WTO to Circulate ROO for LDC Preferential Access

The Committee on Rules of Origin, on 10 April 2014, agreed on steps to implement the Decision on Preferential Rules of Origin for the Least Developed Countries (LDCs) adopted at the 9th Ministerial Conference in Bali last December. This decision would ensure that non-reciprocal rules of origin for LDCs are simple, transparent and that they take into account the productive capacities of LDCs.

The Committee approved the following proposal made by the chair, Mr Marhijn Visser (the Netherlands), after consultations with delegations:

· First, members should notify any new or modified preferential rules origin affecting imports from LDCs as soon as possible. Such notifications should be made through the established regular procedures, that is, to the Committee on Rules of Origin in accordance with Paragraph 4 of Annex II and or the Committee on Trade and Development . If they have already submitted their notifications previously, they should ensure that the information is complete and remains accurate.

· Second, the Committee will review any new such notifications at its next meeting. There will be an opportunity for members to engage in a question and answer exercise on the basis of these notifications.

· Third, the Committee will then compile the information received and take note of the comments made. This will be the basis of the Committee’s report to the General Council and the LDCs Sub-Committee.

The Committee also approved a separate initiative by the chair on intensifying efforts to exchange information regarding existing rules of origin for LDCs:

· A transparency and outreach session will be organized to review the state of notifications currently available with the Secretariat.

· During that session, preference-granting members willing to make presentations about their non-reciprocal rules of origin will have an opportunity to do so.

Uganda, speaking on behalf of the LDCs, welcomed the proposals by the chair, and suggested that the implementation of the Bali decision be made a standing agenda item of the Committee. It said that the LDC Group will be submitting a paper to the Committee on the challenges they face in complying with preferential rules of origin. It also urged preference-giving countries to provide utilization rates of their duty-free, quota-free schemes for LDCs.

Cambodia and Nepal supported Uganda’s statement.

The United States, Turkey, Japan, India, Canada, Korea and China underlined their commitment to facilitating trade of LDCS, and supported the chair’s proposals.

Rules of origin are the criteria used to determine where a product was made. Products that are deemed under such rules to be made in LDCs would qualify for preferential market access schemes for LDCs. In other words, rules of origin are used to ensure that only products originating in LDCs benefit from the trade preferences that have been afforded to them.

The Bali decision contains a set of multilateral guidelines for the rules of origin that WTO members apply to their non-reciprocal preference schemes for LDCs. For the first time, governments will have a set of multilaterally agreed guidelines, which should help make it easier for LDC exports to qualify for preferential market access. The decision recognizes that each country granting trade preferences to LDCs has its own method of determining rules of origin, and it invites members to draw upon the elements contained in the decision when they develop or build on their individual rules of origin arrangements applicable for LDCs.

The guidelines recommend that preferential rules of origin and the related documentary requirements should be as transparent and simple as possible. For this purpose, the decision recognizes ways in which origin can be conferred and provides some illustrations in which preferential rules of origin can be made easier to comply with.

The decision also requires that members notify their preferential rules of origin for LDCs to the WTO to enhance transparency, make the rules better understood, and promote an exchange of experiences as well as mainstreaming of best practices. The WTO’s relevant bodies shall also annually review these rules of origin.

Harmonization work programme

The chair reported on his consultations with delegations on a possible way forward for the Committee’s harmonization work programme on non-preferential rules origin.

These negotiations began in 1995, and despite substantive progress for thousands of tariff lines, came to a halt in 2007 due to divergences on whether or not the harmonized rules of origin should also apply in the implementation of other trade policy instruments, like anti-dumping measures. In July 2007, the General Council recommended that harmonization work be suspended until such guidance from the General Council would be forthcoming. It also recommended that the Committee continue its work on technical elements.

The chair said that there continued to be two distinct views in the Committee on this matter:

· Some Members continue to believe that fully harmonized non-preferential rules of origin would facilitate world trade and would, as a result, like to intensify work to conclude the harmonization work programme.

· Other Members, however, believe that world trade has changed to the point that harmonized rules are no longer needed. In fact some Members think harmonized non-preferential rules are not even desirable.