RESTRICTED  
  
G/RO/M/72  
 
2 September  2019 
(19-5626) Page: 1/11 
Committee on Rules of Origin    
 
MINUTES OF THE MEETI NG OF 15-16 MAY 2019 
CHAIRPERSON : MRS. THEMBEKILE MLAN GENI (SOUTH AFRICA ) 
Subjects Discussed1 
1   WORK OF THE TECH NICAL COMMITTEE ON R ULES OF ORIGIN (TCRO) – REPORT BY 
THE WORLD CUSTOMS OR GANIZATION  ................................ ................................ ...........  1 
2   IMPLEMENTATION O F THE BALI AND THE N AIROBI MINISTERIAL D ECISIONS ON 
PREFEREN TIAL RULES OF ORIGIN  FOR LEAST DEVELOPED  COUNTRIES (WT/L/917   
AND WT/L/917/ADD.1)  ................................ ................................ ................................ ... 2 
2.1   Implementation of the REX  System – Update by the European Union  ................................ . 2 
2.2   Review of Other Recent Developments – Report by Any Other Preference -Granting Members  3 
2.3   Notifications of Preferential Rules of Origin for LDCs and Preferential Imports and Tariffs 
(G/RO/W/163/Rev.5) – Report by the Secretariat  ................................ ................................ ... 4 
2.4   Preferential Rules of Origin Based on the Change of Tariff Classification Criterion – 
Submission by the LDC  Group (G/RO/W/184 and RD/RO/79)  ................................ ...................  4 
2.5   Utilization of Preferential Trade Arrangements by Least Developed Countries – Report by  
the Secretariat (G/RO/W/185 and RD/RO/78)  ................................ ................................ .........  6 
3   UTILIZATION OF P REFERENTIAL TRADE AR RANGEMENTS BY LDCS – SUBMISSION  
BY THE LDC  GROUP (G/ RO/W/186 AND RD/RO/8 0) ................................ .......................  7 
4   NOTIFICATIONS UN DER ARTICLE  5 AND UN DER PARAGRAPH  4 OF A NNEX  II OF  
THE AGREEMENT ON RUL ES OF ORIGIN (G/RO/N /175–G/RO/N/186)  ............................  9 
5   ENHANCING TRANSP ARENCY IN NON -PREFER ENTIAL RULES OF ORIG IN 
(G/RO/W/182/REV.1)  ................................ ................................ ................................ ..... 9 
6   ELECTION OF OF FICERS  ................................ ................................ ............................  11 
7   OTHER BUSINESS  ................................ ................................ ................................ ...... 11 
_____ __________  
 
The Committee  on Rules of Origin ( CRO, or the Committee ) adopted  the agenda of the  meeting as 
circulated  in document  WTO/AIR/ RO/9. 
 
1  WORK OF THE TECHNICA L COMMITTEE ON RULES  OF ORIGIN (TCRO) – REPORT BY THE 
WORLD CUSTOMS ORGANI ZATION  
1.1.  Mrs M  Azzam of the WCO Secretariat  reported that the WCO  Technical Committee on Rules of 
Origin (TCRO) had held its 37th Session on 4  February  2019 under the chairpersonship of 
Mr Aseem  Nanda (India) . Within the framework of its permanent responsibilities, the TCRO had 
adopted the 20th periodic report and the 20th annual review on technical aspects and implementation 
of the Agreement on Rules of Origin for 2018. As in the previous year, the annual review had  been 
short since the WTO  Agreeme nt on Rules of Origin and harmoniz ed non -preferential rules of origin 
were not being implemented : as a result, no Member had referred any specific question relating to 
non-preferential origin to the TCRO. On other matters , the WCO  Secretariat report ed on the state of 
                                                
1 The agenda of the meeting was circulated in document  WTO/AIR/RO/9.  G/RO/M/72  
 
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  play in the origin part of the Revenue Package Action Plan. The Revenue Package consisted of a set 
of initiatives intended to ensure  an effective and efficient collection of revenues by customs 
administrations. In practice , the lack of harmoniz ed rules of origin (RO) created challenges for 
customs administrations ; the WCO promoted the harmonization of origin procedures as a way of 
meeting these challenges and facilitating trade. Phase  III of the Revenue Package Action Plan 
focused on the promoti on of the tools that had already been developed, including guidelines on 
origin certification , verification , advance rulings , and customs infrastructure. She explained that 
these guidelines were intended to  simplify and streamlin e customs procedures linked to rules of 
origin. They had been developed to facilitate customs procedures for compliant traders while striking 
a balance between trade facilitation and the need for customs control. In addition to these 
instruments, a Practical Guide t o the WTO  Nairobi Ministerial Decision on Rules of Origin for LDCs 
had also been developed ; it explained the Decision itself and also provided practical information on 
how to qualify for preferential treatment. I t was hoped that the Guide would encourage L DCs to 
utilize their  trade preferences. Mrs  Azzam reported that the WCO  Secretariat had also revised and 
further developed its e -learning modules, which now covered origin certification , origin verification , 
cumulation , origin criteria , and direct transpor tation. All modules were available on the 
WCO website.  
1.2.  In addition to the TCRO  meeting, the WCO  Secretariat had organized a workshop on origin, 
focusing on the WTO  Nairobi Decision, the review of the Revised Kyoto Convention , and origin 
procedures in gener al, including origin certification and verification. She concluded by informing 
Members that the second  WCO Global Origin Conference would take place in Iquique (Chile), on 
19-20 November  2019. During the Conference, participants would discuss current chal lenges in 
regional integration and the latest developments relating to origin, including the update of the 
Revised Kyoto Convention. She invited al l Members to attend the Conference as it offered a unique 
opportunity for participants to expand their unders tanding of origin -related issues  and to have a say 
on the future of rules of origin.  
1.3.  The Committee  took note  of the WCO's report . 
2  IMPLEMENTATION OF TH E BALI AND THE NAIRO BI MINISTERIAL DECIS IONS ON 
PREFERENTIAL RULES O F ORIGIN FOR LEAST D EVELOPED COUNTRIES (WT/L/917 AND 
WT/L/917/ADD.1)  
2.1  Implementation of the REX System – Update by the European Union  
2.1.  The Chairperson  reminded Members that the European Union (EU) had briefed the Committee, 
in October  2018, about its new system of self -certification for  registered exporters. She also recalled 
that the Registered Exporter (REX) System  was being implemented by Norway and Switzerland. 
She therefore invited the EU  delegation to update Members on the implementation of this new 
system.  
2.2.  The European Union   recalled that the REX had been gradually introduced for beneficiaries of 
the EU  General ized System of Preferences (GSP) since  January  2017. Under the system, registered 
economic operators could complete and submit their own  statement on preferential origin. Economic 
operators were able to participate in the system once they had registered in a database with local 
competent authorities. A detailed list of beneficiary countries and the status of implementation of 
REX was avail able on the EU -TAXUD  website. At present, 27  beneficiary countries were fully applying 
the REX  System , while 15  beneficiary countries were transitioning into the System but still using 
Form A to prove origin. The transitional period for this last category of Members would end either 
on 30  June or by end-2019. Finally, 14  beneficiary countries were not applying the REX  System 
despite their transitional period having  lapsed ; as a result, the preferential origin of exports from 
these countries could not be gua ranteed and no preferential market access was being granted. 
Efforts were ongoing to integrate the countries in question into the REX  System , if they so wished. 
As of January  2020, besides the GSP  beneficiary countries, 25 overseas countries and territorie s of 
the EU would also be integrated in to the REX  system  and, eventually, countries with whom the EU 
had concluded a Free Trade Agreement ( FTA) would also be expected to use the system  to prove 
origin. She said that the  REX system was proving useful, expla ining that India, for instance, had 
already registered over 23,000  economic operators in it. To ensure that all countries could introduce 
the system successfully, the EU had made huge efforts in the area of capacity -building ; 
document  G/RO/W/183 detailed the specific capacity -building efforts that the EU had undertaken  in 
this regard . For example, r epresentatives of beneficiary countries had been invited to hands -on G/RO/M /72 
 
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  training sessions that had taken place either in Brussels or in selected regions. During the se training  
sessions , local administrators had been briefed about the procedures to follow to give  access to other 
administrators or to register exporters. She informed Members that the EU would organize an 
information session about the REX  system on the margins of the next CRO meeting.  
2.3.  The representative of Norway  noted that both his country and Switz erland had cooperated with 
the EU on the implementation of the REX  system . Specifically , Norway had taken responsibility for 
the training of officials from countries that were granted preferences in Norway but not in the EU. 
He explained that  some benefici ary countries had not responded to their training invitations, 
unfortunately, while others had attended the training sessions but had not followed up on it with the 
submission of the documents required actually to start using the REX. In addition, some countries 
had completed  the documentation formalities but had not yet registered any local users . He invited 
delegations to reach out to their Capital -based colleagues to ensure that  all the necessary formalities 
were completed as soon as possible.  
2.4.  The representative of Switzerland  confirmed that since January  2017 his country had also 
introduced the REX  system to facilitate imports from LDCs and GSP  beneficiaries. He noted that it 
was too early  to make  a comprehensive assessment of the system's effectiveness ; nevertheless, the 
figures did suggest that there had been a slight increase in the utilization of preferences. 
He reminded delegations that beneficiary countries had until 30  June 2020 to register their 
exporters. In case of ques tions, he invited delegations to contact Switzerland's  Mission to the WTO . 
2.5.  The delegation of Tanzania , speaking on behalf of the LDC  Group, recalled that the Nairobi 
Decision had established, for the first time , a set of multilateral ly agreed guidelines to facilitate 
preferential market access by LDCs. Paragraph  4.3 of the Nairobi Ministerial Decision had specifically 
provided for the notification of preferential rules of origin as per the agreed template. In addition, 
many  preference -granting Members had  notified their import statistics ; the Committee had been 
analysing the relevant LDC  utilization rates  in this regard , providing a valuable tool for identify ing 
specific difficulties that LDCs were facing when trying to  comply with rules  of origin. Previous 
presentations by the LDC  Group had shown that a significant share of exports from LDC s were 
subject to MFN  tariffs despite being eligible for preferential market access. Against that background, 
the LDC  Group insisted that preference -granting Members take further steps to simplify their 
preferential rules of origin. In addition, the Group believed that further research and analysis was 
needed to identify specific causes of under -utilization. In this regard,  the LDC Group  would continue 
to bring its relevant analysis  and evidence to the Committee on the stringency of certain  origin 
requirements, contrasting them to the provisions of the Ministerial Decisions , in order to recommend 
best practices. The common objective of Members should be to achieve a fuller  utilization of the 
preferences as well as the fulfilment of the development objectives set  out in the sustainable 
development goals (SDGs), specifically ta rget 17.12, which state d that preferential rules of origin 
applicable to imports from least developed countries should be  transparent and simple  in order that 
they contribute to facilitating market access.  
2.6.  In relation to the current agenda item, the repres entative of Tanzania thanked the EU ; Norway;  
and Switzerland for their update s. He agreed that this was a trade -facilitating measure  and 
encouraged these preference -granting Members to continue to reach out to LDCs to ensure that no 
Member was left behind and that all LDCs would continue to receive preferences. In this regard , he 
requested the EU to confirm whether or not the 14  countries that had not completed all the relevant 
procedures were nonetheless still receiving preferences.  
2.7.  The representative of the European Union  clarified  that further training was not possible for 
country officials who had already attended a training session but who had not taken or completed 
the necessary follow -up actions.  
2.8.  The Committee took note  of the report and of the statement s made.  
2.2  Review of Other Recent Developments – Report by Any Other Preference -Granting 
Members  
2.9.  The Chairperson  offered other preference -granting Members an opportunity to report on any 
recent developments relative to their  preferential rules of origin for LDCs . G/RO/M/72  
 
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  2.10.   No further statements were made . 
2.3  Notifications of Preferential Rules of Origin for LDCs a nd Preferential Imports and 
Tariffs (G/RO/W/163/Rev.5) – Report by the Secretariat  
2.11.   The Chairperson  drew Members' attention to d ocument  G/RO/W/163/R ev.5, prepared by the 
Secretariat, which contained the latest status  of notifications relating  to preferential rules or origin  
and origin requirements , as well as preferential import statistics.  
2.12.   Presenting the latest developments, the Secretariat  highlighted new notifications of 
preferential rules of origin from the Kyrgyz Republic;  the Russian Federation;  and Tajikistan 
(document  G/RO/84) . The following four Members were therefore the only Member s not yet to have 
notified their preferential origin requirements for LDCs: Armenia ; Iceland ; Montenegro;  and Turkey. 
Nevertheless, with regard to preferential import statistics, several Members still had partial or full 
gaps in their data submitted to dat e. The Secretariat had contacted  these Members and consequently  
the number of years for which data was available  among a number of the Members concerned had 
gradually improved . 
2.13.   In conclusion, the Chairperson requested  the Secretariat to continue to reach out to 
delegations that had outstanding notifications with a view to filling in all of the gaps in the relevant 
data. 
2.14.   The Committee took note  of the statements made  and agreed  to proceed accordingly . 
2.4  Preferential Rules of Origin Based on the Change of Tariff Classification Criterion – 
Submission by the LDC  Group (G/RO/W/184 and RD/RO/79)  
2.15.   The Chairperson  recalled that, at its last meeting, the Committee had initiated an examination 
of preferential rules of origin based on a change of tariff classificat ion, contrasting existing practices 
with the provisions of paragraphs  1.2, 1.4, and 1.5 of the Nairobi Ministerial Decision. To continue 
that work, she proposed to consider document  G/RO/W/184, prepared by the LDC  Group.  
2.16.   The delegation of Tanzania  introduced the note by the LDC  Group by explaining that it s 
intention had been to increase Members' understanding of current practices. As Members headed 
towards the 12th Ministerial Conference, it was important to take stock of what had been achieved 
since Bali and Nairobi , and also to report on the substantial changes that had significantly impacted 
upon the capacity of LDCs to export  under preference s. In his view , the Nairobi Ministerial Decision 
had asked preference -grating Members to consider three  aspects when applying change -or-tariff-
classification (CTC) rules. First, rules of origin should be simple, ideally based on the change of tariff 
heading criterion (CTH). Second, they should not  contain exceptions or restrictions , unless such 
restrictions w ere justified in order to ensure that a substantial transformation had occurred . 
Third,  Members should introduce allowance limits for the use of materials from the same heading or 
sub-heading . Focusing on these three  elements, he explained that several CTC -based rules currently 
in use did not meet these requirements. Japan, for example , applied certain complex rules with 
page-long exceptions. He argued that the  complexity of such rules was un justified, particularly in 
light of the fact that  several current free trade agreements reflected a more liberal practice . Coffee,  
tea, and spices  in the EU , for example , had an origin criterion of CTH (thus authoriz ing the use of 
non-originating materials from the heading itself) ; however, in the case o f Japan, the criterion was 
also CTH, but exclud ed a change from within the heading. However, in the EU -Japan FTA , the RO 
for coffee was a change of tariff such heading ( CTSH ) or blending, a more flexible criterion,  which 
recogni zed that roasting and blendi ng would qualify a product for preferences. Similarly, rules for 
fish preparations (Chapter  16) in both the EU and Japan exceeded the CTH and CTSH  requirement , 
and contained wide exceptions, basically requiring all materials to be wholly obtained. However,  the 
US-Singapore  FTA for such products required a "change to heading  1601 through 1605 from any 
other chapter", allowing for the processing of non -originating materials. Another problem associated 
with some of these complex rules related to the use of pro duct descriptions instead of clear 
HS designations. The rules for Chapter  19 preparations of cereals in Japan were a case in point. 
The representative of Tanzania went on to provide additional examples of complex rules used for 
products classified in headi ngs 20, 33.03, 44.16, 52.07, 72.16, 87.12 , or in chapter s 64 and 84 
(RD/RO/ 79). In conclusion, he said that the Group had provided several illustrations where the origin 
criterion went beyond the concept of substantial transformation and beyond the simple CTH or G/RO/M /72 
 
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  CTSH  criterion as indicated in the Ministerial Decision. He asked the EU, Japan, Norway,  and 
Switzerl and to review these rules and to assess whether or not such complex restrictions were indeed 
necessary  to ensure a substantial transformation, particularly in light of their own practices in more 
liberal  FTAs.  
2.17.   The representative of Cambodia  said that his d elegation shared the views expressed  by the 
delegation of Tanzania. He argued that the requirements of paragraph  1.2 of the Nairobi Decision 
were simple and urged the EU and Japan to review  their CTC  rules in light of such requirements. 
Annex  I of the LDC  submission contained a list of the rules requiring review . 
2.18.   The representative of the European Union  congratulated the LDC  Group for their 
well-researched and comprehensive presentation. The EU was supportive of the work of the CRO 
and the LDCs in this area . She said that her delegation stood  ready to work bilaterally with the LDCs 
to discuss product -specific rules and good practices. With regard to the rules mentioned in the 
presentation, she said that her Capital would need to review the document and prese ntation before 
making more detailed comments. Meanwhile, she wished to note that there may have been some 
misreading of what the EU requirements actually were for certain products , such as those of 
Chapter  19, or heading  33.02. For this reason, and before any conclusions were drawn, it would be 
ideal to involve Capital -based officials in bilateral discussion s. 
2.19.   The representative of Japan  said that her colleagues in Capital would review the document 
and presentation. By way  of preliminary response , she noted that those  CTC rules containing 
exceptions were intended to ensure an accurate origin determination. She commented  that some of 
the rules listed in Annex  I, such as those for headings  33.02, 72.16, 87.12 and Chapter  84, referred 
to products with a n MFN rate of zero. She also explained that the comparison with origin criteria in 
FTAs was not necessarily adequate because FTAs were negotiated with a small number of partners 
whereas GSP  preferences were offered to a large and  varied group of WTO  Members. In this context, 
she stated that her delegation would appreciate it if LDC  Members could provide her government 
with any request for the regulation of a specific product through diplomatic channels  because t reating 
such indivi dual requests was comparatively easier. Finally, she said that her delegation stood ready 
to engage in a bilateral discussion with the LDCs . 
2.20.   The representative of Switzerland  also said that his colleagues in Capital would require 
additional time to review the information presented. As a result, his delegation could not yet provide 
Switzerland's  answer s to the questions listed on page 3 of the document. H e believed that closer 
collaboration between preference -granting Members and the LDC  Group was necessary in order  to 
move this work forward. H e commented that more intense, informal , small -group or bilateral 
discussions might prove to be useful in terms of focussing the discussion on specific problems.  
2.21.   The representativ e of Norway  also noted that additional time would be required to review the 
documents presented. Nevertheless , his delegation did recognize that specific difficulties could arise 
as a result of these rules. In his view , different options were available for  taking this discussion 
forward. One option c ould be to recognize the best -endeavour nature of the provisions of the 
Nairobi  Ministerial Decision ; another would be  to hold a dedicated, thematic CRO  session ; and finally , 
the Members mentioned in the note  could engage in bilateral consultations . To conclude, he  
encouraged delegations to be pragmatic in these discussions.  
2.22.   In response, and on behalf of the LDC  Group, the representative of Tanzania  welcomed the 
engagement of preference -granting Members and their suggestions of ways to intensify discussions.  
He said that the LDC  Group would review their presentation and correct possible mistakes regarding 
EU rules;  similarly, they would remove produc ts for which Japan's  MFN rate was zero. He agreed 
that increased engagement  could be useful , including in an informal or dedicated session, and with 
the participation of Capital -based experts. He encouraged preference -granting Members to review 
the documen t and presentation in order for them to provide their detailed responses to it in the near 
future.  
2.23.    The Committee took note  of the presentation and statements  made . G/RO/M/72  
 
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  2.5  Utilization of Preferential Trade Arrangements by Least Developed Countries – Report 
by the Secretariat (G/R O/W/185 and RD/RO/78)  
2.24.   The Chairperson  recalled paragraph  4.3 of the Nairobi Decision and said that, under this 
agenda item, Members would continue to improve their understanding of origin requirements and 
to identify areas where the rules could be made simpler and more transparent. The first presentation 
would be made by the Secretariat ( document  RD/RO/ 78). 
2.25.   The Secretariat  explained that , building on previous work ( documents  G/RO/W/169/Rev.1; 
G/RO/W/179; G/ROW185) , it had furthered the anal ysis of the utilization of preferences for 
agricultural products. To simplify the analysis and reduce the number of variables, the Secretariat 
had narrowed down its analysis to a subset of agricultural products and focus ed exclusively on 
products subject t o the wholly obtained  criterion . Furthermore, the Secretariat had  analysed a range 
of import statistics to verify whether MFN rates influenced preference utilization. On the basis of this 
analysis, it  appeared that utilization rates increased with MFN  rates. Nevertheless , there was also a 
significa nt utilization of preferences even for products subject to low MFN  rates (0 -2%) and 
utilization was consistently high for all MFN  tariff rates above 5% . In other words, MFN  rates did not 
seem to be a major det erminant of utilization. In addition, the  Secretariat  compared preference 
utilization for specific products and specific LDCs across different schemes. This comparison 
confirmed that there had been several cases of  low utilization for simple, wholly obtain ed goods . 
It also revealed significant variations in utilization , including cases where the same product received 
preferences under one  scheme but not others . For example , Tanzanian exporters of cut plants 
always received preferences in the EU , but never d id so in the Republic of Korea. Similarly, Nepalese 
producers were always granted preferences in their exports of spices to the United States,  but never 
to India. Since all of the products that were reviewed had been subject to the sa me origin criterion 
(wholly-obtained rules), these variations  suggest ed that other preference -specific aspects were 
influencing utilization, notably  direct transportation and origin certification requirements.  
Therefore , the Secretariat concluded that the simplification of all origin -related requirements was 
important to achieve a  fuller utilization of preferences, including not only with regard to origin 
criteria, but also transportation and certification requirements).  
2.26.   The representative of Cambodia  thanked the Secretariat for its calculations, which had 
confirmed that origin requirements could be operating as a barrier to preferential tariff treatment. 
He noted that rice exports from Cambodia offer ed an interest ing example in this regard, indicating 
that certification or transportation rules could be affecting his country's ability to receive tariff 
preferences. His delegation  encouraged preference -granting Members to reform their rules of origin 
to ensure that they were as simple and as transparent as  possible.  
2.27.   Likewise, the representative of Chad said that a narrower, sectoral approach had proven  
useful for identifying pockets of under -utilization. He asked if additional information was available 
concerning specific difficulties relating to certificat ion of origin  or transportation requirements. 
His delegation wished to ask the Secretariat to deepen  its analysis and to review the role of 
transportation and certification requirements  in particular . 
2.28.   The representative of Norway  said that, while his colleagues in Capital were still studying the 
note, there appeared  to be an indication that the challenges  could be related to certification of 
non-manipulation requirements. In addition, he noted that there was insufficient understan ding of 
preferences , and especially that their requirements could also affect utilization. For this reason, 
Norway had initiated capacity -building activities for its GSP beneficiaries. In his government's 
experience, these activities had proven useful . However, these training opportunities were not fully 
utilized , particularly by African countries.  
2.29.   The representative of Tanzania  thought that the Secretariat had clearly distinguished  the 
origin -related factors that could affect utilization. For example, s trict direct consignment rules 
appeared  to be having a negative impact on the ability of LDC  exporters to utilize their trade 
preferences  fully. He noted that, according to the calculations of the Secretariat, even s ome countries 
that were considered to have rather progressive rules of origin  nevertheless  had low utilization rates, 
as in the case of Canada. He said that the Nairobi Ministerial Decision contained provisions on both 
direct shipment and non -manipulation certificates. For this reason , the Committee should focus its 
attention on these subject areas. He asked the Secretariat to continue its investigations intended to 
identify as precisely as possible those requirements that explain ed under -utilization  of pre ferences . G/RO/M /72 
 
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  2.30.   The representative of Mali agreed that strict or cumbersome transportation requirements 
penalized LDCs, and land-locked LDCs  in particular . She said that most of her country's exports were 
subject to wholly -obtained rule s, including mangoes, Arab ic gum, and shea butter . Nevertheless , 
these exports had to transit through third  countries ; in consequence, traders may  lose the possibility 
of claim ing preferences. In addition, she noted that  exports faced non -tariff barriers and, in 
particular, high co sts and complications linked to a variety of sanitary and phytosanitary 
requirements. She requested the Secretariat to identify as precisely  as possible those  specific 
requirements that hindered the utilization of preferences.  
2.31.   The representative of the European Union  said that her delegation supported this area of work 
and would collaborate with the Secretariat in focussing on specific difficulties and issues. In this 
regard, she recalled that the Committee should focus its atte ntion on rules of origin and 
origin -requirements  only, and not on other factors that could be affecting trade in general.  
2.32.   The representative of The Gambia  requested the Secretariat to continue conducting  studies 
in this area in order to narrow down the pos sible causes of non-utilization of trade preferences. 
In addition, he urged all preference -granting Members to find areas in their rules for possible 
simplification and improvement , in line with the requirements of the Ministerial Decisions.  
2.33.   The representa tive of the Lao People 's Democratic Republic  pointed out  that the Secretariat's 
analysis could not cover all preference -granting Members because of a lack of trade statistics. 
He encouraged all other preference -granting Members to notify their preferential imports to the 
Secretariat so that the utilization of all preference schemes could be monitored.  
2.34.   The representative of Thailand  informed the Committee  that her country would conduct a 
review of its duty -free, quota -free preferences for LDCs , with the focus  on how best to improve 
Thailand's origin -related requirements.  
2.35.   The representative of Canada  noted that the report prepared by the Secretariat was very 
useful in terms of elucidating  and clarifying this topic . Furthermore, it confirmed the use fulness of 
full transparency in rules of origin, which is why Canada was supporting  and sponsoring the proposal 
for transparency on non -preferential rules of origin.  
2.36.   The Chairperson  proposed that the Committee continue in its analysis with a view to 
identify ing the specific linkages between origin requirements and the under -utilization of preferences 
by LDCs.  
2.37.   The Committee took note  of the report and of the statements made , and agreed  to proceed 
accordingly . 
3  UTILIZATION OF PREF ERENTIAL TRADE ARRAN GEMENTS BY LDC s – SUBMISSION BY 
THE LDC  GROUP (G/RO/W/186  AND RD/RO/80 ) 
3.1.  The Chairperson  drew the Committee's attention to document  G/RO/W/186 , submitted  by the 
LDC Group.  
3.2.  The representative of Bangladesh , presenting document  RD/RO/80  on behalf of the LDC  Group, 
explained that the Group's intention had been to initiate an analysis of specific preference 
programmes in order to identify specific problems. In fact, he recalled previous presentations made 
to the Committee that had, in the view of the LDC  Group, revealed two  patterns : first, that s ome 
preference -granting countries exhibited consistently low utilization rates across all products ; and 
second , that preference -granting Members with an overall high utilization rate had p ockets of 
under -utilization in specific sectors. Against this background, the LDC  Group proposed to focus first 
on the preference scheme of Switzerland. He noted   that, despite applying identical origin criteria,  
preference utilization rates in Switzerland were consistently lower than in the EU. For example, for 
imports of garments and clothing, the EU exhibited a utilization rate of 95% , while the rate s in 
Switzerland ranged from zero to 49% only. In fact, u tilization rates for garment and clothing exports 
of chapters  61 and 62 were particularly low for the top LDC export ers (Bangladesh;  Cambodia;  
Lao People's Democratic Republic ; Madagascar; and  Myanmar ). Similar patterns could also be 
observed for other products , such as footwear, bicycles, and precious stones. Possible explanation s 
for the lower utilization of preferences in Switzerland could be found in Switzerland 's landlocked G/RO/M/72  
 
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  position and the  fact that LDC exports thus needed to transit through third  countries  before reach ing 
the Swiss market . Origin certification requirements could be another explanation.  In this regard, the 
LDC Group wished to engage more closely with the Swiss delegation on the issue of removing any 
possible obstacles . In addition, the Group would conduct other Member -specific analysis for future 
discussion in the Committee . 
3.3.  The representative of Cambodia  thanked  the delegation of Switzerland for their engagement 
in these discussions and for volunteering to be a pilot country for the study of linkages between 
utilization rates and preferential rules of origin. His delegation associated itself with the LDC Group 
presentation, which  had confirmed the usefulness of a Member -by-Member analysis in identify ing 
and address ing concrete problems. For this reason, his delegation support ed extending the analysis 
using this methodology to cover additional Members and preferences , carried out in association with 
the LDC  Group, and with the continued assistance of UNCTAD.  
3.4.  The represen tative of Switzerland  acknowledged that utilization rates were not satisfactory  for 
his country . Nevertheless, the  introduction of the REX  System was a step towards improving the 
utilization of Switzerland's preferences. In addition, his delegation commented that conducting a 
case-study of bilateral trade would have been useful to illustrate possible problems in utilizing 
preferences. While his delegati on had not formally volunteered for such a case study, he considered 
the LDC  submission to be helpful and instructive , even so ; he also agreed that the numbers should 
be analysed with a view to correcting any errors in the statistics. For example , Switzerl and applied 
a general GSP  programme and another LDC -specific preference programme, such that  trade flows 
under both of these schemes need ed to be reflected in the analysis . He pointed out  that nearly  90% 
of all LDC  imports entered Switzerland free of duty, and that MFN  rates in Switzerland were generally 
very low ; indeed, MFN rates of 1% or 2% could also affect the willingness of LDC  exporters to comply 
with preferential origin requirements.  In addition, he wondered if the introduction of the REX system , 
with its new statement of origin , could also be affecting the ability of exporters to comply with the 
relevant documentary requirements. Finally, he explained that Switzerland no longer  require d direct 
shipment , but instead used the concept of "non -alteration". He said that it would be useful for 
Members to develop a clearer understand ing of these terms.  
3.5.  The representative of Hong Kong, China  said that the presentations and trade statistics had 
advanced convincing hypothe ses concerning under -utilization  of trade preferences . However , she 
asked if there existed evidence of what was actually happening on the ground , including the extent 
to which  firms were aware of the preferential opportunities  available to them . 
3.6.  In respons e, the representative of Tanzania  explained that one could assume that exporters 
were fully aware of the  preferences available to them if they were using preferences in at least 
one market. In other words, when the same LDC  exporter utilized preferences in one case but not 
another, one had to conclude that exporters were aware of the relevant preferential origin 
requirements ; that said, his delegation also believed that improving exporters' knowledge and 
awareness of the rele vant requirements would improve the overall utilization of trade preferences.  
3.7.  The representative of Chad agreed and requested  the Secretariat to study further the impact 
of preferential rules of origin and origin requirements on the private sector.  
3.8.  The rep resentative of Chinese Taipei  explained that he had been surprised by the wide variation 
in utilization rates between different LDCs. In the case of Switzerland, for example , one found a  high 
utilization for some LDCs , and a low utilization rate for others . However, Switzerland's  applicable 
rules and requirements  were identical for all beneficiary LDCs.  He wondered why there were such 
marked differences , and the factors that could explain it . 
3.9.  In response, the Secretariat  clarified that the composition of the trade of each of the LDCs with 
Switzerland was different. Those LDCs that exported simpler agricultural products would not be 
subject to the same origin criteria and requirements as other LDCs that exported predominantly 
industrial goods. This was the ca se for all preference -granting Members that applied product -specific 
rules of origin as opposed to a single rule of origin across all products. This was also one of the 
reasons why product -specific, disaggregated analysis was useful. In relation to the point raised by 
Hong Kong, China, the Secretari at noted that the International Trade Center (ITC) had conducted 
wide-ranging  business surveys, which had consistently indicated that firms struggled with rules of 
origin  requirements , and in particular with origin certification and other administrative re quirements. G/RO/M /72 
 
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  However, it was impossible  to know what the specific and concrete problems were that 
LDC exporters were facing . In any event, easier access to information about origin requirements, 
trade facilitation reforms (for example , to deliver certificat es of origin on the basis of  faster and 
simpler procedures) , and training and awareness -raising in the private sector , were certainly key 
steps in improving the capacity of exporting companies to utilize the  preferences  available to them . 
3.10.   The Committee took note  of the presentation and of the statements made.  
4  NOTIFICATIONS UNDER ARTICLE  5 AND UNDER PARAGRAP H 4 OF ANNEX  II OF THE 
AGREEMENT ON RULES O F ORIGIN (G/RO/N/175 –G/RO/N/ 186)  
4.1.  The Chairperson  reported that 12  new notifications had been received by the Secretariat since 
the Committee's last meeting. These notifications were contained in documents  G/RO/N/175 , 
G/RO/N/176 , G/RO/N/177 , G/RO/N/178 , G/RO/N/179 , G/RO/N/180 , G/RO/N/181 , G/RO/N/182 , 
G/RO/N/183 , G/RO/N/18 4, G/RO/N/185,  and G/RO/N/186. They included information from 
three  Members  that had never before submitted such a notification : Angola ; the Kyrgyz Republic:  
and Sri Lanka. Others contained  preferential rules of origin that had originally been notified  to the 
Committee on Regional Trade Agreements. Based on  the information reported in these recent 
notifications, it was possible to affirm that 50  Members applied non -preferential origin requirements , 
while 60  Members did not. The remaining 27  WTO Members had not yet submitted any information 
under Article  5 of the Agreement. She urged those  Members to seek the assistance of the 
Secretariat , if required, to prepare their notifications as soon as possible.  
4.2.  The Committee took note  of the report . 
5  ENHAN CING TRANSPARENCY IN  NON-PREFERENTIAL RU LES OF ORIGIN 
(G/RO/W/182/REV.1)  
5.1.  The Chairperson  drew Members' attention to document  G/RO/W/182/Rev.1 and recalled that 
an informal session of the Committee had been held on the previous day in order to consider the 
document . Discussions during the informal session had shown that there existed  wide support for 
the objectives of the proposal, namely , to enhance Members' understanding and knowledge of 
current practices relating  to non -preferential origin. However, the d iscussions had also indicated  that 
certain delegations still had questions on particular aspects of the proposal. Certain other  delegations 
had also indicated that they required additional time to consult their Capitals . She invited Members 
to make any additional comments on the revised proposal and to indicate how they would like to 
proceed . 
5.2.  The representative of Switzerland  said that his delegation had presented  the revised proposal 
during the informal CRO  meeting ; he also indicated that the proponents had revised it in light of the 
comments received from other delegations. He wished to recall some of the main features of the 
proposed notification template. First, its objective was to shed greater light on the current p ractices 
relating  to non -preferential rules of origin and requirements. Therefore, the proposal was  purely 
technical in nature ; there were no linkages to ongoing discussions on WTO  reform. Second,  the 
proposal originated in the realization that current not ifications in this area were out of date, 
incomplete , or inexistent. In fact, one of the main benefits of the proposal would be to standardize 
the scope of the information available , and thereby to improve Members' understanding of 
certification, verificat ion, and other administrative aspects relating to non -preferential rules of origin. 
The work being undertaken  by the CRO on preferential rules of origin for LDCs had clearly proven  
the usefulness of a notification template and enhanced transparency. Third,  the proposal had 
developed through a bottom -up and participatory approach and had taken into account comments 
made by as many Members as possible, including the African Group and the LDC  Group. In the view 
of its proponents, the revised proposal was a stable compromise text . If adopted , it would facilitate 
operations for all exporters, and especially for the small and medium -sized enterprises of all 
Members, and those of developing and least developed countries in particular . Finally, on next steps , 
the representative of Switzerland proposed to organize small -group consultations under the 
Chairperson's good offices, with the intention of  further  stabili zing the text and ensuring that all 
delegations  were sufficiently comfortable with it ; this  small group  could include Members that had 
shared comments at the informal session , for example . In this context, he requested  Members to 
be pragmatic and to engage constructively with a view to finalizing  the template.  G/RO/M/72  
 
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  5.3.  The representative of Togo, on behalf of the Af rican Group, thanked the Swiss delegation and 
other proponents and agreed that the notification template contained elements that could lead to a 
clearer  understanding of non-preferential rules of origin . In addition, a  notification template could 
provide g uidance regarding clearer notification obligations.  However, the Group thought that the 
proposal also introduced new notification obligations, such as those relating  to the certification of 
origin.  Moreover, the Group was concerned over the time -frame prescribed for compliance , which 
was one year. He stated that several Members of the African Group  might not be able to complete 
their notification template within such a deadline. In this respect, the  technical assistance language 
in the proposal was not drafted in a manner that made it mandatory ; nevertheless, the  Group's 
concern over the deadline was exacerbated by possible linkages between these new obligations and 
the proposal that was currently un der discussion in the Council for Trade in Goods (CTG)  on 
transparency provisions that may also include punitive measures. For this reason, the African  Group 
would prefer to introduce a provision to the current proposal that clarified  that non -compliance w ith 
the proposed notification template would not lead to the application of any punitive measure s. 
Finally , he noted that  some Members of the African Group had not yet had sufficient time to examine 
the proposal and its implications.  
5.4.  The representative of Chad, on behalf of the LDC  Group, explained that the LDCs were 
concerned about adopting new notification obligations, which could place an additional burden on 
their delegations. LDCs were challenged by  a high degree of rotation in personnel  in their 
admin istration s, which made it difficult for them to build lasting capacity to enable them to comply 
with their notification obligations. The LDC  Group believed that no LDC should face punitive 
measures for a lack of compliance with WTO  notification obligations. In addition, the LDC  Group was 
concerned about a possible contradiction between the proposal and the Trade Facilitation Agreement 
(TFA) in relation to the establishment of an enquiry point. Several LDCs  had not yet ratified the TFA , 
and most that had done so had also notified their need for a longer time -frame in which to establish 
an enquiry point . The LDC  Group wished to preserve these flexibilities . Finally, certain  LDCs, which  
currently did not have any legislation relating  to non -preferent ial origin, wondered if, on the basis 
of this proposal,  they would need then to adopt new legislation in this area. He concluded that the 
LDC Group remained open to the proposal and would engage constructively in discussions of it, 
provided that additional  time were given for its examination  and review . 
5.5.  The representative of Hong Kong, China  reiterated that, if adopted, the proposal would facilitate 
work for economic operators , and also for Members when preparing their notifications. The vast 
majority of Members did not have any legislation relating to non -preferential origin. As a result, 
completing the proposed template would require no more than ticking a few boxes. Furthermore, 
the proposal recognized  that technical assistance from the Secretariat would be available to those 
Members in need of it She also recalled that the proposed enquiry point would be established within 
the available resources of each Member. Finally, she  encouraged Members to work together towards 
facilitating access to trade information  overall . 
5.6.  The representative of Japan  encouraged Members to engage  constructively in these 
discussions, and the representative of Chinese Taipei  highlighted that completing the template could 
be very  simple  and straightforward . In his view, the benefits of the proposal would certainly outweigh 
any possible administrative inconveniences. Likewise, the representative s of Australia  and the 
United  States  encourage d all other Members to consider the substa ntial benefits to be derived from 
enhancing transparency on non -preferential rules of origin.  
5.7.  The delegation of the Philippines  reported that his delegation shared the objectives of the 
notification template and would co -sponsor the proposal.  
5.8.  The represent ative of El Salvador  thanked the proponents for remaining open and flexible. She 
reported that , further to consultations and the proposal's revision, her delegation had no additional 
concerns over the proposal.  
5.9.  The representative of Chile said that his del egation did not co -sponsor the proposal because 
Chile had no legislation in this area. However, his delegation attached great importance to the 
objectives of enhancing transparency in this area.  
5.10.   The representative of the European Union  said that her delega tion supported the objectives 
of improving transparency on non -preferential rules of origin despite the EU not having co -sponsored G/RO/M /72 
 
- 11 - 
 
  the proposal. Nevertheless, her  delegation had been working closely with the co-sponsors in the 
elaboration of  the draft temp late and they would continue to engage constructively on this initiative . 
5.11.   In conclusion, the Chairperson  asked all delegations to consult with their Capitals concerning 
the revised text. She informed Members that the translations of the revis ion into French and Spanish 
were already available. She also encouraged all delegations  with specific questions to seek 
clarifications from the proponents as soon as possible. Furthermore, she proposed to hold 
small -group consultations on the proposal and invited i nterested delegation s to indicate their interest 
to the Secretariat  accordingly . Finally, she would report back to the Committee on these 
consultations at its next meeting.  
5.12.   The Committee agreed  to proceed accordingly . 
6  ELECTION OF OFFICERS  
6.1.  The Chairperson  explained that the CTG had not yet finished its consultations on a slate of 
names of officers to chair the CTG's subsidiary bodies. As a result, no name had yet been 
recommended to chair the Committee on Rules of Origin in 201 9. She proposed to  send a 
communication  to Members with the name of the proposed Chairperson for the CRO as soon as the 
CTG had made its recommendation in this regard . If no objection were received from any Member 
within the prescribed time -frame, the candidate would then be deemed to have been elected by the 
Committee  by acclamation . 
6.2.  The Committee agreed  to proceed as indicated .2 
7  OTHER BUSINESS  
7.1.  The representative of UNCTAD informed delegations that UNCTAD, in partnership with the 
European University Institute (EUI), would hold an executive workshop on " The Future  of Rules of 
Origin ", on 26 -28 June 2019,  at the EUI in Florence.3 This workshop would offer its participants an 
opportunity to review recent developments in all areas relating to rules of origin , and would in clude 
presentations by officials from the UNCTAD, the WCO,  and the WTO  Secretariats , as well as private 
sector representatives. He hoped that as many delegations as possible would be able to attend the 
workshop.  
__________  
                                                
2 On 7 June 2019, Members were informed that no Member had objected to the election of 
Ms. Uma Shankari MUNIANDY (Singapore) . Mrs Muniandy was therefore  elected as the Chairperson of the 
Committee for the year 2019.  
3 http://globalgovernanceprogramme.eui.eu/event/rules -of-origin -and-utilisation -rates/ .