25 April 2018

WTO reports improved notification of preferential rules of origin for Least Developed Countries

by WTO / in News

Most WTO members with preferential rules of origin programmes for least developed countries (LDCs) have notified their programmes to the WTO as well as data concerning their preferential imports from LDCs as required under the relevant 2015 Nairobi Ministerial Decision, WTO members were told on 19 April.

Originally published on WTO News

The Nairobi Decision on Preferential Rules of Origin for LDCs builds upon the earlier 2013 Bali decision by setting out, for the first time, a set of multilaterally agreed guidelines to help make it easier for LDC exports to qualify for preferential market access. The Nairobi Decision aims to facilitate LDC export of goods to both developed and developing countries under unilateral preferential trade arrangements in favour of LDCs (such as duty-free/quota-free market access).

Reporting to the Committee on Rules of Origin, the WTO Secretariat reported nearly all WTO members with such preferences for LDCs have notified their programmes to the WTO.  Since the committee's last meeting in October 2017, Kazakhstan has submitted a new notification on its programme while Canada has notified members of amendments in its programme.

These notifications are based on an agreed template aimed at enhancing transparency and promote a better understanding of these preferential arrangements.  The template allows for a better understanding of the rules of origin which currently apply to LDC preferences. This concerns not only the detailed origin criteria used in preferential regimes but also the obligations related to certification, transportation of goods and origin verification.

Understanding these requirements is important because compliance with them is a prerequisite for preferential market access. The committee has started to examine these notifications in a more detailed manner and make cross-country comparisons, which will be useful for identifying best practices and recommendations.

The members notifying their programmes with the agreed template are:  Australia; Canada; Chile; China; the European Union; India; Japan; Kazakhstan; Korea; New Zealand; Norway; the Russian Federation; Switzerland; Chinese Taipei; Thailand; and the United States. The detailed origin requirements and notifications can be found in the WTO's Preferential Trade Arrangements Database.

Rules of origin are the criteria needed to determine the national source of a product. Their importance is derived from the fact that duties and restrictions in several cases depend upon the source of imports. Those countries granting preferences to LDC imports often condition the benefits on the imports meeting minimum "LDC content" as set out under their rules of origin schemes.

On behalf of the LDC Group, Tanzania submitted a list of questions to members on implementation of the Nairobi Ministerial Decision, in particular Paragraph 4 on implementation, flexibilities and transparency.  Tanzania recalled the challenges faced by LDCs in fully utilizing these preferences and asked preference-granting members to explain steps they have taken to implement the Nairobi Decision commitments, what the outcomes are, and what steps they are taking to annually provide import data to the WTO Secretariat.

A half dozen members took the floor to say that they have fully implemented the Nairobi Decision commitments or have submitted information on how they have complied. Tanzania said the LDC Group would like members to go further and understand the multiple difficulties LDCs face and commit to improve their rules of origin systems so that full utilization could be achieved.

Switzerland reported to members on talks it has been holding with interested delegations on its initiative to facilitate trade by removing barriers to trade inherent in non-preferential rules of origin. Sixteen members are taking part in the discussions, which Switzerland said was taking place in a good atmosphere. The discussions are currently focused on improving transparency.  Several delegations expressed their support for the initiative and the focus on transparency issues.

At the end of the meeting members confirmed the appointment of Ms Thembekile Mlangeni (South Africa) as the new chair of the committee.

Next meeting

The next meeting of the committee on rules of origin is provisionally schedule for 15-16 October. Further information on the WTO's work regarding rules of origin can be found at www.wto.org/origin

Any views and opinions expressed on Trade for Development News are those of the author(s), and do not necessarily reflect those of EIF.