Practical challenges with free trade agreements
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Practical challenges with free trade agreements. Adriana Ibarra-Fernández. Objectives of Free Trade Agreements. Article 102: Objectives .

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Objectives of free trade agreements
Objectives of Free Trade Agreements

Article 102: Objectives

1. The objectives of this Agreement, as elaborated more specifically through its principles and rules, including national treatment, most-favored-nation treatment and transparency, are to:

  • eliminate barriers to trade in, and facilitate the cross-border movement of, goods and services between the territories of the Parties;


Objectives of free trade agreements1
Objectives of Free Trade Agreements

Article 302: Tariff Elimination

1. Except as otherwise provided in this Agreement, no Party may increase any existing customs duty, or adopt any customs duty, on an originating good.

  • 2. Except as otherwise provided in this Agreement, each Party shall progressively eliminate its customs duties on originating goods in accordance with its Schedule to Annex 302.2.


Objectives of free trade agreements2
Objectives of Free Trade Agreements

Article 401: Originating Goods

Except as otherwise provided in this Chapter, a good shall originate in the territory of a Party where:

a) wholly obtained or produced entirely …;

b) change in tariff classification / regional value content requirements;

c) produced entirely in the territory exclusively from originating materials; or

d) except for Chapters 61 through 63, the good does not undergo a change in tariff classification (Rule 2 a / Heading specifically describes the good and its parts).


Certificate of origin practical problems
Certificate of Origin – Practical Problems

  • Certificates of Origin have been issued without evidencing the originating character of the goods

  • “Just another document” (P.O., Invoice, COO…)

  • Country of Origin / Country of Exportation



There s nothing free about free trade1
“There’s nothing free about Free Trade”

Objectives of Free Trade Agreements


Origin analysis evidence of compliance
Origin Analysis / Evidence of Compliance

  • No origin analysis

  • Changes of sourcing / origin = No update

  • Changes to rules of origin / HS


Verifications of origin
Verifications of Origin

  • Scope - Too broad

  • Insufficient knowledge by the Exporter

  • Language barriers

  • Different legal / accounting systems


Conclusions
Conclusions

  • COMPLIANCE

  • Minimize risk

  • Change Mindset


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