procedures and high shipping costs as the main problems in Tunisia. The same factors prevail in Morocco, in addition to restrictive rules of origin. Firms from Tunisia, Jordan and Egypt highlighted difficulties with Moroccan customs regarding rules of origin, including use of the change of tariff classification criterion to benefit from tariff exemptions, as per Agadir Agreement (which adopts the Pan-European Protocol of origin).

# **3.6. Traders’ Assessments of the Benefits of PAFTA**

The overwhelming majority of respondent companies – over 90 percent – report they have benefited from PAFTA. This strong result is found for all the countries in the sample, albeit with somewhat lower positive response rates for Lebanon, Morocco, Saudi Arabia and Syria than for other countries. When asked to rank the way PAFTA has benefited their businesses, respondent companies rank the removal of tariffs as the most important, followed by a reduction in trading costs (Table A-12).

A minority of respondents report having problems with documentation of PAFTA rules of origin (13 percent of respondents on the import side and 16 percent on the export side). The outlier here is Morocco, where non-acceptance of documentation of PAFTA rules of origin constitutes a problem for a larger number of companies (Table A-13).

The responses also show that the majority of affected exporting firms by problems related to rules of origin are from UAE and Saudi Arabia. For Saudi and UAE exporters certificates of origin issued by their national authorities were often rejected by Customs in Egypt, Morocco and Tunisia. Affected products are concentrated in processed foods, including dairy produce, refined sugar, sugar confectionery and cocoa preparations. UAE-registered exporting companies, especially those located in the Jebel Ali Free Zone, report the most rejections of origin documentation by the customs authorities of PAFTA partner countries.

While the majority of responses judge Egypt, Morocco and Tunisia as the most restrictive in accepting origin documentation issued by other PAFTA countries, many firms in these three countries complained in turn about a lack of transparency in the implementation of PAFTA rules of origin and the non-acceptance of cumulation of origin by many PAFTA countries, in contrast to the Agadir agreement.

# **3.7. Cross-Sector Impediments in Trading across Borders**

The results of the survey were compiled using the HS 1-digit product categories to explore whether different product groups encounter cross-border trade impediments differently in PAFTA countries, and that such heterogeneity expresses itself in a way that cannot be captured simply through pooling firms at the country level or summing up all the firms from the surveyed countries. The collected data were sorted in ten main product groups: animal and vegetable products, prepared foodstuffs, mineral products, chemical products, plastics, wood and paper, textile and garments, base metal articles, electrical and mechanical appliances, and miscellaneous manufactures (Figure A-5).

Table A-14 presents results which display the most costly factors in imports by product groups. Note that these results should be interpreted as only an approximate guide to the types of cross sectoral heterogeneity in impediments that might be present in the survey data.

# _Standards-Related Problems Encountered by Product Groups_

Standards have been found of particular concern to vegetable products, prepared foodstuffs, wood and paper, products of the chemicals (pharmaceuticals). The survey data disclose some 14