A Plan for Us to Create a Globally Competitive Industrial Sector

Context: The recent insertion of compliance to the labelling of country of origin on imported products in Legal Metrology Rules, is marred with complexity and should be implemented in the right way.

Rules of Origin and Challenges therein:

•  Reasons for the Rules of origin to exist: 

• • • Recent boycott towards China: Boycotting is a perfectly valid way of influencing national behavior, as the example of apartheid in South Africa showed.
    • Due to globalization: Free Trade Agreements (FTAs), anti-dumping actions, and preferential tariffs are impossible to implement without some sort of rules of origin

• Multiple criteria to define: These criteria are defined in the “rules of origin”, which vary from country to country and treaty to treaty.

• For E.g. in 2005, India’s government issued custom rules to determine which goods could take advantage of the Singapore-India Comprehensive Economic Cooperation Agreement;
• India’s agreements with Chile and the preferential trade agreement with the Mercosur customs union appear similar.
• India-Japan Free Trade Agreement (FTA) calls for a qualified value content of not less than 35%.
• Spaghetti Bowl Effect: International harmonization of Rules of origin (ROO) has been an ongoing project since the 1990s and is still not completed barring a consensus on ROO for Least Developed Countries.
• Embroiled by territorial disputes:
• The European Court of Justice determined that goods manufactured in the West Bank or Gaza Settlements could not be labeled as Israeli goods under the EU-Israel agreements.

Challenges to Legal Metrology (Packaged Commodity) Rules 2011:

• Burden on traders and importers: Increased complexity of norms would require each importer to provide due diligence to make a truthful declaration of the rules of origin.
• Products are imported from third countries where they are neither manufactured nor assembled.
• Country of manufacturing, assembly, and origin can each be distinct: which increased the complexity of re-classification of products under current Free Trade Agreements.

Way Forward:

• Law should be formulated: about the procedures determining the criteria for the origin of products.
• Must provide clear guidelines on what importers need to do to comply.