RESTRICTED  
  
G/RO/M/73  
 
18 February 2020  
(20-1262) Page: 1/18 
Committee on Rules of Origin    
 
 
MINUTES OF THE MEETI NG OF 17-18 OCTOBER  2019 
CHAIRPERSON : MRS UMA MUNIANDY (SINGAPORE ) 
Subjects Discussed1 
1   OFFICIAL PRESENT ATION OF THE "ORIGIN  FACILITATOR", A JOI NT INITIATIVE  
BY THE WTO, ITC, AND  WCO  ................................ ................................ ............................  2 
2   IMPLEMENTATION O F THE BALI AND THE N AIROBI MINISTERIAL D ECISIONS  
ON PREFERENTIAL RULE S OF ORIGIN FOR LEAS T DEVELOPED COUNTRIE S  
(WT/L/917 AND WT/L/9 17/ADD.1)  ................................ ................................ ................  4 
2.1   Review of recent developments (paragraph  1.10 of the Bali Ministerial Decision  
(WT/L/917) and of the implementation of the Decision (paragraph  4.4 of the Nairobi  
Ministerial Decision (WT/L/917/Add.1))  ................................ ................................ .................  4 
2.1.1    Notifications of Preferential Rules of Origin for LDCs and Preferential Imports and  
Tariffs (G/RO/W/163/Rev.6)  ................................ ................................ ................................ . 4 
2.1.2    Update on the implementation of the REX  system (RD/RO/85)  ................................ ....... 5 
2.2   Report by other Preference -Granting Members  ................................ ................................  7 
2.3   Direct Consignment Rules – Submission by the LDC Group (G/RO/W/191 and  
RD/RO/82)  ................................ ................................ ................................ .........................  8 
2.4   Impact of direct con signment requirements on preference utilization by LDCs –  
Note by the Secretariat (G/RO/W/187 AND RD/RO/81)  ................................ ..........................  11 
2.5   Utilization of China's Preferences by LDCs – Submission by the LDC Group  
(G/RO/W/192 AND RD/RO/84);  ................................ ................................ ..........................  13 
2.6   Report (2019) of the CRO to the General Council on preferential rules of origin  
for LDCs (G/RO/W/188)  ................................ ................................ ................................ ..... 14 
3   NOTIFICA TIONS UNDER ARTICLE  5 AND UNDER PARAGRAP H 4 OF ANNEX  II  
OF THE AGREEMENT ON RULES OF ORIGIN  ................................ ................................ .... 15 
4   DRAFT TEMPLATE F OR THE NOTIFICATION OF NON -PREFERENTIAL RULES  
OF ORIGIN AND ORIGIN  REQUIREMENTS (G/RO/ W/182/REV.1) ................................ .. 15 
5   TWENTY -FIFTH ANN UAL REVIEW OF TH E IMPLEMENTATION AND  OPERATION  
OF THE AGREEMENT ON RULES OF ORIGIN (G/R O/W/189)  ................................ ..........  17 
6   DRAFT REPORT (20 19) OF THE CRO TO TH E COUNCI L FOR TRADE IN GOODS  
(G/RO/W/190)  ................................ ................................ ................................ ..............  17 
7   ROUND -TABLE ON " THE FUTURE OF RULES OF ORIGIN" HELD AT T HE  
EUROPEAN UNIVERSITY INSTITUTE (2 6-28 JUNE 2019) – REPORT BY UNCTAD  ............  17 
8   OTHER BUSINESS  ................................ ................................ ................................ ...... 18 
_______________  
 
The Committee  on Rules of Origin ( the Committee , or CRO ) adopted  the agenda of the meeting as 
circulated  in document  WTO/AIR/ RO/10. 
 
1 The agenda of the meeting was circulated in document  WTO/AIR/RO/10.  G/RO/M/73  
 
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1  OFFICIAL PRESENTATIO N OF THE "ORIGIN FACILITATOR" , A JOINT INITIATIVE  BY THE 
WTO, ITC , AND WCO  
1.1.  The Chairperson  formally presented to Members the " Origin Facilitator ": a free, centrali zed 
online database  containing  detailed and standardized information abou t rules of origin and origin 
procedures  (https://findrulesoforigin.org ). The Origin Facilitator had  result ed from a collaboration 
between the  Secretariats of the International Trade Centre (ITC), the World Customs Organization 
(WCO) , and the World Trade Organization ( WTO). 
1.2.  The WTO Director -General , Roberto Azevêdo , presented the Origin Facilitator and highlighted 
that rules of origin , both preferential and non -preferential,  were a basic and essen tial component of 
international trade. Nevertheless, companies experienced difficulty in accessing information about 
such requirements in simple and standardized language . For this reason, the Origin Facilitator filled 
a real gap. He hoped that, over time, the Origin Facilitator would evolve to cover all preferential and 
all non-preferential rules of origin , making it especially useful for smaller companies in developing and 
least developed countries . 
1.3.  Addressing the Committee by video, the Executive Directo r of the ITC, Mrs Arancha Gonzalez , 
said that businesses needed to comply with rules of origin in order to seize the opportunities created 
by international trade agreements. However, ITC business surveys had revealed that rules of origin 
were one of the most frequent non -tariff trade barrier s facing small businesses. T he Origin Facilitator  
was the world's largest database of rules of origin and it would help businesses, especially micro, 
small , and medium -sized enterprises , to make full use of trade agreements by offering traders 
greater transparency and predictability.  
1.4.  The ITC's Deputy -Executive Director, Mrs  Dorothy Tembo , emphasized that the multiplicity of 
rules of origin and origin requirements currently in force created uncertainty for companies and 
increased the costs of doing business. While recognizing the diffi culties of harmoni zing such rules 
and requirements, she noted that costs and uncertainty could be mitigated by simply facilitating 
access to such information. In this way , the Origin Facilitator would constitute a useful tool not only 
for businesses but al so for trade operators and policy makers. She encouraged delegations to inform 
their Capital -based colleagues about this new tool and invited them not only to use it but also to 
make suggestions on ways to improve  it. 
1.5.  Mr Yi Xiaozhun, Deputy  Director -General  of the WTO , noted that companies were obliged  to 
navigate through over 300  reciprocal trade agreements (FTAs) and about 30  non-reciprocal trade 
preferences  (preferential trade arrangements, or PTAs) . In addition, some 50 WTO Members also 
applied rules of origin for non -preferential purposes. In other words, there existed over 400 different 
sets of rules of origin, each containing different origin criteria, product -specific rules, obligations 
regarding certification , and specificities relating to direct transportation, cumulation, and de minimis 
provisions.  For this reason, the Origin Facilitator broke new ground. He highlighted that  the Origin 
Facilitator was easy and simple to use , even when the rules behind it comprised thousands of pages of 
legislation.  
1.6.  The WTO Secretariat  demonstrated  how to run a search  using the Origin Facilitator . 
The Secretariat noted that the Origin Facilitator displayed rules of origin at the national tariff line 
level. It contained a function that helped user s to find the right tariff code by typing in keywords. 
In addition, it allowed users to compare rules of origin under different agreements , such as by 
LDC preference, by general preference (GSP) , and by FTA. All the information contained in the Origin 
Facilitator had been structured in standardized fields , such as origin criteria, cumulation , de minimis , 
certification , documentation , and so on ). All fields  included an icon that allowed users to learn more 
about the definitions and terminology used. The Origin Facilitator sourced its information from a 
WCO database  (for FTAs) , and from WTO Members' notifications (for LDC PTAs) . The original 
legislation or notifications  had been linked and could be accessed  directly from the Origin Fa cilitator . 
1.7.  Finally, the International Trade Centre  noted that the current priority for the Origin Facilitator 
was to cover all active FTAs , expanded from the two -thirds of preferential agreements currently 
covered. In a second  phase, additional functions would be added to the Origin Facilitator , including 
a translation into French and Spanish. He explained that a ccess to the Origin Facilitator was open to G/RO/M/73  
 
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  all, including government officials and business operators from both developed and developing 
countries. No prior registration or log -in was required.  
1.8.  The representative of Sri Lanka  agreed that the Origin Facilitator would be beneficial for 
developing countries ' companies and governments. In fact, her agency, which was responsible for 
issuing cert ificates of origin  in Sri Lanka , received queries about rules of origin every day. Her 
colleagues could now refer companies to the Origin Facilitator. On a separate point, she asked about 
the colour coding of the website. In addition, she asked if the Origin Facilitator would also contain 
information about products subject to trade remedies. In deed, she noted that , when a product was 
subject to anti -dumping duties  or when it contained inputs and materials that were subject to 
anti-dumping rules , a separate set of specific origin requirements could apply. Therefore, it would 
be useful if the Origin Facilitator could flag those cases and inform operators accordingly. 
She understood that building a fully comprehensive database would take time . In the meantime, 
she asked if information regarding trade remedies could be sourced from existing WTO annual 
reports and notifications made to WTO  bodies.  
1.9.  The representative of the United States  agreed  that the Origin Facilitator was a useful and 
impressive tool. He asked how the agencies involved in this project planned to keep the relevant 
information up to date. In this regard, he noted that changes to certain FTAs had not yet been 
reflected  in the Origin Facilitator . Finally, he asked how the database could reflect the fact  that 
preferences were sometimes permanently or temporarily suspended for certain beneficiaries.  
1.10.   The representative of the Russi an Federation  also wondered how the agencies involved in this 
project would keep track of changes to Members'  rules of origin and how often the information would 
be updated. She also asked if any particular procedure was in place for receiving feedback from 
delegations.  
1.11.   The representative of the Democratic Republic of Congo  asked if countries exporting raw 
materials  and non -processed materials were also included in the database.  
1.12.   The representative of Switzerland  said that the Origin Facilitator was a useful tool and one 
that highlighted the importance of transparency on all origin  requirements, including 
non-preferen tial rules of origin. He emphasized that the discussions had highlighted the importance 
of transparency on both preferential and non -preferential rules of origin. He noted that this point 
had also been highlighted by the WTO  Director -General, the ITC's Exe cutive Director , and by other 
speakers. In fact, over 80% of world trade occurred under non -preferential conditions. In this regard , 
he wished to remind delegations that a proposal was being discussed in the Committee precisely to 
improve notifications and transparency in these areas. Finally, h e asked how the Origin Facilitator 
would be linked to the Global Trade Helpdesk (GTHD).  
1.13.   The representative of the European Union  welcomed the initiative and praised the tool for 
being useful, user -friendly , and open to all. She also asked how and when the information contained 
in the Origin Facilitator would be integrated into the GTHD.  
1.14.   The representative of Tanzania  considered that the Origin Facilitator could be a game -changer 
for LDC users because of its  potential to cut trade costs. He also noted that the usefulness and 
relevance of the Origin Facilitator would depend upon the quality of Members' notifications to the 
WTO.  
1.15.   The representative of Indonesia  asked what type of assistance was available f or governments 
that needed training in this area.  
1.16.   The representative of the International Trade Centre  clarified that the Origin Facilitator was 
already one of the building blocks of the GTHD , and that the Origin Facilitator and the GTHD were 
already linked and synchronized ; in future , the one would continue to feed the other.  He also clarified 
that the information regarding tariffs and beneficiaries was sourced from another application , 
MacMap, which was updated  regularly using governmental so urces.  He clarified , too,  that the Origin 
Facilitator would be regularly updated once all FTAs were covered. In addition, he explained that , 
although trade remedies were currently not flagged , it would be possible to flag them as the ITC had 
a separate too l that covered trade remedies at the HS  tariff-line level. He noted that trade remedies 
usually triggered the use of non -preferential rules of origin ; for this reason, he hoped that G/RO/M/73  
 
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  WTO Members would agree to notify their existing non-preferential rules so  that such information 
could also be integrated in to the Origin Facilitator . Finally, he noted that the Origin Facilitator 
contained a "feedback" button , which could be used by users and delegations for providing feedback 
or corrections.  
1.17.   The Secretariat  agreed that information on trade remedies and non -preferential origin 
requirements needed to be incorporated into the Origin Facilitator to give operators a more 
comprehensive and accurate overview of market access conditions. Nevertheless, he noted that  
standardi zed and up-to-date information on non-preferential rules of origin was not currently 
available. The Committee had rep eatedly noted how most available notifications were incomplete 
and outdated . For this reason, he hoped that Members would see the usefulness of the Origin 
Facilitator and agree to begin notify ing more comprehensive and up -to-date information relating to 
their non-preferential rules of origin and certification. Indeed, one of the many advantages of 
sourcing information from notifications was precisely to use correct, official , and updated 
information. Finally, he clarified that all of the products covered by  the Origin Facilitator were covered 
at the national tariff -line level , including finished goods and raw and intermediate materials.  
1.18.   The Committee  took note  of the Origin Facilitator and the statements made.  
2  IMPLEMENTATION OF TH E BALI AND THE NAIRO BI MINIS TERIAL DECISIONS ON 
PREFERENTIAL RULES O F ORIGIN FOR LEAST D EVELOPED COUNTRIES  (WT/L/917 AND 
WT/L/917/ADD.1 ) 
2.1  Review of recent developments  (paragraph  1.10 of the Bali Ministerial Decision 
(WT/L/917) and of the implementation of the Decision (paragraph  4.4 of the Nairobi 
Ministerial Decision (WT/L/917/A dd.1)) 
2.1.  The representative of Chad, on behalf of the LDC  Group , recalled that the  Ministerial Decision 
aimed more fully to integrate LDCs into the multilateral trading system. He also noted that the 
underutilization of trade preferences  was a serious concern for LDCs . Indeed, work undertaken in 
the Committee had shown that products of significant interest to  LDCs were paying MFN  duties 
despite being eligible for trade preferences. He considered that further research was required to 
understand all the  causes of underutilization ; even so, it was clear that complex rules of origin and 
origin requirements created  barriers  to trade . For this reason , the LDC  Group would continue to 
advocat e for substantive reforms to simplify  origin requirements ; he also called upon all preference -
granting Members to consider their rules of origin in light of the Ministerial Decisio n and to identify 
possible areas for reform and simplification. In this regard , he reported that the LDC Group had held 
useful bilateral meetings with the delegations of the EU, Japan,  and Switzerland , and that the Group 
would move forward with analyses of utilization rates under specific schemes . In that context, he 
invited all preference -granting Members to notify their preferential imports from LDCs so that 
utilization rates could be calculated. In addition, the LDC Group wou ld also put forward 
recommendations for the simplification of documentary requiremen ts, in particular relative  to direct 
consignment.  
2.1.1   Notifications of Preferential Rules of Origin for LDCs a nd Preferential Imports and 
Tariffs (G/RO/W/163/Rev.6)  
2.2.  The Chairpe rson reminded the Committee that Members had instructed the Secretariat to reach 
out to those Members whose notification obligations were outstanding in the areas of preferential 
rules of origin and preferential imports from LDCs . She asked the Secretariat  to report on latest 
developments  in this regard . 
2.3.  The Secretariat  noted that almost all preference -granting Members had now notified the ir 
preferential rules of origin applied under non -reciprocal preferences for LDCs. Since the Committee 's 
previous formal  meeting , Montenegro and Turkey had also notified their rules ; consequently, the 
only notifications still outstanding were those of Iceland and Armenia. In the case of Iceland, the 
delegation had indicated to the Secretariat that new rules of origin were currently being prepared 
and that the new legislation would be notified as soon as it had been adopted.  
2.4.  On import stati stics, in contrast , the Secretariat noted that many Members had only partially 
notified their preferential imports from LDCs  or else had never done so . Import statistics had never G/RO/M/73  
 
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  been notified for Armenia ; Iceland ; Kazakhstan ; the Kyrgyz Republic ; Montene gro; New Zealand ; 
the Russian Federation ; and Turkey ; partial information had been submitted by China , India, and 
the United States (for Haiti only). 
2.5.  The representative of Iceland  confirmed that its domestic legislation regarding preferences for 
LDCs was currently being amended ; the new rules would be notified as soon as possible.  
2.6.  The representative of the United States  also confirmed that his delegation had been working 
with the WTO  Secretariat to find ways to incorporate Haiti's import statistics into the  
WTO's databases. The problem had been that these preferences had been classified under temporary 
codes of HS  chapter  98, meaning that the classification of these imports needed to be converted 
back into the HS  codes of chapters  61 and 62.  
2.7.  The representative of Turkey  informed the Committee that her delegation had been working 
with the Secretariat to notify the necessary tariff and import data. Her delegation also agreed that 
transparency in this area was a key component for full utilization of preferences by LDCs.  
2.8.  In conclusion, the Chair person  requested the Secretariat to continue to reach out to delegations 
that had gaps  in their notification submissions and to present a further progress report at the 
Committee 's next  meeting . 
2.9.  The Committee  took note  of the report and  of the statements made and agreed  to proceed 
accordingly . 
2.1.2   Update on the i mplementation of the REX system  (RD/RO/85)  
2.10.   The Chairperson  invited the EU  delegation to update Members on the implementation of the 
REX system of self-certification for registered exporters . 
2.11.   Mr Christophe Fontaine , Policy Officer on Rules of Origin at the European Commission , 
explained that the EU had identified its complex certification obligations as one of the factors leading 
to the underutilizat ion of the EU 's Generalized System of Preferences (GSP). As a result, a 
2010 reform had simplified these requirements and introduced self -certification. After a transition 
period, all GSP  beneficiaries2 would start using the system from 2017, 2018, or 2019 . During the 
transition period, competent authorities in the beneficiary country would still issue "Form  A" 
certificates of origin , while exporters that had registered to do so could self -certify the origin of their 
consignments. Mr  Fontaine reported that 40,000  exporters had already registered, of which 
26,000  from India,  and 7,000  from Pakistan. However, a few beneficiary countries  had not yet 
implemented the REX  system although their transition period had lapsed. Exporters in these 
countries could no longer present  "Form  A" certificates , but nor did they have access to the 
REX system . As a result, they were currently unable to claim duty -free treatment in the EU, Norway, 
Switzerland,  and Turkey.  
2.12.   He explained that, under the REX  system, a statement on origin drafted by the exporter on a 
commercial document was sufficient to prove the origin of the goods. In practical terms, the 
statement of origin was a simple sentence that the exporter added to commercial documents 
(invoice s, delivery  notes, or packing list s, for example ) stating that the goods had been either wholly 
obtained ("W") or that any foreign materials used had been sufficiently processed ("P"). A footnote 
would indicate i f cumulation provisions had been used. The statement co uld be made in English, 
French , or Spanish. To use self-certification,  businesses had first to register in a database maintained 
by the local authorities of GSP beneficiary countries ; upon registration, they were allocated an 
individual REX  number that had to be quoted in the statements of origin. The process of r egistration 
had to be completed not at every consignment  but only once, and it allowed users to claim 
preferences in  the markets of the EU, Norway, Switzerland,  and Turkey.  Exports valued under €6, 000 
did not need to be registered ; nor did they need a REX  number.  
2.13.   During his presentation, Mr  Fontaine illustrated how operators could apply for registration in 
the REX  system. Applicants had simply to complete and sign an application form to be handed to 
 
2 The REX  system would be used under the regular GSP but also under GSP -plus and the LDC -specific 
"Everything but Arms".  G/RO/M/73  
 
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  their local competent authorities  (on paper or electronically) . Local authorities approved the 
applications and attributed an individual "REX  number" to each exporter. This number, which had  to 
be quoted in stat ements of origin , allowed officials and importers in the EU to verify the authenticity 
of a statement. Statements of origin could be presented up to two years after importation in to the 
EU. This was a useful flexibility, particularly for consignments which  had been split in a country of 
transit.  
2.14.   Mr Fontaine also explained that e xporters were expected to keep records of all customs 
document s concerning their goods and  materials  used in case of a n origin verification. In addition, 
exporters were also requeste d regularly to communicate the list of statements on origin they had 
made out  to local authorities . On the basis of such information, local authorities verified  economic 
operators, either on their own initiative or at the request of the EU. Local authoriti es could revoke 
REX numbers  in the case of irregularities  and fraud.  
2.15.   Mr Fontaine concluded  that the REX  system would be used not only in the EU's GSP but also 
for bilateral cumulation, by exporters from Norway , Switzerland,  and Turkey. It would also be use d 
by EU  exporters under certain Free Trade Agreements ( such as those of the EU with Canada and 
Japan).  Finally, Mr Fontaine invited delegations to consult the following website page for further 
information : https://ec.europa.eu/taxation_customs/ business/calculation -customs -duties/rules -
origin/general -aspects -preferential -origin/arrangements -list/generalised -system -
preferences/the_register_exporter_system_en . 
2.16.   The representative of Turkey  confirmed that her government  had begun in August  2019 to 
implement the REX  system. To benefit from the Turkish GSP  Scheme, exporters were now required 
to make a statement on origin, instead of issuing a "Form  A certificate of origin". Following a 
transition period, all exporters would need to present such a "state ment of origin". She also clarified 
that registration under the EU  REX system had automatic effect under Turkey's GSP  System and 
that the respective systems followed the same conditions and timelines. Additional information could 
be found in Turkey's notif ication to the Committee in document  G/RO/LDC/N/TUR/1 , heading 
"Information on Rules of Origin/Eligibility".  
2.17.   The representative of Norway  confirmed that , like Switzerland,  his country  was also using the 
REX system . Moreover, he noted that Norway's GSP  System included some 40  additional beneficiary 
countries, meaning that additional developing country beneficiaries could use self -certification in the 
Norwegian market.  
2.18.   The representative of Tanzania  thanked the EU for sharing such detailed information with the 
Committee. On behalf of the LDC  Group, he urged the EU to keep reaching out to those LDC  Members 
that faced difficulties transitioning to the REX  system to ensure that all LDCs would continue to enjoy 
preferences in the markets of the EU; Norway ; Switzerland ; and Turkey. With regard to the 
de minimis  of EUR 6,000, he thanked the EU for its flexibility and asked  the EU to clarify if this 
threshold was calculated over a certain period  of time or  if it applied to each consignment. In other  
words, could an LDC  exporter benefit from an exemption from origin certification requirements even 
if several consignments valued under €6,000 were consecutively sent to the EU? Furthermore, he 
asked the EU to elaborate on split consignments , and specific ally on if it were possible to split 
consignments in an EU  member State without any further origin procedures . 
2.19.   The representative of Chad also thanked the EU for sharing this information and for the 
implementation of this trade -facilitating tool. He asked if the EU was aware of any LDCs facing 
specific difficulties in using the REX  system . 
2.20.   Similarly, the representative of  the Russia n Federation  asked the EU to explain what type of 
difficulties were being faced by those LDCs that had not yet begun to implement the REX  system 
despite their transition period having ended . 
2.21.   The representative of the Gambia  asked the EU to clarify the implementation status of the 
REX system for his country.  
2.22.   The representative of the Democratic Republic of Congo  wondered what specific steps her 
country needed to complete in order to begin using the REX  system . G/RO/M/73  
 
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  2.23.   The representative of Cambodia  asked if the EU had made plans to extend cumulation to 
countries with which the EU had signed a regional trade agreement (RTA).  
2.24.   In response, Mr Fontaine  confirmed that consignments below €6,000 did not need a 
REX number , in other words, these consignments did not need to be registered under REX to export 
to the EU. Concerning the splitting of consignments, M r Fontaine explained tha t a new statement of 
origin would need to be prepared in the country of transit only when splitting occurred outside the 
EU and only if the statement of origin did not specifically refer to the split goods being exported to 
the EU. This was precisely the t ype of situation for which statements of origin could be presented 
after exportation. However, if the splitting  had occurred within the EU, the operators handling the 
transit of the goods in question also had the option of replacing the current by a new statement of 
origin. In other words, the "reconsignor" of the goods in the EU could also be a REX  registered user 
and therefore use his own specific REX  number to make a statement about the origin of the goods. 
One important parameter, however, was that the goods had to  remain under customs con trol during 
transit and splitting. If the goods were released for free circulation within the market of one 
EU member State, the statement of origin from the beneficiary country exporter could be used to 
determine the tariff preference and there was no need for another statement on origin.  
2.25.   Mr Fontaine also clarified that LDCs had not faced any particular difficulties in transitioning to 
the REX  system , and he was unaware  of any case  in which a beneficiary Member needed to introduce 
legislative change s. He explained that a typical difficulty was rather to identify the right focal point 
in LDCs in order to advance implem entation.  
2.26.   In response to Cambodia's question  concerning cumulation, Mr  Fontaine said that extended 
cumulation was possible, but not automatic. A request from the beneficiary country had to  be 
formulated for each case , and requests  were granted by the EU, or not. However, this was a point 
not directly related to the implementation of the REX  system . 
2.27.   Mr Fontaine  clarified that the Gambian authorities had very recently completed the 
prerequisites to begin implementing the REX  system ; Consequently, the Gambia's  authorities should 
begin to register its interested exporters. He noted that the REX  system's web page display ed a 
useful table listing all beneficiary countries and the dates from which the REX  system was applicable 
for each , as well as the dates of the transition period.  
2.28.   Mr Fontaine clarified that all GSP  beneficiaries that wanted to use the REX  system needed to 
complete two  prerequisites : first, to commit to respecting the GSP  rules of origin and the 
REX system ; and second , to inform the EU of the n ames of the local authorities responsible for 
overseeing  the administration of the REX  system . 
2.29.   In conclusion, the Chairperson  thanked the European Union for sharing with the Committee 
this detailed information and update. She reminded all delegations that a separate dedicated session 
on the REX  system would be held  after the Committee's 18  October meeting. She also recalled  that 
the Nairobi Ministerial Decision had encourage d all preference -granting Members to seek ways to 
simplify their certification proce dures. For this reason, she was grateful for this opportunity to learn 
more about the EU's initiative and its lessons for  other preference -granting Members.  
2.30.   The Committee took note  of the presentation  and of the statement s made.  
2.2  Report by other Preference -Granting Member s 
2.31.   The Chairperson  offered other preference -granting Members an opportunity to report on any 
recent developments relative to their preferential rules of origin for LDCs . 
2.32.   The representative of China  reported that h is government had revised several aspects of  the 
origin requirements applied to LDCs, as followed:  first, the requirements for the assessment of 
sufficient or substantial transformation had been revised ; second , bilateral and regional cumulation 
had been introduced, in line  with the requirements of the Ministerial Decisions ; third, the 
requirements relating to direct consignment had been revi ewed; and f ourth, documentary and 
procedural requirements relating to origin had been simplified. These changes had had a positive 
effect on preferential imports from LDCs. In 2017, for example , the total number of import 
declarations under preferential rules of origin had increased 10.8% and the value to imports from G/RO/M/73  
 
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  LDCs had increased by 2.9% (to a total import value of 11  billion yuan). In addition, China's 
authorities were also implementing simplifications to certification requirements . In particular, China 
was moving towards an internet -based and paperless certificati on system. This system, which it was 
expected would be launched in December  2019, would offer two  options , as followed:  (i) the office 
of the economic and commercial counsellor of China in each beneficiary country could log onto the 
system to print a blank  certificate of origin e -form for the agency of the host country (for free) or 
(ii) alternatively, local agencies in each beneficiary country could directly log onto the system to 
input the relevant origin data of the goods to be exported. This information  would then be 
transmitted electronically to Chinese customs officials for clearance.  
2.33.   The representative of Tanzania  thanked the delegation of China for its update. He was pleased 
to learn that China's reform of its rules of origin, including the introduct ion of bilateral and regional 
cumulation, had led to a significant increase in imports from LDCs. In his view , this confirmed the 
positive impact of rules of origin  reform . He invited China to share further information in the future 
about its reform s and their impact . He also encouraged China to consider additional possible 
improvements to its origin requirements.  
2.34.   In conclusion , the Chairperson  encouraged  preference -granting Members to consider 
presenting their practices at future Committee meetings. In this regard , she invited 
preference -granting Members that offered technical assistance activities relative to their preferences 
to share their experiences with the Committee. Alternatively, preference -granting Members could 
consider replicating these training activities in Geneva. In addition, a deeper knowledge of existing 
requirements and flexibilities  would contribute to a clearer understanding  of the rul es and hence to 
a fuller utilization of preferences.  
2.35.   The Committee took note  of the statements made.  
2.3  Direct Consignment Rules – Submission by the LDC G roup (G/RO/W/191 and 
RD/RO/ 82) 
2.36.   The Chairperson  recalled that  that there were two  notes on preference util ization , one from 
the LDC  Group and another by the WTO  Secretariat. She also mentioned that , in addition, certain 
preference -granting Members would  give presentations on their direct consignment  requirements . 
She proposed that the Committee begin with a presentation of the submission by the LDC  Group 
(G/RO/W/191).  
2.37.   The representative of Cambodia , on behalf of the LDC  Group  (RD/RO/82) , explained that the 
Group had summarized and compared Members' requirements in relation  to the consignment of 
goods (paragraph  3.1(a) of the Nairobi Decision ). He said that overly strict direct consignment 
obligations could be one cause of underutilization of trade preferences by LDCs. While the Group 
recognized that direct consignment rules ensu red that goods receiving preferential treatment had 
not been further processed during transit in a third  country, it also noted that there were significant 
variations in the application of that requirement across Members. Most preference -granting Members 
required LDCs to present some documentary evidence stating that the goods had not entered the 
market of transit countries ; such  evidence could consist of a through bill of lading, a certificate of 
non-manipulation , or other supporting documents. However, o btaining such documents,  could prove 
challenging for LDC  exporters ; for example , there may be no carrier in an LDC capable of arranging 
a single transportation document to the final destination of the goods, the costs of obtaining a single 
transportation document could  be prohibitive, or the goods might have been sold to an intermediary 
instead of a buyer in the preference -granting market . In such cases, these requirements would 
unduly penalize LDC  exporters, and especially small and medium -sized enterprises  that often had to 
rely upon brokers to sell their goods abroad . Against this background, the LDC  Group had been 
advocating for the adoption of a practice based on risk management  in which a certificate of 
non-manipulation or other evidence would only be requested when customs authorities had concerns 
over possible manipulation during transit. He noted that such an approach  was already being 
implemented in Australia;  the European Union;  New Zealand;  Norway (under its most recent 
legislation) ; and possibly also Switzerland. Nevertheless, in all other preference -granting Members , 
the practice remained to request some type of documentary evidence of non -manipulation whenever 
transit had occurred. For example, under the US  GSP and AGOA, specific requirements applied when 
the US was not shown as the final destination of the goods. In Canada, goods had  to be shipped 
directly on a through bill of lading to a consignee in Canada from the LDC  beneficiary where the 
goods had been certified. In the case of the Eurasian Economic Union (EAEU), goods had to be G/RO/M/73  
 
- 9 - 
 
  purchased directly by an importer in the EAEU and d elivered directly (although it was unclear if 
documentary evidence was required). Similarly, India required evidence in the form of a through bill 
of lading issued in the exporting country , a certificate of origin , a copy of the original commercial 
invoice , and other supporting documents. China;  the Republic of Korea;  and Thailand also requested 
evidence of non -manipulation. For Chinese Taipei  the situation was unclear. The representative of 
Cambodia thought that the non -alteration principle, as applied by the EU, Norway, Switzerland,  and 
Turkey could constitute a best practice in this area and he called upon other preference -granting 
Members to move their requirements in this direction.  
2.38.   The representative of the United St ates briefly described US requirements relative to direct 
shipment , or "direct importation" as it was referred to under US  legislation  (RD/RO/83) . He explained 
that direct importation to the US could be met if the goods had been directly shipped to the US or if 
certain other requirements had been met. US  legislation recognize d that there were situations that 
could limit the ability of exporters to ship their goods directly to the US. The regulations  distinguished 
between two scenarios , one in which the ship ping documents indicated the US as the final destination 
of the goods , and another in which they did not. He clarified that  additional requirements applied  
only when the goods had transited through a non -beneficiary country and the relevant documents 
did not indicate the United States as the final destination. In such cases, the goods had to remain 
under customs control ; they should not  have enter ed the stream of commerce of the transit country ; 
and they should not have been subject ed to any process other t han loading and unloading. He 
reiterated that such conditions only applied if the goods had passed through a non -beneficiary 
country and if the shipping documents had not indicated the United States to be the final destination. 
In addition, he noted that in the case of Haiti, shipment from the Dominican Republic to the United 
States was allowed.  
2.39.   The representative of Switzerland  reported  that his government had launched an internal 
process to understand why Switzerland's preferential utilizat ion rates tended to be lower than those 
of the European Union and Norway despite Switzerland's application of identical rules of origin. 
He noted, first, that one had to discard the hypothesis that Switzerland's rules of origin were overly 
strict because Switzerland and the EU applied identical  rules; second, one had to set aside problems 
relating to TBT or SPS  measures  because non-compliance with TBT or SPS  requirements meant that 
the goods would not have been allowed entry into the Swiss market. A further  hypothesis was that 
lower utilization rates in Switzerland were to be explained by variations in r equirements relating to 
direct consignment or certification of origin. In the case of certification , the implementation of 
self-certification (the REX  system ) was expected to have a positive trade -facilitating impact . 
Therefore , the only remaining explanation for lower utilization rates under Swiss preferences had to 
concern Switzerland's consignment requirements . To test this hypothesis, his government had 
embarked upon a detailed examination of utilization rates for goods that had been consigned directly 
and for goods that had undergone transit. Directly consigned goods had full preference utilization in 
almost all c ases (Bangladesh had a utilization rate of 98% ; Benin – 96%; Cambodia – 83%; 
Côte d'Ivoire – 85%; Lao PDR – 80%; Mozambique – 96%; Myanmar – 95%; Nepal – 85%; 
Uganda  – 88%; Sudan – 100% ; Senegal – 91%; and Tanzania – 98%. In sharp contrast, the 
utilization  rates for indirectly imported goods dropped to zero for all LDCs (except for the Solomon 
Islands, at 37%, and Tanzania, at 2%). In his view, these findings confirmed that the ability of LDCs 
to utilize their preferences was linked to direct consignment requirements ; nevertheless, further 
investigations were needed to identify which specific requirements were proving difficult to meet. 
In his view, the most likely explanation  related to the practice of splitting consignments in the EU. 
Another  possibility was that  preferences went un claimed because the preferential margin was too 
low (for example, precious stones in heading  71.03  were subject to ad valorem  duties of 0.1% to 
0.2%). Further  investigating these cases  require d reaching out to stake holders, including Swiss 
importers, LDC  exporters , and EU transit  operators. He proposed to pursue such investigations , 
focusing on specific sectors and collaborating closely with LDC  delegations.  
2.40.   The representative of Australia  clarified that direct consignment of goods was not a 
prerequisite for preferential treatment in Australia. This approach recogni zed that Australia was a 
distant and relatively small market for many LDCs and that often there were no direct shipment 
options ; for these reasons , requiring direct shipment would effectively negate the potential benefit 
of the preferences for many LDCs.  
2.41.   The representative of Tanzania  thanked the United States for presenting and clarifying its 
legislation. He asked why direct cons ignment rules had been made more flexible for Haiti and 
wondered whether the same reasons could not justify more flexible requirements for other LDCs. G/RO/M/73  
 
- 10 - 
 
  He argued that export with transit through third countries was inevitable in the case of most LDCs 
and in vited the US to consider these constraints in adapting its requirements. Furthermore, he also 
thanked and congratulated Switzerland for its investigations. He encouraged other 
preference -granting Members to engage in a similar exercise to identify  the causes of 
underutilization and to remove any barriers  in this area,  which had been the precise objective of the 
Ministerial Decision.  
2.42.   The representative of the European Union  thanked those delegations that had shared detailed 
information about their practices. She stated that her delegation attached great importance to fuller 
utilization of preferences by LDCs ; for this reason, the EU supported deep er analysis in the 
Committee as well as bilateral discussions on these issues. In addition, she noted that the EU had 
shifted to the "non -alteration principle" instead of a direct consignment requirement in its 
LDC preferences. She explained that the concept underlying non -alteration was that, to rec eive 
preferences, originating products must not be further processe d in a third  country ; in other words, 
the goods for which preferences would be  claimed in the EU had to be the same as those that had 
been obtained or manufactured in a beneficiary country.  In case of transit, the EU required that the 
goods remained under customs supervision , although it authorized such operations as storage, 
splitting, affixing of labels, and preservation. Customs authorities assessed the need for additional 
information and  evidence based on risk assessment methods  such that , by default, no proof had to 
be provided.  In other words, d ocumentary evidence would  only be requested if customs had a doubt . 
2.43.   The representative of Canada  explained that her delegation had  reservations about certain  
statements made in the LDC  paper , and that she wished to make some factual corrections. In her 
view, t he paper significantly downplayed the benefits of Canada's preferences for LDCs when, in 
reality, 90% of all imports from LDCs  had entered Canada duty -free in 2018. To be granted 
preferences in Canada, it was important to verify that the goods shipped from an LDC had arrived 
in the same form as that in which they had been shipped, and that they had not undergone any 
production in  a non -beneficiary country. Such verification ensured that the benefits of the 
program me accrued to the intended LDC beneficiary. Section  17 of the Customs Tariff of Canada 
stated that goods were directly shipped to Canada if the goods were conveyed on a t hrough bill of 
lading to a consignee in Canada. Goods could be transhipped through non -beneficiaries, as long as 
these conditions had been  met. The law also allowed goods to remain in storage in the territories of 
non-beneficiary Members for up to six  months. However, the LDC paper focused  only on the  
explanatory notes to the law and stated that Canada's requirements were "simply overwhelming"  
(paragraph s 16 and 17) . In Canada's  view, this was incorrect because most imports from LDCs 
entered  Canada free of duty. The paper also misleadingly stated that Canada required a certificate 
of origin . Except for textiles and apparel , this was not the case . Of greater concern to her delegat ion 
was the fact that the paper asserted that including a consignee in Canada on the through bill of 
lading "practically nullified" any possibility for trade. In her view, it was normal business practice 
that any producer would know the client for whom the  goods were being produced ; therefore, this 
could not constitut e a trade barrier. Furthermore, paragraph  18 incorrectly  quoted Mexico and Hong 
Kong, China as being among Canada's preference beneficiaries ( whereas both had been removed 
from Canada's GSP in 2015 and thus needed to be removed from the LDC  paper's Table  1). In the 
case of Haiti, Canada's rules had been made more flexible because Haiti's major ports had been 
destroyed by the 2010  earthquake  and the only alternative route for Haiti was through  the 
Dominican Republic. She highlighted that evidence of a through bill of lading had to be presented 
only upon the request of Canada's Border Services Agency (CBSA) , meaning that d ocumentation did 
not need to be provid ed with every shipment but only when a request was made  for it. She also 
noted that Table  1 in the LDC  paper had incorrectly stated that Canada did not comply with 
paragraph  3.1 of the Nairobi Decision , which stated that preference -granting countries should, as a 
general principle, refrain from  requiring a certificate of non -manipulation. She reiterated  that Canada 
did not require such a document. In addition, Canada allowed for self -certification and did not require 
exporters to be registered , as required by the Ministerial Decision . She conclu ded that her delegation 
would be available to follow up with LDC Members bilaterally if they so wished.  
2.44.   In response, the representative of Tanzania  stated that the LDCs were willing to examine 
Canada's arguments and would correct the note if necessary . However, he reiterated that the 
obligation to consign goods on a through bill of lading and to indicate the name of a Canadian 
consignee already const ituted potential barriers. Furthermore, these practices did not recognize the 
fact that LDC  exporters often traded through intermediaries. He agreed that a follow -up bilateral 
discussion would be useful.  G/RO/M/73  
 
- 11 - 
 
  2.45.   In conclusion, the Chairperson  asked preference -granting Member s and LDCs to meet 
bilaterally as required . She also requested the delegations concerned to keep the Committee 
informed about their discussions . 
2.46.    The Committee took note  of the statements made and agreed  to proceed accordingly . 
2.4  Impact of direct consignment requirements on preference utilization by LDCs – Note 
by the Secretariat (G/RO/W/187  AND RD/RO/81 ) 
2.47.   The Chair person  asked the Secretariat to present document  G/RO/W/187.  
2.48.   The Secretariat  explained that the note contained the first results of ongoing research on the 
linkages between direct consignment requirements and underutilization of LDC  preferences 
(RD/RO /81). It built on a previous note in which the Secretariat had reported that 82% of all fruits, 
vegetables , and plants imported from LDCs  did not receive any tariff preferences 
(document  G/RO/W/185). This was counterintuitive because all of the unprocessed goods studied 
were subject to the wholly  obtained origin criteria : variations in preference utilization could therefore 
not be explained  by the stringency of the origin criterion . Instead , other obligations related to 
certification or direct consignment could explain variations in utilization rates. The Secretariat said  
that the note tested whether or not variations in the utilization of t rade preferences could be 
associated with variations in the application of  the direct consignment requirement.  
2.49.   The Secretariat explained  that, for logistical reasons, the Direct transportation of goods was 
not always possible. Therefore, all preferential s chemes allowed transhipment (transit) under certain 
conditions. While the  intention of all Members was to ensure that goods did not undergo  further 
process ing in a non -beneficiary country during their transit, the application of these conditions 
differed in practice. The main variable  related to whether documentary evidence (attesting the 
non-manipulation of the goods) was requested in some or all cases . By comparing dir ect 
consignment requirements with underutilization rates, the note identified patterns that seemed to 
confirm that such requirements were associated with utilization. For example , landlocked LDCs had 
a much lower ability to utilize trade preferences than L DCs with access  to the sea . Underutilization 
of trade preferences was always higher for landlocked LDCS: 52% for landlocked LDCs against 21% 
for other LDCs  (all products considered ), and 29% for landlocked LDCs against a rate of 14% for 
LDCs with access  to the sea (when agricultural goods were subject to the wholly obtained criterion ). 
In addition, Members with stricter consignment requirements were usually associated with higher 
underutilization rates: about 60% of imports from LDCs did not utilize trade p references when they 
were sold in preference -granting Members with stricter consignment requirements  (that is,  double 
the underutilization rate observed for Members applying more flexible requirements ). In conclusion, 
direct consignment requirements appear ed to have a significant influence on the ability of LDCs to 
utilize their trade preferences , particular ly in the case of landlocked LDCs. Nevertheless , the 
Secretariat considered that Members should try t o identify with greater precision wh ich specific 
requirements were associated with higher or lower underutilization rates. In addition, the Secretariat 
explained that it would be useful to hear from preference -granting Members what share of imports 
from LDCs had been consigned directly or indirectly and wh at the underutilization rates were under 
each scenario.  
2.50.   The representative of Norway  clarified that the EU ; Switzerland ; Turkey ; and Norway applied 
the same rules of origin but did not grant identical preferential treatment. Moreover, he noted th at 
the req uirement that transportation documents should mention the name of a national consignee 
for the goods  was common  in international trade . In the case of Norway, the information did not 
need to be provided by the exporter in the beneficiary country ; it did no t need to  appear in the proof 
of origin ; and it could be changed at any time before the goods were presented to customs. 
In addition,  he asked for a correction to be made to Table  1 to indicate that Norway did allow for 
splitting and affixing labels in the transit country. Finally, he reported that his colleagues in Capital 
were also engaged in further examinations to identify possible causes for underutilization.  
2.51.   The representative of Canada  said that her delegation did not agree that low utilization rates 
could be attributed to Canada's direct shipment provisions. For this reason, she wished to correct 
certain aspects of the Secretariat 's Note. She observed that Canada  applied very low tariffs ; indeed, 
71% of Canada's tariff items were duty -free on an MFN  basis. Canada's preferences included all 
LDCs, without exception , and covered 98.6% of tariff lines (a small number of dairy, poultry , and G/RO/M/73  
 
- 12 - 
 
  egg products not of export interest to LDCs  had been excluded from the scheme ). In addition, 
Canadian  preferences included rules of origin that reflected production realities in LDCs, did not 
require a certificate of origin for any goods other than textiles and apparel , and allowed for exporter  
self-certification, without the requirement of prior regist ration . Furthermore, LDCs could choose to 
trade under MFN, LDC , or general preferences. Her delegation considered that the Secretariat's 
paper had incorrectly attributed a low utilization of preferences  for agricultural products to Canada's 
direct shipment requirements. However, 99% of the products considered  in the Secretariat report 
had entered Canada duty -free in 2018 (all tariff treatments ); only 14.7% of the products in question 
had entered Canada under LDC  preferences, but the remaining imports had entered Canada under 
other tariff treatments and had received duty-free treatment  nevertheless . As a result, Canada had 
fully achieved its objective of offering duty-free access to LDCs. Like many  other preference -granting 
countries, Canada did require goods shipped from an LDC to arrive in the same form as that in which 
they had left the LDC ; this ensured that the preferences were administrable and that, more 
importantly, the benefits of the prefe rence programme accrued to its intended LDC beneficiaries. 
She clarified that a through bill of lading was a shipping document obtained through the normal 
course of business ; it was not the same as a certificate of non -manipulation , which was an additional  
document. She requested the Secretariat to revise  the note accordingly . She also argued that there 
should be no comparison made between the dissimilar program mes of different countries ( such as 
Canada's LDCT and the US  AGOA and GSP , for example ). Finally,  she raised specific questions on 
Annex  1. 
2.52.   The representative of Tanzania , speaking on behalf of the LDC  Group, thanked the Secretariat 
for further investigating the possible causes of the underutilization of preferences for agricultural 
products. He expla ined that it was troublesome that LDCs were not fully utilizing their trade 
preferences in their exports of agricultural products subject to the wholly obtained origin criterion. 
Still more worrying was the fact that preference underutilization was even more challenging for 
landlocked LDCs. In his view, Members had a duty , in the context of the CRO,  to explore ways to 
improve utilization and to ensure that fruits, spices , and other simple products receive d duty-free 
treatment. For example , the "non -alteration requirement" appeared to be simpler to meet and could 
therefore be examined by additional preference -granting Members as a best practice which should 
be replicated. He said that these were concrete and specific steps that Members could take to 
implement the Ministerial Decisions look ing ahead to the WTO's 12th Ministerial Conference.  
2.53.   The representative of  the Republic of  Korea  briefly explained his country's consignment 
requirements. In order to receive preferential treatment, it was necessary to  submit a certificate of 
origin regardless of whether the goods had been  consigned directly or indirectly. Such p referential 
treatment was only granted if the goods had been transported from the country of origin. However, 
indirect shipment was admitted provided that certain requirements were met. And in many cases no 
further proof of origin was required ; this was the case for transit or transhipment for geographical 
or logistical reasons , for example . Indirect shipment was also authorized in case of export s for 
display purposes and exhibitions. In all other cases, preferential treatment could be granted, but the 
following additional documents had also to be presented: a certificate of origin issued by the country 
of origin; a bill of lading; and the origina l commercial invoice. He explained that, on  average, 67.5% 
of imports from LDCs had been consigned directly , while 32.5% had been consigned indirectly. 
The share of imports not subject to any preference or MFN  duties had been continuously declining , 
from 3 8.3% in 2016 , to 22.8% in 2018. Nevertheless, direct consignment rules  did not appear to 
be the cause of underutilization. In fact, trade statistics indicated that indirectly consigned goods 
had a higher rate of utilization of preferences (85%) than directly consigned goods (26.5%).  
2.54.   The representative of the Russian Federation  explained that, while her colleagues in Capital 
were still studying both documents, there seemed to be some confusion regarding the terminology 
used in the notes  (for example, the term "through bill of lading" ). She also explained that her 
delegation had submitted notifications  WTO/COMTD/PT A1/N/1 and G/RO/LDC/N/RUS/2 describing 
changes in the Russian GSP  system. These changes had been introduced with the aim  of 
implementing the p rovisions of the Bali and Nairobi Decisions. She noted that more time was needed 
to monitor and identify the effects of these recent trade -facilitating rules. Finally, she clarified  that 
it was normal that goods entering the markets of third  countries woul d not be granted duty -free 
treatment by preference -granting Members.  
2.55.   The representative of the European Union  thanked the Secretariat for its additional analysis. 
In particular, she agreed with the elements mentioned by the Secretariat in the conclusion of  its 
note. Furthermore, the EU would  support discussions about how to refine the statistics available and G/RO/M/73  
 
- 13 - 
 
  to continue this research. She also sought to clarify some aspects of the note, such as the fact that 
the EU require d goods to remain under customs su pervision during transit , as stated in  
paragraph  4.3. She also explained that footnote  5 of Annex  I did not reflect a standard requirement 
in EU legislation. Finally, she asked the Secretariat to clarify the intention of footnote  8 of Annex  I. 
2.56.   The represen tative of the United States  appreciated that the Secretariat Note had built on 
and referred to previous analysis. He thought it interesting that the Secretariat had placed the US 
in the group of Members with more flexible requirements , whereas the LDCs had placed it in the 
group of Members with practices inconsistent with the Nairobi Decision. He clarified that goods 
shipped from beneficiary countries through other beneficiary countries did not need to present any 
additional documentati on at the time of importation . However, in the case of goods shipped through 
a non -beneficiary country, US  Customs verified if the US had been indicated as the final destination 
of the goods ; if so, the only obligation was that the good had not entered the  commerce of a transit 
country. Additional documents were only requested in case s where goods had transited through a 
non-beneficiary country and the US was not the ir final destination.  
2.57.   The representative of Chinese Taipei  agreed with the conclusion of the  Secretariat's report , 
namely that direct consignment requirements could reduce the utilization of trade preferences ; 
however , he also thought these were necessary requirements, so the question was how to strike a 
balance between these different policy obj ectives. He clarified that Article  11 of his government's 
regulation governing the determination of country of origin required goods to be consigned directly ; 
in the  case of shipment through a third  country for logistical reasons, the regulations required that 
the goods did not undergo any operation other than unloading and loading in the country of transit.  
2.58.   In response to Members' comments, t he Secretariat  explained that it would revise the note 
and correct any possible mistakes or misrepresentations. At the same time, he explained  that the 
Annex was based on Members' notifications (document series G/RO/LDC/N) , so differences in the 
language in it reflected Members' notifications (for example, the Annex did not make a difference 
between "direct consignment requirement" and the "obligation that the goods remain under customs 
supervision"  because both terms  appeared as such in Members' regulations ). In addition , he 
explained  that, where different procedures applied to different cases (as occurred under 
US regulations), it was impossible to know how often the more complex procedures applied in 
practice. Having said that, he highlighted that Members' comments had not question ed the link 
between direct consignment requirements and underutilization of preferences, especially by 
landlocked LDCs. He asked preference -granting Members to consider examining their statistics, as 
the Republic of Korea and Switzerland had done, to compare  the underutilization rates for directly 
and indirectly consigned imports. He also recommended that Members more closely examine the 
role of intermediaries and reconsignors in claiming preferences for LDC  exporters.  
2.59.   In conclusion, the Chairperson  said that  further research was needed . To this end, she 
requested the Secretariat to continue conducting its analysis in this area with a view to identify ing 
the specific elements that hinder a fuller utilization of trade preferences. In addition, she asked 
prefere nce-granting Members to convey to the Secretariat their specific comments on the note so 
that it could be revised  on that basis . 
2.60.   The Committee agreed  to proceed accordingly.  
2.5  Utilization of China's Preferences by LDCs – Submission by the LDC Group  
(G/RO/W/1 92 AND RD/RO/84 ); 
2.61.   The Chair person  asked the LDC  Group to present their submission.  
2.62.   The representative of Tanzania  presented document  G/RO/W/192 on behalf of the LDC  Group 
and explained that it contained a detailed analysis of the utilization  rates under China's preferences 
for LDCs  (document  RD/RO/84) . It had followed the same approach as that adopted in previous 
analysis conducted concerning Switzerland ( document  G/RO/W/186). He hoped that the delegation 
of China, like that of Switzerland, would use the Group's analysis to initiate a discussion in Capital 
to identify possible hindrances to the fuller utilization of preferences by LDCs. In fact, the Group's 
analysis sh owed that the majority of tariff lines on which there was trade between LDCs and China 
had utilization rates between zero and 25% only (75% of tariffs, or 930  tariff lines). Only 12.5% of 
all tariff lin es had a utilization  rate above 95% (157  tariff lines) . This confirmed that there was ample G/RO/M/73  
 
- 14 - 
 
  scope for additional work to be undertaken towards fuller utilization. Four  of the top five  LDCs 
exporting to China (Zambia; Côte d'Ivoire; Myanmar; Cambodia) had an overall utilization rate of 
between zero and 2%  only. Bangladesh, as the third largest LDC  exporter  to China , had an overall 
preference utilization of 45%. For other LDCs, the value of annual imports varied greatly and so did 
utilization rates: for example , a 98% utilization rate for Senegal,  and 1% for Les otho. A pplying filters 
to the data (tariff lines with a preferential margin of at least 2%, with utilization rates lower than 
70%, and with annual values greater than USD 24 million) helped to prioritize those tariff lines where 
the underutilization was mo st problematic. Several agricultural and mineral products, subject to the 
wholly obtained criterion, showed very low utilization rates, including  cobalt (from the Democratic 
Republic of Congo), tanned or dressed fur skins and liquid crystal devices (from C ambodia) , and  
articles of semi -precious stones (from Myanmar). Members would need to investigate these tariff 
lines to further understand why these products were not receiving preferences. He concluded by 
asking the delegation of China to initiate an examination to identify the possible causes of such 
underutilization.  
2.63.   The representative of China  explained that the document had been circulated  too late to allow 
for the presence of Capital -based colleagues at the meeting. However, he reported that his 
colleagues were indeed studying the document and that China was committed to exploring solutions 
to these difficulties. He noted, however, that the graphs showed very high utilization rates for several 
LDCs. He also explained that, in the case of Cambodia and Myanmar, importers did not claim 
preferences under China's LDC  preferences but rather under th e China -ASEAN free trade agreement. 
About 95% of tariff lines enjoyed duty-free treatment under th at FTA. Consequently , the 
LDC preferential scheme would only offer benefits for the remaining 5% of tariff lines not covered 
under the FTA. He said that the case of Bangladesh  was similar because exporters could claim 
preferences under the Asia -Pacific Trade Agreement (APTA). For these reasons, China's utilization 
rates for LDCs could not be examined in isolation from other preferential schemes offered by China . 
He said that his colleagues in Capital were also studying the utilization rates of African countries to 
try to understand why they were high in some cases but low in others. The conditions of trade were 
identical for all African countries ; one would therefore expect to find similar utilization rates across 
all beneficiaries. However, it was possible that exporters in some cases did not claim preferences 
simply because they were not aware of the benefits  that were available. In any case, China was 
committe d to implementing the Nairobi Decision and stood ready to cooperate with LDC  delegations 
to optimi ze utilization of the preferential rules of origin.  
2.64.   The representatives of  Tanzania ; Cambodia ; the Democratic Republic of Congo ; and Myanmar  
thanked China for its readiness to collaborate with them and they looked forward to working closely 
with the Chinese delegation to better understand the reasons for the underutilization  of preferences 
among some LDCs . In addition, the representative of Tanzania  clarified  that the analysis had 
excluded products entering through other trade preferences. He concluded by saying that a bilateral 
discussion would be useful to follow up on these issues.  
2.65.   The representative of the United States  was surprised that t he five largest exporters to China 
had such low utilization rates. He wondered if China's consularization  requirements could explain 
these findings.  
2.66.   The Chairperson  proposed that the delegations of China and the LDCs meet bilaterally and 
report to the Comm ittee on the substance of their discussions. In addition, she asked the Committee 
to take note of the presentation and statements made.  
2.67.   It was so agreed . 
2.6  Report (2019) of the CRO t o the General Council on preferential rules of origin for 
LDCs (G/RO/W/188)  
2.68.   The Chair person  recalled that paragraph  4.4. of the Nairobi Decision required the Committee 
to review the implementation of the Ministerial Decision annually, and that paragraph  1.10 of the 
Bali Ministerial Decision required the Committee to report the results of such review to the General 
Counc il. To facilitate this review, the Secretariat had prepared a draft report (G/RO/W/188) . 
She invited delegations to consider this report with a view to it s adoption . G/RO/M/73  
 
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  2.69.   The delegation of Turkey  asked that the report be rectified to include her country in the list 
of preference -granting Members implementing the REX  system . 
2.70.   The Chair person  proposed that the report be adopted with the rectification proposed  by the 
delegation of Turkey.  
2.71.   The Committee adopted  the Annual Report (document  G/RO/89).  
3  NOTIFICATIONS UNDE R ARTICLE  5 AND UNDER PARAGRAP H 4 OF ANNEX  II OF THE 
AGREEMENT ON RULES O F ORIGIN  
3.1.  The Chairperson  reported that new notifications had been received by the Secretariat covering 
both preferential rules of origin (originally submitted to the Committee on Regi onal Trade 
Agreements) and non -preferential rules of origin (Article  5 of the Agreement, including first -time 
notifications ). Angola and Sri Lanka ha d notified that they d id not apply non -preferential rules of 
origin , while the Kyrgyz Republic had informed Members that it applie d those of the EAEU . Including 
these notifications, 80% of all WTO  Members had now submitted a notification concerning 
non-preferential rules of origin under Article  5 of the Agreement , while 10 0% of Members had 
submitted at least one  notification regarding their preferential rules of origin and RTAs. Of those, 
50 Members had informed the Secretariat that they applied non -preferential rules of origin and 
59 Members had notified the Committee that  they did not apply non -preferential rules of origin. 
The remaining 27  WTO Members had not yet notified their practice s. 
3.2.  However, she explained that these numbers had to be interpreted with caution. Most of these 
notifications had been submitted over 20  years before and could refer to legislation that was now 
partly or entirely out of date. In addition, many notifications only reported partial information and 
did not describe the specific  rules that applied to  some sectors or under certain trade measures . 
Neither did notifications contain information about  practices relating to certification. The Annex to 
document  G/RO/W/189 contained a full list of all notifications received.  
3.3.  The Chair person  proposed that Members take note of her report and encouraged deleg ations 
that had not yet ever notified their practices to the Committee to do so as soon as possible.  
3.4.  The Committee took note  of the report.  
4  DRAFT TEMPLATE FOR T HE NOTIFICATION OF N ON-PREFERENTIAL RULES O F ORIGIN 
AND ORIGIN REQUIREME NTS (G/RO/W/182/REV.1)  
4.1.  The Chairperson  drew Members' attention to document  G/RO/W/182/Rev.1 and previous 
discussions of it. At the Committee's previous meeting, Members had asked the Chair of the 
Committee to conduct consultations with interested delegations i n order to clarify any outstanding 
questions  on the proposal . She reported that  informal consultations had been organized with about 
20 interested delegations. At the Committee's meeting, delegations had also raised questions 
relating to special and differ ential treatment (S&D ), linkages with the Trade Facilitation Agreement 
(TFA), and the implications of  the proposal "to enhance transparency and strengthen notification 
requirements under WTO  Agreements " (JOB/GC/204/Rev.2 and JOB/CTG/14/Rev.2). She further 
reported that, as a result of the se consultations, Members had  agreed to continue their discussions 
bilateral ly. She therefore asked the proponents to report on those meetings. In addition, she invited 
Members to express their views on how to take this pro posal forward . 
4.2.  The delegation of Switzerland , on behalf of the proponents, confirmed that informal Chair-led 
consultations and a series of bilateral meetings with interested delegations  had taken place since 
the Committee's previous meeting . He reminded Me mbers that the objective of the proposal was 
not to create new transparency obligations but rather to facilitate the work of exporters and policy 
makers. The direct beneficiaries of the proposal would be small exporters in developing and 
least-developed countries that wished to see their businesses integrate d into global value chains. 
During the launch of the WTO -ITC-WCO Origin Facilitator, Director -General Azevêdo and Executive 
Director Gonzalez had highlighted that easier access to simple and reliable information translated 
into lower trading costs for companies, especially small businesses. In that spirit,  a constructive 
dialogue among Members had led to a clearer understanding of these objectives and had also 
highlighted possible concerns. Th e proponents had agreed to make certain changes to the draft G/RO/M/73  
 
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  proposal, including, for example, to clarify that "technical assistance and capacity building by the 
WTO Secretariat shall be provided". A ccordingly, a  second  revision of the proposal would be 
circulated shortly.  
4.3.  The representative of Canada  thanked delegations for their engagement on the proposal and 
looked forward to working with the co -sponsors and with the Members that had raised concerns with 
a view to defining a mutually agreeable outcome.  
4.4.  The representative of India reiterated his delegation's concerns . In his delegation's view, the 
proposal should contain effective S&D  provisions. For this purpose, any notification obligation under 
the proposal could only be a best -endeavour requirement for  developing countries, including LDCs  
(as was the case for notifications under Article  3 of the proposal ). He also considered that the 
proposal should avoid overlap with the provisions of the TFA , as well as possible discrepancies in the 
information availa ble on the WTO  website and on Members' websites in case s where a Member had 
made changes in its non -preferential rules of origin or certification. Furthermore, his delegation 
highlighted the need for Members to under take similar notification obligations in  the areas of interest 
to developing countries, such as under Article  66.2 of the TRIPS.  
4.5.  The representative of the European Union  explained that her delegation was in favour of 
enhancing transparency ; for this reason, the EU would remain deeply engage d on this proposal. In 
her view, the proposed template would enhance transparency and allow for structured information 
to be gathered concerning Members' practices. She agreed that access to reliable inform ation was 
necessary for economic operators, world businesses , and governmental decision -makers.  
4.6.  The representative of Tanzania  said that his delegation supported this initiative and agreed 
that transparency was very important to facilitating international trade. His delegation would support 
efforts made to finalize the proposal.  
4.7.  The representative of the United States encouraged other delegations to join efforts to enhance 
transparency on non -preferential origin requirements and recalled that several Member s had spoken 
about the need for greater transparency in this area during the launch of the Origin Facilitator. 
The proposal covered a large segment of global trade and would also cover all Members . 
In consequence , its results should prove  substantial.  
4.8.  The representative of Japan  concurred and added that the proposal elaborated on existing 
notification provisions  only; it did not create any new obligations for Members.  
4.9.  The representative of Brazil  agreed that Members were already obliged to notify their 
non-preferential rules of origin to the Secretariat , adding that the intention of the proposal was only 
to simplify, streamline, organize , and update that information.  
4.10.   In the same spirit, the representative of the Republic of Korea  asked all Members to consider 
the benefits of the proposal for all their exporters.  
4.11.   The representative of Colombia  welcomed the changes introduced by the proponents and 
looked forward to seeing the revised version of the proposal. She also indicated that her delegation 
stood ready to work with the co -proponents on the proposal.  
4.12.   The representative of Ecuador  thanked the proponents for their openness to consider her 
delegation's comments and said that her delegation would continue to play a constructive role in the 
discussions.  
4.13.   The representative of Hong Kong, China  congratulated Members on widely supporting the 
proposal. She noted that delegations had already been working on the proposal for two  years ; this 
was because it was a worthy and necessary initi ative. She added that the value of the proposed 
template would be magnified through the WTO -ITC-WCO Origin Facilitator. She also asked Members 
to engage actively on the proposal in order to refine its language and to reach a satisfactory outcome.  
4.14.   The repre sentative of New Zealand  agreed and added that the proposal was a concrete 
contribution that the Committee could make to facilitating trade, particularly to the benefit of micro, 
small and medium -sized enterprises.  G/RO/M/73  
 
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  4.15.   The representative of Chinese Taipei  added that the substantial benefits derived from easier 
access to information for exporters would be greater than any possible administrative cost to 
Members in submitting the ir notifications.  
4.16.   The representative of Norway  considered the proposal to be a simple  but effective measure.  
4.17.   In conclusion, the representative of Switzerland  thanked all delegations for expressing their 
support for the proposal. He asked the delegation of India to elaborate further on the concerns it 
had raised, in particular regarding pos sible overlaps between the proposal and the TFA. He requested 
that India's comments refer to specific provisions in the proposal  and, if possible, that India suggest 
amendments. He said that his delegation stood ready to work with any interested delegation  to 
discuss specific concerns. If necessary, his delegation also stood ready to fill in the template to 
demonstrate how it would work in practice , and how simple it was.  
4.18.   The Chairperson  was pleased to note that there appeared to be broad support for the pr oposal 
and a willingness to continue to engage on it and to move  towards text-based discussions. To make 
the process more effective, she encouraged those delegations with concerns to submit their 
amendments or proposals in writing so that these could then be considered by the proponents and 
other delegations in informal consultations. She also encouraged the proponents to circulate the 
second  version of the proposal to allow delegations sufficient time to hold consult ations on it . 
4.19.   It was so agreed . 
5  TWENTY -FIFTH ANNUAL REVIEW OF THE IMPLEM ENTATION AND OPERATI ON OF THE 
AGREEMENT ON RULES O F ORIGIN (G/RO/W/189 ) 
5.1.  The Chairperson  recalled that Article  6.1 of the Agreement on Rules of Origin stated  the 
following : "[t]he Committee shall review annually the implementation and operation of Parts  II and 
III of this Agreement having regard to its objectives. The Committee shall annually inform the 
Council for Trade in Goods of developments during the period cove red by such reviews". In this 
regard, she noted that the Secretariat had prepared a background note describing the activities of 
the Committee under Parts  II and III of the Agreement (G/RO/W/189). She asked Members to refer 
to that report for the annual re view.  
5.2.  The representative of Hong Kong, China , noted that Annex  1 of the report needed to be 
corrected to indicate that a scanned copy of the legislation was available for the 2012  notification 
on Hong Kong, China's non-preferential rules of origin.  
5.3.  The Chairperson  proposed that the Committee conclude its annual review on the basis of the 
report prepared by the Secretariat , including the correction proposed.  
5.4.  It was so agreed . 
6   DRAFT REPORT (201 9) OF THE CRO TO THE COUNCIL FOR TRADE IN  GOODS 
(G/RO/W/190)  
6.1.  The Committee adopted  its annual report of activities ( document  G/L/1331).  
7  ROUND -TABLE ON "THE FUTURE OF RULES OF O RIGIN" HELD AT THE E UROPEAN  
UNIVERSITY INSTITUTE  (26-28 JUNE 2019) – REPORT BY UN CTAD  
7.1.  A representative of UNCTAD  reported that the round table had brought together Geneva -based 
delegates attending the Committee , Capital -based experts, private firms, international consulting 
companies like KPMG and Deloitte, government agencies, academi c institutions, and representatives 
of key international organizations, including the WTO, the WCO, and the International Chamber of 
Commerce. The aim of the round table was to discuss the future of rules of origin in the international 
trade system and to establish a road  map for possible action -oriented  research initiatives. In the 
absence of comprehensive multilateral disciplines on rules of origin, it was valuable to discuss 
approaches to addressing existing gaps. Participants to the round table discusse d areas such as  the 
following : the extent of convergence of product -specific rules of origin under different FTAs; 
utilization rates as a tool to monitor the effective use of trade preferences; and best practices on G/RO/M/73  
 
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  origin certification and administrative procedures. A research agenda had begun to emerge from the 
round table and some recommendations had translated into proposals from some WTO  Members to 
the WCO  Working Group on the revised Kyoto Convention . The first research topic that had been 
identified at the round table had related to sectoral convergence on product -specific rules of origin 
(a comparison between the draft rules under the WTO  Harmonization Work Programme (HWP) and 
the rules in FTAs had suggested sectors where simplification and convergence were possible). 
The preparation of a consolidated map at HS  6-digit level, showing convergence and divergence on 
drafting product -specific rules of origin across different FTAs, would also offer a prac tical tool for 
negotiators at regional and plurilateral level. The second  research area had related to the impact of 
rules of origin on utilization rates ; in this regard, wider and closer monitoring of such impact could 
help to identify areas where reforms  in origin requirements could improve utilization rates. Finally, 
the third  research area had been to identify trade -facilitating practices relating to origin certification 
and administrative procedures. The UNCTAD and the WCO had begun a joint research ex ercise to 
list and codify the existing practices of certification of origin. He reported that this ambitious research 
agenda  would be carried out taking into account the availability of resources and funding from 
donors ; its progress would be periodically reported to the Committee . In sum, the ambition was to 
build an online platform for the exchange of research outcomes and national experiences. He 
concluded by emphasizing that the international community should not miss this opportunity to 
realize greater  dynamism in the Committee and to foster greater cooperation on rules of origin. 
Another round table had been scheduled for early September  2020 and p articipation in the round 
table event was open and free to all interested participants.  
7.2.  The delegations of  Tanzania  and Cambodia  thanked UNCTAD and the European Union Institute 
for the ir report and for offering delegations the opportunity to hear the views of different 
stakeholders on origin -related matters. The representative of Tanzania believed that more re search 
and information would serve to minimize the gap in existing regimes, whether preferential or non -
preferential. He encouraged Members to take an active part in future round tables.  
7.3.  The representative of Switzerland  reported that he had also attended the roundtable , which 
had been a useful opportunity to meet the private sector and to understand more clearly what was 
happening on the ground. He encouraged delegates to attend future roundtable meetings.  
7.4.  The representa tive of the European Union  said that she had heard very positive feedback from 
other colleagues who had attended the roundtable meeting. She asked if the online knowledge 
platform would be connected to the Origin Facilitator or the Global Trade Helpdesk.  
7.5.  In response, the representative of UNCTAD  said that the platform still had to be developed and 
that he welcome d suggestions concerning possible solutions. He highlighted that the platform would 
disseminate research outcomes, help identify research gaps , and promote the participation of the 
private sector and other stakeholders.  
7.6.  The Committee took note  of the report  and the statements made . 
8  OTHER BUSINESS  
8.1.  The Chairperson  informed Members that the Committee 's next formal meetings  had been 
scheduled to take place on 5 and 6  March and 1 5 and 1 6 October  2020.3 
__________  
 
3 These dates were communicated to Members on 19  November  2019.