RESTRICTED
WORLD TRADE G/RO/M/7
4October 1996
ORGANIZATION(96-4026)
Committee onRules ofOrigin
MINUTES OFMEETING ON13SEPTEMBER 1996
Chairman: Mr.C.Osakwe (Nigeria)
Theagenda proposed forthemeeting, circulated inWTO/AIR/406, wasadopted bythe
Committee asfollows:
Page
1. Request oftheInternational Textiles andClothing Bureau (ITCB) for 2
observer status intheCommittee
2. Report oftheCommittee onRules ofOrigin totheCouncil forTrade 3
inGoods (G/RO/W/16)
3. Origin ofgoods obtained orproduced onvessels, factory ships, 4
structures andinstallations outside acountry (G/RO/2, G/RO/M/6,
paragraphs 2.14-2.16)
4. Fourth Report bytheTechnical Committee onRules ofOrigin tothe 5
Committee onRules ofOrigin (G/RO/6)
5. Proposal bytheUnited States pursuant toArticle 9.3(a) ofthe 6
Agreement onRules ofOrigin (G/RO/W/15)
6. Notifications under Article 5andparagraph 4ofAnnex IIofthe 6
Agreement onRules ofOrigin (G/RO/N/10 and11,
G/RO/M/6, paragraphs 5.2-5.4)
7. Update oftheIntegrated Negotiating TextfortheHarmonization 7
Work Programme (G/RO/W/13, G/RO/W/13/Rev.1)
8. Other Business 8
(i) Meaning oftheword "obtained" indefinition 1(i)of 8
Annex A
(ii) Harmonization ofnon-preferential rules oforigin 8
(iii) Dateofnextmeeting 9G/RO/M/7
Page2
1. Request oftheInternational Textiles andClothing Bureau (ITCB) forobserver status in
theCommittee
1.1 TheChairman drew attention tothefactthattheGeneral Council, atitsmeeting of18July,
hadadopted guidelines forobserver status forinternational intergovernmental organizations (reproduced
asAnnex 3toWT/L/161). Healsoinformed theCommittee thathehadreceived arequest fromthe
International Textiles andClothing Bureau (ITCB) toattend asanobserver themeetings ofthis
Committee. Henoted thattheITCB wasanintergovernmental organization ofdeveloping countries
engaged ininternational tradeintextiles andclothing. Italready hadobserver status intheWTO Council
forTrade inGoods andtheCommittee onMarket Access. Taking these factsintoaccount, itseemed
clearthattherequest fromtheITCB forobserver status metthecriteria setoutinparagraph 4ofthe
Guidelines forObserver Status forInternational Intergovernmental Organizations. TheChairman
proposed thattheCommittee grant observer status totheITCB.
1.2 Therepresentatives ofCanada, theEuropean Communities, Switzerland andtheUnited States
stated thattheywerenotinaposition totakeafinaldecision onthisrequest andreserved theirpositions
onthisissue.
1.3 Therepresentative ofNorway stated thatinhisview, theITCB mettherequirements forbeing
granted observer status. Itwasaninternational intergovernmental organization which hadakeeninterest
inthematters discussed inthisCommittee, andhewelcomed itasobserver.
1.4 Therepresentative ofColombia, speaking alsoasChairman oftheCouncil ofRepresentatives
oftheITCB, expressed surprise attheposition expressed bythedelegations ofCanada, theEC,
Switzerland andtheUnited States. Hefeltthattheremight bealackofsufficient accurate information
onthesideofthesedelegations asconcerns thelegalnature, objectives, purpose andwork oftheITCB.
TheITCB asaninstitution hadalegitimate interest infollowing thework oftheCommittee, aninterest
which wasareasonable follow-up totheTextiles Agreement achieved bytheWTO. Ifthere was
something thatwent beyond asimple lackofinformation, including possible political factors, light
needed tobeshedonallthefactors atplay.
1.5 Therepresentative ofIndia joined Colombia inexpressing hissurprise atthereservations of
some delegations onthequestion ofthegranting ofobservership status totheITCB. Hepointed out
thattheITCB fulfilled thecriteria handed down bytheGeneral Council forgranting ofobservership
invarious bodies. Without justified reasons observer status could notbedenied todeserving
organizations.Hisdelegationwouldnotbeinapositiontoacceptthegrantingofpermanentobservership
toanyother body inthisCommittee, including those organizations which hadalready beengranted
observer status onanadhocbasis, untilthisissuewasresolved, either through informal consultations
ordiscussion intheGeneral Council.
1.6 Therepresentative ofHong Kong joined thetwospeakers (India andColombia) andpointed
outthattheissuewasamatter which called foraverysimple decision tobemade atthepresent meeting,
andthatinformal consultations would notbeneeded. Hereferred toparagraph 4ofAnnex 3todocument
WT/L/161, which provided thatrequests forobserver status should beconsidered onacase-by-case
basis bytheWTO body towhich sucharequest wasaddressed, taking intoaccount sixfactors: the
nature ofmajor work oftheorganization concerned, thenature ofitsmembership, thenumber ofWTO
Members intheorganization, reciprocity withrespect toaccess toproceedings, documents, andpast
associations. Hewould begrateful todelegations whowerenotabletodecide presently iftheywould
explain theirposition inthelightofthese factors. Heemphasized thattheITCB should beaccorded
treatment equal tothataccorded toother international intergovernmental organizations.G/RO/M/7
Page3
1.7 Therepresentative ofPakistan stated thathewasshocked overtheposition taken bysome
delegations asregards therequest bytheITCB forobserver status. Hisdelegation extended its
unqualified support totherequest. Inhisview, theITCB constituted animportant intergovernmental
entity looking aftertheinterests ofthetextile-exporting countries. Hebelieved thattheITCB adequately
metthecriteria laiddown forthegranting ofobserver status.
1.8 Therepresentative ofThailand, onbehalf oftheASEAN Members, stated thatoneofthereasons
thatThailand hadalways beenproud tobeassociated andaffiliated withtheWTO wasbecause ofthe
open andtransparent manner inwhich thatOrganization operated. ItwasafactthattheITCB had
observer status intheCouncil forTrade inGoods andtheCommittee onMarket Access, andhadalways
enjoyed averyclose relationship withGATT, whose representative regularly participated inallITCB
meetings. InalloftheITCB'scouncil meetings, observers suchastheWTO, UNCTAD andITC
werealways represented. Hehoped thatsympathetic andfavourable consideration would beaccorded
totheITCB request forobserver status bytheCommittee.
1.9 Therepresentative ofMexico shared what hadbeensaidbytheColombian delegation, and
byother members oftheITCB. Itwasalsoquite clearthatthework andinterests oftheITCB were
veryclosely linked withrulesoforigin. Hehoped thatthefourdelegations whowerenotinaposition
totakeadecision atthepresent meeting would beabletotakeapositive decision assoonaspossible.
Ifthatwere notthecase, thisissue would continue taking uptheCommittee 'stimewhich could be
better usedtodealwithsubstance relating totheCommittee 'swork.
1.10 Therepresentatives ofArgentina, Japan, Korea, PeruandVenezuela supported therequest
bytheITCB forobserver status.
1.11 TheChairman noted thattheCommittee hadnotreached aconsensus onthisissueandproposed
thattheCommittee revert tothisagenda item, aswellastheissueofobserver status oftheIMF, OECD,
UNCTAD, WCO andWorld Bank, atitsnextmeeting. Heintended toholdinformal consultations
withdelegations whohadexpressed aninterest inthismatter.
1.12 TheCommittee soagreed. Pending theoutcome oftheinformal consultations, theCommittee
withdrew theadhocinvitation extended tothefiveinternational intergovernmental organizations to
attend thepresent meeting.
2. Report oftheCommittee onRules ofOrigin totheCouncil forTrade inGoods
(G/RO/W/16)
2.1 TheChairmannotedthatthetextofthedraftreporthadbeencirculatedindocumentG/RO/W/16.
2.2 BasedonconsultationstheChairmanhadheldwithMembersconcerningthisissue,theCommittee
agreed asfollows:
"The Committee recalled thatatitsmeeting of10May1996, ithadmandated the
Chairman toproduce adraftreport totheCouncil forTrade inGoods foritsconsideration.
Inthisconnection, itnoted thedraftcirculated bytheChairman indocument G/RO/W/16,
following extensive informal consultations. TheCommittee further tooknoteofthestatus
ofinformal consultations onthedraftasreported bytheChairman inthepaper attached. The
Committee expressed satisfaction withtheparagraphs onwhich informal understanding had
beenreached, andconsequently urged theChairman toundertake further consultations onthe
draftparagraphs which wereeither bracketed, oronwhich Members hadexpressed reservations,
withaview tofinalizing thereport foradoption bytheCommittee on11October 1996, inG/RO/M/7
Page4
keepingwiththedeadlineestablishedforthesubmissionoftheCommittee'sreporttotheCouncil
forTrade inGoods."
2.3 Therepresentative ofVenezuela stated thathejoined adreferendum intheagreement ofthe
Committee.
3. Origin ofgoods obtained orproduced onvessels, factory ships, structures andinstallations
outside acountry (G/RO/2, G/RO/M/6, paragraphs 2.14-2.16)
3.1 TheChairman noted thattheInformal Working Group, established bytheCommittee atits
meeting on16November 1995, hadexamined theissue of"origin ofgoods obtained orproduced on
vessels, factory ships, structures andinstallations outside acountry", andfouralternative proposals
hadbeenpresented forconsideration bytheCommittee atitsmeeting on10May1996. TheCommittee
thenagreed thattheInformal Working Group would consider these fouralternative proposals atits
nextmeeting. Atthatmeeting, theChairman hadalsourged Members toconsult theircapitals onthe
fouroptions, andhadexpressed thehopethatdelegations would beabletonarrow down theirpositions
bythetimeofthenextCommittee meeting.
3.2 Based onconsultations theChairman hadheldwithMembers onthisissue, theCommittee
agreed asfollows:
"TheInformal Working Group further examined draftdefinition 2ofAnnex Aongoods
considered asbeing wholly obtained inonecountry, withrespect totheorigin ofgoods obtained
orproduced onvessels, factory ships, structures andinstallations outside acountry. Arevised
proposal wassubmitted byJapan asanon-paper, which wasaccepted asasubstitute fortheir
earlier proposal (Option IV).Delegations commented onthisproposal. Thecomments made
evident continued divergence onthefouroptions, atthesame time, equally making evident,
significant differences inrelative support forthefouroptions.
Having regard tothecontinuing difficulties, theCommittee:
(a) requests theInformal Working Group tointensify negotiations ondraftdefinition 2of
Annex A,onthebasis ofoneoption, before theOctober meeting;
(b) furtherrequestsdelegationstoconsiderincludingintheirdelegationstothenextmeeting
oftheInformalWorkingGroup,expertswithdecision-makingauthorityonthisquestion;
(c) alsorequests theSecretariat toproduce asuccinct, brief, comparative analysis ofthe
current fouroptions, andtohavethiscirculated todelegations wellinadvance ofthe
October meeting; and
(d) finally, requests theChairman oftheInformal Working Group totakeallnecessary
steps tosubmit oneoption forconsideration atthenextmeeting."
3.3 Asaresult ofthediscussion onthenon-paper submitted byJapan, accepted asasubstitute
fortheirearlier proposal, Option IVcontained inparagraph 2.16ofdocument G/RO/M/6 nowreads
asfollows:
"Option IV
1. (Asprepared bytheTechnical Committee).G/RO/M/7
Page5
2.(i) Products ofsea-fishing andother products taken from theseaoutside theterritorial
seaofacountry areconsidered tobewholly obtained inthecountry ofregistration
ofthevessel thatcarries outthose operations (except where suchproducts fallunder
subparagraph (iii)below).
(ii) Goods obtained orproduced onboard factory shipsareconsidered tobewholly obtained
inthecountry ofregistration ofthefactory ships provided thatthose goods are
manufactured fromtheproducts referred toinsubparagraph (i)originating inthatsame
country.
Note: Ifthecountry ofregistration differs fromthecountry towhich thegenuine user
ofthevessel orfactory shipbelongs, definitions 2(i)and(ii)areapplied inthelatter
country.
(iii) Products taken fromthesea-bed orsubsoil beneath thesea-bed outside theterritorial
seaofacountry areconsidered tobewholly obtained inthecountry thathastherights
toexploit thatsea-bed orsubsoil beneath thesea-bed.
Footnote:
Further consideration should bemade incases where definitions 1and2arenot
applicable."
4. Fourth Report bytheTechnical Committee onRules ofOrigin totheCommittee onRules
ofOrigin (G/RO/16, G/RO/W/14)
4.1 TheChairman noted thatinconformity withparagraph 2(c)(ii) ofArticle 9oftheAgreement
onRules ofOrigin, theTechnical Committee onRules ofOrigin hadsubmitted totheCommittee on
Rules ofOrigin itsFourth Report. TheReport wascontained indocument G/RO/6. TheReport
pertained to:
(a) theresults ofthecontinuing work under Phase IIoftheHarmonization Work Programme;
and
(b) responses totherequests raised bytheCommittee onRules ofOrigin atitsmeeting on
10May1996 (G/RO/W/14).
4.2 Mr.Janeczko, theChairman oftheTechnical Committee whowasinvited tointroduce the
FourthReport,drewtheattentionoftheCommitteetothefactthatsignificantprogresshadbeenachieved
onrules oforigin elaborated onthebasis ofchange intariff classification. Thelistofheadings and
subheadings oftheHSonwhich agreement hadbeenreached wascontained inthefirstpageofthe
Report. TheTechnical Committee hadworked continuously ondeveloping thearchitectural design
oftheharmonized rulesoforigin. Healsostressed thataninformal meeting hadbeenheldinOttawa
totrytoaccelerate thework oftheformal meeting. Thework thathadbeendoneinOttawa would
bepresented totheformal meeting starting thefollowing week inBrussels. TheTechnical Committee
would alsodiscuss thentheIntegrated Negotiating Text, which should become avaluable device for
bothCommittees toforge amuch closer link,andaccelerate thework theywerebothdoing. Thework
inBrussels wascontinuing, andwould continue tobecomplex. Itwaswork thatrelied oncooperation
between bothCommittees.
4.3 Therepresentative oftheUnited States expressed appreciation fortheinitiative undertaken
bytheTechnical Committee andforhaving aninformal meeting inOttawa withregard tothematterG/RO/M/7
Page6
ofarticulation, i.e.onhowthese harmonized rules would beexpressed. Significant progress onthis
matter hadbeenachieved inOttawa. Healsobelieved thatthemeeting heldinOttawa wasvery
important foranother reason: itwasaprecedent withregard tosignificantly speeding upthework
byshowing awillingness tomeetparticular issues andtomove forward insuchafashion.
4.4 Based onconsultations theChairman hadheldwithMembers onthisissue, andstatements
made atthismeeting, theCommittee agreed asfollows:
"1. TheCommittee noted theReport oftheFourth Session oftheTechnical Committee
onRules ofOrigin. Itwelcomed theReport made bytheChairman oftheTechnical Committee,
present atthemeeting, inparticular withregard totheemphasis oninformal procedures and
approaches being developed toaccelerate progress under Phase IIoftheHarmonization Work
Programme. Members werealsosatisfied withtheemphasis onthedevelopment ofcommon
terminologies andapproaches tofacilitate workinPhase II.Inthisregard, theinformal meeting
inOttawa waswelcomed. TheCommittee wasinformed thattheFifth Session would give
consideration totheIntegrated Negotiating Textanditscontents. Asaresult ofearlier informal
consultations, theCommittee alsoagreed totransmit totheTechnical Committee therequest
tofurther examine andclarify withaviewtopossibly defining thefollowing terms when used
inthecontext ofwholly obtained orproduced: processing, further processing and
manufacturing.
2. Finally, recalling itsletters dated 20July1995 and21May1996 totheChairman of
theTechnical Committee onRules ofOrigin, andnoting thatthreemeetings hadalready been
scheduled for1996, theCommittee reaffirmed thenecessity ofadhering totheprovisions of
theAgreement, withaviewtosubmitting theresults ofitswork totheCommittee atleaston
aquarterly basis. Tothisend,theCommittee requests theTechnical Committee totakeaccount
oftheprovisions oftheAgreement."
5. Proposal bytheUnited States pursuant toArticle 9.3(a) oftheAgreement onRules of
Origin (G/RO/W/15)
5.1 TheChairman drew theattention oftheCommittee toaproposal made bytheUnited States
regarding aspecific "starting point" tobeundertaken asanewapproach bytheTechnical Committee
initswork inPhase IIoftheHarmonization Work Programme. Thisproposal hadbeencirculated
indocument G/RO/W/15.
5.2 Therepresentative oftheUnited States stated thattheproposal wasintended toassist the
Technical Committee, andwasinnowaymeant tolimitdiscussion. Indeed, nothing wasproposed
tochange inregard totheneedtoreach consensus. Nothing would bechanged withregard toarticulating
minority views thatmight emerge. Theproposal simply provided astarting point forthediscussion,
andframed theissue. Itwasinthatspirit thattheUnited States offered itsproposal. Hethanked
Members who,during theinformal consultations, indicated theirwillingness toallow theUnited States
toputforward thismatter forconsideration atthenextmeeting.
5.3 TheChairman proposed thattheCommittee revert tothismatter atthenextmeeting.
5.4 TheCommittee soagreed.G/RO/M/7
Page7
6. Notifications under Article 5andparagraph 4ofAnnex IIoftheAgreement onRules
ofOrigin (G/RO/N/10 &11,G/RO/M/6, paragraphs 5.2-5.4)
6.1 TheChairman recalled thatsincethelastmeeting, theSecretariat hadcirculated twodocuments
informing delegations ofnotifications received (G/RO/N/10 and11).Todate,47Members hadmade
notifications ofnon-preferential rulesoforigin and48Members hadmade notifications ofpreferential
rules oforigin. Hethenexpressed concern thatanumber ofMembers hadnotcomplied withthe
notification requirements. Healsourged Members which didnotapply rulesoforigin, non-preferential
orpreferential, tonotify theSecretariat tothateffect sothatacomplete picture could beobtained.
6.2 Therepresentative ofVenezuela raised anissue which wasdiscussed inprevious meetings of
theCommittee. Itconcerned criticisms which were made about theestablishment ofarequirement
bysome governments ofcertificates oforigin when therewasalinktotheapplication ofanti-dumping
lawsorcountervailing measures. Theissue wasalsoconnected totheissue ofcoverage ofthese
instruments bytheagreement, although hedidnotwishtogointodetails. Hebelieved thatthese
instruments were useful andcould beusedinaperfectly legitimate wayinorder totryanddetect
practices which were usedtodisguise thetrueorigin ofproducts, practices which perhaps didnot
manipulate rules oforigin, butcertainly failed toshow thetrueorigin ofthegoods.
6.3 Therepresentative ofCanada noted thatatthelastmeeting under thisagenda item,hisdelegation
hadrequested thatthose Members whohadnotified thattheydidnothavenon-preferential rules of
origin confirm totheCommittee thatontheircustoms documentation relating toimports there was
norequirement forthedeclaration ofacountry oforigin, orthatintheprocess ofclearing goods through
customs, importers andexporters were notrequired toprovide documents establishing acountry of
origin, forexample, issued bytheChamber ofCommerce intheexporting country. Hereiterated
thatrequest, andstated thathewould begrateful toknow ifanyoftheMembers whohadnotified
nothaving non-preferential rules could indeed today oratthenextmeeting confirm thattheydidnot
require suchdeclarations.
6.4 Therepresentative oftheUnited States shared theview expressed byCanada. Itwasvery
much aconcern ifintheabsence ofnon-preferential rules oforigin there wasarequirement foran
origin tobedeclared. Theissue wasrelated totherequirement under theAgreement forconformity
andfortransparency.
6.5 Inresponse toaquestion bytherepresentative ofColombia, therepresentative ofCanada
confirmed thathisproposal didnotmean creating anewnotification obligation.
6.6 Therepresentatives ofthePhilippines andMexico stated thatthebestwayofsolving theproblem
raised byCanada would beconsultations onabilateral basis. TheMexican delegate saidthathis
comment wasbased onthefactthattheAgreement covered onlyrulesoforigin, andtherefore anything
related tocertification fellunder other provisions, forexample theGATT 1994 orother multilateral
instruments, andshould notbediscussed intheCommittee onRules ofOrigin.
6.7 TheCommittee tooknoteofthestatements made.
7. Update oftheIntegrated Negotiating Text(INT) fortheHarmonization Work Programme
(G/RO/W/13, G/RO/W/13/Rev.1)
7.1 TheChairman recalled thatatitsmeeting on10May1996, theCommittee onRules ofOrigin
haddecided toestablish anIntegrated Negotiating Text(INT) fortheHarmonization Work Programme
thatwould become acommon working document andreference point fortheCommittee onRules of
Origin andtheTechnical Committee onRules ofOrigin. ThefirstINT wascontained inG/RO/M/7
Page8
document G/RO/W/13. Thisdocument hadbeenupdated, reflecting work done bytheTechnical
Committee during itsFourth Session, from28Mayto7June1996 inBrussels. Negotiating textsof
chapters 1-5,44-49, 64-71, 74-79 and92-97 hadalsobeenadded. Therevised INThadbeencirculated
indocument G/RO/W/13/Rev.1. ThetwoTexts hadalsobeenconveyed totheTechnical Committee
on23Mayand12September 1996, respectively. TheChairman 'sletter conveying therevised INT
totheTechnical Committee would becirculated inthenearfuture.
7.2 Therepresentative ofCanada thanked theChairman andtheSecretariat fortheirefforts in
producing thisdocument, which wasapositive step,andafurther development oftheCommittee 's
bridge withtheTechnical Committee. Hebelieved thatitwould facilitate thework thatboththe
Committee andtheTechnical Committee would beundertaking overthecourse ofthenextyearor
two.
8. Other Business
(i) Meaning oftheword "obtained" indefinition 1(i)ofAnnex A
8.1 Therepresentative ofCanada recalled thathehadraised aquestion about themeaning ofthe
word"obtained" indefinition 1(i)ofthedefinition of"wholly obtained". Herequested thattheTechnical
Committee continue, aspartofitsongoing work, toreview whether thatword wasneeded. He
recognized thatinmaking thisrequest, theTechnical Committee would notnecessarily beabletoprovide
anexplanation afteritsnextmeeting, given thatthereweresome outstanding matters ofotherdefinitions
within thedefinition of"wholly obtained". Thisquestion wasconnected towhatwould happen with
definitions 1(g)and1(h).
8.2 Therepresentative ofColombia recalled thatthisdefinition hadbeen discussed onmany
occasions, andthatifitweresentbackyetagain totheTechnical Committee, itwould taketimeaway
from theTechnical Committee 'sveryheavy agenda.
8.3 TheCommittee tooknoteofthestatements made.
(ii) Harmonization ofnon-preferential rules oforigin
8.4 Therepresentative ofJapan stated thattheCommittee should embark upontheharmonization
ofpreferential rulesoforigin applied byregional integration arrangements immediately afterthecurrent
work onnon-preferential rulesoforigin wascompleted. Japan'sposition wasbased uponitsconcern
thatpreferential rules oforigin applied byregional integration arrangements hadadistorting effect
ontheflowoftradewithcountries outside aregion. Thiswasamatter ofconcern given theincreasing
number ofregional integration arrangements. TheCommittee should takeadvantage oftheresults
andexperiences ofthecurrent harmonization workonnon-preferential rulesoforigin when itembarked
upon thistask.
8.5 Therepresentative ofMexico tooknoteofwhat theJapanese delegation hadsaid, andsaid
itwassomething hisdelegation would havetoconsider onitsmerits andseewhich bodyoftheWTO
would havetodealwiththisquestion; onebody thatcame tomind was,forexample, theCommittee
dealing withregional trade arrangements.
8.6 TheCommittee tooknoteofthestatements made.G/RO/M/7
Page9
(iii) Date ofthenextmeeting
8.7 TheChairman proposed, asagreed atthelastmeeting, thattheCommittee holditsnextmeetings
on8and9October 1996 (informal meetings), and11October 1996 (formal meeting), whereby on
8October 1996 theywould most likely havetomeetoutside theCentre William Rappard.
8.8 TheCommittee soagreed.