Rules of Origin for Goods and ServicesConceptual Issues and Economic Considerations

Abstract

Rules of origin form part of the traditional trade policy landscape. They are necessary for any government that seeks to distinguish between different foreign sources of supply of a product. This paper provides a basic introduction to the conceptual issues that arise in this area. It discusses both origin rules for products and producers, the latter being crucial in the context of trade in services, and summarizes the results of the economic literature with respect to rules of origin. The intention is to provide a `primer' to this increasingly complex area. The increasing attention being given to rules of origin by policy-makers and analysts is in large part a reflection of the spread of regional trade arrangements. Much of the analysis therefore focuses on preferential origin rules.

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