Wto Agreement Rules Of Origin

(ii) maximum percentage of non-native inputs (construction or indirect testing): the use of non-native materials or components in processing or manufacturing in the country of origin is limited to a maximum rate. This review is based on a comparison between the value of non-native inputs and the value of finished products. Therefore, the rigour of the rules of origin would be inversely proportional to the allocation for non-native products. For example, a rule that allows the value of 60% of finished products from non-native materials is stricter than a rule that allows 65%. [18] All countries accept that a harmonization of the rules of origin, i.e. the definition of rules of origin, applied by all countries and identical to the objective for which they will be applied, would facilitate international trade. Indeed, the abuse of the rules of origin can in itself make it an instrument of trade policy, rather than simply acting as an instrument of support for a trade policy instrument. However, given the diversity of rules of origin, such harmonization is a complex task. In 1981, the GATT secretariat drew up a note on the rules of origin, and in November 1982, ministers agreed to review the rules of origin used by the GATT contracting parties.

The rules of origin were not much more elaborate until the Uruguay Round. In the late 1980s, developments in three important areas served to place greater emphasis on the problems of rules of origin: recognition that clear and predictable rules of origin and their application facilitate international trade; the harmonization of goods considered to be fully preserved in a country and minimum operations or procedures that alone do not lend goods; Exhibitions: a provision allowing the acquisition of an original character during an exhibition in a third country (excluding free trade agreement) and import into a free trade country with preferential treatment. This method dictates certain production processes that may be related to the origin of the product. It requires that non-native materials be subjected to certain processing or manufacturing operations in a country so that the products can be considered originating in that country. Although the revised Kyoto agreement has abandoned this method, it is still often used in practice: the often cited rule is a good example. Indeed, this method is recognized by the agreement on the rules of origin. Article 2, point (a) (a) of the agreement stipulates that, in cases where this method is applied, the activities conferring origin on the products concerned must be defined precisely. [20] In essence, a shipment must be accompanied by proof of origin in order to receive preferential treatment.