Identifying and Applying Rules of Origin in Trade Agreements

Abstract

Trade agreements help countries to trade with each other more efficiently, and to access new markets and investment opportunities. They create more favourable trading possibilities by reducing customs tariffs, and by removing trading barriers. Companies can benefit from trade agreements if they fulfil the Rules of Origin set in the agreement. Each trade agreement has its own Rules of Origin, which are furthermore split into product specific rules. The complexity and extensiveness of trade agreements and origin criteria make them very difficult to manage. There are, however, some fundamental principles that can give more clarity to the topic.

The purpose of this thesis was to examine different trade agreements and how to interpret and apply their Rules of Origin in practice. The theoretical part explained the key concepts related to trade agreements, especially the goods classification and the difference between preferential origin and non-preferential origin.

The empirical research included the construction of a systematic method or tool that the case company can use to apply and interpret the Rules of Origin. A practical framework and step-by-step instructions for the Rules of Origin assessment was presented in this thesis. It examined the Rules of Origin especially from the case company’s perspective and explained the requirements for demonstrating compliance with the Rules of Origin through comparison of different trade agreements.

These instructions can be further developed or integrated into the case company’s order-delivery processes description. This thesis also gave suggestions for further development from the viewpoint of case company’s process and system development, so that the origin analysis would be easier and more efficient to perform in the future.