The Agreement on Rules of Origin

As defined by the Agreement on the Rules of Origin, the rules of origin are the laws, regulations and the administrative decisions for general application that enable the establishment of a country of origin for merchandise. In a globalized world, however, given the many changes and numerous components coming from various countries, they are increasingly difficult to establish. Producers divide up the production process into many geographically localized stages, and it is difficult to trace the exact origin of a product. The production process is divided between a pre-assembly and assembly phase and is carried out on a global basis (Landau 2001: 122). The maquiladora in Mexico, who undertake assembly operations for American companies, accounted in 1994 for US$23,000 million – almost half the Mexican exports to the USA (World Bank 1997: 43). Most of the presentday products are manufactured in more than one country. More than 80 per cent of the semi-conductors destined for the American markets are assembled and tested abroad, mainly in the five South-east Asian countries (D’Andrea Tyson 1992).