Proposal for a Council Decision on a Community position within the EU-Mexico Joint Committee relating to Annex III to Decision No 2/2000 of the EU-Mexico Joint Council of 23 March 2000, concerning the definition of the concept of 'originating products' and methods of administrative cooperation
Date: 2007-01-31
Institutions: European Commission
Subjects: Mexico, administrative cooperation, agreement (EU), originating product

COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 31.1.2007 
COM(2007) 38 final 

2007/0011 (ACC) 

Proposal for a 

COUNCIL DECISION 

on a Community position within the EU – Mexico Joint Committee 

relating to Annex III to Decision No 2/2000 of the EU-Mexico Joint Council of 23 March 
2000, concerning the definition of the concept of 'originating products' and methods of 
administrative cooperation 

(presented by the Commission) 

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EXPLANATORY MEMORANDUM 

. 

110 

1)  CONTEXT OF THE PROPOSAL 

•  Grounds for and objectives of the proposal 

The  Economic  Partnership,  Political  Coordination  and  Cooperation  Agreement 
between  the  European  Community  and  its  Member  States,  of  the  one  part,  and  the 
United Mexican States, of the other part, was signed in Brussels on 8 December 1997. 
The trade liberalisation provisions were laid down in Decision No 2/2000 of the EU-
Mexico  Joint  Council  established  by  the  Agreement  (hereinafter  "Decision  No 
2/2000"). 

Annex  III  to  Decision  No  2/2000  of  the  EU-Mexico  Joint  Council,  concerning  the 
definition  of  the  concept  of  'originating  products'  and  methods  of  administrative 
cooperation, sets out the rules of origin for the products originating in the territory of 
the Parties to the Agreement. 

Mexico and the Community have agreed to introduce certain amendments to the rules 
of origin contained in Annex III to Decision No 2/2000. 

120 

•  General context 

Some  of  the  rules  of  origin  contained  in  Annex  III  to  Decision  No  2/2000  were 
originally agreed on a temporary basis and require regular monitoring. This is the case 
in  particular  for  the  special  rules  applying  to  certain  chemical  products  of  HS 
(Harmonized System) headings 2914 and 2915 and those applying to hides and skins 
and leather products of HS headings 4104 and 4107. 

The  temporary  derogation  for  chemical  products  was  initially  agreed  until  30  June 
2003. This period was subsequently extended until 30 June 2006. It is now proposed to 
extend the period of application of these special rules for another three years, i.e. until 
30 June 2009. 

The temporary derogation for hides and skins and leather products was initially agreed 
until 31 December 2002, linked to the likely conclusion of the ongoing round of WTO 
negotiations. This period was subsequently extended until 31 December 2004. It is now 
proposed  to  further  extend  the  period  of  application  of  these  special  rules  until 
conclusion of the WTO negotiations. 

Annex III to Decision No 2/2000 lays down annual quotas for Community exports to 
Mexico of certain textiles and footwear products under application of special rules of 
origin.  Those  'origin  quotas'  concern  textiles  products  of  HS  headings  5208  to  5212, 
5407  and  5408,  5512  to  5516,  5801,  5806  and  5811  and  footwear  products  of  HS 
headings 6402, 6403 and 6404. 

Annex  III  to  Decision  No  2/2000  provides  that  those  textiles  and  footwear  annual 
quotas  should  be  allocated  by  Mexico  through  auction.  In  both  cases  the  Agreement 
provides for a review of the quotas, in 2003 in the case of textiles and in 2004 in the 

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case of footwear. The quotas' utilisation rate has been consistently very low, which the 
Community perceives as being the result of a burdensome quota management method 
applied  by  Mexico.  It  is  now  proposed  to  change  the  management  method  of  these 
'origin quotas' from the present auction system to a "first come, first served" basis. 

The  specific  rule  of  origin  set  out  in  Annex  III  to  Decision  No  2/2000  for  cereal 
products of HS heading 1904 does not allow the use of non-originating Zea indurata 
maize  in  the  manufacture  of  products  of  this  heading.  This  particular  type  of  maize, 
which  is  required  for  the  manufacture  of  certain  products,  namely  corn  flakes,  is 
however not available within the preferential area. It is now proposed to introduce an 
exception allowing the use of non-originating Zea indurata maize. 

The specific rule of origin set out in Annex III to Decision No 2/2000 for unwrought 
aluminium  of  HS  heading  7601  describes  the  working  or  processing  required  for  the 
acquisition  of  origin  in  a  restrictive  way,  leaving  out  the  most  commonly  used 
manufacturing  process.  It  is  now  proposed  to  include  an  alternative  rule  which 
broadens the scope of the working or processing enabling the acquisition of origin. 

139 

141 

•  Existing provisions in the area of the proposal 

There are no existing provisions in the area of the proposal. 

•  Consistency with the other policies and objectives of the Union 

Not applicable. 

2)  CONSULTATION OF INTERESTED PARTIES AND IMPACT ASSESSMENT 

•  Consultation of interested parties 

219 

Not relevant. 

This proposal introduces amendments to a previous text. 

•  Collection and use of expertise 

There was no need for external expertise. 

•  Impact assessment 

229 

230 

Not  relevant.  This  proposal  introduces  amendments  to  an  existing  bilateral  trade 
agreement. There are no other options to be considered. 

Not relevant. For the reasons given above there are no other options to be considered.  

3)  LEGAL ELEMENTS OF THE PROPOSAL 

305 

•  Summary of the proposed action 

The  Council  is  asked  to  adopt  a  Community  position  on  a  draft  Decision  of  the 
European  Union  -  Mexico  Joint  Committee  introducing  amendments  to  the  rules  of 
origin contained in Annex III to Decision No 2/2000 of the EU-Mexico Joint Council, 

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concerning  the  definition  of  the  concept  of  'originating  products'  and  methods  of 
administrative cooperation. 

310 

•  Legal basis 

Article  38  of  Annex  III  to  Decision  No  2/2000  of  the  EU-Mexico  Joint  Council 
empowers the Joint Committee to amend this Annex. 

329 

•  Subsidiarity principle 

The proposal falls under the exclusive competence of the Community. The subsidiarity 
principle therefore does not apply. 

•  Proportionality principle 

The proposal complies with the proportionality principle for the following reason(s). 

331 

332 

341 

342 

Not relevant 

Not relevant 

•  Choice of instruments 

Proposed instruments: other. 

Other means would not be adequate for the following reason(s). 

Decision of the EU - Mexico Joint Committee 

4)  BUDGETARY IMPLICATION 

409 

The proposal has no implication for the Community budget. 

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2007/0011 (ACC) 

Proposal for a 

COUNCIL DECISION 

on a Community position within the EU – Mexico Joint Committee 

relating to Annex III to Decision No 2/2000 of the EU-Mexico Joint Council of 23 March 
2000, concerning the definition of the concept of 'originating products' and methods of 
administrative cooperation 

THE COUNCIL OF THE EUROPEAN UNION, 

Having regard to the Treaty establishing the European Community, and in particular Article 
133 thereof, 

Having regard to the proposal from the Commission, 

Whereas: 

(1) 

(2) 

The  Economic  Partnership,  Political  Coordination  and  Cooperation  Agreement 
between  the  European  Community  and  its  Member  States,  of  the  one  part,  and  the 
United Mexican States, of the other part, was signed in Brussels on 8 December 19971. 
The trade liberalisation provisions were laid down in Decision No 2/2000 of the EU-
Mexico  Joint  Council  established  by  the  Agreement  (hereinafter  "Decision  No 
2/2000")2. 

Annex  III  to  Decision  No  2/2000  of  the  EU-Mexico  Joint  Council,  concerning  the 
definition  of  the  concept  of  'originating  products'  and  methods  of  administrative 
cooperation, sets out the rules of origin for the products originating in the territory of 
the Parties to the Agreement. 

(3) 

Article 38 of Annex III to Decision No 2/2000 provides that the Joint Committee may 
amend this Annex. 

(4)  Mexico and the Community have agreed to introduce certain amendments to the rules 

of origin contained in Annex III to Decision No 2/2000, 

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2 

OJ L 276, 28.10.2000, p. 45. 
OJ  L  157,  30.6.2000,  p.  10  and  OJ  L  245,  29.9.2000,  p.  1  (Annexes).  Decision  as  last  amended  by 
Decision No 1/2004 of the European Union - Mexico Joint Committee (OJ L 113, 20.4.2004, p. 60). 

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HAS DECIDED AS FOLLOWS:  

Sole Article 

The  position  to  be  adopted  by  the  Community  within  the  EU  –  Mexico  Joint  Committee 
relating  to  Annex  III  to  Decision  No  2/2000  of  the  EU-Mexico  Joint  Council  of  23  March 
2000,  concerning  the  definition  of  the  concept  of  'originating  products'  and  methods  of 
administrative  cooperation,  is  that  set  out  in  the  attached  draft  Decision  of  the  Joint 
Committee. 

Done at Brussels,  

For the Council 
The President 

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DRAFT 

DECISION No …/2007 OF THE EUROPEAN UNION - MEXICO JOINT 
COMMITTEE 

of … 2007 

relating to Annex III to Decision No 2/2000 of the EU-Mexico Joint Council of 23 March 
2000, concerning the definition of the concept of 'originating products' and methods of 
administrative cooperation 

THE JOINT COMMITTEE, 

Having  regard  to  Decision  No  2/2000  of  the  EU-Mexico  Joint  Council of  23  March  20003 
(hereinafter "Decision No 2/2000"), and in particular its Annex III concerning the definition 
of the concept of 'originating products' and methods of administrative cooperation; 

Whereas: 

(1) 

(2) 

(3) 

(4) 

Annex  III  to  Decision  No  2/2000  sets  out  the  rules  of  origin  for  the  products 
originating in the territory of the Parties to the Agreement. 

According  to  Joint  Declaration  V  to  Decision  No  2/2000,  the  Joint  Committee  shall 
review  the  necessity  to  extend  beyond  30  June  2003  the  application  of  the  rules 
established  in  Notes  2  and  3  of  Appendix  II(a),  if  the  economic  conditions  which 
formed  the  basis  for  establishing  the  rules  set  out  in  those  Notes  continue.  On  22 
March 2004 the Joint Committee adopted Decision No 1/2004 of the EU-Mexico Joint 
Committee4 extending the application of the rules of origin established in Notes 2 and 
3 of Appendix II(a) to Annex III to Decision No 2/2000 until 30 June 2006. 

It is considered appropriate to extend once again, on a temporary basis, the application 
of the rules of origin established in Notes 2 and 3 of Appendix II(a) to Annex III to 
Decision  No  2/2000,  thereby  ensuring  the  continuity  of  application  of  the  mutual 
advantages provided for under that Decision. 

According to Joint Declaration VI to Decision No 2/2000, the Joint Committee shall 
extend  beyond  31  December  2002  the  rules  of  origin  established  in  Note  4  of 
Appendix  II(a)  to  Annex  III  to  Decision  No 2/2000  until  the  current  round  of 
multilateral negotiations within the World Trade Organisation (WTO) has finished. 

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4 

OJ  L  157,  30.6.2000,  p.  10  and  OJ  L  245,  29.9.2000,  p.  1  (Annexes).  Decision  as  last  amended  by 
Decision No 1/2004 of the European Union - Mexico Joint Committee (OJ L 113, 20.4.2004, p. 60). 
OJ L 113, 20.4.2004, p. 60. 

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(5) 

(6) 

(7) 

(8) 

(9) 

By Decision No 1/2002 of the EU-Mexico Joint Committee of 20 December 20025, the 
application of the rules of origin established in Note 4 of Appendix II(a) to Annex III 
to Decision No 2/2000 was extended until 31 December 2004. The WTO negotiations 
have  not  been  concluded  to  date  and  it  is  thus  necessary  to  extend  once  again  the 
application  of  these  rules  of  origin,  thereby  ensuring  the  continuity  of  application  of 
the mutual advantages provided for under Decision No 2/2000. 

The  management  method  currently  used  to  allocate  the  annual  quotas  set  out  in 
Appendix  II  to  Annex  III  to  Decision  No 2/2000  for  products  classified  in  HS 
(Harmonised  System)  headings  5208  to  5212,  5407  and  5408,  5512  to  5516,  5801, 
5806 and 5811 exported from the Community to Mexico should be changed from the 
present auction system to a "first come, first served" basis in order to simplify access 
to such quotas and bring about a higher utilisation rate. 

The management method currently used to allocate the annual quotas set out in Note 9 
of  Appendix II(a)  to  Annex  III  to  Decision  No 2/2000  for  products  classified  in  HS 
headings  6402  to  6404  exported  from  the  Community  to  Mexico  should  be  changed 
from the present auction system to a "first come, first served" basis in order to simplify 
access to such quotas and bring about a higher utilisation rate. 

The  rule  of  origin  set  out  in  Appendix  II  to  Annex  III  to  Decision  No 2/2000  for 
products  classified  in  HS heading  1904  should  be  amended  to  allow  the  use  of  non-
originating Zea indurata maize in the manufacture of products of this heading. 

The  rule  of  origin  set  out  in  Appendix  II  to  Annex  III  to  Decision  No 2/2000  for 
products classified in HS heading 7601 should be amended to allow the acquisition of 
origin through different manufacturing processes, 

HAS DECIDED AS FOLLOWS 

Article 1 

The  rules  of  origin  set  out  in  Notes  2  and  3  of  Appendix  II(a)  to  Annex  III  to  Decision 
No 2/2000 shall apply until 30 June 2009 instead of the rules of origin set out in Appendix II 
to Annex III to that Decision. 

Article 2 

The rules of origin set out in Note 4 of Appendix II(a) to Annex III to Decision No 2/2000 
shall apply until the conclusion of the present round of WTO negotiations instead of the rules 
of origin set out in Appendix II to Annex III to that Decision. 

1. 

The text of the footnotes in Appendix II to Annex III to Decision No 2/2000 referring 
to products classified in HS headings 5208 to 5212, 5407 and 5408, 5512 to 5516, 

Article 3 

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OJ L 44, 18.2.2003, p. 97. 

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5801,  5806  and  5811  shall  be  replaced  by  the  text  contained  in  Annex  I  to  this 
Decision. 

2. 

A new Note 13 shall be added to Appendix II(a) to Annex III to Decision No 2/2000, 
the text of which is contained in Annex I to this Decision. 

The text of Note 9 of Appendix II(a) to Annex III to Decision No 2/2000 shall be replaced by 
the text contained in Annex II to this Decision. 

Article 4 

Article 5 

The  rule  of  origin  set  out  in  Appendix  II  to  Annex  III  to  Decision  No 2/2000  for  products 
classified  in  HS heading  1904  shall  be  replaced  by  the  text  contained  in  Annex  III  to  this 
Decision. 

Article 6 

The  rule  of  origin  set  out  in  Appendix  II  to  Annex  III  to  Decision  No 2/2000  for  products 
classified  in  HS heading  7601  shall  be  replaced  by  the  text  contained  in  Annex  IV  to  this 
Decision. 

This  Decision  shall  enter  into  force  on  the  date  the  Parties  exchange  written  notifications 
certifying the completion of their respective legal procedures. 

Article 7 

Article 1 shall apply from 1 July 2006. 

Article 2 shall apply from 1 January 2005. 

Done at Brussels,  

For the Joint Committee 
The President 

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ANNEX  

ANNEX I 

(Referred in Article 3) 

TEXT OF THE FOOTNOTES IN APPENDIX II TO ANNEX III TO DECISION NO 2/2000 

REFERRING TO PRODUCTS CLASSIFIED IN HS HEADINGS 5208 TO 5212, 5407 AND 5408, 

5512 TO 5516, 5801, 5806 AND 5811 

FOOTNOTE TO HS HEADINGS 5208 TO 5212 

The printing rule shall apply only to exports from the EC to Mexico for an aggregate annual 
quota  of  2 000 000 m2.  This  quota  will  be  allocated  on  a  "first  come,  first  served"  basis  by 
Mexico. See Note 13 to Appendix II(a). 

FOOTNOTE TO HS HEADINGS 5407 AND 5408 

The printing rule shall apply only to exports from the EC to Mexico for an aggregate annual 
quota  of  3 500 000 m2.  This  quota  will  be  allocated  on  a  "first  come,  first  served"  basis  by 
Mexico. See Note 13 to Appendix II(a). 

FOOTNOTE TO HS HEADINGS 5512 TO 5516 

The printing rule shall apply only to exports from the EC to Mexico for an aggregate annual 
quota  of  2 000 000 m2.  This  quota  will  be  allocated  on  a  "first  come,  first  served"  basis  by 
Mexico. See Note 13 to Appendix II(a). 

FOOTNOTE TO HS HEADINGS 5801, 5806 AND 5811 

For HS headings 5801, 5806 and 5811, the printing rule shall apply only to exports from the 
EC to Mexico for an aggregate annual quota of 500 000 m2. This quota will be allocated on a 
"first come, first served" basis by Mexico. See Note 13 to Appendix II(a). 

TEXT OF NOTE 13 OF APPENDIX II(A) TO ANNEX III TO DECISION NO 2/2000 

Note 13 

Mexico  shall  allocate  the  benefit  of  the  annual  quotas  set  out  in  Appendix  II  for  products 
classified in HS headings 5208 to 5212, 5407 and 5408, 5512 to 5516, 5801, 5806 and 5811 
on a "first come, first served" basis. 

The Joint Committee shall review in 2009 the annual quotas to adjust them in the light of the 
experience in managing them and the bilateral trade flows. 

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ANNEX II 

(Referred in Article 4) 

TEXT OF NOTE 9 OF APPENDIX II(A) TO ANNEX III TO DECISION NO 2/2000 

Note 9 

For HS headings 6402, 6403 and 6404: 

HS heading 

Description of product 

Working or processing carried out on non-
originating materials that confers originating status 

(1) 

6402 to 6404 

(2) 

(3) 

or 

(4) 

Footwear  of  plastics,  leather  and 
textiles 

of 

Manufacture 
from 
any 
materials 
heading,  except  from 
assemblies  of  uppers 
affixed to inner soles or 
sole 
other 
to 
components  of  heading 
6406 

This rule shall confer origin only to goods exported by the EC to Mexico within the following 
annual quotas for each heading: 

6402 

120 000 pairs 

6403, only for pairs with a customs value over USD 20 

250 000 (women's pairs) 

6404 

250 000 (men's pairs) 

125 000 (children's pairs) 

120 000 pairs 

Mexico shall allocate the benefit of these annual quotas on a "first come, first served" basis. 

The Joint Committee shall review in 2009 the conditions established in this Note to adjust it 
in the light of the quota management experience with a view to allowing effective use of the 
trading opportunities offered. 

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ANNEX III 

(Referred in Article 5) 

RULE OF ORIGIN SET OUT IN APPENDIX II TO ANNEX III TO DECISION NO 2/2000 

FOR PRODUCTS CLASSIFIED IN HS HEADING 1904 

HS heading 

Description of product 

Working or processing carried out on non-
originating materials that confers originating status 

(1) 

1904 

(2) 

(3) 

or 

(4) 

Prepared  foods  obtained  by  the 
swelling  or  roasting  of  cereals  or 
cereal products (for example, corn 
flakes);  cereals  (other  than  maize 
(corn))  in  grain  form  or  in  the 
form  of  flakes  or  other  worked 
grains  (except  flour,  groats  and 
meal);  precooked,  or  otherwise 
prepared,  not  elsewhere  specified 
or included 

Zea 

in  which  all 

Manufacture: 
–  from  materials  not 
classified 
within 
heading 1806, 
the 
– 
cereals 
flour 
and 
(except  durum  wheat 
indurata 
and 
maize, 
their 
and 
derivatives)  used  must 
be wholly obtained, 
– in which the value of 
any 
of 
materials 
Chapter  17  used  does 
not exceed 30 % of the 
ex-works  price  of  the 
product 

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ANNEX IV 

(Referred in Article 6) 

RULE OF ORIGIN SET OUT IN APPENDIX II TO ANNEX III TO DECISION NO 2/2000 

FOR PRODUCTS CLASSIFIED IN HS HEADING 7601 

HS heading 

Description of product 

Working or processing carried out on non-
originating materials that confers originating status 

(1) 

(2) 

(3) 

or 

(4) 

7601 

Unwrought aluminium 

Manufacture: 

– from materials of any 
heading,  except  that  of 
the product, and 

– in which the value of 
all  the  materials  used 
does  not  exceed  50  % 
of the ex-works price of 
the product 

or 

Manufacture by thermal 
or electrolytic treatment 
from 
unalloyed 
aluminium or waste and 
scrap of aluminium 

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