RESTRICTED  
  
JOB/RO/6  
 
13 October 2016  
(16-5526) Page: 1/2 
Committee on Rules of Origin  Original: English  
 
 NON-PREFERENTIAL RULES O F ORIGIN  
Communication from Switzerland  
The following communication, dated 11 October 2016, is being circulated at the request of the 
Delegation of Switzerland.  
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1. Introduction  
1.1 In the preamble of the Rules of Origi n Agreement  (hereafter the Agreement), Members 
recognize that clear and predictable rules of origin (RoO) and their application facilitate the flow of 
international trade.  
1.2 With the objective of bringing about further facilitation and expansion of world  trade, t he 
Agreement establishes a Harmonization Work Programme (hereafter HWP) for non -preferential 
RoO, based upon a set of principles, including making those rules objective, understandable and 
predictable.   At the same time, the Agreement  requires WTO  members to ensure that their RoO 
are transparent and that they do not have restricting, distorting or disruptive effects on 
international trade.  
1.3 The HWP has been under discussions for more than 20 years. Despite all efforts made, the 
HWP has not prod uced the expected results yet.  The lack of common multilateral rules both for 
non-preferential and preferential RoO led to many different and complex regimes that hinder 
today 's trade flows along global value chains.  
1.4 Estevadeordal et al. (2007) quali fy RoO as restrictive and divergent.1 While restrictiveness 
refers to the complexity of the RoO regimes and the associated compliance costs that affect trade 
under tariff preference schemes, divergence denotes the proliferation of RoO known as the 
"spaghet ti bowl of RoO ".  
1.5 As reflected during the two information sessions on non -preferential rules of origin held at 
the WTO on 21 April and 21 September 2016, both restrictiveness and divergence  on 
non-preferential RoO impose significant compliance costs on  firms wishing to integrate global value 
chains, notably MSMEs and in particular those operating in less integrated economies.2  As a 
consequence, global trade is distorted as firms deviate from optimal trade patterns.  
2. Questions  
2.1 In light of the releva nce of the objectives set out in the Agreement on Rules of Origin and 
the challenges inherent in today 's trade patterns, this paper seeks to stimulate fresh informal 
discussions about principles and guidelines to streamline non -preferential RoO, and about ways to 
foster convergence between regimes of RoO.  As a background for future work, Switzerland would 
like to share a non -exhaustive list of questions that could guide the discussions:  
                                                
1 For a literature review on RoO see also Yi (2015).  
2 According to the report by the International Trade Centre "Invisible Barriers to Trade:  How Business 
Experience Non -Tariff Measures (2015) ", rules of origin and related paperwork account for 35% of the 
burdensome Non -Tariff Measures applied by partner countries on manufactured goods (see figure 7 page  20). JOB/RO/6  
 
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  (a) What options could be envisaged to reduce compl iance costs associa ted with 
non-preferential RoO?  
(b) How could global value chains and the needs of MSMEs be reflected in non -preferential 
RoO? 
(c) Could non -preferential RoO be inspired by RoO practices in RTAs and other existing 
agreements?  
References  
Estevadeordal, A., J . Harris & K. Suominen, 2007, Multilateralizing preferential rules of origin 
around the world , WTO Doc WTO/HEI/NCCR Trade/CEPR Conference, Geneva.  
Yi, Jisoo, Rules of origin and the use of free trade agreements:  a literature review , World Customs 
Journal,  9 (1): p. 43 -58. 
International trade Centre  report (2015), Invisible Barriers to Trade: How Business Experience 
Non-Tariff Measures  (2015), Geneva, http://www.intracen.org/publication/The -Invisible -Barriers -
to-Trade ---How-Businesses -Experience -Non-Tariff-Measures/ . 
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