The WTO Agreement on Rules of Origin , concluded as part of the Uruguay Round in 1994, has opened a new chapter in the history of Customs. Until then, there was no global model for the determination of origin, which is one of the cornerstones of trade policy, trade statistics and general macroeconomic analysis.
The WTO Agreement on Rules of Origin sets out important provisions relating to the application and administration of Rules of Origin, providing for the Harmonization of non-preferential rules of origin , those rules of origin which are not derived from trade regimes leading to the granting of tariff preferences.
By securing transparency in trade policy, this harmonization is expected to facilitate international trade.
The WTO Committee on Rules of Origin (CRO ) and the WCO Technical Committee on Rules of Origin (TCRO) are the two bodies responsible for the full development of this Agreement. In 1999, the TCRO concluded the technical review of the Harmonized Rules of Origin and these final results were forwarded to the CRO in Geneva for consideration. In 2006, these results are still under consideration by the WTO.
Concept of ROO Agreement
The Rules of Origin Agreement requires WTO members to ensure that their rules of origin are transparent; that they do not have restricting, distorting or disruptive effects on international trade; that they are administered in a consistent, uniform, impartial and reasonable manner; and that they are based on a positive standard.
For the longer term, the agreement aims for common (“harmonized”) rules of origin among all WTO members, except in some kinds of preferential trade — for example, countries setting up a free trade area are allowed to use different rules of origin for products traded under their free trade agreement. The agreement establishes a harmonization work programme, based upon a set of principles, including making rules of origin objective, understandable and predictable. The work was due to end in July 1998, but several deadlines have been missed. It is being conducted by a Committee on Rules of Origin in the WTO and a Technical Committee under the auspices of the World Customs Organization in Brussels. The outcome will be a single set of rules of origin to be applied under non-preferential trading conditions by all WTO members in all circumstances.