Bilateral cumulation
The simplest form of origin cumulation allowing two FTA partner countries to treat originating materials from each other as their own.
Definition and principle
Bilateral cumulation is the most common and simplest form of origin cumulation. It allows a producer in country A to incorporate materials originating in country B (the FTA partner) into its product, and treat those materials as originating in its own country when determining the preferential origin of the finished product.
Legal framework
Bilateral cumulation is present in all EU free trade agreements. It is governed by the origin protocols annexed to each agreement. In the UCC (Regulation EU 952/2013), provisions relating to bilateral cumulation appear in the delegated acts (Regulation 2015/2446, articles 37 et seq.). Each agreement (EU-Canada/CETA, EU-Japan/JEFTA, EU-UK/TCA) contains its own provisions.
Practical operation
- A manufacturer in the EU uses Japanese-originating materials to produce a product exported to Japan: the Japanese materials are treated as EU-originating
- Only materials that have already acquired originating status in the partner country benefit from cumulation
- The proof of origin for imported materials must be retained and available for post-clearance verification
- Bilateral cumulation is reciprocal: it works in both directions between the partners
Difference from other forms of cumulation
- Unlike diagonal cumulation, bilateral involves only two parties to the agreement
- Unlike full cumulation, bilateral requires materials to already be originating — partial processing in the partner country is not sufficient
- Bilateral cumulation is the starting point to master before approaching more complex forms