Rules of Origin in International Trade

Half-title......Page 3
Title......Page 5
Copyright......Page 6
Contents......Page 7
Figures......Page 17
Tables......Page 19
Acronyms......Page 23
Preface......Page 27
1 Efforts to Establish Multilateral Rules......Page 29
Substantial Transformation or Sufficient Working or Processing......Page 32
1.2. The UNCTAD Working Group on Rules of Origin......Page 37
2 The Uruguay Round Agreement on Rules of Origin: The Harmonization Work Program of Nonpreferential Rules of Origin......Page 45
2.1. The Agreement on Rules of Origin......Page 48
2.3. Adapting the HS to Origin: Some Decisive Technical Issues and Their Implications......Page 62
2.3.1. Definition of \"Assembly\" in Machinery......Page 66
2.3.2. Definition of \"Assembly\" in Textiles and Clothing......Page 72
2.4. Secondary or Residual Rules of Origin......Page 74
2.5.1. The Architecture......Page 75
Appendix 2 – Product-Specific Rules of Origin......Page 87
2.6. Outstanding Product-Specific Issues......Page 99
2.6.1. Fishery Products......Page 100
2.6.2. Slaughtering......Page 102
2.6.3. Dairy Products......Page 103
2.6.4. Coffee Products......Page 104
2.6.6. Refining Sugar and Sugar Products and Molasses......Page 105
2.6.8. Juices and Wines......Page 106
2.6.9. Mixtures/Blends......Page 108
2.6.11. Cement......Page 109
2.6.12. Chemicals......Page 110
2.6.13. Leather......Page 111
2.6.14. Textiles and Clothing......Page 112
2.6.15. Footwear......Page 114
2.6.16. Coating of Steel Products......Page 115
2.6.17. Machinery and Electronics......Page 116
2.7. The Chairperson\'s Proposal on Machinery and Electronic Sectors......Page 122
2.8. Trade Policy Implications of the HWP on Rules of Origin and Other WTO Agreements: The Issue of \"Equally all Purposes\"......Page 130
2.8.1. Negotiating Issues and Proposals on the Implications of HWP on Other WTO Agreements......Page 136
2.8.3. Possible Implications of Article IX of the GATT 1994: Marks of Origin......Page 145
2.8.4. Possible Implications of the Agreement on the Application of Sanitary and Phytosanitary Measures......Page 148
2.8.5. Possible Implications of the ARO on Textiles and Clothing......Page 151
2.8.6. Section 3 of the ARO on Trade-Related Aspects of Intellectual Property Rights: Geographical Indications......Page 153
2.8.7. Nonpreferential Rules of Origin and Circumvention......Page 154
2.9. Implementation Issues......Page 164
2.10. Conclusions......Page 168
3 Preferential Rules of Origin......Page 202
3.1. The Current Rules of Origin under the Generalized System of Preferences......Page 205
3.1.1. \"Wholly Obtained\" Products......Page 207
3.1.2. Products with an Import Content......Page 208
3.1.2.1. Process Criterion......Page 209
3.1.2.2.1. Canada......Page 211
3.1.2.2.2. United States......Page 212
3.1.2.2.3. Russian Federation......Page 216
3.1.3. Preference-Giving Country or Donor-Country Content Rule......Page 217
3.1.4. Cumulative Origin in the GSP Schemes......Page 218
3.1.4.1. The Difference between Full and Partial Diagonal Cumulation......Page 222
3.1.4.2. Cumulation under the EC GSP Scheme and EBA......Page 224
3.1.4.3. Derogation Procedures from Rules of Origin under the EC GSP Scheme......Page 226
3.1.4.5. Cumulation under the U.S. GSP Scheme......Page 228
3.1.4.6. Cumulation under the Canadian GSP Scheme......Page 229
3.1.5.1. African Growth Opportunity Agreement......Page 232
Grouping 3......Page 235
Grouping 7......Page 236
Grouping 9......Page 237
Grouping 10......Page 238
3.1.5.2. Rules of Origin under the Former Cotonou Partnership Agreement and the Current Interim EPAs......Page 242
3.1.5.3. The Trade Preferences for ACP from the Former Lom Conventions Through the CPA and to EPAs......Page 243
3.1.5.4. Rules of Origin, Cumulation and Derogations Procedures under the Former Cotonou Partnership Agreement......Page 246
3.1.5.5. Rules of Origin under Interim EPAs and the Cariforum EPAs......Page 252
3.1.5.6. Recent Proposal by the EC Commission on New GSP Rules of Origin from 2009…......Page 259
3.2. Contractual Rules of Origin in Free-Trade Areas......Page 262
3.2.1. The EC Pan-European Rules of Origin......Page 263
3.2.2. The EC Policy on Preferential Rules of Origin: The Progressive Adoption of the Pan-European Rules of Origin......Page 266
3.2.2.1.1. Products Wholly Obtained......Page 268
3.2.2.1.2. Sufficient Working on Processing – The Product-Specific Rules of Origin under the Pan-European Rules of Origin......Page 271
3.2.2.1.3. Product-Specific Rules of Origin Requirements Contained in Annex II of the Protocols Pursuant to Article 6 of the Protocol......Page 274
3.2.2.1.4. Additional Features of the Pan-European Rules of Origin......Page 278
3.2.2.1.5. Insufficient Working or Processing......Page 282
3.2.2.1.6. Explanatory Notes on the List of Product-Specific Pan-European Rules of Origin......Page 284
3.2.2.1.7. Progressive Adoption of the Diagonal Cumulation under the Pan-European Rules of Origin and the Enlargement to the…......Page 285
3.2.2.1.8. From Diagonal Cumulation under the Europe Agreements to the System of Euro-Mediterranean Cumulation......Page 287
3.2.2.1.9. Recent Developments in the EC Rules of Origin......Page 297
3.2.3. Rules of Origin of North American Free-Trade Agreement......Page 303
3.2.3.1. The Main Criteria for Determining Origin in NAFTA97......Page 307
3.2.3.2. De Minimis......Page 310
3.2.3.3. Regional Value Content in NAFTA......Page 315
3.2.3.4. Some Methodologies and Examples of Calculations under the Net Cost Method......Page 319
3.2.3.5. Cumulation in NAFTA......Page 332
3.2.3.6. Other NAFTA Provisions......Page 337
3.2.3.8. Automotive Products in NAFTA......Page 348
3.2.3.9. The Evolution of the NAFTA Model of Rules of Origin: From NAFTA to CAFTA through U.S.-Chile and U.S.-Singapore and Other FTA Agreements......Page 351
3.2.3.10. A Brief Comparison between the NAFTA Model and the Pan-European Rules of Origin Approaches: Techniques and Substantive Requirements......Page 356
4.1. The Basic Tenets of Rules of Origin and Economics......Page 365
4.1.1. Recent Developments on the Analysis of the Economic Effects of Rules of Origin......Page 368
4.1.2. Most Recent Studies on Economics and Rules of Origin: The Elaboration of an Index of Restrictiveness......Page 373
4.1.3. Some Preliminary Conclusions on the Status of the Economic Analysis on Rules of Origin......Page 386
4.2. Assessing the Impact of Rules of Origin: Evidence from the Utilization of Trade Preferences under the Generalized System of Preferences......Page 388
4.2.1. Linking Low Utilization of Preferences and Rules of Origin: A Methodology......Page 393
Conclusions......Page 411
General Observations and Lessons Learned......Page 417
5.2.1. The Definition of Two Categories of Products: Wholly Produced and Products that Have Undergone Substantial Transformation......Page 419
5.2.2. Negotiations and Experiences on the Definition of the Wholly Produced Criterion......Page 420
5.2.3. Negotiations and Experiences in Drafting Origin Criteria for the Definition of Substantial Transformation......Page 428
5.2.3.1. An Analysis of the Experiences and Lessons Learned under the Process Criterion......Page 431
5.2.3.1.1. An Analysis of the Specific Requirements Related to Selected Products under the Process Criterion......Page 436
5.2.3.1.2. Early Experience and Difficulties with the Issue of Multistage Operations, Double Jumps, and Double Transformations......Page 439
5.2.3.1.3. Some Examples of Product-Specific Experiences under the Process Criterion......Page 441
5.2.3.1.4. Difficulties Experienced by the Introduction of the Harmonized System and the Single List......Page 450
5.2.3.2. An Analysis of the Experiences and Lessons Learned under the Percentage Criterion......Page 454
5.2.3.2.1. Experiences and Lessons Learned on Different Draftings of the \"Percentage Criterion\"......Page 457
5.2.3.2.2. Preliminary Conclusions and Lessons Learned from the Different Drafting of the Numerator under the Percentage Criterion......Page 464
5.2.3.2.3. Preliminary Conclusions and Lessons Learned from the Different Drafting of the Denominator under the Percentage Criterion......Page 471
5.2.3.2.4. Early Experience and Lessons Learned from Utilizing the Percentage Criterion under the GSP Schemes......Page 472
5.2.3.2.5. Difficulties in Interpreting the Terminology Used in the Percentage Criterion......Page 475
5.2.4. Comparisons of Formulations between Percentage and Process Criteria......Page 477
5.3.1. Rules of Origin in AFTA and the ASEAN-China Free-Trade Area......Page 484
5.3.2. The SADC and COMESA Experience......Page 499
5.3.3. Mercosur Rules of Origin......Page 506
5.4.1. The Main Actors in Drafting and Administering Rules of Origin......Page 509
5.4.2.1. A Drafting Dilemma: What Are the Good and Bad Rules of Origin and How Should a Good Rules of Origin Be Drafted?......Page 514
5.4.2.2. Defining the Index of Technical Soundness......Page 516
5.4.2.3. Suggestions on Defining the Index of Technical Soundness......Page 522
5.4.3. Defining the Index of Restrictiveness When Drafting Product-Specific Rules of Origin: A Methodology Used in Different Scenarios......Page 528
5.4.3.1. The Experience with the EC GSP Rules of Origin......Page 531
5.4.3.2. The SADC Experience......Page 533
5.4.3.3. The ASEAN-China Free-Trade Experience......Page 535
5.4.3.4. Negotiating Product-Specific Rules of Origin in the Context of the Economic Partnership Agreements......Page 536
6 The Administration of Rules of Origin......Page 558
6.1.1. Issuance of Certificate of Origin Form A or Declaration by Exporter or Importer......Page 559
6.1.2. Direct Consignment......Page 562
Verification and Control......Page 565
6.2. The Experience of the United States on Administering Origin......Page 566
6.2.1. Customs Procedures and Enforcement under AGOA for Textiles and Clothing Products......Page 567
6.2.2. The Administration of NAFTA Rules of Origin......Page 570
6.2.3. From NAFTA to the U.S.-Chile Agreement......Page 573
6.3. The EC Experience in Administering Rules of Origin......Page 577
6.3.1. Procedure for the Issuance of Certificates of Origin EUR.I and EUR-MED......Page 581
6.3.2. Optional Use of Form EUR and EUR-MED and Mandatory Use of Form EUR.I or EUR-MED......Page 583
6.3.3. Simplified Procedures for the Issuance of Certificates of Origin: Approved Exporters......Page 586
Approved Exporter......Page 588
6.3.4. Supplier Declarations......Page 590
6.3.5. Documentary Evidence for the Issuance of Certificates of Origin......Page 591
Validity of Forms EUR.I and EUR-MED and Preservation of Proof of Origin and Supporting Documents......Page 592
6.3.6. Verification of Proofs of Origin......Page 593
6.3.7.1. Procedure for the Issuance of Certificates of Origin for Cumulation under EC GSP Rules of Origin......Page 596
6.3.7.2. Procedure for Issuance of Certificates of Origin for Cumulation under the Former Cotonou Partnership Agreement......Page 598
6.3.8. The Procedure and Decision Making in the Case of A Posteriori Recovery or Remission of Customs Duties and Origin Verification in the EC......Page 600
6.3.8.1. The Procedure for Nonrecovery of Customs Duties after Clearance......Page 601
6.3.9. The Future of the EC Rules of Origin: The Green Paper on the Future of Rules of Origin in Preferential Arrangements and Recent Developments......Page 602
6.3.10. Recent Developments Following the Green Paper......Page 607
6.3.11. Origin Administration and Customs Cooperation in the EC......Page 610
6.3.12. Experience of OLAF on Origin Investigation......Page 615
6.3.13. An Overview of EC Judicial Remedies in Matters Related to Origin and Verification Requirements......Page 621
Index......Page 635