Members of the Committee on Rules of Origin (CRO) have engaged in discussions aimed at facilitating trade through simplified rules of origin for Least Developed Countries (LDCs). The LDC Group presented various strategies to ease the burden on the trade community and improve the utilization of preferential regimes by LDCs. These strategies cover several areas, including ad valorem calculations, cumulation, direct consignment, proof of origin, and flexibilities for low-value shipments.
The group also shared its vision for future rules concerning US trade preferences such as the Generalized System of Preferences (GSP) and the African Growth and Opportunity Act (AGOA). Preference-granting members acknowledged these recommendations while emphasizing compliance with ministerial decisions from Bali 2013 and Nairobi 2015. They stressed the importance of ensuring that rules promote adequate processing levels within LDCs.
Mr. Guna Seelan Balakrishnan from Malaysia, Chair of the CRO, stated that discussions on LDC requests would continue. Updates were provided by China, Japan, and the United Kingdom regarding their non-reciprocal preferences for LDCs. Japan reported high utilization rates in its GSP scheme when regional trade agreements are included. The UK highlighted its Developing Countries Trading Scheme (DCTS), which offers tariff reductions to 65 countries. China announced updates to its certificate of origin system set to be operational by November 2025.
The WTO Secretariat introduced an updated note on methodologies for calculating preference utilization rates. Members debated whether to focus on individual programs or adopt a more holistic approach considering all schemes influencing trade patterns between LDCs and preference-granting members.
Research findings from UNCTAD and the Asian Development Bank suggested that despite differences in language across free trade agreements, many product-specific rules are substantively similar. This opens up possibilities for simplifying rules to reduce compliance costs.
An information session was held on November 20th regarding work by the World Customs Organization related to rules of origin. The session aimed at fostering collaboration between relevant committees under Article 4 of the WTO Agreement on Rules of Origin.
Efforts towards transparency in non-preferential rules were discussed but no consensus was reached for formal adoption. Members were encouraged to voluntarily update notifications about their practices.
The next formal meetings are scheduled for April 3-4 and November 5-6, 2025. The CRO will celebrate its 30th anniversary during these sessions.
Rules of origin play a crucial role in determining a product's national source and affect import duties along with other trade policy instruments like anti-dumping measures.
Further details can be accessed at www.wto.org/origin.