98-2825 MOREPRESS RELEASE
PRESS/106
9 July 1998
WTO TO CONTINUE WORK ON HARMONIZING RULES OF ORIGIN
Concluding that work on the harmonization of non-preferential rules of origin could not be
completed as foreseen in the Agreement on Rules of Origin on 20 July 1998 due to the complexity of
issues, WTO members have committed themselves to make their best endeavour to complete the work
by November 1999.
This conclusion is contained in a report adopted by the Committee on Rules of Origin on 6
July. The Council for Trade in Goods, on 8 July, approved the recommendations in the report and
forwarded them to the General Council for adoption.
"Rules of origin" are the criteria used to define where a product was made. They are linked to
the application of trade measures such as quotas, preferential tariffs, anti-dumping actions andcountervailing duties.
The WTO Agreement on Rules of Origin, the first-ever agreement on the subject, provides for
a three-year work programme (launched in July 1995) to establish common ("harmonized") rules of
origin on non-preferential trade of members that would be objective, transparent and predictable.These rules do not cover preferential arrangements such as free trade areas. The work is being
conducted by the WTO Committee and a Technical Committee under the auspices of the World
Customs Organization in Brussels.
The WTO Committee, in its report, noted that despite the complexity of issues substantial
progress had been made in the work programme. Technical work on rules for specific products, for
example, has been largely completed and work in other areas is far advanced.
The Chairman of the Committee, Mr. Ric Wells (Deputy Permanent Representative of
Australia to the WTO), in introducing the report to the Goods Council, said that "therecommendations include a fixed deadline for completion of the work of the Technical Committee on
Rules of Origin (May 1999), and a review of the status of the work by the Committee on Rules of
Origin in June 1999 with a recommendation of a final deadline for completing the Harmonization
Work Programme". He added that the Committee "proposes to work under strict discipline, with
future work programmes for both the Committee and the Technical Committee".
The full text of Committee's report follows.PRESS/106
Page 2/3
98-2825 MOREWORLD TRADE
ORGANIZATIONG/RO/25
7 July 1998
(98-2685)
Committee on Rules of Origin Original:  English
REPORT OF THE COMMITTEE ON RULES OF ORIGIN
TO THE COUNCIL FOR TRADE IN GOODS
ON THE HARMONIZATION WORK PROGRAMME
Status of the work
1. The Harmonization Work Programme (HWP), in accordance with Article 9.2(a) of the
Agreement on Rules of Origin (the Agreement), was officially launched on 20 July 1995, and wasscheduled for completion by 20 July 1998, as the Agreement foresees that the HWP will be completed
within three years of its initiation.
2. The Committee on Rules of Origin (CRO) notes that, despite the complexity of the issues
under discussion, substantial progress has been made.  Especially as regards the harmonization of
rules of origin for specific products the technical work has been largely completed, and the templates,
drawn up by the Technical Committee on Rules of Origin (TCRO) and setting out alternative options
of possible solutions, are very useful for dealing with technically unresolved issues as a basis for trade
policy considerations by the CRO.  Additional work  is, however, still necessary.  Elaboration of
definitions of goods wholly obtained is virtually completed, although several issues such as “products
taken from the sea outside a country” and “environmental concerns with respect to the parts recovered
from non-repairable articles” remain unresolved and need further consideration.  Definitions ofminimal operations or processes are far advanced but will be subject to further refinement.  The CRO
also notes that the overall architecture of the harmonized rules of origin (including general rules),
section/chapter rules and residual rules still require considerable work (see Annex on the Status of theHarmonization Work Programme).
3. In conclusion, the CRO notes that, due to the complexity of issues, the work in connection
with the Harmonization Work Programme as set out in Part IV of the Agreement, and identified in
Articles 9.2(c) and 9.3 of the Agreement, could  not be completed within the three-year period
foreseen in Article 9.2(a) of the Agreement.
Continuation of the Harmonization Work Programme
4. Members commit themselves to make their best endeavour to complete the HWP by
November 1999, and  in this context, the CRO recommends that:
- the CRO, in cooperation with  the TCRO, should continue the work identified in Articles
9.2(c) and 9.3 of the Agreement, in accordance with the indicative future work programme set
out below;PRESS/106
Page 4
MORE- the Chairman of the TCRO shall report to each meeting of the CRO on the progress achieved
in the TCRO;
- the TCRO shall submit the results of its work on overall architecture to the CRO in January
1999.  It shall submit the final result of its work to the CRO by the end of May 1999 for final
consideration by the CRO;
- the CRO shall report to the Council for Trade in Goods (CTG) on the progress of work in
February, June and October 1999.  In June 1999 the CRO shall review the status of the HWP
and make a recommendation on a deadline for completing that work.
Future work programme
5. With regard to the future work for the HW P, the CRO recommends the following guidelines:
- the overall architecture of the harmonized rules of origin (including general rules) should first
be addressed in order to ensure consistency of the relevant horizontal rules;
- section/chapter rules and residual rules should subsequently be established;- with a view to refining and clarifying further technically unresolved issues, and in light of the
discussions on overall architecture, the CRO may request the TCRO to review further certain
templates with specified reasons for its request and also with definite guidelines on how the
TCRO should conduct its review; and
- the Secretariats of the WTO and WCO should provide technical assistance, where requested,
to Members in order to facilitate their work.
6. With a view to keeping up the momentum in the work concerning the HWP, and on the basis
of the above guidelines, the CRO proposes the following indicative future work programme:
(a) September – December 1998
TCRO:
- Overall architecture
- Section/chapter rules and residual rules
CRO:
- Implications of the implemen tation of the harmonized rules of origin on other WTO
Agreements
- Discussion on product-specific rules which are not directly affected by overall architectural
considerations, in particular also relating to Chapters 72 to 81 (Metals )
- Discussion on criteria for requesting the TCRO to review templates- Discussion of Article 2 of the AgreementPRESS/106
Page 5
MORE(b) January-May 1999
TCRO
- Product- specific rules which the CRO has requ ested the TCRO to revi ew in light of the
outcome of the discussions on overall architecture
- Outstanding product-specific rules
- Outstanding issues concerning definitions of goods wholly obtained- Outstanding issues concerning definitions of minimal operations
(c) January – July, September – October 1999
CRO
- Overall architecture
- Section/chapter rules and residual rules
- Definitions of goods wholly-obtained- Definitions of minimal operations- Any outstanding product-specific rules- Issues related to trade facilitation, pending agreement by the CTG
- Review of the status of th e HWP and recommendation of a deadline for completion of the
HWP
- Consideration of the results of the HWP in terms of their overall coherencePRESS/106
Page 6
MOREANNEX
STATUS OF THE HARMONIZATION WORK PROGRAMME
Note by the Secretariat
This document has been revised by the Secretar iat in light of the meeting of the TCRO in
June 1998 in preparation for the informal discussion on the future work of the Committee.  Thisoverview is provided on the basis of the information available to the Secretariat.
A. Architecture/general rules
There was agreement in the TCRO, at its Sec ond Session, that the overall architectural design
of the harmonized rules of origin which contains General rules as a core part should be discussed and
decided at the last stage of the Harmonization Work Programme.  As of the date of this document the
texts with square brackets or the issues to be resolved are as follows (see G/RO/W/13/Rev.3,pp. 2-5):
- Preamble
- Article 3 (Definitions):
- Paragraph 2 (Neutral elements)- Paragraph 3 (Other definitions, as necessary)
- Article 4 (Determination of origin):
- Paragraph 2, Subparagraph (c) (General residual rule)
- Article 7 (Special provisions):
- Paragraph 1 (Neutral elements)- Paragraph 4 (Mixtures)- Paragraph 5 (Fungible goods and materials)
- Article 8 (De minimis)
B. Definitions of goods being wholly obtained
The texts with square brackets are as follows (see G/RO/W/13/Rev.3, pp. 6-8):
- Paragraph 1 (clarification of "obtained", "produced" and "manufactured")
- Paragraph 1(g) (Non-repairable articles)- Paragraph 1(h) (Parts recovered from non-repairable articles)- Paragraph 1(i) (Goods obtained from goods from paragraphs 1(a)-1(h))- Paragraph 2 (Products taken from the sea outside a country)
C. Minimal operations or processes
The TCRO, at its Second Session, concluded th at the definitions of minimal operations or
processes should be subject to further refinement or elaboration throughout the Second and ThirdPhases of the Work Programme (see G/RO/W/13/Rev.3, p.544).PRESS/106
Page 7
MORED. Product-specific rules
- The TCRO has not yet finished its work on "Principles of Application" (see
G/RO/W/13/Rev.3, p.9).
- The following table provides an overview of the status of work on product-specific rules.
Summary Table of Status of Work on Product-Specific Rules of Origin
HS Code
numberDocument symbol Unresolved
issues
transmitted
to the CROBasket 1
(Subheading
level)Further work to be done by the
TCRO (chapters)
1-24
(Agricultural
products)G/RO/22/Add.1
[For chapters 13and 15:  12thReport of the
TCRO to the CRO
1]106
[+11]275 Mixture/blending:  4, 7-9, 11, 15-21,
24;Definition of "refining":  15;Definition of "food preparation":16-21;
Minimal operations or processes:
16, 22;Method of calculation for valueadded criterion:  3, 15;
Chapter residual rules:  15
25-27
(Mineral
products)G/RO/W/23/Rev.1
[12th Report1]2
[+13]116
28-40
(Chemicals)[12th Report1] [25] [607]
41-43
(Leather)G/RO/W/23/Rev.1,
G/RO/235 41 General Rules for the Interpretation
of the HS (GIR) 2(a) - collection ofparts:  42-43;Disassembly:  42-43;Definitions of "complete makingup":  42-43;
Simple processes:  42-43
44-49
(Wood andpaper)G/RO/19/Add.1
[12
th Report1]5
[+6]17
[+4]GIR 2(a):  44-46, 48, 49;
Assembly/disassembly:  44-46, 48,49;
Chapter residual rules:  44-49
50-63(Textiles)G/RO/W/27 71 32 Spinning of yarn, extrusion of
monofilament, fabric making:  50-63;
Definitions of "fabric-making
process":  50-63;Minimal operations or processes:50-63;Chapter residual rules:  61, 62;
Sets for 63.08 (Basket 2)
64-67(Footwear)G/RO/19/Add.1
[12
th Report1]10
[+4]14
[+2]
                                                     
1 To be submitted in July 1998.PRESS/106
Page 8
MOREHS Code
numberDocument symbol Unresolved
issues
transmitted
to the CROBasket 1
(Subheading
level)Further work to be done by the
TCRO (chapters)
68-70(Ceramics)G/RO/19/Add.1,
G/RO/23
[12
th Report1]6
[+4]115
71
(Precious stones
and metals)G/RO/19/Add.1
[12th Report1]1
[+3]37 "Ottawa" terminology as Chapter
Note;
Definitions of "blanks", "unfinished
form";Chapter residual rules
72-73(Steel)[12
th Report1] [12] [161] Assembly:  73;
Disassembly:  73;Packaging/repackaging:  73;
GIR 2(a) - collection of parts:  73
74-81(Metals)[12
th Report1] [18] [42] Assembly:  74-81;
Disassembly:  74-81;
Packaging/repackaging:  74-81;
GIR 2(a) - collection of parts:  74-81;
Coiling/uncoiling:  74-81
82-83
(Articles of
metal)[12th Report1] [19] [56] Assembly:  82-90;
Disassembly:  82, 84-90;Change of use:  82, 84;
GIR 2(a) - collection of parts:  84-
90;Blanks/incomplete goods:  82-90;Sets:  82;Packaging/repackaging:  84, 85, 90;Multi-function/composite machines:
84, 85;
Functional units:  84, 85, 90;Recertification/retesting:  84;Degradation:  84;Subassemblies:  84-90;Chapter residual rules:  82-90;
Method of calculation for value
added criterion:  84-90;Terminology - CTH/CTSH:  82, 83
84
(Machinery)To be examined by
the TCRO in
October
85(Electronics)To be examined by
the TCRO in
October
86-89
(Transportation
equipment)[12th Report1][32] [None]
90
(Scientific
equipment)[12th Report1][21] [1]PRESS/106
Page 9
END91
(Clocks and
watches)G/RO/W/23/Rev.1 6 2
92
(Musical
instruments)G/RO/19/Add.1 2 8 GIR 2(a);
Disassembly;
Packaging/repackaging
93-97
(Miscellaneous
articles)[12th Report1]
[Ch.97-to be
examined by the
TCRO in October][33] [29]