Rules of origin are the criteria used to define where a product was made. Many preference programmes stipulate certain conditions relating to rules of origin, indicating how LDCs and developing economies can make use of these preferences.

The chair of the Committee on Rules of Origin, Mr Elia Mtweve of Tanzania, updated members on the recent discussions in the Committee. The United States provided an overview of its five preference programmes for LDCs, including the African Growth and Opportunity Act, the Caribbean Basin Initiative Programme and the Nepal Preference Programme, as well as various factors affecting the utilization of preferences. The United Nations Conference on Trade and Development and the WTO Secretariat presented work related to capacity-building, including on efforts to analyse rules of origin conditions for LDCs' products to access the markets of trading partners.

Speakers mentioned the challenges faced by some countries in the WTO's LDC Group when seeking to utilize the preferences granted to them. These challenges include high compliance costs, the administrative burden and limited awareness of preference benefits. The Coordinator of the LDC Group urged members to take further steps to ease LDCs' use of preferential rules of origin.

The United Kingdom mentioned its Developing Countries Scheme rolled out after consultations with stakeholders, under which up to 75 per cent of non-local content is allowed for over 6,700 products. It was noted that an interactive dashboard helps users of this scheme access product and country information.

Business representatives highlighted that implementing trade facilitation measures and simplifying rules of origin can help companies, especially micro, small and medium-sized enterprises, realize market access opportunities. Speakers recognized that greater use of digital tools could help LDCs reduce the administrative burden of meeting preferential rules of origin. The success of the European Union's Registered Exporter System in helping LDC exporters make use of preferential market access was also highlighted.

It was noted that flexible rules of origin requirements can add value to domestic production. While low value addition thresholds have been useful in facilitating exports from LDCs, speakers noted, policy makers in LDCs should focus more on strengthening productive sectors. It was also stressed that the existing evidence on the use of preferential market access opportunities could help to set the direction for LDCs' negotiating priorities.

Information about the information-sharing session is available here.

There are currently 46 LDCs, of which 35 are WTO members and eight are in the process of accession. More information on the Sub-Committee on LDCs can be found here.




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