This article discusses the deadlock in the WTO on multilateral harmonization of nonpreferential rules of origin (RoO) and reviews some of the RoO included in recent preferential trade agreements. We argue that there is a trend towards adoption of similar approaches and that this suggests that cooperation to reduce the trade-impeding effects of differences in RoO across jurisdictions is more feasible than often is assumed by observers and policymakers. From a trade facilitation perspective such cooperation could be based on plurilateral initiatives under the umbrella of the WTO. These could include a focus on pursuit of greater convergence between preferential and nonpreferential RoO helping to achieve the long-standing goal of moving towards harmonization of rules of origin.

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This book discusses the different aspects of the rules of origin with a multidisciplinary perspective. It offers the first overview of the status of the negotiations on nonpreferential rules of origin under the World Trade Organization (WTO) agreement on rules of origin, after more than 10 years of negotiations, and its possible implications for other WTO Agreements. This book deals extensively with preferential rules of origin both under unilateral trade instruments like the Generalized System of Preferences, the Everything But Arms initiative, and the Africa Growth and Opportunity Act and in free-trade areas. Inama analyzes the experience of the United States and the European Community (EC) in developing the North American Free-Trade Agreement and the Pan-European rules of origin. He also compares and discusses the parallel experiences of the major southern regional trade agreements, including Mercosur, the Association of Southeast Asian Nations (ASEAN), and the ASEAN-China free-trade area, as well as the Common Market for Eastern and Southern Africa, Eastern Africa Community, and Southern Africa Development Community in their negotiations of the European Partnership Agreements with the EC. It discusses the evolution of the different sets of rules of origin, the economics of the rules of origin, and the technical options for drafting rules of origin including a methodology for drafting product-specific rules of origin. Stefano Inama is a project manager and senior trade and customs expert for the United Nations Conference on Trade and Development. He has extensively advised governments, private sector, and regional trade secretariats on rules of origin negotiations and has regularly been invited to speak on trade issues by universities such as the Bocconi University in Milan, Italy, and Columbia University in New York, as well as by international organizations.

Governments are increasingly entering FTAs and mega-regionals to secure market access for their firms. Utilization rates are used to monitor whether firms are using these FTAs. This paper is part of a recent stream of studies to dash out enduring myths that preferences are not used when preferential MFN rates are low or for unknown or vague reasons. Contrary to this sort of conventional wisdom this study advocates that low utilization rate is a valuable and unequivocal sign that reform of rules of origin and related administrative procedures is needed to make the FTA attractive and meaningful to the private sector. By using a "repeated offender" methodology this paper identifies a series of product specific rules of origin (PSROs) causing low utilization rates. Such PSROs are the candidate for reforms towards more lenient requirements that are commercially viable for firms.

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