./.WORLD TRADE
ORGANIZATIONG/RO/48/Add.1
26 October 2001
(01-5259)
Committee on Rules of Origin
REPORT BY THE CHAIRMAN OF THE COMMITTEE ON RULES OF ORIGIN
TO THE GENERAL COUNCIL
Addendum
1. Background
1.1 Pursuant to Article 9.2(a) of the Agreem ent on Rules of Origin, the harmonization work
programme for non-preferential rules of origin (HWP) was launched in July 1995 and scheduled to be
completed within three years of its initiation, i.e. by July 1998.   The deadline was extended until the
end of 1999, but even the extended deadline was passed without completion of the HWP.
1.2 On 15 December 2000, the General Council adopted the following decision  to expedite the
completion of the HWP:
"Members undertake to expedite the remaining work on the harmonization of non-preferential
rules of origin, so as to complete it by the time of the Fourth Ministerial Conference, or by the
end of 2001 at the latest. The Chairman of the Committee on Rules of Origin shall reportregularly, on his own responsibility, to the General Council on the progress being made. The
first such report would be submitted to the Council at its first regular meeting in 2001, and
subsequently at each regular meeting until the completion of the work programme."
(WT/L/384)
1.3 Such report has been made to the General Council meeting on 9 February, 9 May and
18-19 July 2001, respectively.  A comprehensive report was also made to the General Council Special
Session on Implementation on 3 October 2001.  This is a supplementary report to the comprehensive
report, covering the outcome of the work subsequently carried out by the Committee on Rules of
Origin (CRO) in its session held from 24 September – 8 October 2001.
2. Progress made at the September/October 2001 Session of the CRO
2.1 Since the comprehensive report, the CRO held another negotiating session from 24 September
to 8 October 2001.  The outcome of the session was very positive;  consensus has been reached on no
less than 115 issues.  The progress since 1997 is summed up in the following table:
Number of  issues referred to the CRO by the
Technical Committee on Rules of OriginNumber of issues resolved by the CRO
486 September 1997-September 2000:  22 (less than 1
per session)
November 2000:  8
March 2001:  24May 2001:  42
July 2001: 67
September/October 2001:  115
Total:  268 (with 208 outstanding issues)G/RO/48/Add.1
Page 2
2.2 In this connection, the renewed guideline from the General Council issued at its meeting  on
18 and 19 July 2001 should be recalled and appreciated for the encouraging progress achieved at the
recent session of the CRO.  The positive impact of the General Council’s guideline was most
conspicuous in the CRO’s discussions on machinery chapters (Chapters 84, 85 and 90), which had
been reported to the General Council as examples of the most difficult chapters.
2.3 In the discussion on these chapters, some Members moved away from the position that any
assembly resulting in a new good with new characteristics should be origin-conferring.  Some other
Members advocating the value-added rule agreed to delete many issues that, after the resolution of
differences specific to those issues, could be dealt with under the generic assembly issue or the blanks
issue, under the following conditions:
(1)  In the non-paper (JOB(01)/52), a registry would be provided to list all the issues deleted under
such conditions.  This registry would list generic issues, the resolution of which is still
pending.
(e.g. under Issue No. 1, if the generic rule involved is the assembly rule.)
(2)  Two remaining options (one favoured by Members supporting the value-added rule and the
other favoured by other Members) shall be kept  in the matrix (G/RO/45) as well as in the
registry cited in the above subparagraph (1).
3.  Assessment of the remaining work
3.1 The CRO agreed to hold another negotiating session, and continue to make best efforts so that
maximum progress would be made within the period mandated by the General Council through its
Decision of  15 December 2000.
3.2 In this connection, the following methodology was agreed upon at the CRO in its session
from 24 September-8 October 2001:
(1) Identification of major outstanding issues:  it was agreed to make a list of major outstanding
issues in view of the fact that a large number of issues have already been resolved, or are
close to being resolved.   The list would have no legal implication other than remindingMembers of the overall scope of major remaining issues.
(2) Active search for a compromise option:  it was advised that Members, especially when and if
they have to stick to an option supported by a small number of Members, should actively
develop a compromise option or search for a package of options for a group of issuesacceptable as a whole in view of balance of interests within the group.
(3) Preparations for a structured discussion on horizontal issues:  to facilitate the discussion on
relevant horizontal issues (assembly rule, mixture rule, architecture, etc.) in the November-
December 2001 session, it was agreed to compile issue papers on the basis of Members’submissions.  One full-day session has already been allocated for the discussion of the
assembly rule.  Appropriate time will be allocated to discuss the mixture rule and the overall
architecture of harmonized rules depending upon the scope of the specific issues identified by
Members.
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