Abstract:
From neutral trade policy devices employed to identity country
of origin of commodities, the rules of origin are emerging as protectionist
tools. Nation-states, as they are increasingly denied of conventional
trade policy tools, are reasserting themselves by evolving new and less
visible weapons of intervention. The misuse of rules of origin as
protectionist tools is widely reported from PTAs among developed
countries, such as EEC and NAFTA. More recently, non-preferential
rules of origin are also being used for protectionist purpose. It is such
protectionist adaptation of the rules of origin that prompted the WTO to
launch the HWP to evolve common rules of origin for all countries. The
present study is a critique of the harmonization work programme. The
central objective of the ARO and also the HWP is to ensure that the rules
of origin are employed without/ or with least trade distorting effects.
But, as our study shows, it would be too optimistic to expect such an
outcome from the HWP. On the contrary, even if it is successfully
completed, the HWP is likely to leave considerable scope for misuse of
rules of origin for protectionist purpose. Further, the new multilateral
regime, even if it succeeds in establishing semblance of an order in the
arena of rules of origin, is likely to have unequal effects on members.
The moot question is as to whether the adopted harmonised rules match
the trading interests of the developing nations. The picture emerging
from our analysis of outstanding disputes is not very encouraging for
the developing countries. They belong mainly to the traditional areas
of western protectionism against developing countries. The fear that the
developed countries are trying to manipulate rules of origin to
compensate for the loss of tariff and other conventional barriers, therefore,
cannot be ruled out.
