Determination Origin of Goods

Two Kinds of Rules of Origin

Non-Preferential Rules of Origin

These are defined as those laws, regulations and administrative determinations of general application applied by any Member to determine the country of origin of goods. This means that these rules are applied by a country for all other purposes other than the granting of preferential market access to goods originating from other countries.
Article 1(2) of the agreement on rules of origin for non-preferential rules of origin are meant for:
- Application of Most Favoured Nation (MFN) treatment;
- Application of anti-dumping and countervailing duties;
- Compliance with Origin Marking Requirements;
- Application of tariff quotas

These are defined those laws, regulations and administrative determinations of general application applied by any Member to determine whether goods qualify for preferential treatment under contractual or autonomous trade regimes leading to the granting of tariff preferences going beyond the application of paragraph a of Article 1 of GATT 1994.
Granting of preferential tariff treatment or preferential tariff treatment means that the import duty levied on goods imported is lower than the MFN duty rate, either due to an agreement existing between the importing and exporting countries or by unilateral concessions by the importing state to goods deemed to originate from the exporting state.

Article 9 of the Agreement on Rules of Origin sets out the following principles or objectives for the harmonious application of rules of origin:

- Be objective, understandable and predictable: this means that their provisions should be objective and understandable to users and that their application should not subject multiple interpretation;
- Not be used as instruments to pursue trade objectives either directly or indirectly. This means that they should not create restrictive, disruptive effects on international trade.
- Be administered in a consistent, uniform, impartial and reasonable manner
- Be coherent;
- Be based on positive standards. This means that they should state what confers origin and not what does not confer origin.

These criterial generally fall in to two: goods are considered to originate from a country where they are:

- Wholly obtained/produced in that country; or
- When more than one country is involved in the production of that good, the good is considered to originate in the country where the last substantial transformation/ working process was carried out.

Substantial transformation fall in any of these categories:
1. Change in tariff classification. This may be at the heading or subheading level;
2. Application of ad valorem percentage criterion;
3. Where the specific working process or manufacturing operation must be applied in the production of the commodity to confer origin to it.

In groups, taking your Partner State as the example, list the Rules of Origin that are applied for both imports and exports, describing them as either preferential or non-preferential.
List also whether the Rules identified are negotiated or unilateral and which countries or territories are also party to those rules.

Explain the difference between Preferential and Non-Preferential Rules Origin;
Explain any four principles that govern the application of Rules of Origin as set out in the Agreement of Rules of Origin;
Define Rules of Origin;
Goods are said to originate in a country if they have been wholly obtained there or have undergone substantial transformation in that country. Explain what substantial transformation (sufficient working) means and the categories which its application takes in Rules of Origin.