RULES OF ORIGIN
Rules of origin are the criteria used to define where a product is made and are important for implementing other trade policy measures, including preferences in favour of developing countries and LDCs. WTO members adopted the 2015 Nairobi Decision on Preferential Rules of Origin for LDCs which set out for the first time multilaterally agreed guidelines to facilitate LDC exports that qualify for preferential market access granted by WTO members. Five years later, LDC members said the time has come to acknowledge that, with few exceptions, implementation of the Decision is lagging by preference-granting members.
According to a WTO Secretariat paper presented to the committee in May 2019, LDCs are often unable to fully use preferences even when their exports are subject to simple origin requirements. For example, 82% of imports of fruits, vegetables, and plants by preference-granting members from LDCs do not receive any tariff preference, despite being eligible for such treatment.
Tanzania presented a paper (G/RO/W/194) summarizing the several submissions to the CRO by the LDC Group since 2015 which identify reforms on rules of origin that preference-granting members should undertake to make the use of trade preferences more effective, as well to shed light on aspects of rules of origin that have benefitted not only LDCs but also the international trading community.
The LDC Group said that the mandate of the CRO should be strengthened not only by setting clearer obligations and simplifying requirements in line with the Nairobi Decision, but also by establishing a work programme as the basis for effective participation by both Geneva and capital-based experts in the Committee meetings. To reach this objective, the LDC Group said it will engage in the coming months with preference-granting members to develop appropriate language to be submitted to ministers when they meet on 8-11 June in Nur-sultan, Kazakhstan, for the 12th WTO Ministerial Conference.
In addition, during the meeting, the European Union updated members on the implementation of its Registered Exporters (REX) scheme, which replaced the previous system of certifications of origin issued by governments with self-certification by registered exporters. The REX system has been applied since 1 January 2017 in the Generalized System of Preferences (GSP) scheme of the European Union by exporters in beneficiary countries, as well as exporters in the EU, Norway, Switzerland and Turkey, for the purposes of bilateral cumulation. It is also applied in those four members for re-consignment and/or replacement of proofs of origin.
The Russian Federation also presented its latest notification describing new preferential rules of origin for LDCs, which includes regulation of the terms and procedure for the application of the Eurasian Economic Union's (EAEU) Common System of Tariff Preferences, a list of developing and least developed country beneficiaries, a list of preferential goods, and the EAEU rules of origin for developing and least developed countries.
Enhancing transparency in non-preferential rules of origin
Members once again discussed a joint proposal for enhancing transparency in non-preferential rules of origin, which aims at introducing a template to notify rules of origin used in the application of most-favoured-nation (MFN) treatment and other non-preferential commercial policy instruments, as well as any other practices with respect to certification of origin for non-preferential purposes.
The proposal had broad support by members which acknowledged the potential benefits of the template, considering that non-preferential rules of origin cover a significant portion of trade and apply to all WTO members. However, some members asked for further clarification and posed additional questions about the proposal. The chair of the Committee, Ms. Uma Shankari Muniandy of Singapore, will hold further consultations to address the new concerns raised.
25 years of the CRO
The chair updated members on the event held on 4 March to mark 25 years of the first meeting of the Committee on Rules of Origin. Ms Munaindy stressed that the Agreement on Rules of Origin and the CRO “were the result of hours and hours of negotiations, which then led to hours and hours of negotiations and discussions over the past 25 years.”
She invited members to visit the dedicated webpage where the programme, all presentations made and video recordings of the session are available, and to share all these materials with colleagues in capital. “The Secretariat prepared a rich programme with substantive presentations. A number of interesting messages and recommendations came out of this event and I would like to ask delegations to reflect about some of these messages,” she added.