The proposal will modernise the EU’s preferential trade agreements with 20 trading partners

The proposal will modernise the EU’s preferential trade agreements with 20 trading partners

The European Apparel and Textile Confederation (Euratex) has welcomed the EU's decision to modernise the Pan-Euro-Mediterranean (PEM) Convention but calls for an ambitious information campaign to ensure companies fully benefit.

The European Commission adopted a package of proposals on 24 August that aims to increase trade between the European Union and neighbouring countries in the Pan-Euro-Mediterranean (PEM) region.

The proposal will modernise the EU's preferential trade agreements with 20 trading partners by making the relevant 'rules of origin' more flexible and business-friendly.

More specifically, it will introduce increased thresholds of tolerance for non-originating materials, from 10% to 15%; introduce "full" cumulation, under which the manufacturing operations needed to acquire origin for most products can be split among several countries; and lifts the current prohibition of duty-drawback.

Euratex says the PanEuroMed is an important region for the EU, as trade with these countries accounted for EUR677bn in 2019. For the EU textile and clothing sector, the region represents 29% of its exports.

The industry body has welcomed the current proposals, despite a full and final agreement not being reached with all PEM partners. It says the proposed rules are timely and will facilitate the integration of textile and clothing supply chains and, therefore, boost production and trade within the region.

Euratex is calling on the European Commission to continue negotiations with all PEM partner countries, and to launch an information campaign that will allow companies to fully understand and benefit from the new rules.

"This is also a perfect opportunity to present a similar proposal to the UK, which should join the PEM convention too," says director general Dirk Vantyghem. "It will be a win-win situation both for the EU and UK companies."

If the UK joins the PEM conventions, nearly 50% of EU exports in textiles and clothing would be covered by a single set of origin rules.

Paolo Gentiloni, Commissioner for Economy, said: "We need to do everything we can to facilitate trade and economic activity between the EU and our neighbours in the Euro-Mediterranean area, and to promote regional integration. This will also help countries like Lebanon recover and rebuild, while at the same time supporting European businesses in accessing new markets."