Rules of origin (ROO) define the amount of production and input sourcing that must occur within trade agreement countries to receive tariff preferences. The TPP seeks to harmonize the disjointed ROO across 32 existing trade deals among its 12 member countries. Canada's ROO negotiating approach is heavily influenced by its dependence on the US as a major supplier and output market. While the TPP will make ROO more restrictive for agriculture, textiles, and apparel, it will allow more non-agricultural input sourcing from outside the TPP region. The TPP's ROO rationalization could help streamline rules, but greater harmonization through WTO efforts would be preferable. Canada's competitiveness in vehicle production and attracting

1. Edited by: Stephen Tapp, Ari Van Assche and Robert Wolfe
Chapter 16 in Redesigning Canadian Trade Policies for New Global Realities
Navigating the Maze:
Canada, Rules of Origin and the TPP
Sandy Moroz (formerly Government of Canada)

2. In this chapter
• Rules of origin (ROO) define how much production and
input sourcing of a good must occur within the countries
of a trade deal for producers to benefit from tariff
preferences.
• Regional trade deals can weave together a disjointed web
of rules under separate agreements into a common rule
book
There are 32 trade deals among subsets of the 12 TPP countries.

3. American influence
• Canada’s dependence on the US, which is both a
major supplier and output market, remains the
main factor in our negotiating approach to ROO.

4. TPP’s implications for rules of origin
• For agricultural products, textiles and apparel, the
most restrictive ROO in existing trade deals
involving TPP signatories were used.
• For most non-agricultural products, the TPP would
allow producers to import more inputs from
outside the TPP area.

5. TPP’s implications for rules of origin
• TPP’s rationalization of ROO could help, but WTO efforts
to harmonize preferential rules would be better.
• Canada’s ability to keep vehicle production and attract
new investment will mainly depend of competitiveness
factors (productivity, regulations, infrastructure, and
value of the Canadian dollar) not TPP rules.

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7. Find more research at:
irpp.org/research/trade