WORLD TRADE
ORGANIZATIONG/RO/43
25 November 1999
(99-5107)
Committee on Rules of Origin
FIFTH ANNUAL REVIEW OF THE IMPLEMENTATION AND
OPERATION OF THE AGREEMENT ON RULES OF ORIGIN
Note by the Secretariat
Article 6:1 of the Agreement on Rules of Origin provides that "the Committee shall review
annually the implementation and operation of Part II and Part III of this Agreement having regard to
its objectives".  At its meeting on 16 November 1999 the Committee on Rules of Origin conducted its
fifth review of the implementation and operation of the Agreement on Rules of Origin.G/RO/43
Page 2
The contents of this document are as follows:
1. Members and Observ ers ........................................................................................................ ..3
2. Officers of the Committ ee on Rules of  Origin........................................................................4
3. Meetings of the Committe e on Rules of Origin ......................................................................4
4. Trade Facilitation ........................................................................................................... ..........4
5. Harmonization of Rules of Origin...........................................................................................4
6. Implementation of the Agre ement on Rules of Origin ..........................................................7
7. Notifications of Rules of Origin ............................................................................................. ..7
8. Annual Report to the Council for Trade in Goods ................................................................8G/RO/43
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1. Members and Observers
(a) WTO Members (134)
Angola
Antigua and Barbuda
Argentina
Australia
AustriaBahrain
Bangladesh
Barbados
Belgium
BelizeBenin
Bolivia
Botswana
Brazil
Brunei DarussalamBulgaria
Burkina Faso
Burundi
Cameroon
Canada
Central African Republic
ChadChile
Colombia
Congo
Congo, Democratic Republic of
Costa RicaCôte d'Ivoire
Cuba
Cyprus
Czech Republic
DenmarkDjibouti
Dominica
Dominican Republic
EC
EcuadorEgypt
El Salvador
Fiji
Finland
FranceGabon
Gambia
GermanyGhana
Greece
Grenada
Guatemala
Guinea BissauGuinea, Republic of
Guyana
Haiti
Honduras
Hong Kong, ChinaHungary
Iceland
India
Indonesia
IrelandIsrael
Italy
Jamaica
Japan
Kenya
Korea
KuwaitKyrgyz Republic
Latvia
Lesotho
Liechtenstein
LuxembourgMacau
Madagascar
Malawi
Malaysia
MaldivesMali
Malta
Mauritania
Mauritius
MexicoMongolia
Morocco
Mozambique
Myanmar
NamibiaNetherlands
New Zealand
NicaraguaNiger
Nigeria
Norway
Pakistan
PanamaPapua New Guinea
Paraguay
Peru
Philippines
PolandPortugal
Qatar
Romania
Rwanda
Saint Kitts and NevisSaint Lucia
Saint Vincent & Grenada
Senegal
Sierra Leone
Singapore
Slovak Republic
Slovenia
Solomon Islands
South Africa
Spain
Sri Lanka
SurinameSwaziland
Sweden
Switzerland
Tanzania
ThailandTogo
Trinidad and Tobago
Tunisia
Turkey
UgandaUnited Arab Emirates
United Kingdom
United States
Uruguay
VenezuelaZambia
ZimbabweG/RO/43
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(b) Observer Governments (37)
Albania
AlgeriaAndorraArmeniaAzerbaijanBelarusBosnia and 
Herzegovina
BhutanCambodiaCape VerdeChinaCroatiaEstonia
EthiopiaGeorgiaF. Yugoslav Rep. of
Macedonia
Holy SeeJordanKazakhstanLaos, P.D.R. ofLebanonLithuaniaMoldovaNepalOman
Russian FederationSamoaSaudi ArabiaSeychellesSudanTaipei, ChineseTongaUkraineUzbekistanVanuatuViet NamYemen
(c) Observer International Organizations (9)
1
ACP
EFTA
IADBIMF
ITCB
OECD
UNCTAD
WCOWorld Bank
2. Officers of the Committee on Rules of Origin
Chairman: Mr. Sandy Moroz (Canada)
Vice-Chairman: Mr. S.I. M. Nayyar (Pakistan)
3. Meetings of the Committee on Rules of Origin
During the reporting period, the Committee on Rules of Origin (CRO) has held six formal
meetings on 22 and 26 February, 23 April, 1 and 23 July, 1 October and 16 November 1999.  The
minutes of these meetings are contained in documents G/RO/M/21-26.
4. Trade Facilitation
4.1 At the request of the Chairman of the Council for Trade in Goods (CTG), the CRO had
discussions on those aspects of trade facilitation regarded as being related to the Agreement on Rules
of Origin.  The summary of these discussions was sent to the Chairman of the CTG in a letter dated26 February 1999 (G/RO/M/21, paragraph 4).
5. Harmonization of Rules of Origin
5.1 The Chairman of the Technical Committee on Rules of Origin (TCRO) submitted to the CRO,
in January 1999, a report on progress  made at the 15
th Session of the TCRO at which the overall
architecture of the harmonized rules of origin was discussed. The report stated that while measurable
progress had been made, particularly in respect of the general rules,  the TCRO was unable to
                                                     
1 These organizations have official observer status following agreement in the Committee (G/RO/M/9) and
agreements between the World Bank and the IMF with the WTO (WT/L/195).G/RO/43
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complete the work, as scheduled.  The main reason for this delay was a divergence of views over the
method of application for the primary and residual rules.  Having exhausted the technical debate, this
matter was submitted to the CRO on 20 January 1999 (see G/RO/32, paragraphs 6 and 7, G/RO/33,
paragraph 3).
5.2 At the meeting on 22 and 26 February 1999, the CRO:
- discussed the issue of the application of the primary rules and residual rules. It was
considered necessary to clarify further points raised by delegations concerning certain
administrative aspects of the application of the three options in the template as well as points
raised concerning matters of substance.  The CRO agreed to submit these questions to the
proponents of options A, B and C for further clarification (G/RO/W/41).  At the same time,
the CRO transmitted these questions also to the TCRO for consideration whether it might beable to contribute to clarifying the questions (G/RO/M/21, Paragraph 1);
- sent a progress report to the Council for Trade in Goods (CTG) (G/RO/M/21,
paragraph 3).
5.3 The Chairman of the TCRO submitted to the CRO, in April 1999, a report on progress made
at the 16
th Session of the TCRO.   At that Session the TCRO discussed the overall architecture, and
took note of questions posed by the CRO to propone nts of the various options. The TCRO agreed that
a “single text” suggested by the WCO Secretariat would constitute the basis for further discussions.
5.4 At its meeting on 23 April 1999, the CRO, recalling the agreement it had reached at its
meeting in July 1998, that the 17th Session of the TCRO should be its final meeting concerning the
Harmonization Work Programme (HWP), agreed to co nfirm that agreement in  a letter to the TCRO
(G/RO/M/22, paragraph 1, G/RO/26).
5.5 The Chairman of the TCRO submitted to the CRO, on 9 June 1999, the report on the final
results of the TCRO`s work on the HWP.  The report stated that the TCRO had pursued its technical
discussions of the harmonized rules of origin and had authorized its Chairman to report to the CRO
the cumulative views expressed and the decisions reached during its 17th Session as the final results of
its work on harmonization of rules of origin for endorsement or further examination (G/RO/37,paragraph 3).
5.6 At its meeting on 1 July 1999 (G/RO/M/23), the CRO:
- discussed the issue of the application of primary and residual rules;- in accordance with paragraph 4 of document G/RO/25, conducted its review of the
status of the HWP (G/RO/38, pages 2-3) and considered the making of a
recommendation on a deadline for completing that harmonization work.  In
connection with this review and also in accordance with G/RO/25, the CRO discussed
two proposals that were made during the discussions on the continuation of the work
programme.  One proposal envisaged the scheduling of substantive meetings of theCRO in July, September and October 1999 to discuss all aspects of the remaining
work as mandated in G/RO/25.  This proposal included the suggestion that, based on
the progress made in these meetings, the consideration of a deadline for the
completion of the HWP in the CRO could be postponed to the end of the meeting in
October 1999, when Members would have a better appreciation of the remainingwork.  The second proposal was for a deadline of July 2000 for completing the
remaining work.
In the course of the discussion, there was consensus on a number of elements:G/RO/43
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- all Members emphasized the importance of the continuation and completion
of the HWP;
- all Members agreed that there remains a substantial amount of work for the
CRO to complete the HWP;
- all Members agreed that they want to continue the substantive work on all
outstanding issues, including the overall architecture and product-specificrules, as early as possible;
- all Members agreed that they want to continue the substantive work on the
issue of the implications of the implementation of the harmonized non-
preferential rules of origin on other WTO Agreements;
- all Members emphasized the importance of early establishment of harmonized
non-preferential rules of origin for facilitating trade.
Members agreed to the scheduling of a substantive meeting of the CRO in July 1999,
on the basis of progress made in which, the next meeting would be scheduled.
Members could not, however, agree on the postponement of the consideration of the
deadline to the end of the meeting in October 1999 or on the deadline of July 2000.
- discussed a proposal from India concerning the implications of the implementation of
the harmonized rules of origin on other WTO Agreements (G/RO/W/42).
5.7 At its meeting on 23 July 1999 (G/RO/M/24), the CRO:
- discussed the overall architecture of the harmonized rules of origin.  As concerns the
issue of the application of the primary and residual rules, new texts were submitted by the
European Communities, India, the Philippines and the United States.  Hong Kong, China and
India submitted a joint proposal (G/RO/41, pages 30-35).  Consensus was reached for the text
of paragraph 3 of Appendix 1 "Accessories and spare parts and tools" (G/RO/41, page 7) and
the corresponding text of Rule 5(a)  of Appendix 2 (G/RO/41, page 15);
- discussed product-specific rules of origin for Chapters 25-27 (minerals), 44-49 (wood
and paper), and 71 (precious stones and metals).
5.8 At its meeting on 1 October 1999 (G/RO/M/25), the CRO:
- discussed the issue of the application of the primary and residual rules;
- discussed product-specific rules of origin for Chapters 25-27 (minerals), 28-40
(chemicals) 44-49 (wool and paper), and 71 (precious stones and metals).
5.9 At its meeting of 16 November 1999 (G/RO/M/26), the CRO:
- discussed product-specific rules of origin for Chapters 25-27 (minerals), 28-40
(chemicals), 41-43 (leather), 44-49 (wood and paper), 68-70 (ceramics and glass) and 71
(precious stones and metals), 72-73 (iron and steel);
- endorsed Option B of Issue No. 2 of Chapter 25-27 (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.");
- endorsed 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");G/RO/43
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- as regards architectural issues, continued to make further progress on issues relating
to Rules 2 and 3 of Appendix 2;
- had further discussions on the issue of the implications of the implementation of the
harmonized rules of origin;
- completed its third progress report as required under G/RO/25 (G/RO/42).
6. Implementation of the Agreement on Rules of Origin
6.1 The CRO, at its meeting on 22 and 26 February 1999 (G/RO/M/21), discussed the issue
"Implementation of Article 2 and Paragraph 3 of Annex II of the Agreement."  The CRO, at its
meeting on 3 October 1997, mandated the Secretariat to conduct a survey of Members' practices withreference to Article 2(h) as well as paragraph 3(d) of Annex II of the Agreement.  The Secretariat has
circulated information provided by 33 Member s in documents G/RO/W /26 and G/RO/W/26/Add.1.
6.2 Several Members pointed out their serious concern regarding the continuing delay beyond the
mandated three-year period in the conclusion of the harmonization work program and the finalizationof the harmonized rules of origin.  They have also expressed serious concern about the
trade-restricting and trade-disrupting effects of interim rules of origin put in place by some Members
pending finalization of the harmonized rules of or igin.  These Members also emphasized that this
delay, coupled with the interim rules of origin that had been put in place by some Members, was
seriously affecting the balance of rights and obligations achieved in the Uruguay Round.
6.3 At the meeting of the CRO on 1 July 1999, one delegation stated that the Agreement on Rules
of Origin dealt with more than the harmonization of non-preferential rules of origin.  Article 2(h) and
paragraph 3(d) of Annex II of the Agreement allowed the private sector to obtain, even in advance of
trade being conducted, binding assessments of the or igin.  These provisions were intended to provide
important predictability and transparency.  However,  in this delegation's view it was apparent from
the limited number of responses to the survey received thus far that these important provisions of the
Agreement on Rules of Origin were not operating as intended.  This delegation stressed that the CRO
should continue to give this issue the necessary at tention to ensure that all parts of the Agreement
were being implemented consistent with its objectives (G/RO/M/23).
6.4 At the same meeting of the CRO, one delegation stated that his authorities had opted to be a
third party in the consultations held between the EC  and the US on the question of changes in rules of
origin introduced by the US (G/RO/D/1 and 3).  Th at delegation had learnt that an agreement had
been reached between the two Members concerned, and his authorities requested that a copy of the
agreement be provided. It was necessary for Members to know whether such an agreement would
affect their rights and obligations.  Several delegations supported the statement made (G/RO/M/23).
7. Notifications of Rules of Origin
(i) Non-preferential rules of origin
7.1 Notifications relating to non-preferential rules of origin under Articles 5.1 and 5.2 of the
Agreement have been received from 72 Members of which 38 Members notified that they do not havenon-preferential rules of origin.  47 Members have not yet notified their non-preferential rules oforigin (see Annex).G/RO/43
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(ii) Preferential rules of origin
7.2 Notifications relating to preferential rules of origin under paragraph 4 of Annex II to the
Agreement have been received from 75 Members, of which two Members notified that they do nothave preferential rules of origin.  44 Members have not yet notified their preferential rules of origin(see Annex).
8. Annual Report to the Council for Trade in Goods
The CRO adopted its report to the CTG at its meeting on 1 October 1999 (G/L/326).G/RO/43
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ANNEX
1. Members that have notified Non-Preferential Rules of Origin (34)
Argentina (G/RO/N/2, 10 & 16)
Australia (G/RO/N/1)Burkina Faso (G/RON/19)Bulgaria (G/RO/N/17)Canada (G/RO/N/1)Colombia (G/RO/N/1)Cuba (G/RO/N/3)Czech Rep. (G/RO/N/2)EC (G/RO/N/1)Hong Kong, China (G/RO/N/1)Hungary (G/RO/N/2)Israel (G/RO/N/13)Japan (G/RO/N/1)
Korea (G/RO/N/1)Latvia (G/RO/N/25)Madagascar (G/RO/N/11)Mexico (G/RO/N/12)Morocco (G/RO/N/2)New Zealand (G/RO/N/1)Niger (G/RON/19)Norway (G/RO/N/8)Peru (G/RO/N/4 & 5)Poland (G/RO/N/8)Qatar (G/RO/N/25) Romania (G/RO/N/1)
Senegal (G/RO/N/10)Slovak Republic(G/RO/N/1)Slovenia (G/RO/N/5 & 7)South Africa (G/RO/N/3)Switzerland (G/RO/N/4)Tunisia (G/RO/N/7)Turkey (G/RO/N/8)US (G/RO/N/1 & 6)Venezuela (G/RO/N/1 &10)
2. Members that have notified that they do not have Non-Preferential Rules of Origin (38)
Bolivia (G/RO/N/9)
Brazil (G/RO/N/14)Brunei Darussalam(G/RO/N/5)Chad (G/RO/N22)Chile (G/RO/N/6)Costa Rica (G/RO/N/1)Cyprus ((G/RON/19)Dominica (G/RO/N/24)Dominican Rep.(G/RO/N/9)El Salvador (G/RO/N/10)Fiji (G/RO/N/17)Guatemala (G/RO/N/21)Haiti (G/RO/N/20)
Honduras (G/RO/N/3)Iceland (G/RO/N/5)India (G/RO/N/1)Indonesia (G/RO/N/16)Jamaica (G/RO/N/4)Kenya (G/RO/N/9)Macau (G/RO/N/21)Malaysia (G/RO/N/6)Maldives (G/RO/N/22)Malta (G/RO/N/4)Mauritius (G/RO/N/1)Mongolia (G/RO/N/20)Namibia (G/RO/N/26)Nicaragua (G/RO/N/10)
Pakistan (G/RO/N/16)Panama (G/RO/N/23)Paraguay (G/RO/N/21)Philippines (G/RO/N/6)Singapore (G/RO/N/3)Suriname (G/RO/N/24)Thailand (G/RO/N/1)Trinidad & Tob. (G/RO/N/7)Uganda (G/RO/N/12)United Arab Emirates(G/RO/N/17)Uruguay (G/RO/N/12)
3. Members that have not notified Non-Preferential Rules of Origin (47)
Angola
Antigua & BarbudaBahrainBangladeshBarbadosBelizeBeninBotswanaBurundiCameroonCentral African Rep.
CongoCôte d'Ivoire
D.R. of CongoDjiboutiEcuadorEgyptGabonGambiaGhanaGrenadaGuinea BissauGuinea, Rep. of
GuyanaKuwait
Kyrgyz Rep.LesothoLiechtensteinMalawiMaliMauritaniaMozambiqueMyanmarNigeriaPapua New Guinea
RwandaSaint Kitts & Nevis
Saint LuciaSaint Vincent &GrenadinesSierra LeoneSolomon IslandsSri LankaSwazilandTanzaniaTogoZambia
ZimbabweG/RO/43
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___________4. Members that have notified Preferential Rules of Origin (73)
Argentina (G/RO/N/16)
Australia (G/RO/N/1)Bolivia (G/RO/N/1, 22&23)Brazil (G/RO/N/12)Brunei Darussalam(G/RO/N/4)Bulgaria(G/RO/N/15, 22&23)Burkina Faso (G/RO/N/19)Canada (G/RO/N/1, 6 & 8)Chad (G/RO/N/22)Chile (G/RO/N/6)Colombia (G/RO/N/1)Costa Rica(G/RO/N/20/Rev.1)Côte d'Ivoire (G/RO/N/11)Cuba (G/RO/N/3)Cyprus (G/RO/N/19)Czech Rep. (G/RO/N/2, 22& 23)Dominica (G/RO/N/24)Dominican Rep.(G/RO/N/5)EC (G/RO/N/1)Ecuador (G/RO/N/12)El Salvador (G/RO/N/10 &11)
Fiji (G/RO/N/17)
Guatemala (G/RO/N/21)Haiti (G/RO/N/20)
Honduras (G/RO/N/3 & 10)
Hungary (G/RO/N/2, 22 &
23)
Iceland (G/RO/N/15, 22 &
23)
India (G/RO/N/1)
Indonesia (G/RO/N/4)Israel (G/RO/N/13)
Jamaica (G/RO/N/4)
Japan (G/RO/N/6)
Kenya (G/RO/N/9)
Korea (G/RO/N/7)Latvia (G/RO/N/25)
Liechtenstein (G/RO/N/22)
Madagascar (G/RO/N/11)
Malaysia (G/RO/N/4)
Maldives (G/RO/N/22)Malta (G/RO/N/4)
Mauritius (G/RO/N/1)
Mexico (G/RO/N/12)
Mongolia (G/RO/N/20)
Morocco (G/RO/N/2)Namibia (G/RO/N/26)
New Zealand (G/RO/N/1)
Nicaragua (G/RO/N/10)
Niger (G/RON/19)
Norway (G/RO/N/8, 22 &23)
Pakistan (G/RO/N/16)Panama (G/RO/N/23)
Paraguay (G/RO/N/12)
Peru (G/RO/N/1)
Philippines (G/RO/N/4)
Poland (G/RO/N/8, 22 & 23)
Qatar (G/RO/N/25)
Romania (G/RO/N/14, 22 &
23)Senegal (G/RO/N/10)
Singapore (G/RO/N/3 & 4)
Slovak Republic (G/RO/N/1,
22 & 23)
Slovenia (G/RO/N/5, 7, 22& 23)
Suriname (G/RO/N/24)
Switzerland (G/RO/N/6, 22
& 23)
Thailand (G/RO/N/1 & 4)
Trinidad &Tob. (G/RO/N/7& 24)
Tunisia (G/RO/N/7)
Turkey (G/RO/N/8)
Uganda (G/RO/N/12)
United Arab Emirates(G/RO/N/17)
US (G/RO/N/1 , 6 & 18)
Uruguay (G/RO/N/5)
Venezuela (G/RO/N/1)
Zambia (G/RO/N/15)
5. Members that have notified that they do not  have Preferential Rules of Origin (2)
Hong Kong, China (G/RO/N/1).
Macau (G/RO/N/21)
6. Members that have not notified Preferential Rules of Origin (44)
Angola
Antigua & Barbuda
Bahrain
Bangladesh
Barbados
BelizeBenin
Botswana
Burundi
Cameroon
Cent. African Rep.
Congo
D.R. of CongoDjibouti
EgyptGabon
Gambia
Ghana
Grenada
Guinea Bissau
Guinea, Rep. ofGuyana
Kyrgyz Rep.
Kuwait
Lesotho
Malawi
Mali
MauritaniaMozambique
MyanmarNigeria
Papua New Guinea
Rwanda
St. Kitts & Nevis
Saint Lucia
Saint Vincent & GrenadinesSierra Leone
Solomon Islands
South Africa
Sri Lanka
Swaziland
Tanzania
TogoZimbabwe