The rules of origin determine which products qualify for preferential tariffs under an FTA. Originating products must either be wholly obtained or manufactured (e.g. a cow must be born and raised in Switzerland) or have undergone sufficient working or processing in the territory of an FTA partner (e.g. manufacture of a machine that also includes foreign components). Simple and liberal rules of origin are necessary in a context in which products increasingly contain intermediate inputs from different countries and production processes involve several economies.
The rules of origin in an FTA consist of the substantive rules (usually set out in an annex) and the so-called Product Specific Rules (PSR). The rules define, among other things, what constitutes a certificate of origin, the rules applicable to transport from one contracting party to another, the proofs of origin to be used, the verification of proofs of origin, and other matters to be observed during import and export. In the list rules, each product is assigned a rule which specifies the minimum working or processing that must be carried out on it in order for the finished product to be considered as originating in a contracting party within the meaning of the FTA. Both the provisions and the list rules usually differ in the various agreements. The reason for this is the different interests and sensitivities of the contracting parties towards different partner states. The list rules should reflect the current working or processing operations of Swiss producers so that they can benefit from the FTA.
FAQs on rules of origin
Why do the various FTAs not always have the same product-specific rules?
Where are the applicable rules of origin and product-specific rules set out?
Just like the rest of an FTA, the product-specific rules are the result of negotiations. The starting positions are often different at the beginning of the negotiations. They reflect the expectations of the economy and the economic policy of a country. It is thus inevitable that a certain country will have more or less flexibility in formulating its product-specific rules during negotiations, while another country will have different sensitive areas. The individual solutions to be found with different negotiating partners result in list rules which are not identical in every FTA.
Rules of origin are usually regulated in an annex.
The Federal Customs Administration’s Regulation 30 (R-30) (only available in German) provides links to the relevant rules of origin for the FTAs of the individual countries (in the columns “Ursprungsbestimmungen” (“Rules of origin”) and “Liste der erforderlichen Bearbeitungen” (“List of requisite degrees of processing”)
Last modification 09.09.2020
