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Presentation on WTO Agreement on

Presentation on WTO Agreement on
Rules of Origin
Rules of Origin


By Shashank Priya
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Definition
Definition

Rules of Origin are laws, regulations and

administrative determination of general
application to determine the country of
origin of goods that is, where made, grown,
etc!"!

#$ception% Such rules of origin would not

apply to preferential trading agreements!
&
Application
Application

Such rules of origin are to 'e used for various non(

preferential commercial policy instruments!
)llustrative e$amples are%
(
#$tending *+, treatment under various -.//
.rticles ), )), ))), 0) and 0)))"!
(
.nti(dumping and countervailing duties!
(
Safeguard measures!
(
Origin marking re1uirements!
(
.pplication of 2Rs or /R2s!
(
-overnment Procurement!
(
/rade statistics!
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Scope
Scope

Rules of Origin would apply e1ually for all

purposes as set out in the .greement!

Such Rules should 'e administered in a consistent,

uniform and impartial manner!

/ransparency re1uirements(laws 'e pu'lished,

advance ruling, no retrospective changes!

Provision for 4udicial review and confidentiality

clause!
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Harmonisation Work Programme
Harmonisation Work Programme
(HWP)
(HWP)

6ertain 7/O *em'ers already have their

own non(preferential ROO

)ndia does not have such non(preferential

ROO

/he .greement seeks to harmoni8e, that is,

have common rules of origin for all 7/O
*em'ers!

/he e$pected 'enefit is to provide more

certainty in the conduct of world trade!
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Principles of HWP
Principles of HWP

Rules of Origin should 'e o'4ective,

understanda'le and predicta'le!

/hey should not 'e used as instruments to

pursue trade o'4ectives!

/hey should 'e coherent!

/hey should 'e 'ased on a positive

standard!
:
Criteria for HWP
Criteria for HWP

Origin of a good would either 'e the country

where it is wholly produced and in case of multi(
country production of goods, the country where
the last su'stantial transformation took place!

/he 'asis for ;7P is the ;armonised System

;S" tariff classification developed 'y 76O total
;S su'headings(511&"!

<iscussion on product sector 'asis represented 'y

various 6hapters or Sections 15 product sectors"!
=
Criteria for HWP (contd.)
Criteria for HWP (contd.)

7holly o'tained and minimal operations or

processes that do not confer origin e$amples%
milk, eggs, crops, fruits o'tained in one country>
packaging, preservation operations"!

Su'stantial transformation for multi(country

production(66, 6/;, 6/S;, 6/;S,
6/S;S!
?
Criteria for HWP (contd.)
Criteria for HWP (contd.)

66(6hange of 6hapter

6/;( 6hange of /ariff ;eading

6/S;( 6hange of /ariff Su'(heading

6/;S( 6hange of /ariff ;eading Split

6/S;S( 6hange of /ariff Su' ;eading Split

;S ?!@1(6offee, whether or not roasted or

decaffeinated> coffee su'stitutes containing coffee
in any proportion!

(coffee not roasted

(coffee roasted
1@
Criteria of HWP (Contd.)
Criteria of HWP (Contd.)

Supplementary criteria for su'stantial

transformation(value addition,
manufacturing or processing operations!
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Progress of HWP
Progress of HWP

7ork initiated in Auly 1??5!

)nitial deadline for completion was Auly 1??=!

<ue to technical and voluminous nature of work

and trade policy considerations for several issues,
deadline had to 'e e$tended repeatedly(1???,
2@@@, 2@@1 and the latest is end of 2@@2!

,egotiations for first three years was conducted in

/6RO in Brussels in 1: formal sessions!
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Progress of HWP (contd.)
Progress of HWP (contd.)

Results of discussions in /6RO presented

to 6RO in Aune 1???(agreed Rules Basket
1" for endorsement and unresolved issues
3=9" for decision!

.s on date, &5@ issues resolved and 1&9

issues are outstanding!
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Remaining Work of HWP
Remaining Work of HWP

/he remaining outstanding issues are some

of the most comple$ and sensitive!

Sectors with largest num'er of unresolved

issues are agricultural products, te$tiles
and machinery!

*achinery sector has another large num'er

of outstanding issues linked to the
resolution of the .ssem'ly Rule!
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Remaining Work of HWP
Remaining Work of HWP
(contd.)
(contd.)

.rchitecture of the rules of origin to 'e

finalised(one contentious issue is origin of
products of sea fishing!

)mplications of rules of origin for other

7/O .greements!
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Was to complete HWP
Was to complete HWP

. new working methodology adopted since .pril

2@@1 *eeting of 6RO!

6hairmanBs recommendation for each issue is the

'asis for further negotiation

2:9 issues resolved after adopting this approach

in 3 6RO Sessions" compared to 53 issues
resolved 'etween Septem'er 1??: to *arch 2@@1
in 25 Sessions"!

Progress slowed in 2@@2! &@@ )ssues resolved in 3

6RO Sessions in 2@@1 'ut only 1= resolved in 2
6RO Sessions in 2@@2!

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Was to complete HWP (contd.)
Was to complete HWP (contd.)

6ountries to give reasoned e$planation

where 6hairmanBs recommendation not
accepta'le and suggest compromise
solutions!

?2 )ssues identified as core policy level

issues in 6RO meeting of Aune 2@@2!

/hese referred to the -eneral 6ouncil for

decision!
1:
!mportant Resol"ed !ssues in
!mportant Resol"ed !ssues in
Te#tile Sector
Te#tile Sector

6otton ;S 52!@2"% 6ountry in which cotton is

o'tained in its natural or unprocessed state 7O"!

6arded or 6om'ed 6otton ;S 52!@&"% 66

6otton Sewing /hread ;S 52!@3"% 6/; 'y

core spinning from yarn or fi'res

6otton Carn ;S 52!@5"% 6/;, e$cept from

;S 52!@3

6otton +a'rics ;S 52!@="% 6/;

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!mportant Resol"ed !ssues in
!mportant Resol"ed !ssues in
Te#tile Sector (Contd.)
Te#tile Sector (Contd.)

Sewing thread of man made filament ;S 53!@1"%

6/;, e$cept from ;S 53!@2(53!@9

*an made filament yarn ;S 53!@2(53!@5"% 6/;,

e$cept from ;S 53!@1 or 53!@9

+ilament yarn> put up for retail sale ;S 53!@9"%

6/;, e$cept from ;S 53!@1(53!@5

+a'rics of filament yarn ;S 53!@:"% 6/;

Similar rules agreed for silk 6h 5@" and wool 6h

51"
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Core $nresol"ed !ssues
Core $nresol"ed !ssues

Out of ?2 core issues, 23 relate to te$tiles which

is the 2
nd
largest after agriculture 35 )ssues"!

Some important unresolved issues for te$tile

sector relate to dyeing, printing, coating,
em'roidery, assem'ly and making of flat
products!

)ndia favours li'eral rules i!e! favours origin for

all these processes!
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!mportant $nresol"ed !ssues in
!mportant $nresol"ed !ssues in
Te#tile Sector
Te#tile Sector
1! Printing or <yeing of Carn or +a'ric
)ncluding dyeing white"%
Ces%

Permanent printing or dyeing from un'leached or

pre('leached yarnDfa'ric with at least two
preparatory or finishing operations #6, .ES, ),<,
/ER(5@F G., HOR, ,I, P;JK6hairmanBs
recommendation"

<yeing or printing plus at least one other

preparatory or finishing operation ;H6, *CS"
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!mportant $nresol"ed !ssues in
!mportant $nresol"ed !ssues in
Te#tile Sector (Contd.)
Te#tile Sector (Contd.)

<yeing and printing plus two or more of specified

finishing operations% 'leaching, shrinking, fulling,
napping, decating, permanent, stiffening, weighting,
permanent em'ossing or moireing! ES."
,o% ,either printing nor dyeing confers origin .R-, BR.,
6.,, *#0, /;."!
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!mportant $nresol"ed !ssues in
!mportant $nresol"ed !ssues in
Te#tile Sector (Contd.)
Te#tile Sector (Contd.)
*aking of flat products 'ed sheets, pillow covers, etc!
from fa'rics"
Ces 6/;" 6OJ, ),<, *CS, P;J, G#,"!
Ces, provided 'oth cut or knitted to shape and assem'led in the same
country otherwise, origin is the country of fa'ric" ;H6, ##6,
/ER"> for goods of knitted or crocheted material> 6/;S, provided
the change is attained 'y complete making(up" #6, /ER"!
,o, origin should 'e the country of fa'ric .R-, BR., 6.,, AP,, *#0,
/;., ES."
6hairmanBs compromise proposal% 6/;, provided the starting material is
pre('leached or un'leached fa'ric" supported 'y .ES, ),<, ,OR,
,I, P.H"!
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Some important issues for !ndia
Some important issues for !ndia

.griculture( mi$ture issue, roasting or toasting of

coffee, making curry 'y mi$ing spices, etc!

/e$tiles( <yeing, printing, making of flat

products, etc!

+ootwear( manufacture of shoes from formed

uppers to which an inner sole has 'een attached
permanently

7holly o'tained goods( origin of fish caught in

##I of a country should go to that country and
not the flagDcountry of registration of the vessel!
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/hank Cou!