• Journal of Arbitration Studies
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• v.26 no.3
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• pp.3-26
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• 2016

The preferential Rules of Origin (RoO) govern tariff preferences that are given in accordance with the FTA. However, relatively few studies have been devoted to the procedures in settling disputes that are relevant to RoO under the FTA. This study is a first attempt at analyzing the applicability and the potential improvement in dispute settlement procedures in FTAs targeted at the preferential RoO. By exploring three dispute cases involving the preferential RoO, it is suggested that restrictiveness, complexity, and uncertainty that are inherent in the preferential RoO may trigger political tension and dispute. Forming a panel that is capable of mitigating political tension, facilitating participation and early cooperation of experts and stakeholders, and establishing a well-structured enforcement procedure are essential in dispute settlement procedures to resolve disputes involving cases on RoO. Furthermore, the current dispute settlement procedure that hinders the private sector's access should be changed to one that is more open to private sector entities, such as companies, to facilitate the enforcement of the decision. Given that more improved FTA dispute settlement procedure may guarantee the enforcement and application of the FTA preferential treatment in relation with more politically powerful states and foster genuine free trades, more in-depth studies must be conducted on this topic.

• Journal of Korea Trade
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• v.25 no.8
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• pp.1-24
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• 2021

Purpose - This study categorizes factors that influence the utilization of preferential tariffs based on the characteristics of rules of origin (RoO) and identifies and analyzes the influence of these characteristics on the utilization of preferential tariffs and the trade performance of companies. Design/methodology - In this study, we categorized factors that have an influence on the utilization of preferential tariffs based on the characteristics of RoO and investigated and tested the influence of these characteristics on the utilization of preferential tariffs and the trade performance of companies. For empirical analysis, we categorized the characteristics of RoO into restrictiveness, complexity, and uncertainty. We then developed a research model and formulated hypotheses based on previous studies, and tested the hypotheses using statistical software-(SPSS 25.0 and AMOS 18.0.) Findings - Previous studies suggested that each characteristic of RoO is determined by unique features of a Regional Trade Agreement (RTA). This study conducted an empirical analysis on the influence of the characteristics of RoO on the utilization of preferential tariffs and trade performance. The results confirmed that, overall, the characteristics of preferential rules of origin (PRoO) are related to and influence Korean companies' utilization of preferential tariffs and trade performance. As for the degree of the influence, the characteristics were in the order of uncertainty> restrictiveness> complexity. Nevertheless, complexity turned out not to have an influence large enough to change a company's decision on the utilization of preferential tariffs. Based on these results, this study identified unique features of PRoO and related problems for Korean companies that want to utilize preferential tariffs and suggested countermeasures for their effective utilization of preferential tariffs in the future. Originality/value - Companies that want to use preferential tariffs in international trade have to satisfy PRoO. The issue of origin can be regarded as an essential part of an RTA and RoO, are a crucial criterion in using preferential tariffs. The rules are requirements to claim benefits of preferential trade agreements and are the primary reasons companies have trouble in utilizing preferential tariffs. In this sense, this study categorized the characteristics of RoO, which are a key part of an RTA, and surveyed working-level professionals in charge of international trade at Korean companies to investigate the relationship between these characteristics and the utilizations of preferential tariffs and trade performance of the companies.

• International Commerce and Information Review
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• v.13 no.3
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• pp.143-166
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• 2011

This paper describes the characteristics and outline of rules of origin among Korea and USA, EU, ASEAN. The main focus of this paper is to conduct comparative analysis on rules of origin. Rules of origin are used to determine the country of origin of a product for purposes of international trade. There are two common types of rules of origin depending upon application, the preferential and non-preferential rules of origin Non-preferential rules of origin are used to determine the country of origin for certain purposes. The basis for the non-preferential rules originates from the Kyoto convention which states that if a product is wholly obtained or produced completely within one country the product shall be deemed having origin in that country. For a product which has been produced in more than one country, the product shall be determined to have origin in the country where the last substantial transformation took place. To determine exactly what was the last substantial transformation, three general rules are applied : Change of tariff classification(on any level, though 4-digit level is the most common), Value added-rule.(ad-valorem), and Specific process rule. While criteria of wholly obtained or produced in one country is almost similar to those of theses area and countries, in compliance with value percentages of Substantial Transformation, sufficient working or processing, Korea-US FTA adapts 'Regional Value Content', meanwhile Korea-EU FTA adapts 'Import Content' rule. Finally, Korea-US FTA and ASEAN FTA adapt FOB price for the calculation value added, on the other hand Korea-EU FTA adapts EXW price.

• THE INTERNATIONAL COMMERCE & LAW REVIEW
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• v.69
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• pp.589-616
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• 2016

The reviewing of an analysis of the Korea-China FTA due to guidance introduced for the new regulations or exceptional regulations compared to the KORUS, Korea-EU, Korea-ASEAN FTA. Commodity sectors in the Korea-China FTA and the KORUS, Korea-EU, Korea-ASEAN FTA(the majority in the country and trade criteria analysis result) compared and analyzed the results, rules of origin and the customs clearance procedures of origin, preferential tariff rate of origin and the origin preferential specific rules are somewhat difference, but customs and trade facilitation regulations are already quite consistent with the Korea customs system. Relatively important research results were as follows. First, the calculation of the regional value content in KORCHINA FTA is that I'm to use the deduction method can comprehensively reflect a regional value ratio, with respect to the materials acquired originating status as the FTA in the US and EU use the product non it's not to consider the value of the originating materials originating materials can be utilized for intermediate goods. Second, even if a non-treaty country in the middle with the exception of direct transport rules, and acknowledge the country of origin are under customs control, there are provisions for the period are temporarily stored in a non-treaty countries separately, that period goods imported into the non-treaty countries and up to three months from the day. If the situation of the occurrence of force majeure be greater than three months, but has so exceed six months. Third, the materials acquired originating status in the Korea-China FTA not to consider the value of non-originating materials used in its products as the KORUS FTA and Korea-EU FTA, that can be utilized originating materials for intermediate goods. It is expected that higher utilization of rules of origin. Meanwhile, Korea-China FTA has provisions to allow requests for preferential tariff applied on imports Customs declaration of intention to apply pre-condition for a preferential tariff applied to the importer. In other words, if the import customs tariff preference when applying post-intention not to advance is to be noted that any preferential treatment to prevent the later application.

• East Asian Economic Review
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• v.22 no.1
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• pp.3-28
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• 2018

This article discusses the deadlock in the WTO on multilateral harmonization of nonpreferential rules of origin (RoO) and reviews some of the RoO included in recent preferential trade agreements. We argue that there is a trend towards adoption of similar approaches and that this suggests that cooperation to reduce the trade-impeding effects of differences in RoO across jurisdictions is more feasible than often is assumed by observers and policymakers. From a trade facilitation perspective such cooperation could be based on plurilateral initiatives under the umbrella of the WTO. These could include a focus on pursuit of greater convergence between preferential and nonpreferential RoO helping to achieve the long-standing goal of moving towards harmonization of rules of origin.

• THE INTERNATIONAL COMMERCE & LAW REVIEW
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• v.49
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• pp.493-518
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• 2011

The term rules of origin(RoO) actually speaks for itself, referring to the rules which determine the origin of goods in international trade. The importance of RoO has grown significantly as preferential agreements expand and countries have treated similar imported goods differently according to where the product was made. The purpose of this paper is to study the main case study and its implication of RoO in FTAs. According to survey, the degree of using FTAs in Korea export firms is sharply low. Major reasons are that rules of origin differ from country to country in the FTAs, and that Korean firms have yet to work out what the RoO are. Chapter II of this paper views criteria of the determination country of origin of goods. Chapter III introduces the main case study of FTA rules of origin. Chapter VI presents implication through the case studies and finally concluded this study. In conclusion, Korea needs to build up its own position for rules of origin and provides rules of origin experts into the market. In-depth study and evaluation about Korea's existing FTAs RoO should be carried out to prepare for future FTAs.

• Journal of Korea Trade
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• v.26 no.8
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• pp.58-76
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• 2022

Purpose - This study examined the Rules of Origin (RoO) as a factor affecting free trade agreements' (FTA) utilization and analyzed the causal relationship and the effects of these factors on the export performance of automobile parts companies. Design/methodology - We analyzed and verified the impact of FTA utilization and the export performance of automobile parts companies by dividing the characteristics of the RoO into complexity and uncertainty. Following which, various statistical analyses were conducted on the interrelationships among these variables. Findings - This research analyzed the effect of the RoO factors of complexity and uncertainty on the use of FTA and the export performance of automobile parts companies. We found that these characteristics of RoO were generally related to and affected the FTA use and export performance of these companies. Based on this, this study's investigation into the characteristics of the RoO would then help companies in better utilizing the FTA, as well as providing suggestions on how to effectively respond to the application of the FTA in the future. Originality/value - Companies that want to utilize FTAs in international trade must follow the RoO. In the Regional Trade Agreement (RTA), the country-of-origin is a key factor, with the RoO being an important requirement for the application of preferential tariffs. These regulations are a requirement for receiving FTA preferential treatment; however, they also cause difficulties to companies in using the FTA.

• THE INTERNATIONAL COMMERCE & LAW REVIEW
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• v.67
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• pp.163-186
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• 2015

This study attempts to analyze the trade costs of domestic firms utilizing the FTAs in terms of burden of expenses in managing the rules of origin. In doing so, we classify the managing costs of FTA rules of origin into three categories (that is, (i) ex ante costs from acquiring necessary information and building the infrastructure in the advance stage before the FTAs, (ii) the actual costs of the origin management in the application stage of FTA preferential treatment, (iii) ex post management cost in the preparation stage of origin verification) and perform a survey on the greater details on each category. Using the comprehensive results from the survey regarding domestic firm's use of FTAs, this paper also discusses the issues related to small and medium-sized firms and addresses the concerns involved with their managing costs of FTA rules of origin. Importantly, this paper emphasizes the importance of government supports to reduce inefficiency induced by the additional costs that domestic firms face in their use of FTAs and proposes the various policy implications regarding the managing costs of rules of origin.

• THE INTERNATIONAL COMMERCE & LAW REVIEW
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• v.41
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• pp.267-292
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• 2009

It is a right time to improve the Korea Foreign Trade Act(KFTA) as a fundamental law on Rules of Origin(RoO) in the global trade circumstances which are summarized FTA and WTO. The KFTA's RoO constitutes the labelling system of the Country of Origin, the criterion of it, the issuing of certificate of origin and the punishing offender mainly around the importing goods. This study has focused on the problems of KFTA's RoO at the macro and practical level, and proposed the programs to improve the KFTA's RoO about importing, exporting and domestic production goods. KFTA need to create a purpose clause to protect consumers and industries also, and has to be located a general and top position in the RoO of Korea. In the concrete, the labelling system of the Country of Origin has to set limited in the point of minimum necessity view. The criterion of the Country of Origin also has to improve the wholly obtained criterion, the changing in tariff classification criterion, value added criterion and processing operation criterion to harmonize WTO Rules of Origin and FTA Rules of Origin. The punishment ceiling against offender has to raise to guarantee the effectiveness of RoO.

• International Commerce and Information Review
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• v.15 no.3
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• pp.475-498
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• 2013

The most fundamental reason why FTA Agreement must be concluded is based on the preferential tariff treatment among country parties. In order to get applied by the preferential tariff treatment under an FTA, the parties need to meet the rules of origin and the criteria stipulated under the FTA simultaneously. In addition, Certificate of Origin(C/O) document is required to claim for the preferential treatment under the FTA Agreement. In South Korea, the electronic Certificate of Origin can be issued by the UNI-PASS and FTA-PASS of the Korea Customs Service. The Web Certification System of the Korea Chamber of Commerce & Industry also is established. But the majority cases of requesting the preferential Certificate of Origin are generally performed by the business partners. The settlement and activation of electronic Certificate of Origin are urgently needed to maximize the effects of FTA, First, this paper examines the application situation of electronic Certificate of Origin throughly. Second, the current circumstances related to electronic Certificate Origin are analyzed in the practical and systematic perspectives. Finally, the improvements for activating electronic Certificate of Origin is suggested.