./.WORLD TRADE
ORGANIZATIONWT/GC/W/506
G/RO/W/96
16 July 2003
(03-3860)
General Council
Committee on Rules of OriginOriginal:  English
COMMENTS ON THE PROPOSAL BY THE CHAIRMAN OF THE
COMMITTEE ON RULES OF ORIGIN ON THE
IMPLICATIONS ISSUE
Communication from Australia and New Zealand
The following communication, dated 15 July 2003, has been received from the Permanent
Missions of Australia and New Zealand.
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1. The following expresses our concerns with the CRO Chair’s implications proposal, found in
page 4-5 of JOB(03)/132.
2. Para. 2, General Rule 1 of the implications proposal provides:
"2. Rules of Origin provided in this Annex shall be applied equally for the purposes set
out in Article 1, paragraph 2 of the Agreem ent on Rules of Origin, whenever a Member is
required, or in the absence of such a requirement voluntarily decides, to determine the country
of origin of a good in the application of an  agreement set out in Annex 1A of the WTO
Agreement.  However, the Rules of Origin in this Annex shall be without prejudice toMembers’ rights and obligations in respect of the application of non-preferential commercial
policy instruments."
3. The first sentence can be better explained by way of an example, such as the Anti-dumping
Agreement.  The ADA provides that a Member can either use "Country of Origin" or "Country ofExport" to determine origin.  In this case, a Me mber could choose to use the "Country of Export"
criteria, avoiding the need to use harmonised rules.  However, there may be cases (possibly where a
good is transshipped through a third country or not produced in the country of export) that the
Member would have to use the "country of origin" cr iteria.  In that case, they would have to use the
harmonised rules.
4. It is unclear what the second sentence means.  "Rules of Origin used in non-preferential
commercial policy instruments" are defined in Article 1 (para. 2) of the Agreement on Rules of Origin
(ARO) to include the application of MFN, Nati onal Treatment, Schedules of Concession, Marks of
Origin, Quotas, Anti-dumping and Countervailing duties and Safeguards Measures.  The second
sentence could be read to exclude certain measures from the scope of the ARO.  We question whether
it would mean that even where a Member chooses, or is required to determine origin, e.g. to use the
"Country of Origin" criteria in the ADA, the harmonised rules of origin do not have to be used.WT/GC/W/506
G/RO/W/96
Page 2
5. We consider that the second sentence could give Members a free rein to pick and choose how
they apply the harmonised rules.  In our view it also conflicts with the first sentence in the proposed
text and with Article 1, paragraph 2, of the ARO.
6. We have major concerns over this wording.  We  suggest either deleting the second sentence,
or amending it to reflect the original wording of  Brazil’s proposal, including Australia’s suggested
amendment, that is, "in a manner consistent with the rights and obligations derived from the WTO
Agreements."  The second sentence of para 2 would therefore provide,
"The Rules of Origin in this Annex shall be applied in a manner consistent with the rights and
obligations derived from the WTO Agreements."
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