RESTRICTED
WORLD TRADE G/RO/W/32
25May1998
ORGANIZATION(98-2113)
Original: English Committee onRules ofOrigin
IMPACT OFTHE HARMONIZED RULES OFORIGIN
ONOTHER WTO AGREEMENTS
Proposition bytheUnited States
Thefollowing communication, dated 14May1998, hasbeenreceived from thePermanent
Mission oftheUnited States.
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Communication from theUnited States
Issues Related toApplication ofNon-Preferential Rules ofOrigin
TheUnited States takes noteoftherecent submissions byIndia, which seekananalysis of
theimplications ofcertain proposals forharmonized non-preferential rulesoforigin andtherights and
obligations under various WTO agreements. India hasraised itsquestions specifically withrespect
tothetextilessector,andhasreferredtoquantitativerestrictions,markingrequirements,andanti-subsidy
measures asrelevant.
Article 1.1oftheAgreement defines non-preferential rulesoforigin as"laws, regulations and
administrative determinations ofgeneral applications applied byanyMember todetermine thecountry
oforigin ofgoods." Article 1.2further clarifies thatrules oforigin referred toinArticle 1.1(i.e.
those laws, regulations andadministrative determinations ofgeneral application) include "allrulesof
origin usedinnon-preferential commercial policy instruments" suchasintheapplication ofselected
WTO provisions andAgreements, which areenumerated inanon-exhaustive list.Article 3setsforth
thebasic framework fortheoutcome oftheHarmonization Work Programme byspecifying in
paragraph (a)thatMembers shall"apply rulesoforigin equally forallpurposes assetoutinArticle 1."
Consultations attheCommittee onRules ofOrigin onvarious product-specific proposals have
made cleartheexistence ofdiffering views withregard totheuseofrulesoforigin andtherelationship
withtheoperation ofvarious non-preferential commercial policy instruments. More importantly, it
appears thattheabsence ofacommon viewastothefuture discipline under theAgreement to"equally
apply"theharmonizedrulesoforiginmaybecontributingtotheexistenceofsomeofthemoresignificant
divergences inproposals forproduct-specific rulesoforigin. Forexample, during these consultations
ithasnotbeenunusual forMembers toinvoke theneedfora"safety valve" within aspecific rule,
ortootherwise discuss aneedtoensure aparticular levelofrigour within aspecific rule,duetoconcerns
about theimplications oftheuseofrulesoforigin --notonlyforcurrent commercial policy measures,
suchasanti-dumping orsanitary andphytosanitary measures, butalsowithregard tothepotential
implications forfuture suchmeasures. Ontheother hand, other Members donotviewsuchadirect
linkbetween rules oforigin andthedevelopment andimplementation ofsuchmeasures.
./.G/RO/W/32
Page2
Thecompilation provided bytheSecretariat setsforthvarious references inother Agreements
totheterm"origin" or"country oforigin." However, thequestion presented foranalysis goestothe
context ofthose Agreements, which cannot bedivined fromamere mention within suchAgreements
oftheword "origin". Inthisregard, theuse,orapplication ofrules oforigin foraparticular
administrative purpose maybeaseparate matter fromthedevelopment andimplementation ofparticular
trademeasures orcommercial policy instruments thatfallunder thejurisdiction ofother Agreements.
Consequently, itistheview oftheUnited States thatwhile India hasidentified anissue of
fundamental importance, theissueismostcertainly notasector orproduct-specific matter, butbroadly
extends toallindustry sectors, fromagriculture toawiderange ofconsumer products. Assuch, the
answers tothequestions presented byIndiawillnotbebrought about byatechnical analysis ofspecific
proposals, given thatsuch ananalysis cannot beundertaken without firstundertaking aninitial
fundamental review oftherelationship oftheAgreement onRules ofOrigin toother Agreements.
Theissue presented requires ananalytical sequence thatmust begin withanundertaking by
theCommittee toward acommon andgeneral understanding oftheterms oftheAgreement onRules
ofOrigin asitpertains tothefuture obligation to"apply [harmonized] rules oforigin equally forall
purposes assetoutinArticle 1."Insuchanundertaking, itwould likely benecessary from timeto
timefortheCommittee tocommunicate withother WTO bodies, toensure thattheHarmonization
Work Programme doesnotimpinge onrights andobligations under Agreements subject totheauthority
andjurisdiction oftheother bodies. Thisundertaking isnotatechnical matter, andistheresponsibility
oftheCommittee, nottheSecretariat.
Insummary, theUnited States again notes thatIndia hasraised some veryimportant issues
withrespect toimplications oftheresults oftheHarmonization Work Programme fortheoperation
ofvariousWTOprovisionsandAgreements.Theunderlyingissuesareneitheruniquetotextileproducts
norlimited totheparticular Agreements cited byIndia, butextend toallsectors andtonumerous
Agreements. Theanswers tothesequestions donotlieinworking backwards fromindividual proposals
thatarecurrently being considered forspecific products. Rather, theanswers lieinanunderstanding
within theCommittee onRules ofOrigin concerning thefuture discipline to"apply equally" the
harmonized rules oforigin anditsimplication forother Agreements.
Building upontheIndian proposal, theUnited States proposes thatgiven theimportance with
regard tothework programme leading totheharmonization ofnon-preferential rules oforigin, the
CommitteeonRulesofOriginshouldseparatelyinitiatediscussionsontheinterplayofvariousprovisions
oftheAgreement onRules ofOrigin, anddevelop acommon understanding oftheimplications of
thefuture discipline toapply theharmonized rules oforigin "equally forallpurposes setoutin
Article 1".
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