WORLD TRADE
ORGANIZATIONG/RO/42
25 November 1999
(99-5106)
Committee on Rules of Origin
PROGRESS REPORT OF THE COMMITTEE ON RULES OF ORIGIN TO
THE COUNCIL FOR TRADE IN GOODS ON THE STATUS OF
THE HARMONIZATION WORK PROGRAMME
1. The Council for Trade in Goods (CTG) and the General Council, in July 1998, approved the
recommendations of the Committee on Rules of Orig in (CRO) that it, in  cooperation with the
Technical Committee on Rules of Origin (TCRO), should continue the work identified in
Articles 9.2(c) and 9.3 of the Agreement on Rules of Origin (the Agreement), and that Members
commit themselves to make their best endeavour to complete the HWP by November 1999;
furthermore, that the TCRO shall submit the fina l result of its work to the CRO by the end of
May 1999 for final consideration by the CRO;  that  the CRO shall report to the CTG on the progress
of work in February, June and October 1999; and that in June 1999 the CRO shall review the status of
the HWP and make a recommendation on a deadline for completing that work (G/RO/25).  TheTCRO submitted the final result of its work to the CRO on 9 June 1999.  The CRO submitted its first
two progress reports to the CTG on 2 March (G/RO/ 33) and on 2 July 1999 (G/RO/38).  This, the last
report as specified in the fourth indent of paragraph 4 of document G/RO/M/25, reports on the
progress of the work since 2 July 1999.
2. The CRO has held three formal meetings, on 23 July, 1 October and 16 November 1999,
respectively.  These formal meetings were preceded by open-door plurilateral and informal meetingswhich lasted two weeks each.  Members agreed that  the open-door plurilateral and informal meetings
were a useful process for advancing the work.  Members also reaffirmed the CRO's decision-making
process for endorsing proposals (G/RO/M/25).
3. The CRO discussed the overall architecture of the harmonized rules of origin.  With regard to
the outstanding issue concerning the application of primary and residual rules, which has been an
important area for making further progress, extensive discussion has been undertaken on various
proposals, including discussing specific scenarios and cases.  Members have developed a better
understanding of the issues, and have continued to make further progress in addressing these issues.
However, final resolution is still required on a number of key issues.  The CRO reached consensus onthe text of paragraph 3 of Appendix 1, "Accessories and spare parts and tools" (G/RO/41, page 7) and
the corresponding text of Rule 5(a) of Appendix 2 (G/RO/41, page 15).  The results of this work have
been reflected in the Integrated Negotiating Text (G/RO/41, pages 2-35).
4. The CRO discussed 89 product-specific rules of origin for chapters 25-27 (minerals), 28-40
(chemicals), 41-43 (leather), 44-49 (wood and pape r), 68-70 (ceramics), 71 (precious stones and
metals), and 72-73 (iron and steel).  The CRO reached consensus for Option B of Issue No. 2 of
Chapters 25-27 and for Chapter Notes 4 and 5 of Chapter 33.   There was growing consensus on 14
issues.  On several issues the number of options were narrowed down.
5. The CRO discussed the concerns expressed by a number of delegations concerning the
implications of some major proposals for harmonized non-preferential rules of origin for other WTOG/RO/42
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Agreements.  Several delegations proposed that the CRO should confirm that, in accordance with
Articles 3(a) and 9.1(a) of the Agreement, rules of origin should be applied equally for all purposes as
set out in Article 1 of the Agreement.  Some other delegations questioned why confirmation of
isolated parts of the Agreement in the context of this discussion was an appropriate way to proceed.
The CRO agreed to continue its discussions on the implications of the implementation of theharmonized rules of origin for other WTO Agreements at its planned February 2000 meeting.  The
CRO also confirmed that while there could be legitimate differences of view as to which processes
constitute last substantial transformation, the best approach remained for Members to continue
discussions on product-specific rules on the basis of technical considerations in accordance with
Articles 9.1 and 9.2 of the Agreement.
6. As concerns the continuation of the Harmonization Work Programme, the CRO considered
that very useful work and substantial progress has been made since July 1998.  However the
remaining work could not be completed on a best-endeavour basis by November 1999 as set out in
G/RO/25.  The CRO discussed a proposal from India that , to facilitate a decision by Ministers at their
third Ministerial Conference, the CRO make a reco mmendation on the deadline for completion of the
HWP by 31 July 2000, and that there be a suspension of interim arrangements. Several Memberssupported India’s proposal.  In this context, a num ber of Members noted that the proposals on the
completion of the HWP are being discussed in the General Council.  There were differing views
amongst Members on whether the CRO should make such a recommendation.  Some Members stated
that it would be appropriate for the CRO to  forward a recommendation while other Members
indicated that the discussion and decision should be taken at the higher level.   All Members agreedthat establishing a deadline was useful for completing the work programme and that the results of the
HWP should be a quality product.  A number of Members stated that they were still considering what
specific date would be appropriate for a deadline.  A number of Members also indicated that the
deadline had to be realistic and achievable.  A number of Members further stated that the CRO should
first undertake an assessment of the current status of work to identify how much work remained and
that it should develop a management plan for completing the HWP before making a recommendation.
As concerns the suspension of interim arrangements, a number of Members supported India's
proposal, but a number of other Members had reservations on this proposal.  One delegation indicated
that its reservation was based on the consideration that it would disallow all interim arrangements,
including those consistent with the Agreement.
7. The CRO agreed to meet on 27 and 28 January 2000 to develop its management work
programme for the HWP.  It was also agreed th at the CRO would meet from 7-18 February 2000 to
continue its work on the basis of the following agenda:
7 February 2000 Plurilateral meetings hosted by the Philippines to discuss the product-
specific rules of Chapters 25-27 (mineral products) and 71 (precious
stones and metals)
8 February 2000 Plurilateral meetings hosted by Canada to discuss the product-specific
rules of Chapters 41-43 (leather)
9-11 February 2000 Plurilateral meetings ho sted by New Zealand to discuss product-
specific rules of Chapters 72-73 (iron and steel).  Plurilateral meetings
hosted by Australia to discuss the product-specific rules of Chapters
74-81 (non-ferrous metals)
14-15 February 2000 Plurilateral meetings hosted by the EC to discuss the overall
architecture, including Rule 2 of Appendix 2G/RO/42
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16-17 February 2000 Informal meetings to discuss the overall architecture, including
Rule 2 of Appendix 2
18 February 2000 (a.m.) Informal meeting to discuss the implications of the implementation of
the harmonized rules of origin on other WTO Agreements, includingconfirmation that rules of origin should be applied equally for all
purposes as  set out in Article 1 of the Agreement;  reporting of the
plurilateral meetings;  endorsement of the proposals on the
harmonized rules of origin;  other issues
18 February 2000 (p.m.) Formal meeting
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