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Rules of Origin
10.
The Group next considered, under item 4 of its Agenda, the first report by the Expert Group on Rules of Origin. This again produced an inconclusive discussion, with no agreement on the policy questions posed by the Expert Group. Di Martino (Commission) made it clear yet again that the Community were not prepared to change their system and that they were quite prepared to accept that each donor country should apply its own system of origin.
11.
Apart from this intervention, however, most of the discussion centred on the questions asked by the Expert Group in paragraph 55 of its report, namely,
(a) the question of "neutrality" of an origin system and
whether it should be expected to cater for special restrictions or limitations within a generalised system of preferences,
(b) whether origin shouli he cumulative or based on its acquisition in the developing country claiming preference alone, and
country
(c) whether developed country content (i.e. of the country
granting preferences) should he recognised.
There was also the general question of
(a) value added or process (or transformation) criteria,
or both.
12.
Tone of these questions could be answered. The Japanese concentrated on (b) and (c) above. They con- sidered that both group origin and developed country content could only be adopted practically within a value added criterion and they pointed out the administrative difficulties in adopting both. In general they appeared to be against both concepts. Most other speakers did not seem to have made up their minds on these two aspects. The U.S. said flatly that this was the case with them. Switzerland said that they were aspects where it would be worth listening to the views of the developing countries before reaching firm conclusions. This seemed to be the view of the U.K. as well, but most speakers stressed the administrative difficulties of cumulative origin and none were clear about how far it should go, i.e., developing country content in general, continental or regional groupings or only some roupings fulfilling certain conditions, etc.
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13. There was rather more discussion of the concept of "neutrality". Denmark (for the Nordics) said that the object should be to limit preferences to the real products of the LDCs. The rules should aim at this and should not be so liberal as to include what amounted to largely developed country products or be so restrictive as to frustrate the scheme. Canada (Monk) and the U.3. (Leary) had difficulties with the concept of neutrality. pointed out that not just origin rules but all the elements in a system of preferences (i.e., depth of tariff cuts, quota limitations, safeguards, product coverage, etc.)
Monk
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