WTO LDCs group expectations from the discussions held after each sub‑item under agenda item (B) of November 2024 CRO
with a view to adequately prepare the agenda for
next CRO meeting of April 2025

The following communication, dated 12 March 2025, is being circulated at the request of the delegation of Togo, on behalf of the LDC group.

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The note below is an updated version of previous communications with similar content that were transmitted to the Chairperson of the Committee on Rules of Origin (CRO) in November 2024 and February 2025. It consolidates demands made by the Group and has been used to guide bilateral meetings between the LDC Group and Preference-Granting Members. The objective of this note is to transparently share with CRO Members, particularly Preference-Granting Members, the expectations of the LDC WTO group regarding the agenda items for the upcoming CRO meeting and the content of the discussions.

Considering the detailed presentations delivered by the WTO LDC group at the CRO meeting in November 2024, and in view of the Chairperson's convening note of 15 October 2024 – particularly the annex on page 3, which suggests agenda items for the April 2025 CRO meeting – the LDC WTO group invites the Chairperson to hold consultations with CRO Members, especially Preference‑Granting Members, to ensure proper preparation of the agenda items, as outlined below.

In particular, the Chairperson should hold consultations or facilitate consultations among Members on each agenda item to remind CRO Members that preparations and discussions should focus on the following:

Sub-Item (a): Level of ad valorem percentages

1._    The LDC group identifies the recent UK reform of their RoO which provides, inter alia, for the use of up to 75% of non-originating materials out of ex-works price with deduction of cost of insurance and freight with CTC as alternative criterion, as an example of best practice.

2._    The LDC group invites PGMs which are not yet adopting such practice to consider its adoption in their RoO for the LDC Members.

3._    Preference-Granting Members that are not using and/or are not envisaging to use such example of best practice are invited to share their detailed views on the reasons why they are adopting different criteria.

4._    In addition to the 75% threshold identified in the UK DCTS, the LDC group also recognizes the urgent need to find optimum, sector-specific levels of threshold based on firm-based Bill of materials (BOM) studies rather than on arbitrary or econometric assumptions.

5._    Therefore, the LDC group calls on Donors to fund field studies to identify commercially viable levels of threshold for the LDC Members while at the same time allowing for alternative forms of product specific rules of origin such as CTC or specific working or processing.

6._    In accordance with the above, the LDC WTO group would welcome any initiative by the Donors to fund such research that could have positive spillovers beyond LDCs.

Sub-Item (b): Method of calculation of ad valorem percentage

1._    The LDC group expects a response (possibly in written format) from the PGMs which are currently not using a method of calculation of ad valorem percentage based on value of materials to provide concrete examples to explain:

a._    why they are not using a value of materials calculation; and

b._    how their different calculations work more effectively for the firms in the LDCs countries.

2._    The LDC group invites the PGMs which "remain unclear on the mechanism and technicalities on the deduction of the cost of insurance and freight from the value of non-originating materials" to identify and present their practices and legislation on this issue by no later than March 2025.

3._    The group also invites those PGMs, such as US and UK that do allow such deductions in the ad valorem percentage calculations to present their practices at the next CRO.

Sub-Item (c): Evidence of direct consignment

1._    The LDC group identifies the "non-alteration" principle introduced by EU, and other similar arrangements by Australia and New Zealand, as the best practices regarding the issue of evidence of consignment. Such practice is trade facilitating and consistent with the spirit of WTO TFA.

2._    Therefore, the LDC group requests other PGMs to start considering the adoption of such practices, and abandoning documentary requirements for through bill of lading, and the certificate of non-manipulation.

3._    Preference-Granting Members that are not adopting the non-alteration principle are invited to state the reasons for non-adoption and why different practices are not causing difficulties to LDC exporters.

4._    The LDC group also invites EU, Australia and New Zealand to share their experiences gained from adopting the non-alteration principle at the next CRO meeting.

Sub-Item (d): Rules based on the Change of tariff classification criterion

1._    The LDC group identifies UK DCTS PSRO with regards to its CTC provisions as the best practices based on:

a._    the application of simple CTH in most cases with few exceptions; and

b._    the provision of alternative rules in addition to CTC.

4._    Therefore, the LDC group first requests PGMs that are not yet using CTC to explore the possibility to complement their existing ad valorem across the board percentages for the LDC Members with CTC or specific working or processing as an alternative for specific sectors.

5._    The LDC group further invites PGMs that are using a combined requirement, i.e. requiring compliance with both ad valorem and CTC at the same time, to provide justification for the adoption of such combined requirements.

6._    The LDC group requests PGMs that are using CTC as shown in their presentation, to start considering further liberalizing their CTC rule by introducing simple CTH or CTSH whenever possible and/or by introducing alternative rules such as ad valorem or specific working or processing.

Sub-Item (e): Proof of Origin (certificate of origin and self-certification)

1._    The LDC group identifies self-certification provision introduced by members such as the EU, Norway, Switzerland, etc. as the best practices in origin-certification process. Therefore, the group invites PGMs that are not providing for self-certification to consider its adoption in their RoO procedures.

2._    The LDC group also expects a response (preferably in written form) from the PGMs that do not plan to adopt self-certification, to state reasons for not adopting self-certification, and to provide alternatives if they have one.

3._    The EU and other Preference-Granting Members that are adopting self-certification are invited to make presentation or submit evidence and lessons learned from such best practices.

Sub-Item (f): Cumulation provisions

1._    The LDC group identified the following practices to be adopted by PGMs regarding the issue of cumulation:

a._    Products originating in beneficiaries and former beneficiaries of the GSP/GPT should continue to be considered as originating by LDCs for the purpose of cumulation even when the LDC has graduated or signed a FTA.

b._    PGM should provide extended cumulation which allows LDCs to request cumulation with other countries that signed FTAs with the PGM.

c._     Preference-Granting Members that are not adopting such best practices are invited to state the reasons for not adopting these principles and make written submissions or Presentations. 

2._    The LDC group will share the preliminary findings of a study funded by the UK Government on cumulation.

Concerning paragraph 2 of page 4 of the Chairperson convening notice, the LDC WTO group does not intend to present any other additional submission besides the above-mentioned draft study on cumulation.

Concerning paragraph 3 of page 4 under April 2025 on the "Methodology for the calculation of utilization rates", the WTO LDC group believe that no further discussion is necessary since the methodology has been agreed by CRO and there is no need to revisit it.

Concerning Paragraph 4 of page 4 under April 2025, on the "Utilization of trade preferences" the WTO LDC group may make a new submission at the next CRO. Further information will be provided in due time.

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