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There is no international definition of Origin, although a distinction is made between two systems: preferential and non-preferential. In the case of preferential Origin, everything is based on bilateral or multilateral agreements. In the case of non-preferential Origin each country applies its own rules, although within some regional economic unions the non-preferential rules are harmonized for all the Member States of the Union concerned.
During the Uruguay Round, participating countries recognized the need to provide transparency to regulations and practices regarding Rules of Origin. The main purpose was to prevent unnecessary obstacles to the flow of international trade. The Agreement established a Harmonization Work Programme(HWP)to harmonize Non-Preferential Rules of Origin.
Article 1 of the Agreement defines rules of origin as those laws, regulations and administrative determinations of general application applied to determine the country of origin of goods except those related to the granting of tariff preferences.
Rules of origin are now more topical than ever. They have become a very prominent feature of today’s trading system and various regional trade agreements are being negotiated across the globe.