REPORT (2022) OF THE COMMITTEE ON RULES OF ORIGIN

TO THE COUNCIL FOR TRADE IN GOODS

1.       This document reports on the work conducted by the Committee on Rules of Origin (CRO) in 2022. Article 6.1 of the Agreement on Rules of Origin provides that

"The Committee shall review annually the implementation and operation of Parts II and III of this Agreement having regard to its objectives" and "inform the Council for Trade in Goods of developments during the period covered by such reviews."

2.       The CRO held two formal meetings in 2022: on 7 April and on 13 October. The minutes of these meetings are contained in documents G/RO/M/78 and G/RO/M/79^[1] respectively. Mrs Laura GAUER (Switzerland) was elected Chairperson of the CRO in May 2022 and chaired both meetings. The Committee also considered the appointment of a vice-chair at the October 2022 meeting, but the election could not be completed because of concerns expressed by one delegation.

3.       The work of the Committee continued to be structured around two broad themes: (1) non-preferential rules of origin; and (2) preferential rules of origin for LDCs.

4.       On non-preferential rules of origin, the Committee did not hold specific discussions related to the Harmonization Work Programme (HWP), launched in 1995 in accordance with Article 9.2(a) of the Agreement on Rules of Origin. Members have expressed diverse views regarding the implications that harmonized rules of origin could have for other trade policy instruments ("core policy issues"). Therefore, the negotiations have not seen much development since 2007.

5.       Since then, Members have been focusing on improving their understanding and knowledge about national practices related to non-preferential rules of origin. In this regard, a proposal to "enhance transparency on non-preferential rules of origin" (G/RO/W/182/Rev.4) has been on the Committee's agenda for some time. In October 2022, Members discussed again this proposal and, agreed to engage in Chair-led consultations with a view to preparing a Chair's text. The Chairperson confirmed that she would hold consultations and keep the Committee informed.

6.       In addition, an information session was held on the work programme for the harmonization of non-preferential rules of origin. The session, organized in October 2022, provided an overview of the objectives and history of these negotiations mandated in the Agreement on Rules of Origin (Article 9). In addition to a presentation by the Secretariat, Ms. Thorstensen, former Chairperson of the Committee on Rules of Origin (2004-2009), also shared her impressions and memories about these negotiations.

7.       Finally, the Committee completed the mandated annual review of the implementation and operation of the Agreement (G/RO/96).

8.       With respect to preferential rules of origin, the Committee continued to oversee the implementation of the Bali and the Nairobi Ministerial Decisions on preferential rules of origin for least developed countries (LDCs) (WT/L/917 and WT/L/917/Add.1).

9.       In this context, Members adopted, in April 2022, a "Decision on Preferential Rules of Origin and the Implementation of the Nairobi Ministerial Decision" (G/RO/95). In it, Members underscored the importance of identifying and addressing as appropriate specific challenges that LDCs face, as Members may agree, in complying with preferential rules of origin and origin requirements to effectively use trade preferences. To that end, Members agreed to continue working in the CRO to ensure that the rules or origin used by Members in their non-reciprocal preferences for LDCs are simple and transparent. Such efforts could include identifying and agreeing to best practices and further analysing the utilization of trade preferences. This Decision was also acknowledged in paragraph 8 of the Outcome Document of the 12^th Ministerial Conference.

10.    Members also considered a number of technical notes in 2022. First, a note by the WTO Secretariat on obligations related to the certification of origin and the utilization of trade preferences (G/RO/W/212). Second, two notes prepared by the LDC Group on (i) documentary requirements (G/RO/W/211); and (ii) a preliminary assessment of the new preferential rules of origin of the United Kingdom (G/RO/W/216).

11.    Finally, on 7 April, members participated in a public event organized by the WTO Secretariat at the margins of the formal CRO meeting on "What drives the utilization of trade preferences" (via Zoom, recording available). This second event followed up on a first event held in 2021 on this topic. Speakers explored the different factors which influence the ability and willingness of businesses to utilize trade preferences and shared their experience monitoring the utilization rates of their trade preferences. Speakers included government officials from Canada; Chile; Türkiye; the United States; and the EFTA Secretariat (Iceland; Liechtenstein; Norway; and Switzerland).

12.   Members adopted a more detailed report to the General Council on its work related to preferential rules of origin for LDCs, as required by the Bali and Nairobi Ministerial Decisions (G/RO/97).