XN000022-1996-05-17 — Page 16

· 15

-

Origin rule for cut and sewn garments to be revised

Hong Kong's origin rule for cut and sewn garments will be revised with effect from July 1 from "cutting and sewing" to "assembly of parts into garments", the Trade Department announced today (Friday).

The revision will not deviate from the basic principle of "substantial transformation", which is an internationally accepted criterion for origin determination, and will not affect Hong Kong's obligations under the World Trade Organisation (WTO) Agreement on Rules of Origin.

A department spokesman said: "The revision will in fact be a step towards bringing about greater harmonisation of origin rules before the conclusion of an on- going international effort to align origin rules being undertaken by the WTO."

He said Hong Kong had all along been a staunch advocate of free trade and its policy was to provide a good trading and investment environment to the industry.

"The change of origin rule for cut and sewn garments will on the whole benefit our trade and industry as a broadly harmonised origin criterion will eliminate the need to invest in different modes of manufacturing to cater for the requirements of different markets, thus enhancing the competitiveness of the local industry," the spokesman said.

At present, divergent origin rules are being adopted by Hong Kong and its major trading partners for cut and sewn garments, that is, "cutting" for the United States (US), "complete making-up" for the European Union (EU) and "cutting and sewing" for Hong Kong.

The promulgation of the US Uruguay Round Agreement Act (URAA) has confirmed that US will revise its origin rule for cut and sewn garments from "cutting" to "wholly assembled" effective from July 1.

The revised US rule will, in effect, bring it into closer alignment with the origin rule currently adopted by the EU.

"With an emerging common international practice of using 'assembling' as origin-conferring process for cut and sewn garments, the Trade Department, after careful consideration, has concluded that there is no need to maintain a more stringent origin rule than our trading partners," the spokesman said.

"It is therefore decided to revise the current Hong Kong origin rule to 'assembly of parts into garments' with effect from July 1."