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)