RESTRICTED
WORLD TRADE G/RO/W/28
7April 1998
ORGANIZATION(98-1404)
Committee onRules ofOrigin Original: English
PREPARATION OFANANALYSIS PAPER BYTHE SECRETARIAT
INREGARD TOTHE MAJOR PROPOSALS ONRULES OFORIGIN
INTHE TEXTILE SECTOR
Proposal byIndia
Thefollowingcommunication,dated6April1998,hasbeenreceivedfromthePermanentMission
ofIndia.
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Following India'sintervention attheinformal meeting oftheCommittee onRuleofOrigin
on27March 1998which wasdulysupported byPakistan andSriLanka, India hadformally proposed
intheformal meeting oftheCommittee onRuleofOrigin on27March 1998thattheWTO Secretariat
should prepare anAnalysis Paper inregard tothemajor proposals intheTextiles Sector. Itmaybe
recalledthatattheformalmeeting,theproposalofIndiawassupportedbyPakistan,DominicanRepublic,
SriLanka andMalaysia, while therewasnoopposition fromanyother Member totheIndian proposal.
Intheinformal meeting oftheCommittee heldon1April 1998, theChairman suggested that
theproposal should besenttotheSecretariat inwriting quickly sothatthework canbedonebythe
Secretariat without anydelay. Accordingly, Iamforwarding herewith theproposal forpreparation
ofanAnalysis Paper bytheWTO Secretariat forappropriate action.
./.G/RO/W/28
Page2
India'sproposal forpreparation ofananalysis paper bytheWTO Secretariat
inregard tothemajor proposals onrules oforigin intheTextile sector
Interms oftheAgreement onRules ofOrigin, harmonized origin rulesshallbeapplied equally
forpurposes ofallcommercial policy instruments assetoutinArticle 1.2oftheAgreement, i.e.the
application of:
(a) MFN treatment under Articles I,II,III,XI,andXIIIoftheGATT
(b) Safeguard measures under Article XIXoftheGATT
(c) Anti-dumping andCountervailing duties under Article VIoftheGATT
(d) Origin Making requirement under Article IXoftheGATT
(e) Anydiscriminatory Quantitative Restriction ofTariff Quotas
(f) Government Procurement andTrade Statistics
TheAgreement alsoprovides thattheharmonized rules oforigin should beadministrable in
aconsistent, uniform, impartial andreasonable manner, andshould becoherent.
Inrespect ofthetextiles sector, anumber ofproposals havebeenreferred bytheTechnical
Committee onRules ofOrigin totheCommittee onRules ofOrigin foritsconsideration. While there
areanumber ofimportant differences inthese proposals, themajor onesdiffer from eachother in
thesense thatwhile onesetofproposals recognises processing ofyarns andfabrics (e.g.bybleaching,
dyeing orprinting, etc)asorigin conferring, theother setdoesnotdosoinrespect ofsome orallof
these processes. Likewise, onesetofproposals recognises conversion offabrics tomade uparticles
asorigin conferring, theother setofproposals doesnotrecognize suchconversion assubstantial
transformation andtherefore, origin conferring. Inrelation togarment sector also,onesetofproposals
recognises assembly asorigin conferring, theother setrecognises cutting anddesigning operation as
origin conferring.
During bilateral aswellasplurilateral discussions, thereappeared tobeacertain lackofclarity
astotheimpact ofimplication ofthese major proposals insofarastheirpractical application was
concerned. Likewise itwasnotclearastohowtheorigin ruleonthebasis ofeither ofthetwosets
ofproposals would impact ontheflowoftrade and/or therights andobligations under various WTO
Agreements andinstruments referred tointheAgreement onRules ofOrigin. There alsoappeared
tobeasubstantial ambiguity anduncertainty withreference totheutilization ofaccess under the
Agreement onTextiles andClothing.
Intheinterest ofbuilding consensus fortransparent andneutral rules oforigin which canbe
applied inanimpartial, predictable andconsistent manner, itisproposed thattheWTO Secretariat
mayprepare ananalysis bringing outtheaforesaid implications, andpresent itforconsideration of
theMembers oftheCommittee sothattherulesareprepared inareasonable manner andinaccordance
withthepurpose andobjectives oftheAgreement including, mostimportantly, thatthenewrulesdo
notcreate unnecessary obstacles totradeornullify orimpair therights ofMembers under theGATT.
Itishoped thattheproposed analysis bytheWTO Secretariat willbeavailable forconsideration
oftheMembers sufficiently inadvance ofthenextmeeting oftheCommittee.
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