CAOBISCO: market access gains in EU-Japan EPA may be jeopardised by unworkable rules of origin

CAOBISCO, representing the European Chocolate, Biscuits and Confectionery industries, welcomes the entry into force on 1 February 2019 of the EU Japan EPA and commends the efforts of EU negotiators to secure increased market access in Japan for the sector. While the EPA did not result in immediate tariff elimination, the partial or full phasing out of Japan’s high import duties on confectionery products generally over 10 years, is a significant result especially in a long term perspective, according to the association.

However, CAOBISCO is deeply concerned that the weight-based rules of origin proposed by the EU and ultimately agreed in the EPA will prevent EU exporters of confectionery, chocolate and fine bakery wares, to reap the benefit from any tariff concession. As highlighted in several occasions to the European Commission, the shift from value-based (as is the case for the overwhelming majority of FTAs currently in force) to weight based rules of origin in most cases represents an “insurmountable obstacle” in order to qualify for preferential treatment: EU manufacturers, while sourcing the vast majority of sugar from the EU, are unable to prove the weight of non-originating sugar in the final product as sugar suppliers are often unwilling to provide a supplier declaration certifying EU origin.

Therefore, CAOBISCO calls the European Commission to rethink its approach in all FTAs currently being negotiated and, if a return to value limit criteria is not possible, at least provide that suppliers are required to certificate the EU-origin in their production facilities where European production is the regular input factor.