Rules of Origin A Necessary Evil

C Satapathy IN the course of the Uruguay Round Multilateral Trade Negotiations, full agreement was reached at least on two non- tariff measures, one of them being the Rules of Origin. Initially there was considerable disagreement over whether Rules of Origin were necessary at all and what they should cover. Finally it was agreed to formulate some general principles pending formulation of harmonised Rules of Origin and to apply them to non-preferen- tial trade. Besides, an understanding was reached to apply the basic principles to preferential trade also. It was recognised that harmonisation of Rules of Origin would be a highly technical task, accomplishment of which could not fit into the time frame of the Uruguay Round. It was, therefore, agreed to embark on a three- year work programme after the conclusion of the Uruguay RoundConsidering the fact that the customs co-operation council, since renamed as the World Customs Organisation (WCO), had earlier evolved a harmonised system of tariff classification of internationally traded goods, it was also agreed to enlist its co-operation for evolving a set of harmonised Rules of Origin, These decisions were built into the Agreement on Rules of Origin (ARO) which is one of the multilateral agreements on trade in goods forming part of the Annex IA to the WTO Agreement [WTO 1997]. Two committees were established by the ARO the Committee on Rules of Origin (CRO) at the headquarters of WTO at Geneva and the Technical Committee on Rules of Origin (TCRO) at the headquarters of WCO at Brussels. All WTO members are members of these two committees. International organisations like UN. ILO, ICC, etc, as well as non- member countries like China are observers to these committees without voting rights. All decisions of these committees are to be based on consensus only.