As countries are increasingly concluding bilateral and regional Preferential Trade Agreements (PTAs), diverging rules of origin regulations and procedures are becoming a trade barrier along the entire supply chain. This is becoming even more challenging in absence of a multilateral agreement on rules of origin, especially where new PTAs overlap existing ones. Small- and medium-sized enterprises (SMEs) are often limited in resources, and are thus particularly impacted by the complexity.
In its Business Recommendations, ICC calls for parties to PTA negotiations to aim for global horizontal cohesion, wherever possible, through the streamlining of rules of origin and origin procedures by following the provisions of the World Customs Organization (WCO) Revised Kyoto Convention (RKC), in line with the principles of the World Trade Organization’s (WTO) Trade Facilitation Agreement (TFA). Recommendations also include developing common procedural standards for customs verification of origin documentation, enabling ‘extended cumulation’ or ‘cross cumulation’ between common agreements and including provisions for the resolution of minor origin disputes in PTAs.
See related ICC webstory: Launch of ICC Statement: Business recommendations on rules of origin in preferential trade agreements.