RESTRICTED  
  
G/RO/M/65  
 
12 February 2016  
(16-0901)  Page: 1/7  
Committee on Rules of Origin    
 
 MINUTES OF THE MEETING OF 15 OCTOBER 2015 
CHAIRMAN: MR CHRISTIAN WEGENER (DENMARK) 
Subjects Discussed1 
1   HARMONIZATION OF NON-PREFERENT IAL RULES OF ORIGIN - EDUCATIONAL 
EXERCISE AND EXPERIENCE SHARING ABOUT EXISTING NON-PREFERENTIAL RULES OF OR IGIN ............................................................................................................ 1
 
1.1   Presentation by the International Trade Centre (RD/RO/32) ............................................. 2  
1.2   Presentation by the Internatio nal Chamber of Comme rce (RD/RO /30) ............................... 2  
1.3   Presentation by the United Nations Conference on Trade and Development 
(RD/RO/ 31) .................................................................................................................... . 2 
2   HARMONIZATION OF NON-PRE FERENTIAL RULES OF ORIGIN – 
TRANSPOSITION OF DRAFT HARMONIZED RULES OF ORIGIN TO MORE RECENT VERSIONS OF THE HS NO MENCLATURE – (DOCUMENTS  JOB/RO/5/REV.1 AND 
JOB/RO/5/REV.1/CORR.1) .............................................................................................. 4
 
3   INFORMAL DEDICATED SESSION OF THE COMMITTEE ON RULES OF ORIGIN 
ON PREFERENTIAL RULES OF ORIGIN FOR LEAST-DEVELOPED COUNTRIES – 
REPORT BY THE CHAIRMAN ............................................................................................. 4  
4   NOTIFICATIONS UNDER ARTICLE 5 AND UNDER PARAGRAPH 4 OF ANNEX II 
OF THE AGREEMENT ON RULES OF ORIGIN (DOCUMENTS G/RO/N/125 TO 135) ............. 5  
5   REVIEW OF NEW DEVELOPMENTS IN RELATION TO PREFERENTIAL RULES OF 
ORIGIN FOR LEAST-DEVELOPED COUNTR IES (WT/L/917 AND G/RO/W/156) ................ 5  
5.1   Thailand (G/RO/N/130 and G/RO/N/130 /Corr.1) ............................................................ 5  
5.2   Japan (G /RO/N/131)  .................................................................................................. 5  
5.3   China (G /RO/N/132)  .................................................................................................. 6  
6   TWENTY-FIRST ANNUAL REVIEW OF THE IMPLEMENTATION AND OPERATION 
OF THE AGREEMENT ON RULES OF ORIGIN (G /RO/W/157) ............................................ 7  
7   DRAFT REPORT (2015) OF THE CO MMITTEE TO THE COUN CIL FOR TRADE IN 
GOODS (G/RO/ W/158) ................................................................................................... 7  
8   OTHER BU SINESS ........................................................................................................ 7  
 
 
1  HARMONIZATION OF NON-PREFERENTIA L RULES OF ORIGIN - EDUCATIONAL 
EXERCISE AND EXPERIENCE SHARING ABOUT EXISTING NON-PREFERENTIAL RULES OF 
ORIGIN 
1.1.  The Chairman recalled that, in the absence of negotiations on the Harmonization Work 
Programme (HWP), Members had agreed to an "educational exercise" to share experiences and 
learn more about existing non-preferential rules of origin and their impact on international trade. 
                                               
1 The agenda of the meeting was circulated in document WTO/AIR/RO/2. G/RO/M/65 
 
- 2 - 
 
  Having heard presentations by the World Customs Organization and the Secretariat in April 2015 
(G/RO/M/64), the Chairman proposed to pursue this  exercise with three additional presentations: 
1.1  Presentation by the International Trade Centre (RD/RO/32) 1.2.  A representative of the ITC shared some of the results of ITC's programme on non-tariff 
measures (NTM) with the CRO. The programme aimed at identifying trade barriers on the basis of 
business surveys. The responses reported by over 17,000 businesses in seventy countries revealed that 22% of all NTMs faced were related to rules of origin (35% in the manufacturing sector and 
12% in the agricultural sector). Some sectors were more affected than others by origin-related 
barriers, particularly the clothing, textiles, non-electrical machinery, wood and leather sectors. In 11% of cases the problems concerned the orig in regulation itself and in 75% of cases the 
overall complexity of origin requirements.  This in dicated that origin-related procedures, associated 
costs and delays, were particularly problematic.  In almost all cases, the barriers reported occurred 
in the exporting country (that is, they were domestic barriers), which would seem to confirm that problems were mainly related to compliance and proof of origin. Moreover, the answers were very 
similar in both developed and developing countries. 
1.2  Presentation by the International Chamber of Commerce (RD/RO/30) 1.3.  A representative of the ICC Commission on Customs and Trade Facilitation and member of 
the Chamber of Commerce and Trade of Stuttgart in Germany shared the view of the ICC about 
the use of non-preferential rules of origin in international trade. The ICC argued that both large and small companies struggled with overly cumbersome regulations. These difficulties became more common and more acute as a new spaghetti bowl of non-preferential rules was in the 
making. While more complex global supply and value chains emerged, the proliferation of 
non-preferential origin regimes across all regions was a worrying trend for many reasons. Non-preferential rules of origin could only be de termined by the manufacturer. However, the final 
destination of a product might not be known at the time of manufacturing because companies 
often traded in standardised products. Therefore,  uncertainty about origin, he argued, diverted 
trade and created uncertainty about labelling requirements and other applicable regulations. As a 
result, firms faced increased production and trading costs. This, according to the ICC, was a 
paradox because businesses had increased compliance costs but no tangible benefits for complying with non-preferential rules of origin (unlike preferential rules, which allowed firms to save import duties, for instance). The ICC therefore argued in favour of multilateral rules of origin and an 
agreement at the WTO. Alternatively, the ICC calle d for the mutual recognition of origin regimes 
so that companies could use the rules of the country of production. Finally, the ICC encouraged countries to honour the provisions of the World Customs Organization Revised Kyoto Convention 
on definitions, principles, standards and recommended practices with regard to origin. 
1.3  Presentation by the United Nations Conference on Trade and Development 
(RD/RO/31) 
1.4.  UNCTAD's work on rules of origin had traditionally focused on the possibility to simplify GSP 
rules of origin. This kind of work was disconti nued in 1995 in the hope that the HWP in the WTO 
would advance and also result in recommendations for GSP rules of origin.  Since then, UNCTAD had participated, as an observer, to the work of the CRO and the TCRO.  In addition, UNCTAD had 
been also providing assistance to governments on origin-related matters. Experience showed that 
governments and traders often had doubts about the applicable rules of origin, applicable regulations, and certification requirements. Such doubts were problematic for traders but also for 
administrations because rules of origin had become increasingly important, particularly in the 
context of marks of origin (labelling) and trade re medies (anti-dumping, anti-circumvention, etc.). 
Moreover, the interpretation of the rules had also ev olved, particularly through the work of judicial 
courts in the European Union and the United States.  In a context where rules of origin were not 
harmonized, businesses had to trade in an unce rtain and changing regulatory environment. 
According to UNCTAD, the numerous requests for judici al review of non-preferential rules of origin 
in the EU and the US were evidence that there were gaps in these rules which could be usefully 
filled by a WTO agreement on non-preferential rules of origin. It could be that businesses feared 
change and that some companies preferred the exis ting national rules because they were familiar 
to them. However, companies would also prefer a more stable environment, with clearer rules and 
an internationally accepted interpretation of su ch rules. In sum, firms may resent change, but 
would favour greater predictability. G/RO/M/65 
 
- 3 - 
 
  1.5.  The Chairman thanked the speakers for havi ng shared their knowledge and experience with 
the CRO.  He thus invited Members to make comments. 
1.6.  The representative of India thanked the speakers and said that he had been surprised to hear 
that many origin-related barriers occurred in exporting countries, that is, they were domestic 
barriers. He had also been surprised to hear that harmonization, or lack thereof, had not been 
highlighted as a problem by businesses. He also wondered whether harmonized rules would not actually reduce the options available to exporters.  In fact, at present, manufacturers could pick 
and choose their export destinations on the ba sis of their supply chains and manufacturing 
capacities and the applicable rules of origin. 
1.7.  The representative of China also thanked all speakers and highlighted that the different 
experiences and methodologies presented pointed to th e fact that the lack of non-preferential rules 
of origin had a negative impact on trade and businesses. He invited Members to develop a 
common understanding of the reality and to try to deal with it. The representatives of Switzerland 
and Thailand agreed and invited Members to resume the HWP. 
1.8.  The representative of the European Union thanked the speakers and also noted that there 
seemed to be strong evidence that harmonized rules would indeed facilitate international trade. 
She noted, in addition, that there had not been  a clear distinction between preferential and 
non-preferential rules of origin in the presentations made. Such a distinction would have been 
useful, particularly in the results presented by the ITC. She also expressed some surprise that 
certificates of origin appeared to be an obstacle, while, according to a WCO comparative study, only 8% of WCO Members had a mandatory certificate of origin. 
1.9.  The representatives of the United States thanked the speakers as well as the Chair for his 
efforts to improve Members' understanding about the impact of rules of origin on trade. He asked 
other delegations, nevertheless, to keep in mind the larger questions that remained, such as the 
fundamental concerns that some Members had expressed with the so-called implications issue. 
The representative of Canada supported this statement. 
1.10.  The representative of Australia thanked the presenters for their very interesting 
presentations, which had highlighted some of the dilemmas that policy makers faced with respect 
to origin. While he shared the views of the US and Canada, he said that the strongest message 
from the three presentations had been that, regardle ss of the type of rules in place, what mattered 
was to keep the administrative burden associated with such rules as low as possible. 
1.11.  In response, the ITC explained that domestic barriers could actually refer to the difficulties 
in completing procedures in the exporting co untry but which were imposed by the importing 
country. For instance, companies might find it diffic ult to obtain the correct certificate of origin. 
While this happened physically in the exporting country, the barrier actually stemmed from 
requirements of the importing country. With resp ect to the distinction between preferential and 
non-preferential origin, he clarified that work was under way to fine-tune the classification of 
NTMs, including those related to rules of origin. 
1.12.  The ICC explained that predictability and stability mattered greatly and that with known 
rules companies could adapt, if necessary, their supply chains. 1.13.  The Chairman concluded that the presentati ons and the exchange of views had been useful. 
He therefore proposed to continue discussions at the next CRO meeting. On that occasion, he 
proposed to invite representatives of the private sector to comment on the impact of non-preferential rules of origin on trade and invited Members to suggest names of possible 
speakers.  
1.14.  With respect to this proposal, the United States requested the Chair to consult Members and 
ensure that a variety of different views would be expressed by the private sector representatives 
invited to the CRO. 
1.15.  The representative of India said that his delegation would be reluctant to invite 
representatives of the private sector to attend a CRO meeting and asked to be consulted by the 
Chair during his consultations. G/RO/M/65 
 
- 4 - 
 
  1.16.  The Chairman therefore proposed to consult Members to ensure that the speakers invited 
would share an appropriate variety of views and interests. 
1.17.  The Committee agreed to proceed accordingly. 
2  HARMONIZATION OF NON-P REFERENTIAL RULES OF ORIG IN – TRANSPOSITION OF 
DRAFT HARMONIZED RULES OF ORIGIN TO MORE RECENT VERSIONS OF THE HS 
NOMENCLATURE – (DOCUMENTS JOB/RO/5/REV.1 AND JOB/RO/5/REV.1/CORR.1) 
2.1.  The Chairman recalled Members that, at the last CRO meeting, some delegations had asked 
for additional time to review document JOB/RO/5/Rev.1, which contained the results of the 
transposition exercise. In addition, he informed  Members that the Secretariat had circulated 
document JOB/RO/5/Rev.1/Corr.1, which containe d some corrections which had been pointed out 
by one delegation. The Chairman therefore propos ed to take note of these two documents and 
thereby conclude the transposition exercise. Th e Chairman, furthermore, proposed that the 
Secretariat prepare a revised version of the draft Consolidated Text of Harmonized Rules of Origin containing all product-specific rules in their most recent HS version (document 
G/RO/W/111/Rev.7). It would be understood that, given the complexity and volume of the 
transposition exercise, delegations could, at all time s, submit additional comments or rectifications 
to these documents. 
2.2.  The representative of the United States informed the CRO that his delegation would need 
some additional time to consider the documents.  
2.3.  The representative of the European Union said that her delegation would prefer keeping the 
results of the transposition work separate from the Draft Consolidated Text, that is, not merging 
the transposed rules in a Revision 7 of the Consolidated Text. 
2.4.  The representative of Switzerland said that Members should avoid delaying the conclusion of 
the transition work and that, therefore, the CR O should agree to a timeline to complete the 
technical verification work. 
2.5.  The Chairman took note of these comment s and asked delegations to send any comments to 
the Secretariat by latest 15 March 2016.  
2.6.  It was so agreed. 
3  INFORMAL DEDICATED SESSION OF THE COMMITTEE ON RULES OF ORIGIN ON 
PREFERENTIAL RULES OF ORIGIN FOR LEAST-DEVELOPED COUNTRIES – REPORT BY THE CHAIRMAN 
3.1.  The Chairman referred to the informal dedica ted session on preferential rules of origin held 
on 23 and 24 July at the request of the least-developed countries (LDCs). He reported that, at the 
meeting, Members had heard several presentations by  LDC representatives illustrating some of the 
difficulties that LDC producers faced in trying to comply with existing preferential rules of origin. 
For each agenda item, the LDCs had provided exam ples of how existing rules could be improved 
and aligned to the guidelines of the Bali Ministerial Decision (WT/L/917). Seven items had been 
covered: (1) the levels of percentages under the percentage criterion (RD/RO/22); (2) the 
methods of calculation under the percentage criterion (RD/RO/23); (3) aspects related to the change of tariff classification criterion (RD/RO/24); (4) aspects related to specific manufacturing or processing requirements (RD/RO/25); (5) cumulation (RD/RO/26); (6) documentary requirements 
and certification (RD/RO/27); and, (7) notificati ons and transparency (RD/RO/28).  According to 
the Chair, the presence of a nu mber of capital-based officials had contributed to a focused, 
substantive and fruitful discussion on each of these items. 
3.2.  On behalf of the LDC Group, the representative of Bangladesh thanked other Members for 
their participation and engagement. According to him, the dedicated discussions had given the 
LDCs an opportunity to make their needs better understood. A proposal recently submitted by the 
LDCs to the TNC (JOB/TNC/53) contained the group's proposals to improve rules of origin applied 
in non-reciprocal trade preferences. The proposal  would be discussed under the Chairmanship of 
Ambassador S. Smidt, on behalf of the TNC Chair. G/RO/M/65 
 
- 5 - 
 
  3.3.  The representatives of Tanzania, Cambodia and Lao People's Democratic Republic also 
thanked WTO Members for their engagement during the dedicated meeting in July and said that 
they looked forward to discussing additional ways to improve preferential rules of origin for LDCs. 
3.4.  The Committee took note of the Chair's report and of the statements made. 
4  NOTIFICATIONS UNDER ARTICLE 5 AND UNDER PARAGRAPH 4 OF ANNEX II OF THE 
AGREEMENT ON RULES OF ORIGIN (DOCUMENTS G/RO/N/125 TO 135) 
4.1.  The Chairman informed Members that documents G/RO/N/125 to G/RO/N/135 contained the 
latest notifications received since the last meet ing of the CRO. These notifications covered both 
preferential and non-preferential rules of origin.  As a result of these notifications, 44 Members 
implemented some type of non-preferential ru les of origin, while 51 other Members did not 
implement rules of origin for non-preferential pu rposes.  Information about non-preferential rules 
of origin was still missing for 38 WTO Members.  
4.2.  In order to facilitate access to notification s, the Chairman proposed that all notifications of 
non-preferential rules of origin be listed on the WT O website, with direct links to these notifications 
and the relevant national legislation as notified by Members. In addition, he proposed that 
information on rules of origin, as notified by Members, be referenced in the WTO Integrated Trade Intelligence Portal (I-TIP), which contained trade policy measures. 
4.3.  Members took note of the new notificati ons and agreed to proceed as proposed by the 
Chairman. 
5  REVIEW OF NEW DEVELOPMENTS IN RELATION TO PREFERENTIAL RULES OF ORIGIN 
FOR LEAST-DEVELOPED COUNTRIES (WT/L/917 AND G/RO/W/156) 
5.1.  Recalling the requirements of the Bali Minist erial Decision on preferential rules of origin for 
LDCs, the Chairman informed Members that new pref erential rules of origin had been notified by 
Thailand (documents G/RO/N/130 and G/RO/N/130/Corr.1) and China (document G/RO/N/132). 
In addition, Japan had also notified some modifications to its preferential rules of origin (document 
G/RO/N/131). He therefore invited delegations to review such new developments. 
5.1  Thailand (G/RO/N/130 and G/RO/N/130/Corr.1) 
5.2.  A representative from Thailand briefly presented the rules of origin applicable to LDCs under 
Thailand's new duty-free and quota-free scheme for LDCs. 
5.3.  The representative of Tanzania thanked the government of Thailand for introducing new 
preferences for LDCs. With respect to the rules of origin, he noted that the notification referenced 
a website in which the actual legislation was only available in Thai.  He asked whether a translation 
of the legislation was available and, if so, that it be sent to his delegation. 
5.4.  The representative of Bangladesh than ked the government of Thailand for the new 
preferences and also asked for an En glish-version of the legislation. 
5.5.  The Committee took note of the statements made. 
5.2  Japan (G/RO/N/131) 
5.6.  The representative of Japan briefly presented Japan's rules of origin for LDCs and the recent 
changes introduced to them (RD/RO/29).  He said that trade preferences for LDCs had first been 
introduced in 1980. These preferences, which were  currently available until 2021, covered 98% of 
all tariff lines and benefitted 47 LDCs. As for the rules of origin, the basic requirement for 
substantial transformation was based on a change of tariff classification (tariff heading level) and, 
in few cases, a 60% value added criterion.  For some garments and chemicals, the rule was based on specific manufacturing or processing criteria. The recently introduced modifications had sought 
to make the rules more flexible for knitted or crocheted articles of apparel under HS Chapter 61.  
Specifically, the rule now contained a single transformation requirement to determine substantial transformation when finished garments were manufac tured from fabrics.  Similarly, the rules also G/RO/M/65 
 
- 6 - 
 
  accepted single transformation for woven articles of apparel under HS Chapter 62. Finally, the 
representative of Japan commented on aspects of the rules related to certification and advance rulings. 
5.7.  The representatives of Bangladesh, Tanzan ia, Yemen, Cambodia and Myanmar thanked Japan 
for the presentation and for the newly-introduced changes. They also expressed their hope that 
these changes would be the first in a series of improvements aimed at aligning Japan's rules of 
origin with the guidelines of the Bali Ministerial Decision. The representative of Bangladesh 
suggested, for instance, that self-certification would be useful. The representative of Tanzania 
further mentioned that allowing for the use of up to 75% of value of non-originating materials would also be a significant improvement. The representative of Yemen expressed his concern with 
the complexity and restrictiveness of Japan's rules based on change of tariff heading with many 
exceptions and, sometimes, cumulative requir ements. The representatives of Cambodia and 
Myanmar raised concerns with Japan's rules on cumulation, which covered only ASEAN countries 
with the exception of ASEAN LDCs. They reques ted Japan to allow for cumulation among all 
members of ASEAN or all members of a regional grouping. 
5.8.  The representative of Japan thanked the LDCs for their questions and said that the 
government of Japan was ready to discuss and address specific problems faced by the LDCs, 
including with respect to cumulation. 
5.9.  The Committee took note of the statements made. 
5.3  China (G/RO/N/132) 5.10.  The representative of China informed the Committee that the relevant Chinese rules were 
contained in 2010 Decree No. 192 of the General Administration of Customs.  These rules had 
been formulated to implement China's duty-f ree treatment programme of 2004. The programme 
expanded to cover 97% of tariff lines in 2015. Wi th respect to rules of origin and substantial 
transformation, exporters had a choice of either  an ad valorem percentage criterion (with a 
minimum of 40% local value added) or a change of tariff heading without any exceptions. This alternative approach meant that these rules of origin were the most flexible rules applied by 
China. The rules also contained a direct cons ignment requirement. When the goods were not 
transported directly to China from an LDC for geographical reasons or for considerations related exclusively to transportation, the goods needed to meet three conditions: first, they must not have 
entered trade or consumption in a third country ; second, the goods must not have suffered any 
processing operation in a third country; and third, temporary storage must not have exceeded 
three months and the goods must have been kept under customs control. 
5.11.  The representatives of Bangladesh, Tanzan ia and Cambodia thanked the representative of 
China for his comprehensive presentation.  
5.12.  For the representative of Bangladesh, while useful, these presentations were insufficient to 
ensure a full understanding of the rules applicable to LDC exports. In his opinion, the CRO should 
discuss an improved format for such notifications, with guidelines requiring more comprehensive 
and detailed information and official translations in English.  Notifications should include all relevant information such as official legal texts or product-specific rules of origin.  In addition, an illustration of the certificate of origin and other relevant documents would also be useful.  Greater 
transparency and better understanding of the rule s would help LDC exporters in their efforts to 
utilize preferences. 
5.13.  The representative of Tanzania agreed an d emphasized the importance of having access to 
full notifications and legislation in a WTO official  language. The representative of Cambodia added 
that having access to the certificate of origin would be important to ensure compliance and support 
LDC exporters. 
5.14.  In conclusion, the Chairman said that th e discussion had been substantive, leading to a 
thorough review of new legislation on preferential rules of origin.  He proposed that Members take 
note of the statements and presentations made and that a report be sent to the General Council. Document G/RO/W/156 contained a draft report. G/RO/M/65 
 
- 7 - 
 
  5.15.  Members took note of the statements and presentations made and adopted the report to 
the General Council. 
6  TWENTY-FIRST ANNUAL REVIEW OF THE IMPLEMENTATION AND OPERATION OF THE 
AGREEMENT ON RULES OF ORIGIN (G/RO/W/157) 
6.1.  The Chairman drew Members' attention to document G/RO/W/157, which contained a 
background note by the Secretariat on the impl ementation and operation of the Agreement on 
Rules of Origin. 
6.2.  The Committee took note of the document and completed the 21st review of the 
implementation and operation of the Agreement. 
7  DRAFT REPORT (2015) OF THE COMMITTE E TO THE COUNCIL FOR TRADE IN GOODS 
(G/RO/W/158) 
7.1.  The Chairman asked Members to consider document G/RO/W/158.  He proposed a small 
rectification to paragraph 5. The sentence "The Committee took note of that work" would be 
deleted and replaced with the sentence "Members  agreed that comments to the draft transposed 
rules should be sent to the Secretariat by 15 March 2016 and that the Committee will revert back 
to this issue at its next meeting". 
7.2.  The Committee adopted its annual report to the Council for Trade in Goods with the 
modification suggested (G/L/1127). 8  OTHER BUSINESS 8.1.  The Committee took note of the provisiona l date of the next CRO meeting (28 April 2016). 
 
__________