WRITTEN QUESTION E-2759/99

by Concepció Ferrer (PPE-DE) to the Commission

(18 January 2000)

Subject: Rules of origin in free-trade agreements

Negotiations on the bilateral agreement between the EU and Mexico, which will bring about full liberalisation of trade in industrial goods by 2007 and in agricultural goods by 2010, were concluded on 25 November 1999. In concluding the agreement, however, a series of concessions and derogations were made with regard to the application of Community rules of origin. The European textiles, garment and footwear industries were firmly opposed to those derogations, given that the export to Mexico of products considered as being of Community origin under EC rules would still be subject to restrictions while no such restrictions would apply to Mexican products.

On the same day, the EU-Mercosur and EU-Chile Ministerial Councils officially launched the negotiations on the signing of new association and trade-liberalisation agreements and entered into a commitment on the calendar for negotiations, their structure and the methods to be followed.

Can the Commission confirm that, in the case of the negotiations with Mercosur which are of greater significance than those with Mexico it will take a different approach to that taken with regard to Mexico and will oppose the adoption of rules of origin which differ from Community rules of origin?

With regard to the Mercosur agreement and possible future free-trade agreements, can the Commission confirm that there will be no further derogations which would imply a proliferation of rules of origin tailored to the needs of each of the associated countries, which would create confusion for industry and run counter to the Community's objective of legislative simplification?

Answer given by Mr Lamy on behalf of the Commission

(21 February 2000)

In November 1999 negotiations of the free trade agreement with Mexico reached a final deal which is in the view of the Commission well balanced, comprehensive and positive in its overall results for Community interests. The final approach taken on certain issues during the negotiations with Mexico does not automatically form a precedent for other negotiations. Each negotiation has its own dynamism and will have to be assessed on its own merits. As regards the reference to the preferential rule of origin, the Commission underlines that Mexico has accepted a large majority of Community harmonised rules of origin. In the case of Mexico, where compromises had to be found, this has always been accompanied by mechanisms which assure market access for our economic operators.

In the case of the association negotiations with Mercosur the Commission aims to establish a final agreement that is balanced, comprehensive and forms a single undertaking. Within the framework of the negotiating directives for these negotiations the Commission has been instructed to negotiate the issue of rules of origin inspired by the model proposed by the Community for the harmonisation process of preferential rules of origin applicable to third countries. In the negotiation of a protocol on rules of origin with Mercosur, the economic interests of the Community in trade relations with this region will be fully taken into account. At present it is still too early to anticipate the developments of the negotiations with Mercosur concerning this issue of rules of origin.

The first meeting of the Community-Mercosur biregional negotiations committee will take place during March or April 2000 in Buenos Aires and will deal with general issues only. In principle the biregional negotiations committee, and related technical groups and subgroups, will meet three times a

year, following a timetable that is related to the progress of the World trade organisation (WTO) negotiations and the free trade agreement for the Americas (FTAA) negotiations. It is not possible to foresee how long the negotiations with Mercosur will take.