MJIEL Vol 7 Issue 1 2010 - Article 2

ABSTRACT: Rules of origin are used in preferential trade arrangements to ensure that goods from countries which are not members of the preferential arrangements do not pass through a partner-country to benefit from the tariff concessions in the preferential arrangements. Without them, imports from the rest of the world will seek entry through the country with the lowest tariff and consequently, make trade preferences of little or no value. This paper examines the impact of the current EU rules of origin on the over three-decade preferential trade relationship between the EU and African countries. It finds that the strictness of the rules of origin have resulted in the under-utilisation of preferences by African countries, notwithstanding the non-reciprocity requirement and very low duty rates that is characteristic of the relationship. It takes the position that except the current origin rules are simplified, African countries may never be able to benefit from even the unprecedented market access offer of the EU in the context of the economic partnership agreements, largely still being negotiated between the EU and many African countries and regions. This paper is a contribution to efforts at simplifying the current rules of origin. The paper engages in some comparative analysis between the change in tariff heading criterion and the value added criterion of determining originating status in arriving at suggestions for reforms of the current rules of origin following a single-across-the-board approach, while also allowing room for ‘additional or different’ conditions for sensitive products like agricultural and fisheries products. The paper strongly suggests a single-across-the-board criterion based on a change-in-tariff heading as a development-friendly option for any such reform.

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