Ethiopia and EPA Negotiation 2008 - FES Ethiopia

distinguish the” products entirely obtained in a country” from the “processed
products.” 34
One of the glaring weaknesses of the EBA scheme compared to the Interim EPA
and the Cotonou Partnership Agreement is its restrictive rules of origin. The EBA
regime is weak in different aspects of rules of origin.
First, the cumulation rules under EBA are more restrictive than the rules under the
Interim EPA. Under the EBA, cumulation can occur with the European Union and
other beneficiary EBA countries while under the Interim EPA cumulation is
allowed with ACP states, the EU and its OCTs and neighbouring developing
countries that are not ACP countries. It is possible that a country that signed an
Interim EPA using materials from other countries qualify for duty –free access to
the EU market under the Interim EPA but not under the EBA scheme. Therefore
there is more flexibility in the Interim EPA than there is in the EBA regime.
In reality, however, the value of cumulation is not that apparent for Ethiopia, as
there is little evidence that Ethiopia uses much material from other ACP
countries in its manufacturing processes. In fact the EU is probably a more
important trade partner for the purposes of cumulation and this is allowed under
all regimes. Moreover, rules of origin will not be a major issue for importers and
exporters that are presently engaged in trade of primary agricultural products
34 The key concepts of rules of origin are the following.
Products entirely obtained in a country. Goods entirely obtained in a country largely refers to
agricultural and food processing products such as vegetables, live animals and goods that are
manufactured in the country exclusively from agricultural products and their derivatives.
Processed products. When products are obtained in the country and contain goods which have
not been “entirely” obtained there, it raises the question of knowing whether these obtained
products must be considered as originating products or not. The criterion retained is the sufficient
“working” or processing of materials which were not entirely obtained there. The working or
processing conditions depend on the different protocols. These conditions appeal mainly to the
criteria for tariff position change but also to the added value or the undertaking of a specific
working.
Cumulation rules. Within the framework of a bilateral preferential regime where products
obtained from one of the contracting parties contain materials which are not entirely obtained
there but utilize materials originating from the other party, the latter are considered as
originating materials when they are incorporated in an obtained product. This principle is called
the “bilateral cumulation.” Only materials not originating from the zone constituted by the two
countries are considered for sufficient characteristic, or lack of, of the working or processing.
Beyond the bilateral cumulation, there are enlarged systems of cumulation which include
several country zones named “diagonal cumulation”.
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