RESTRICTEDWORLD TRADE
ORGANIZATIONG/RO/M/40
18 June 2002
(02-3372)
Committee on Rules of Origin
MINUTES OF THE MEETING OF 19 APRIL 2002
Chairman:  Mr. Stefan Moser
The agenda proposed for the meeting, contained in WTO/AIR/1743, was adopted by the
Committee on Rules of Origin (CRO) as follows:
I. OVERALL ARCHITECTURE OF THE HARMONIZED RULES OF ORIGIN
(G/RO/45/REV.1)................................................................................................................ ...................1
II. PRODUCT-SPECIFIC RULES OF OR IGIN (JOB(01)/52/REV.4) ....................................4
III. ENDORSEMENT OF PROPOSALS ON HARMONIZED RULES OF ORIGIN
(G/RO/W/67/REV.3, G/RO/W/68/REV.2, G/RO/W/70/REV.1, G/RO/W/75)...................13
IV. IMPLICATIONS OF THE IMPLEMENTATION OF THE HARMONIZED
RULES OF ORIGIN ON OTHER WTO AGREEMENTS (G/RO/W/28/REV.1,
G/RO/W/30-34, 38, 48, 50, 65, 66, 74 AND 83).....................................................................17
V. NOTIFICATIONS UNDER ARTICLE 5 AND PARAGRAPH 4 OF ANNEX II
OF THE AGREEMENT ON RULES OF ORIGIN (G/RO/N/36)......................................22
VI. ELECTION OF  OFFICE RS..................................................................................................22
VII. OTHER BUSINESS............................................................................................................. ...22
I. OVERALL ARCHITECTURE OF THE HARMONIZED RULES OF ORIGIN
1.1 The Chairman stated as follows:
"DEFINITIONS
Consensus on the definitions was confirmed.GENERAL RULESGeneral Rule 1:  Scope of Application
Consensus on this rule was confirmed.General Rule 2:  HS
Paragraph 1
Consensus on this rule was confirmed.G/RO/M/40
Page 2
Paragraph 2
On the basis of the informal discussions th e Chairman proposed the following text for
consideration at the next meeting:  "The possible effect of amendments to the HS on theharmonized non-preferential rules of origin shall be examined according to the review
mechanism referred to in Article 6(3) of this Agreement."  Some Members preferred the
alternative text contained in document G/RO/45/Rev.1.
General Rule 3:  Determination of origin
Consensus on this rule was confirmed.General Rule 4:  Neutral Elements
Consensus on the unbracketted text was confirmed.  However one delegation requested that the
bracketed text be included in the provision until a complete picture was obtained.
General Rule 5:  Packing and Packaging
Consensus had already been reached at the previous session.  However one delegation requested that
the alternative text be contained in the Chairman's box until a complete picture was obtained.
General Rule 6:  Accessories and Spare Parts and Tools
Consensus on this rule was confirmed.
APPENDIX 1
(a) Scope of Application
Consensus on this rule was confirmed.(b) Minimal Operations and Processes
Consensus on this rule was confirmed.  It was agreed that the possibility of application of this rule to
Appendix 2 should be reconsidered at a later stage when the work was virtually completed.
Definition 1:  Letter (a) through (i)
Consensus on this rule was confirmed.Definition 2:  Products of sea fishing and other products taken from the sea
No consensus was reached.  One Member proposed an alternative text for Alternative Text 1(iii).APPENDIX 2:  PRODUCT-SPECIFIC RULES OF ORIGINRule 1:  Scope of Application
Consensus on this rule was confirmed.Rule 2:  Application of RulesG/RO/M/40
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Consensus was confirmed on Rule 2(a).
As regards Rule 2(b) the concept of the co-equality of primary rules was acceptable to all Members.
Further fine-tuning of the text would be needed at a later stage when the work was virtuallycompleted.
As regards Rule 2(c), consensus was achieved on the following text (subject to HK):  "[Unless
otherwise specified,] primary rules shall apply only to non-originating materials."  The bracketed text
would be reconsidered when a complete picture was obtained.
As regards Rule 2(d), it was agreed that this rule be reconsidered at a later stage when the work was
virtually completed.
As regards Rule 2(e), no objection was raised.Rule 3:  Determination of Origin
As regards Rule 3(a) one Member made a new proposal.  Members stated that they needed more time
to study this proposal.  Another Member suggested reversing the order of Rules 3(a) and 3(b).
As regards Rules 3(b), (c) and (f), there was a general agreement among Members on the basic
approach to Rule 3, namely, the application of primary rules in the last country of production as the
first test, the application of the origin-retaining concept as the second test, and the application of
major portion concept as a final test.  The gap among the various approaches would become more
bridgeable at a later stage when a complete picture was obtained.
Consensus was confirmed on Rules 3(d) and (e).  However it was noted that Rule 3(e) might not be
necessary, since the application of Rules 3(f) and (g) would result in the same origin outcome.
Rule 4:  Intermediate Materials
The principle of this provision was acceptable to all Members.  However, one delegation confirmed
its request for the initial bracketed text to be in cluded in the provision until a complete picture was
obtained.  Another delegation requested that the Chairman's box should contain an indication whereby
the originating status was acquired by fulfilling a primary rule or chapter residual rule.
Rule 5:  Interchangeable goods and materials
Some Members questioned the meaning of the interchangeable goods and what type of goods or
materials were covered by this Rule.  Accordingly, proponents of the Rule were requested to improve
the text.
Rule 6:  Putting up in sets or kits
There was growing consensus that putting up in sets was not origin-conferring, and that there was no
need for a specific rule as well as for reference in Rule 2(d) of Appendix 2.  Three delegations
reserved their positions.
Rule 7:  Collection of parts
There was consensus on deletion of this Rule.G/RO/M/40
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Rule 8:  De Minimis
There was general support for this Rule.  Some Members stated that the nature of this Rule should be
optional for producers (although this Rule itself should be mandatory for all Members)."
1.2 The CRO took note of the statement.
II. PRODUCT-SPECIFIC RULES OF ORIGIN
2.1 The Chairman stated as follows:
"Chapters 1-24 (agricultural products and fish)
Raising/slaughtering of animal products
Issue Nos. 1 and 2:  Members supporting option A in Issue No. 2 stated that the HWP should be
carried out under the mandate of the Agreement on Rules of Origin, namely substantial
transformation, independent of labelling or sanitary concerns, and also pointed out the administrativedifficulties associated with the control of fatten ing periods.  Although Members supporting option B
in Issue No. 2 shared the view that the solutions  to these issues should not prevent Members from
taking necessary measures for labelling or sanitary purposes, they stated that fattening of animals
determined the quality of meat, and also pointed out that in many countries producers and traders
were required to provide information regardin g the complete traceability of animal and meat
(including fattening periods).  It was agreed to delete option C of Issue No. 2.  It was also agreed that
the country of origin of a pure-bred breeding animal is the country where the animal was born.
Issue No. 12:  One delegation made a compromise  proposal.  Members supporting option A stated
that filleting of fish more than doubled the value of fish and that this illustrated complex processing
operations of substantial transformation of the product.  Some Members supporting option B
expressed their concern about some other commercial policies, such as circumvention of
anti-dumping duties, labelling, conservation or trade statistics.  Other Members supporting option B
stated that the "wholly obtained" rule was appropriate for fish.
Issue No. 13:  Linked to Issue No.12.
Issue Nos. 49 and 50:  As concerns HS ex1604(a) there was growing support for the Chairman's
recommendation.  The description of HS ex1604(a) needed to be reconsidered in the light of possible
changes in heading through minimal additions of batter or breadcrumbs.
Drying and Similar Processes
Issue Nos. 4 and 6:  There was growing support for the Chairman's package recommendation.
However, with regard to fish, some Members expressed concern about the implications of conferring
origin to a country where only drying or smoking had been carried out, for consumer protection or for
circumvention of anti-dumping duties.  A Member, supporting Option A of Issue No. 4(ii) stated that
the value increase by drying was more than 400%.
Issue No.15(2):  Some delegations stated that the FAO definition of "heavy salted fish" seemed
inappropriate for the purpose of origin control.  Other delegations preferred a percentage criteria.
Accordingly, one proponent of Option A stated its intention to submit a new proposal toaccommodate the concerns expressed by Members supporting option B.
Dairy ProductsG/RO/M/40
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Issue Nos. 16-19, 20-22:  Several Members shifted their positions to support the Chairman's package
recommendation.  Others explained why they coul d not.  One delegation emphasized the importance
of its proposed Chapter Note for HS Chapter 4.  Some delegations supporting option A in Issue Nos.
17 and 18 stated that dairy processing including recombining, inter alia , and reconstituting should be
recognized as origin-conferring since it could be demonstrated that a new and different product with
changed characteristics, commercial realities and utility had emerged.  One delegation also stated that
raw materials produced in their countries and reconstituted/recombined in another country should not
be labelled as a product of their country because they could not guarantee the food quality standards
of processing countries.  One delegation indicate d no flexibility for Issue No. 20 (supporting Option
B).
Issue Nos. 91 and 95:  No consensus was reached.  Most delegations supported option A
(origin-conferring) for Issue No. 91.  One delegation reconfirmed their strong position in both issues
(supporting Option C).
Issue No. 110:  There was growing support for th e Chairman's recommendation (CTH, except from
headings 0401-0403).  However, a number of Memb ers supported option A (CTH without exception).
Powdering/milling
Issue No. 19:  No consensus was reached.  One delegation moved to option B (non origin-conferring)
on Issue No. 19.
Issue No. 35:  One Member stated that crushing and/or grinding were significant (micro-biological)
processes and complicated preparatory processes were also involved, and that, since the final products
were almost always a mixture of different materials, conferring origin by application of a majorportion rule was difficult and costly.  Furthermore, it seemed appropriate that, due to sanitary
concerns, origin should be directly conferred to the country where crushing and/or grinding were
carried out.
Issue No. 71:  One delegation stated that they could ma ybe be flexible in future for this issue, but they
had to maintain their position for the moment above all for consistency reasons.
Fats (Chapter 15 products)
Issue No. 43:  There was consensus on option A (CTH, except from 0209) (subject to DOM, GUA,
JPN, MOR, SAL, VEN).
Issue No. 44:  There was consensus on option B (CTH, except from 1501, or 1502) (subject to GUA,
JPN, NZ).
Issue No. 45:  Members supporting option A stated that crude oil was inedible and therefore refining
substantially transformed the good.  Members supporting option B stated that crude oil itself was very
pure and refining was insignificant.  Some Members shifted their position to support the Chairman's
recommendation (option A1(a)), but ma ny Members stated that they had no room for flexibility on
this issue.  It was agreed to delete option A(2).
Issue No. 46:  Many Members shifted their positions towards the Chairman's recommendation
(option B), as a result of which a large majority now support option B.Issue No. 115:  There was strong support for the Chairman's recommendation (CTH or Chapter Note).
The Secretariat was requested to revise Chapter Note 3 in parallel with the chemical reaction ChapterG/RO/M/40
Page 6
Rule in the chemical Chapters.  Two Members supporting option B expressed their intention to
reconsider their positions.
Issue No. 116:  There was strong support for the Chairman's recommendation (CTH).  Two Members
supporting option B expressed their intention to reconsider their positions.Issue No. 117:  There was some support for the Chairman's recommendation (CTH for ex1517.90(a),
CC for ex1517.90(b)).  Several Members expressed their intention to reconsider their positions and
join the Chairman's recommendations.
Issue No. 118:  There was strong support for the Chairman's recommendation (CTHS).  Several
Members expressed their intention to reconsider their positions.
Coffee/tea
Issue Nos. 30, 32, 81-83:  No consensus was reached.
Issue Nos. 31, 79 and 122:  No consensus was reached.  One Member proposed a compromise in line
with option C and proposed a threshold of 85%.  So me Members stated that the implications of the
origin rule of coffee or tea on labelling or trademarks are the major concern of these issues.
Sugar
Issue Nos. 51-57:  Some Members showed flexib ility on Issue Nos. 51 and 57 to support the
Chairman's package of recommendations.  Many Members provided technical information on the
refining of sugar and indicated their strong interest in this issue.  One Member stated that they had no
flexibility in these issues.  No consensus was reached.
Cocoa
Issue Nos. 58-64:  Some Members shifted their positions to support the Chairman's package of
recommendations for Issue Nos. 59, 60, 62 and 63.  Two Members who did not support the
Chairman's recommendations on Issue Nos. 58 and 64 stated that they had no flexibility.
Other issues and beverages
Issue No. 75:  No consensus was reached.  It was agreed to delete options A and C.
Issue No. 77:  Some Members changed their posit ions to support the Chairman's recommendation
(CC).  One delegation stated that if some pulp was added to juice, origin would be granted to the
juice-producing country by a major-portion rule.  One delegation supporting option A (CTH) recalled
that the origin rule of HS 2008 was "CTH", and stated that the proposed rule "CTH" for HS 2009 was
consistent.
Issue No. 89:  One Member changed its position to support the Chairman's recommendation.
Issue No. 93:  No consensus was reached.  The Chairman questioned whether the exclusion of
Chapter 4 was needed as this split subheading covered products containing less than 50% by weight
of milk solids.
Issue No. 96:  No consensus was reached.  One delegation supporting option B stated that this split
subheading covered juice containing a small portion of mineral and that this addition of mineral
should not be considered as origin-conferring.G/RO/M/40
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Issue No. 97:  Some Members changed their positions to support the Chairman's recommendation.  It
was agreed to delete option C.
Issue Nos. 98 and 99:  No consensus was reached.  One Member submitted a compromise proposal
focussing on the alcohol content of the grape must.Issue No. 101:  There was consensus on option B (subject to AUS, JPN, MAL).
Issue No. 104:  As concerns Korea's proposal, one delegation needed more time for further study and
stated that the composition of soju or shochu seemed like vodka.
Issue no. 108:  No consensus was reached.  One Member supporting option C stated that a change
from wine to vinegar was not substantial transformation.
Mixtures and blends
Issue No. 100:  Two Members made an alternative proposal of 75% threshold against 85% of
option C (see also Issue No. 31).  It was agreed to delete option B.
Issue No. 106:  Some Members changed their positions to support the Chairman's recommendation
(option B (85% threshold)).Issue Nos. 121-125:  It was noted that the mi xture proposal contained in document G/RO/W/64
covered only identical or fungible materials and that the coverage, therefore, should be reconsidered
in order to apply this proposal for Issue Nos. 121, 123 or 124.
Chapters 25-27 (mineral products)
Issue No. 1:  No consensus was reached, however one delegation changed its position from option A
to option B.  One Member supporting option B stated that grinding of clinker and addition of other
components such as gypsum, mineral additions and SCMs were not regarded as significant value-
adding steps;  nor did the transformation process of  grinding and blending of clinker and the other
additions change the chemistry of the clinker component.  This Member also proposed a "mixtures"
rule that determined the country of origin of the cement based on the country of origin by weight of
the total clinker in the cement (as opposed to the total weight of the cement).
Issue No. 8:  No consensus was reached.  The pr oponent of option B modified their proposal as
follows:
Note 3:  [Goods of headings 27.07 or 27.10 that have been blended to conform to specific
predetermined physical specifications, which are different from the specifications of  the input
materials, are deemed to be goods of the country where the blending occurred, provided that not morethan [70] per cent by volume of the product is composed of blending components originating from a
single country other than the countr y where the blending occurred. (US)]
Chapters 28-40 (chemical products)
Issue Nos. 1-3:  Switzerland and the United States were requested to submit a joint proposal.G/RO/M/40
Page 8
Issue No. 4:  Some Members supporting option A confirmed their strong interest in these products.
No consensus was reached.
Issue No. 5:  One Member changed its position from option B to option A, and stated that the addition
of diluent resulted in a change of strength and concentration of chemicals.  No consensus was
reached.
Issue No. 7:  Some Members raised questions as to whether or not the separation process was possibly
carried out in Chapters 38 or 39 and whether or not the purification rule could address this issue
concerning Chapter 33.  The proponents of option A were requested to provide more detailed
technical information.
Issue No. 22:  One Member supporting option A stat ed that doped chemical compounds classified in
heading 38.18 could be cut into discs or wafers, followed by polishing or coating with an expitaxial
layer.  Members supporting option B needed more time to reflect on this question.  No consensus was
reached.
Issue No. 30:  Based on informal discussions, the Chairman made the following recommendations:
- HS 3925:  CTH
- HS 3926.20:  same rule as to be decided for textile products
- HS 3926.10, 3926.30, 3926.40 and 3926.90:  CTH
Chapters 41-43 (leather)
Issue Nos. 6 and 7:  There was growing consensus for the Chairman's recommendation.  Two
delegations expressed their strong opposition to this recommendation.
Chapters 50-63 (textile products)
Fibres, yarns
Issue Nos. 4 and 5:  Linked to Issue Nos. 12 and 13.
Issue No. 23:  Linked to Issue No. 24.  (Chairma n's package recommendation:  Option A for No. 23;
Option B for No. 24).
Dyeing and printing
Issue No. 11:  Linked to Issue Nos. 12 and 13.
Issue Nos. 12 and 13:  One Member changed its position to support the Chairman's recommendations.
One Member supporting option B indicated no flexibility for the dyeing or printing issues but stated
that they would like the proponents of option A to elaborate the definition of "printing", particularly
with respect to complex printing.  Other Memb ers supporting option B confirmed their positions.
Members supporting option A stated that option A/3 (A/2) was already a compromise proposal.  One
Member stated that coating of fabrics increased the value of fabrics by three times.
Coating
Issue No. 16:  There was consensus on option B (subject to IND, PAK, SG).G/RO/M/40
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Issue No. 37:  There was consensus on option A for the rubber-coating in this issue.  As concerns
plastic-coating, one Member changed its position to support the Chairman's recommendations.  One
Member proposed a "30% value-added rule" as a compromise solution;  one Member supporting
option E stated that 50% weight criteria were appropriate but they would further consult with industryto find whether it would be possible to lower the percentage.  Some Members stated that the
implementation of a weight criterion would be technically difficult;  other Members, however, stated
that percentage of plastics was usually indicated in commercial documents like an invoice and that
technical tests for customs purposes were a common practice although the technical tests were not
required for every transaction.
Issue No. 44:  There was consensus on option D (subject to MAL, SG).
Embroidery
Issue No. 35:  Two Members changed their positi ons from option C1 to C3.  One Member modified
its position on the distance between the patterns (30 cm.).
Issue No. 47:  Two Members changed their positions from option C to B.
issue No. 58:  It was agreed to delete option A.
Quilted Articles
Issue No. 36:  No consensus was reached.
Issue No. 60:  It was agreed to delete option C.  The CRO will discuss whether heading 6307.90
should be excluded.
Issue No. 81:  No consensus was reached.  The CRO will discuss whether heading 6307.90 should be
excluded.
Apparel
Issue No. 45:  One Member supporting option A1 stated  that the same rule should be applied for both
knitted apparel (Issue No.45) and for woven apparel (for No.46) while Members supporting Option B
stated that the significance of assembly for knitted apparel and woven apparel were not the same.
One Member stated that option A2 was a compromise proposal.
Issue No. 46:  One Member supporting option B stated that the apparel industry is a fashion industry
in which the design and cutting added more than th ree fourths to the value of the apparel, while the
process of assembly of parts presents from 7-10% of the total production process, and expressed
strong concern over the implications on trade remedies agreements since it was easy to internationally
circumvent the origin of dumped/subsidized products if those assembly processes were to beorigin-conferring.  Another Member supporting option A pointed out that the laser cutting was a very
simple process and that assembly rule appeared a better alternative to the cutting rule.
Issue No.49:  No consensus was reached.G/RO/M/40
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Flat products, three-dimensional products
Issue Nos. 55, 59, 61-67, 69 and 71:
On the basis of informal discussions, the Chairman  invited Members to consider the following rules
as a compromise:
- Flat products (Issue nos. 48, 54, 55, 59, 61, 62, 69):  "CTH, provided the starting material is
prebleached or unbleached fabric"
- Three-dimensional Products (Issue nos. 63-67, 70, 71):  "CTH"
Residual rules
Issue Nos. 74, 75 and 77:  No consensus was reached.
Chapters 64-67 (footwear)
Issue No. 9:  On the basis of the informal disc ussions, the Chairman amended his recommendations as
follows for consideration at the next meeting:
- HS ex6406(a) (uppers to which an inner sole is attached permanently which completely closes
the bottom):  CTHS
- HS ex6406(b) (other): CTHS
- HS ex6406(c) (parts of upper): CTH
A majority of Members changed their positions to support the Chairman's recommendation.
Issue No. 11:  No consensus was reached.
Issue No. 12:  It was agreed to change th e description of this issue to "Footwear".
On the basis of the informal discussions, the Chairman amended his recommendations as follows for
consideration at the next meeting:
- HS 6401-6405:  CTH, except from HS ex6406(a)A majority of Members changed their positions to support the Chairman's recommendation.Issue Nos. 13-14:  Due to the change in title of issue No. 12, these issues were suggested to be
deleted.
Chapters 68-70 (glassware)
Issue Nos. 9, 10 and 11:  There was a growing support for the Chairman's recommendations.
Chapters 72-73 (iron and steel)
Issue Nos. 3 and 5:  No consensus was reached.  It was confirmed that coating of stainless steel
usually did not take place in the normal course of business.  Some Members questioned the meaningG/RO/M/40
Page 11
of option D.  The intention of the Chapter Note on co ating is that on matrix level the coating will not
be recognized as substantial transformation.  To apply, the Chapter Note is proposed as an alternative
primary rule and if met, would confer origin to the coating.  One Member supporting option D of HS
ex 72.16(d) reiterated their position.  It was agreed to delete option C of HS ex 72.25(d) as well as
option D of HS ex 72.29(b).  One Member supportin g option D stated that the coating of hot-rolled
products or galvanized steel was more than a process involving a simple process of uncoiling the hot
coil, sprinkling the spray, painting and then recoiling.  It required a multi-stage process which
consisted of pre-treatment, coating, baking and post-treatment.  The surface of the colour steel had
three layers – zinc coating, chromate coating and oil coating – which covered the base metal.  The
coloured steel was considered a new product, creating almost 100% of added value and was used for
interior and exterior decorations of buildings due to its high corrosion resistance and weatherproof
qualities, and also for electric home appliances such as refrigerators, air conditioners, etc., for itsattractive appearance.
Chapters 74-81 (non-ferrous metals)
Issue No. 9:  There was growing consensus towards the Chairman's recommendation (CTH, provided
that the cross-sectional area of the input material is reduced by at least 25%).
Issue No. 10:  One Member joined the Chairman's recommendations.
Issue No. 14:  The Chairman amended the recommendation as follows:  "CTH, provided the wall
thickness of the input material is reduced by at least 25%".Issue No. 17:  There was consensus on the following rules (subject to CAN, MEX, PHI, VEN):
For 7419.10:  CTH
For 7419.91:  CTH
For 7419.99:  CTSH
For ex 7508(a):  CTH
For ex 7508(c):  CTHS
For 7616.91:  CTH
For 7616.99:  CTSH
Chapters 82 and 83 (articles of metal)
Issue No. 1:  One delegation made the following proposal:
"Note 2
Good produced by assembling components other than blanks:
When application of the primary rules of this Chap ter does not result in an origin determination, the
country of origin of a good produced by assembling components other than blanks shall be the
country of origin of the cutting or working part."
Chapters 84, 85 and 90 (machinery)
Issue No. 1:  One delegation suggested reporting th is issue to the General Council for discussion and
decision.  It was suggested that the Swiss compromi se proposal should be included in the negotiatingG/RO/M/40
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text as option C, together with the existing options A and B.  One delegation explained that option A
was outlined as follows:  (1) obtaining parts from components is origin-conferring with exceptions on
a product-specific basis;  (2) obtaining parts from parts of the same heading is origin-conferring by
the application of the five-part rule;  (3) assembly of machines from parts is origin-conferring with
exceptions on a product-specific basis;  and (4) modification of machines is not origin-conferring(however some machines are possibly treated as parts).
Issue No. 13:  One Member stated that this issue should deal with a situation in which a part of
disassembled parts was repaired (or replaced) and then reassembled.  Some Members needed more
time for further reflection if a rule was necessary or not.
Issue No. 20:  No consensus was reached.
Issue No. 33:  Linked to Issue Nos. 59, 60 and 61.  No consensus was reached.
Issue No. 51:  One Member supporting option C stated that origin should be conferred to a country in
which music was produced rather than a medium.  Other Members pointed out that origin of a good
should be considered in terms of production of a good rather than intellectual property.  One Member
changed its position from option C to option A.
Issue No. 55:  It was agreed to delete this issue.
Issue Nos. 56, 59-62, 75-77:  No consensus was reached.
Chapters 86-89 (transportation equipment)
Issue Nos. 69 and 70:  No consensus was reached.  One Member supporting option D2 stated that a
chassis fitted with an engine had the essential characteristics of motor vehicles because it could move
by itself without additional equipment.  The process of fitting an engine onto a chassis was a
complicated one including the assembly of transmission, electric power steering system and
electrically controlled suspension system;  on the other hand, putting the body onto the chassis fitted
with its engine and installing other interior equipment were relatively simple ones that did not bring
about substantial changes.  But special purpose motor vehicles (HS 8705), such as crane lorries, fire-
fighting vehicles, etc., had special functions and purposes and needed additional specific equipment
and systems.  For example, to generate strong water pressure, fire-fighting vehicles needed special
equipment and technology by which the power generator was interlinked with the engine.  Therefore
it required more expertise, time and effort, and was much more complicated and labour-intensive than
general purpose motor vehicles.
Issue No. 71:  It was agreed to delete this issue.
Issue No. 72:  It was agreed to delete this issu e.  However two options – "CTH" and "CTH, or value
added rule" – should remain in the matrix and be included in the registry of deleted issues.
Issue No. 73: It was agreed to delete this issue.   However two options – "CTH" and "CTHS; or value
added rule" – should remain in the matrix and be included in the registry of deleted issues.
Issue No. 74A: It was agreed to delete this issu e.  However two options – "CTH" and "CTH, except
from 88.03;  or 45% value added rule" – should remain in the matrix and be included in the registry of
deleted issues.G/RO/M/40
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Chapter 91 (watches and clocks)
Issue No. 1:  No consensus was reached.  One Member indicated that they continued to support
Option A (i.e. the country of origin should be based on where the movement is made) after further
consultation with domestic industry.  The Member also informed the CRO that their industry hadraised questions concerning the detailed interpretation/implementation of the other two Options (i.e.
Option B, CTH and Option C, CTH plus 50% value addition) on the table and the implications of the
CTH rule on origin marking.  In respect of Option B, the Member requested (i) clarification on the
definition of “final assembly” and the minimum assembly processes that constitute “final assembly”;
and (ii) confirmation on their understanding that, should Option B be adopted and if an origin marking
is to be applied on the watches and clocks, the originating place to be marked should be the place
where the final assembling processes took place, regardless of the origins of the different components.On (i), the supporters of Option B stated that Option B was a simple CTH rule with no other
conditions attached.  As such, as long as the materials used in the production were classified in HS
headings different from that for watches and clocks, the CTH rule would then be met. Besides, Option
B essentially required “encasing” to be done for origin-conferring purpose.  On (ii), Members made
no comment on the Member's understanding.  The Member, therefore, hoped that Members couldconsider this matter at a later stage.  On Option C, the Member also had similar concern over the
interpretation of the CTH rule and the definition of “50% value addition”.
Chapter 92 (musical instruments)
Issue No. 1:  No consensus was reached.
Chapters 93-97 (other articles)
Issue No. 6:  The representative of Argentina stated  that they were unable to join the consensus and
proposed a "CTH, or 45% value addition" rule.
Issue No. 7:  No consensus was reached.
Issue No. 12:  There was a growing consensus on the Chairman's recommendation (CTH).
Issue No. 33:  The representative of the European Communities stated that they joined the consensus
for heading 95.06, and that the proposed Chapter Note for Chapter 93 was only relevant for heading
93.07 and the wording of that Note should, for consistency reasons, be similar to Chapter Note 1 of
Chapter 82."
2.2 The representative of Ecuador stated that although Ecuador did not participate in the meetings
of the CRO, they would submit their positions in writ ing and be in a position to defend those positions
at the June meeting.
2.3 The CRO took note of the statements made.
III. ENDORSEMENT OF PROPOSALS ON HARMONIZED RULES OF ORIGIN
3.1 The CRO endorsed the following proposals on harmonized rules of origin:
- Chapters 1-24 – Issue No. 27:  to endorse Option A (each primary rule of split headings
ex06.03(a) and ex06.04(a) should read "CTHS").
- Chapters 1-24 – Issue No. 33:  to delete this issue.G/RO/M/40
Page 14
- Chapters 1-24 – Issue No. 103:  to endorse Option C (the primary rule of subheading
2207.10 should read "CTH").
- Chapters 1-24 – Issue No. 107:  to delete this issue.
- Chapters 28-40 – Issue No. 9:  to endorse the following rules: "CTH except by mere
dilution or by mere addition of alcohol to odoriferous substance or to a perfume base" for
heading 33.03.
- Chapters 28-40 – Issue No.13: to endorse Option A (the primary rule of split headings
ex34.01(a) and ex34.05b) should read "CTHS"; the primary rule of split headingex34.05(a) should read "CTH".
- Chapters 44-49 –Issue No. 5 bis:  to delete this issue.
- Chapters 50-63 – Issue No.2:  to endorse th e following primary rule s: "CTH" for heading
51.05, "CC" for heading 52.03.
- Chapters 50-63 – Issue No. 17:  to endorse Option B (each primary rule of split heading
ex54.04(a)(2) and ex54.05(a)(2) should read "CTH, except from heading 39.20 or
39.21").
- Chapters 50-63 – Issue No. 26: to endorse Option B (the primary rule of split heading
ex56.08(c) should read "CTH, except from 58.04").
- Chapters 50-63 – Issue No. 39:  to endorse Option B (the primary rule of split heading
ex59.05(b) should read "CTH, provided the starting material is unbleached fabric, felt or
non-woven fabric").
- Chapters 50-63 – Issue No. 44:  to endorse Option D for split heading ex60.02(c) (the
split heading ex60.02(c) should be deleted, and ex60.02(d) should be renumbered as
ex.60.02(c)).
- Chapters 50-63 Issue No. 54:  to endorse th e following primary rule of split heading
ex62.09:  "CC, except by cutting and/or hemming only.
- Chapters 50-63 – Issue No. 57:  to endorse Option B (split headings ex63.01(a),
ex63.02(a), ex63.03(a), ex63.04(a), ex63.05(a) and ex63.06(a) should be deleted).
- Chapters 64-67 – Issue No. 3:  to endorse Option A (the primary rule of heading 65.05
and 7108.13 should read "CTH".
- Chapters 68-70 – Issue No. 7:  to endorse Option B (the primary rule of heading 68.13
should read "CTH".
- Chapter 71 – Issue No. 5: to delete this issue (the proposed Chapter Note should be
deleted).
- Chapters 72-73 – Issue No. 4:  to endorse th e following  Note (primary rule) for Chapter
72: for the purposes of this Chapter, the expressions "cold-rolled" (cold-reduced) and
"cold-formed" mean cold reduction resulting in changes to the crystalline structure of the
workpiece.  The expressions do not include very light cold-rolling and cold-formingG/RO/M/40
Page 15
processes (skin pass or pinch pass) which act only on the surface of the material and do
not result in change to its crystalline structure;  to endorse the following primary rule:
"CTH, except from 72.13 through 72.15;  or change from headings 72.13 through 72.15,
provided the material has been cold-formed in conformity with the Chapter Note" for
heading 72.17; "CTH, except from 72.21 through 72.22;  or change from headings 72.21through 72.22, provided the material has be en cold-formed in conformity with the
Chapter Note" for heading 72.23, "CTH, except from 72.27 through 72.28;  or change
from headings 72.27 through 72.28, provided the material has been cold-formed in
conformity with the Chapter Note for heading 72.29.
- Chapters 72-73 – Issue No.6:  to endorse  the following primary rule: "CTH" for
subheadings 7304.21, 7304.29 and 7304.90,  split subheadings ex7304.39(a),ex7304.39(b), ex7304.49(a), ex7304.49(b), ex7304.59(a) and ex7304.59(b); "CTH, or
CTSHS from split subheading ex7304.39(a)" for subheading 7304.31; "CTH or CTSHS
from split subheading ex7304.49(a)" for subheading 7304.41; "CTH, or CTSHS from
split subheading ex7304.59(a)" for subheading 7304.51.
- Chapters 72-73 – Issue No. 7:  to endorse Option A (the primary rule of split heading
ex73.08(a) should read "CTHS").
- Chapters 72-73 – Issue No. 8:  to endorse Option B (the primary rule of split heading
ex73.08(b) should read "CTH").
- Chapters 72-73 – Issue No. 9:  to endorse Option B (the primary rule of split heading
ex73.08(c) should read "CTH, except from heading 72.08 through 72.16, 73.01, 73.04,
73.05 or 73.06").
- Chapters 72-73 – Issue No. 11:  to endorse Option B (the primary rule of heading 73.15
should read "CTH").
- Chapters 74-81 – Issue No.13:  to endorse Option A (the primary rule of heading 75.01
should read "CTH or change within this heading to mattes or sinters containing 90 % or
more of nickel from mattes or sinters containing not  more than 75 % of nickel";  the
primary rule of split subheading ex7601.10(a) should read "CTSHS"; the primary rule ofsubheading 7801.10 should read "CTSH", the primary rule of subheading 8001.10 should
read "CTH or manufacture of refined tin of this subheading from unrefined tin of the
same subheading"; each primary rule of split heading ex8101(b)-ex8112.91(b) should
read "CTHS".
- Chapters 74-81 – Issues Nos. 15 and 16:  to endorse the following primary rules:
"CTSH" for subheadings 7507.11, 7507.12 and 7507.20; "CTHS for split headings
ex78.05(a) and (b), ex79.06(a) and (b), ex80.06(a) and (b), split headings ex81.01(g)(1)-
ex81.11(g)(1) and ex81.13(h)(1); "CTHS or cold-rolling from articles of this split
heading" for split headings ex81.01(g)-81.11(g) and ex81.13(h);  "CTSHS, or cold-rolling from articles of this split subheading" for split subheading ex8112.19(d),
ex8112.20(g)-ex8112.40(g), and ex8112.99(d); "CTSHS" for split subheadings
ex8112.19(d)(1), ex8112.20(g)(1)-ex8112.40(g)(1) and ex8112.99(d)(1).
- Chapters 74-81 – Issue No. 18:  to endorse Option A (the primary rule of split heading
ex76.10(a) should read "CTHS".G/RO/M/40
Page 16
- Chapters 82-83 – Issue No. 11 bis:  to endorse Option A (the primary rule of split
subheading ex8302.60(a) should read "CTSHS";  the primary rule of split subheading
ex8302.60(b) should read "CTH".
- Chapters 82-83 – Issue No. 13:  to endorse Option B (the primary rule of heading 83.05
should read "CTH".
- Chapters 84, 85 and 90 (for headings 90.17, 90.18, 90.21 and 90.23) – Issue No. 2:  to
endorse the following chapter Note:
"X.  Parts and accessories produced from blanks:  The country of origin of goods that are
produced from blanks which, by applicat ion of the Harmonized System General
Interpretative Rule 2(a), are classified in the same heading, subheading or subdivision asthe complete or finished goods, shall be the country in which the blank was finished
provided finishing included configuring to fi nal shape by the removal of material (other
than merely by honing or polishing or both), or by forming processes such as bending,
hammering, pressing or stamping.
- Chapters 84-85 and 90 – Issues Nos. 14, 21-31, 32, 44, 50 54 and 57:  to delete these
issues.
1
- Chapters 86-89 – Issue No. 70 bis: to delete this issue.
- Chapters 86-89 – Issue No. 68:  to endorse the following primary rule: "CTH, except
from heading 73.09 or 73.10" for heading 86.09.
- Chapter 91 – Issue No.3:  to endorse Option B (each primary rule of headings 91.08 and
91.09 should read "CTH, except from split heading ex91.10(b)").
- Chapter 91 – Issue No.5:  to endorse Op tion C (each primary rule of subheading 9113.10
and 9113.20 should read "CTH or change from part s to finished goods classified in the
same subheading).
- Chapters 93-97 – Issue No. 1:  to endorse th e following primary rule s:  "CTH, with the
exclusion of locks, breeches, breech boxes,  frames or barrels of heading 93.05;  or
assembly if accompanied by the production of at least one of the essential parts of the
mechanism (lock, breech, breech box, frame) or of  the complete barrel" for split headings
ex93.01(a) and ex93.04(a), headings 93.02 and 93.03;  "CTH" for split headings
ex93.01(b) and ex93.04(b).
- Chapters 93-97 – Issue Nos. 23-26 and 28:  to endorse the following primary rule for
subheadings 9607.11, 9607.19, 9608.10-9608.40, 9608.60 and 9613.10-9613.80: "CTSH,
provided at least one part originates in the country of assembly".
3.2 The representative of Malaysia stated that they joined consensus for the sake of moving
forward and reserved the right to revisit some issues  if necessary, at the appropriate time, when the
subject of overall coherence was discussed.
3.3 The CRO took note of the statement.
                                                     
1 Two options are to be kept in the relevant documents.  Split heading ex85.37(a) should be deleted.G/RO/M/40
Page 17
IV. IMPLICATIONS OF THE IMPLEMENTATION OF THE HARMONIZED RULES
OF ORIGIN ON OTHER WTO AGREEMENTS
4.1 The Chairman recalled that there had been seven submissions on the table:  from India
(G/RO/W/28/Rev.1, 30, 42 and 50);  from the United  States (G/RO/W/32, 48 and 65);  from the
Dominican Republic and Honduras (G/RO/W/33);  from El Salvador (G/RO/W/34);  from Korea
(G/RO/W/38);  and from Japan (G/RO/W/66 and 74);  from Australia and New Zealand
(G/RO/W/83).
4.2 The representative of Japan stated that their intention to submit document G/RO/W/74 was to
facilitate the Harmonization Work Programme (HWP) and that they could be more flexible in certain
specific issues of chapter 1-24 if an explicit understanding was established among Members on the
following two points:  (i)  in certain cases, it is rather inappropriate to thoroughly and automaticallyapply the results of the ongoing harmonization work to the labelling requirements on foods applied
domestically;  and (ii) it is not logical in itself to refer to the harmonized rules of origin (HRO) in
deciding whether to apply sanitary and phytosanitary measures.
4.3 The representative of Brazil stated that there would be no apparent inconsistency between
measures taken under SPS requirements or labelling requirements (origin labelling of all ingredients
of a good, in addition to marking of the origin of the good) and rules of origin for customs purposes.
Those measures could be taken in parallel with a determination of origin according to the results of
the HWP for customs or statistical purposes.
4.4   He also stated that the issue of imp lications first surfaced in the Committee in 1998,
although at that point it was circumscribed to one particular aspect.  Later that same year, a paper was
submitted by one delegation arguing that the issue was broader than the one specific aspect initially
raised, and that the matter should be addressed in a wider context, with reference to implications of
HRO for other Agreements.  One other delegation also made specific proposals as to how theharmonized rules of origin should be applied to other WTO Agreements.  Notwithstanding the
importance apparently attributed by these delegations to the issue of implications, it was not until
mid-2001 that the Committee was presented with more comprehensive views on some possible
implications of HRO on other WTO Agreements.  It should be stressed that these submissions
coincided with  period in which the Committee was taking important strides in the HWP on the basis
of the new methodology of the Chairman's recommendations.  Despite the timing of these papers, the
Committee had taken the trouble to engage in very substantive discussions on the issues raised, bothwithin the regular programme of work, such as th e first day of the current session, and in dedicated
informal inter-sessional consultations convened sp ecifically to deal with these issues.  These
discussions seemed to provide the required level of comfort to some, but not to all.  It was not news to
any delegation that the HWP was the integral part of the Uruguay Round  and was, as stated at the
General Council last December, an outstanding implementation issue and should be addressed assuch.  Any backtracking at this point in time would amount to upsetting the balance of rights and
obligations undertaken in Marrakesh, and further to the intrinsic consequences of such a situation that
could not help but have a profound impact on the new round of trade negotiations set in motion by
Ministers in Doha last November.  Ministers in Doha also reiterated the importance they attached to
this matter by urging the Committee to complete its work by December 2001.  The Agreement onRules of Origin (the Agreement) already outlined clearly the relationship between it and other
Agreements of the WTO.  In a nutshell, these provisions stated that whenever there was a requirement
in a WTO Agreement for determination of origin, then  the HRO agreed to as an integral part of the
Agreement should be applied equally, or in other words, consistently.  It was the strong view of his
delegation that it was far beyond the mandate of this body to specify each and every circumstance inwhich such a situation might arise.  He also doubted the ability of other Committees to foresee
definitively every possibility under the respective Agreements in which a determination of origin
might be warranted.  This broad understanding was apparently shared by a significant number ofG/RO/M/40
Page 18
delegations and would thus constitute a resolution of the issue.  However, there were still those who
were not satisfied by this.  To them, nothing short of a major reinterpretation of the Agreement would
be sufficient.  He noted that what was required by these delegations would be an explicit decision to
overturn the applicability of the HRO to specific Agreements mentioned in Article 3 of the Agreement
itself. It was almost as if these delegations were seeking to withdraw their signature from portions ofthe Agreement.
4.5 The representative of Brazil further noted that other delegations had legitimate concerns with
regard to specific points pertaining to the implementation of other WTO Agreements.  While
understanding these concerns, he felt that the manner in which theses concerns were first raised had
clouded the issue by drawing inappropriate and non-existent linkages to the Agreement on Rules of
Origin.  His delegation stood ready to continue to engage constructively with these delegations inorder to explore fully the alleged implications for other Agreements.
4.6 He concluded that any Member adopting a measure consistently with its rights and
obligations derived from other WTO Agreements would only benefit further from the predictability
and trade-facilitating effects of HRO.  The CRO was at a critical juncture in its work, not onlybecause Members could finally see some light at the end of the tunnel in that outstanding issues would
soon be elevated to a higher body, but also because Members had begun an ambitious new round of
multilateral trade negotiations.  The option Members had was to conclude the HWP expeditiously or
to risk sliding backwards in all that the CRO had achieved, with several undesirable consequences.
On the one hand, Members might see an increase in the recourse to autonomous non-preferential rulesof origin adopted at the national level.  On the other, most Members would face the uncertainty and
the anti-trade facilitating consequences of these autonomous rules of origin.
4.7 The representative of New Zealand support ed Japan's approach contained in document
G/RO/W/74, on the relationship between SPS measur es and the harmonized rules of origin.  HRO
should not be applied to SPS measures because in the SPS context the issue of origin was only
secondary to the primary object of assessing the risk  of a certain product on the basis of characteristics
of that product.  She also raised a question as to whether a Member could require a good to have an
origin mark based on HRO and, at the same time, another mark of origin derived from the Member's
domestic consumer labelling laws as well as from the application of a geographical indication to the
good.
4.8 The representative of Egypt supported Japan's approach on the relation between SPS and
HRO, noting that SPS measures were applied in order to protect animals and plants in accordance
with its own requirements.
4.9 The representative of Australia supported the views of Japan, Brazil, New Zealand and Egypt.
The objective of the SPS Agreement was to protect human, animal or plant life or health, and
concerned the nature of the goods in and of themselves, irrespective of their origin.  As concerns
labelling issues, it would be possible to avoid an y conflict between HRO and other labelling regimes.
The principle objectives of HRO, as applied by the customs authorities at the border, was to attribute a
single origin for each product imported in a country, whereas the purposes of domestic food labellingwas to meet other trade objectives, such as consumer demand for product information, or the
prevention of deceptive practices.  Governments might legitimately have different requirements for
satisfying these objectives and accordingly Members should retain the right to determine their
domestic labelling requirements for products sold in their domestic markets.
4.10 The representative of India stated that the Committee should not seek to interpret any WTO
Agreements, but that it would be useful to clarif y that the origin determination at the border for
customs or statistical purposes was not an alternat ive to, but supplemental to the requirements for SPS
or labelling purposes, depending upon the requirements from either domestic consumer interests orG/RO/M/40
Page 19
from the SPS point of view.  She emphasized that there was no hierarchy implicit or explicit in these
two purposes and provisions of various WTO Agreements, since there was no conflict among them.
4.11 The representative of Korea shared the views expressed by other Members and stated that the
labelling requirements went beyond the scope of rules of origin.  The requirements for labelling of
origins of ingredients of a good or other information would be made by each domestic regulation or
legislation, while HRO would be applied for marking of origin of a good.  SPS measures had different
objectives from the origin determination.
4.12 The representative of the United States stated  that it was not the CRO's duty at present to
interpret other WTO Agreements.  The CRO, instead, should seek more clarity and a better
understanding as to how HRO would apply once th e HWP was concluded.  Although he appreciated
some of the concerns that Japan had raised in its submission, especially with respect to SPS, he
questioned whether this unique treatment of SPS would be the appropriate approach.  There were
concerns in other areas, a few of which the s ubmission from the US (G/RO/W/65) highlighted.  It
would be useful to consider the implications of  the implementation of HRO across all areas and to
devise simpler, more practical solutions to that question, rather than a multilateral pick-and-chooseapproach.  It might also be more practical for individual Members to identify when they would use
HRO for trade measures covered by the WTO once the HWP was completed, rather than a
multilateral approach on this issue at this stage.  In this connection he drew attention to the fact
(G/RO/W/45) that 38 Members had notified that they do not have non-preferential rules of origin.
While many of these same Members were known to utilize anti-dumping measures, it would appearthat rules of origin were not being used for such measures, given that these Members had notified that
they did not have non-preferential rules of origin.  He then raised a question as to whether the
existence of HRO would require changes in those practices by those Members.
4.13 The representative of Argentina stated that the issues before the CRO were also being
discussed in the other Committees.  For example, as regards labelling, a proposal for a compulsory
labelling regime was objected to in a certain Committee.  Accordingly, it would be very difficult to
find a solution for the issue in the CRO.  He also stated that it was not appropriate for the CRO to
choose certain trade policy measures for which HRO would be applicable.
4.14 The representative of New Zealand stated that the joint submission from Australia and New
Zealand (G/RO/W/83) contained their views on the implications of HRO upon other WTO
Agreements, like labelling requirements as well as on wider issues, i.e. the coherence and trade
facilitation issues which were important in assessing whether the outcome of the HWP was consistent
with the original goals set out in the Agreement.  The objective of the submission was to provide a
reminder of the key principles underpinning the HWP.  The objectives and principles set out in Article
9.1 of the Agreement explicitly provided the basis for the HWP.  There are a large number ofparameters set for the HWP, including:  the importance of substantial transformation;  the need to
avoid creating restrictive or disruptive effects on international trade and, in fact, to provide more
certainty to international trade;  the need for rules to be administered in a predictable and reasonable
manner;  the importance of ensuring the rules to be understandable;  and, the need for the rules to be
coherent.  From these principles, it was taken that the drafters of the Agreement envisaged thatharmonization would produce trade neutral rules, wh ich provided a liberal standard for determining
substantial transformation.  She suspected that the CRO had strayed from some of these principles
during its work.  Obviously an outcome that left traders worse off then they were today would be
quite contrary to the intent of the Agreement.  While appreciating the efforts that the chairman and
Members had made in order to improve our working methods, she pointed out that the departure fromthe benchmark of substantial transformation could be seen in the working methods of the CRO.  It
seemed that the approach to developing special packages of trade-offs could produce results which
were at odds with the substantial transformation criterion.  She then stated that the burden of proof
should not automatically be placed on minority position holders, but on those proposing a rule thatG/RO/M/40
Page 20
deviated from the criterion of the last substantial transformation.  She urged Members to consider this
point very carefully before basing any rules of origin on the weight of numbers or a package of trade
offs.  Another issues that the submission raised was coherence, that is, HRO should be coherent.  An
integral part of the HWP, therefore, would be consideration of the result in terms of the overall
coherence.  The work of the CRO would not be complete until that review had taken place.  Ensuringthat HRO were coherent, she suggested that a summary of those rules which have already been
endorsed, or emerging themes, be articulated at the beginning of each product group in the negotiating
text.  This would help provide a snapshot of the work to date and help highlight any potential
inconsistencies between rules already endorsed and those still outstanding.  She also suggested
discussing how the overall coherence review would be carried out as well as how to address any lack
of coherence found.  As concerns "trade facilitating effects", she stated that the Agreement was
predicated on the desire for the HWP to be a tool for further trade liberalization and to avoid addingfurther costs to international trade.  A number of questions was raised in their submission
(G/RO/W/83) with respect to the implementation of HRO, such as documentation requirements,
compliance costs for exporters and customs authorities,  the legal implications of an origin certificate.
It would be very helpful, in order to ensure that  the results of the HWP were consistent with the
Agreement, to assess how the work would facilitate trade, and in this context if Members wouldoutline how they might administer and enforce HRO.   She wished that their submission provided a
sense that the success of the HWP would not be measured by its completion alone, but also by
whether it faithfully implemented the aims and objectives of the guiding mandate in the Agreement.
If these aims and objectives were ignored, there would be a potential credibility issue facing the CRO.
4.15 The representatives of Brazil and the Philippines
 thanked Australia and New Zealand for
submitting their paper and stated that every proposal on the table was based on the criterion of
substantial transformation, and that it might not be very helpful to suggest placing the burden of proof
on rules that deviated from the criterion of last substantial transformation.
4.16 The representative of the Philippines stated that there was no conflict between HRO and the
labelling and SPS Agreements.  Rules of Origin determined the single origin of a good, but they did
not preclude the domestic regulations that might require multiple origins of ingredients of the good.
She also stated that the purpose of the joint submission from Australia and New Zealand was to
highlight the importance of ensuring that the outcome of the HWP should be consistent with the
original objectives and principles of the Agreement,  and that the outcome should benefit international
trade and not create uncertainty.
4.17 The representative of Norway supported the views of Australia and New Zealand, especially
the objectives and principles of the HWP on the issue of coherence as well as on the issue of trade
facilitation.
4.18 The representative of the European Communities stated that HRO should be equally applied
for all purposes as set out in Article 1 of the Agreement.  However, there seemed to be problems for
some Members with regard to the implications of the implementation of HRO on other WTO
Agreements.  She also stated that an explicit common understanding of the following view would be
very useful for the completion of the remainder of  the HWP:  "If other WTO Agreements require that
origin be determined for specific purposes of those Agreements, HRO would then have to be used."
4.19 The representative of the United States stated that the conclusions specified by the EC would
probably be the conclusions that the CRO might reach u nder this issue.  In this regard he referred the
last paragraph of the US submission (G/RO/W/65)  which suggested several options:  one being a
relatively straightforward option and similar to those articulated by the EC;  and a second alternative,
conducting a further examination of the implications question through communication with all of the
other WTO bodies responsible for the matters as outlined in Article 1 of the Agreement.G/RO/M/40
Page 21
4.20 The representative of New Zealand supported the suggestion for communication with other
WTO bodies.
4.21 The representative of India, in connection with the submission from Australia and New
Zealand, pointed out that the distinction between the WTO Agreements listed in Article 1.2 of the
Agreement and other WTO Agreements not listed in Article 1, might not be a useful approach since
those non-preferential commercial policy instruments referred to in Article 1.2 of the Agreement were
not an exhaustive list of policy instruments (Article 1.2 uses the words "include" and also "such as").
4.22 The representative of Canada stated that it was the other WTO Agreements that had to
determine whether or not rules of origin would be applied for them and that if Members had to use
rules of origin, they then had to apply HRO.  In respect of the submission from Japan, the issue
concerned a question as to whether or not Members could have supplementary information for
consumers or the authorities concerned in addition to the origin of the good.  She pointed out that no
Member disagreed with that notion, although some ha d stated that they were still reviewing their
positions.  In respect to the submission from Australia and New Zealand, she agreed with them that
the burden of proof should not totally and automatically be placed on Members who were in theminority position to set out why they supported a certain position.  Those in the majority position
should not be allowed to abdicate their responsibilities to set out their reasoning of why their
proposals denoted substantial transformation and should have an equal burden of proof in that respect.
4.23 The representative of Japan stated that they were able to witness some fruitful and
constructive exchange of views during the informal meeting of this Committee held on Monday, 8
April regarding the implications of the Harmonized Rules of Origin on other WTO agreements, in
particular, on the points raised in document G/RO/W/74 submitted by Japan.  They noted that the
following line of thinking was broadly shared by Members on that occasion, as regards the areas
about which Japan was concerned regarding their relations with the Harmonized Rules of Origin:
(i) the policy objectives for Members to carry out domestic consumer labelling on foods, as well
as sanitary and phytosanitary measures, were quite different from the objectives of origin
determination for customs purposes, which are to be enforced under the Harmonized Rules of Origin;
(ii) since these objectives were not alternative and no hierarchy existed among them, it could be
said that there should be no conflict, but instead that they were supplementary in nature and shouldcoexist without any particular trouble.
Although the above might not be a definitive conclusion in a legal sense, Japan believed that
it provided useful guidelines as a working basis, t hus providing clarity to Members for continuing the
ongoing harmonization process in this Committee.  In  this regard, Japan wanted to suggest that the
details of such discussion, having taken place during the harmonization work, be concisely recorded
in an appropriate form, for example, in the formal report of the Chairman of the Committee, which
shall ultimately be attached to the final result s of the harmonization work when presented to the
General Council.  If such treatment was given, through which Japan's concerns could be
accommodated, his delegation would be prepared to exercise further flexibility in the course of thetalks on product-specific rules which relate to agricultural products.
4.24 The representative of India stated that India did not agree that it was necessary for the CRO to
send details of the discussion on the submission of Japan (G/RO/W/74) to the General Council.
4.25 The representative of Colombia stated that the implementation of HRO was closely linked to
other WTO Agreements.  In this connection, the CRO should reach a common understanding that, as
clearly stipulated in Article 3(a) of the Agreement, HRO should be applied equally for all the
purposes set out in Article 1 of the Agreement, which would help all parties involved achieve aG/RO/M/40
Page 22
satisfactory balance by guaranteeing predictability and transparency in the implementation of the
agreed commitments.  The common understanding also would be able to link consumers, producers
and operators ensuring that they were not subject to discretionary application of HRO which might
incur heady costs to the flow of international trade.
4.26 The representatives of Chile and the Philippines  stated that the implications issue should be
reported to the General Council after the June session of the CRO.
4.27 The CRO took note of the statements made and agreed  to revert to this ssue at the next
meeting.
V. NOTIFICATIONS UNDER ARTICLE 5 AND PARAGRAPH 4 OF ANNEX II OF THE
AGREEMENT ON RULES OF ORIGIN
5.1 The Chairman recalled that since the last meeting the Secretariat had circulated a document
informing delegations of notifications submitted by Croatia, Lithuania, Moldova and Myanmar
(G/RO/N/36).  To date, 80 Members had made notificat ions of non-preferential rules of origin and 82
Members had made notifications of preferential rules of origin.
5.2 The Chairman expressed concern that a number of Members had not yet complied with the
notification requirements.  He urged Members who ha d not yet notified to do so as early as possible.
5.3 The CRO took note of the statement.
VI. ELECTION OF OFFICERS
6.1 The CRO elected Mr. Stefan Moser (Switzerla nd) as Chairman, and Mr. Ronaldo Costa Filho
(Brazil) as Vice-Chairman of the CRO for 2002.
VII. OTHER BUSINESS
A. Agenda for the next meeting
7.1 The CRO agreed the agenda for the next meetings as follows:
24-25 June Identification of core policy issues to be reported to the General
Council for discussion and decision
26-27 (a.m.) June Identification of issues to be resolved in the Committee
27 June (p.m.) Implications of the HWP on other WTO Agreements
28 June -  Reporting of the informal meetings;
-  Endorsement of the proposals on the harmonised rules of origin;-  Other business
Formal Meeting
28 June
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