The criteria in the rules of origin sets out specific and detailed conditions on the level of processing that an imported item from a non FTA partner country must undergo in the FTA partner country (or other eligible countries in the region) before being eligible to be called an originating product of a FTA partner country.
Some of the common criteria used are –
- Change in tariff classification (this could be at the tariff chapter, tariff heading or tariff sub heading level)
- Regional value addition
- Substantial manufacturing or processing by excluding some minimal operations.
Rules of origin are used –
- To implement measures and instruments of commercial policy such as antidumping duties and safeguard measures.
- To determine whether imported products shall receive most-favoured-nation (MFN) treatment or preferential treatment.
- For the purpose of trade statistics.
- For the application of labelling and marking requirements.
- For government procurement.