where a product comes from is no longer easy when raw materials and parts criss-cross the globe to be used as inputs in scattered manufacturing plants. Rules of origin are therefore needed to attribute one country of origin to each product. They are the criteria used to define where a product was made and are important for implementing other trade policy measures, including trade preferences, quotas, anti-dumping measures and countervailing duties.
Non-preferential rules of origin
Non-preferential rules of origin are those which apply in the absence of any trade preference — that is, when trade is conducted on a most-favoured nation basis. Not all countries apply specific legislation related to non-preferential rules of origin. However, some trade policy measures such as quotas, anti-dumping or “made in” labels may require a determination of origin and, therefore, the application of non-preferential rules.
In the Agreement on Rules of Origin, WTO members agreed to negotiate harmonized non-preferential rules of origin. These negotiations have not concluded, and about 40 WTO members currently apply national rules of origin for non-preferential purposes.
The Committee on Rules of Origin of the WTO
The Committee on Rules of Origin is established under Article 4 of the Agreement. The Committee on Rules of Origin is to adopt a communication entitled ‘Enhancing Transparency in Nonpreferential Rules of Origin’.
The EU has adopted a position which hopes to enhance the transparency of laws, regulations and practices regarding non-preferential rules of origin, by means of rules on mandatory or voluntary notification by World Trade Organization (WTO) members of their non-preferential rules of origin, using standardised templates. This will result in clearer and more predictable rules of origin and will facilitate the flow of international trade, according to the EU.
2. EU Position
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