Policy Briefs
Reforming Rules of Origin in Greater Arab Free Trade Area for Effective Economic Integration
No.
29
Date
September, 2017
Topic
F1. Trade
- Free trade agreements are about reducing tariffs, market access in services, protection of intellectual property rights, streamlining customs procedures, trade remedy measures, and dispute settlement mechanism. Equally important if not even more important than these provisions is the designation of rules of origin. Many benefits can be lost if restrictive rules of origin are incorporated. Rules of origin are supposed to be straightforward and easy-to-follow methods used to determine origin of imported goods. The policy question that arises is how to improve trade integration among Arab countries through more effective rules of origin.
- GAFTA should ease the burden of rules of origin by exempting certain goods from meeting the required rules of origin. The exemption can apply to imported goods that have no tariffs at all or where trivial tariff is imposed. It makes common sense to allow some items certificates of origin to be in English- not 100 percent in Arabic- especially if these items are commonly used.
- For purposes of flexibility and facilitating inter-trade, the validity period for certificates of origin can be expanded to twelve months for instance. GAFTA regulations should allow written advance rulings. Advance ruling allow traders to obtain an origin ruling prior to the importation of a product. Hence, advance ruling saves time and energy.
- Perhaps the most important aspect of GAFTA rules of origin is the dispute settlement process. The dispute settlement process can play a crucial role especially at times when the political will of the integration is questionable. If the dispute settlement body or process is seen independent and able to ascertain its power, this will engender confidence in an integration scheme. There is no public record of origin disputes among GAFTA countries that would shed light on thorny issues. The resulting body of case law can help in interpreting origin rules and remove ambiguities.
Research Associates
Bashar Hikmet Malkawi
Professor of Law, College of Law, University...