Title: Standards and Rules of Origin in East Asia: introducing the key issues
1Standards 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
2Overview
- Rules of Origin
- Definition
- Approaches to ROO
- Impact on ASEAN of ROO
- Standards
- Standards as a trade issue
- Multilateral and Regional Approaches
3Rules of Origin Defining Origin
- Wholly Obtained
- Substantial Transformation
- Change of Tariff Classification (CTC)
- Value Added
- Specific Manufacturing Processes
4Rules of Origin Features
- Cumulation (bilateral, diagonal, full)
- Tolerance or de minimis
- Absorption or Roll-Up Principle
- Duty Drawback
5Measuring 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
6Rules 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
7ASEAN Rules of Origin
- AFTA
- Value Added (import content 60 per cent)
- Selected Specific Manufacturing Process
- Bilateral Cumulation
- Absorption
8ASEAN Experience
- Administrative compliance costs
- Cumbersome paperwork
- Weak capacity for verification
- Difficult for New ASEAN Members (CLMV)
- Lack of certainty
9Why standards?
- The real 21st Century issues are standards and
rules in areas such as safety, health or consumer
protection - Pascal Lamy September 9, 2004
10Standards 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
11Total 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
12WTO Principles
- Most Favoured Nation
- National Treatment
- Technical Regulations (as far as possible) based
on international standards - Not create unnecessary obstacles to trade
- Transparent process
13Standards 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
14The Technical Infrastructure of Conformity
Assessment
Market
Market
Certification
SDoc
Metrology
Accreditation
Metrology
And/Or
Testing
Inspection
Product
Product
Supplier
Supplier
15Traditional 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
16ASEAN 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)
17Mutual 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)
18Constraints 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
19Summary
- Rules of Origin
- Keep it simple and transparent with low
compliance costs - Standards
- Use regional agreements to support effective
implementation of multilateral agreements