Ministry of trade: Israel will join the newly extended Euro-Med cumulation of origin zone

The Council of Ministers of the EU approved last week the extension of the cumulation rules of origin to Mediterranean basin countries. According to a statement issued last week by the Ministry of Industry and Trade, the main beneficiaries of the EU extension would be the Israeli textile industry.
 
Israeli participation in the EU cumulation of origin system will enable Israeli exporters to overcome one of the fundamental conditions of the present Israel-EU trade agreement, which stipulates a "direct shipment" rule that to be eligible for origin benefits, an Israeli exporter must ship goods directly from Israel to the destination in Europe.
 
Due to the above stipulation it has not been possible to carry out any basic production in Israel and ship the product to be finished in a third or forth countries such as Turkey, Romania or Jordan, to be eligible for cumulation production rights for duty-free entry to the EU.
 
The Ministry of Industry, Trade and Labor believes that the extension of the cumulation rules of origin to Mediterranean basin countries will save hundreds of jobs in the textile and related industries in which splitting of manufacturing processes is essential.
 
The Israeli textile Industries will, once the multilateral agreements approved, be able to carry out part of their high value added production stages in Israel, and have simple sewing to be carried out in countries with much lower labor costs, without losing the origin status on exports to the EU.
 
The Ministry of Industry, Trade and Labor also pointed out that the new cumulation rules of origin will no doubt improve the competitiveness of the Israeli industry against Far Eastern manufacturers who enjoy lower labor costs.