Thirtieth annual review of the implementation and
operation of the agreement on rules of origin

note by the secretariat[1]

1  Introduction

1.1.  The purpose of this note is to assist Members in undertaking the 30^th Annual Review of the implementation and operation of the Agreement on Rules of Origin. It was prepared by the Secretariat to assist Members' during their discussions about the implementation of the Agreement. According to Article 6.1 of the Agreement, "the Committee shall review annually the implementation and operation of Parts II and III of this Agreement having regard to its objectives". The Committee's Annual Report to the Council for Trade in Goods on the Implementation and Operation of the Agreement on Rules of Origin will incorporate the outcomes of this review.

2  Members and Observers of the Committee on Rules of Origin

2.1.  Government representatives of all WTO Members and Observers are also Members and Observers to the Committee on Rules of Origin (CRO). Additionally, the following international organizations have observer status at the CRO: ACP, EFTA, IADB, IMF, ITC, OECD, UNCTAD, WCO and World Bank.

3  Rules of procedure of the Committee on Rules of Origin

3.1.  The rules of procedure for meetings of the CRO were adopted by the Committee in February 1997 (_G/L/149 and _WT/L/161).

4  Officers of the Committee on Rules of Origin

4.1.  On 10 June 2024, Mr. Guna Seelan BALAKRISHNAN (Malaysia) was elected as the Chairperson of the CRO for the period 2024-2025.

5  Meetings of the Committee on Rules of Origin

5.1.  In 2024, the CRO held two formal meetings: on 29 April and 21-22 November. Documents _G/RO/M/82 and _G/RO/M/81 (to be prepared), respectively, contain the minutes of these meetings.

6  Notifications under Article 5 (non-preferential rules of origin)

6.1.  Two Members, who had never submitted a notification under Article 5 of the Agreement, submitted their notifications in 2024: Cambodia (_G/RO/N/266) and Cabo Verde (_G/RO/N/281).

6.2.  As a result of these notifications, 57 WTO Members have notified the Secretariat that they apply non-preferential rules of origin (counting the EU and its member states as one). Sixty WTO Members have informed the Secretariat that they do not apply any non-preferential rules of origin. The remaining 22 WTO Members had not yet notified any information to the WTO under Article 5.

6.3.  The full list of Members under each of these categories as well as the relevant information notified to the WTO Secretariat is listed in three tables in Annex 1 to this note.

6.4.  All notifications and the related legislation or references provided can be accessed through the section "Non-preferential origin/Notifications" of the Rules of Origin webpage of the WTO website (https://www.wto.org/english/tratop_e/roi_e/roi_e.htm).

7  Notifications under Annex II (preferential rules of origin)

7.1.  As agreed by the Committee in 2012 (_G/RO/M/59), notifications about reciprocal trade agreements made to the Committee on Regional Trade Agreements (CRTA) or to the Committee on Trade and Development (CTD) are deemed to discharge Members' notification obligations under the Agreement on Rules of Origin. The Committee therefore agreed that notifications which had initially been received by the CRTA or the CTD should be circulated by the Secretariat to the CRO. The information contained in such notifications, including information about preferential rules of origin, can be accessed through the WTO database of regional trade agreements (https://rtais.wto.org) and the WTO database of preferential trade agreements (http://ptadb.wto.org).

7.2.  In addition, it should be noted that the Committee adopted a specific template for notifications of non-reciprocal preferential rules of origin applied to least-developed countries (_G/RO/84). All WTO preference-granting Members agreed to submit detailed information about their preferential rules of origin using that template. To date, 22 preference-granting Members submitted such notifications. and three Members still have to inform the Committee about their practices. Notifications were circulated under the _G/RO/LDC/N/ document series. A complete overview of these notifications is available in document _G/RO/W/163/Rev.13.

8  Origin Facilitator

8.1.  The Origin Facilitator is a publicly available, online database containing tariff-level data about rules of origin and origin-related procedural requirements. It is the result of a collaboration between the WTO Secretariat and the International Trade Centre (ITC) and the World Customs Organization (WCO). It is a user-friendly tool that allow users to retrieve rules of origin information, including rules of origin notified to the WTO (for instance, concerning preferential rules of origin applied to LDCs under non-reciprocal trade arrangements). The Facilitator is available at: https://findrulesoforigin.org.

9  Work of the Committee related to Parts I, II and III of the Agreement

9.1.  Part II of the Agreement relates to the multilateral disciplines which govern the application of non-preferential rules of origin by WTO Members during the "transitional period". This period refers to the time before the implementation of fully harmonized non-preferential rules of origin (Article 2). Since the Work Programme for the Harmonization of non-preferential rules of origin (HWP) has not yet been finalized, Members have not adopted and do not implement harmonized non-preferential rules of origin. Hence, Article 2 of the Agreement contains the disciplines which currently apply to WTO Members. The Committee did not hold discussions specifically related to these disciplines.

9.2.  As had been noted in the Committee's 2013 Annual Report to the CTG (_G/L/1047), the implementation and operation of the Agreement is not satisfactory as the stalemate in the HWP compromises the attainment of the core objectives of the Agreement (i.e., the facilitation of global trade through the international harmonization of non-preferential rules of origin). The draft results of the HWP are contained in documents _G/RO/W/111/Rev.6 (in HS96); _JOB/RO/5/Rev.1 and _JOB/RO/5/Rev.1/Corr.1 (rectified to reflect the 2002, 2007, and 2012 versions of the HS nomenclature). In the period of this annual review, the Committee did not consider any item specifically related to the HWP.

9.3.  In 2024, Members continued to discuss ways to enhance transparency on non-preferential rules of origin following a proposal by a group of Members in 2019 (_G/RO/W/182/Rev.4). At the request of Members, the Chairperson of the Committee held consultations which led to different versions of a draft decision to be adopted by the CRO. The decision would encourage Members to update their notifications and to use a new notification format (template) for the preparation of such notifications (documents _JOB/RO/8; _JOB/RO/8/Rev.1 and _JOB/RO/8/Rev.2). Informal consultations were held on 17 May 2024. Despite wide support, the Chairperson reported that some concerns had been raised, and, as a result, the decision could not be adopted. He therefore suggested that the Committee should simply take note of the template and use it on an entirely voluntary basis (_JOB/RO/8/Rev.3).

9.4.  [Complement in light of the discussions during the formal CRO meeting of 21 and 22 November.]

10  Amendments, interpretations and rectifications to the Agreement

10.1.  The Committee has not dealt with any of these matters during the year under review.

11  Consultation and dispute settlement

11.1.  Since 1995, the Agreement on Rules of Origin has been cited in the context of the following dispute settlement proceedings.

Table 1 - List of Disputes citing the Agreement on Rules of Origin

12  Other areas of work of the CRO

12.1  WTO Reform and improvements to the functioning of the CRO

12.1.  At the request of the Council for Trade in Goods (CTG) (_JOB/CTG/29 and _JOB/CTG/33), Members had adopted a report on discussions related to measures taken to improve the functioning of the CRO (_G/RO/W/217 and _G/RO/W/224). In 2024, the Secretariat reported that all measures had been implemented and made presentations specifically on the functioning of e-Registration; eAgenda; "Introduction to the Committee on Rules of Origin" (resources for new delegates in the Webpage); and the Rules of Origin Gateway (WTO Rules of Origin Webpage).

12.2  Preferential rules of origin for Least Developed Countries (LDCs)

12.2.  Members continued to engage in the implementation of the 2013 and 2015 Ministerial Decisions (_WT/L/917 and _WT/L/917/Add.1 respectively) and of the 2022 Committee Decision on preferential rules of origin for LDCs (_G/RO/95). The Committee also considered possible next steps to its 2023 report to the General Council (_G/RO/99) and agreed to follow a programme of work covering different issues (_ICN/RO/7).

12.3.  [Based on inputs from the delegations and the Secretariat, a draft report of work (_G/RO/W/XXX) was adopted and forwarded to the General Council. Complement in light of the discussions during the formal CRO meeting of 21 and 22 November.]

13  Report to the Council for Trade in Goods

13.1.  On 12 October 2023, the CRO's draft annual report to the Council for Trade in Goods (_G/RO/W/XXX) was considered and adopted through written procedures.