International Trade: Rules of Origin

[Excerpt] Determining the country of origin of a product is important for properly assessing tariffs, enforcing trade remedies (such as anti-dumping and countervailing duties) or quantitative restrictions (tariff quotas), and statistical purposes. Other commercial trade policies are also linked with origin determinations, such as country of origin labeling and government procurement regulations. Rules of origin (ROO), used to determine the country of origin of merchandise entering the U.S. market, can be very simple, noncontroversial tools of international trade as long as all of the parts of a product are manufactured and assembled primarily in one country. However, when a finished product’s component parts originate in many countries, as is often the case in today’s global trading environment, determining origin can be a very complex, sometimes subjective, and time-consuming process. U.S. Customs and Border Protection (CBP) is the agency responsible for determining country of origin using various ROO schemes. Non-preferential rules of origin are used to determine the origin of goods imported from countries with which the United States has most-favored-nation (MFN) status. They are the principal regulatory tools for accurate assessment of tariffs on imports, addressing country of origin labeling issues, qualifying goods for government procurement, and enforcing trade remedy actions and trade sanctions. Preferential rules are used to determine the eligibility of imported goods from certain U.S. free trade agreement (FTA) partners and certain developing country beneficiaries to receive duty-free or reduced tariff benefits under bilateral or regional FTAs, trade preference programs (such as the Generalized System of Preferences), and other special import programs. Preferential rules of origin are specific to each FTA, which means that they vary from agreement to agreement and preference to preference. This report deals with ROO in three parts. First, we describe in more detail the reasons that country of origin rules are important and briefly describe U.S. laws and methods that provide direction in making these determinations. Second, we discuss briefly some of the more controversial issues involving rules of origin, including the apparently subjective nature of some CBP origin determinations, and the effects of the global manufacturing process on ROO. Third, we conclude with some alternatives and options that Congress could consider that might assist in simplifying the process. This report will be updated as events warrant

International technology transfer: building theory from a multiple case-study in the aircraft industry

International technology transfer occurs frequently in international operations, for example in\ud cases of foreign direct investment where companies set-up existing manufacturing lines in new\ud locations. It also occurs in situations of international outsourcing where a new supplier receives\ud product and/or production process information. This technology transfer process often leads to\ud difficulties, for example delays and much higher costs than anticipated. To gain insight into the\ud causes of these difficulties we used a grounded theory approach to describe the process of\ud international production technology transfer. We conducted four case studies in the aircraft\ud industry and analyzed the problems that occurred. We found that technology transfer consists of\ud three phases: preparation, installation and utilization. These three phases are influenced by three\ud types of factors: technological, organizational and environmental. The combination of activities\ud with factors enables an integrated view on international technology transfer. We found that the\ud amount of technology, the accuracy of information, and the extent of organizational and\ud environmental differences have a large impact on the efficiency of the technology transfer\ud process