Rules of origin in Free Trade Agreements
Simple value-based sugar origin rules for the export competitiveness of CAOBISCO industries
CAOBISCO represents the Chocolate, Biscuits and Confectionery Industries in Europe amongst which membership, a large number of SMEs. Out of an annual production of 11 million tonnes, around 2 million tonnes of our produce is exported outside the European Union. CAOBISCO industries employ more than 300 000 people across Europe and create high value-added for the European economy. The survival of our manufacturing industries heavily depends on our future export competitiveness.
Free Trade Agreements signed by the EU play a vital role in securing new opportunities for the industry to access overseas markets. Rules of origin are a key part of these agreements. The rules need to be respected in order to benefit from tariff concessions agreed. Rules negotiated in FTAs should therefore remain clear, simple and harmonised, and must not act as a barrier to EU exports.
Sugar is the main ingredient in CAOBISCO products. Current rules of origin in FTAs set a value limit on non-EU sugar in our products of 30%. The rule is respected by all manufacturers, is internationally recognised and should be maintained in all future EU FTAs.
In recent trade agreements e.g. Singapore and Vietnam, the EU has switched to weight based rules of origin. The intention is to limit non-originating material, sugar in this case, based on a weight percentage of the final product. This represents a huge obstacle for our exports, threatens growth and jobs in our industry and undermines the creation of value-added in the European Union.
Weight-based rules of origin will lead to drastic barriers to our exports. This situation not only leads to more administrative burden to operators having to comply with different rules in FTAs but also restricts the use of non-EU sugar which is and will continue to be sourced by sugar suppliers in the future in order to respond to the needs on the market.
CAOBISCO mainly uses raw materials sourced in Europe and wishes to do so in the future. However, agricultural commodities are traded globally and sugar suppliers are not able to prove the origin of the sugar without a supplier declaration. Both suppliers and CAOBISCO manufacturers must be allowed to apply accounting segregation. To do so, EU customs administrations must put in place the correct procedures for processing applications for all preferential export markets.