Signatories to a free trade agreement form a free trade area (e.g. B Switzerland-EU). It is not a customs union, i.e. the signatories to the agreement retain their own external customs duties. On the other hand, in the case of a customs union, there are only common external customs duties. Once the goods have passed through this limit and reached the market, they can move freely between different countries, without imposing any further tariffs. Examples of customs unions: European Union or Switzerland-Liechtenstein. At the time of the initiation of the investigation, the Commission found such potential abnormal business models in product categories 4B, 5, 13, 15, 16, 17 and 25. For these categories, either certain country-specific annual quotas or the corresponding balance, which was to apply until the end of June 2019, were already exhausted or were about to be exhausted within only two months of the introduction of the definitive safeguard measures. The Commission found that all bilateral trade agreements invoked by the parties provided for the possibility of taking safeguard measures. Therefore, no exemption can be invoked on this basis. The Commission also objected to the idea that it should give preferential treatment to some countries over others. Those bilateral agreements do not provide for an obligation of different treatment vis-à-vis other parties subject to measures and do not impose them on the Union.
Moreover, no interested party has been able to refer to such provisions in the relevant agreements. The Commission was therefore unable to accept these requests. As regards requests for an increase in trQ in a number of product categories due to an alleged increase in demand, the Commission has already taken these claims into account in its in-depth analysis of the use of TRQ described in point 2.A. The Commission concluded that the level of quotas was reasonable and proportionate to stop traditional trade flows and that there was no evidence of a significant increase in demand in the Union justifying a change in the level of tariff quotas. Furthermore, the fact that at the end of the first year of application of the safeguard measures (30 June 2019) quantities were still available in most product categories, those measures generally do not restrict the possibilities for steel exports to the Union by third countries. Therefore, the Commission was unable to conclude that the current trQ had a negative impact on the achievement of the integration objectives pursued. In the manufacture of products with a Swiss country of origin, materials which do not meet the criteria of the country of origin which are subject to refund or non-payment of customs duties (e.g. products imported and re-exported in processing trade.B) may not be used. This rule does not apply to agreements with Singapore, South Korea, SACU, Canada, Japan, Colombia and Peru.
Most (but not all) Swiss free trade agreements contain such a rule. This means that the determination of the country of origin of the product does not take into account materials originating in a third country, provided that their value does not exceed 10% of the ex-works price. However, if a percentage rule is fixed in the list, it shall not be exceeded by the application of the general tolerance. Therefore, this tolerance is particularly relevant for goods for which the list provides for a position jump. The general value tolerance cannot apply to products listed in Chapters 50 to 63 of the Harmonized System and does not apply to products that have received a minimum processing in Switzerland. However, reliable statistics on imports of steel products in calendar year 2018 were only available after the first quarter of 2019 (i.b around three months after the Commission adopted the definitive safeguard measures). . . .