Towards Inclusive and Sustainable Rules of Origin

Regional trade agreements (RTAs) and particularly deep integration agreements concluded in recent years have increasingly allowed firms to operate within a networked global economy. On the other hand, however, RTAs also have also created limitations, not least through the use of strict rules of origin (RoO) which disincentivise the use of cheaper parts and materials from countries outside a particular trading block. By limiting the ability of firms to take part in value chains spreading across various RTAs, the diversity and complexity of RoO can therefore limit efficiency gains opportunities offered by globalisation. Strict and diverse sets of rules of origin may also prevent developing countries including least developed countries from fully benefiting from the enhanced market access granted through preferential schemes or negotiated under their RTAs. A possible solution could be pushing for the simplification and harmonisation of RoO, seizing on the momentum the issue has gained within the WTO after Bali and Nairobi as well as through the negotiations under way in the context of mega-regional agreements. The session provided an overview of the most pressing issues concerning RoO with regard to their design, implementation, purpose, restrictiveness, and utilisation and explored the most effective way to go in promoting the harmonisation and simplification of inclusive RoO, to be achieved through a cumulation scheme. This session was organised under the RTA Exchange, and was moderated by Christophe Bellmann, Senior Resident Research Associate, ICTSD.

The biennial Trade and Sustainable Development Symposium (TSDS), held alongside the WTO ministerial conference for over a decade, is the leading multi-stakeholder platform for intellectual enquiry and dialogue on sustainable development and the global trade and investment system. The TSDS – organised by ICTSD in partnership with the Centro de Implementación de Políticas Públicas para la Equidad y el Crecimiento (CIPPEC), the Inter–American Development Bank (BID), Consejo Argentino para las Relaciones Internacionales (CARI) and Bolsa de Cereales with the support and collaboration of the Ministerio de Producción, Presidencia de la Nación, Argentina – acts as an inclusive platform outside of the WTO negotiating setting for sharing ideas, engaging in dialogue, and influencing trade policy negotiations. Drawing in participants from government, business and civil society, the Symposium helps to maintain and elaborate a global vision of sustainable development in trade and investment policymaking.