RESTRICTED
WORLD TRADE G/RO/M/5
8March 1996
ORGANIZATION(96-0834)
Original: English Committee onRules ofOrigin
MINUTES OFMEETING ON1FEBRUARY 1996
Chairman: Mr.C.Osakwe (Nigeria)
Therepresentative oftheSecretariat informed theCommittee thatinaccordance withthe
established Guidelines forappointment ofofficers theChairman oftheCouncil forTrade inGoods
hadcarried outinformal consultations onaslateofnames forappointment aschairpersons ofsubsidiary
bodies. Todate, theconsultations hadnotyetbeencompleted.
TheChairman proposed, therefore, postponing theitem"Election ofOfficers", which hadbeen
ontheoriginally proposed agenda, circulated inWTO/AIR/241, tothenextmeeting.
TheCommittee soagreed.
Theagenda forthemeeting wasadopted bytheCommittee asfollows:
Page
1. Notifications under Article 5andparagraph 4ofAnnex IIofthe 2
Agreement onRules ofOrigin
2. FirstReport bytheTechnical Committee onRules ofOrigin tothe 3
Committee onRules ofOrigin; Results oftheFirstPhase ofthe
Rules ofOrigin Harmonization Work Programme
3. Second Report bytheTechnical Committee onRules ofOrigin to 6
theCommittee onRules ofOrigin
4. Other Business 6
TheChairman noted that,inaccordance withtheagreement reached atthefirstmeeting of
thisCommittee on4April 1995, theIMF, OECD, UNCTAD, WCO andtheWorld Bank hadbeen
invited tothismeeting. Heproposed thatuntilthecriteria andconditions forobserver status inthe
WTO forinternational intergovernmental organizations areagreed, theCommittee invite these five
organizations toitsnextmeeting aswell.
TheCommittee soagreed.G/RO/M/5
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1. Notifications under Article 5andparagraph 4ofAnnex IIoftheAgreement onRules
ofOrigin (G/RO/N/6)
1.1 TheChairman recalled thatsince thelastmeeting, theSecretariat hadcirculated adocument
informing delegations ofthenotifications received (G/RO/N/6 ).Heinformed theCommittee that
sinceG/RO/N/6wascirculated,sixadditionalMembershadmadenotifications,namely:Korea,Mexico,
Slovenia, Trinidad andTobago, Turkey andTunisia. Todate, 38Members hadmade notifications
ofnon-preferential rulesoforigin and36Members hadmade notifications ofpreferential rulesoforigin.
HeexpressedconcernthatanumberofMembershadnotyetcompliedwiththenotificationrequirements.
Healsourged Members which didnotapply rulesoforigin, non-preferential orpreferential, tonotify
theSecretariat sothatacomplete picture could beobtained.
1.2 TheCommittee tooknoteofthestatement made.
1.3 TheCommittee discussed thematter ofsubstantive issues arising fromnotifications ofnational
rules oforigin which could beraised byMembers andreached thefollowing understanding: onthe
basis ofArticle 4.1oftheAgreement, itwasrecognized thatMembers could express views on
notifications ofnational non-preferential rulesoforigin, andrequest clarifications, asmaybenecessary,
fromother Members onmatters related totheAgreement onRules ofOrigin. Itwas,however, agreed
thatsuchviews, andrequests forclarification, should becommunicated totheSecretariat tenworking
daysinadvance ofthemeeting atwhich theywould beraised.
1.4 Therepresentative ofSwitzerland recalled thatatthemeeting oftheCommittee on16November
1995, hehadraised several technical questions concerning theorigin regimes ofPeruandmade ageneral
comment ontheorigin régime ofMexico. Hehadreceived satisfactory technical answers fromPeru.
Hefound itveryuseful thattheCommittee provided anopportunity toraisequestions onotherMember 's
rules oforigin.
1.5 Therepresentative ofKorea expressed thewishthattheinformation provided toSwitzerland
should alsobemade available tohisdelegation. Therepresentatives ofMexico andPerustated that
theywere prepared toreply toquestions thatwere provided inwriting.
1.6 Therepresentatives ofCanada, theEuropean Communities andSwitzerland expressed concern
withrespect totherecent unilateral change oforigin rulesforcertain textiles andapparel bytheUnited
States. Inthisrespect, therepresentative ofHong Kong saidthatthenewrules represented amajor
departure fromtheoriginal USpractice. Thechanges wereexpected tohaveasevere impact ontextiles
andgarment trade withtheUS. Hong Kong wasdisappointed toseethattheUS,oneoftheactive
participants intheRules ofOrigin Harmonization Work Programme, introduced unilaterally major
changes initsorigin rules; atthesame timework wasinprogress ontheHarmonization Work
Programme which wasintended tobring about auniform setofharmonized rules forapplication to
allnon-preferential trade purposes. Hong Kong wasalsoconcerned about thefactthatthenewUS
origin rules contained ambiguous areas ofinterpretation. Hong Kong hadbeenseeking clarification
fromtheUSonanumber ofissues, andwasstillwaiting toreceive precise information ontherelevant
neworigin-conferring processes. Thishadcreated uncertainty andadverse effects ontrade, given that
thenewrules would beimplemented inafewmonths. Such lackoftransparency wasregrettable,
particularly since work onthenewUSruleshadbeengoing onforalongtime. Hong Kong reserved
allitsrights toprotect itstrading interests. Therepresentative oftheUnited States tooknoteofthe
comments made.G/RO/M/5
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2. First Report bytheTechnical Committee onRules ofOrigin totheCommittee onRules
ofOrigin; Results oftheFirst Phase oftheRules ofOrigin Harmonization Work
Programme (G/RO/2, G/RO/W/9 and10)
2.1 TheChairman noted thattheFirstReport bytheTechnical Committee onRuleofOrigin to
theCommittee onRuleofOrigin (hereafter the"First Report") wascirculated indocument G/RO/2
andtheCommittee hadbegun reviewing thereport atitsmeeting of16November 1995. Furthermore,
asagreed atthatmeeting, hehadsentaletter totheChairman oftheTechnical Committee raising
three issues regarding theHarmonization Work Programme (G/RO/W/9).
2.2 Therepresentative ofArgentina proposed replacing "laeliminación" indefinition 1(f)(ii) in
theSpanish textofAnnex AtotheFirstReport with"sueliminación".
2.3 TheCommittee soagreed.
(a) Legal Status oftheExplanatory Notes
2.4 Asagreed atthemeeting oftheCommittee on16November 1995, theChairman consulted
withMembers onthequestion ofthelegalstatus oftheExplanatory Notes inAnnexes AandBtothe
FirstReport. Following theconsultations, theCommittee agreed thattheExplanatory Notes should
belegally binding. Itwasalsoagreed thattheCommittee should request theTechnical Committee
inBrussels torevisit theExplanatory Notes, onthebasis thattheyaretobelegally binding. The
Committee alsoauthorized theChairman tocommunicate thisdecision totheChairman oftheTechnical
Committee.
2.5 TheChairman emphasised thatthedecision taken bytheCommittee related onlytothelegal
status oftheExplanatory Notes andnottotheirsubstantive content.
2.6 Therepresentative ofMorocco stated thatcertain amendments would probably needtobemade
tothetextoftheExplanatory Notes when thematter wasdiscussed intheTechnical Committee. The
representative ofIndia reserved hisposition onAnnex BtotheFirstReport. Therepresentative of
Venezuela stated thatitwould beimportant fortheTechnical Committee toensure greatest possible
precision andobjectivity inorder toavoid divergent interpretations byMembers ofthelegally binding
Explanatory Notes.
2.7 TheCommittee tooknoteofthestatements made.
(b) Definitions 1(f),2(i)and(ii)ofAnnex AtotheFirstReport
2.8 TheChairman recalled that,atitsmeeting of16November 1995, theCommittee hadestablished
anInformal Working Group toconsider bracketed interpretations andopinions oftheTechnical
Committee onRules ofOrigin andtoforward appropriate recommendations totheCommittee forfinal
consideration anddecision. Under itsterms ofreference, theWorking Group isto(i)consider bracketed
language thatmaybeincluded intheinterpretations andopinions presented bytheTechnical Committee
onRules ofOrigin, and(ii)forthispurpose theWorking Group should include initsconsideration
alltheinformation contained inthedocuments circulated bytheSecretariat oftheTechnical Committee
onRules ofOrigin. Atitsmeeting of16November 1995, theCommittee hadagreed thattheWorking
Group should consider thebracketed language indefinition 1(f)and2(i)and(ii)ofAnnex Atothe
FirstReport oftheTechnical Committee.
2.9 Based onthediscussions intheInformal Working Group, theCommittee agreed asfollows:G/RO/M/5
Page4
onDefinition 1(f)
"The Committee discussed thebracketed language ofdraftdefinition 1(f)concerning goods
wholly obtained inonecountry. There wasagreement todelete thebrackets indefinition 1(f),and
todelete 1(f)(i). There wasalsoagreement torenumber draftdefinition 1(f)(ii) as1(g)andformer
1(g)as1(h). Many delegations supported draftdefinition 1(g); some stated theneedformore time
toconsider thefullscope ofthecontent oftheparagraph. They needed toreferbacktotheircapitals.
Furthermore, theproblem ofparts recovered wasrecognized asbeing different from theproblem of
articles. Consequently, itwasagreed thattheproblem ofpartsshould beurgently firstaddressed at
atechnical level inBrussels. Itwasdecided thattheCommittee should revisit draftdefinition 1(g)
atthenextmeeting. TheCommittee alsoauthorized theChairman tocommunicate theproblem of
parts totheChairman oftheTechnical Committee."
2.10 Therepresentative ofJapan reserved therighttoreconsider thisissuelateronthebasisofresults
oftheharmonization work inthesecond andthirdphases. Therepresentatives ofChile, Colombia
andVenezuela wished toensure thatdraftdefinition 1(g)wasstillopenforfurther consideration. The
representative ofVenezuela alsostated thatthisissuewaslinked totheproblems ofpartstobeconsidered
bytheTechnical Committee inBrussels.
2.11 TheCommittee tooknoteofthestatements made.
onDefinition 2
2.12 "The Committee considered draftdefinition 2ofAnnex AoftheFirstReport extensively.
Members expressed different views ontheissues involved. Following consultations, analternative
drafttextwasformulated asfollows:
"1 (i) forthepurposes ofparagraph 1,theexpression "country" covers thatcountry 's
territorial sea,aswellasthesea-bed andsubsoil beneath thesea-bed.
2. Thegoods described indefinition 1(a)-(h) above, butnotobtained inacountry are
tobeconsidered asbeing wholly obtained:
asregards activities outside theterritorial sea,
(i) asfarasproducts ofsea-fishing andother products taken from theseaare
concerned, inthecountry ofregistration ofavessel orfactory ship, ifthe
activities toobtain them arecarried outonthatvessel orfactory ship;
(ii) asfarasproducts taken from thesea-bed orthesubsoil beneath thesea-bed
areconcerned, inthecountry which hasrights toobtain suchgoods inthat
area.
Explanatory Note
Definition 2(i)includes registration granted toavessel orfactory shipchartered inaccordance
withtheregistration requirements ofthatcountry."
TheCommittee agreed thatfundamental issues were involved which would require further
deliberation andconsultations. TheCommittee alsoagreed thatthealternative textpresented apossible
basis foranagreed definition. Finally, itwasclearly recognized thatthere wasaneed tofocus
principally onpractical issues, dealing exclusively withtheattribution oforigin togoods."G/RO/M/5
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2.13 Therepresentatives ofChile, Japan, PeruandVenezuela reserved theirpositions onthisissue.
Therepresentatives ofPhilippines andThailand wished toensure thattheCommittee hadagreed that
ageneral andabstract definition oftheterm"country" wasnotrequired atthistime, andthatfurther
consideration onthisissue should beguided bythisprinciple.
2.14 TheCommittee tooknoteofthestatements made.
(c) Canadian Proposal
2.15 TheChairmannotedthataCanadianproposalwascirculatedindocumentG/RO/W/10regarding
theAnnex foreseen under Article 9.4oftheAgreement onRules ofOrigin which would contain the
results oftheHarmonization Work Programme.
2.16 Therepresentative ofCanada stated thatthereweretwoissues raised intheproposal; thefirst
being theformat ormethod ofpresenting theproduct-specific rules, theother relating tothegeneral
rules, i.e.thegeneral legal instructions onhowtoapply theproduct-specific rules andother rules
governing specific situations suchasthetreatment ofpackaging andpacking materials andspare parts.
Henoted that,according totheSecond Report bytheTechnical Committee onRules ofOrigin tothe
Committee onRules ofOrigin, anumber ofdelegations hadpresented proposals, some ofwhich were
indifferent formats. Hesuggested thatadecision onthatmatter wasneeded veryquickly. His
preference would bethattheCommittee address arequest totheTechnical Committee thatwork on
product-specific rulesshould proceed onthebasis oftheformat tobeagreed bythisCommittee. He
expressed alsoastrong preference forthesequential approach which setsouttheproduct-specific rules
inascending numerical order bytariff heading orsub-heading.
2.17 Therepresentative ofAustralia stated thatitwaspremature forthisCommittee tobetrying
tosetstrict guidelines fortheTechnical Committee. Hesuggested thattheCommittee consider the
matter afteralltheproposals before theTechnical Committee inBrussels hadbeenfullydiscussed.
Therepresentative ofVenezuela supported thatview.
2.18 Therepresentatives ofColombia andUnited States stated thatitwasveryimportant tohave
thewell-defined format ofthefuture Annex asearly aspossible, andsuggested thattheTechnical
Committee complete itsreview onthisissue attheMarch meeting.
2.19 Therepresentatives ofCanada, Colombia, theEuropean Communities, Hong Kong, Japan,
Korea, Switzerland andUnited States supported thesequential approach contained intheCanadian
proposal. Therepresentative oftheEuropean Communities stated thatfurther discussion wasneeded
before afinaldecision could betaken ontheformat ofpresentation. Therepresentative ofSwitzerland
pointed outthatthesameruleswould appear repeatedly under thesuggested sequential approach. Also,
inhisview, theformat thatwould beannexed totheAgreement maynotnecessarily betransposed
inthesame format intothenational legislation.
2.20 Onthebasisoftheviews expressed theCommittee agreed asfollows: "TheCanadian proposal
waswelcomed asbeing avaluable contribution tothesubject. There wasstrong support forthe
sequential approach inAppendix B-Presentation ofproduct-specific rules. Itwasrecognized that
thiswasanissuethatrequired urgent treatment. Itwasalsoagreed thattheCanadian proposal aswell
astheviews expressed bymembers oftheCommittee should betransmitted totheTechnical Committee
onRules ofOrigin."
2.21 TheCanadian delegate stated thattheissue ofthegeneral rules which wasalsoraised inthe
Canadian proposal needed urgent consideration andthework should startimmediately either inthe
Technical Committee onRules ofOrigin orintheCommittee onRules ofOrigin.G/RO/M/5
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2.22 TheChairman recalled thatintheletter thathehadsenttotheChairman oftheTechnical
Committee, theTechnical Committee hadbeenrequested toforward, aspartofitsnextreport onthe
Harmonisation Work Programme, ageneral format establishing theoverall architectural design ofan
annex. TheCanadian proposal would beconsidered inthatcontext.
2.23 Therepresentative ofHong Kong stated thatanyfinaldecision inthismatter should onlybe
taken intheCommittee onRules ofOrigin.
3. Second Report bytheTechnical Committee onRules ofOrigin totheCommittee onRules
ofOrigin
3.1 TheChairman noted thatinaccordance withtheparagraph 2(c)(ii) ofArticle 9oftheAgreement
onRules Origin, theTechnical Committee onRules ofOrigin hadsubmitted theSecond Report to
theCommittee onRules ofOrigin. TheReport pertained totheinitial workoftheTechnical Committee
onRules ofOrigin concerning theuseofchange intariff heading orsubheading, fortheelaboration
ofrulesoforigin onthebasisofthecriterion ofsubstantial transformation ofgoods. TheReport was
circulated bythesecretariat indocument G/RO/4. TheReport informed theCommittee onRules of
Origin ofthestatus ofcontributions received inpreparation fortheMarch session oftheTechnical
Committee.Todate,fiveMembershadpartiallyorfullycompletedtheworkwithintheiradministrations
andhassentproposals. Itindicated alsothataprovisional detailed planofworkforthenexttwosessions
oftheTechnical Committee hadbeendrawn up.
3.2 TheCommittee tooknoteoftheReport andtheinformation provided therein.
4. Other Business
DateoftheNext Meeting
4.1 TheChairman stated thatthedateofthenextmeeting should becoordinated withthedate
ofthenextmeeting oftheTechnical Committee anddecided inconsultation withdelegations.
4.2 TheCommittee soagreed.