Trade Issues in East Asia : Preferential Rules of Origin
Rules of origin are a necessary feature of any regional trade agreement. They ensure that preferences are available only to the signatories of the agreement and that imports from non-members do not avoid customs duties by entering through the membe...
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| Language: | English en_US |
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Washington, DC
2014
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| Online Access: | http://documents.worldbank.org/curated/en/2007/06/7865028/preferential-rules-origin-policy-research-report http://hdl.handle.net/10986/19238 |
| Summary: | Rules of origin are a necessary feature
of any regional trade agreement. They ensure that
preferences are available only to the signatories of the
agreement and that imports from non-members do not avoid
customs duties by entering through the member with the
lowest tariff. The rules of origin define the amount of
local processing, or the extent of the transformation of the
product, that must be undertaken in the country from which
the product claiming preferences is exported. The definition
of these requirements to prevent trade deflection is not
straightforward. If the rules are too onerous and complex
and are costly to comply with, they will limit the impact of
tariff reductions on trade. Indeed, import competing
industries have often been successful in obtaining
restrictive rules of origin that dilute the impact of the
loss of tariff protection. This is most apparent in
agreements between developed countries and lower wage
countries. As FTAs multiply in the region, putting in place
rules of origin (ROO) that are simple, transparent, and easy
to implement becomes important. The experience in the
implementation of the AFTA rules of origin can provide some
lessons for the upcoming FTAs. |
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