Jul 14, 1998

 

WTO MISSES DEADLINE ON HARMONIZING ORIGIN RULES

 

Geneva 11 July (Chakravarthi Raghavan) -- The World Trade Organization has missed a deadline, set out in the Marrakesh Agreement on Rules of Origin annexed to the WTO agreement, for harmonization of the non-preferential rules of origin.  

The work programme due to be completed by 20 July is now being extended to be completed on a best endeavour basis by November 1999, with the intention that by then a recommendation can be made for the Third Ministerial Conference for a final deadline for the work.  

While the WTO Committee on Rules of Origin claimed in its report that substantial progress has been made, trade officials said that of the over 5000 separate rules of origin by the various member-countries, the Committee on rules of origin has been able to complete its work only on 1300 of them.  

Rules of origin are the criteria used to define where a product was made, and are linked to the application of trade measures such as quotas, preferential tariffs, anti-dumping actions and countervailing duties.

The Uruguay Round accord covered only the non-preferential rules of origin, and not those under preferential trading arrangements including free trade areas. The Marrakesh agreement set a three-year work programme to complete harmonization of various rules so that they will be objective, transparent and predictable.  

The new work programme calls for the technical committee on rules of origin to complete its work by May 1999, and for a review by June 1999 by the Committee on the Rules of Origin of the status of the work with a recommendation for setting a final deadline for completing the work.  

The issue of harmonizing the rules are of particular importance to developing countries whose exports to various markets face complicated, and sometimes conflicting requirements, under rules of origin issued by the importing countries.  

The Committee has now set a new deadline, but on a "best endeavour" basis, to complete its work by November 1999, and come up with a recommendation then for a final deadline.  

The US and other industrialized countries had suggested that the work programme for harmonization should be extended without any new deadline, but developing countries did not agree.  

As a result the compromise of a "best endeavour" to complete the work has been set.  

In theory, in a world of globalization and most-favoured-nation treatment applicable to international trade, rules of origin should lose most of their importance.  

But that they proliferate and remain is an indication how the major importing countries use these trade instruments to protect their domestic markets.