Why Are Rules of Origin Important

Rules of origin can be divided into non-preferential rules of origin and preferential rules of origin. Non-preferential rules of origin are those designated primarily to maintain the most-favoured-nation (most-favoured-nation) within the World Trade Organization (WTO). Preferential rules of origin are those related to “contractual or autonomous trade arrangements leading to the granting of tariff preferences beyond the most-favoured-nation clause”. This separation is provided for in Article 1 of the WTO Agreement on Rules of Origin. [5] In principle, free trade agreements and their rules of origin should be notified to the WTO as an obligation of Members. [7] However, rules of origin in free trade agreements and autonomous trade agreements (e.g. B GSP schemes) are not subject to any essential WTO requirements. Indeed, the Agreement on Rules of Origin does not regulate how rules of origin are to be formulated and implemented in a free trade agreement or GSP. There is only a brief joint declaration on preferential rules of origin, which sets out certain standards and recommendations for the formulation of preferential rules of origin. [8] The fact that preferential rules of origin do not fall within the scope of the WTO adds even more divergence to the “spaghetti bowl” of rules of origin: each free trade agreement and each autonomous trade regime can formulate its own rules of origin. Due to the rapid growth of regionalism, hundreds of rules of origin are currently applied in hundreds of free trade agreements. According to the WTO, as of 4 January 2019, 291 RTAs will be in force – only those notified to the WTO Secretariat will apply. [9] According to the International Trade Centre (ITC), more than 440 free trade agreements are in force at the end of March 2019.

[10] Goods wholly produced in a given country are considered to originate in that country. It shall be deemed to be wholly produced in a given country: 2. MEMBER STATES SHALL ADOPT THE RULES OF ORIGIN REFERRED TO IN PARAGRAPH 1 WHICH SHALL INCLUDE ALL RULES OF ORIGIN USED IN NON-PREFERENTIAL TRADE POLICY INSTRUMENTS, for example in the application of most.B-favoured-nation treatment in accordance with Articles I, II, III, XI and XIII of GATT 1994; anti-dumping and countervailing duties imposed pursuant to Article VI of the GATT 1994; the safeguard measures provided for in Article XIX of the GATT 1994; origin marking requirements under Article IX of the GATT 1994; and discriminatory quantitative restrictions or tariff quotas. They also contain the rules of origin used for public procurement and trade statistics. The most likely changes in return on equity will affect importers from the EU to the UK and vice versa. At present, goods originating in or undergoing processing or assembly work in one of the 28 old EU Member States have contributed to considering a product imported between the UK and the EU as originating in the EU. This meant that significant quantities of goods were classified as originating in the EU and were therefore subject to reduced or zero import duties under the existing ROO regime for the movement of goods within the EU internal market. The Rules of Origin Facilitator aims to help small and medium-sized enterprises increase their trade by taking advantage of global trade opportunities in the form of low tariff rates under trade agreements. The tool can also be used by policymakers, trade negotiators, economists, as well as other users. Any user can easily search for information on origin criteria, other origin determinations and trade documentation by entering the HS code of their product.

The CRO and the TCRO have developed a comprehensive architectural design within the framework of which the harmonization work programme is to be completed. These include the general rules set out in eight articles provisionally entitled “Scope”; the Harmonized System; definitions; determination of origin; Residual rules of origin; minimal operations or processes; special provisions; and de minimis; three annexes: Appendix 1: Wholly obtained goods; Appendix 2: Product Rules – Essential Processing; and Appendix 3: Minimum Operations or Processes. Simply put, ROO are the rules by which it is determined where a particular good comes from or where it is produced. They are used to enable importers, exporters and regulators to determine whether the importer of that product is entitled to a reduced or zero duty on imports of that product when it is “originating” in one FTA country and is imported into the other. During the transitional period (i.e. until the entry into force of the new harmonised rules), members must ensure that: (a) the rules of origin, including the specifications for the examination of substantial conversion, are clearly defined; (b) rules of origin are not used as a trade policy instrument; (c) the rules of origin themselves do not have restrictive, distorting or disruptive effects on international trade and do not require compliance with conditions unrelated to the manufacture or processing of the product concerned; (d) the rules of origin applied to trade are not stricter than those applied to determine whether the product is present in the internal market and do not discriminate between members (principle of the most-favoured-nation clause of gatt). .