Rules of Origin

Rules of Origin and Regional Trade Agreements

Rules of origin (ROO) have emerged as an area in whichconsensus is hard to achieve among negotiating countries within an RTA.Disagreements over rules of origin have often deferred the implementationof several trade agreements. One of the reasons for this is because ROOare viewed as those obstructing trade. Most of the literature on the subjecttoo argues that ROO reduce efficiency costs in production and restrictmarket access. It is argued in this paper that both the negotiations and theanalytical literature pertaining to ROO display a lack of soundunderstanding of the implications of rules of origin. 
Developing acomprehensive view on the subject, with a developmental perspective ofROO, could help prevent wastage of negotiating-time, avoid cumbersomeprocedures and implement the agreements with the intention to reap theeconomic benefits of ROO. The study aims to highlight the economics of ROO,focuses on the issue of near-optimum ROO formulation, present a factualaccount of ROO as evolved in RTAs, empirically estimate of theeffects of ROO on trade in an FTA and finally make new policysuggestions relating to ROO implementation and enforcement.