Building Inclusive Rules of Origin in the 21st Century

November 21, 2016

This is an overview report of the Rules of Origin Dialogue held November 21-22, 2016. The report report provides an analysis and evaluation of rules of origin in the context of RTAs and the multilateral system. The number of bilateral and plurilateral trade agreements, and preferential trading schemes has increased dramatically over the past two decades. These agreements effectively enable today’s international production-sharing possibilities and are at the centre of developments in supply chains and the fragmentation of value-addition. The rules of origin contained within RTAs therefore have significant implications in the way firms choose the locations in which they set up segments of their production. Consequently, strict RoO can result in economically sub-optimal functioning of value chains by disincentivising the use of cheaper parts and materials from third countries. Strict and diverse RoO also affect the ability of developing countries – especially the least-developed countries – to fully benefit from the enhanced market access granted through RTAs.

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