• Concept of the Rules of Origin
• The Harmonized Rules of Origin and Trade Facilitation
• Scope and Guiding Principles of the Harmonized Rules of Origin

• Background to the Initiation and Schedule of the Harmonization Work Programme
• Role and Interaction of WTO and WCO in the Harmonization Work Programme

• Devising Principles for Origin Determination
• Consolidated Text Covering the Results of Technical Review
• Identification of Unresolved Issues in Referral Documents

• Completion of the Technical Review Undertaken by WCO/TCRO
• Continuation of the Harmonization Work Programme by WTO/CRO

• General Rules (Architecture )
• Appendix 1 ( Definitions of Wholly Obtained Goods)
• Appendix 2 ( Product Specific Rules of Origin )

• Contribution to Trade Facilitation
• Providing Overall Consistency in Origin Determination

• Domestically
• Internationally
• Other Web Sites

• Concept of the Rules of Origin

According to the WTO Agreement on Rules of Origin effective from 1995, Rules of Origin are defined as those laws, regulations and administrative determinations of general application applied by WTO Member countries to determine the country of origin of goods provided such rules are not related to contractual or autonomous trade regimes leading to the granting of tariff preferences going beyond the application of the relevant Articles of GATT 1994.

• The Harmonized Rules of Origin and Trade Facilitation

"Harmonized Rules of Origin" mean the coherent rules concerning origin determination which are expected to be set out by co-operative efforts between WTO Member countries and applied to non-preferential commercial policy instruments. When they are completed, the Rules will be appended to the Agreement with the objective of contributing to the facilitation of international trade.

• Scope and Guiding Principles of the Harmonized Rules of Origin

The Harmonized Rules of Origin shall cover all rules of origin used in non-preferential commercial policy instruments relating inter alia, to Most Favoured Nation "MFN" treatment, anti-dumping duty, safeguard measures, origin marking, tariff quotas.  They shall also cover government procurement and trade statistics. They should :

• be applied equally for all the above-mentioned non-preferential purposes;
• be objective, understandable and predictable;
• not be used as instruments to pursue trade objectives directly or indirectly;
• be administrable in a consistent, uniform, impartial and reasonable manner;
• be coherent and based on a positive standard.

• Background to the Initiation and Schedule of the Harmonization Work Programme

During the Uruguay Round, participating countries recognized the need to provide transparency of regulations and practices regarding rules of origin in order to prevent unnecessary obstacles to the flow of international trade. That being the case, the Agreement on Rules of Origin stipulated that the Work Programme to harmonize non-preferential Rules of Origin should be completed within three years of initiation, i.e. by 20 July 1998. However, due to the complexity of many issues raised during the Work Programme, the time schedule laid down in the Agreement was extended and WTO Members countries committed themselves to make their best endeavour to complete the HWP by November 1999.

• Role and Interaction of WTO and WCO in the Harmonization Work Programme

The international institutions carrying out the Programme have been the WTO Committee on Rules of Origin (CRO) which reports to the WTO Council for Trade in Goods, and the WCO Technical Committee on Rules of Origin which was established under the auspices of the WCO to undertake the technical work. Membership of both Committees is limited to Members of the WTO; however, the TCRO admits as observers those WCO Members that are not WTO Members, as well as some international organizations including WTO, OECD, UNCTAD the UN Statistical Division, the UN Law of the Sea Convention Secretariat and the International Chamber of Commerce

• Devising the Principles for Origin Determination

After the official initiation of the Programme in July 1995, the TCRO held 17 formal sessions and 3 informal sessions, the final formal session was held on 17-28 May 1999. In the course of those sessions, many rules for origin determination, (e.g. product specific rules including primary rules and residual rules) and overall architecture setting out the applications of those rules have been devised and articulated.

• Consolidated Text Covering the Results of Technical Review

In November 1998, the WCO Secretariat issued the first edition of the Consolidated Text, which contains the results of the technical review concerning the origin determination criteria for each product, plus the opinions of participating countries. The Consolidated Text was sent to the relevant authorities of WTO Member countries. The Consolidated Text has been updated by 2 Amending Supplements and covers the results of all the TCRO sessions.

• Identification of Unresolved Issues in Referral Documents

For particular issues where consensus was not reached after exhaustive discussion the TCRO prepared Referral Documents (Templates) inviting the CRO to decide. These documents contain the results of the TCRO’s technical review and many options proposed by participating countries for determining the origin of each product.

• Completion of the Technical Review Undertaken by WCO/TCRO

In May 1999, at the conclusion of its 17^th formal session, the TCRO approved the final results of its harmonization work for submission to its WTO counterpart, the CRO. The TCRO thus concluded the technical review for the Harmonized Rules of Origin under the rearranged time schedule agreed by the Members of the WTO.The package of final results includes the Report of the 17^th Session (added to the other previously submitted session reports), Referral Documents covering unresolved issues and all the Chapter Notes, and the Consolidated Text.The Referral Documents and the Consolidated Text have become the common working texts for the CRO and the TCRO and, in the forthcoming discussions at CRO, these two instruments are expected to play make an important role in achieving a reasonable decision.

• Continuation of the Harmonization Work Programme by WTO/CRO

The CRO is now expected to review the status of the Harmonization Work Programme and recommend a deadline for its completion. In the course of the discussions held in April and June 1999, all CRO Members emphasized the importance of the early establishment of the Harmonized Rules of Origin for facilitating international trade and agreed that they wished to continue the substantive work on all outstanding issues as early as possible.

• General Rules (Architecture)

The Harmonized Rules of Origin will consist of Definitions, the General Rules, Appendices 1 and 2. In Appendix 2, Rules for the application of Appendix 2 are followed by the matrix rules covering goods classified in Chapters 1 to 97 of the Harmonized System. At the beginning of each Chapter, the negative standard, the primary rules, the residual rules and definitions may be set out. The architecture will set out the principles under which the various rules are applied and will result in the final results for applying those rules to specific cases.

• Appendix 1 (Definitions of Wholly Obtained Goods)

This Appendix sets forth the definitions of the goods that are to be considered as being wholly obtained in one country. It provides for the origin determination of live animals born and raised in that country, and plants and minerals harvested or taken in that country.

• Appendix 2 (Product Specific Rules of Origin)

This Appendix sets forth rules for determining the country of origin of a good when the origin of the good is not determined under Appendix 1. It will provide for the rules necessary for origin determination, including the primary rule and residual rule and their application. There are still differing opinions concerning the concept of de minimis, intermediate materials, fungible goods and putting up in sets.

• Contribution to Trade Facilitation

Harmonization means that a single origin can be determined for all non-preferential commercial policy purposes. Both private and public sectors can anticipate being able to know a clear and predictable origin outcome by application of a single set of Rules of Origin. Customs officers and traders may face a significant task in implementing the Harmonized Rules of Origin once they are operational. However, in the long run, the benefits of harmonization will be widely appreciated in the same way as the Harmonized System Nomenclature.

• Providing overall consistence in origin determination

The Harmonized Rules of Origin are expected to prevent discrepancies in origin determination between WTO Member countries because they do not allow any loopholes in origin determination and they should confer one origin to one good.

Further information can be obtained from domestic Customs, trade or industry administrations, or from the International Chamber of Commerce which participated in the Harmonizatioin Work Programme.

WTO UNCTADICC(Edited on 15 September 1999)