Explanatory Memorandum to COM(2002)633 - 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

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dossier COM(2002)633 - Community position within the EU - Mexico Joint Committee relating to Annex III to Decision No 2/2000 of the EU - Mexico ...
source COM(2002)633 EN
date 19-11-2002
1. Rules of origin are essential to the correct functioning of the free trade agreements between the Community and its trading partners, including Mexico. The European Communities and its Member States, of the one part, and the United Mexican States, of the other part, have signed an Economic Partnership, Political Coordination and Cooperation Agreement which entered into force on 1 October 2000  i.

Annex III to Decision No 2/2000 of the EU - Mexico Joint Council  i concerns the definition of the concept of originating products and methods of administrative cooperation and has entered into force on 1 July 2000.

2. A Joint Declaration to the Agreement provides that the Joint Committee shall extend the application of a temporary origin rule  i applicable until 31 December 2002 to certain leather products of headings 4104 and 4107, should the WTO negotiations continue beyond that date.

3. The current round of WTO negotiations shall address the issue of export duties that are applied on certain products by a number of countries, including some Latin American trading partners of Mexico. This issue poses a problem for Mexico as regards the supply of certain hides and skins in the wet-state that, otherwise under the standard origin rules  i, would obtain originating status through retanning processes. In this respect, the temporary rule of origin set out in Note 4 of Appendix II(a) to Annex III to Decision No 2/2000 does not consider the manufacturing process 'retanning of tanned leather' as an origin conferring criteria. The temporary exclusion of this origin rule at present maintains a level-playing field between the two Parties, as Community producers would otherwise be able to source the above-mentioned hides and skins in neighbouring countries without the financial burden represented by export duties.

4. Having considered the above elements, the Joint Committee shall take a decision with a view to extend beyond 31 December 2002 and until 31 December 2004 the application of the above-mentioned temporary rule of origin.

5. The Commission therefore calls on the Council to draw up a common position for presentation to the EU - Mexico Joint Committee.