The Tripartite FTA: Background and overview of progress made in developing new harmonized Rules of Origin
Rules of Origin (RoO) are instruments used to determine the real source and economic origin of traded goods. Different types of RoO however serve different objectives. Non-preferential RoO are used by countries for various commercial policy objectives, and are criteria that define the origin of goods with the purpose of capturing and classifying trade flows for statistical and record-keeping purposes, for labeling and related marking purposes, for the implementation of policies around anti-dumping duties and safeguard measures, government procurement and so forth. On the other hand, preferential RoO are those contained in specific preferential trade arrangements (PTA) and are thus, in effect, bilateral arrangements tailored to the specific trade regime. They are used to determine the economic origin of a traded good in the context of trade within a specific preferential trade area, and may or may not be more restrictive than a country’s standard origin criteria. The ultimate objective of preferential RoO is to facilitate preferential trade between preferential trade partners without opening such a trade regime up to goods simply transshipped from third countries.
Rules of Origin in African trade regimes span a wide range of methodological approaches in the determination of preferential origin status. However the conditionalities that they impose, by and large, go well beyond one of the key objectives for RoO, being the avoidance of trade deflection, often being influenced by protectionist attitudes relating to incumbent operators more generally, or specific national industries. Their implementation and consistent application also continues to be a challenge for customs authorities and traders alike, often resulting in the creation of unnecessary RoO-related trade barriers. The (African) RoO history and experience, in the absence of any international or WTO multilateral best-practice standards that go beyond mere guiding principles, and given the inherent challenge associated with RoO, is likely to create difficulties for the realization of any practical benefits accruing to traders for example under a (future) African continental FTA.
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