Country of origin in the global economy

Abstract

This paper reviews the increase in problems associated with the origin of goods that is due to increasing fragmentation of international trade. In particular, it examines three applications of rules of origin: rules of origin in free trade areas, preferences to developing countries, and the treatment of imports that have some domestic factor content. Traditionally each of these has used all-or-nothing rules of origin. The paper proposes a new method of dealing with all three problems. This method substitutes a valuation based on the value added in different origins for the present methods of valuing goods at the gross price and attributing origin to only one country. The value added method w..