Rules of Origin for India-Australia Trade Deal

Why in news?

• The notification, which relates to the eligibility requirement to claim the preferential customs duty on trade in goods, under the economic cooperation and trade agreement (ECTA), will come into effect from December 29. This is when the ECTA will also come into effect.
• India and Australia had in April this year signed the ECTA, which is expected to cover 90% of the bilateral trade between the two.

What is Rules of Origin?

• Rules of origin are the criteria needed to determine the national source of a product. Their importance is derived from the fact that duties and restrictions in several cases depend upon the source of imports.

Where are rules of origin used?

• to implement measures and instruments of commercial policy such as anti-dumping 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; and
• for government procurement.

No specific provision in GATT

• GATT has no specific rules governing the determination of the country of origin of goods in international commerce.
• Each contracting party was free to determine its own origin rules, and could even maintain several different rules of origin depending on the purpose of the particular regulation.

 

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Q1) When were rules of origin introduced?

The most comprehensive definition for rules of origin is found in the International Convention on the Simplification and Harmonization of Customs procedures (Kyoto Convention), which entered into force in 1974 and was revised in 1999.

Source: Customs notifies Rules of Origin for India-Australia trade pact