. /.RESTRICTEDWORLD TRADE
ORGANIZATIONG/RO/W/50
15 November 1999
(99-4900)
Committee on Rules of Origin Original:  English
IMPLICATIONS OF CERTAIN MAJOR PROPOSALS FOR
HARMONIZED RULES OF ORIGIN FOR ACCESS UNDER
THE AGREEMENT ON TEXTILES AND CLOTHING:
AN ANALYSIS OF POSSIBLE EFFECTS
Replies of India to Questions from the United States
The following communication, dated 4 November 1999, has been received from the
Permanent Mission of India.
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India is delighted to receive the questions from the United States (G/RO/W/48) with respect
to India's submission in document G/RO/W/42.  Indi a believes that these questions reflect a serious
effort by the United States to appreciate India's concerns with respect to the implications of certain
major proposals for harmonized rules of origin for access under the Agreement on Textiles andClothing.  India is, therefore, happy to clarify as follows:
The submission of India (G/RO/W/42 – Implications of certain major proposals for
harmonized rules of origin for access under the Agreement on Textiles and Clothing:
An analysis of possible effects) states that "there should be a general acceptance of
the principle that origin rules be developed in such a way that they do not produce
adverse effects".
Question: Under such a proposed principle, how would India propose defining "adverse
effects"?
Answer: India has used the term "adverse effects" as it is ordinarily understood in the English
language.  However, in order not to leave any doubt, what India means is that the
rules should not result in impairing or distorting the conditions of access for the
exporters concerned.
Question: Would it be from the standpoint of the final place of production?Answer: As mentioned above, any adverse effect s would need to be assessed from the
standpoint of exports and substantial transformation at the final place of processing.
Question: In the view of India, what if the penultimate place of production had a different view
of whether the rule of origin resulted in an "adverse effect"?
Answer: Since substantial transformation is to be seen with reference to the final place of
processing, India is not clear as to the US concern about a different view being taken
by the penultimate place of production.G/RO/W/50
Page 2
Question: In the view of India, would the measure of "adverse effect" be in terms of the effect of
the operation of a particular rule under a given Agreement, or all Agreements?
Answer: India is committed to the fundamental principle of the Agreement on Rules of Origin
that rules of origin should be applied equally for all purposes.
Question: In the view of India, what if the perspective of "adverse effect" differed from one
Agreement to another?
Answer: Unfortunately, India is not able to fully grasp the US concern here.  Could the US
elaborate its concern, preferably with the help of a concrete example?
Question: How would India view the relationshi p of such a principle it proposes with the
Agreement's guiding principle of substantial transformation for the development of
the harmonized rules of origin?
Answer: India does not see any contradiction between its simple suggestion that the rules
should be developed in such a way that they do not produce adverse effects for trade
and the principle of substantial transformation.  In fact, the instrumentality of
substantial transformation ought to be seen in the context of facilitation of trade and
avoidance of restrictive or distorting effects, which is the basic purpose and objective
of the entire exercise.
Question: Could India clarify whether its submission sets forth its understanding that "domestic
industry or like products of domestic industry or similar terms wherever they apply"
cannot be defined differently than under the harmonized rules of origin –
notwithstanding the footnote at the end of Article 1, paragraph 2?
Answer: India wishes to reiterate that the f undamental principal of the Agreement on Rules of
Origin that rules of origin should be applied equally for all purposes should guide the
formulation of individual rules for various products.
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