Ukraine starts application of provisions of Pem Convention

From January 1, 2019, the application of the provisions of the Regional Convention on pan-Euro-Mediterranean preferential rules of origin in bilateral trade has been launched between Ukraine and the European Union.

The PEM Convention is a tool that establishes identical rules of origin for goods used in the framework of free trade agreements between the contracting parties.

In the future, the use of the PEM Convention will enhance the benefits for national exporters through the opening up additional opportunities for Ukrainian producers: they will be able to use the principle of diagonal accumulation of origin of goods applied among the parties to the Convention on the condition of the existence of free trade regimes between them.

The PEM adds a new measure to the established regime of international trade: in the future, a Ukrainian producer will be able to purchase raw materials or components, for example in Georgia, and produce products to Germany (EU) without paying of duty. Soon it is planned to make appropriate changes to the agreement on free trade with Georgia.

There is an important condition: materials and component should come from a country that is also a member of the PEM and has an agreement on free trade with Ukraine.

Europeans have created the PEM as a good tool for improving the effectiveness of the network for its free trade.

There is a certain humanitarian value: the PEM rules work not only for the trade of the three countries with the EU, but also with the third among themselves.

That is, in the future, in Ukraine, can open companies, which will buy raw materials, for example, in Israel, will be processed in Ukraine and exported to Norway as a Ukrainian commodity.

This will shift the emphasis of international trade for Ukraine and, instead of exporting Ukrainian raw materials, processing will be concentrated in Ukraine.

The information was taken from an interview with the First Vice Prime Minister/Minister of Economic Development and Trade of Ukraine Stepan Kubiv to the “Ekonomichna Pravda” publication.

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