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Francis Osiemo Omesa  Rules of Origin in COMESA-SADC-EAC: The Impact of International Harmonization of Rules of Origin on ...
Overview   The Tripartite Free Trade Agreement (TFTA).   What are Rules of Origin (RoO)?   Rules of determining origin....
The TFTA           © Francis Osiemo, Stellenbosch University                             2012
Definition of RoO   Rules to determine the country of origin of a    product.                  © Francis Osiemo, Stellenb...
Definition of RoO            © Francis Osiemo, Stellenbosch University                             2012
Definition of RoO   Classified into : - preferential; and                    : - non-preferential.                   © Fr...
Definition of RoO: Preferential RoO   Used in Free Trade Agreements (FTA) to    determine which goods qualify for prefere...
Definition of RoO: Preferential RoO   An FTA is an agreement by a set of countries to    eliminate trade restrictions in ...
Definition of RoO: Preferential RoO            © Francis Osiemo, Stellenbosch University                             2012
Definition of RoO: Preferential RoO            © Francis Osiemo, Stellenbosch University                             2012
Definition of RoO: Preferential RoO            © Francis Osiemo, Stellenbosch University                             2012
Definition of RoO: Non-PreferentialRoO   Allocate origin for purposes of trade    statistics, trade restrictions or marke...
Definition of RoO   Preferential and non-preferential RoO are    further sub-categorised into product specific    RoO and...
Rules of determining origin   Goods are either: - wholly produced ; or                         : - sufficiently processed...
Rules of Determining Origin: Whollyproduced goods   Goods cultivated, extracted or grown in    countries eligible for pre...
Rules of determining origin: Whollyproduced goods             © Francis Osiemo, Stellenbosch University                   ...
Rules of determining origin: Whollyproduced             © Francis Osiemo, Stellenbosch University                         ...
Rules of determining origin: WhollyProduced goods             © Francis Osiemo, Stellenbosch University                   ...
Rules of determining origin:Substantially transformed goods   Goods produced with inputs from more than    one country.  ...
Rules of determining origin:Substantially transformed goods            © Francis Osiemo, Stellenbosch University          ...
Rules of determining origin: ProductSpecific RoO   The four rules:-     : - Regional (Local) Value Contents (RVC);     : ...
Rules of determining origin: ProductSpecific RoO.   Regional (Local) Value Contents (RVC): A    good originates from the ...
Rules of determining origin: ProductSpecific RoO.   Specific Production Process (SP): determines    origin using specifie...
Rules of determining origin: ProductSpecific RoO   Change in Tariff Classification (CTH): confers    origin depending on ...
Rules of determining origin: ProductSpecific RoO   Value Added Percentage (VA): the origin of a    good is the country it...
Rules of determining origin: RegimeWide RoO   The 3 principles: -         : - Cumulation;         : - Tolerance or de min...
Rules of determining origin: RegimeWide RoO   Cumulation: Allows importation of goods from    specific country or region(...
Rules of determining origin: Regimewide RoO   Tolerance or de minis rule: allows for the use    of a percentage of non-or...
Rules of determining origin: Regimewide RoO   Absorption principle: Additional processing or    transformation of a produ...
Rules of origin: Regime wide RoO   NB:     The regime wide RoO allow for leniency in     the application of product speci...
COMESA-EAC-SADC RoO:COMESA   The origin of goods in COMESA are    determined by:-      The concept of wholly produced go...
COMESA-EAC-SADC RoO: EAC   The origin of goods in EAC are determined    by:-      The concept of wholly produced goods; ...
COMESA-EAC-SADC RoO: SADC   The origin of goods in SADC are determined    by:-      The concept of wholly produced goods...
International Harmonization of RoO   The harmonization of non- preferential RoO    is ongoing. The main instrument is the...
TFTA RoO   Annex 4 of TFTA provides that origin of    goods is determined by:-      The concept of wholly produced goods...
Conclusion   The RoO regime in COMESA and EAC differ    from RoO in SADC but TFTA RoO regime is    similar to COMESA and ...
Conclusion   International harmonization has minimal    impact on TFTA RoO as it focuses on non-    preferential RoO     ...
Conclusion   There is need for further studies on    international harmonization of preferential    RoO.                 ...
Conclusion   Solutions for possible conflict with SADC’s    RoO?                  © Francis Osiemo, Stellenbosch Universi...
Conclusion   Make the RoO in TFTA more protective of    local industries.                 © Francis Osiemo, Stellenbosch ...
Conclusion             © Francis Osiemo, Stellenbosch University                              2012
© Francis Osiemo, Stellenbosch University                 2012
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Rules of Origin in the Tripartite Free Trade Agreement

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Rules of Origin in the Tripartite Free Trade Agreement

  1. 1. Francis Osiemo Omesa Rules of Origin in COMESA-SADC-EAC: The Impact of International Harmonization of Rules of Origin on the Tripartite Free Trade Agreement © Francis Osiemo, Stellenbosch University 2012
  2. 2. Overview The Tripartite Free Trade Agreement (TFTA). What are Rules of Origin (RoO)? Rules of determining origin. COMESA-EAC-SADC RoO. International Harmonization of RoO. TFTA RoO. Conclusion. © Francis Osiemo, Stellenbosch University 2012
  3. 3. The TFTA © Francis Osiemo, Stellenbosch University 2012
  4. 4. Definition of RoO Rules to determine the country of origin of a product. © Francis Osiemo, Stellenbosch University 2012
  5. 5. Definition of RoO © Francis Osiemo, Stellenbosch University 2012
  6. 6. Definition of RoO Classified into : - preferential; and : - non-preferential. © Francis Osiemo, Stellenbosch University Press 2012
  7. 7. Definition of RoO: Preferential RoO Used in Free Trade Agreements (FTA) to determine which goods qualify for preferential treatment. © Francis Osiemo, Stellenbosch University 2012
  8. 8. Definition of RoO: Preferential RoO An FTA is an agreement by a set of countries to eliminate trade restrictions in intra-member trade: (Article XXIV, GATT). © Francis Osiemo, Stellenbosch University 2012
  9. 9. Definition of RoO: Preferential RoO © Francis Osiemo, Stellenbosch University 2012
  10. 10. Definition of RoO: Preferential RoO © Francis Osiemo, Stellenbosch University 2012
  11. 11. Definition of RoO: Preferential RoO © Francis Osiemo, Stellenbosch University 2012
  12. 12. Definition of RoO: Non-PreferentialRoO Allocate origin for purposes of trade statistics, trade restrictions or market access restrictions. © Francis Osiemo, Stellenbosch University 2012
  13. 13. Definition of RoO Preferential and non-preferential RoO are further sub-categorised into product specific RoO and regime wide RoO. © Francis Osiemo, Stellenbosch University 2012
  14. 14. Rules of determining origin Goods are either: - wholly produced ; or : - sufficiently processed. © Francis Osiemo, Stellenbosch University 2012
  15. 15. Rules of Determining Origin: Whollyproduced goods Goods cultivated, extracted or grown in countries eligible for preferential treatment. © Francis Osiemo, Stellenbosch University 2012
  16. 16. Rules of determining origin: Whollyproduced goods © Francis Osiemo, Stellenbosch University 2012
  17. 17. Rules of determining origin: Whollyproduced © Francis Osiemo, Stellenbosch University 2012
  18. 18. Rules of determining origin: WhollyProduced goods © Francis Osiemo, Stellenbosch University 2012
  19. 19. Rules of determining origin:Substantially transformed goods Goods produced with inputs from more than one country. © Francis Osiemo, Stellenbosch University 2012
  20. 20. Rules of determining origin:Substantially transformed goods © Francis Osiemo, Stellenbosch University 2012
  21. 21. Rules of determining origin: ProductSpecific RoO The four rules:- : - Regional (Local) Value Contents (RVC); : - Specific Production Process (SP); : - Change in Tariff Classification (CTH); and : - Value Added Percentage (VA) © Francis Osiemo, Stellenbosch University 2012
  22. 22. Rules of determining origin: ProductSpecific RoO. Regional (Local) Value Contents (RVC): A good originates from the country where it underwent the last substantial transformation into a new product. © Francis Osiemo, Stellenbosch University 2012
  23. 23. Rules of determining origin: ProductSpecific RoO. Specific Production Process (SP): determines origin using specified process or technical tests. © Francis Osiemo, Stellenbosch University 2012
  24. 24. Rules of determining origin: ProductSpecific RoO Change in Tariff Classification (CTH): confers origin depending on the change in tariff classification of the Harmonized System (HS) of Tariff Nomenclature. © Francis Osiemo, Stellenbosch University 2012
  25. 25. Rules of determining origin: ProductSpecific RoO Value Added Percentage (VA): the origin of a good is the country it underwent the highest value addition. © Francis Osiemo, Stellenbosch University 2012
  26. 26. Rules of determining origin: RegimeWide RoO The 3 principles: - : - Cumulation; : - Tolerance or de minis rule; and : - Absorption principle © Francis Osiemo, Stellenbosch University 2012
  27. 27. Rules of determining origin: RegimeWide RoO Cumulation: Allows importation of goods from specific country or region(s) without affecting its origin. Types of cumulation:-  Bilateral: imports from a partner country.  Diagonal: imports from a particular region.  Full: Any processing activity from within a country of a regional grouping. © Francis Osiemo, Stellenbosch University 2012
  28. 28. Rules of determining origin: Regimewide RoO Tolerance or de minis rule: allows for the use of a percentage of non-originating material without affecting the final product. © Francis Osiemo, Stellenbosch University 2012
  29. 29. Rules of determining origin: Regimewide RoO Absorption principle: Additional processing or transformation of a product qualifying for preferential treatment does not affect its origin. © Francis Osiemo, Stellenbosch University 2012
  30. 30. Rules of origin: Regime wide RoO NB: The regime wide RoO allow for leniency in the application of product specific RoO. © Francis Osiemo, Stellenbosch University 2012
  31. 31. COMESA-EAC-SADC RoO:COMESA The origin of goods in COMESA are determined by:-  The concept of wholly produced goods;  CTH Rule;  VA Rule; and  Full cumulation. © Francis Osiemo, Stellenbosch University 2012
  32. 32. COMESA-EAC-SADC RoO: EAC The origin of goods in EAC are determined by:-  The concept of wholly produced goods;  VA Rule;  CTH Rule; and  Full cumulation. © Francis Osiemo, Stellenbosch University 2012
  33. 33. COMESA-EAC-SADC RoO: SADC The origin of goods in SADC are determined by:-  The concept of wholly produced goods;  VA Rule;  CTH Rule;  SP Rule;  Full cumulation; and  Tolerance/ de minis rule. © Francis Osiemo, Stellenbosch University 2012
  34. 34. International Harmonization of RoO The harmonization of non- preferential RoO is ongoing. The main instrument is the WTO Agreement on RoO Previous attempts to harmonize preferential RoO have been unsuccessful. © Francis Osiemo, Stellenbosch University 2012
  35. 35. TFTA RoO Annex 4 of TFTA provides that origin of goods is determined by:-  The concept of wholly produced goods;  CTH Rule;  Principle of territoriality(new); and  Full cumulation. © Francis Osiemo, Stellenbosch University 2012
  36. 36. Conclusion The RoO regime in COMESA and EAC differ from RoO in SADC but TFTA RoO regime is similar to COMESA and EAC. © Francis Osiemo, Stellenbosch University 2012
  37. 37. Conclusion International harmonization has minimal impact on TFTA RoO as it focuses on non- preferential RoO © Francis Osiemo, Stellenbosch University 2012
  38. 38. Conclusion There is need for further studies on international harmonization of preferential RoO. © Francis Osiemo, Stellenbosch University 2012
  39. 39. Conclusion Solutions for possible conflict with SADC’s RoO? © Francis Osiemo, Stellenbosch University 2012
  40. 40. Conclusion Make the RoO in TFTA more protective of local industries. © Francis Osiemo, Stellenbosch University 2012
  41. 41. Conclusion © Francis Osiemo, Stellenbosch University 2012
  42. 42. © Francis Osiemo, Stellenbosch University 2012

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