Business recommendations on rules of origin in preferential trade agreements
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 whole supply chain.
With limited progress being made in the Doha Round of multilateral trade negotiations, countries are increasingly looking to bilateral and regional Preferential Trade Agreements (PTAs) as a trade liberalizing alternative.
PTAs have multiplied as a result, with over 400 bilateral and regional deals currently in existence. Recent developments include ‘mega-regional’ PTA negotiations such as the Trans-Pacific Partnership (TPP), the Regional Comprehensive Economic Partnership Agreement (RCEP) and the Transatlantic Trade and Investment Partnership (TTIP).
A growing number of PTAs cover the same trading areas. The resulting overlap of PTA rules and procedures creates confusing and inconsistent market entry arrangements, which are particularly felt by small and medium sized enterprises (SMEs) with limited resources. These inconsistencies are also problematic in situations where companies seek to determine which PTA provides greatest advantage for trading their goods.