Study Guide
3. The Meaning of Origin
3.1. Non-Preferential and Preferential Rules of Origin
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Non-preferential Rules of Origin |
Preferential Rules of Origin |
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Determines Origin but do not confer any tariff benefits. |
Determines which goods enter under preferential treatment at zero or reduced tariff rates. |
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Used for: quota determination, anti-dumping and countervailing duty calculation, and country-of-origin labeling. |
Used for: preferential market access between economies under a trading arrangement (FTAs, customs unions, preference schemes). |
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Applied on a most-favored-nation (MFN) basis; non-discriminatory. |
Discriminatory by design; the donor country’s benefits are restricted to qualifying trading partners. |
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The WTO is actively developing harmonized rules in this area. |
The principal objective is to ensure preferential benefits flow only to selected partners. |