RESTRICTEDWORLD TRADE
ORGANIZATIONG/RO/M/26
17 January 2000
(00-0170)
Committee on Rules of Origin
MINUTES OF THE MEETING OF 16 NOVEMBER 1999
Chairman:  Mr. A.R. Moroz
The agenda proposed for the meeting, contained in WTO/AIR/1202, was adopted by the
Committee on Rules of Origin (CRO) as follows:
I. OVERALL ARCHITECTURE OF THE HARMONIZED RULES OF ORIGIN
(G/RO/41, PAGES 2-35).......................................................................................................... .1
II. PRODUCT-SPECIFIC RULES OF  ORIGIN (G/RO/41).....................................................3
A. C HAPTERS 25-27 ( MINERAL PRODUCTS ) AND 71 ( PRECIOUS STONES AND METALS )..................3
B. C HAPTERS 28-40 ( CHEMICALS )...................................................................................................4
C. C HAPTERS 41-43 ( LEATHER ).......................................................................................................6
D. C HAPTERS 44-49 ( WOOD AND PAPER ) ........................................................................................6
E. C HAPTERS 68-70 ( STONE , GLASS AND CERAMICS ) AND 72-73 ( IRON AND STEEL ).....................7
III. ENDORSEMENT OF PROPOSALS ON HARMONIZED RULES ...................................9
IV. IMPLICATIONS OF THE IMPLEMENTATION OF THE HARMONIZED
RULES OF ORIGIN ON OTHER WTO AGREEMENTS (G/RO/W/28/REV.1,
G/RO/W/30-34, 38 AND 42) .....................................................................................................9
V. PROGRESS REPORT OF THE COMMITTEE ON RULES OF ORIGIN TO
THE COUNCIL FOR TRADE IN GOODS ON THE STATUS OF THE
HARMONIZATION WORK PROGRAMME....................................................................11
VI. FIFTH ANNUAL REVIEW OF THE IMPLEMENTATION AND
OPERATION OF THE AGREEMENT ON RU LES OF ORIGIN (G/RO/W/47) ...........13
VII. INTERIM ARRANGEMEN TS .............................................................................................13
VIII. DATE OF THE NEXT MEETING.......................................................................................13
I. OVERALL ARCHITECTURE OF THE HARMONIZED RULES OF ORIGIN
(G/RO/41, PAGES 2-35)
1.1 Based on informal consultations which had taken place from 28-29 October and
3-4 November 1999, the Chairman summarized the discussion on this issue as follows:
"In terms of rule 2 of Appendix 2, the European Communities reported on the results
of plurilateral discussions held on 1 November 1999.  The EC also tabled a proposed text for
rule 2, which formed the basis of the discussion during the informal meeting.G/RO/M/26
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As regards rule 2(a), one Member made a proposal designed to expand the
application of this rule.  Other Members indicated that they did not want to change rule 2(a)
and that if that Member wanted to pursue its proposal, it should bring it forth as a proposal for
a separate rule under rule 2.  This situation was now reflected in the revised text for rule 2 by
the reference to Attachment IV after the title of rule 2.  Also with regard to rule 2(a), another
delegation expressed a view that rule 2(a) was a rule of application and not a rule of origin
determination and therefore it might be better placed in rule 3 of Appendix 2.  Other Members
indicated that they wanted rule 2(a) to stay under rule 2 and not to be moved to rule 3.
There was little discussion with regards to rule 2(b) because Members agreed with it.The discussion on rule 2(d) covered three elements:  (i) the internal workings of the
rule;  (ii) the question of sequence ; and (iii) whether or not rule 2(d) was a rule of origin
determination or a rule of application.  As regards the internal workings of rule 2(d), the text
as proposed by the EC was discussed.  It was agreed to delete the phrase, "already has the
essential characteristics of the good" in the text proposed by the EC, and to add the word
"single" in the second to last line.  The re maining discussion focused on the phrase, "finished
article".  It was agreed that this term might need to be defined.  There were also questions on
whether or not the adjective "finished" should be kept.
As regards sequencing, two Members indicated that they still had reservations on the
placement of rule 2(d) before rule 2(c).  One of these Members indicated its intention toreview the chapter residual rules to see if there were any that it might want to propose as
being requalified from chapter residual rules to  chapter primary rules in order to see if its
concerns on the sequencing question could be addressed.  This Member indicated its intention
to make these proposals at the meeting in February 2000.  To reflect this question of
sequencing a bracket had been placed around rules 2(d) and 2(c) with a footnote, "Sequencingto be addressed" in the revised text for Appendix 2.
As regards the third element concerning rule 2(d), a Member was of the view that
rule 2(d) was a rule of application, not a rule of determination, and therefore should be moved
to rule 3.  Other Members, however, indicated that they wanted rule 2(d) to remain where it
was now.
Turning to rule 2(c), the only question concerned the sequencing, which was
discussed above.
As for rule 2(e), one Member indicated that it had a number of concerns regarding the
current text of rule 2(e) and would provide written questions on this later.
Turning to rule 2(f), the various proposals were discussed and some ideas were
considered.  Based on this discussion, one Member proposed splitting its proposal into two
parts as its original proposal might not have covered all the possible cases or scenarios
rule 2(f) might need to deal with.  As regards the other proposals for rule 2(f), they remainedon the table, unchanged.  All Members were encouraged to submit detailed papers on how
rule 2(f) might operate, based on various scenarios.  It was also recognized by Members that
rule 2(f) was the final rule in the hierarchy of rules for determining origin and that the
determination of origin had to go through all the other rules before getting to rule 2(f).
The CRO discussed rule 3 of Appendix 2  on the basis of the contribution by one
Member that consolidated the various earlier drafts, issues and proposals.  Members agreed
that this consolidation was a good basis to proceed upon.  Over the course of the discussion,
Members discussed whether or not general rule 5 on minimal operations should apply to ruleG/RO/M/26
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3, and no consensus was reached.  Members also discussed a proposal that the text of rule 3
should clarify that where more than one primary rule was applicable to a good, the country of
origin of the good was the last country of production provided any one of the primary rules
was satisfied in that country.  There was also a proposal that the text would reflect the fact
that residual rules would be applied only  when none of the primary rules applicable to a
particular product were satisfied.  There were also a number of other proposals regarding
changes to rule 3, including an alternative text for paragraph (b).
1.2 The CRO agreed that the texts of rules 2 and 3 of Appendix 2 of the Integrated Negotiating
Text be revised in accordance with the Chairman's summary in paragraph 1.3 above (Amending
Supplement No. 2 of G/RO/41, pages 10-35A).
II. PRODUCT-SPECIFIC RULES OF ORIGIN (G/RO/41)
A. CHAPTERS 25-27 ( MINERAL PRODUCTS ) AND 71 ( PRECIOUS STONES AND METALS )
2.1 The representative of the Philippines, rapporteur for the informal plurilateral discussions on
chapters 25-27 and 71, stated as follows:
"On chapters 25-27:
Issue No. 1 – Members agreed that consensus on this issue was still elusive.
Issue No. 2 – Consensus was reached for option B last 20 July.
Issue Nos. 3-6 – Consensus was reached for option A in the meeting held on
10-21 November 1997.  This consensus was reflected on page 7 of document G/RO/M/12.
Issue No. 7 –  There was growing agreement to delete in para.43 on page 293 of G/RO/41 the
processes in brackets (b), (l), (m) and (n) of chapter note 2 of chapter 27.  However, no
agreement was reached on the inclusion of "atmospheric distillation" in process (a) of chapter
note 2 of chapter 27.
Issue Nos 8-9  – As reported in the July and September meetings, there was growing
consensus towards option A.  At this meeting the Member who found it difficult to join the
consensus for option A informed that it was still working on a compromise proposal.
Issue No. 10 – Consensus was reached for option B.
On chapter 71
Issue No. 1 – There was growing consensus towards option A.
Issue No. 2(a) – Working of industrial diamonds
Consensus was reached that the origin rule sh ould be "CTSH provided that the goods are cut
or ground to final shape".
Issue No. 2(b) – Workings of non-industrial di amonds and precious and semi-precious stones
Consensus was reached that the origin rule sh ould be “CTSH provided that the goods are cut,
ground or otherwise worked to final shape, whether or not polished”.G/RO/M/26
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Issue No. 2(c) – Working of reconstructed stones
There was agreement that issue No. 2(c) should be split into two parts:  issue No. 2(c) covers
only reconstructed stones, while 2(d) covers synt hetic stones.  As concerns this new issue No.
2(c),  consensus was reached for the same origin rule as for issue No. 2(b).
Issue No. 2(d) –  Working of synthetic stones
It was agreed that the proposed origin rule for option A be the same as for issue No. 2(b),
while the proposed origin rule for option B should read "The country in which these goods are
obtained in their unworked state".  Members will further consider these two options at thenext meeting.
Issue No. 3 –  No consensus was reached.
Issue No. 4 –  No consensus was reached.
Issue No. 5 – It was agreed that this issue w ould be considered together with other horizontal
issues in chapters 82-90."
B. CHAPTERS 28-40 ( CHEMICALS )
2.2 The representative of India, rapporteur for the informal plurilateral discussions on
chapters 28-40, summarized the results of the discussions as follows:
"Issue No. 1 – No consensus was reached.  However there was agreement that mixing of two
or more active ingredients was origin-conferring.  The remaining disagreement concerned
whether or not the mixing of active ingredients with inactive ingredients was origin-
conferring.
Issue No. 2 – No consensus was reached.  However it was agreed that putting up medicaments
in packaging for retail sale was, in itself, no t origin-conferring.  It was also noted that the
chapter note on mixtures should apply for change from outside to heading 30.04.
Issue No. 3 – No consensus was reached.  Some Members stated that they would consult with
their industries in order to confirm the tech nical explanation provided by the Members
supporting option B.
Issue No. 4 – No consensus was reached.  One Member stated that this issue should not be
addressed until the mixture issue was resolved.
Issue No. 5 – No consensus was reached.
Issue No. 6 – There was consensus on notes 4 and 5 of chapter 33.  As concerns note 1 of
chapter 33, no consensus was reached.Issue No. 7 – No consensus was reached.
Issue No. 8 – There was consensus on option A.G/RO/M/26
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Issue No. 9 – There was a common understanding that the tariff change resulting from the
mere addition of alcohol to odoriferous substances or to a perfume base is not origin-
conferring.  There was no consensus.
Issue No. 10 – No consensus was reached.
Issue No. 11 – There was agreement to delete option B.
Issue No. 12 – No consensus was reached.  One Member noted that this issue was connected
with issue No. 5.Issue No. 13 – No consensus was reached.
Issue No. 14 – No consensus was reached.
Issue No. 15 – No consensus was reached.
Issue No. 16 – There was growing consensus towards option A.
Issue No. 17 – No consensus was reached.
Issue No. 18 – No consensus was reached.
Issue No. 19 – No consensus was reached.  One Member stated that this issue should not be
addressed until the mixture issue was resolved.Issue No. 20 – No consensus was reached.  One Member stated that this issues should not be
addressed until the mixture issue was resolved.Issue No. 21 – No consensus was reached.  One Member stated that this issues should not be
addressed until the mixture issue was resolved.Issue No. 22 – No consensus was reached.
Issue No. 23 – Consensus was reached for option B (subject to verification of Mexico and the
Philippines).Issue No. 24 – No consensus was reached.  One Member noted that this issue was connected
with issue No. 5.Issue No. 25 – No consensus was reached.
Issue No. 26 – No consensus was reached.
Issue No. 27 – No consensus was reached.
Issue No. 28 – No consensus was reached..
Issue No. 29 –No consensus was reached.
Issue No. 30 – It was agreed that this issue should be addressed together with the textile issue.
Issue No. 31 – No consensus was reached.G/RO/M/26
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Issue No. 32 – No consensus was reached.
Issue No. 33 – No consensus was reached.
Issue No. 34 – No consensus was reached.
Issue No. 35 – No consensus was reached.
Issue No. 36 - No consensus was reached.
Issue No. 37 – No consensus was reached.
Issue No. 38 – No consensus was reached."
C. CHAPTERS 41-43 ( LEATHER )
2.3 The representative of Canada, rapporteur for the informal plurilateral discussions on
chapters 41-43, summarized the results of the discussions as follows:
"Issue No. 1 – No consensus was reached.
Issue No. 2 – Consensus was reached on option B at the meeting of the CRO on 10-29
November 1997 (G/RO/M/12, page 7).Issue No. 3 – Consensus was reached on option A at the meeting of the CRO on 10-29
November 1997 (G/RO/M/12, page 7)Issue No. 4 – Consensus was reached on option A at the meeting of the CRO on 3 October
1997 (G/RO/M/11, page 3).Issue No. 5 – There was growing consensus towards option A.  There was agreement to delete
option B.  One Member made a new proposal as option C.
Issue No. 6 – No consensus was reached.  There was agreement to delete option C.
Issue No. 7 – No consensus was reached.  There was agreement to delete options C and E.
Issue No. 8 – No consensus was reached."
D. CHAPTERS 44-49 ( WOOD AND PAPER )
2.4 The representative of Switzerland, rapporteur for the informal plurilateral discussions on
chapters 44-49, summarized the results of the discussions as follows:
"Issue No. 1 – Consensus was reached that "finger-joining" should be origin-conferring.
Furthermore, there was growing consensus that "finger- or end-jointing" should be origin-
conferring.
Issue No. 2 – No consensus was reached.  Members supporting option A were invited to
provide further information in order to clarify substantiality of beading or moulding.G/RO/M/26
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Issue No. 3 – No consensus was reached.
Issue No. 4 – No consensus was reached.  It has been suggested that the operation "surface-
covering" be further split up for consideration at the next meeting (Canada).
Issue No. 5 – There was growing consensus towards option A.
Issue Nos. 6 and 7 – No consensus was reached.  Members were invited to reconsider their
positions in light of consistency concerning assembly.Issue No. 8 – There was growing consensus towards option B.
Issue No. 9 – Consensus for option A was reached at the last meeting.
Issue No. 10 – There is growing consensus towards option A.
Issue No. 11 – There is growing consensus towards option A."
2.5 The representatives of Brazil and Mexico  stated that as concerns issue 5, they supported
option B.
E. CHAPTERS 68-70 ( STONE , GLASS AND CERAMICS ) AND 72-73 ( IRON AND STEEL )
2.6 The representative of New Zealand, rapporteur for the informal plurilateral discussions on
chapters 68-70 and 72-73, summarized the discussions as follows:
"A plurilateral was held on 2 November 1999 to  review for the first time chapters 68-70 and
72-73.  It was intended that chapters 74-81 would also be reviewed during this meeting but
there was not enough time.
The meeting was attended by 16 Members – Argentina;  Australia;  Brazil;  Canada;  Chile;
European Communities;  Fiji;  India;  Hong Kong, China;  Japan;  Korea;  New Zealand;
Norway;  Philippines;  Switzerland;  and United States.
The basic document used for the meeting was G/RO/41 plus an additional issue for chapters
68-70 (issue 12) which was distributed to all Members.
Below is a summary of the outcome of the plurilateral discussions:Chapters 68-70 (stone, ceramics and glass)
Issues 1 and 2 - Members indicated which options they supported under each of these issues
and a useful exchange of views was held.  It was noted that issue 1 is linked to issue 8 which
also deals with glazing.
Issue 3 - With a change in position indicated by one delegation, option B was deleted.  Strong
positions were set out in favour of both options A and C.
Issue 4 - There was a growing consensus towards option A, with a number of Members
showing welcome flexibility.G/RO/M/26
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Issue 5 - As no delegation indicated support for option C it was deleted.  There was a growing
consensus towards option A.  This issue is closely linked to the chapter note on cutting and
trimming, and also relates to issue 6.
Issue 6 - It was again possible to reduce the number of options by deleting option D.  There
was a growing consensus towards option A and it was noted that there did not appear to be
much difference between options B and C.
Issue 7 - No consensus was reached.
Issue 8 - As noted above, this issue is related to issue 1 and consistent positions were adopted
by some Members.  No consensus was possible at this meeting.Issues 9, 10 and 11 - It was agreed that issues 9, 10 and 11 on cut glassware would be
considered together as they essentially address the same question.  In the revised text for these
issues, three options will be presented.  The first two will be similar as the delegations
supporting these recognise that a substantial transformation occurs when there is “substantialcutting or polishing”.  The difference will be in the test to determine what is “substantial”.
Issue 12 - A third option was added to reflect the view of one Member that a chapter note is
not required because the issue of trimming or cutting is provided fo r at the heading level.
This is closely related to issues 5 and 6.
Chapters 72-73 (steel)
Issues 1 and 2 - These are particularly complex issues and it was agreed that to assist future
discussions the sub-issues would be grouped acco rding to the type of steel involved.  It was
felt that this would better allow delegations to consider the various sub-issues in a consistent
manner.
There was a growing consensus towards option B for issue 1(c).  It was noted that this
outcome would provide a certain coherence with the basket 1 decision for 72.14 products.
There was a growing consensus towards option A for issue 2(a), with option C to be deleted
as the concerns of the Member supporting this option were addressed by the chapter note on
cutting.
There was some confusion over the question addressed in issue 2(b) and delegations
undertook to consider this carefully before the next meeting.
Issue 3 - The strong views of a number of Members on the issue of coating were noted and it
was not possible to reach consensus at this stage.Issue 4 - No consensus was reached.
Issue 6 - It was not possible to reach a consensus on this issue but there was a useful
discussion of the technical points involved, including cold-rolling.It was not possible to discuss the other issues under chapter 73 in the time available."
2.7 The representative of Mexico stated that he had been unable to participate in the plurilateral
meetings which took place from 25 October 1999 to 12 November 1999, and he reserved his country's
position on any consensus reached by Members at the plurilateral meetings.G/RO/M/26
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2.8 The CRO took note of the statements made.
III. ENDORSEMENT OF PROPOSALS ON HARMONIZED RULES
3.1 The CRO endorsed the following proposals for harmonized rules of origin:
- option B for issue No. 2 of chapters 25-27.  The origin rule of subheading 2526.20 should
read, "The country of origin of the goods shall be the country in which the minerals of this
subheading are obtained in their natural or unprocessed state";
- Chapter Notes 4 and 5 of chapter 33:  note 4 should read "For the purposes of this chapter the
change of classification resulting from the mere putting up for retail sale of products is not to
be considered origin-conferring".  Note 5 should read "The change of classification resulting
from the mere change in use is not to be considered origin-conferring".
3.2 The CRO agreed to revert to the endorsement of option A for issue No. 8 of chapters 28-40
(Malaysia reserved its position), and option A for issue No. 9 of chapters 44-49 (Argentina  supported
option B on this issue), at the meeting scheduled for February 2000.
IV. IMPLICATIONS OF THE IMPLEMENTATION OF THE HARMONIZED RULES
OF ORIGIN ON OTHER WTO AGREEMEN TS (G/RO/W/28/REV.1, G/RO/W/30-34,
38 AND 42)
4.1 The Chairman recalled that, as concerned this agenda item, there had been five submissions
on the table:  from India (G/RO/W/28/Rev.1, G/ RO/W/30 and 42);  from the United States
(G/RO/W/32);  from the Dominican Republic and Honduras (G/RO/W/33);  from El Salvador
(G/RO/W/34);  and from Korea (G/RO/W/38).  The Se cretariat had also circulated questions from the
United States to India and the replies of India to those questions in documents G/RO/W/48 and
G/RO/W/50, respectively.
4.2 The representative of the United States thanked India for its responses to the questions raised
by his delegation.  With respect to the problem of adverse effects, the questions concerned how these
adverse effects would be determined and what criteria would be established in order to examinewhether an origin rule would result in impairing or distorting the conditions of access for a good.  The
Agreement on Rules of Origin (the Agreement) had established a consistent discipline of approach
with respect to the work on the harmonization of non-preferential rules of origin;  origin should be
based on the criterion of substantial transformation.  However, Members held differing views as to
when the substantial transformation had been carried out.  The substantial transformation might notalways occur in the last country of production or the country of export, which might generate certain
inconveniences.  The problems identified by India in document G/RO/W/42 were not so much
concerned with the particular proposals as with the fact that the last substantial transformation had not
always been carried out in the country of export;  proposals themselves did not give rise to adverse
effects.  However, when the Harmonization Work Programme (HWP) was completed, every Memberwould use the same rules of origin, which would am eliorate the problems described by India.  The
completion of the HWP would also help Members to recognize the need for more streamlined
administrative procedures, addressing India's concerns expressed in document G/RO/W/42.
4.3 The representative of India stated that some of the proposals for specific rules of origin were
not based on the criterion of substantial transformation.  If these proposals were accepted, the rights
and obligations of Members under the Agreement would be impaired.  He also noted that some of theG/RO/M/26
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interim arrangements were not based on the criterion of substantial transformation and were under
dispute.
4.4 The representative of Canada stated that Members held differing views as to which processes
constituted substantial transformation, and were working hard to reach agreement on them.  She had
found the plurilateral discussions very constructive.
4.5 The representative of the European Communities recalled that in accordance with Article 9.1
of the Agreement rules of origin should be applied equally for all purposes as set out in Article 1, and
stated that the establishment of these rules should not be influenced by other WTO Agreements or by
the desired outcome of various non-preferential commer cial policies.  Rules of origin should be based
on neutral and technical criteria of the wholly obtained concept, or the last substantial transformation.Therefore the EC did not agree with India's view that the substantiality of a production process should
be assessed in terms of the trade effects occurring in the last country of production of the good, and
that the last country of production should always be recognized as the country of origin.  All the
proposals on the table were based on the criterion of substantial transformation, although these
proposals differed from each other.  If one proposal did not recognize the cutting of fabric as asubstantial transformation, that did not mean that the proponent of the proposal intended to distort
trade.  With regard to textiles, the EC's proposals were the same as had been applied for many years
within the EC.  If these proposals were accepted as  harmonized rules, they would not disrupt trade
between the EC and its trading partners.  She also stated that the analysis of the implications of major
proposals for harmonization of rules of origin on other WTO Agreements, which had been requestedby India, would cause several problems.  Since rule s of origin were a tool used in non-preferential
trade relations and for the implementation of non-preferential trade policy instruments, it appeared
very difficult to analyze the provisions of all the WTO Agreements in the light of origin
determination.  The analysis could possibly end up with an unexpected result, demanding several
rules of origin for the same product, if Members, as a result of the analysis, became convinced thatdifferent origin outcomes were necessary for different Agreements.  There was also the danger of
reopening Basket 1 decisions if Members consider ed that some Basket 1 decisions would create
distorting effects on their trade.  Ultimately, she acknowledged that substantial transformation
reflected the technicalities of production processes which were an industrial and economic reality and
represented a significant value added.
4.6 The representative of Korea stated that rules of origin should be applied equally to all WTO
Agreements and all commercial policy instruments.  Although concern about the adverse effects of
certain proposals on trade and other WTO Agreemen ts was understandable and should be minimized
as much as possible, absolute neutrality of rules of origin would not be feasible.
4.7 The representative of India stated that origin outcomes should be the same for tariff purposes,
for statistics, for origin-making and for other trade policy instruments.  He also stated that India did
not intend to reopen any Basket 1 decisions.
4.8 The representatives of the EC;  Hong Kong, China ;  India ;  Korea ;  and Turkey  proposed that
the CRO should confirm that, in accordance with Articles 3(a) and 9.1(a) of the Agreement, rules of
origin should be applied equally for all purposes as set out in Article 1 of the Agreement.  The
representatives of Argentina, Colombia  and the US  questioned whether confirmation of isolated parts
of the Agreement in the context of this discussion was an appropriate way to proceed.
4.9 The CRO took note of the statements made and agreed  to continue its discussions on the
implications of the implementation of the harmonized rules of origin for other WTO Agreements at its
meeting scheduled for February 2000.  The CRO also confirmed that while there could be legitimate
differences of view as to which processes constituted the last substantial transformation, the bestG/RO/M/26
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approach remained for Members to continue discussions on product-specific rules on the basis of
technical considerations in accordance with Articles 9.1 and 9.2 of the Agreement.
V. PROGRESS REPORT OF THE COMMITTEE ON RULES OF ORIGIN TO THE
COUNCIL FOR TRADE IN GOODS ON THE STATUS OF THE HARMONIZATION
WORK PROGRAMME
5.1 Based on the informal consultations which had taken place from 28 October-
5 November 1999, the CRO adopted its progress re port to the Council for Trade in Goods (CTG)
(G/RO/42).
5.2 As concerns the continuation of the HWP (paragraph 6 of document G/RO/42), the
Secretariat had circulated a proposal by India (G/RO/W/49).
5.3 The representative of India stated that Article 9 of the Agreement set out a period of three
years for the completion of the HWP as well as an explicit role for the Technical Committee on Rules
of Origin (TCRO) during this period.  India's proposal was a continuation of its proposal made in
June 1999 when the TCRO submitted its final report to the CRO.  All technical issues had been dealt
with and the results of the TCRO's work were be fore the CRO.  Since the CRO at that stage had not
undertaken an examination of the report of the T CRO, India had suggested that the consideration of
the deadline should be postponed to the end of October.  Since then, the CRO, in July, September and
October 1999, had held substantive discussions on the issues that had been transferred to it by theTCRO.  Therefore, it was India's assessment that the CRO should be in a position to complete the
remaining work by 31 July 2000.  The work could be arranged in accordance with the EC's proposal
for a management plan (G/RO/W/45). In the meantime, a serious imbalance in the rights and
obligations of the Uruguay Round agreements, against India and developing countries in general, was
occurring.  Accordingly India had sought to bring its concerns to the notice of Ministers at the thirdMinisterial Conference in Seattle, and looked to  guidance from them on this matter of time-bound
completion of the HWP.  To facilitate a decision by Ministers, it would be useful for the CRO to
consider and send a recommendation to Ministers.  It would clearly signal to Ministers that there were
a certain number of delegations that were delaying the process of completion and thereby denying
others the benefits that had been expected to accrue to them from the Uruguay Round. Resolution of
trade policy issues required a political will.  In this regard, sending a recommendation to Ministers
would show the necessary political will to brin g this important work to an early conclusion.
5.4 The representatives of Brazil, Cuba
 and the Dominican Republic  supported the statement
made by India.5.5 The representatives of Argentina, Mexico
 and the United States  stated that they were still
considering this issue.5.6 The representative of the Philippines, speaking on behalf of ASEAN, supported India's
proposal to set a time-limit for the completion of the HWP.  Completion of the HWP was long
overdue since this Work Programme, which was initiated on 20 July 1995, should have beencompleted on 20 July 1998, as provided for in Part IV, Article 9, paragraph 2 of the Agreement.  In
connection with the preparations for the forthcoming Ministerial Conference, there was a proposal to
undertake new commitments and obligations under trade facilitation.  Trade facilitation per se  was a
goal shared by all, but ASEAN was of the view that before any new obligations were undertaken
under trade facilitation, existing obligations, such as completion of the HWP, among others, whichwould contribute to trade facilitation, should be completed and implemented.G/RO/M/26
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5.7 The representative of Korea supported the establishment of a definite but realistic deadline.
However, Korea was flexible on a specific date.  He was also of the view that the CRO should make a
recommendation on a deadline to facilitate a decision by Ministers at the Third Ministerial
Conference.
5.8 The representative of Hong Kong, China stated that harmonized rules of origin were
necessary for trade facilitation purposes and for pr oviding certainty in international trade.  Hong
Kong, China attached great importance to an early conclusion of the HWP and were disappointed at
the lack of progress.  Hong Kong, China urged all Members that in the interests of the credibility of
the WTO, the remaining work should be carried forward actively and without delay.  It had always
been Hong Kong, China's preference to have a definite timetable in order to sustain work momentum.
When considering a new deadline, at least two major elements should be taken into account.  First, the
CRO should aim for a quality product.  Second, a realistic and definite extension was required so as to
sustain work momentum.  However, Hong Kong, China did not have any preconceived ideas on a new
timeframe.  A realistic and achievable deadline should be set after the CRO had made a full
assessment of the size of all unresolved issues a nd agreed to a detailed management plan on how and
when to press ahead with the various issues.  It would be logical for the CRO, which had been directly
involved with the HWP, to consider the issue of  continuation of the work.  When the HWP was last
extended in July 1998, it was the CRO which initiated the recommendation for adoption by the
General Council.  It was appreciated that Members might be reluctant to continue discussion of the
issue at this particular point in time, with the Seattle process going on, but there might be no sound
justification for pushing this debate outside the boundaries of the CRO.
5.9 The representative of Canada stated that establishing a deadline was useful for completing the
HWP.  However Canada was still considering whether the proposed deadline of July 2000 was
realistic and achievable, taking into account the work which still needed to be done.  She also shared
the view expressed by several Members that this matter should be considered by the General Council.
5.10 The representative of the European Communities stated that, in order to respect the rights and
obligations of all Members, the results of the HWP should be a quality product.  Taking into account
the amount of remaining work (about 500 pending issues in product-specific rules, the overall
architecture and other general issues), a deadline should be realistic and achievable.  Although, in
light of the progress achieved on the overall architecture at this meeting, the EC was optimistic, more
time was needed to assess correctly by when it would be possible to finalize this work.  The EC didnot wish to find the CRO in the same situation next year, having failed to meet the deadline again, and
discussing another extension of the HWP.
5.11 The representative of Japan stated that the completion of the HWP would greatly contribute to
trade facilitation.  Since the harmonized non-preferential rules of origin might affect the rights and
obligations of each Member, the results of the HWP should be a quality product.  The new deadline
should be realistic and achievable.
5.12 The representative of New Zealand stated that establishing a deadline would be useful for
completing the HWP and that the results of the HWP should be a quality product.  The CRO should
undertake an assessment of the current status of work to identify how much work remained, and it
should develop a management plan for completing the HWP before making a recommendation on a
deadline.
5.13 The CRO took note of the statements made.G/RO/M/26
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VI. FIFTH ANNUAL REVIEW OF THE IMPLEMENTATION AND OPERATION OF
THE AGREEMENT ON RULES OF ORIGIN (G/RO/W/47)
6.1 Based on the informal consultations which had taken place from 28 October-
5 November 1999, the CRO adopted its fifth annual review of the implementation and operation of
the Agreement on Rules of Origin (G/RO/43).
VII. INTERIM ARRANGEMENTS
7.1 The Chairman noted that the Secretariat had circulated a proposal by India on interim
arrangements (G/RO/W/49).
7.2 The representative of India stated that the negotiations in the CRO on the disciplines to
govern the application of rules of origin were sti ll ongoing.  In the meantime the interim arrangements
that had been introduced by some Members were creating restrictive, distortive and disruptive effects
on trade, in particular in sectors of export interest to developing country Members.  Therefore India
proposed that no new interim arrangements be introduced, and further that any interim arrangements
introduced by any Member with effect from 1 January 1995 or any subsequent date should be
suspended with effect from 4 December 1999.
7.3 The representative of the Philippines stated that the balance of rights and obligations that had
been carefully crafted in the WTO would be upset by interim measures that might be introduced by
other Members.  Any interim measure that might be introduced by a Member was contrary to the
letter and spirit of the disciplines during the transition period as provided in Article 2 of theAgreement.
7.4 The representative of Hong Kong, China reserved his position on India's proposal, based on
the consideration that it would disallow all interim arrangements, including those consistent with the
Agreement.  Hong Kong, China's understanding was that Members might modify their rules of originor introduce any new ones as long as such modifications were in accordance with the disciplines
stipulated in Article 2 of the Agreement and the Members concerned had fulfilled the requirements set
out in Article 5.2 of the Agreement.
7.5 The representative of Korea supported the statement made by the representative of Hong
Kong, China, and reserved his position on India's proposal.
7.6 The representative of Brazil stated that Brazil, in principle, did not support any kind of
standstill, although there was a possibility that the area of rules of origin might fall outside Brazil's
opposition to a standstill.
VIII.  DATE OF THE NEXT MEETING
8.1 The CRO agreed to meet on 27 and 28 January 2000 to develop its management work
programme for the HWP.  It was also agreed that the CRO would meet from 7-18 February 2000 to
continue its work on the basis of the following agenda:
7 February 2000 Plurilateral meetings hosted by the Philippines to discuss the product-
specific rules of chapters 25-27 (mineral products) and 71 (precious
stones and metals)
8 February 2000 Plurilateral meetings hosted by Canada to discuss the product-specific
rules of chapters 41-43 (leather)G/RO/M/26
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9-11 February 2000 Plurilateral meetings ho sted by New Zealand to discuss product-
specific rules of chapters 72-73 (iron and steel).  Plurilateral meetings
hosted by Australia to discuss the product-specific rules of chapters
74-81 (non-ferrous metals)
14-15 February 2000 Plurilateral meetings hosted by the EC to discuss the overall
architecture, including rule 2 of Appendix 2
16-17 February 2000 Informal meetings to discuss the overall architecture, including rule 2
of Appendix 2
18 February 2000 (a.m.) Informal meeting to discuss the implications of the implementation of
the harmonized rules of origin on other WTO Agreements, including
confirmation that rules of origin should be applied equally for all
purposes as  set out in Article 1 of the Agreement;  reporting of the
plurilateral meetings;  endorsement of the proposals on theharmonized rules of origin;  other issues
18 February 2000 (p.m.) Formal meeting
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