Provision of Better, More Precise and Product-Specific Information on FTA

declarations. It would particularly relieve the burden on small and medium-sized enterprises without comprehensive internal system-based solutions and simplify the utilization of FTA.

Furthermore, the proof of origin should be simplified. Exporters should be free to choose whether to present consignment-related proof (declaration of preference on the invoice and formal certificate such as EUR.1) or a certificate of origin valid for several consignments for a certain long-term period. Nonofficial proofs of origin, such as invoice declarations, should also be allowed as they would significantly simplify handling of preferential origin. Up to a certain amount, the use of a non-official proof of origin should always be possible (e.g. €6000 as in the EU-South Korea FTA). In addition, an exporter who has been granted “approved exporter” status should be able to submit an invoice declaration at any time without being restricted by a threshold. This is already practiced in several countries such as South Korea, Mexico, and Switzerland. In order to further simplify proof of origin, the obligation to indicate origin criteria in origin declarations, as introduced in the Economic Partnership Agreement (EPA) between the EU and Japan, should not be included in future free trade agreements. The obligation to indicate origin criteria delineates a considerable additional administrative burden for companies.

Calculation of origin should be based on average material or product prices. This would lead to a considerable simplification for economic operators.

Goods should retain their preferential status irrespective of the mode of transport. Proof of preferential status should be deemed to have been provided as long as customs authorities to not express or assert reasonable doubts as to the unchanged condition or status of a good. This adjustment is necessary in times of global value chains. In modern logistic networks, goods are often not delivered directly from the country of origin to the country of preferential destination. Rather, they are first delivered to a regional hub which then supplies the region at short notice and usually does not fall within the scope of the preferential agreement. This type of distribution system contributes significantly to improving supply flows and enables widespread just-in-time deliveries. Challenges associated with the direct transport principle and the use of regional hubs could be addressed by innovative technologies, such as microchips placed directly on the goods or alternative evidence (for example, serial numbers and markers of batch identification). Companies could thus obtain preferential tariffs without having to use direct transport routes.

Provision of Better, More Precise and Product-Specific Information on FTA

BDI is committed to supporting all companies, but particularly small and medium-sized enterprises and enterprises that lack experience with dealing with free trade agreements. This can be done through a more targeted information policy on the part of competent bodies regarding the regulatory intricacies of implementing FTA. The introduction of the Access2Markets portal with a targeted application for the rules of origin applicable in the various European FTA (Rules of Origin Self-Assessment, ROSA) serves as a good step towards a low-threshold provision of information for economic operators.

German industry furthermore recommends more intensive exchange between the European Commission and the business community in order to more quickly and precisely identify potential problems in the utilization of European free trade agreements, as well as to better understand the solutions offered and to close information gaps. This also entails the European Commission’s involvement of economic stakeholders more in the negotiation process. Timely dissemination of information, for example on the rules of origin, could help to avoid problems with application as well as to enable an important preparatory phase for industry.