RESTRICTED  
  
G/RO/M/69  
 
5 April 2018  
(18-2099) Page: 1/16 
Committee on Rules of Origin   
 
MINUTES OF THE MEETI NG OF 4 AND 5 OCTOBE R 2017  
CHAIRMAN: MR GERALD PAJUELO (PERU)  
Subjects Discussed1 
1   IMPLEMENTATION OF TH E BALI AND THE NAIRO BI MINISTERIAL DECIS IONS 
ON PREFERENTIAL RULES OF ORIGIN FOR LEAST DEVELOPED COUN TRIES  .....................  2 
1.1   NOTIFICATION BY MEMBERS ABOUT MEASURES BEING TAKEN TO IMPLEMENT THE 
DECISION  – REPORT BY PREFERENCE -GRANTING MEMBERS  ................................ ....................  2 
1.2   NOTIFICATION OF PREFERENTIAL RULES OF ORIGIN FOR LDCs – UPDATE BY THE 
SECRETARIA T ................................ ................................ ................................ .....................  2 
1.3   DEVELOPMENTS REGARDING METHODS OF CALCULATION OF THE PERCENTAGE 
CRITERION (PARAGRAPH  1.1 OF THE NAIROBI DECISION AND ITEM 1 OF G/RO/W/169) 
– PRESENTATION BY THE LDC  GROUP  ................................ ................................ ...................  3 
1.4   DEVELOPMENTS REGARDING METHODS USING A CHANGE OF TARIFF 
CLASSIFICATI ON CRITERION TO DETERMINE SUBSTANTIAL TRANSFORMATION 
(PARAGRAPH  1.2 OF THE NAIROBI DECISION AND ITEM  2 OF G/RO/W/169) – 
PRESENTATION BY THE LDC  GROUP  ................................ ................................ ......................  4 
1.5   DEVELOPMENTS REGARDING METHODS USING A SPECIFIC MANUFACTURING OR 
PROCESSING OPERATION CRITERION TO DETERMINE SUBSTANTIAL TRANSFORMATION 
(PARAGRAPH  1.3 OF THE NAIROBI DECISION AND ITEM  3 OF G/RO/W/169) – 
PRESENTATION BY THE LDC  GROUP  ................................ ................................ ......................  5 
1.6   DEVELOPMENTS REGARDING METHODS USING A COMBINATION OF 
REQUIREMENTS TO DETERMINE SUBSTANTIAL TRANSFORMATION (PARAGRAP HS 1.4 
AND 1.5 OF THE NAIROBI DECISION AND ITEM  4 OF G/RO/W/169) – PRESENTATION BY 
THE LDC  GROUP  ................................ ................................ ................................ .................  5 
1.7   DEVELOPMENTS REGARDING CUMULATION PROVISIONS (PARAGRAPHS  2.1 AND 
2.2 OF THE NAIROBI DECISION AND ITEM  5 OF G/RO/W/169) – PRESENTATION BY THE 
LDC GROUP  ................................ ................................ ................................ ........................  6 
1.8   DEVELOPMENTS REGARDING DOCUMENTARY REQUIREMENTS (PARAGRAPH  3 OF 
THE NAIROBI DECISION AND ITEM  6 OF G/RO/W/169) – PRESENTATION BY THE 
LDC GROUP  ................................ ................................ ................................ ........................  6 
1.9   NOTIFICATION OF PREFERENTIAL TRADE DATA (PARAGRAPH  4.3 OF 
WT/L/917/ADD.1 AND DOCUMENT  G/RO/W/163/REV.3) – UPDATE BY THE SECRETARIAT  ...........  8 
1.10   UTILIZATION RATES UNDER PREFERENTIAL TRADE ARRANGEMENTS FOR LEAST 
DEVELOPED COUNTRIES (PARAGRAPH  4.3 OF WT/L/917/ADD.1) - REPORT BY THE 
SECRETARIAT (G/RO/W/168/REV.1) AND PRESENTATION BY THE LDC  GROUP  ...........................  9 
2   HARMONIZATION OF NON -PREFERENTIAL RULES O F ORIGIN - EDUCATIONAL 
EXERCISE AND EXPERIE NCE SHARING ABOUT EX ISTING NON -PREFERENTIAL 
RULES OF ORIGIN  ................................ ................................ ................................ ..........  12 
3   GUIDELINES AND PRINC IPLES TO STREAMLINE NON-PREFERENTIAL RULES 
OF ORIGIN – REPORT BY SWITZERLAN D ................................ ................................ ....... 13 
                                                
1 The agenda of the meeting was circulated in document  WTO/AIR/RO/6.  G/RO/M/69  
 
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  4   NOTIFICATIONS UNDER ARTICLE  5 AND UNDER PARAGRAP H 4 OF ANNEX  II 
OF THE AGREEMENT ON RULES OF ORIGIN  ................................ ................................ .... 15 
5   TWENTY -THIRD ANNUAL REVIEW OF THE IMPLEMENTATIO N AND 
OPERATION OF THE AGR EEMENT ON RULES OF O RIGIN  ................................ ................  15 
6   DRAFT REPORT (2017) OF THE CRO TO THE CO UNCIL FOR TRADE IN G OODS  ...........  15 
7   DRAFT REPORT (2017) OF THE CRO TO THE GE NERAL COUNCIL ON 
PREFERENTIAL RULES O F ORIGIN FOR LDCS  ................................ ................................ . 15 
8   OTHER BUSINESS  ................................ ................................ ................................ ...... 16 
 
1  IMPLEMENTATION OF TH E BALI AND THE NAIRO BI MINISTERIAL DECIS IONS ON 
PREFERENTIAL RULES O F ORIGIN FOR LEAST D EVELOPED COUNTRIES  
1.1.  The Chairman  drew Members' attention to a number of agenda items relating  to the 
implementation of the 2013 and 2015 Ministerial Decisions on preferential rules of origin for least  
developed countries (WT/L/917 and WT/L/917/ Add.1). He proposed to discuss each of  these items 
separately.  
1.1  NOTIFICATION BY MEMBERS ABOUT MEASURES BEING TAKEN TO IMPLEMENT THE 
DECISION – REPORT BY PREFERENCE -GRANTING MEMBERS  
1.2.  The Chairman  recalled that paragraph  4.2 of the Nairobi Ministerial Decision invited 
preference -granting Members to inform the Committee on Rules of Origin (CRO) about measures 
being taken to implement the Decision , and that the  Committee had heard and considered a 
number of reports at its previous meetings. He asked if any preference -granting Member wished to 
share with the Committee any additional information. No Member requested  the floor. The  
Chairman therefore invited all preference -granting Members to continue to review their 
preferential rules of origin for least  developed countries (LDCs) with a view to simpli fying them 
wherever possible . The Committee was also to be kept informed of any changes.  
1.3.  The Committee took note  of the Chair's statement.  
1.2  NOTIFICATION OF PREFERENTIAL RULES OF ORIGIN FOR LDC s – UPDATE BY THE 
SECRETARIAT  
1.4.  With regard to transparency, the Ch airman was pleased to report to the Committee that, 
following adoption of a new template for the notification of preferential rules of origin for LDCs 
(G/RO/84), the Secretariat had received 15  notifications from Members , namely : Australia 
(G/RO/LDC/N/AUS/ 1); Canada (G/RO/LDC/N/CAN/1); Chile (G/RO/LDC/N/CHL/1); China 
(G/RO/LDC/N/CHN/1); the United States (G/RO/LDC/N/USA/1, G/RO/LDC/N/USA/2 and 
G/RO/LDC/N/USA/3); India (G/RO/LDC/N/IND/1); Japan (G/RO/LDC/N/JPN/1); Republic of Korea 
(G/RO/LDC/N/KOR/1); New Ze aland (G/RO/LDC/N/NZL/1); Norway (G/RO/LDC/N/NOR/1); the 
Russian Federation (G/RO/LDC/N/RUS/1); Switzerland (G/RO/LDC/N/CHE/1 and 
G/RO/LDC/N/CHE/1/ Corr.1); Chinese  Taipei (G/RO/LDC/N/TPKM/1 and 
G/RO/LDC/N/TPKM/1/ Corr.1); Thailand (G/RO/LDC/N/THA/1); and th e European Union 
(G/RO/LDC/N/EU/1). The Chairman congratulated these preference -granting Members for the 
submission of their comprehensive notifications within the time -frame agreed by the Committee.  
1.5.  The representative of Canada  reported that, since her delegation's first  notification, further 
changes had been implemented , in June  2017, to allow additional apparel products to qualify for 
duty-free treatment when imported into Canada. These changes would ensure that Canadian rules  
of origin more accurately reflected the sourcing patterns and manufacturing capabilities of LDCs 
for the products  in question . Additional and more detailed  information would be provided in a 
complementary notification to be submitted in due course . 
1.6.  Likewi se, the representative of China  recalled that, in an effort to implement the 
WTO Ministerial Decisions, China had promulgated new rules and procedures of origin with regard 
to special preferential tariff treatment for LDCs maintaining diplomatic relations with China. The 
new rules allowed  operators to choose between either applying a regional value (40%) or else a 
change of tariff heading criterion ; in addition, and where neither option could be satisfied, the G/RO/M/69  
 
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  Chinese government was willing to negotiate pro duct-specific rules of origin with representatives 
of least developed countries in order to address their specific concerns. In this regard , the 
calculation of value was based on the value of non -originating materials, which complied with the 
requirements of the Nairobi Ministerial Decision. Similarly, the change of tariff classification 
criterion did not contain any exclusion, which was also in line with the Decision. Furthermore, the 
new rules introduced the possibility of cumulating bilaterally and with other countries from the 
same  regional group. Finally, the new rules had simplified documentary requirements, for example 
by waiving certificates of origin in certain circumstances.  
1.7.  The representative of Cambodia , on behalf of the LDC  Group, thanked preference -granting 
Members for submitting their comprehensive notifications. These notifications would allow the 
LDC Group to better understand preferential origin requirements and thereby  help to advance the 
work of the Committee on the implementation  of both Ministerial Decisions.  
1.8.  Similarly, the representative of Tanzania  reported that his colleagues in Capital had been 
very impressed with the quality of the se notifications. It had been especially helpful that the 
requirements had been described using si mple and clear language. He called upon the remaining 
preference -granting Members that had not yet submitted their notification s to do so as soon as 
possible. The representative of Tanzania especially thanked the governments of Canada and China 
for simplif ying their respective origin requirements. With regard specifically to China's reforms, he 
noted that regional cumulation had only been introduced for LDCs in ASEAN and ECOWAS , and 
asked if  LDCs in other regions would be allowed the same flexibility.  
1.9.  In co nclusion, the Chair  proposed that the Committee take note of the statements made. 
He urged preference -granting Members that had not yet submitted their notification s using the 
new template to do so as soon as possible. He also invited all preference -granti ng Members to 
ensure that their notifications remained up -to-date and that any changes to origin requirements 
were promptly  notified . Moreover, he proposed that the Committee initiate a review process to 
examine origin requirements in greater detail by foc using , for example,  on specific themes that 
could be introduced and elaborated upon in presentations by Members or documents prepared by 
the Secretariat. Finally, he asked the Secretariat to disseminate the notifications as widely as 
possible, including  by incorporating them into the WTO  Preferential Trade Arrangements (PTA) 
database.  
1.10.   The Committee so agreed . 
1.3  DEVELOPMENTS REGARDING METHODS OF CALCULATION OF THE PERCENTAGE 
CRITERION (PARAGRAPH  1.1 O F THE NAIROBI DECISION AND ITEM  1 OF G/RO/W /169) 
– PRESENTATION BY THE LDC  GROUP  
1.11.   The Chairman  explained that seven  items had been included on  the meeting's agenda  at the 
request of the LDC  Group . Each of these items would afford Members an opportunity to assess 
current practices and to review recent develo pments with regard to the main elements of the 
Nairobi Decision. The first  item concerned  paragraph  1.1 of the Decision  and he  invited the 
LDC Group to introduce this item  before opening the floor to all Members.  
1.12.   The representative of Tanzania  recalled tha t paragraph  1.1 of the Nairobi Decision contained 
four elements. First, it contained a commitment to adopt a calculation method based on the value 
of non -originating materials. The LDC  Group had explained in previous submissions its reasons for 
preferring this method (G/RO/W/148 and RD/RO/23). Second, it recognized  that adoption of this 
method could take Members some time. Third, rules were adopted that  allowed for the use of 
non-originating materials up to 75% of a product's final value. Fourth , the Decisi on asked 
preference -granting Members to consider allowing for the deduction of transportation and 
insurance costs from the value of non -originating inputs.  
1.13.   On the basis of these benchmarks, the Group 's presentation  had provided a summary of 
current practice (RD/RO/52). The delegate of Tanzania noted that rules or origin based on the 
value of the imported materials were commonly used, albeit with significant national variation. As 
indicated in the matrix given in the presentation , all preferen ce-granting Members had adopted a 
calculation method based on the value of non -originating materials (with some variations) , except 
for the US (where the relevant rules were based upon the direct processing cost and the value of G/RO/M/69  
 
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  the originating materials).  With regard to the agreed threshold for the use of non -originating 
materials, a majority of Members did not meet the Decision's 75% threshold ; that said, it could be 
argued that Canada, and perhaps the EU, Norway,  and Switzerland,  did meet this threshold if their 
rules on cumulation were also taken into account. Finally, no preference -granting Member seemed 
to allow for the deduction of insurance and freight costs, although in some of the notifications this 
point was not always made clearly . 
1.14.   The representa tive of Lao People 's Democratic Republic  noted that the United States had 
allowed for the deduction of freight and insurance costs in their free trade a greements but not in 
their LDC  preferences. He reminded Members that , according to the Nairobi Decision,  there was no 
obligation to use rules of origin based on the value of materials. However, for Members adopting 
such rules certain benchmarks , as per the Ministerial Decision, had nevertheless to be met.  
1.15.   The representative of the United States  thanked the LDC  Group for their presentation. As 
permitted by the Nairobi Decision, he confirmed that the US applied a method ology  based on the 
value of originating materials. Hence, the deduction of freight and insurance costs would have the 
opposite eff ect to that of a method ology  based on the value of non -originating materials. In the 
US, freight, insurance , and packing costs could be added, which was beneficial to LDCs wishing to 
qualify for American preferences. In fact, the way that freight, insuranc e, and packing expenses 
were treated fa cilitated the utilization of US  preference programmes. Second, he added that , under 
both the African Growth and Opportunity Act (AGOA) and the Caribbean Basin Economic Recovery 
Act (CBRA) programmes, up to 15% of the value of local content could be assigned to the cost or 
value of the materials produced in the United States. This effectively changed the value of the 
materials threshold from 35% to 20%, which was also beneficial for LDCs.  
1.16.   The Committee took note  of the presentation and of the statements made.  
1.4  DEVELOPMENTS REGARDING METHODS USING A CHANGE OF TARIFF 
CLASSIFICATION CRITERION TO DETERMINE SUBSTANTIAL TRANSFORMATION 
(PARAGRAPH  1.2 OF THE NAIROBI DECISION AND ITEM  2 OF G/RO/W /169) – 
PRESENTATION BY THE LDC  GROUP 
1.17.   The representative of Benin  said that his delegation would present a summary of current 
practices and recent developments concerning  paragraph  1.2 of the Nairobi Declaration 
(RD/RO/53). In his view , this paragraph required Members using rules of origin based on tariff 
classification changes to prefer a simple change of tariff heading ("CTH") or sub -heading ("CTSH"). 
It also invited Members to eliminate all exclusions , restrictions , and exceptions unless such 
exclusions , restrictions , or exceptions were n eeded. Finally, the last element of this paragraph 
invited Members to introduce, where appropriate, a tolerance rule for inputs from the same 
heading or sub -heading.  
1.18.   According to the analysis made by the LDC  Group, several preference -granting Members 
based  their rules on tariff classification changes ( for example,  China; the EU ; India; Japan;  
Norway; and Switzerland). While the rules often allowed for simple CTH or CTSH, there were a 
significant number of exceptions or restrictions, particularly in importan t sectors such as 
HS chapter  16. Japan, for example , had 89  tariff headings that were covered by a CTH  rule with 
multiple exceptions. Similarly, while China used the CTH  criterion as an alternative rule to the 
percentage criterion (one "or"  the other), Ind ia used it as a cumulative requirement together with 
the percentage criterion (one "and" the other). Finally, few Members had introduced tolerance 
allowances in their rules although this was relatively common practice in free trade agreements. 
Nevertheless , there existed also positive practices and those could be replicated. For example , the 
EU had included tolerance allowances for shoes, coffee, tea , and spices. He recommended that 
preference -granting Members examine their current rules and eliminate exclu sions and restrictions 
whenever possible. In  addition, Members could also compare their rules of origin for LDCs with 
those of free trade agreements so that similar flexibilities in the rules could be extended to them . 
1.19.   The Committee took note  of the presentation made.  G/RO/M/69  
 
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  1.5  DEVELOPMENTS REGARDING METHODS USING A SPECIFIC MANUFACTURING OR 
PROCESSING OPERATION CRITERION TO DETERMINE SUBSTANTIAL TRANSFORMATION 
(PARAGRAPH  1.3 OF THE NAIROBI DECISION AND ITEM  3 OF G/RO/W/169) – 
PRESENTATION BY THE LDC  GROUP 
1.20.   On behalf of the LDC  Group, the representative of Myanmar  presented recent developments 
in relation to paragraph  1.3 of the Nairobi Decision (RD/RO/54). He recalled that the purpose of 
this paragraph was to ensure that these types of rules were not ove rly burdensome. In other 
words, LDC  producers should have the productive capacity to perform such processes. Canada , the 
EU, Japan , Norway , Switzerland , and the US , used rules based on specific manufacturing 
processes, typically  for textile s and clothing p roducts. However, the LDC  Group considered that 
such rules were in most cases not as simple as those enumerated in subparagraphs  (a) to (d) of 
paragraph  1.3. In the case of agro-processing products, for example , substantial transformation 
should be recogni sed when raw agricultural products were transformed into agro -processed 
products , such as when  canning raw agricultural products into preserved food preparations. He 
concluded by inviting all preference -granting Members to examine their requirements  in light of 
paragraph  1.3, where the recommendations  were simple and straightforward  to understand . 
1.21.   The Committee took note  of the presentation.  
1.6  DEVELOPMENTS REGARDING METHODS USING A COMBINATION OF REQUIREMENTS 
TO DETERMINE SUBSTANTIAL TRANSFORMATION (PA RAGRAPHS  1.4 AND 1.5 O F THE 
NAIROBI DECISION AND ITEM  4 OF G/RO/W /169) – PRESENTATION BY THE 
LDC GROUP  
1.22.   The representative of Tanzania  first presented the requirements of paragraphs  1.4 and 1.5 
of the Nairobi Decision and then offered a review of current practices and recent developments 
(RD/RO/55). The Nairobi Decision acknowledged that rules of origin that contained a combination 
of requirements were restrictive and to be avoided. He  noted that only a few Members used this 
type of rule. India's t rade preferences, for example , contained a general rule according to which all 
imports from LDCs should fulfil both a minimum percentage criterion and, simultaneously, a 
change of tariff classification (CTSH). Combined requirements were also used, albeit t o a lesser 
extent , in the rules of the EU, Norway,  and Switzerland,  as well as Japan. For example , the rule of 
origin in Japan for certain cocoa products stated that these products must be "manufactured from 
products other than those of heading  18.06, prov ided that the value of non -originating products 
used [did] not exceed 40% of the value of the products and the sugar and milk (including cream) 
used [was] originating". He noted that rules of this type were complex and restrictive, particularly 
for small a nd medium -sized enterprises in LDCs.  
1.23.   The delegate of Tanzania noted that rules that offered a choice between two  requirements 
were by contrast  liberal and to be preferred. Such rules were used extensively , for example,  in 
China's trade preferences (exporte rs could choose to comply with either a minimum value criterion 
or with a CTH). They also appeared, if to a lesser extent, in the rules of the EU, Norway,  and 
Switzerland,  and also Japan.  
1.24.   The Tanzanian delegate concluded with the observation that there see med not  to be any 
recent developments on this particular aspect of the Nairobi Decision. Nevertheless, he urged all 
preference -granting Members using rules containing multiple requirements to reform those rules. 
He also urged all preference -granting Members to consider introducing rules containing alternative 
options wherever possible.  
1.25.   The representative of the World Customs Organization  (WCO) thanked the LDCs for their 
presentations and informed Members that the WCO  Secretariat had been developing a guide for 
the implementation of the Nairobi Decision. This guide, when finished, would be a very practical 
tool to assist Members to implement the Decision and to help LDCs to benefit from preferential 
rules of origin. In addition, she reminded Members tha t the WCO  Secretariat had also prepared a 
compendium on rules of origin that consolidated all WCO  origin -related information in to a single 
document. The compendium could also prove to be a very useful tool for navigating through some 
of the very technical aspects covered by the Decision.  
1.26.   The Committee took note  of the presentation and of the statement made.  G/RO/M/69  
 
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  1.7  DEVELOPMENTS REGARDING CUMULATION PROVISIONS (PARAGRAPHS  2.1 AND 2.2 
OF THE NAIROBI DECISION AND ITEM  5 OF G/RO/W/169) – PRESENTATION BY THE 
LDC GROUP  
1.27.   With regard to paragraphs  2.1 and 2.2 of the Nairobi Decision, the representative of 
Cambodia  made a presentation (RD/RO/56) , noting that there were four  types of cumulation: 
bilateral; with other LDCs; with other beneficiaries  of a General System of Prefer ence scheme 
(GSP) ; and with other developing countries in a regional trade agreement. He added that, with the 
exception of Thailand, all other preference -granting Members had introduced some form of 
cumulation. Bilateral cumulation was possible under all s chemes except for Thailand and for the 
US GSP ( where it was only possible under AGOA) while cumulation possibilities for Norway were 
not entirely clear. Other types of cumulation were available depending on the specific scheme. The 
delegate of Cambodia dre w Members' attention to the fact that a number of prerequisites had to 
be met before an exporter could benefit from cumulation. He then presented a matrix that 
illustrated some of these conditions, including: (i)  that the regional group must submit an 
application; (ii)  that regions needed to have a central organization capable of ensuring 
administrative cooperation; and (iii) that the value of materials that could be cumulated was 
sometimes limited . 
1.28.   The Cambodian delegate noted that one  additional const raint concerned "graduation". In 
fact, the EU did not allow for cumulation with a third  country that had been removed from its 
GSP scheme (for instance, after signing a  free trade agreement  with the EU). This disrupted trade 
and the value chains that had e merged under these preferences. For example , when Malaysia and 
Thailand were removed from the list of EU  GSP beneficiaries, Cambodia was no longer permitted to 
export parts to Malaysia and Thailand for further processing. Similarly, it also lost the possib ility to 
buy inputs in Malaysia and Thailand for further processing. By contrast, Canada and the US 
maintained the option of cumulating materials from countries that had "graduated". One option 
offered by the EU was approval of expanded cumulation at the r equest of a n LDC. However, the 
requests were not automatically granted and were always product -specific. In conclusion, the 
delegate of Cambodia recommended that Members expand their range of cumulation options in 
order to cover all cumulation types envisa ged in the Nairobi Decision. He also recommended that 
graduated  countries retain the possibility to cumulate, and that cumulation requests be granted 
automatically.  
1.29.   In response to a point raised during the presentation, the representative of Norway  
confirm ed that , further to a domestic review process initiated after the adoption of the Nairobi 
Decision, cumulation with other LDCs had recently been introduced in to Norway's rules of origin.  
1.30.   For the representative of the European Union , cumulation provisions h ad to be assessed in 
conjunction with other origin requirements. In her opinion, the EU's origin requirements were very 
liberal because they allowed for use of up to 70% of non -originating materials together with very 
relaxed single transformation rules for textiles. This already allowed LDC  producers to source their 
inputs from the most competitive producers while maintaining a minimum level of local processing. 
Furthermore, she noted that the EU  legislation allowed for cross -regional cumulation, which h ad 
not been reflected in the presentation.  
1.31.   The representatives of Bangladesh  and Tanzania  seconded the arguments presented by 
Cambodia and confirmed that it was of critical importance to maintain stability and predictability 
with regard to  cumulation provi sions.  
1.32.   The Committee took note  of the presentation and of the statements made.  
1.8  DEVELOPMENTS REGARDING DOCUMENTARY REQUIREMENTS (PARAGRAPH  3 OF 
THE NAIROBI DECISION AND ITEM  6 OF G/RO/W/169) – PRESENTATION BY THE 
LDC GROUP  
1.33.   The representative of Nepal  delive red a presentation (RD/RO/57) on current practice and 
recent developments in relation to Paragraph  3 of the Nairobi Decision: documentary 
requirements. Three  items had been reviewed: (i)  practice in relation to non -manipulation 
certificates; (ii)  trade fac ilitating measures for small consignments; and (iii)  self-certification. On  
the first item, the LDC  Group recommended that a certificate of non -manipulation only be G/RO/M/69  
 
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  requested in those cases where  customs administrations had a doubt over the origin of goods  that 
had not been directly consigned to them. Only Australia , the EU , and New Zealand followed this 
practice. All other preference -granting Members systematically requested proof of 
non-manipulation. The practice of Norway , Korea , Switzerland , and Chinese  Taipei in this respect 
was not entirely clear from their notifications.  
1.34.   With regard to the second  element of this provision, namely,  minimizing documentation 
requirements for small consignments, the delegate of Nepal said that many preference -granting 
Members had provisions of this type in their non -reciprocal preferences. In the case of Australia , 
Canada , New Zealand , and the US, a certificate of origin was not required and simplified measures 
were in place across the board. However, China , India, Korea , Chinese Taipei , and Thailand,  did 
not have any simplified provisions of this type.  
1.35.   Finally, with regard to the third  element, self -certification, the presenter said that the 
analysis was slightly more complex because of the variety of national practices. F or example , the 
EU, Norway,  and Switzerland were introducing the REX  system, which allowed for self -certification 
for registered exporters only. Canada authorize d self-certification while US practices differed such 
that this requirement did not entirely ap ply (the US  requested an importer declaration). Japan 
allowed self -certification for some products up to a certain value but still required the presentation 
of a "Form  A". The practice for Korea was not entirely clear , whereas the schemes of China, India, 
the Russian Federation, Chinese Taipei , and Thailand,  did not contain such provisions.  
1.36.   The Nepalese delegate concluded by noting that the LDC  Group hoped that the 
implementation of the WTO  Trade Facilitation Agreement would generate renewed  momentum 
towards  further simplify ing documentary requirements in line with the Nairobi Ministerial Decision.  
1.37.   The representative of Chinese Taipei  thanked the LDC  Group for their analysis and 
presentations. He reminded Members that the Nairobi Decision had explicitly recognized flexibilities 
for developing preference -granting Members ; his impression was that the presentations had not 
reflected that aspect of the Ministerial Decision. Moreover, he had the impression that the LDCs 
had proposed that certain specific manuf acturing process rules be adopted whereas, in his view, 
the Decision did not imply that preference -granting Members should converge towards a single 
type of rule.  
1.38.   The representative of the United States  thanked the LDC  Group for the extensive work that 
had gone into preparing  the presentations. He regretted that the analysis and presentations had 
not been shared ahead of the meeting so that delegations could have provided more substantive 
comments from Capitals . He wished to confirm that the United States d id not require any 
certificate of non -manipulation for imports that had transited through a third  country. US  customs 
authorities only assessed the normal commercial invoices so as to ensure that the final destination 
of the goods was indeed the United Sta tes. As a result, his delegation considered that US practice 
was entirely in conformity with the requirements of the Nairobi Decision.  
1.39.   The representative of Norway  clarified that Norway's provisions regarding direct 
transportation and certificates of non -manipulation were liberal. He said that Norway allowed for 
storage and splitting up in a third  country. If the importer could prove beyond reasonable doubt 
that the goods had not undergone any changes while in transit the shipment would be accepted.  
1.40.   The rep resentative of Bangladesh  asked the delegation of China to clarify China's practice in 
relation to small consignments. In fact, while the presentation by the LDCs had shown that China 
did not maintain simplified provisions for small consignments, there did  seem to be simplified 
procedures for shipm ents that did not exceed a value of 6,000  yuan.  
1.41.   The representative of China  said that his delegation would enquire and respond at a later 
date. 
1.42.   In response to the point raised by Chinese Taipei, the representative  of Tanzania  said that 
the LDCs recognized that developing countries could implement the Decision with flexibility. 
However, he understood that these flexibilities were not without limit . For the LDC  Group, the 
flexibilities should not equate to developing  countries not need ing to make any effort at all to 
simplify their origin requirements. Developing countries that had implemented trade preferences G/RO/M/69  
 
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  for LDCs surely had the intention to provide benefits to LDC  producers, so they should also make 
efforts to simplify their origin requirements. With regard to the second  question, that is, whether 
LDCs would expect preference -granting Members to adopt process -specific rules, the delegate of 
Tanzania clarified that the Group was not seeking harmonization. Process -specific rules, if 
designed in a simple way, were easy and straightforward to comply with  and understand . For this 
reason, such rules could suit certain products well, as had been illustrated in paragraph  1.3 of the 
Ministerial Decision. What the LDC  Group would expect , however,  was that preference -granting 
Members assess the advantages of such rules against their current practices with a view to 
adopting more lenient requirements whenever possible. The spirit of the Decision was precisely to 
recognize tha t different approaches could be used to ensure simple r rules of origin , such that 
Members were free to choose their own approach. The result, however, should be a set of rules 
that effectively benefited LDC  producers. Perhaps the LDC  Group would consider drawing up  a list 
of products for which product -specific rules result ed in simple r origin requirements.  
1.43.   In addition, and in response to the comments made by the US, the delegate from Tanzania 
confirmed that the US did not require certificates of non -manipul ation. However, the US , like 
Canada,  did require exporters to show a through bill of lading. This requirement could have a 
similarly restrictive effect. For instance, goods exported to Canada were often sent first to the US 
and split there before being con signed to their final destination in Canada. In this case, the 
preferences would be denied because a through bill of lading (indicating Canada as the final 
destination) could not be presented. The governments of Canada and the US should therefore 
reflect on how to eliminate this requirement.  
1.44.   The Committee took note  of the presentation and of the statements made.  
1.9  NOTIFICATION OF PRE FERENTIAL TRADE DATA (PARAGRAPH  4.3 OF 
WT/L/917/ADD.1 AND DOCUMENT  G/RO/W/163/REV .3) – UPDATE BY THE 
SECRETARIAT  
1.45.   Having completed the review of the specific provisions of the Ministerial Decision, the 
Chairman  proposed to turn to the agenda's next item, namely the notification of preferential tariffs  
and trade data,  and rules of origin relating to LDC non -reciprocal preferences. The latest status of 
notifications was contained in a background note by the Secretariat (G/RO/W/163/Rev.3).  
1.46.   The Secretariat  pointed out that the note enumerated the notification requirements in 
relation to preferential rules of origin for LDC s: Annex  2 of the Agreement on Rules of Origin; the  
Transparency Mechanism for PTA; and the Bali and Nairobi Ministerial Decisions. An annex in the 
note summarized in a single table the notifications sent under these instruments both to the 
Committee on Tr ade and Development (CTD) and to the CRO. With regard to the table, the 
Secretariat noted that most Members had complied with their notification obligations. In addition 
to the schemes reflected in the table  itself, two additional notifications had subsequ ently been 
received, namely Chile's notification and an update from Canada.  
1.47.   On the tariff and import side, the Secret ariat explained that preference -granting Members 
had to notify  the following:  (i) the tariff lines covered by their preferences ; (ii) the p referential 
duty rates applied ; and (iii)  the trade for each tariff line. The Secretariat was pleased to report 
that the coverage of tariff and trade data had improved as was shown in the table. The Secretariat 
also noted that, since the note had been issu ed, the delegation of Japan had notified tariff (2017) 
and trade (2016) data , and that the delegation of Thailand had notified tariff and trade data 
(2016).  
1.48.   The Chair congratulated all Members that had endeavoured to submit their notifications, 
especially the delegations of Japan and Switzerland that had reported their preferential data for 
the first time. He added that , notwithstanding improvements in data coverage, some Members had 
not yet provided  any information regarding their preferential trade with LDCs, including  certain  
Members that represented major markets for LDC  exports. He urged all preference -granting 
Members to ensure that their notifications were complete and up to date in order to al low the CRO 
to perform its monitoring functions as mandated by the Bali and Nairobi Ministerial Decisions.  
1.49.   The representative of Tanzania  thanked all the preference -granting Members that had 
submitted their preferential rules of origin as well as their tariff and trade data. These notifications G/RO/M/69  
 
- 9 - 
 
  were instrumental in allowing Members to move forward with the implementation of the Ministerial 
Decisions and, in particular, in enabling a discussion to take place about the impact of origin 
requirements on the uti lization of preferences. He encouraged all preference -granting Members 
that had not yet notified all of the relevant information to do so as soon as possible. He noted that, 
for instance, no data was available for China, which was regrettable given that Ch ina had become 
one of the main exporting markets for many LDCs, particularly African LDCs.  
1.50.   The representative of China  thanked the LDCs for their presentations. He clarified that China 
had, in June  2017, submitted to the CTD their preferential tariffs as w ell as the import trade data 
from certain countries. In addition, China was preparing the M ost-Favoured Nation (MFN)  rate data 
and the LDC  preferential data for the 2012 -2016 period. The data would be submitted to the 
Secretariat as soon as possible.  
1.51.   The r epresentative of Switzerland  thanked the LDCs for their presentations and the 
Secretariat for its report. He said that the Swiss delegation was pleased finally to have notified its 
preferential trade data. He explained that two  years were still missing (20 10 and 2011) because 
another methodology for collecting import data had been used at that time, which meant that the 
data was not comparable. He concluded by saying that Switzerland would notify its preferential 
trade data on an annua l basis, as required by the WTO  Transparency Mechanism for PTAs.  
1.52.   The Chairman  proposed that the Secretariat update its report regularly so as to keep 
Members informed about the availability of information on rules of origin and preferential tariffs 
and trade. He also invited a ll preference -granting Members to ensure that their notifications were 
up to date. Finally, he reminded delegations that the Secretariat was available to assist any 
Member that required guidance with the preparation of these notifications.  
1.53.   The Committee took note  of the presentation and of the statements made and agreed  to 
proceed accordingly.  
1.10  UTILIZATION RATES UNDER PREFERENTIAL TRADE ARRANGEMENTS FOR LEAST  
DEVELOPED COUNTRIES (PARAGRAPH  4.3 OF WT/L/917/ADD.1) - REPORT BY THE 
SECRETARIAT (G/RO/W/168/REV.1)  AND PRESENTATION BY THE LDC  GROUP  
1.54.   Paragraph  4.3 of the Nairobi Ministerial Decision instructed the Secretariat to calculate 
preferential utilization rates. The aim of this provision, the Chairman  explained, was to offer an 
analytical tool to examine the i mpact of preferential rules of origin. In fact, Members could identify 
products or sectors where the utilization of preferences was low and therefore assess whether 
restrictive origin -related requirements could be the cause of such underutilization. The CR O would 
then be in a position to identify  patterns and best practices.  
1.55.   The Secretariat  presented its report ( RD/RO/59 and G/RO/W/168/Rev.1) and emphasized 
that it should be considered a first attempt to summarize information about the utilization of 
non-reciprocal preferences by LDC  countries ( that is,  utilization of PTAs). Since rules of origin 
constituted a prerequisite to claim trade preferences, a more in -depth understanding of how 
preferences were used or not used could help Members identify cases in which origin -related 
requirements constituted an obstacle to a fuller utilization of those preferences. Following the 
adoption of a methodology for the calculation of utilization rates by the Committee, the Secretariat 
had consulted with different preferen ce-granting Members in order to discuss possible ways of 
presenting this information. The format, length , and focus of the report could be adjusted in future 
depending on Members' evolving needs. The note only showed information for those 
preference -granti ng Members that had notified their tariff and trade data. Finally, the Secretariat 
added that, for some Members, the data was still under review.  
1.56.   The Secretariat recalled that origin  requirements were, of course, not the only element that 
could influence t he utilization of preferences. First, utilization could only be calculated where a 
preference was available. In other words, no advantage could be offered on a tariff line for which 
the most -favoured -nation rate was zero. Norway, for instance, had an MFN  tariff of zero on 85% of 
its tariff lines. Hence, a preferential margin could only be offered for 15% of its tar iff lines. For this 
reason, MFN -zero tariff lines had been excluded from the Secretariat 's calculations. Second, if not 
zero, the level of the MF N rate could also have an impact: the higher the MFN  rate, the greater the 
incentive to comply with preferential origin requirements so as to utilize the preferences available G/RO/M/69  
 
- 10 - 
 
  and to avoid customs duties. Third, preferences could only be utilized if export ers were aware of 
and knowledgeable about  the availability of such preferences. Fourth, utilization rates could vary 
depending on the availability of other trade schemes . In fact, more than one preferential regime 
could be available at the same time, in wh ich case exporters could choose to trade under one 
scheme or another. Cambodia, for instance, could choose to export to Australia either under 
Australia's GSP or else under the ASEAN -Australia Free Trade Agreement . As a result, the 
utilization rates for Au stralia's GSP gave only a partial understanding of Australia's preferential 
imports from Cambodia.  
1.57.   These factors meant that there was a need for caution when interpreting utilization rates 
and linking them to origin requirements. Graph  1 of the note attempted to reflect this complexity 
by showing the value of trade taking place under different options (dutiable or zero MFN  rates, 
non-reciprocal (PTA) or reciprocal preferences). With respect to that graph, Members' attention 
should focus on the percent age of trade that (i) was eligible for LDC  preferences, ( ii) concerned 
dutiable lines , and ( iii) was not using preferences. In other words, the issue of the percentage  of 
trade involved raised the following question: why were imports that were eligible for  trade 
preferences not being imported under those preferences? This was the area of trade that could be 
impacted by preferential rules of origin for LDCs. In addition, the note included two  tables to 
complement the analysis: Table  1 showed utilization rate s by product groups under each 
LDC scheme ; and Table  2 showed utilization rates for each WTO  LDC beneficiary under each PTA. 
In these tables, the numbers showed the proportion of exports eligible for preferences that were 
actually being imported under those preferences. Empty cells indicated that no preferential imports 
had been reported ( that is,  these items had a n MFN-zero rate, they were not covered by the PTA , 
or there was no trade in these  products).  
1.58.   Having heard the presentation by the Secretariat, th e Chairman  underscored two  points : 
first, he highlighted the importance of complete and up -to-date notifications ; second , he reminded 
Members that the report was not an end in itself but rather a tool to help Members advance  with 
the implementation of the Ministerial Decisions. He then invited the LDC  Group to make a 
presentation.  
1.59.   The representative of Yemen  (RD/RO/58), on behalf of the LDC  Group, said that utilization 
rates were an important indicator of the effectiveness of  preferences as they could point to 
possible reasons as to why preferential treatment was sometimes being denied to goods covered 
by preferences. In the view of the LDC  Group, the re could be three  possible reasons : first, the 
preferential tariff margin was  too low , although  the delegate of Yemen argued that this was not 
supported by any evidence ; second , exporters could ignore the existence of trade preferences. In 
his view, however, this concerned only a small number of the cases  at issue ; third , certifica tes of 
origin or rules of origin were overly stringent. He considered that this was the only plausible 
explanation , and one also  corroborated by empirical evidence (utilization rates and business 
surveys). In fact, different studies had shown a steep incre ase in preference utilization after origin  
requirements had been relaxed and simplified. For example , reforms of preferential rules of origin 
in Canada and the European Union had translated into a dramatic increase in utilization and had 
generated an overa ll increase in trade flows, investment , and manufacturing operations. Graphs 
showing the  increase in utilization for HS  Chapters  61 and 62 in both Canada and the EU proved 
this point. He explained that the examples of Canada and the EU made clear that a relaxation of 
origin requirements could support the development of new productive capacities in LDCs.  
1.60.   The delegate of Yemen noted that one should also consider the value of preferential trade. 
In fact, full utilization of preferences in a very low value of  trade (or a small number of operations , 
or a small number of tariff lines) had a different meaning than full utilization in a large value of 
trade. Studies by UNCTAD had shown that high utilization rates for textile s and clothing products 
in the US  GSP ac tually concerned very few tariff lines and only minimum trade value (because 
textile s and clothing products were, in general, excluded from the coverage of the US  GSP). 
Between 2008 and 2015, the US  GSP utilization rates had decreased from 88.3% to 68.9%. Low 
trade volumes translated into greater volatility in utilization rates and could also be interpreted as 
a sign of the possible inadequacy of the current rules of origin in the US  GSP ( that is,  that the 
current rules were not generating trade ). Data for the US  GSP contrasted with that for AGOA, for 
which product coverage was wider and utilization rates generally higher and more stable 
(particularly for textile s and clothing products).  G/RO/M/69  
 
- 11 - 
 
  1.61.   In the case of Japan's GSP, there were no significant differences in th e pattern s of utilization 
when fuels and agricultural products were excluded from the calculations. Utilization rates had 
decrease d from 88% (2008) to 76% (2015). Even after significant improvements in terms of the 
coverage of the Japanese GSP  scheme, trad e patterns and utilization rates had remained fairly 
low. Utilization rates in HS  Chapter  61 were an exception: a recent reform had relaxed the rules of 
origin and subsequently increased trade flows.  
1.62.   In conclusion, the representative of Yemen said that uti lization rates were a crucial indicator 
of the restrictiveness of rules of origin and one that could be used by preference -granting Members 
to analyse their own schemes with a view to simplifying their requirements. He invited all 
preference -granting Membe rs to submit the necessary tariff and trade information to the 
Secretariat so that all preferences could be reviewed in the future.  
1.63.   The representative of Norway , commenting on the Secretariat 's report, said that the report 
needed to clearly define those factors that could explain low utilization figures and that were not 
linked to rules of origin. He underscored the fact that, to benefit from unilateral preferences, LDCs 
should complete certain administrative work. For at least ten of the 36  LDCs presented in the 
table, that preparatory work had not been done, and this explained why those LDCs had  not 
benefit ted from any preferences in the Norwegian market. A footnote in the table could indicate 
that some LDC  Members were temporarily ineligible for preferences otherwise granted by a given 
Member.  
1.64.   In response, the Secretariat  confirmed that this concern had also been raised by other 
Members. For instance, Thailand was not shown in the tables because, in 2015, no LDC  Member 
had submitted t he signatures of authorized certifying office rs to the Thai authorities. As a result, 
no LDC was currently eligible for Thailand's PTA. The same point had been previously raised by the 
delegation of Chile. The Secretariat added that all suggestions on how to improve the presentation 
of the report or to make it more comprehensive would be most welcome.  
1.65.   The representative of Tanzania  agreed that there were procedures that required action from 
preference -granting Members as well as from LDC  beneficiaries. More over, he noted that the size 
of companies also had an impact on the ability of businesses to understand and comply with origin 
requirements. He thought that both presentations had been very informative and said that the 
LDC Group valued this type of techni cal work in the CRO. He proposed to continue deepening 
Members' understanding about the impact that rules of origin  had on preference utilization.  
1.66.   For the representative of Switzerland , both presentations had been insightful. He noted that 
more than 80% of  imports from LDCs entered Switzerland under zero -rated duties, which was very 
positive. However, his delegation recognized that there was still  room for improving utilization 
rates in Switzerland. His government hoped that the new simplified procedures fo r registered 
exporters (the REX  System) would facilitate compliance with preferential rules of origin for LDCs 
and thus increase utilization.  
1.67.   The representative of the European Union  thanked the LDC  Group and the Secretariat for 
their detailed analyses and  noted that the narrative sections added to the Secretariat report were 
useful and provided greater transparency concerning the general context of GSP  schemes. The EU 
welcomed the fact that a majority of preference -granting Members had notified their impor t 
statistics for this exercise. For her, having wide data coverage was crucial to allow for a 
comparative assessment of the preferences granted. She confirmed that preference utilization 
rates for the EU were high because the EU provided very liberal acces s for almost all tariff lines, 
including sensitive products, such as sugar, textiles , and clothing. Once the EU had reformed its 
preferential rules of origin, exports of clothing, textiles , and sugar products , had almost doubled. 
The utilization of prefere nces for textiles, for instance, had gone from 80% to 95%. She therefore 
agreed with the argument that the liberalization of origin requirements had a positive effect on 
market access.  
1.68.   Regarding notifications, the representative of Japan  said that Japan  was pleased to have 
reported tariff and trade data for the first time. He recalled that Japan provided duty -free 
quota -free access to imports from LDC  Members on 97.9% of Japan's tariff lines. He pointed to the 
fact that a large number of PTA -eligible import s were actually used by LDC  Members. He  reminded 
LDC Members that Japan's government welcomed specific requests from LDC  governments G/RO/M/69  
 
- 12 - 
 
  whenever they experienced difficulties in meeting a particular origin requirement. His delegation 
took note of the analysis and recommendations presented and indicated that he would report 
these to his Capital . 
1.69.   Commenting on the Secretariat 's report, the representative of the United States  said that 
the tables must be read in conjunction with the narrative sections . He recalled, in fact, that the 
United States had in place four preference schemes that benefitted LDCs: first, the GSP, which had 
been analysed in the Secretariat's report ; second , AGOA, which was a much utilized preference 
scheme for sub -Saharan Africa n countries ; third , the Caribbean Basin Programme, which also 
covered some LDCs ; and finally , the US had a specific scheme for Nepal. As a result, the GSP was 
not the only scheme through which trade was being channelled ; this helped to explain and place in 
context  the data shown in the report. In addition, the US  delegation had identified some data 
discrepancies. For example , the US  recorded imports from Tanzania under the US  GSP contrary to 
what appeared in the Secretariat report. He informed Members that h is delegation had been 
working with the Secretariat to identify the reasons for such discrepancies and so as to correct any 
errors in the report . Furthermore, he informed Members that his delegation wished also to notify 
imports under the AGOA, but that ob taining this information had proven difficult for the time 
being . Notwithstanding these limitations, he agreed that the calculation of utilization rates was an 
exercise of great utility for the Committee  and that, while there was a long way to go before 
Members could start drawing conclusions from this exercise, it was useful to reflect upon the 
various barriers that may be  inhibit ing the utilization of trade preferences , including the fact that 
eligibility for such preferences varied at times. He looked fo rward to deepening Members' 
understanding of these issues through continued discussions in the Committee.  
1.70.   The representative of Cambodia , on behalf of the LDC  Group, thanked all those Members 
that had notified their preferential rules of origin and submitted their data on preferential imports 
for this first  substantive analysis of preferential origin requirements in the Committee. He 
encouraged all preference -granting Members to provide complete not ifications to the Secretariat 
so that the Committee could advance  in its substantive discussion of these issues. In addition, he 
thanked those preference -granting Members that had recently introduced improvements to their 
origin  requirements , and in partic ular thanked China , Norway , Switzerla nd, and Canada. These 
improvements were encouraging signs of Members' commitment to implement the Ministerial 
Decisions. However, several other aspects of the Decisions needed further attention, in particular: 
(i) the p ossibility to deduct freight and insurance costs; (ii) rules that contained combined 
requirements; (iii) expansion of cumulation possibilities; and (iv) the facilitation of administration 
of rules of origin, including the simplification of d ocumentary evid ence in case of transhipment.  
1.71.   The Chairman  thanked all the delegations that had taken an active part in the discussion. 
He agreed that the calculation of utilization rates was a very informative tool and encouraged 
Members to continue working to wards  becoming more familiar with this concept and how best to 
use it in the context of rules of origin. In that respect, he encouraged Members to work with the 
Secretariat to ensure that the data being used was accurate. In conclusion, he asked the 
Secretariat to correct or update its report as necessary. He also recommended that the Committee 
engage in a more detailed and disaggregated analysis of utilization rates, for instance 
sector -by-sector or country -by-country, with a view to identifying good practice, o bstacles , and 
perhaps recommendations.  
1.72.   The Committee took note  of the presentations and statements made and agreed  to proceed 
accordingly.  
2  HARMONIZATION OF NON -PREFERENTIAL RULES O F ORIGIN - EDUCATIONAL 
EXERCISE AND EXPERIE NCE SHARING ABOUT EX ISTING NON -PREFERENTIAL RULES OF 
ORIGIN  
2.1.  The Chairman  reminded Members that the CRO had begun an educational exercise to 
promote an exchange of experiences to better understand the impact of non -preferential rules of 
origin on international trade. In that context, the Committee had heard presentations given by 
several organizations, chambers of commerce , and private sector representatives. The various 
presentations had confirmed that non -preferent ial origin requirements were highly relevant to 
businesses engaging in international trade , and this underscored the need for technical and 
substantive discussions in the CRO about possible tools to streamline and simplify compliance with 
such requirements . Of course, these issues had to be approached cautious ly given sensitivities G/RO/M/69  
 
- 13 - 
 
  around the Harmonization Work Programme  (HWP). Nevertheless, Members should remain open to 
advancing pragmatic ally in areas of work that could lead to constructive and relevant r esults. 
Having these objectives in mind, he sought Members ' views on two  issues: first , he invited 
Members to share the conclusions that they thought could be drawn from the educational exercise ; 
and second , he invited Members to identify possible areas fo r future work in the CRO. He would 
also welcome Members ' comments and views on how to design future sessions of the educational 
exercise, such as whether or not to organize thematic sessions on certification of origin, global 
value chains , or marks of orig in. 
2.2.  The representative of Switzerland  agreed that the educational exercise had proven to be a 
useful instrument for moving the work of the Committee  forward . However, he argued  that 
Members would need more time to reflect on the questions raised and to beg in to draw conclusions 
about the Committee's future work. To advance the objectives of the Agreement on Rules of 
Origin, he invited Members to talk to each other with a view  to find ing areas of common interest. 
In that context, he agreed that additional information sessions could also be useful.  
2.3.  The representative of the United States  agreed. He added that technical work on the 
harmonization of non -preferential rules of origin would be unlikely to achieve positive results. He  
recalled that the effort to harmonize non -preferential rules of origin had a long history in the 
Committee and invited delegations to seek more background on this issue from the Secretariat. As 
for current work, he agreed that the educational exercise was enlightening. However, it had not 
changed the fundamental disparity that existed among Members in respect of the HWP. As a 
result, he agreed that the best way forward was for Members to consult with each other in order to 
identify areas in which future work would be productive.  
2.4.  The representative of Canada  agreed and recalled that, in her government's view, there was 
no longer a need to harmonize non -preferential rules of origin and to complete the HWP. The 
energy an d resources of the Committee would be better spent on other endeavours.  
2.5.  The representative of Tanzania  said that the LDC  Group had a growing interest in 
non-preferential origin requirements. He thought that the information sessions under the 
educational ex ercise had been very useful and that these could be continued. His delegation was 
concerned by the multitude of differing national legislation in this area. In the absence of effective 
multilateral disciplines on non -preferential rules of origin, national rules of origin could in fact 
create non -tariff barriers, increase trade costs , and restrict market access, particularly for small 
and medium -sized enterprises (SMEs). While the full harmonization of non -preferential rules of 
origin was not at present a realistic objective, he argued that the Committee could nevertheless 
achieve results in other areas, bearing in mind the need to facilitate compliance with such rules.  
2.6.  Having heard these statements, the Chairman  invited delegations to consult with each other  
so as to identify areas where discussions could be productive. He said that he would ask Members 
to respond to his two  questions at the next CRO  meeting . Furthermore, he proposed to leave open 
the possibility of organizing other information sessions unde r the educational exercise, perhaps 
with a thematic focus, such as rules of origin and certification.  
2.7.  The representative of Canada  reiterated that, for her government, this might not be the best 
use of the Committee's time.  
2.8.  The Chairman  took note of Canada's concern and replied that his intention was simply to 
keep all options open.  
2.9.  The Committee took note  of the statements made and agreed  to proceed accordingly.  
3  GUIDELINES AND PRINC IPLES TO STREAMLINE NON-PREFERENTIAL RULES O F 
ORIGIN – REPORT BY SWITZERLAN D 
3.1.  The Chairman  recalled that the delegation of Switzerland had initiated informal discussions on 
possible guidelines and principles for streamlining the use of non -preferential rules of origin. He 
asked the delegation of Switzerland to update the Committee on Switzerland's most recent efforts 
as well as its future plans with regard to this issue.  G/RO/M/69  
 
- 14 - 
 
  3.2.  The representative of Switzerland  reminded Members that hi s delegation had circulated 
two communications after the two  information sessions of April and September  2016. The 
first communication (JOB/RO/6) ha d been circulated on 13  October  2016, and the s econd 
(JOB/RO/7) , on 17  November  2016. Both communications had led to an informal, small group 
discussion that his delegation had been coordinatin g. Since the last CRO  meeting, the small group 
had met three  times. The process was participatory ; in other words , each delegation was 
encouraged to submit ideas for discussion. The meetings had been constructive and positive. The 
objective of the process was to identify different options for facilitating international trade by 
reducing trade barriers resulting from non-preferential rules of origin. Reducing these compliance 
costs would enhance  integration of micro, small and medium -sized enterprises (MSMEs ) in the 
global economy. Concretely, participants had been discussing: "general principles"; certification  
issues ; origin -related procedures; and transparency. The discussions did not prejudice participants' 
positions with regard to the work of the Committ ee, in particular in relation to the HWP. The 
"guidelines and principles" were not meant to replace the HWP, and nor should they contradict the 
work already carried out in that area. Finally, Switzerland reiterated that the small group was open 
to any delegation wishing to participate constructively  in its discussion . 
3.3.  Having heard this report, the delegate of the United States  thanked the delegation of 
Switzerland for the documents it had circulated and for the initi ative that it was spearheading. 
While the American delegation could not support reviving  the HWP, it did remain open to new 
ideas that could lead to useful work. In this sense, he considered that the ideas put forward by 
Switzerland were worthy of Members'  consideration. While it was important to avoid duplicating 
work, the US believed that the successful negotiation of the Nairobi Decision on Preferential Rules 
of Origin for LDCs could serve as a model.  
3.4.  The delegate of  the Republic of Korea  also supported continuing the discussion initiated by 
Switzerland and highlighted that the purpose of the discussion was to explore options to reduce 
the cost of complying with non -preferential rules of origin and thus to further facilitate 
international trade. Neverthel ess, he agreed that this initiative should neither replace the HWP nor 
go over again the difficulties faced by delegations in the past.  
3.5.  The delegate of the  European Union  reported that her delegation had also taken an active 
part in the small group and could support the elements of the proposal relating to transparency. 
The EU also agreed that delegations should avoid duplicating efforts as they attempted to move 
the discussion forward.  
3.6.  Likewise, the representative of Chinese Taipei  said that his delegation  had been engaging 
actively in these discussions and was particularly interested in the area of transparency.  
3.7.  The representative of China  supported the work that the Swiss delegation was leading and 
had even provided written suggestions for a possible text . 
3.8.  The delegate of Japan  joined previous speakers in supporting this initiative and said that they 
would continue to engage constructively in these discussions.  
3.9.  The representative of Singapore  said that her government shared the objectives of this 
initiative. She agreed that Members should avoid duplicating their efforts and invited other 
delegations to join the small group so as to further advance the group's work.  
3.10.   The representative of South Africa  recalled that her delegation had, in the past, expressed 
its concerns and reservations over the approach that was being taken with regard to these issues. 
She said that her delegation would make substantive comments on this issue once it was again 
brought before  the Committee for additional discussion.  
3.11.   In conclusion, the Chairman  thanked all the delegations that had joined Switzerland in these 
discussions. He proposed that for the time being the Committee simply take note of the report and 
comments m ade. He recommended that interested Members continue to meet to identify ideas to 
help Members to meet the objectives of the Agreement.  
3.12.   The Committee took note  of the report and the comments made.  G/RO/M/69  
 
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  4  NOTIFICATIONS UNDER ARTICLE  5 AND UNDER PARAGRAP H 4 OF ANNE X II OF THE 
AGREEMENT ON RULES O F ORIGIN  
4.1.  The Chairman  drew Members' attention to some of the notifications that had been received 
by the Secretariat (documents  G/RO/N/148/Rev.1; G/RO/N/149; G/RO/N/150; G/RO/N/151; 
G/RO/N/152; G/RO/N/153; G/RO/N/154; G/RO/N /155; G/RO/N/156; G/RO/N/157; G/RO/N/158; 
G/RO/N/159; G/RO/N/160; G/RO/N/161; G/RO/N/162; and G/RO/N/163). These notifications 
covered both non -preferential and preferential rules of origin and included the notifications of 
several Members that had not yet  submitted their notification s under Article  5 of the Agreement. 
There were 48  Members applying non -preferential rules of origin and 55  Members not applying 
non-preferential rules of origin. The remaining 33  Members had not yet informed the Secretariat 
about their practices. A detailed report had been prepared with a detailed list of Members under 
these three  categories (Annex  1 of document  G/RO/W/171).  
4.2.  In addition, the Chairman recalled that all notifications received to  date could be found on the 
WTO website, on the page dedicated to rules of origin. Under the section entitled "Notifications", 
Members could consult information on Members' practices relating to non -preferential rules of 
origin and find links to the relevant legislation. The Chair invite d all delegations to verify that the 
information presented on that page was both correct and up -to-date. 
4.3.  The Committee took note  of this report.  
5  TWENTY -THIRD ANNUAL REVIEW OF THE IMPLEMENTATIO N AND OPERATION OF T HE 
AGREEMENT ON RULES O F ORIGIN  
5.1.  The Chairman  recalled that paragraph  6.1 of the Agreement on Rules of Origin required the 
Committee to undertake an annual review of the application of the functioning of the Agreement in 
light of its objectives. To assist Members in their annual review, the Secretari at had prepared a 
report (G/RO/W/171). In the Chairman 's opinion , Members should acknowledge that the 
Agreement was not functioning satisfactorily since its main objectives had not yet been met. As 
discussed earlier in the meeting, he relied on delegations  to consult with their Capitals and each 
other in order to determine possible areas for future work. For this reason, he  asked if Members 
had any comments regarding the annual review and the functioning of the Agreement.  
5.2.  The delegate of Chinese Taipei  said that paragraph  3 of the Secretariat report should be 
corrected to read 2017 (not 2016).  
5.3.  The delegate of Thailand  said that the title of the second table in Annex  1 should also be 
corrected to read "Members who did not apply non -preferential rules of origi n" (with the addition 
of the word "not" ). 
5.4.  The Chairman  confirmed that the Secretariat would correct these mistakes and issue a 
corrigendum of the note. Since no additional comments were made, the Chairman asked the 
Committee to complete the twenty -third an nual review of the application of the Agreement.  
5.5.  The Committee so agreed . 
6  DRAFT REPORT (2017) OF THE CRO TO THE CO UNCIL FOR TRADE IN G OODS  
6.1.  Having completed the annual review of the application of the Agreement, the Chairman  asked 
Members to consider the Committee's annual report of activities to the Council for Trade in Goods. 
To assist Members, the Secretariat had prepared a draft report (G/RO/W/172). No comments were 
made. The Chairman therefore proposed that Members adopt  the draft report.  
6.2.  The Committee's 2017  report was adopted . 
7  DRAFT REPORT (2017) OF THE CRO TO THE GE NERAL COUNCIL ON PRE FERENTIAL 
RULES OF ORIGIN FOR LDCs 
7.1.  The Chairman  recalled that, since the adoption of the Bali and Nairobi Ministerial Decisions, 
the Com mittee had also been entrusted with the preparation of a separate report on recent G/RO/M/69  
 
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  developments regarding preferential rules of origin for LDCs , to be forwarded to the General 
Council. He therefore proposed that Members consider the draft report that had b een prepared by 
the Secretariat (G/RO/W/173).  
7.2.  The representative of the United States  noted that the report contained a typo in 
paragraph  2, where the sentence on the fifth  item was incomplete . 
7.3.  The Chairman  confirmed that a new version of the report would be circulated and proposed 
that Members adopt the report with that rectification.  
7.4.  The report was adopted . 
8  OTHER BUSINESS  
8.1.  The Chairman  informed Members that the next meeting of the CRO had been provisionally 
scheduled for 20 and 21  March  2018.2 
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2 The date s of the meeting were then moved to 18 and 19  April 2018.