On The Regulation And Harmonization Of Rules Of Origin

With the fast development of the global economy, countries receive benefits from Regional Trade Agreements, as well as the multilateral trading system. On the way to global free trade, the most viable and realistic path is relying on the successive and overlapping RTAs. However, the spread of criss-crossing RTAs in the world has generated too much serious problems, such as the overlapping agreements, disordered rules and the rising transaction costs. In the meantime, along with the rapid development of RTAs at the present times, the importance of ROOs also increases greatly. ROOs have evolved from technical means to essential trade policy instruments. ROOs are very important while maintaining the normal operation, but these rules also have caused negative effect to global free trade. Its quality of complexity, discrimination and lack of flexibility make us realize that it is very necessary to regulate and harmonize them. The harmonization of ROOs will be a time-consuming and laborious job, but the results of this programme will play a major role in promoting free trade.In order to attain the long-term goal of coordinating rules of origin, the major strategy is: countries need to actively carry out the diagonal or full accumulation system based on sectors, beginning from the industries in which identical product-specific rules among participating countries have been introduced. The application of coequality in the change in tariff classification and regional value content (VC) rules also make trading systems more flexibility. If WTO members are able to set up model ROOs, we may calculate the extent of each RTA's deviation from this criterion, and we could also multilaterally negotiate certain modalities for its reduction. On the purpose of realizing the long–term interests, other systemic rules on the top of ROOs need to be converged or harmonized across RTAs on a regional or global basis. Our final purpose of materializing global free trade will be determined by these concerted efforts.This essay includes three parts. In the first part, it is an overview of Regional Trade Agreements from the perspective of economical and trade policy. We will analyze the benefits and costs of RTAs, and then elaborate the criterion, features and functions of ROOs. The second part starting with the typical model and development tendency of ROOs, we can find out the potential complex and uncoordinated rules among RTAs. So in the framework of regional and multilateral trade, we can propose how to coordinate ROOs so as to encourage the global trade and investment, and how to deal with the great transaction costs, and then we can make a thorough inquiry to defragmenting fragmented rules of origin. Through all these efforts to achieve our ultimate goal of regional and global free trade. In the third part, we will inquire into the present state and development prospect of ROOs in China. Putting forward to formulate scientific and rational Rules of Origin which are suitable to China's national condition, so China will put herself in a dominant or favorable position in international competition.