Rules of origin: New implications

As a subject of international negotiations, rules of origin have been of interest since the early 1970s, but in recent years they have come to be regarded as a new form of protectionism and have figured prominently in the spate of trade negotiations which have been initiated or carried forward in the Americas since the late 1980s. The trade schemes negotiated under the terms of the new treaties thus adopted make it possible to extend the protection of intermediate inputs from one signatory country to another. Therefore, the advantages associated with a free trade area are no longer determined solely by each country’s system of protection but have instead come to depend upon their trading partners having low trade barriers as well. Moreover, any country gaining access to a trading partner’s market must “share the preference” with the party benefiting from the rules of origin in the other country.