EU approves new trade incentives for North Africa

Reuters, Thursday 14 Apr 2011

European Union approves an agreement allowing developing neighbours to export goods made with raw materials from third parties at low duties

Alexandria Port

Exporters in North Africa, the Middle East and the Balkans will be able to sell goods to the European Union at lower tariffs more easily in the future, under an agreement endorsed by the 27-nation bloc on Thursday.

The agreement on preferential "rules of origin", approved by EU ministers, allows exporting states to source raw materials from countries such as China, and still qualify for low duties when shipping finished goods to Europe.

"This will help their economies to grow faster, thus contributing to the stability of the whole region and easing migration pressures," the EU's rotating presidency, held by Hungary, said of the accord.

The agreement covers seven Balkan countries and nine North African and Middle Eastern states — Algeria, Egypt, Israel, Jordan, Lebanon, Morocco, Syria, Tunisia and Turkey — plus the West Bank and Gaza. It replaces a series of existing bilateral protocols on rules of origin with a single convention covering all the named countries.

The EU's rules of origin require exporters to prove that a minimum level of added value was created in goods produced domestically from imported raw materials, in order to qualify for preferential EU import tariffs. Under the new agreement, the added value of goods produced in more than one participating country can be added together when determining if a product meets the minimum threshold.

The combined value of the trade in goods between the EU and the Middle East and North Africa was 140 billion Euros in 2010.

Algeria, Egypt and Syria mainly export fuels and mining goods to Europe, while Tunisia and Morocco are the most diversified, with exports ranging from minerals and textiles to farm produce and machinery.

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