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Exclusionary Rules of Origin of Mega-RTAs under WTO Law: Mega-RTA ‘Fracturing’ Its Overlapping RTA

  • JONG BUM KIM (a1)

A mega-RTA such as the planned Trans-Pacific Partnership (TPP) or the Regional Comprehensive Economic Partnership (RCEP) may overlap another RTA, with the result that some of the parties to the mega-RTA's overlapping RTA may become common parties, while others may remain as single-agreement parties. If the mega-RTA provides rules of origin based on the change in tariff classification (CTC)-with-exception criterion such as yarn-forward rules, the rules of origin will become more restrictive with respect to the imports of the excluded intermediate goods from the single-agreement parties after the formation of the mega-RTA than before, thus failing to meet the requirement under GATT Article XXIV:5. The exclusionary rules of origin of the mega-RTA draw the trade away from the single-agreement parties, causing ‘fracture’ in the mega-RTA's overlapping RTA. As a legal remedy to the problem, the mega-RTA should eliminate the restriction from the CTC-with-exception criterion by adopting the rules of origin based on the non-exclusionary criteria such as the value-added or the CTC criterion that does not presumptively exclude the use of certain non-originating intermediate inputs.

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I would like to thank Professor L. Alan Winters and two anonymous referees for their very helpful comments. I would also like to thank Suwon Rim for providing helpful research assistance.
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This list contains references from the content that can be linked to their source. For a full set of references and notes please see the PDF or HTML where available.

Joost Pauwelyn and Wolfgang Alschner , ‘Forget About the WTO: The Network of Relations between PTAs and Double PTAs’, in Andreas Dűr and Manfred Elsig (eds.), Trade Cooperation: The Purpose, Design and Effects of Preferential Trade Agreements (Cambridge University Press, 2015), pp. 497532

Olivier Cadot , Celine Carrere , Jaime De Melo , and Bolormaa Tumurchudur , ‘Product-Specific Rules of Origin in EU and US Preferential Trading Arrangements: An Assessment’, 5(2) World Trade Review 199 (2006)

Jong Bum Kim and Joongi Kim , ‘The Role of Rules of Origin to Provide Discipline to the GATT Article XXIV’, 14(3) Journal of International Economic Law (2011) 613

James H. Mathis , Regional Trade Agreements in the GATT/WTO (The Hague, T.M.C Asser Press, 2002) 1328

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World Trade Review
  • ISSN: 1474-7456
  • EISSN: 1475-3138
  • URL: /core/journals/world-trade-review
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