance: 10% of ex-works price
 Derogation: None




ECDPM                                                              Page 18
Cumulation:
    Simplification to cover, EU27, EFTA (Iceland, Liechtenstein
       Mediterranean countries (Algeria, Egypt, Israel, Jordan, Lebanon,
       Morocco, Syria, Tunisia, Palestine, West Bank and Gaza) - 42
       countries in total. Key elements:

    -   Bilateral cumulation – between EU and Turkey;

    -   Full cumulation between European Economic Area (EU27 +
        Iceland, Liechtenstein, Norway), Turkey, Algeria, Morocco,
        Tunisia

    -   Diagonal cumulation – with other Euro Med countries having
        FTAs among themselves and identical rules of origin




ECDPM                                                                Page 19
2. Turkey as a potential market

    1. Mauritius – Turkey FTA
    Mauritius signed an trade agreement with Turkey in 2011. The Agreement
       has not yet entered into force.

    What has been obtained?
   Turkey               Cotton Denim      T Shirts      T shirts                                              Shirts
                Yarn                                             Pull wool Pull cotton          Trousers
   Tariffs              Fabric Fabric     Cotton       man made                                               cotton
    MFN         3.8%     8%     8%          12%           12%          12%        12%             12%          12%
    GSP          3%     6.4%   6.4%         9.6%          9.6%         9.6%       9.6%            9.6%         9.6%
  Mauritius                                                                                      25% per      25% per
                                        25% per year 25% per year             25% per year
  FTA from                                                                                      year from    year from
                                          from entry    from entry              from entry
   date of       0%      0%     0%                                     0%                       entry into   entry into
                                         into force of into force of           into force of
  entry into                                                                                     force of     force of
                                          agreement     agreement               agreement
    force                                                                                       agreement    agreement


                                Fish fillets, fresh, frozen,                                fish prepared and
               Turkey           chilled                      Tuna, skip jack                preserved
                MFN                          30%                        80%                            80%
                GSP                                                N0 Preferences
                                 100% reduction on MFN on        20% reduction on MFN (no      50% reduction on MFN rate
          Mauritius FTA
                                         100 KG                        quota limits)                  for 100 kg




ECDPM                                                                                                             Page 20
Mauritius Turkey FTA – Rules of Origin

    Value tolerance: 15% ex works price
    General Derogation: possible for development purposes
    Derogation for tuna: annual quota of 3.000 tonnes for preserved tuna
       and tuna loins and 2.000 tonnes for fish fillets (valid for 7 years, with
       possibility of renewal)

    Vessels:
    Registration and flag requirements; and at least one of the following:
    - ownership: 50% national
    - Owned by companies with HO in country + 50 % ownership by nationals

    Cumulation:
    Bilateral
    Diagonal – as with EPA, Mauritius can source its products with Turkey or
       EU or EPA countries, provided they are sufficiently processed
    With neighbouring countries, provided a PTA is applicable, the RoO are
       similar and countries have concluded an agreement on customs
       cooperation

ECDPM                                                                          Page 21
Specific rules: Textiles

    •   Yarn – Manufacture from raw silk

    •   Fabric – single stage transformation – manufacture from yarn

    •   T Shirts and pullovers – single stage transformation - manufacture
        from fabric

    •   Trousers and Shirts – single stage transformation - manufacture from
        fabric




ECDPM                                                                        Page 22
Special safeguard measure applicable on textiles


   •      In January 2011, Turkey initiated safeguard procedures regarding imports
          of woven fabric and apparel
   •      Approved by Turkish Authorities in September 2011

        Turkey
                   Cotton   Denim    T Shirts T shirts man                                       Shirts
        special                                            Pull wool   Pull cotton   Trousers
                   Fabric   Fabric   Cotton      made                                            cotton
       safeguard
         MFN        8%       8%       12%        12%         12%          12%          12%        12%
    Countries
  other than EU MFN +       MFN +    MFN +
                                              MFN + 40% MFN + 40% MFN + 40% MFN + 40%           MFN + 40%
     and FTA     30%         30%      40%
    countries
                   MFN +    MFN +    MFN +
         GSP                                  MFN + 37% MFN + 37% MFN + 37% MFN + 37%           MFN + 37%
                    28%      28%      37%
                   MFN +    MFN +    MFN +
        LDCs                                  MFN + 27% MFN + 27% MFN + 27% MFN + 27%           MFN + 27%
                    21%      21%      27%



   •      The safeguard currently applies to Mauritius but will be lifted as soon as
          the the FTA will enter into force



ECDPM                                                                                                Page 23
3. EUROMED Agreements:

        Case of Tunisia, Morocco and
                    Egypt




ECDPM                                  Page 24
Key elements of the EU Med Agreements
  1. Coverage:
  Algeria, Egypt, Israel, Jordan, Lebanon, Morocco, Tunisia, Palestine,
     Turkey, Syria (not signed)




ECDPM                                                                 Page 25
•   Cover essentially trade in goods, being complemented with a
            number of additional negotiations to open up additional
            agricultural trade;

        •   Duty-free access to the EU for Med industrial products and
            around 80% of agricultural produce

        •   Common rules to allow cumulation of origin within the Euromed
            and beyond.

        •   Regional convention on PanEuroMed preferential rules of origin
            agreed in 2011

        •   However: proper implementation of the requires complete
            South-South FTA network




ECDPM                                                                     Page 26
1. Tunisia
  Exports of selected textile products of Tunisia to main markets
  Tariffs: duty free on all selected products below


                                 T Shirts     T Shirts Shirts Pull  Denim          Pull     Cotton
                      Trousers                                                                            Yarn
                                 Cotton      Man Made Cotton cotton Fabric         Wool     fabric

        Total Exports
         to world (€  495,427    276,907      100,246    60,256    53,344 35,681   22,873     24           48
            '000)

                EU     97.1%     99.8%         98.3%     99.3%     95.4%   42.7%   100.0%    0.0%    100.0%




                                                              fish prepared and    Fish fillets, fresh,
                                            Tuna, skip jack
                                                                  preserved          frozen, chilled


        Total Exports to world (€ '000)         2,789               792                     111

        EU                                      15.3%              99.9%                100.0%
        Libya                                   73.8%
        UAE                                      7.4%




ECDPM                                                                                                       Page 27
2. Morocco
 Exports of selected textile products of Morocco to main
 markets
 Tariffs: Duty free on all selected products below

                              T Shirts    T Shirts   Shirts  Pull      Denim    Pull    Cotton
                   Trousers                                                                       Yarn
                              Cotton     Man Made    Cotton cotton     Fabric   Wool    fabric

   Total Exports
   to world (€     273,888    189,384     82,744     71,126   43,162   29,050     922    538       19
   '000)
         EU         95.7%     98.8%       98.9%      98.7%    99.9%    98.3%    99.3%   86.6%    100.0%


                                         Fish prepared and
                                                                 Tuna, skipjack
                                             preserved
    Total Exports to world (€ '000)           83,213                   2,484
    EU                                        92.1%                    77.4%
    Syria                                      3.1%                    10.3%
    Eq. Guinea                                 1.3%                    9.4%




ECDPM                                                                                                    Page 28
3. Egypt

 Exports of selected textile products of Egypt to main markets
 Tariffs: Duty free on selected products below


                       T Shirts   T Shirts Man              Shirts                        Pull
                                                 Trousers            Yarn    Pull Wool
                       Cotton        Made                   Cotton                       cotton

    Total Exports to
                       246,712       42,450      135,314    31,137   2,476      65        84
     world (€ '000)

           EU          47.9%         50.8%        24.4%     68.9%     8.0%     9.2%      0.0%
         Turkey        4.5%                        7.6%              82.0%
           US          42.6%         43.6%        65.0%     28.3%             90.8%      95.2%


        Egypt does not export fish and fish products (tuna, skipjack) to the EU.
        However, duty on tuna is 20.5%




ECDPM                                                                                             Page 29
A closer look at rules of origin in the Euromed Zone

        Textile products:
        Yarn
        Manufacture from raw silk, natural fibres, chemicals or paper
           make materials
        Value tolerance: 10% weight of yarn
        Fabric
        Single stage transformation - Manufacture from yarn
        Value tolerance: 10% weight of fabric
        Apparel:
        Double stage transformation – manufacture from yarn
        Value tolerance: 8% ex works price

        Fish and fish products:
        Same as above for Turkey

ECDPM                                                                   Page 30
Cumulation


    •   Jordan, Morocco, Egypt and Tunisia have an FTA since 2006.
    •   This FTA is based on their EUROMED agreement.
    •   The RoO that apply are the EU RoO
    •   This allows them to use the full cumulation principle, when
        they export to the EU. It means that any of those four countries
        can source their inputs among themselves and export to the EU
        and still benefit from duty free access to the EU market.




ECDPM                                                                Page 31
EU South Africa Trade relationship
                      TDCA




ECDPM                                        Page 32
•     South Africa is the EU's largest trading partner in Africa
  •     EU concluded a trade, development and cooperation agreement in 1999

  Rules of origin
  Cumulation – Bilateral between SA and EU
  Cumulation with ACP:
  - SACU – Any working or processing carried out within SACU shall be
     considered as having been carried out in South Africa, when further
     worked or processed there
  - Other ACP –Products acquire originating status in the Community or South
     Africa only when the value added there exceeds the value of the materials
     used originating in any one of the ACP States and when it has undergone
     sufficient working or processing. However, EPA RoO should apply between
     SA and ACP country. This is currently not the case.

  Vessels (all):
  a. Registration and flag requirements
  b. Ownership requirement : 50% (also for companies headquartered)
  c. Nationality requirement for masters and officials
  d. Crew requirement: 75% should be nationals (c and d to be replaced by
      50% crew requirement once tariffs are reduced on fisheries)
ECDPM                                                                         Page 33
General value tolerance: 15% ex works price, except for products falling
    within chapter 3 and 24 (incl fish and fish products), where 10% ex works
    price

    Specific rules:
    Fish and fish products: wholly obtained

    Yarn: Manufacture from raw silk or natural fibres

    Fabric: Single stage transformation – manufacture from yarn or natural
    fibres

    T-shirts and pullovers: Double stage transformation – manufacture from
    yarn or natural fibres

    Shirts and trousers: Double stage transformation – manufacture from yarn
    or natural fibres

    Value tolerance: 10% weight of yarn

ECDPM                                                                      Page 34
Tariff applied to South Africa under TDCA

                            Cotton     Denim      T Shirts    T Shirts   Pull    Pull
                     Yarn                                                                   Trousers
                            Fabric     Fabric     Cotton     Man made    Wool   Cotton

 Tariff applied by
 EU under TDCA       0%       0%         0%          0%         0%        0%     0%              0%
  to South Africa




                            Fish fillets, fresh, frozen,                        fish prepared and
                                                             Tuna, skip jack
                                       chilled                                      preserved

   No preferences under
                                      14.5%                      20.5%                   20.5%
    TCDA - GSP applied




ECDPM                                                                                                  Page 35
Exports of selected textile products of South Africa to main markets

                       T Shirts               T Shirts   Shirts    Pull                Denim
                                  Trousers                                 Pull Wool
                       Cotton                Man Made    Cotton   Cotton               Fabric


    Total Exports to
                        4,615      4,334       2,818     2,109     254       220        165
     world (€ '000)

            EU         10.7%       13.2%       6.1%      4.9%     16.1%      4.5%      0.0%
          Zambia       11.7%       11.3%      17.1%      15.0%    27.6%     30.9%
        Zimbabwe       10.9%       14.2%      12.5%      32.5%    9.4%                 18.2%
        Mozambique                 15.0%      18.6%                         10.5%
         Mauritius      8.7%       5.5%        5.5%      5.5%     14.6%      9.1%      81.2%
           DRC         10.8%
          Angola                                         8.3%
          Kenya                                                             26.8%




ECDPM                                                                                         Page 36
South Africa as a potential market
    •     South Africa is the largest trading partner of Mauritius in Africa

    Imports from South Africa from main competitors in selected products

                                                                  T Shirts
                                 Cotton     Denim     T Shirts    Man         Pull      Pull                   Shirts
        South Africa    Yarn     Fabric     Fabric    Cotton      made        Wool      Cotton    Trousers     Cotton

        Total imports      820      2,215     6,884     118,304      51,255     2,790    28,288      121,537    64,779
        Italy                       6.0%                                       10.1%                   1.0%
        China            15.2%     20.2%      45.4%      48.3%       68.4%                65.6%       62.7%      41.3%
        Turkey           76.8%                                        1.1%                             0.9%       1.7%
        Austria                     6.5%
        Bangladesh                                        3.9%        2.1%                 3.6%        6.5%      11.0%
        Hong Kong                                                                          2.3%
        India                                  6.7%       8.6%        1.3%                 1.8%        1.2%       8.6%
        Bulgaria          4.9%
        Mauritius         2.1%     58.1%      35.1%      28.1%       12.3%     52.2%       9.1%       18.9%      10.3%
        Mexico                                 3.2%
        Thailand                    3.8%                              3.2%
        Madagascar                                        2.2%                 28.2%       9.8%        4.1%      17.0%
        Tanzania                                          1.0%
        Indonesia                                                     2.9%                                        3.7%
        Vietnam                                                       1.3%


ECDPM                                                                                                                   Page 37
South Africa imports from fish and fish products from main market

                        Fish fillets, fresh, frozen,                     fish prepared and
        South Africa                                   Tuna, skip jack
                                   chilled                                   preserved
        Total imports              5,412                   30,526              3,047
            China                 18.4%                                       23.5%
          Vietnam                 15.0%
           Norway                 23.7%
          Mauritius                7.8%                     0.2%
         Philippines                                        2.0%
              UK
          Thailand                                         95.5%              10.7%
         Argentina                 6.4%
            Taipei                                          1.1%
         Indonesia                                          0.4%
             Italy                                          0.2%
          Uruguay                                                             41.8%




ECDPM                                                                                   Page 38
Duties applied by South Africa to SADC countries

                               Cotton    Denim      T Shirts       T Shirts    Pull      Pull
                        Yarn                                                                      Trousers
                               Fabric    Fabric     Cotton        Man made     Wool     Cotton

        MFN Rate        0%      22%       22%            45%         45%        45%      45%          45%

   Duty applied to
                        0%      0%        0%             0%           0%        0%       0%           0%
   SADC countries



                                  Fish fillets, fresh,                                  fish prepared and
                                                                  Tuna, skip jack
                                    frozen, chilled                                         preserved
                                                               25% or $240 whicher is
             MFN Rate                    25%                                              $ 7.2 per tonne
                                                                    the highest
        Duty applied to SADC
                                          0%                            0%                       0%
              countries




ECDPM                                                                                                        Page 39
SADC Rules of Origin

    •    Fish and Fish products: Wholly obtained

    •    Yarn: (51.06.10) – change in tariff heading

    •    Fabric: Single stage transformation – manufacture from yarn

    •    T Shirts and pullovers: Double stage transformation - manufacture
         from yarn

    •    Shirts and trousers: Double stage transformation - manufacture from
         yarn




ECDPM                                                                        Page 40
Thank you
   www.ecdpm.org
www.slideshare.net/ecdpm




                           Page 41

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EU trade policy: EFTA, Turkey and EUROMED agreements

  • 1. EU Trade Policy EFTA, Turkey and EUROMED Agreements Isabelle Ramdoo, ECDPM MEXA Workshop, 27 July 2012 Labourdonnais Hotel
  • 2. Overview of Presentation 1. European Free Trade Area a) EFTA and the EU b)EFTA as a potential market 2. Turkey a)EU – Turkey Customs Union b)Turkey Mauritius FTA c)Turkey safeguard on woven fabrics and apparel 3. Euromed Agreements a)Tunisia – Morocco – Egypt 4. EU – South Africa : TDCA ECDPM Page 2
  • 3. European Free Trade Association 1. EFTA and the EU • The 4 EFTA countries are Iceland, Liechtenstein, Norway and Switzerland • They signed an European Economic Area Agreement in 1994 with the EU, allowing them to participate in EU’s internal market • It covers free movement of goods for industrial products. Tariff reductions are applicable for agriculture and fish and fish products Fish fillets, fresh, fish prepared and Tariffs applied by EU Tuna, skip jack frozen, chilled preserved EEA 5.4% 7.2% 7.2% MFN 18.0% 24.0% 24.0% EPA Mauritius 0.0% 0.0% 0.0% • EEA is not a customs union, and therefore each EFTA country applies its own rate of duty to all third countries. ECDPM Page 3
  • 4. EFTA as a potential market: trade relations with third countries • EFTA has concluded 24 FTAs with a total of 33 partner countries and territories outside the EU: Albania, Canada, Chile, Colombia, Croatia, Egypt, the Gulf Cooperation Council (Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates), Hong Kong, Israel, Jordan, Korea, Lebanon, Macedonia, Mexico, Montenegro, Morocco, Palestinian Authority, Peru, Serbia, Singapore, the Southern African Customs Union (Botswana, Lesotho, Namibia, South Africa and Swaziland), Tunisia, Turkey and Ukraine. • Negotiations are on going with Bosnia, Central American States, India and Indonesia, Russia, Belarus and Kazakhstan. Negotiations are expected to be launched with Vietnam. • EFTA has signed a Joint Declaration on Cooperation with Mauritius. This is not an FTA • FTAs provides for free trade in industrial goods, including fish and other marine products; and tariff reductions in processed agricultural products; ECDPM Page 4
  • 5. Imports of textiles from selected EFTA countries :Norway T Shirts Cotton Denim T Shirts Pull Pull Shirts Norway Yarn Man Trousers Fabric Fabric Cotton Wool Cotton Cotton made Total imports 2,543 109 27 105,447 148,432 2,520 138,633 146,051 73,272 ('€ 000) China 1.5% 18.3% 18.5% 32.0% 34.1% 35.8% 61.3% 25.3% 41.0% Bangladesh 25.2% 13.1% 11.1% 5.8% Turkey 14.4% 18.4% 7.1% 15.7% 6.7% Germany 48.6% Italy 18.6% 18.5% 5.3% 12.6% 11.2% 2.0% tunisia 6.4% Pakistan 6.0% India 5.1% 1.9% 2.8% 14.6% UK 13.0% 16.5% Lithuania 12.1% 1.6% Peru 6.0% US 15.6% Sweden 13.8% 3.7% 8.3% Hong Kong 18.0% ECDPM Page 5
  • 6. Tariffs applied by Norway on textile products T shirts Norway Cotton Denim T Shirts Pull Shirts Yarn man Pull wool Trousers Tariffs Fabric Fabric Cotton cotton cotton made MFN 0.0% 0.0% 0.0% 10.7% 10.7% 10.7% 10.7% 10.7% 10.7% GSP Rate (including 0.0% 0.0% 0.0% 10.7% 10.7% 10.7% 10.7% 0% 0% MRU) LDCs 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% Countries having FTAs with Norway Egypt 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% Morocco 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% Peru 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% Mexico 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% SACU 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% Tunisia 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% Turkey 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% ECDPM Page 6
  • 7. Norway GSP Scheme and Rules of Origin • GSP applies to all developing countries Coverage: • Prepared or preserved fish benefit from 100% reduction from MFN • T-shirts, jerseys and pulls (Ch 61.09; 69.10) are excluded from GSP • Trousers and shirts (Ch 62) : GSP = 0% • LDCs have duty free, including from excluded products General Rules - Change in tariff heading – i.e when all the imported materials (non- originating materials) used are classified in a HS tariff heading (4 digits) different from the tariff heading under which the exported product is classified, except when specified in the specific rule - Chapter 3 : fresh fish – wholly obtained; - Chapter 16: Canned tuna, prepared, preserved fish: fish to be wholly obtained. - Yarn: silk – manufacture from raw silk; - Woven fabric – manuf. from natural fibres (double stage transformation) - T shirts & pull (Ch 61) – Manufacture from natural fibres - Shirts (Ch 62) – Manufacture from yarn (double stage transformation) ECDPM Page 7 -
  • 8. Value tolerance – 10% of ex works price (except where specified otherwise) Cumulation: All countries must be GSP beneficiary; 3 types: 1.Bilateral – with Norway 2.Regional – between developing countries forming a regional grouping, at the request of the country and upon approval. 3.Diagonal – between Norway, EU and Switzerland and beneficiary country (except in Ch 1 – 24). It implies that materials originating in Norway, EU and Switzerland can be incorporated in goods produced in a GSP country, when the final product is exported to Norway, EU and Switzerland. Derogation possible for LDCs only, if justified for economic development purposes ECDPM Page 8
  • 9. Switzerland – Textile imports from main markets Cotton Denim T Shirts T Shirts Pull Pull Shirts Switzerland Yarn Trousers Fabric Fabric Cotton Man made Wool Cotton Cotton Total imports 3,172 9,427 314 190,532 114,052 5,453 409,445 379,964 165,403 (€ '000) China 6.4% 4.5% 4.3% 8.0% 12.4% 11.2% 7.8% Bangladesh 9.2% 11.2% 8.4% 7.1% Turkey 4.5% 4.5% 5.1% 3.4% 9.9% Germany 30.6% 11.6% 44.9% 38.7% 55.0% 26.4% 36.8% 29.2% Italy 3.0% 44.1% 7.9% 6.0% 53.1% 12.4% 21.1% Belgium 13.7% France 22.5% 4.2% 3.7% 7.7% 5.7% Madagascar 3.8% Japan 17.8% Spain 7.3% Austria 13.5% India 4.8% 8.8% 4.5% Pakistan 3.7% UK 5.8% Denmark 26.5% Peru 4.0% Estonia 19.1% ECDPM Page 9
  • 10. Tariffs applied by Switzerland: Note duties are specific Cotton Denim T Shirts T Shirts Man Pull Pull Shirts Switzerland Yarn Trousers Fabric* Fabric* Cotton made Wool Cotton Cotton CHF CHF 26 - CHF130/1 CH CHF CHF 391/100 CHF CHF CHF MFN Duty 306/100 46/100 kg 00 kg 75/100 kg 152/100 kg kg 120/100 kg 182/100 kg 200/100 kg kg CHF CHF CHF 13 CHF CHF CHF CHF CHF 91/100 CHF GSP 37.5/100k 153/100 23/100 kg 65/100 kg 76/100 kg 195.5/100 kg 60/100 kg kg 100/100 kg g kg China MFN MFN MFN MFN MFN MFN MFN MFN MFN Countries having an FTA with Switzerland Morocco 0 0 0 0 0 0 0 0 0 Tunisia 0 0 0 0 0 0 0 0 0 Turkey 0 0 0 0 0 0 0 0 0 Egypt 0 0 0 0 0 0 0 0 0 SACU 0 0 0 0 0 0 0 0 0 * for fabric, when manufactured from handlooms from Pak, Sri Lanka, India and China, Duty =0% ECDPM Page 10
  • 11. Rules of origin applied by Switzerland • Since 2011, Swiss RoO for industrial products are identical to EU RoO; i.e differentiation between developing countries and LDCs • For agricultural products (HS chapters 1 to 24), the rules of origin are specific to the Swiss GSP and apply the method of tariff heading change (HS 4-digit level) with the exception of four products, i.e. HS 1108 (starches), 1901 (malt extract), 1904 (cereal products), and 1905 (bread, pastry, cakes). • General value tolerance: 15% ex-works price, with the exception of textile and clothing, where specific rules apply Derogation possible for LDCs only, if justified for economic development purposes ECDPM Page 11
  • 12. Cumulation: - Bilateral, between Switzerland and beneficiary country; - Diagonal, with Norway, EU and Turkey (with Turkey, not yet in force) - limited to industrial products of HS Chapters 25-97 - Regional – between countries belonging to same regional group provided that a request is made and approved by Switzerland and there is sufficient processing. Products of chapters 50 to 63 and HS 6401 to 6405 are excluded from regional cumulation . ECDPM Page 12
  • 13. Imports from Norway and Switzerland – Fish and Fish products Fish Fish fish fish fillets, fillets, Tuna, prepared Tuna, skip prepared Norway fresh, Switzerland fresh, skip jack and jack and frozen, frozen, preserved preserved chilled chilled Total Total imports 49,917 10,649 31,503 Imports (€ 79,270 8,509 16,779 (€’000) ‘000) China 34.4% Vietnam 17.2% Russia 13.9% Thailand 12.3% 85.9% 0.3% Germany 10.6% 34.0% 16.2% Poland 6.8% Denmanrk 9.2% 5.9% Faroe Isl 5.8% Russia 9.2% Vietnam 3.5% 4.8% China 8.7% Italy 2.7% Philippines 2.5% Italy 17.0% 15.9% Portugal 1.0% Spain 36.8% Sweden 71.9% Morocco 7.4% France 8.6% France 2.5% 23.2% Denmark 4.6% Japan 3.3% Netherlands 16.8% ECDPM Page 13
  • 14. Tariffs applied by Switzerland and Norway Fish fillets, fresh, fish prepared and Norway Tuna, skip jack frozen, chilled preserved MFN 0.0% 0.0% 0.0% GSP Rate (including MRU) 0.0% 0.0% 0.0% LDCs 0.0% 0.0% 0.0% Countries havinf FTA 0.0% 0.0% 0.0% Fish fillets, fresh, fish prepared and Switzerland Tuna, skip jack frozen, chilled preserved MFN None None CHF 0 -13.00/100kg GSP None None None Countries having FTAs None None None Rules of origin: fish fillets: Wholly obtained Tuna and prepared fish: fish must be wholly obtained ECDPM Page 14
  • 15. 2. TURKEY 1. EU – Turkey Customs Union • A Customs Union between Turkey and the EU entered into force in December 1995. • The scope of the customs union with Turkey is limited to industrial products and processed agricultural products. • Some products do not fall within the scope of the customs union: they remain subject to a preferential treatment based on origin. These are agricultural products and coal and steel • In a nutshell: Turkey – EU CU covers textile and apparel but does not cover fish and fish products ECDPM Page 15
  • 16. Exports of Turkish textile products to main markets Tariffs: duty free T Shirts T Shirts Pull Shirts Denim Cotton Pull Trousers Yarn Cotton Man Made Cotton Cotton Fabric Fabric Wool Total Exports 1,951,195 1,102,113 1,034,069 674,244 494,457 316,756 53,916 6,170 5,241 to world (€ '000) EU 87.1% 82.1% 81.7% 86.0% 74.0% 35.5% 53.9% 84.5% 66.1% Hong Kong 8.3% Freezones 21.7% Morocco 4.3% Tunisia 17.9% Egypt 10.9% Russia 1.1% 2.8% 8.7% US 0.9% 1.1% 4.3% Iraq 10.9% ECDPM Page 16
  • 17. Fish and fish products: Exports from Turkey to main markets Tariffs: Duty free Fish fillets, fresh, frozen, fish prepared and Tuna, skip jack chilled preserved Total Exports to world (€ '000) 43,720 291 6,190 EU 86.7% 55.3% 80.4% US 7.6% 20.3% 5.5% Azerbaijan 13.0% ECDPM Page 17
  • 18. Rules of origin: For industrial products – Movement of goods within customs unions is not based on their originating status but on the fact that they comply with provisions on free circulation For agricultural products – pan-Euro-Mediterranean Protocol Vessel requirements (all conditions must be fulfilled): - Registration and flag - Ownership: 50% by nationals; or companies headquarted in Turkey or EU where executive staff (managers, board members etc) must be nationals; - Masters and officials are nationals - At least 75% of crew must be nationals Value tolerance: 10% of ex-works price Derogation: None ECDPM Page 18
  • 19. Cumulation: Simplification to cover, EU27, EFTA (Iceland, Liechtenstein Mediterranean countries (Algeria, Egypt, Israel, Jordan, Lebanon, Morocco, Syria, Tunisia, Palestine, West Bank and Gaza) - 42 countries in total. Key elements: - Bilateral cumulation – between EU and Turkey; - Full cumulation between European Economic Area (EU27 + Iceland, Liechtenstein, Norway), Turkey, Algeria, Morocco, Tunisia - Diagonal cumulation – with other Euro Med countries having FTAs among themselves and identical rules of origin ECDPM Page 19
  • 20. 2. Turkey as a potential market 1. Mauritius – Turkey FTA Mauritius signed an trade agreement with Turkey in 2011. The Agreement has not yet entered into force. What has been obtained? Turkey Cotton Denim T Shirts T shirts Shirts Yarn Pull wool Pull cotton Trousers Tariffs Fabric Fabric Cotton man made cotton MFN 3.8% 8% 8% 12% 12% 12% 12% 12% 12% GSP 3% 6.4% 6.4% 9.6% 9.6% 9.6% 9.6% 9.6% 9.6% Mauritius 25% per 25% per 25% per year 25% per year 25% per year FTA from year from year from from entry from entry from entry date of 0% 0% 0% 0% entry into entry into into force of into force of into force of entry into force of force of agreement agreement agreement force agreement agreement Fish fillets, fresh, frozen, fish prepared and Turkey chilled Tuna, skip jack preserved MFN 30% 80% 80% GSP N0 Preferences 100% reduction on MFN on 20% reduction on MFN (no 50% reduction on MFN rate Mauritius FTA 100 KG quota limits) for 100 kg ECDPM Page 20
  • 21. Mauritius Turkey FTA – Rules of Origin Value tolerance: 15% ex works price General Derogation: possible for development purposes Derogation for tuna: annual quota of 3.000 tonnes for preserved tuna and tuna loins and 2.000 tonnes for fish fillets (valid for 7 years, with possibility of renewal) Vessels: Registration and flag requirements; and at least one of the following: - ownership: 50% national - Owned by companies with HO in country + 50 % ownership by nationals Cumulation: Bilateral Diagonal – as with EPA, Mauritius can source its products with Turkey or EU or EPA countries, provided they are sufficiently processed With neighbouring countries, provided a PTA is applicable, the RoO are similar and countries have concluded an agreement on customs cooperation ECDPM Page 21
  • 22. Specific rules: Textiles • Yarn – Manufacture from raw silk • Fabric – single stage transformation – manufacture from yarn • T Shirts and pullovers – single stage transformation - manufacture from fabric • Trousers and Shirts – single stage transformation - manufacture from fabric ECDPM Page 22
  • 23. Special safeguard measure applicable on textiles • In January 2011, Turkey initiated safeguard procedures regarding imports of woven fabric and apparel • Approved by Turkish Authorities in September 2011 Turkey Cotton Denim T Shirts T shirts man Shirts special Pull wool Pull cotton Trousers Fabric Fabric Cotton made cotton safeguard MFN 8% 8% 12% 12% 12% 12% 12% 12% Countries other than EU MFN + MFN + MFN + MFN + 40% MFN + 40% MFN + 40% MFN + 40% MFN + 40% and FTA 30% 30% 40% countries MFN + MFN + MFN + GSP MFN + 37% MFN + 37% MFN + 37% MFN + 37% MFN + 37% 28% 28% 37% MFN + MFN + MFN + LDCs MFN + 27% MFN + 27% MFN + 27% MFN + 27% MFN + 27% 21% 21% 27% • The safeguard currently applies to Mauritius but will be lifted as soon as the the FTA will enter into force ECDPM Page 23
  • 24. 3. EUROMED Agreements: Case of Tunisia, Morocco and Egypt ECDPM Page 24
  • 25. Key elements of the EU Med Agreements 1. Coverage: Algeria, Egypt, Israel, Jordan, Lebanon, Morocco, Tunisia, Palestine, Turkey, Syria (not signed) ECDPM Page 25
  • 26. Cover essentially trade in goods, being complemented with a number of additional negotiations to open up additional agricultural trade; • Duty-free access to the EU for Med industrial products and around 80% of agricultural produce • Common rules to allow cumulation of origin within the Euromed and beyond. • Regional convention on PanEuroMed preferential rules of origin agreed in 2011 • However: proper implementation of the requires complete South-South FTA network ECDPM Page 26
  • 27. 1. Tunisia Exports of selected textile products of Tunisia to main markets Tariffs: duty free on all selected products below T Shirts T Shirts Shirts Pull Denim Pull Cotton Trousers Yarn Cotton Man Made Cotton cotton Fabric Wool fabric Total Exports to world (€ 495,427 276,907 100,246 60,256 53,344 35,681 22,873 24 48 '000) EU 97.1% 99.8% 98.3% 99.3% 95.4% 42.7% 100.0% 0.0% 100.0% fish prepared and Fish fillets, fresh, Tuna, skip jack preserved frozen, chilled Total Exports to world (€ '000) 2,789 792 111 EU 15.3% 99.9% 100.0% Libya 73.8% UAE 7.4% ECDPM Page 27
  • 28. 2. Morocco Exports of selected textile products of Morocco to main markets Tariffs: Duty free on all selected products below T Shirts T Shirts Shirts Pull Denim Pull Cotton Trousers Yarn Cotton Man Made Cotton cotton Fabric Wool fabric Total Exports to world (€ 273,888 189,384 82,744 71,126 43,162 29,050 922 538 19 '000) EU 95.7% 98.8% 98.9% 98.7% 99.9% 98.3% 99.3% 86.6% 100.0% Fish prepared and Tuna, skipjack preserved Total Exports to world (€ '000) 83,213 2,484 EU 92.1% 77.4% Syria 3.1% 10.3% Eq. Guinea 1.3% 9.4% ECDPM Page 28
  • 29. 3. Egypt Exports of selected textile products of Egypt to main markets Tariffs: Duty free on selected products below T Shirts T Shirts Man Shirts Pull Trousers Yarn Pull Wool Cotton Made Cotton cotton Total Exports to 246,712 42,450 135,314 31,137 2,476 65 84 world (€ '000) EU 47.9% 50.8% 24.4% 68.9% 8.0% 9.2% 0.0% Turkey 4.5% 7.6% 82.0% US 42.6% 43.6% 65.0% 28.3% 90.8% 95.2% Egypt does not export fish and fish products (tuna, skipjack) to the EU. However, duty on tuna is 20.5% ECDPM Page 29
  • 30. A closer look at rules of origin in the Euromed Zone Textile products: Yarn Manufacture from raw silk, natural fibres, chemicals or paper make materials Value tolerance: 10% weight of yarn Fabric Single stage transformation - Manufacture from yarn Value tolerance: 10% weight of fabric Apparel: Double stage transformation – manufacture from yarn Value tolerance: 8% ex works price Fish and fish products: Same as above for Turkey ECDPM Page 30
  • 31. Cumulation • Jordan, Morocco, Egypt and Tunisia have an FTA since 2006. • This FTA is based on their EUROMED agreement. • The RoO that apply are the EU RoO • This allows them to use the full cumulation principle, when they export to the EU. It means that any of those four countries can source their inputs among themselves and export to the EU and still benefit from duty free access to the EU market. ECDPM Page 31
  • 32. EU South Africa Trade relationship TDCA ECDPM Page 32
  • 33. South Africa is the EU's largest trading partner in Africa • EU concluded a trade, development and cooperation agreement in 1999 Rules of origin Cumulation – Bilateral between SA and EU Cumulation with ACP: - SACU – Any working or processing carried out within SACU shall be considered as having been carried out in South Africa, when further worked or processed there - Other ACP –Products acquire originating status in the Community or South Africa only when the value added there exceeds the value of the materials used originating in any one of the ACP States and when it has undergone sufficient working or processing. However, EPA RoO should apply between SA and ACP country. This is currently not the case. Vessels (all): a. Registration and flag requirements b. Ownership requirement : 50% (also for companies headquartered) c. Nationality requirement for masters and officials d. Crew requirement: 75% should be nationals (c and d to be replaced by 50% crew requirement once tariffs are reduced on fisheries) ECDPM Page 33
  • 34. General value tolerance: 15% ex works price, except for products falling within chapter 3 and 24 (incl fish and fish products), where 10% ex works price Specific rules: Fish and fish products: wholly obtained Yarn: Manufacture from raw silk or natural fibres Fabric: Single stage transformation – manufacture from yarn or natural fibres T-shirts and pullovers: Double stage transformation – manufacture from yarn or natural fibres Shirts and trousers: Double stage transformation – manufacture from yarn or natural fibres Value tolerance: 10% weight of yarn ECDPM Page 34
  • 35. Tariff applied to South Africa under TDCA Cotton Denim T Shirts T Shirts Pull Pull Yarn Trousers Fabric Fabric Cotton Man made Wool Cotton Tariff applied by EU under TDCA 0% 0% 0% 0% 0% 0% 0% 0% to South Africa Fish fillets, fresh, frozen, fish prepared and Tuna, skip jack chilled preserved No preferences under 14.5% 20.5% 20.5% TCDA - GSP applied ECDPM Page 35
  • 36. Exports of selected textile products of South Africa to main markets T Shirts T Shirts Shirts Pull Denim Trousers Pull Wool Cotton Man Made Cotton Cotton Fabric Total Exports to 4,615 4,334 2,818 2,109 254 220 165 world (€ '000) EU 10.7% 13.2% 6.1% 4.9% 16.1% 4.5% 0.0% Zambia 11.7% 11.3% 17.1% 15.0% 27.6% 30.9% Zimbabwe 10.9% 14.2% 12.5% 32.5% 9.4% 18.2% Mozambique 15.0% 18.6% 10.5% Mauritius 8.7% 5.5% 5.5% 5.5% 14.6% 9.1% 81.2% DRC 10.8% Angola 8.3% Kenya 26.8% ECDPM Page 36
  • 37. South Africa as a potential market • South Africa is the largest trading partner of Mauritius in Africa Imports from South Africa from main competitors in selected products T Shirts Cotton Denim T Shirts Man Pull Pull Shirts South Africa Yarn Fabric Fabric Cotton made Wool Cotton Trousers Cotton Total imports 820 2,215 6,884 118,304 51,255 2,790 28,288 121,537 64,779 Italy 6.0% 10.1% 1.0% China 15.2% 20.2% 45.4% 48.3% 68.4% 65.6% 62.7% 41.3% Turkey 76.8% 1.1% 0.9% 1.7% Austria 6.5% Bangladesh 3.9% 2.1% 3.6% 6.5% 11.0% Hong Kong 2.3% India 6.7% 8.6% 1.3% 1.8% 1.2% 8.6% Bulgaria 4.9% Mauritius 2.1% 58.1% 35.1% 28.1% 12.3% 52.2% 9.1% 18.9% 10.3% Mexico 3.2% Thailand 3.8% 3.2% Madagascar 2.2% 28.2% 9.8% 4.1% 17.0% Tanzania 1.0% Indonesia 2.9% 3.7% Vietnam 1.3% ECDPM Page 37
  • 38. South Africa imports from fish and fish products from main market Fish fillets, fresh, frozen, fish prepared and South Africa Tuna, skip jack chilled preserved Total imports 5,412 30,526 3,047 China 18.4% 23.5% Vietnam 15.0% Norway 23.7% Mauritius 7.8% 0.2% Philippines 2.0% UK Thailand 95.5% 10.7% Argentina 6.4% Taipei 1.1% Indonesia 0.4% Italy 0.2% Uruguay 41.8% ECDPM Page 38
  • 39. Duties applied by South Africa to SADC countries Cotton Denim T Shirts T Shirts Pull Pull Yarn Trousers Fabric Fabric Cotton Man made Wool Cotton MFN Rate 0% 22% 22% 45% 45% 45% 45% 45% Duty applied to 0% 0% 0% 0% 0% 0% 0% 0% SADC countries Fish fillets, fresh, fish prepared and Tuna, skip jack frozen, chilled preserved 25% or $240 whicher is MFN Rate 25% $ 7.2 per tonne the highest Duty applied to SADC 0% 0% 0% countries ECDPM Page 39
  • 40. SADC Rules of Origin • Fish and Fish products: Wholly obtained • Yarn: (51.06.10) – change in tariff heading • Fabric: Single stage transformation – manufacture from yarn • T Shirts and pullovers: Double stage transformation - manufacture from yarn • Shirts and trousers: Double stage transformation - manufacture from yarn ECDPM Page 40
  • 41. Thank you www.ecdpm.org www.slideshare.net/ecdpm Page 41