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Standards and Rules of Origin in East Asia: introducing the key issues

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... Definition Approaches to ROO Impact on ASEAN of ROO Standards Standards as a trade issue Multilateral and Regional Approaches Rules of Origin: ... – PowerPoint PPT presentation

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Title: Standards and Rules of Origin in East Asia: introducing the key issues


1
Standards and Rules of Origin in East Asia
introducing the key issues
  • Robert Kirk
  • rkirk_at_tsginc.com
  • World Bank-BFA Workshop
  • Hainan, China, June 26-27,2006

2
Overview
  • Rules of Origin
  • Definition
  • Approaches to ROO
  • Impact on ASEAN of ROO
  • Standards
  • Standards as a trade issue
  • Multilateral and Regional Approaches

3
Rules of Origin Defining Origin
  • Wholly Obtained
  • Substantial Transformation
  • Change of Tariff Classification (CTC)
  • Value Added
  • Specific Manufacturing Processes

4
Rules of Origin Features
  • Cumulation (bilateral, diagonal, full)
  • Tolerance or de minimis
  • Absorption or Roll-Up Principle
  • Duty Drawback

5
Measuring Restrictiveness of ROO
  • Recent work follows Estevadeordal (2000)
  • Index of Restrictiveness
  • CTC at HS 8-10 digit
  • CTC at HS 6 digit
  • CTC at HS 6 digit plus value content
  • CTC at HS 4 digit
  • CTC at HS 4 digit plus value content
  • CTC at HS 2 digit level
  • CTC at the HS 2 digit and Technical Requirements

6
Rules of Origin
  • EU- Pan Euro/GSP/Cotonou
  • CTC (4,2) VA (import content 50-30), Tech
  • Cumulation (bilateral, diagonal, full Cotonou
  • Tolerance (10, 10, 15 Cotonou), Absorption
  • NAFTA
  • CTC (2,4,6),VA (import content 50-40),Tech
  • Cumulation, Tolerance (7), Absorption

7
ASEAN Rules of Origin
  • AFTA
  • Value Added (import content 60 per cent)
  • Selected Specific Manufacturing Process
  • Bilateral Cumulation
  • Absorption

8
ASEAN Experience
  • Administrative compliance costs
  • Cumbersome paperwork
  • Weak capacity for verification
  • Difficult for New ASEAN Members (CLMV)
  • Lack of certainty

9
Why standards?
  • The real 21st Century issues are standards and
    rules in areas such as safety, health or consumer
    protection
  • Pascal Lamy September 9, 2004

10
Standards and International Trade
  • Decline in tariffs
  • Increase in standards and technical
    regulations-potential to use as a tool of
    protection
  • Voluntary standards and mandatory technical
    regulations
  • Contrast with tariffs-technical regulations serve
    a desirable objective and cannot be negotiated
    away
  • WTO TBT and SPS Agreements

11
Total number of TBT notifications since 1995
794
794
669
648
638
611
581
538
460
365
Source WTO (2005a) Tenth Annual Review of the
Implementation and Operation of the TBT Agreement
G/TBT/15
12
WTO Principles
  • Most Favoured Nation
  • National Treatment
  • Technical Regulations (as far as possible) based
    on international standards
  • Not create unnecessary obstacles to trade
  • Transparent process

13
Standards Institutions and Policy Issues
  • Establishing the standard (technical experts)
  • Ensuring goods and services meet the standard
    (conformity assessment)
  • Ensuring conformity assessment functions well
    accreditation and recognition

14
The Technical Infrastructure of Conformity
Assessment
Market
Market
Certification
SDoc
Metrology
Accreditation
Metrology
And/Or
Testing
Inspection
Product
Product
Supplier
Supplier
15
Traditional and New Approaches to Standardization
  • Traditional Approach
  • Weights and Measures and Health Safety
  • Static Structure
  • Domestic Focus
  • Public Sector Activity
  • Regulatory Focus
  • New Approach
  • National and International Focus
  • Flexible structure
  • Public-Private Activity
  • International Recognition
  • Voluntary standards

16
ASEAN and Standards
  • ASEAN Consultative Committee on Standards and
    Quality (ACCSQ)
  • Institutional Structure (12 sub committees)
  • Goal of One Standard, One Test, Accepted
    Everywhere
  • Upgrade to international standards
  • AFTA Council identified 20 products as priorities
    for standards harmonization (1997-2005)
  • Main Focus now on Mutual Recognition Agreements
    (MRA)

17
Mutual Recognition Agreements
  • Limited in Scope product group approach
  • The Pre-Conditions for equivalence between
    national systems
  • Automaticity What is recognized at the
    individual level and what are the entry
    requirements (pre-market approval)

18
Constraints within ASEAN
  • Inadequate legal framework
  • Ineffective control of compliance
  • Deficient institutional coordination
  • Lack of awareness on quality issues
  • No accreditation infrastructure
  • Weak WTO Enquiry points

19
Summary
  • Rules of Origin
  • Keep it simple and transparent with low
    compliance costs
  • Standards
  • Use regional agreements to support effective
    implementation of multilateral agreements
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