Changing Rules of Origin to Improve Market Access for Least Developed Countries

Developed countries are committed by the Millennium Development Goals, and under the World Trade Organization (WTO) communiqué issued at the Hong Kong ministerial in 2005, to provide duty-free, quota-free (DFQF) market access for least developed countries (LDCs). Removing trade barriers to LDC exports lowers trade costs and expands trade, but rules of origin often raise costs and penalize exports, especially in LDCs with relatively undeveloped manufacturing sectors. As a result, what trade preferences give with one hand, they frequently take away with the other. While many rich countries have more to do to provide DFQF market access for LDCs, many could immediately improve existing programs by implementing more flexible rules of origin.

Preview