Preferential Origin : The Strategic Advantage of Major Brands
Adidas, Nike and their peers don’t pick their production sites at random. Behind every factory set up in Asia, or elsewhere, lies a strategy far more complex than simple labor costs. The driver ? Free-trade agreements signed between the European Union and numerous third countries, which allow import duties to be reduced, or even waived.
But beware, gaining access to these tariff advantages isn’t just about producing locally. Companies must comply with specific rules of preferential origin. These rules determine whether a product can be considered “originating” from the partner country, and therefore eligible for duty reductions.
Take the EU–Vietnam agreement, for example. If a pair of shoes is fully assembled in Vietnam in line with the criteria (notably using materials from “any tariff heading”), it qualifies for preferential customs treatment. But if certain components, like soles or uppers classified under heading 6406, are imported and merely attached in Vietnam, the rule is no longer met. The result : full import duties apply.
