Revision of the PEM Convention Rules of Origin: Unlocking Trade Opportunities for Nonwovens Manufacturers

1 January 2025

As of 1 January 2025, the revised Pan-Euro-Mediterranean Convention (PEM) on Preferential Rules of Origin has officially come into effect, marking a significant achievement for trade across the 25 PEM Contracting Parties. EDANA’s definition of nonwovens, which is more in line with the industry production processes, will be applied in the revised PEM Convention rules of origin. The transformation into Nonwovens is now a sufficient operation to give the local origin to the roll goods, opening doors for manufacturers to benefit from reduced tariffs and simplified trade compliance.

What is the PEM Convention?

The Pan-Euro-Mediterranean Convention on Preferential Rules of Origin, established in 2012, serves as a comprehensive framework to harmonize rules of origin. Its goal is to simplify trade processes and integrate supply chains across the 25 Contracting Parties, which are:

• The European Union (EU),
• EFTA States: Switzerland, Norway, Iceland, and Liechtenstein,
• Barcelona Process Participants: Algeria, Egypt, Israel, Jordan, Lebanon, Morocco, Palestine, Syria, Tunisia, and Türkiye,
• EU Stabilization and Association Process Countries: Albania, Bosnia and Herzegovina, North Macedonia, Montenegro, Serbia, and Kosovo,
• Faroe Islands,
• Moldova,
• Georgia,
• and Ukraine.

What is new in the Revised PEM Rules?

EDANA lobbied at the European Textile level and the EU Commission to get a more accurate definition of the nonwoven processes and for the nonwoven production to be recognized as a double transformation process, including a web forming process, which can already deliver a finished product (e.g. waddings), and a web bonding process. This was agreed and included in the proposal of the textile industry (the so-called PEM11 revision) provided to the EU Commission in 2011. Since then, EDANA makes sure that this new definition of nonwoven products is used in all trade negotiations (e.g. FTA’s).

Why is this important for the Nonwovens industry?

The revised PEM rules of origin, which finally entered into force on 1 January 2025, gives the opportunity to manufacturers, even if they use non-originating raw materials, to get local certificates of origin, which are required to take profit of possible reduced tariff duties.

By simplifying trade and lowering tariffs, the revised PEM rules of origin strengthen economic ties among Contracting Parties. For the nonwovens industry, this means greater integration into global supply chains, enhanced competitiveness, and expanded market opportunities.

The new definition of the Nonwoven processes is used in different Free Trade Agreements that are already in place (e.g. Japan in 2019, UK in 2020, New Zealand in 2024), in the process of ratification (Mercosur in 2025) or under negotiation (e.g. India, Australia, or the six ESEA countries).

These revised rules will coexist with the original framework until 31 December 2025, providing businesses with the flexibility to choose the most beneficial approach during the transition. As of 2026, only the new revised convention will apply.