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I. Preamble back to top
A. Text of the Preamble
Members,
Noting that Ministers on 20 September 1986 agreed that the
Uruguay Round of Multilateral Trade Negotiations shall aim to “bring
about further liberalization and expansion of world trade”, “strengthen
the role of GATT” and “increase the responsiveness of the GATT
system to the evolving international economic environment”;
Desiring to further the objectives of GATT 1994;
Recognizing that clear and predictable rules of origin and their
application facilitate the flow of international trade;
Desiring to ensure that rules of origin themselves do not create
unnecessary obstacles to trade;
Desiring to ensure that rules of origin do not nullify or impair
the rights of Members under GATT 1994;
Recognizing that it is desirable to provide transparency of laws,
regulations, and practices regarding rules of origin;
Desiring to ensure that rules of origin are prepared and applied
in an impartial, transparent, predictable, consistent and neutral
manner;
Recognizing the availability of a consultation mechanism and
procedures for the speedy, effective and equitable resolution of
disputes arising under this Agreement;
Desiring to harmonize and clarify rules of origin;
Hereby agree as follows:
B. Interpretation and Application of the Preamble
No jurisprudence or decision of a competent WTO body.
Part I: Definitions and Coverage
II. Article 1
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A. Text of Article 1
Article 1: Rules of Origin
1. For the purposes of
Parts I to IV of this Agreement, rules of
origin shall be defined as those laws, regulations and administrative
determinations of general application applied by any Member to determine
the country of origin of goods provided such rules of origin are not
related to contractual or autonomous trade regimes leading to the
granting of tariff preferences going beyond the application of paragraph
1 of Article I of GATT 1994.
2. Rules of origin referred to in
paragraph 1 shall include all rules
of origin used in non-preferential commercial policy instruments, such
as in the application of: most-favoured-nation treatment under Articles
I, II, III,
XI and XIII of GATT
1994; anti-dumping and countervailing
duties under Article VI of GATT
1994; safeguard measures under Article
XIX of GATT 1994; origin marking requirements under Article IX of GATT
1994; and any discriminatory quantitative restrictions or tariff quotas.
They shall also include rules of origin used for government procurement
and trade statistics.(1)
(footnote original)
1 It is understood that this provision is
without prejudice to those determinations made for purposes of defining
“domestic industry” or “like products of domestic industry” or
similar terms wherever they apply.
B. Interpretation and Application of Article 1
1. Parts I to
IV of the Agreement on Rules of Origin concern rules of
origin for non-preferential (“most-favoured nation”) trade regimes.
Preferential trade regimes, including those governing eligibility for
preferential treatment under regional trade agreements as well as
autonomous preferences, are governed by Part V.
Part II: Disciplines to
Govern the Application of Rules of Origin
III. Article 2
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A. Text of Article 2
Article 2: Disciplines During the Transition Period
Until the work programme for the harmonization of rules of origin set
out in Part IV is completed, Members shall ensure that:
(a) when they issue administrative determinations of general
application, the requirements to be fulfilled are clearly defined. In
particular:
(i) in cases where the criterion of change of tariff classification
is applied, such a rule of origin, and any exceptions to the rule, must
clearly specify the subheadings or headings within the tariff
nomenclature that are addressed by the rule;
(ii) in cases where the ad valorem percentage criterion is applied,
the method for calculating this percentage shall also be indicated in
the rules of origin;
(iii) in cases where the criterion of manufacturing or processing
operation is prescribed, the operation that confers origin on the good
concerned shall be precisely specified;
(b) notwithstanding the measure or instrument of commercial policy to
which they are linked, their rules of
origin are not used as instruments to pursue trade objectives directly
or indirectly;
(c) rules of origin shall not themselves create restrictive,
distorting, or disruptive effects on international trade. They shall not
pose unduly strict requirements or require the fulfilment of a certain
condition not related to manufacturing or processing, as a prerequisite
for the determination of the country of origin. However, costs not
directly related to manufacturing or processing may be included for the
purposes of the application of an ad valorem percentage criterion
consistent with subparagraph (a);
(d) the rules of origin that they apply to imports and exports are
not more stringent than the rules of origin they apply to determine
whether or not a good is domestic and shall not discriminate between
other Members, irrespective of the affiliation of the manufacturers of
the good concerned(2);
(footnote original)
2 It is understood that this provision is
without prejudice to those determinations made for purposes of defining
“domestic industry” or “like products of domestic industry” or
similar terms wherever they apply.
(e) their rules of origin are administered in a consistent, uniform,
impartial and reasonable manner;
(f) their rules of origin are based on a positive standard. Rules of
origin that state what does not confer origin (negative standard) are
permissible as part of a clarification of a positive standard or in
individual cases where a positive determination of origin is not
necessary;
(g) their laws, regulations, judicial decisions and administrative
rulings of general application relating to rules of origin are published
as if they were subject to, and in accordance with, the provisions of
paragraph 1 of Article X of GATT 1994;
(h) upon the request of an exporter, importer or any person with a
justifiable cause, assessments of the origin they would accord to a good
are issued as soon as possible but no later than 150 days(3)
after a request for such an assessment provided that all necessary
elements have been submitted. Requests for such assessments shall be
accepted before trade in the good concerned begins and may be accepted
at any later point in time. Such assessments shall remain valid for
three years provided that the facts and conditions, including the rules
of origin, under which they have been made remain comparable. Provided
that the parties concerned are informed in advance, such assessments
will no longer be valid when a decision contrary to the assessment is
made in a review as referred to in subparagraph
(j). Such assessments
shall be made publicly available subject to the provisions of
subparagraph (k);
(footnote original)
3 In respect of requests made during the
first year from the date of entry into force of the WTO Agreement,
Members shall only be required to issue these assessments as soon as
possible.
(i) when introducing changes to their rules of origin or new rules of
origin, they shall not apply such changes retroactively as defined in,
and without prejudice to, their laws or regulations;
(j) any administrative action which they take in relation to the
determination of origin is reviewable promptly by judicial, arbitral or
administrative tribunals or procedures, independent of the authority
issuing the determination, which can effect the modification or reversal
of the determination;
(k) all information that
is by nature confidential or that is
provided on a confidential basis for the purpose of the application of
rules of origin is treated as strictly confidential by the authorities
concerned, which shall not disclose it without the specific permission
of the person or government providing such information, except to the
extent that it may be required to be disclosed in the context of
judicial proceedings.
B. Interpretation and Application of Article 2
1. Article 2
(a) Disciplines prescribed by Article 2(b) through (d) and Members’
discretion regarding rules of origin
2. With respect to the provisions prescribed by
Article 2 of the
Agreement on Rules of Origin, the Panel in US — Textiles Rules of
Origin explained that subparagraphs (b) through
(d) lay down a
negative set of disciplines that apply during the transition period
(until the work programme set out in Part IV is completed). After this
transition period, i.e. upon implementation of the results of the
harmonization work programme, Members will apply harmonized rules of
origin, and the application of those rules will be subject to the
provisions of Article 3. According to the Panel, during the transition
period members enjoy “considerable discretion in designing and
applying their rules of origin”:
“With regard to the provisions of Article 2 at issue in this case
— subparagraphs (b) through (d) — we note that they set out what
rules of origin should not do: rules of origin should not pursue trade
objectives directly or indirectly; they should not themselves create
restrictive, distorting or disruptive effects on international trade;
they should not pose unduly strict requirements or require the
fulfilment of a condition unrelated to manufacturing or processing; and
they should not discriminate between other Members. These provisions do
not prescribe what a Member must do.
By setting out what Members cannot do, these provisions leave for
Members themselves discretion to decide what, within those bounds, they
can do. In this regard, it is common ground between the parties that
Article 2 does not prevent Members from determining the criteria which
confer origin, changing those criteria over time, or applying different
criteria to different goods.
Accordingly, in assessing whether the relevant United States rules of
origin are inconsistent with the provisions of Article
2, we will bear
in mind that, while during the post-harmonization period Members will be
constrained by the result of the harmonization work programme, during
the transition period, Members retain considerable discretion in
designing and applying their rules of origin.”(1)
2. Article 2(b)
(a) Purpose of Article 2(b)
3. The Panel in US — Textiles Rules of Origin explained that
Article 2(b) is intended to preclude Members from using rules of origin
“to substitute for, or to supplement, the intended effect of trade
policy instruments”:
“In our view,
Article 2(b) is intended to ensure that rules of
origin are used to implement and support trade policy instruments,
rather than to substitute for, or to supplement, the intended effect of
trade policy instruments. Allowing Members to use rules of origin to
pursue the objectives of ‘protecting the domestic industry against
import competition’ or ‘favouring imports from one Member over
imports from another’ would be to substitute for, or supplement, the
intended effect of a trade policy instrument and, hence, be contrary to
the objective of
Article 2(b).”(2)
(b) Pursuit of trade objectives
4. In US — Textiles Rules of Origin, the Panel, examining a
claim under
Article 2(b), found that the two key issues in applying this
provision were how to assess the purpose for which rules of origin are
being used, and how to interpret the “trade objectives” that may not
be pursued via rules of origin:
“The Panel agrees with the parties that the operative part of
Article 2(b) is the phrase ‘rules of origin are not [to be] used as
instruments to pursue trade objectives directly or indirectly’. It is
clear from this phrase that in order to establish a violation of
Article 2(b), a Member needs to demonstrate that another Member is using rules
of origin for a specified purpose, viz., to pursue trade
objectives. … this interpretation of
Article 2(b), which is not in
dispute, confronts the Panel with the following two issues. First,
how is the Panel to determine whether a Member’s rules of origin are
used for the purpose specified in
Article 2(b)? And second, what
are “trade objectives”?’(3)
(c) Examination of objectives for which rules of origin are used
5. The Panel in US — Textiles Rules of Origin had the task
of evaluating the objective for which rules of origin are used, in order
to apply the phrase in
Article 2(b), “used as instruments to pursue
trade objectives”. The Panel decided to utilize the approach taken by
the Appellate Body to evaluating purpose in the context of de facto
discrimination claims under Article III of the GATT 1994 — drawing on
structural and other objective indicia of intent:
“[W]e agree with India that the Appellate Body has already taken a
position on how panels should conduct an inquiry into the objectives of
a measure. The Appellate Body did so in the context of an analysis under
Article III:2, second sentence, of the GATT 1994. In examining whether a
tax measure was applied ‘so as to afford protection to domestic
production’, the Appellate Body stated that:
‘[…] it is not necessary for a panel to sort through the many
reasons legislators and regulators often have for what they do and weigh
the relative significance of those reasons to establish legislative or
regulatory intent.’ The subjective intentions inhabiting the
minds of individual legislators or regulators do not bear upon the
inquiry, if only because they are not accessible to treaty interpreters.
It does not follow, however, that the statutory purposes or objectives
— that is, the purpose or objectives of a Member’s legislature and
government as a whole — to the extent that they are given objective
expression in the statute itself, are not pertinent. To the
contrary, as we also stated in Japan — Alcoholic Beverages:
‘Although it is true that the aim of a measure may not be easily
ascertained, nevertheless its protective application can most often be
discerned from the design, the architecture, and the
revealing structure of a measure. (emphasis added)’(4)
The reasons cited by the Appellate Body in support of its view do not
appear to be specific to the provisions of Article
III:2, second
sentence, of the GATT 1994. Hence, these reasons apply with equal force
in the context of Article 2(b) of the RO
Agreement. Accordingly, in
applying Article 2(b), we will follow the above-quoted statement by the
Appellate Body.”(5)
(d) “trade objectives”
6. In US — Textiles Rules of Origin, the Panel then
interpreted the meaning of the term “trade objectives” as it appears
in Article 2(b). While the Panel considered that it would not be
necessary to develop a general definition of this term, it concluded
that “the objectives identified by India — i.e., the objectives of
‘protecting the domestic industry against import competition’ and
‘favouring imports from one Member over imports from another’ —
may, in principle, be considered to constitute ‘trade objectives’ in
pursuit of which rules of origin may not be used.”(6)
(e) Trade effect is not necessarily a trade objective
7. In US — Textiles Rules of Origin, India claimed that a US
measure (“section 405”) providing exemptions to the general origin
rule for flat textile goods was being used to pursue the trade objective
of favouring imports from the European Communities over imports from
other countries (particularly from developing countries such as India).
Section 405 had been agreed with the European Communities to settle an
earlier EC dispute against the United States. The Panel found that
section 405 had been adopted to create exceptions from the general rule
for products of export interest to the European Communities and that the
US objective was to settle a bilateral WTO dispute with the European
Communities.(7) However, it found that the EC concerns were solely with
market access for its own products, not with gaining an advantage over
other suppliers in the US market; settling a bilateral dispute did not
imply any intention by either the EC or the United States to disfavour
third parties.(8) Finally, the Panel found that even if this provision
actually had a discriminatory effect, it could not infer discriminatory
intent from mere effects:
“[E]ven if section 405 had the practical effect of favouring goods
imported from the European Communities over competitive goods imported
from other Members, that effect might be incidental rather than
intentional. In other words, we do not think that the mere effect of
favouring European Communities imports over imports from other Members
would in itself justify the inference that creating such an effect is an
objective pursued by the United States.”(9)
3. Article 2(c), first sentence
(a) “themselves”
8. The Panel in US — Textiles Rules of Origin considered
that the term “themselves” in Article 2(c) means that
Article 2(c) focuses on a Member’s rules of origin as a policy instrument, rather
than the underlying commercial policy. The Panel discussed the term “themselves”
as follows:
“[W]e consider that, in the first sentence of Article 2(c), the
pronoun ‘themselves’ is used mainly to emphasize the preceding term
‘rules of origin’. By emphasizing the term ‘rules of origin’,
the pronoun ‘themselves’ brings out very clearly that the first
sentence of Article 2(c) is concerned with a Member’s rules of origin,
as distinct from something other than rules of origin, and that it is
rules of origin, as opposed to something other than rules of origin,
that must not ‘create restrictive, distorting, or disruptive effects
on international trade’.
…
The term ‘themselves’ is meant to highlight that, although there
may be commercial policy measures which create restrictive, distorting,
or disruptive effects on international trade, the rules of origin used
to implement and support these commercial policy measures must not
create restrictive, distorting, or disruptive effects on international
trade additional to those which may be caused by the underlying
commercial policy measures.(10) Similarly, in cases where an underlying
commercial policy measure does not cause any restrictive, distorting, or
disruptive effects on international trade, the word ‘themselves’
would serve to underscore that rules of origin must not create any new
restrictive, distorting, or disruptive effects on international trade.”(11)
(b) “create”
9. The Panel in US — Textiles Rules of Origin continued
exploring the interpretation of terms used in Article 2(c)
first
sentence, and explained that the term “create” ensures that there
should be a “causal link” between a certain rule of origin and a
prohibited trade effect for that rule of origin to be considered
inconsistent with the first sentence of Article 2(c):
“The next element of the text of the first sentence of
Article 2(c) to be considered is the term ‘create’. The ordinary meaning of the
term ‘create’ is to ‘cause, occasion, produce, give rise to’.(12)
Thus, it is implicit in the term ‘create’ that a Member’s rules of
origin only contravene the first sentence of Article 2(c)
if there is a
causal link between those rules and the prohibited effects specified in
the first sentence.(13)”(14)
(c) “restrictive, distorting or disruptive effects”
10. The Panel in US — Textiles Rules of Origin explained
that the prohibited “restrictive, distorting, or disruptive effects”
listed in the first sentence of Article 2(c) form “alternative bases”
for a claim:
“Turning to the prohibited effects — i.e., ‘restrictive,
distorting, or disruptive effects’ — the Panel notes that these
effects constitute alternative bases for a claim under the first
sentence of Article 2(c), as is confirmed by the use of the disjunctive
‘or’. Accordingly, independent meaning and effect should be given to
the concepts of ‘restriction’, ‘distortion’ and ‘disruption’.
In this regard, we note that the ordinary meaning of the term ‘restrict’
is to ‘limit, bound, confine’; that of the term ‘distort’ is to
‘alter to an unnatural shape by twisting’; and that of the term to
‘disrupt’ is to ‘interrupt the normal continuity of’.(15) Thus,
the first sentence of Article 2(c) prohibits rules of origin which
create the effect of limiting the level of international trade (‘restrictive’
effects); of interfering with the natural pattern of international trade
(‘distorting’ effects); or of interrupting the normal continuity of
international trade (‘disruptive’ effects).”(16)
(d) “effects on international trade”
11. The Panel in US — Textiles Rules of Origin determined
that the term “effects on international trade” could not be
interpreted as covering adverse effects on trade in different goods:
“[W]e cannot assume that Members intended to bring adverse effects
on different types of goods within the ambit of the prohibition set out
in the first sentence of Article 2(c). Indeed, as the Appellate Body has
said in a different context, ‘[t]o sustain such an assumption and to
warrant such a far-reaching interpretation, treaty language far more
specific […] would be necessary’.(17) We consider that the same could
be said of Article 2(c), first sentence.(18)
Therefore, we consider that it would not be appropriate to interpret
the phrase ‘effects on international trade’ as covering adverse
effects on trade in different (but closely similar) types of finished
goods. We construe the phrase ‘effects on international trade’ to
cover trade in the goods to which the relevant rule of origin is applied
(e.g., cotton bed linen)”.(19)
4. Article 2(c), second sentence
(a) “unduly strict requirements”
12. In US — Textiles Rules of Origin, the Panel explained
the meaning of the phrase “unduly strict requirement” in the context
of India’s claim that the United States’ measures at issue imposed
strict requirements that did not assist the United States in determining
the country with which the product had the most significant economic
link. The Panel explored the meaning of the sentence examining each
term:
“First, we need to examine what kind of ‘requirements’ are
covered by the obligation that Members must ensure that their rules of
origin not ‘pose unduly strict requirements’. In this regard, we
note the view of the United States that the clause ‘as a prerequisite
for the determination of the country of origin’ qualifies also the
phrase ‘[rules of origin] shall not pose unduly strict requirements’.
While the English version of Article 2(c) may be susceptible of such an
interpretation, the equally authentic French version is not.(20)
Nevertheless, the clause ‘as a prerequisite for the determination
of the country of origin’ is part of the immediate context of the term
‘requirements’. Considered as relevant context, the clause at issue
lends force to the argument that the ‘requirements’ which must not
be unduly strict include the kind of requirements which must be fulfilled
as a prerequisite for the determination of the country of origin.
Article 2(a) of the RO Agreement provides further contextual
support for such an interpretation. The first sentence of that provision
states that the ‘requirements to be fulfilled’ must be clearly
defined. It is clear to us that these requirements include the
substantive requirements which must be met for a good to be determined
to originate in a particular country. For these reasons, we read the
term ‘requirements’ in the second sentence of Article 2(c) as
encompassing the substantive origin requirements(21) that must be met for
a good to obtain origin status.(22)
Another issue presented by the phrase ‘unduly strict requirements’
is the interpretation to be given to the adjective ‘strict’. The
most pertinent dictionary definitions of the term ‘strict’ are ‘exacting’(23)
and ‘rigorous’(24). Thus, a ‘strict’ requirement is an exacting or
rigorous requirement. In the specific context of Article 2 of the RO
Agreement, and also bearing in mind our interpretation of the term
‘requirements’, ‘strict’ requirements are, therefore, those
requirements which make the conferral of origin conditional on
conformity with an exacting or rigorous (technical) standard.(25)
The second sentence of Article 2(c) only precludes Members from
imposing requirements which are ‘unduly’ strict. The dictionary
meaning of the adverb ‘unduly’ is ‘more than is warranted or
natural; excessively, disproportionately’.(26)
Accordingly, an origin
requirement can be considered to be ‘unduly’ strict if it is
excessively strict.”(27)
(i) “fulfilment of a certain condition not related to
manufacturing or processing”
13. In US — Textiles Rules of Origin, the Panel noted that
the sentence “fulfilment of a certain condition not related to
manufacturing or processing” requires Members to ensure that the
conditions that their rules of origin impose as a prerequisite for the
conferral of origin do not include a condition unrelated to the
manufacturing or processing:
“[W]e consider that the ordinary meaning of the second clause is
clear. It requires Members to ensure that the conditions their rules of
origin impose as a prerequisite for the conferral of origin not include
a condition which is unrelated to manufacturing or processing.(28) We note
the example offered by the United States that a rule of origin would not
conform to this requirement if it stated that a good can only be
ascribed the origin of a country if the good has been certified by
several authorities through a time-consuming process in the exporting
country.”(29)
5. Article 2(d)
(a) Scope of application of non-discrimination rule
14. In US — Textiles Rules of Origin, India argued that
rules of origin violate Article 2(d) if they result in unjustifiably
differential treatment of “closely related (Indian and European
Communities) products”. The Panel rejected India’s claim and
explained that India’s argument was partly based on the erroneous
assumption that Members should apply “the same rule of origin, or at
least equally advantageous rules, to ‘closely related’ products
imported from different Members”. The Panel then determined that Article 2(d)
does not intend to preclude discrimination across different
(but closely related) goods imported from different Members:
“[W]e recall that the second clause of Article 2(d)
states that
rules of origin ‘shall not discriminate between other Members,
irrespective of the affiliation of the manufacturers of the good
concerned’. It does not state that rules of origin ‘shall not
discriminate between closely related goods of other Members […]’.
Thus, the plain terms of the second clause do not support India’s
reading.
Moreover, the expression ‘the good concerned’ in the singular
indicates that the second clause of Article 2(d)
is not concerned with
discrimination across different (but closely related) goods. Were it
otherwise, the second clause would arguably have referred to ‘the
goods concerned’ in the plural. In our view, the use of the singular
suggests that, for the purposes of assessing whether there is
discrimination ‘between Members’, a comparison should be made
between the rule of origin applicable to a particular good when imported
from one or more Members and the rule(s) of origin applicable to the
same good — ‘the good concerned’ — when imported from one or
more other Members.
If the second clause of Article 2(c) were intended to preclude
discrimination across different (but closely related) goods, we consider
it likely that the drafters would have provided some textual guidance as
to the product scope of the prohibition set forth in the second clause.
Indeed, we note that other WTO nondiscrimination provisions, such as
Articles I, III and IX of the GATT
1994, do specify the product scope of
the prohibitions they contain.(30)
Finally, our reading of the second clause of Article 2(d) is
consistent with the objective of that clause. In our view, the principal
objective of the second clause of Article 2(d) is to ensure that, for a
given good, the strictness of the requirements that must be satisfied
for that good to be accorded the origin of a particular Member is the
same, regardless of the provenance of the good in question (i.e.,
Member from which the good is imported, affiliation of the manufacturers
of the good, etc.).(31)”(32)
IV. Article 3
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A. Text of Article 3
Article 3: Disciplines after the Transition Period
Taking into account the aim of all Members to achieve, as a result of
the harmonization work programme set out in Part IV, the establishment
of harmonized rules of origin, Members shall ensure, upon the
implementation of the results of the harmonization work programme, that:
(a) they apply rules of origin equally for all purposes as set out in
Article 1;
(b) under their rules of origin, the country to be determined as the
origin of a particular good is either the country where the good has
been wholly obtained or, when more than one country is concerned in the
production of the good, the country where the last substantial
transformation has been carried out;
(c) the rules of origin that they apply to imports and exports are
not more stringent than the rules of origin they apply to determine
whether or not a good is domestic and shall not discriminate between
other Members, irrespective of the affiliation of the manufacturers of
the good concerned;
(d) the rules of origin are administered in a consistent, uniform,
impartial and reasonable manner;
(e) their laws, regulations, judicial decisions and administrative
rulings of general application relating to rules of origin are published
as if they were subject to, and in accordance with, the provisions of
paragraph 1 of Article X of GATT 1994;
(f) upon the request of an exporter, importer or any person with a
justifiable cause, assessments of the origin they would accord to a good
are issued as soon as possible but no later than 150 days after a
request for such an assessment provided that all necessary elements have
been submitted. Requests for such assessments shall be accepted before
trade in the good concerned begins and may be accepted at any later
point in time. Such assessments shall remain valid for three years
provided that the facts and conditions, including the rules of origin,
under which they have been made remain comparable. Provided that the
parties concerned are informed in advance, such assessments will no
longer be valid when a decision contrary to the assessment is made in a
review as referred to in subparagraph (h). Such assessments shall be
made publicly available subject to the provisions of subparagraph
(i);
(g) when introducing changes to their rules of origin or new rules of
origin, they shall not apply such changes retroactively as defined in,
and without prejudice to, their laws or regulations;
(h) any administrative action which they take in relation to the
determination of origin is reviewable promptly by judicial, arbitral or
administrative tribunals or procedures, independent of the authority
issuing the determination, which can effect the modification or reversal
of the determination;
(i) all information which is by nature confidential or which is
provided on a confidential basis for the purpose of the application of
rules of origin is treated as strictly confidential by the authorities
concerned, which shall not disclose it without the specific permission
of the person or government providing such information, except to the
extent that it may be required to be disclosed in the context of
judicial proceedings.
B. Interpretation and Application of Article 3
15. By their own terms, the provisions of
Article 3 will only enter
into effect after the harmonization work programme has been concluded
and its results have been implemented.
Part III: Procedural Arrangements on Notification, Review, Consultation and Dispute Settlement
V. Article 4
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A. Text of Article 4
Article 4: Institutions
1. There is hereby established a Committee on Rules of Origin
(referred to in this Agreement as “the Committee”) composed of the
representatives from each of the Members. The Committee shall elect its
own Chairman and shall meet as necessary, but not less than once a year,
for the purpose of affording Members the opportunity to consult on
matters relating to the operation of Parts I, II,
III and IV or the
furtherance of the objectives set out in these Parts and to carry out
such other responsibilities assigned to it under this Agreement or by
the Council for Trade in Goods. Where appropriate, the Committee shall
request information and advice from the Technical Committee referred to
in paragraph 2 on matters related to this Agreement. The Committee may
also request such other work from the Technical Committee as it
considers appropriate for the furtherance of the above-mentioned
objectives of this Agreement. The WTO Secretariat shall act as the
secretariat to the Committee.
2. There shall be established a Technical Committee on Rules of
Origin (referred to in this Agreement as “the Technical Committee”)
under the auspices of the Customs Co-operation Council (CCC) as set out
in Annex I.(33) The Technical Committee shall carry out the technical work
called for in Part IV and prescribed in Annex I. Where appropriate, the
Technical Committee shall request information and advice from the
Committee on matters related to this Agreement. The Technical Committee
may also request such other work from the Committee as it considers
appropriate for the furtherance of the above-mentioned objectives of the
Agreement. The CCC Secretariat shall act as the secretariat to the
Technical Committee.
B. Interpretation and Application of Article 4
1. Observers
16. At its meeting on 4 April 1995, the Committee on Rules of Origin
agreed that governments granted observer status by the WTO General
Council would be allowed to attend meetings of the Committee as
observers, without prejudice to the possibility of holding closed
sessions without observers.(34)
2. Rules of procedure
17. At its meeting of 16 November 1995, the Committee on Rules of
Origin adopted its Rules of Procedure(35), which were subsequently
approved by the Council for Trade in Goods at its meeting of 1 December
1995.(36)
18. The Committee on Rules of Origin reports to the Council for Trade
in Goods on an annual basis.(37)
3. Drafting Group on Rules of Origin
19. At its meeting on 27 June 1995, the Committee on Rules of Origin
set up a Drafting Group to elaborate a definition of the term “country”
for the purposes of the Agreement on Rules of Origin.(38) At its meeting
on 16 November 1995, the Committee on Rules of Origin agreed to adopt
the following recommendation from the Drafting Group:
“[T]he Committee requests the Technical Committee to fully proceed
with its Harmonization Work Programme in the absence of an abstractly
constructed definition of the term ‘country’; and to forward to it
unresolved issues relating to the definition of the term ‘country’,
for a final determination; and
the Committee may request the Drafting Group to address particular
issues relating to the definition of the term ‘country’ and, in that
connection, to offer clarification that may enhance the work of the
Technical Committee;”(39)
4. Working Group
20. At its meeting on 16 November 1995, the Committee on Rules of
Origin agreed, as concerned the process of reviewing the reports
submitted to the Committee by the Technical Committee on Rules of Origin
in Brussels, to establish an open-ended Working Group to deal with
bracketed interpretations and opinions of the Technical Committee, and
consequently forward appropriate recommendations to the Committee on
Rules of Origin for final consideration and decision.(40)
VI. Article 5
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A. Text of Article 5
Article 5: Information and Procedures for Modification
and Introduction of New Rules of Origin
1. Each Member shall provide to the Secretariat, within 90 days after
the date of entry into force of the WTO Agreement for it, its rules of
origin, judicial decisions, and administrative rulings of general
application relating to rules of origin in effect on that date. If by
inadvertence a rule of origin has not been provided, the Member
concerned shall provide it immediately after this fact becomes known.
Lists of information received and available with the Secretariat shall
be circulated to the Members by the Secretariat.
2. During the period referred to in
Article 2, Members introducing
modifications, other than de minimis modifications, to their
rules of origin or introducing new rules of origin, which, for the
purpose of this Article, shall include any rule of origin referred to in
paragraph 1 and not provided to the Secretariat, shall publish a notice
to that effect at least 60 days before the entry into force of the
modified or new rule in such a manner as to enable interested parties to
become acquainted with the intention to modify a rule of origin or to
introduce a new rule of origin, unless exceptional circumstances arise
or threaten to arise for a Member. In these exceptional cases, the
Member shall publish the modified or new rule as soon as possible.
B. Interpretation and Application of Article 5
1. Notification procedures
21. At
its meeting of 4 April 1995, the Committee on Rules of Origin
agreed that, if a notification under Article 5.1 and
paragraph 4 of
Annex II were to be made in a language other than one of the WTO working
languages, such notification should be accompanied by a summary in one
of the WTO working languages.(41)
22. At its meeting of 1 February 1996, the Committee on Rules of
Origin adopted a procedure to deal with queries by Members in respect of
national legislation; such queries should be communicated to the
Secretariat ten working days in advance of the meeting at which they are
to be raised.(42)
2. Notifications
23. As of 28 October 2010 when the Committee conducted its sixteenth
annual review under Article 6, 38 Members had notified non-preferential
rules of origin, 42 Members had notified that they do not have
non-preferential rules of origin, and 46 Members had not notified
non-preferential rules of origin, pursuant to Article
5. As of the same
date, 84 Members had notified preferential rules of origin, four Members
had notified that they did not have preferential rules of origin, and
one Member had not notified preferential rules of origin, pursuant to
paragraph 4 of Article II. For 37 other Members, preferential rules of
origin had been notified to other WTO bodies or were available with the
Secretariat.(43)
VII. Article 6
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A. Text of Article 6
Article 6: Review
1. The Committee shall review annually the implementation and
operation of Parts II and III of this Agreement having regard to its
objectives. The Committee shall annually inform the Council for Trade in
Goods of developments during the period covered by such reviews.
2. The Committee shall review the provisions of
Parts I, II and III
and propose amendments as necessary to reflect the results of the
harmonization work programme.
3. The Committee, in cooperation with the Technical Committee, shall
set up a mechanism to consider and propose amendments to the results of
the harmonization work programme, taking into account the objectives and
principles set out in Article 9. This may include instances where the
rules need to be made more operational or need to be updated to take
into account new production processes as affected by any technological
change.
B. Interpretation and Application of Article 6
1. Article 6.1
24. As of 30 September 2011, the Committee on Rules of Origin has
conducted sixteen reviews of the implementation and operation of the
Agreement.(44)
VIII. Articles 7
and 8 back to top
A. Text of Articles 7
and 8
Article 7: Consultation
The provisions of Article XXII of GATT
1994, as elaborated and
applied by the Dispute Settlement Understanding, are applicable to this
Agreement.
Article 8: Dispute Settlement
The provisions of Article XXIII of GATT
1994, as elaborated and
applied by the Dispute Settlement Understanding, are applicable to this
Agreement.
B. Interpretation and Application of Articles 7 and 8
25. The only dispute in which a panel report has been adopted where
the provisions of the Agreement on Rules of Origin were invoked is US
— Textiles Rules of Origin.
Part IV: Harmonization of Rules of Origin
X. Article 9
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A. Text of Article 9
Article 9: Objectives and Principles
1. With the objectives of harmonizing rules of origin and, inter
alia, providing more certainty in the conduct of world trade, the
Ministerial Conference shall undertake the work programme set out below
in conjunction with the CCC, on the basis of the following principles:
(a) rules of origin should be applied equally for all purposes as set
out in Article 1;
(b) rules of origin should provide for the country to be determined
as the origin of a particular good to be either the country where the
good has been wholly obtained or, when more than one country is
concerned in the production of the good, the country where the last
substantial transformation has been carried out;
(c) rules of origin should be objective, understandable and
predictable;
(d) notwithstanding the measure or instrument to which they may be
linked, rules of origin should not be used as instruments to pursue
trade objectives directly or indirectly. They should not themselves
create restrictive, distorting or disruptive effects on international
trade. They should not pose unduly strict requirements or require the
fulfilment of a certain condition not relating to manufacturing or
processing as a prerequisite for the determination of the country of
origin. However, costs not directly related to manufacturing or
processing may be included for purposes of the application of an ad
valorem percentage criterion;
(e) rules of origin should be administrable in a consistent, uniform,
impartial and reasonable manner;
(f) rules of origin should be coherent;
(g) rules of origin should be based on a positive standard. Negative
standards may be used to clarify a positive standard.
Work Programme
2. (a)
The work programme shall be initiated as soon after the entry
into force of the WTO Agreement as possible and will be completed within
three years of initiation.
(b) The Committee and the Technical Committee provided for in
Article
4 shall be the appropriate bodies to conduct this work.
(c) To provide for detailed input by the CCC, the Committee shall
request the Technical Committee to provide its interpretations and
opinions resulting from the work described below on the basis of the
principles listed in paragraph 1. To ensure timely completion of the
work programme for harmonization, such work shall be conducted on a
product sector basis, as represented by various chapters or sections of
the Harmonized System (HS) nomenclature.
(i) Wholly Obtained and Minimal Operations or Processes
The Technical Committee shall develop harmonized definitions of:
- the goods that are to be considered as being wholly obtained in
one country. This work shall be as detailed as possible;
- minimal operations or processes that do not by themselves confer
origin to a good.
The results of this work shall be submitted to the Committee within
three months of receipt of the request from the Committee.
(ii) Substantial Transformation — Change in Tariff Classification
- The Technical Committee shall consider and elaborate upon, on the
basis of the criterion of substantial transformation, the use of change
in tariff subheading or heading when developing rules of origin for
particular products or a product sector and, if appropriate, the minimum
change within the nomenclature that meets this criterion.
- The Technical Committee shall divide the above work on a product
basis taking into account the chapters or sections of the HS
nomenclature, so as to submit results of its work to the Committee at
least on a quarterly basis. The Technical Committee shall complete the
above work within one year and three months from receipt of the request
of the Committee.
(iii) Substantial
Transformation — Supplementary Criteria
Upon completion of the work under subparagraph (ii) for each product
sector or individual product category where the exclusive use of the HS
nomenclature does not allow for the expression of substantial
transformation, the Technical Committee:
- shall consider and elaborate upon, on the basis of the criterion
of substantial transformation, the use, in a supplementary or exclusive
manner, of other requirements, including ad valorem percentages(4) and/or
manufacturing or processing operations(5), when developing rules of origin
for particular products or a product sector;
(footnote original)
4 If the ad valorem criterion is
prescribed, the method for calculating this percentage shall also be
indicated in the rules of origin.
(footnote original)
5 If the criterion of manufacturing or
processing operation is prescribed, the operation that confers origin on
the product concerned shall be precisely specified.
- may provide explanations for its proposals;
- shall divide the above work on a product basis taking into
account the chapters or sections of the HS nomenclature, so as to submit
results of its work to the Committee at least on a quarterly basis. The
Technical Committee shall complete the above work within two years and
three months of receipt of the request from the Committee.
Role of the Committee
3. On the basis of the principles listed in
paragraph 1:
(a) the Committee shall consider the interpretations and opinions of
the Technical Committee periodically in accordance with the timeframes
provided in subparagraphs (i), (ii) and
(iii) of paragraph 2(c) with a
view to endorsing such interpretations and opinions. The Committee may
request the Technical Committee to refine or elaborate its work and/or
to develop new approaches. To assist the Technical Committee, the
Committee should provide its reasons for requests for additional work
and, as appropriate, suggest alternative approaches;
(b) upon completion of all the work identified in
subparagraphs (i),
(ii) and (iii) of paragraph 2(c), the Committee shall consider the
results in terms of their overall coherence.
Results of the Harmonization Work Programme and Subsequent Work
4. The Ministerial Conference shall establish the results of the
harmonization work programme in an annex as an integral part of this
Agreement.(6) The Ministerial Conference shall establish a time-frame for
the entry into force of this annex.
(footnote original)
6 At the same time, consideration shall be
given to arrangements concerning the settlement of disputes relating to
customs classification.
B. Interpretation and Application of Article 9
26. The Committee on Rules of Origin has pursued work on the
harmonization of non-preferential rules of origin. This work was
formally launched when the Chairman of the Committee sent a letter on 20
July 1995 to the Chairman of the Technical Committee on Rules of Origin,
transmitting the Committee’s request pursuant to Article 9.2(c) that
the Technical Committee undertake the work on harmonization of
non-preferential rules of origin provided for in Article
9.(45)
27. At its meeting of 10 May 1996, the Committee on Rules of Origin
decided to establish an Integrated Negotiating Text for the
Harmonization Work Programme, as a common working document and reference
point for the Technical Committee on Rules of Origin in Brussels and the
Committee in Geneva; this text would include the overall architectural
design for the Harmonization Work Programme; an annex of definitions for
goods considered as being wholly obtained in one country; an annex of
product-specific rules; and an annex for minimal operations and
processes which do not by themselves confer origin.(46) Although
Article
9.2(a) provides that the Harmonization Work Programme is to be completed
“within three years of initiation”, on 7 July 1998, the Committee
reported to the Council for Trade in Goods that while considerable
progress had been made, due to the complexity of issues, the work in
connection with the Harmonization Work Programme identified in Articles
9.2(c) and 9.3 could not be completed within the three-year period
foreseen in Article 9.2(a). At its meeting of July 1998, the General
Council adopted the recommendations of the Committee on Rules of Origin,
i.e. that the Committee continue its work in cooperation with the
Technical Committee, and strive to complete the work by November 1999.(47)
28. In 1999–2000, the Committee held intensive meetings. The
Technical Committee submitted the final result of its work to the
Committee on 9 June 1999. The Committee discussed the architecture of
the harmonized rules of origin, issues regarding product-specific rules
of origin, and the implications of the implementation of the harmonized
rules of origin on other WTO Agreements.(48) After the General Council
decided on 15 December 2000 to complete work by the Doha Ministerial
Conference or by the end of 2001 at the latest(49), the number of resolved
issues increased greatly. The Committee Chairman reported regularly to
the General Council. In December 2001, the General Council considered a
report by the Committee, and agreed to extend the deadline until the end
of 2002.(50)
29. In July 2002, the Committee Chairman reported again to the
General Council, identifying 94 core policy issues for discussion and
decision at the level of the General Council. These issues included a
number of product-specific rules, and the implications for other WTO
Agreements of adoption of the harmonized rules of origin.(51) In December
2002, the General Council considered another progress report, agreed to
extend to July 2003 the deadline for completion of negotiations on the
94 core policy issues, and agreed that after these issues were settled,
the Committee would complete the harmonization work programme by 31
December 2003.(52) In July 2003, the General Council considered a further
progress report and extended the deadline for 94 core policy issues to
July 2004 and for overall completion to December 2004.(53) In July 2004,
the General Council again considered a progress report by the Committee
Chairman, noting division on the issue of whether the future harmonized
rules of origin should be used for the Anti-Dumping Agreement; the
General Council agreed on a further one-year extension.(54) The Committee
Chair’s progress report in July 2005 noted that views remained divided
on the application of harmonized rules of origin to trade remedies. The
General Council agreed to a further one-year extension to the end of
2006.(55) In July 2006, the General Council agreed to a further extension
to the end of 2007.(56)
30. At the General Council’s meeting on 27 July 2007, the Chair of
the Committee again reported on progress and outlined the division of
views regarding proposed dual rules of origin for machinery (HS Chapters
84–90) and regarding whether harmonized rules of origin should be
applied to trade remedies. The Chairman of the General Council noted
that delegations in the Committee felt that the difficulties they had
encountered on the “implications” issue and in the machinery sector
were such that guidance from the General Council was now warranted on
how to take these issues forward. The General Council agreed that work
on these issues would be suspended until such guidance from the General
Council would be forthcoming, and that, in the meantime, the Committee
would continue its work with a view to resolving all technical issues
including the technical aspects of the overall architecture, as soon as
possible.(57)
31. Since 2007, the Committee has continued its discussions on
technical issues. On 15 October 2007, the Committee circulated a draft
Consolidated Text of Non-Preferential Rules of Origin.(58) The most recent
revision of this text, circulated on 11 November 2010, comprises a draft
Annex III to the Agreement on Rules of Origin and a decision of the
Ministerial Conference that would adopt the new Annex III. The draft
Annex III comprises general rules; an appendix defining goods that are
to be considered as being wholly obtained in one country; and an
appendix of product-specific rules of origin for each chapter of the
Harmonized System of customs classification.(59)
XI. Annex I
back to top
A. Text of Annex I
Annex I: Technical Committee on Rules of Origin
Responsibilities
1. The ongoing responsibilities of the Technical Committee shall
include the following:
(a) at the request of any member of the Technical Committee, to
examine specific technical problems arising in the day-to-day
administration of the rules of origin of Members and to give advisory
opinions on appropriate solutions based upon the facts presented;
(b) to furnish information and advice on any matters concerning the
origin determination of goods as may be requested by any Member or the
Committee;
(c) to prepare and circulate periodic reports on the technical
aspects of the operation and status of this Agreement; and
(d) to review annually the technical aspects of the implementation
and operation of Parts II and III.
2. The Technical Committee shall exercise such other responsibilities
as the Committee may request of it.
3. The Technical Committee shall attempt to conclude its work on
specific matters, especially those referred to it by Members or the
Committee, in a reasonably short period of time.
Representation
4. Each Member shall have the right to be represented on the Technical
Committee. Each Member may nominate one delegate and one or more
alternates to be its representatives on the Technical Committee. Such a
Member so represented on the Technical Committee is hereinafter referred
to as a “member” of the Technical Committee. Representatives of
members of the Technical Committee may be assisted by advisers at
meetings of the Technical Committee. The WTO Secretariat may also attend
such meetings with observer status.
5. Members of the CCC which are not Members of the WTO may be
represented at meetings of the Technical Committee by one delegate and
one or more alternates. Such representatives shall attend meetings of
the Technical Committee as observers.
6. Subject to the approval of the Chairman of the Technical
Committee, the Secretary-General of the CCC (referred to in this Annex
as “the Secretary-General”) may invite representatives of
governments which are neither Members of the WTO nor members of the CCC
and representatives of international governmental and trade
organizations to attend meetings of the Technical Committee as
observers.
7. Nominations of delegates, alternates and advisers to meetings of
the Technical Committee shall be made to the Secretary-General.
Meetings
8. The Technical Committee shall meet as necessary, but not less than
once a year.
Procedures
9. The Technical Committee shall elect its own Chairman and shall
establish its own procedures.
B. Interpretation and Application of Annex I
32. The Technical Committee has presented periodic reports to the
Committee on its operations.
XII. Annex II
back to top
A. Text of Annex II
Annex II: Common Declaration With Regard to Preferential Rules of Origin
1. Recognizing that some Members apply preferential rules of origin,
distinct from non-preferential rules of origin, the Members hereby agree
as follows.
2. For the purposes of this Common Declaration, preferential rules of
origin shall be defined as those laws, regulations and administrative
determinations of general application applied by any Member to determine
whether goods qualify for preferential treatment under contractual or
autonomous trade regimes leading to the granting of tariff preferences
going beyond the application of paragraph 1 of Article I of GATT
1994.
3. The Members agree to ensure that:
(a) when they issue administrative determinations of general
application, the requirements to be fulfilled are clearly defined. In
particular:
(i) in cases where the criterion of change of tariff classification
is applied, such a preferential rule of origin, and any exceptions to
the rule, must clearly specify the subheadings or headings within the
tariff nomenclature that are addressed by the rule;
(ii) in cases
where the ad valorem percentage criterion is applied, the
method for calculating this percentage shall also be indicated in the
preferential rules of origin;
(iii) in cases
where the criterion of manufacturing or processing
operation is prescribed, the operation that confers preferential origin
shall be precisely specified;
(b) their preferential rules of origin are based on a positive
standard. Preferential rules of origin that state what does not confer
preferential origin (negative standard) are permissible as part of a
clarification of a positive standard or in individual cases where a
positive determination of preferential origin is not necessary;
(c) their laws, regulations, judicial decisions and administrative
rulings of general application relating to preferential rules of origin
are published as if they were subject to, and in accordance with, the
provisions of paragraph 1 of Article X of GATT
1994;
(d) upon request of an exporter, importer or any person with a
justifiable cause, assessments of the preferential origin they would
accord to a good are issued as soon as possible but no later than 150
days(7) after a request for such an assessment provided that all necessary
elements have been submitted. Requests for such assessments shall be
accepted before trade in the good concerned begins and may be accepted
at any later point in time. Such assessments shall remain valid for
three years provided that the facts and conditions, including the
preferential rules of origin, under which they have been made remain
comparable. Provided that the parties concerned are informed in advance,
such assessments will no longer be valid when a decision contrary to the
assessment is made in a review as referred to in subparagraph
(f). Such
assessments shall be made publicly available subject to the provisions
of subparagraph (g);
(footnote original)
7 In respect of requests made during the
first year from entry into force of the WTO Agreement, Members shall
only be required to issue these assessments as soon as possible.
(e) when introducing changes to their preferential rules of origin or
new preferential rules of origin, they shall not apply such changes
retroactively as defined in, and without prejudice to, their laws or
regulations;
(f) any administrative action which they take in relation to the
determination of preferential origin is reviewable promptly by judicial,
arbitral or administrative tribunals or procedures, independent of the
authority issuing the determination, which can effect the modification
or reversal of the determination;
(g) all information that is by nature confidential or that is
provided on a confidential basis for the purpose of the application of
preferential rules of origin is treated as strictly confidential by the
authorities concerned, which shall not disclose it without the specific
permission of the person or government providing such information,
except to the extent that it may be required to be disclosed in the
context of judicial proceedings.
4. Members agree to provide to the Secretariat promptly their
preferential rules of origin, including a listing of the preferential
arrangements to which they apply, judicial decisions, and administrative
rulings of general application relating to their preferential rules of
origin in effect on the date of entry into force of the WTO Agreement
for the Member concerned. Furthermore, Members agree to provide any
modifications to their preferential rules of origin or new preferential
rules of origin as soon as possible to the Secretariat. Lists of
information received and available with the Secretariat shall be
circulated to the Members by the Secretariat.
B. Interpretation and Application of Annex II
33. Preferential origin rules have also been discussed in the
Committee on Regional Trade Agreements.(60) Preferential origin rules are
also available in the WTO Secretariat’s online database of regional
trade agreements.(61)
Footnotes:
1. Panel Report, US — Textiles Rules of Origin, paras.
6.23–6.25. back to text
2. Panel Report, US — Textiles Rules of Origin,
para.
6.43; see also para. 6.84. back to text
3. Panel Report, US — Textiles Rules of Origin,
para.
6.36. back to text
4. (footnote original) Appellate Body Report, Chile —
Taxes on Alcoholic Beverages (“Chile — Alcoholic Beverages”),
WT/DS87/AB/R, WT/DS110/AB/R, adopted 12 January 2000, DSR 2000:I, 281,
para. 62 (footnotes omitted). back to text
5. Panel Report, US — Textiles Rules of Origin,
paras.
6.37–6. 38. back to text
6. Panel Report, US — Textiles Rules of Origin,
para.
6.44. back to text
7. Panel Report, US — Textiles Rules of Origin,
paras.
6.112, 6.114. back to text
8. Panel Report, US — Textiles Rules of Origin,
paras.
6.113–6.114. back to text
9. Panel Report, US — Textiles Rules of Origin,
para.
6.117. back to text
10. (footnote original) It is worth noting in this context
that Article 3.2 of the Agreement on Import Licensing Procedures on
non-automatic licensing contains provisions along these lines.
Specifically, it states that “[n]on-automatic licensing shall not have
trade-restrictive or — distortive effects on imports additional to
those caused by the imposition of the restriction” (emphasis added).
back to text
11. Panel Report, US — Textiles Rules of Origin,
paras.
6.136–6.137. back to text
12. (footnote original) The New Shorter Oxford English
Dictionary, L. Brown, ed., Clarendon Press, 1993, Vol. I, p. 198.
back to text
13. (footnote original) It is relevant to point out here
that the Appellate Body has given a similar interpretation to the
previously mentioned Article 3.2 of the Agreement on Import Licensing
Procedures. Appellate Body Report, European Communities —
Measures Affecting the Importation of Certain Poultry Products (“EC
— Poultry”), WT/DS69/AB/R, adopted 23 July 1998, DSR 1998:V,
2031, paras. 126–127. back to text
14. Panel Report, US — Textiles Rules of Origin,
para.
6.140. back to text
15. (footnote original) The New Shorter Oxford English
Dictionary, L. Brown, ed., Clarendon Press, 1993, Vol. II, p. 2569;
Vol. I, pp. 707 and 702, respectively. back to text
16. Panel Report, US — Textiles Rules of Origin,
para.
6.141. back to text
17. (footnote original) Appellate Body Report, EC
Measures Concerning Meat and Meat Products (Hormones) (“EC —
Hormones”), WT/DS26/AB/R, WT/DS48/AB/R, adopted 13 February
1998,DSR 1998: I, 135, para. 165. back to text
18. (footnote original) In response to a question from the
Panel, India argues that the plural in Article 2(c) means that that
provision applies both to an individual rule of origin as well as to a
Member’s system of rules of origin. India’s reply to Panel question
No. 48. Since India, in developing its claim, does not rely on this
interpretation of the text of Article 2(c), it is sufficient to note
that we understand the plural in Article 2(c), first sentence, to refer
to a Member’s “rules of origin” taken individually, i.e.,
to individual rules of origin as they apply to individual goods. Indeed,
provisions like the second sentence of Article 2(c), the first clause of
Article 2(d), Article 2(f) and Article 3(a) of the RO Agreement cannot
reasonably be read to lay down disciplines for anything other than
individual rules of origin. back to text
19. Panel Report, US — Textiles Rules of Origin,
paras.
6.146–6.147. See also para. 6.172. back to text
20. (footnote original) The French version of
Article 2(c), second sentence, reads as follows:
“[Les règles d’origine] n’imposeront pas de prescriptions
indûment rigoureuses ni n’exigeront, comme condition préalable à la
détermination du pays d’origine, le respect d’une certaine
condition non liée à la fabrication ou à l’ouvraison.”
The Spanish text of Article
2(c), second sentence, seems to track the
French version rather than the English version. It reads:
“[Las normas de origen] [n]o impondrán condiciones indebidamente
estrictas ni exigirán el cumplimiento de una determinada condición no
relacionada con la fabricación o elaboración como requisito previo
para la determinación del país de origen.” back to text
21. (footnote original) For the purposes of this dispute,
we need not decide whether the “requirements” mentioned in the
second sentence of Article 2(c) would also encompass the formal, or
administrative, requirements which may be imposed in order to assess
compliance with rules of origin (e.g., documentation requirements).
back to text
22. (footnote original) The negotiating history of the RO
Agreement tends to confirm that the term “requirements” refers
to the substantive origin requirements that must be met for a good to
obtain origin status. The first clause of Article
2(c), second sentence,
appears to originate in two provisions proposed by Japan. The first of
these proposed provisions states that “the requirements to be fulfilled
in the determination of origin shall be clearly defined. […] Rules
of origin which state only what does not confer origin […] or state
only abstract conditions or unduly strict conditions shall be
prohibited”. MTN.GNG/NG2/W/52, p. 5 (emphasis added). The other
provision proposed by Japan states that “[t]echnically excessive
requirements as a prerequisite for the determination of country of
origin shall be prohibited”. Ibid. back to text
23. (footnote original) Black’s Law Dictionary,
B. A. Garner (ed.), West Group, 1999, p. 1434. back to text
24. (footnote original) Merriam-Webster OnLine
Thesaurus, http://www.m-w.com (March 2003). We note that the French
version of the second sentence of Article 2(c)
also uses the adjective
“rigoureux”. back to text
25. (footnote original) In other words, we think that the
“strictness” of requirements is to be assessed from the perspective
of countries wanting to obtain origin status, rather than from the
perspective of countries wanting to lose origin status.
back to text
26. (footnote original) The New Shorter Oxford English
Dictionary, L. Brown (ed.), Clarendon Press, 1993, Vol. 2, p. 3480.
back to text
27. Panel Report, US — Textiles Rules of Origin,
paras.
6.204–6.206. back to text
28. (footnote original) We are aware that the third
sentence of Article 2(c) states that “costs not directly related to
manufacturing or processing may be included for the purposes of the
application of an ad valorem percentage criterion consistent with
subparagraph (a)”. But the third sentence opens with the word “however”,
which implies a contrast between the second and third sentences.
back to text
29. Panel Report, US — Textiles Rules of Origin,
para.
6.208. back to text
30. (footnote original) For instance, Article I of the
GATT 1994 prohibits discrimination as between “like” products only.
back to text
31. (footnote original) The Panel notes that this is
consistent with its view that Article 2 is intended to leave Members a
considerable measure of discretion in designing and applying their rules
of origin. Supra, para. 6.25. back to text
32. Panel Report, US — Textiles Rules of Origin,
paras.
6.245–6.248. back to text
33. See Section X below. back to text
34. G/RO/M/1, para. 11. In addition, Representatives of the ACP,
EFTA, IADB, IMF, ITCB, OECD, UNCTAD, WCO and the World Bank were invited
to attend meetings of the Committee on Rules of Origin in 2000 in an
observer capacity. See G/L/413, para. 1. back to text
35. G/RO/M/3. The adopted rules of procedure can be found in G/L/149. back to text
36. G/C/M/7. back to text
37. Annual reports to the Council for Trade in Goods: G/L/36, 36/Corr.1, 119, 210, 271, 326, 413, 656, 704, 747, 790,
831, 870, 905 and
939. back to text
38. G/RO/M/2, paras. 10–16. back to text
39. G/RO/M/3,
paras. 3.1–3.2. back to text
40. The terms of reference of the Working Group can be found in G/RO/M/3,
para. 4.3. back to text
41. G/RO/M/1,
para. 44. For details on Members’ notifications
relating to preferential and non-preferential rules of origin, see
G/RO/70, pp. 6–8. back to text
42. G/RO/M/5, para. 1.3. back to text
43. G/RO/M/55, section III;
G/RO/70, Secretariat Background Note
for Sixteenth Annual Review of the Implementation and Operation of the
Agreement on Rules of Origin, 17 December 2010. back to text
44. See G/RO/3, G/RO/12, G/RO/21, G/RO/28, G/RO/43, G/RO/47,
G/RO/50, G/RO/55, G/RO/57, G/RO/59, G/RO/60, G/RO/63, G/RO/65, G/RO/67,
G/RO/69 and
G/RO/70. back to text
45. For text of letter, see G/RO/W/4; for the decision to launch
work programme, see G/RO/M/1. back to text
46. G/RO/M/6, para. 1 The Integrated Negotiating Text was issued
as G/RO/W/13 and was replaced inter alia by G/RO/45, G/RO/45/Rev.2 and addenda. back to text
47. Committee recommendation: G/RO/25; General Council action:
WT/GC/M/29, item 4. back to text
48. G/RO/42. back to text
49. WT/GC/M/59, Section 1(e); WT/L/384, para. 5.
back to text
50. WT/GC/M/72; Committee progress report,
G/RO/49.
back to text
51. G/RO/52; WT/GC/M/75. back to text
52. WT/GC/M/77. back to text
53. WT/GC/M/81. back to text
54. WT/GC/M/87. back to text
55. WT/GC/M/97. back to text
56. WT/GC/M/103. back to text
57. WT/GC/M/109, item 6. back to text
58. G/RO/W/111. back to text
59. G/RO/W/111/Rev.6. back to text
60. See, e.g., WT/REG/W/45, Secretariat Note on “Rules of
Origin Regimes in Regional Trade Agreements”, 5 April 2002.
back to text
61. http://rtais.wto.org. back to text
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