Jointly implemented by the International Centre for Trade and Sustainable Development (ICTSD) and the Inter-American Development Bank (IDB), the RTA Exchange works in the interest of the sharing of ideas, experiences to date and best practices to harvest innovation from RTAs and leverage lessons learned towards progress at the multilateral level. Access to preferential import tariffs under a free trade agreement (FTA) is governed by clearly defined rules of origin designed to prevent non-members from enjoying the benefits. However, a company’s ability to trade under preference even when it meets these rules, is subject to a number of other conditions and requirements. In particular, the documentary evidence required to demonstrate compliance with rules of origin can create an unintended second layer of protection and act as a non-tariff barrier to trade. This paper examines the current rules of origin requirement and how it applies to global value chains. It puts forth several recommendations for improvements in implementation.
Written by Anna Jerzewska