Rules of origin are the trade rules used to determine the country where a product is considered to have been made or substantially transformed. In international trade, they help customs authorities decide which duty rates, trade agreements, quotas, sanctions, marking rules, or import restrictions apply. Rules of origin are especially important when goods contain materials or components from multiple countries, because the final origin may depend on manufacturing, value added, tariff shift, or specific processing requirements. They also determine origin for trade remedy purposes.
Types of Rules of Origin
- Wholly obtained: goods produced entirely in one country with no imported inputs
- Substantial transformation: goods undergo a change in tariff classification or specified manufacturing process
- Value content rules: a minimum percentage of the finished product’s value must be added in the qualifying country
- Specific process rules: particular manufacturing or processing steps must occur in the qualifying country
Each free trade agreement has its own set of rules. USMCA uses a mix of tariff shift, value content, and specific process rules depending on the product.
Learn more about Dedola’s sustainable fashion and apparel shipping. Related terms: Country of Origin, Certificate of Origin (CoO), Anti-Dumping Duties.
