Understanding on rules of origin needed

Understanding on rules of origin needed

JAKARTA (JP): Businesses must have a sound understanding of
the rules of origin stipulated in international trade because the
adoption of such policies will be unavoidable in the future, a
Ministry of Trade official says.

Director for Foreign Trade Hatanto Reksodiputro said that each
country or regional trade grouping has their own set of rules and
that presently there is no general agreement between countries on
rules of origin.

"There are over 100 rules of origin existing in the world
today, so it is important for businesses to fully understand them
to be able to take part in the global market," he told reporters.

Rules of origin, he explained, determine the origin of a
certain product, which is generally regarded as the last country
in which the product has undergone a substantial part of its
production process.

Determining the origin of a product has become increasingly
difficult as many of today's products are made, assembled and
harvested in different countries, Hatanto said.

"The problem is complicated because the World Trade
Organization does not have guidelines for such rules," he said.

Hatanto said that a number of industrialized countries, such
as the United States, Japan and members of the European Union,
have established their own rules of origin as part of their trade
policies.

Protection

"But rules of origin have evolved into a means of protection
and trade 'harassment'," he said.

He said rules of origin tend to be discriminatory and can
often lead to regional trading agreements.

He also said that some countries use rules of origins to
conduct anti-dumping investigations and establish evidence of
circumvention practices, even though the Uruguay Round of General
Agreement on Tariffs and Trade (GATT) negotiations did not reach
an agreement on anti-circumvention.

"One of the terms agreed to in the 1994 Marrakesh meeting of
GATT ambassadors was that rules of origin should not be used as a
non-tariff barrier," Hatanto said.

The WTO, established earlier this year to replace the GATT,
together with the World Customs Organization, are presently
making an effort to harmonize non-preferential rules of origin.

"This harmonization is needed so WTO members can implement the
rules transparently and uniformly without causing trade
distortions," he said.

Hatanto said Indonesia fully supports the need to harmonize
the existing rules of origin, but does not consider the rules to
be necessary.

"We still need lots of imports to support our growing
industries and export commodities," he explained.

Hatanto said yesterday that to increase the public's
understanding, the Ministry of Trade would hold a two-day
seminar, starting tomorrow, explaining rules of origin.

The seminar will discuss the rules currently being imposed by
certain countries and those having an impact on Indonesian
exports.

Speakers at the seminar will include Edwin Vermulst, an expert
on rules of origin from the European Union, and Teruo Ujiie, an
expert from the United Nations Conference on Trade and
Development. (pwn)