WORLD TRADE  
ORGANIZATION  WT/GC/W/622 
23 April 2010 
 (10-2112) 
General Council 
4-5 May 2010 Original:   English 
 
 
 
HARMONIZATION WORK PROGRAMME (HWP) UNDER THE AGREEMENT 
ON RULES OF ORIGIN – THE WAY FORWARD 
 
Communication from India  
 
 
 The following communication, dated 22 April 2010,  is being circulated at the request of the 
Delegation of India. 
_______________ 
 
I. INTRODUCTION 
1. The importance of Rules of Origin for global commerce is obvious.  Issues such as grant of 
tariff preferences, application of anti-dumping and countervailing duties, administration of tariff 
quotas and other quantitative restrictions etc. all depend upon clear determin ation of the source of 
imports.  Compilation of accurate trade statistics is also not possible without first determining the 
correct source of imported and e xported products.  Clear and predictable rules of origin provide 
greater certainty for the conduct of world trade and he lp facilitate trade flows.  Conversely, if these 
rules are not framed properly, and are not impl emented in a uniform, im partial and reasonable 
manner, they can hamper trade.  Rules of Origin can also serve as a means of protectionism alongside 
tariff and non-tariff barriers.  
2. The importance of Rules of Origin has grown significantly due to globalization of production. 
Much of global production of goods takes place in  stages, using materials and components produced 
in different countries.  Origin determination in su ch cases is not an easy job.  While there is an 
agreement among Members that the country of origin status has to be given to the country where "the last substantial transformation" took place, ther e is no common understanding re garding the term "last 
substantial transformation".  Members are using thei r own criteria to determine the source of goods of 
multi-country origin, i.e. where more than one country is involved in the production process.  
Consequently, origin rules vary widely. 
3. The multiplicity of rules has given rise to a situation where the same product could be 
required to meet the value added criterion in one  country, manufacturing or processing operations 
criterion in another and tariff change criterion in a third country.  The manner of application of these 
rules in a large number of cases conveys the impressi on that these rules are in creasingly being viewed 
as trade policy instruments per se,  instead of as a device to support trade policy instruments.  
4. The Agreement on Rules of Origin (ARO) aims at harmonization of non-preferential rules of 
origin, and seeks to ensure that such rules do not  themselves create unnecessary obstacles to trade.  
The Agreement sets out a Harmonization Work Progr amme (HWP) for harmonization of the Rules of 
Origin, to be completed within 3 years of initiatio n, based on certain principles including that these 
rules should be objective, understanda ble and predictable and that they should be administrable in a 
consistent, uniform, impartial and reasonable manner.  Another fundamental principle is that Rules of 
Origin should not be used as instruments to pursue trade objectives directly or indirectly. WT/GC/W/622 
Page 2  
 
  5. The HWP began in July 1995 and the work is  being conducted both in the Technical 
Committee on Rules of Origin (TCRO) in Brussels and the Committee on Rules of Origin (CRO) in 
Geneva.  The main work was carried out by TCRO  in 18 formal sessions held between July 1995 and 
May 1999 and the results of the work were presented to CRO in June 1999 in the form of agreed rules 
(Basket 1) for endorsement, and unr esolved issues (486) for decision.   The CRO in various meetings 
endorsed the Basket 1 decisions and also resolved a large number of unresolved issues referred to it 
by TCRO.  However, due to the technical and voluminous nature of work and trade policy considerations for several issues, the wo rk has remained incomplete till date.  
6. In November 2001, the Ministerial Conference at Doha took note of the progress on the HWP 
and, in its decision on implementation-related issu es and concerns, urged the CRO to complete its 
work by the end of 2001.  The General Council, in July 2002, extended the deadline for completion of 
the HWP to the end of 2002.  The CRO had also  submitted to the Genera l Council in July 2002, 
94 core policy issues for discussion and decision.  The General Council, at its meeting in December 2002, extended the deadline to July 2003 a nd thereafter, yearly extensions were granted 
until 2007.  
7. The CRO Chair, on behalf of the Chair of the General Council held  consultations on the 
94 core policy issues, and reported the final packag e for 83 product-specific rules of origin to the 
General Council in July 2006 and the machinery pack age in July 2007.  In the July 2007 meeting of 
the General Council, the Chair had recommended that  the work on the "implications issue" and the 
"dual-rule approach" for machinery be suspe nded pending receipt of guidance from the General 
Council on these two issues.  The Chairman of th e General Council proposed that Members should 
take some time to reflect on this matter and in th e meantime, the CRO may continue its work with a 
view to resolving all technical issues, including technical aspects of the overall architecture, as soon as possible.  The General Council approved this proposal.  
8. Based on the General Council’s decision, th e CRO is presently examining the product-
specific technical issues, including technical asp ects of the overall architecture.  The progress 
however, has been very slow.  The same issues ar e being discussed again and again with no solution 
in sight.  
9. The HWP requires reaching an agreement on specifi c rules of origin for 2,739 products.  Out 
of this, the CRO has reached consensus on 1,528 pro ducts.  The Chair has reported that 55% of the 
work has been completed and that only 45% of the work remains to be completed.  Included in the 
latter category are the outstanding 94 core policy issu es (that include the "implications" issue), "dual-
rule approach" for machinery; overall architectur e of the rules; chapter-specific "primary" and 
"residual rules"; and origin of fish caught in an E EZ of a country. It may be recalled that the 94 core 
policy issues were referred to the General Council for decision in 2002. 
10. The HWP is an unfinished agenda of the Urugua y Round.  It is a matter for reflection among 
Members that the work remains incomplete after ne arly 15 years of intense negotiations.  Rules of 
Origin are the basic underpinnings of global co mmerce and the WTO, as the premier rule making 
body for global trade ignores such issues at its peril.  It is essential that a fresh impetus is provided to 
the deliberations in the CRO to enable it to comple te work on the HWP within the shortest possible 
time.  For this to happen the General Council has to address two issues: 
(a) The General Council has to deliberate on and decide the 94 core issues and the "dual-
rule approach" for machinery which ha ve been referred to it by the CRO. 
(b) As the CRO has completed work on 1,528 products a decision may be taken to 
implement the harmonized rules for these products at an early date.  WT/GC/W/622 
 Page 3 
 
 
  II. PROPOSAL 
11. It is therefore proposed that: 
(a) A deliberative process be established under th e chairmanship of the Chair of the 
General Council to discuss the above issues with the objective of preparing the ground for a formal decision in the next Ministerial Conference as provided for in 
Article 9.4 of the Agreement on Rules of Origin. 
(b) The CRO may resolve the other technical is sues, including technical aspects of the 
overall architecture and transposition of the agreed rules into HS 2007 by July 2011. 
__________