Standardization of Complex and Diversified Preferential Rules of Origin

Abstract

The growing number of free trade agreements (FTAs) and economic partnership agreements (EPAs) and the divergent contents of their preferential Rules of Origin (RoO) have led to the increasing complexity and diversity of such regulations. This has caused considerable concern among all parties involved in international trade. Although there has been some progress in attaining convergence of RoO in some product areas, particularly chemicals, similar initiatives have not been successful in other sectors, such as agricultural products, textiles, iron, steel and machinery. Instead, preferential RoO in these industries remain heterogeneous and often incompatible. This article examines the current state of preferential RoO. The regulatory rationale is analysed by separating the ‘content of rules’ from the ‘way of expressing rules’, with a focus on the World Trade Organization’s HarmonizationWork Programme of Non-Preferential Rules of Origin (HWP) and how this has influenced the development of preferential RoO. In addition, this article proposes the standardization of preferential RoO in key product sectors by harmonizing and simplifying the ‘way of expressing rules’ according to the ‘content of the rules’ to reduce disparities in the regulations. Rules of Origin, Preferential Rules of Origin, Non-Preferential Rules of Origin, Free Trade Agreements, Economic Partnership Agreements, World Trade Organization, Harmonization Work Programme