Rules of origin determine where goods "originate" for customs/tariffs purposes. As such, the ‘origin’ is the economic nationality of goods traded under a Free Trade Agreement (FTA) and the product classification, value and origin of a good determines the customs tariff treatment to be applied on entering the EU or any other "Third Country". The European Commission has competence under the EU Treaties for international trade, and on the operation of EU rules of origin.
I understand that in correspondence with industry stakeholders the European Commission has confirmed that it does not intend to review any existing trade agreement for reasons relating to the withdrawal of the UK from the EU. While there are FTA negotiations with Australia which are first time negotiations (and not an upgrade of an earlier agreement), existing rules of origin proposals and bilateral cumulation are what the EU is proposing.
Given that Northern Ireland goods have UK origin, in accordance with the provisions of the Protocol on Ireland and Northern Ireland, the rules of origin requirements that form part of the EU’s set of Free Trade Agreements may present challenges for some traders in Northern Irish or mixed-all island goods. Each supply chain is unique and must be evaluated alongside the rules of origin associated with each FTA. No unilateral action on Ireland’s, or the EU’s, part can resolve these issues, as any preferential treatment must be conceded by a third party.
The Government remains committed to providing every possible support to cross-Border supply chains and to protecting the shared all-island economy. Moreover, my Department, directly and through the ongoing work of InterTrade Ireland, Enterprise Ireland and Local Employment Offices has been engaging with representative groups and with companies to assist them in preparing for the significant changes flowing from the UK’s decision to leave the Single Market. The Government will continue to engage all relevant stakeholders on these issues.
While solutions on Rules of Origin may not be immediately to hand, it is worth recalling that, with the support of our fellow Member States, we successfully negotiated a border-free outcome for goods on the island of Ireland, facilitating the free flow of goods from Northern Ireland within the European Union’s Single Market of almost half a billion people.
