Harmonizing preferential rules of origin regimes around the world

The Openness of National Economies: The World and Russia

“…In view of this adverse effect, various commentators have argued in favour of reforming RoOs, making them more transparent and compatible with the principles of the multilateral trading system (see for instance Cadot and de Melo, 2007). 31 This box discusses the system of "cap and convergence" proposed by Estevadeordal et al (2009a) and supported by Baldwin and Thornton (2008), based on the two concepts of "multilateralization" and "convergence".…”

“…"Multilateralization" of RoOs refers to the establishment of multilateral rules that limit the restrictiveness and complexity of RoOs in PTAs (Estevadeordal et al, 2009a). According to the authors, such rules would ensure that "at least the qualifying production methods in a given sector remain relatively similar across export markets".…”

“…Moreover, it could be subject to WTO discipline. Estevadeordal et al (2009a) suggest that the non-preferential RoOs currently negotiated at the WTO could serve as the global benchmark with which to compare the overall restrictiveness of RoOs of a given PTA. This would be analogous to the General Agreement on Tariffs and Trade (GATT) Article XXIV restriction on a customs union's external tariff, which caps it at the average of the tariffs previously charged by the members (Baldwin and Thornton, 2008).…”

The move to preferential trade on the Western Pacific Rim: some initial conclusions

“…Companies have to demonstrate that imported inputs from other parties do not exceed the value specified by the preferential agreement, and/or that specific processes and/or product changes have been undertaken locally. For the EU, EFTA and NAFTA, the costs of compliance with rules of origin are estimated to range between 4 and 8 percent of the cost of a consignment (Estevadeordal, Harris and Suominen 2007;Manchin and Pelkmans-Balaoing 2007). Costs escalate when companies face multiple rules of origin in complying with the various PTAs that their government has signed*/ as is the case for Australian exporters who face different rules of origin for each of Australia's PTAs negotiated to date.…”

New Evidence on Preference Utilization

“…We consider the unprocessed products as primary. 35 One could instead use a direct measure of ROO restrictiveness, such as the index developed by Estevadeordal et al (2009). This index is constructed based on an analysis of the text of the ROO annex of individual agreements.…”