Preferential treatment provided for in a free trade agreement is usually granted only to products originating from members of that FTA, so rules of origin are important. These are the criteria which determine the national origin of a product. The country of origin of a product is usually seen as the country where the last substantial transformation took place.
Enforcing and defining rules of origin for goods or services poses major problems. This issue has been very controversial in a number of agreements and trade unions and other critics have campaigned to highlight the ways in which rules of origin can be used and abused by governments and corporations alike. In particular there are concerns about the ease with which goods processed partly or fully in a third country can receive duty-free access under a bilateral agreement by being re-exported with just enough processing to satisfy rules of origin requirements. This is further complicated by the fact that different bilateral free trade agreements use different criteria to set rules of origin.
Beyond ISDS, another potential trade policy issue lurks in the background and which has not yet captured the attention of the health policy community: rules of origin in trade agreements.
Among the key issues where negotiations are still needed include the rules of origin, non-tariff barriers, structure of implementation, schedule of concessions and tariff books.
Issue with “cumulation,” which relates to certificates of origin required by exporters to both regions and differences in relation to timeframes for the continued recognition of sanitary and phytosanitary import requirements are not resolved.
India has mooted stricter rules of origin in the Regional Comprehensive Economic Partnership (RCEP) trade agreement to prevent Chinese goods from indirectly flooding the country.
Rules of origin for autos is really a “bilateral” issue between Mexico and the United States because Canada was relatively comfortable with the original US proposal.
Trump administration demands in NAFTA trade negotiations meant to push auto jobs back to the United States may not be enough to spark a shift in where automakers build cars and trucks.
The latest US proposal for increasing NAFTA’s regional automotive content would carry a four-year phase-in to meet a higher, 75 percent regional value threshold and new labor content rules requiring substantial work at wages of $16 an hour or higher.
Negotiators trying to hammer out a quick NAFTA deal said they will take a break until May 7, allowing time for consultations with the auto industry in Mexico.
Canadian, Mexican and U.S. ministers seeking to revamp the North American Free Trade Agreement (NAFTA) have made good progress on the key question of autos, Canadian Foreign Minister said.
The US proposal would distinguish between different NAFTA car parts by grouping them into five categories, some of which would have a lower requirement for North American content or none at all
The US negotiator for regional content requirements in autos flew back to Washington from a NAFTA round in Mexico on Monday to talk with car companies, officials said, in a development some hoped would lead to progress on the contentious issue.
Seventh round set to run Feb. 25 to March 5 in Mexico City. Rules of origin to be one of most discussed issues in talks.
Mexico will make a proposal for regional content requirements for autos at the next round of talks to renegotiate the North American Free Trade Agreement (NAFTA), a senior Mexican official said.
While “significant” challenges remain, all three ministers said some progress has been made this round.
Canada has proposed that Canada and Mexico would agree to a dispute settlement process between their two countries alone — to be outlined in an annex to the NAFTA.
Cultural and auto issues remain obstacles to reviving Pacific trade pact.
Negotiators gathered at an informal session in Washington are considering ways to work around a main impasse of the talks so far, a US demand on auto parts deemed unfeasible by Canada, Mexico and the industry.
Negotiators from the United States, Mexico and Canada square off for the last time in a fifth round of talks to rework the North American Free Trade Agreement, with stalemate brewing on a contentious proposal to ramp up regional content for autos.
The US wants 85 percent of content to come from the United States, Mexico and Canada. The request may include a demand for a 50 percent American content requirement.