RESTRICTEDWORLD TRADE
ORGANIZATIONG/RO/M/25
22 October 1999
(99-4581)
Committee on Rules of Origin
MINUTES OF THE MEETING OF 1 OCTOBER 1999
Chairman:  Mr. A.R. Moroz
The agenda proposed for the meeting, contained in WTO/AIR/1156, was adopted by the
Committee on Rules of Origin (CRO) as follows:
I. OVERALL ARCHITECTURE OF THE HARMONIZED RULES OF ORIGIN
(G/RO/41, PAGES 2-35).......................................................................................................... .1
II. PRODUCT-SPECIFIC RULES OF  ORIGIN (G/RO/41).....................................................2
A. C HAPTERS 25-27 ( MINERAL PRODUCTS ) AND 71 ( PRECIOUS STONES AND METALS )..................2
B. C HAPTERS 28-40 ( CHEMICALS )...................................................................................................3
C. C HAPTERS 44-49 ( WOOD AND PAPER ) ........................................................................................5
III. REPORT (1999) OF THE COMMITTEE ON RULES OF ORIGIN TO THE
COUNCIL FOR TRADE IN GOODS (G/RO/W/44) ............................................................6
IV. NOTIFICATIONS UNDER ARTICLE 5 AND PARAGRAPH 4 OF ANNEX II
OF THE AGREEMENT ON RULES OF ORIGIN (G/RO/N/26)........................................6
V. DECISION-MAKING PROCESS OF THE COMMITTEE ON RULES OF
ORIGIN ......................................................................................................................... ............6
VI. DATE OF THE NE XT MEETING.........................................................................................6
I. OVERALL ARCHITECTURE OF THE HARMONIZED RULES OF ORIGIN
(G/RO/41, PAGES 2-35)
1.1 Based on informal consultations which had taken place from 27-29 September 1999, the
Chairman summarized the discussion on this issue as follows:
The discussion on the outstanding issue of the application of the primary and residual rules
(Option X issues) was useful because it helped identify the main issues that Members needed
to address.
The first key issue was the sequence.  If a product, under the proposed Rule 2(b) of Appendix
2, did not meet the primary rule in the last country of production, what would the next rule to
considered in order to determine the country of origin for that good?
In this regard, Members had divergent views over the placement of the residual chapter rules.
Some Members suggested that the chapter residual rules should be the next rule to be appliedG/RO/M/25
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if Rule 2(b) was not applicable.  Various other Members suggested that next rule in the
sequence after Rule 2(b) should be based on the concept of “origin-retaining”, i.e. the good
should retain the origin it possessed before processing in the last country.  While there was
evident interest in this concept, several que stions were raised concerning the specific
circumstances and scope for the application of origin-retaining rules. For example, did origin-retaining rules apply only when minor operations or processing occurred; or when only a
single material was used; or were there other circumstances?   It appeared desirable to have
greater clarity on scope and circumstances of the application of origin-retaining rules, both to
better understand their application and for addressing the question of where such rules should
appear in the sequence.
With no prejudice to either the sequence issue or the origin-retaining issue, there was another
set of issues regarding how proposed certain rule s would actually work.  For example,  there
were significant differences between the EC and US proposals on Rule 2(d) in regard of
which materials should be taken into account when an imported good has undergone further
processing in the last country of production?  Likewise, there were differences in the Rule
2(f) proposed by the EU, India and the US regarding which materials should be taken intoaccount in the circumstances described by that provision: only non-originating materials; or
both originating and non-originating materials.
All Members should consider the above issues and consult amongst themselves in preparation
for the next meeting.  It would also be useful for Members to provide early writtencontributions on the issues
1.2 The CRO took note of the statement made.
II. PRODUCT-SPECIFIC RULES OF ORIGIN (G/RO/41)
A. CHAPTERS 25-27 ( MINERAL PRODUCTS ) AND 71 ( PRECIOUS STONES AND METALS )
2.1 The representative of the Philippines, rapporteur for the informal plurilateral discussions on
chapters 25-27 and 71, stated as follows:
"1. Pursuant to the agreement of the Committee in its meeting held on 23 July 1999, a
plurilateral meeting was held on 22 September 1999 to review for the second time
chapters 25-27 and 71.
2. The invitation to the meeting was sent to all Members and was attended by 12
Members, namely, Australia; Canada; Colombia; European Communities; Hong
Kong, China; India; Japan; Korea; Mexico; Morocco; Philippines and the United
States.
3. The basic document used for the meeting was document G/RO/41 issued on
3 September 1999.  This document was distributed to all Members.
4. Following intensive deliberations and the same spirit of compromise and flexibility
that was demonstrated by the members who attended the first plurilateral meeting on
these chapters on 20 July 1999, the outcome of the plurilateral meeting is as follows:
On chapters 25-27:
Issue No. 1 – Members agreed that consensus on this issue was still elusive.G/RO/M/25
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Issue No. 2 – Consensus was reached for option B last 20 July.
Issue Nos. 3-6 – Consensus was reached for option A in the meeting held on
10-21 November 1997.  This consensus was reflected on page 7 of document G/RO/M/12.
Issue No. 7 –  There was agreement to delete in para.43 on page 293 of G/RO/41 the
processes in brackets (b), (l), (m) and (n) of chapter Note 2 of Chapter 27.  However, no
agreement was reached on the inclusion of "atmospheric distillation" in process (a) of Chapter
Note 2 of Chapter 27.   With this agreement, consensus can be reached on option A.
Issue Nos 8 - 9  – As reported in the July meeting, there was growing consensus towards
option A.  At this meeting it was agreed that the Member/s who found it difficult to join theconsensus for option A would undertake to circulate a compromise proposal in a timely
manner for consideration at the next meeting of the Committee.
Issue No. 10 – It was agreed to check with a Member who could not join the plurilateral
meeting if it could join the consensus for option B.
On Chapter 71
Issue No. 1 – There was growing consensus towards option A.  One Member pointed out that
the process described in option A which was "electrolytic" should not be confused with"galvanization" which involves a more substantial coating process.
Issue No. 2(a, b and c) – It was agreed to c onsult that the rule of origin would be “CTSH
provided that the goods are cut or ground to final shape”.  One Member needs to consult on
this origin criteria with regard to synthetic stones.
Issue No. 3 –  There was growing consensus towards option A.
Issue No. 4 – There was growing consensus towards option A. One Member needs to consult
further with regard to pearls.
Issue No. 5 – It was agreed this issue would be considered together with other horizontal
issues in Chapters 82-90.
Conclusion/Observation
As rapporteur for this meeting, I would like to commend those members who participated at
the plurilateral meeting for the spirit of flexibility and compromise that they demonstrated that
enabled us to reach substantial progress on these chapters."
B. CHAPTERS 28-40 ( CHEMICALS )
2.2 The representative of India, rapporteur for the informal plurilateral discussions on
chapters 28-40, summarized the results of the discussions held from 20-21 September 1999 as
follows:
"Issue No. 1 - No consensus was reached.  However there was agreement that mixing of two
or more active ingredients was origin-conferring.  The remaining disagreement concerned
whether or not the mixing of active ingredients with inactive ingredients was
origin-conferring.G/RO/M/25
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Issue No. 2 -  No consensus was reached.  However it was agreed that putting up
medicaments in packaging for retail sale was, in itself, not origin-conferring.  It was also
noted that the Chapter Note on mixtures should apply for change from outside to heading
30.04.
Issue No. 3 -  No consensus was reached.  Some  Members stated that they would consult with
their industries in order to confirm the tech nical explanation provided by the Members
supporting option B.
Issue No. 4 -  As concerns Chapter 30, there was  growing consensus towards option B
(subject to verification of Singapore).
Issue No. 5 - No consensus was reached.
Issue No. 6 -  There was consensus on Chapter Notes 4 and 5 of Chapter 33.
Issue No. 7-  No consensus was reached.
Issue No. 8 -  There was consensus on option A.
Issue No. 9 -  There was a common understanding that the tariff change resulting from the
mere addition of alcohol to odoriferous substances or to a perfume base is not
origin-conferring.  Some delegations needed further reflection on whether mixing within
heading 33.03 is origin-conferring and whether options B and C can be merged.
Issue No. 10 -  No consensus was reached.
Issue No. 11 -  No consensus was reached.
Issue No. 12 - There was agreement to delete option A.  Some Members needed further
reflection on option B which contained some ambiguity.Issue No. 13 -  No consensus was reached.
Issue No. 14 -  No consensus was reached.
Issue No. 15 -  No consensus was reached..
Issue No. 16 - No consensus was reached.  However, it was noted that disagreement between
options A and B was not large.  While option A allowed the change from heading 37.03, one
Member supporting option B stated that change did not occur in the normal course of
business.
Issue No. 17 -  No consensus was reached.
Issue No. 18 -  No consensus was reached.
Issue No. 19 - There was growing consensus towards option B (subject to verification of
Singapore).Issue No. 20 - There was growing consensus towards option B (subject to verification of
Singapore).G/RO/M/25
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Issue No. 21 - There was growing consensus towards option B (subject to verification of
Singapore).
Issue No. 22 -  No consensus was reached.
Issue No. 23 - There was growing consensus towards option B.
Issue No. 24 -  No consensus was reached.
Issue No. 25 - There was growing consensus towards option B (subject to verification of
Switzerland).
Issue No. 26 - There was growing consensus towards option B (subject to verification of
Canada and Mexico).Issue No. 27 - There was growing consensus towards option B (subject to verification of
Canada).
Issue No. 28 -  No consensus was reached.
Issue No. 29 - No consensus was reached.
Issue No. 30 - No consensus was reached.
Issue No. 31 - There was growing consensus towards option B (subject to verification of
Canada).
Issue No. 32 - No consensus was reached.
Issue No. 33 - There was growing consensus towards option B (subject to verification of the
Philippines)."
C. CHAPTERS 44-49 ( WOOD AND PAPER )
2.3 The representative of Switzerland, rapporteur for the informal plurilateral discussions on
chapters 44-49, summarized the results of the discussions held on 23 September 1999 as follows:
"A number of delegations stated the issues in this product group were a matter of principles
and, therefore, they could go along with the consensus.
Issue No. 1 - Some delegations indicated that if  there was consensus, they would support the
proposal "finger - or - end-jointing" (only "finger-jointing" for some other delegations).
However no consensus was reached.
Issue No. 2 - No consensus was reached.  One Member pointed out that heading 44.13 was
not relevant for this issue.Issue No. 3 -  No consensus was reached.
Issue No. 4 - One delegation indicated strong in terest in this issue.  Another delegation
pointed out that painting should not be considered as substantial transformation.
Issue No. 5 - One delegation stated that if th ere is consensus, he could join consensus.
Another delegation stated that his position on option B had been reconfirmed.G/RO/M/25
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Issue No. 6 -  No consensus was reached.
Issue No. 7 -  No consensus was reached.
Issue No. 8 -  No consensus was reached.
Issue No. 9 -  Consensus was reached for option A.
Issue No. 10 -  No consensus was reached.
Issue No. 11 -  No consensus was reached.
Conclusion
 At the conclusion of the plurilateral meeting, it was agreed that the discussion was useful and
another plurilateral meeting on the same chapters be scheduled in October meetings."
2.4 The CRO took note of the statements made and agreed  to take up the issues on which
consensus has been reached and unresolved issues at its next meeting.
III. REPORT (1999) OF THE COMMITTEE ON RULES OF ORIGIN TO THE
COUNCIL FOR TRADE IN GOODS (G/RO/W/44)
3.1 The Chairman noted that the Secretariat had circulated a draft of the Committee's report to the
Council for Trade in Goods, as required by  Article 6.1 of the Agreement (G/RO/W/44).
3.2 Based on the informal consultations which had taken place on 30 September 1999, the CRO
adopted its revised annual report to the CTG (G/L/326).
IV. NOTIFICATIONS UNDER ARTICLE 5 AND PARAGRAPH 4 OF ANNEX II OF THE
AGREEMENT ON RULES OF ORIGIN (G/RO/N/26)
4.1 The Chairman recalled that since the meeting of 1 July 1999, the Secretariat had circulated a
document informing delegations of the new notifications received (G/RO/N/26).  To date, 72
Members had made notifications of non-preferential rules of origin and 75 Members had made
notifications of preferential rules of origin.  He expressed concern that a significant number ofMembers had not complied with the notification requirements, and urged Members who had not yet
notified to do so as early as possible.
4.2 The Committee took note of the notifications made and of the statement of the Chairman.
V. DECISION-MAKING PROCESS OF THE COMMITTEE ON RULES OF ORIGIN
5.1 Based on the informal consultations that had taken place on 30 September 1999, the CRO
reaffirmed the current decision-making process that had been established in previous years in the
CRO.  In addition, Members agreed that “Endorseme nt of Proposals” should be a standing agenda
item for CRO meetings.
VI. DATE OF THE NEXT MEETING
6.1 The Chairman proposed the following dates for the next meeting of the Committee:G/RO/M/25
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25 October 1999: Plurilateral meetings hosted by India to discuss the product-specific
rules of Chapters 28-40 (chemicals)
26 October 1999 (a.m.): Plurilateral meetings hosted by Canada to discuss the
product-specific rules of Chapters 41-43 (leather)
26 October 1999 (p.m.): Plurilateral meetings to discuss product-specific rules of Chapters
68-81 (host to be decided) or the overall architecture, including the
Option X issue
27 October 1999 (a.m.): Plurilateral meeting hosted by the Philippines to discuss the
product-specific rules of Chapters 25-27 (mineral products) and 71(precious stones and minerals)
27 October 1999 (p.m.): Plurilateral meetings hosted by Switzerland to discuss the
product-specific rules of Chapters 44-49 (wood and paper)
28 and 29 October 1999: Informal meeting to discuss the overall architecture, including the
Option X issue
1-2 November 1999: Plurilateral meetings to discuss the Option X issue or
product-specific rules for Chapters 68-81 (host to be decided)
3 November 1999: Informal meeting to discuss the overall architecture, including the
Option X issue
4 November 1999 (a.m.): Informal meeting to discuss the overall architecture, including the
Option X issue
4 November 1999 (p.m.): Informal meeting to discuss the progress report to the CTG on the
HWP
5 November 1999 (a.m.): Informal meeting to discuss the implications of the implementation
of the harmonized rules of origin on other WTO Agreements
5 November 1999 (a.m./p.m.): Formal meeting
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