What are Rules of Origin?
Rules of Origin are a set of legal standards or rules, used to determine how to enforce tariffs on goods that are being traded, based on their country of origin. Different countries, organizations, and trade agreements / associations generate a different set of rules to determine which country can claim to be the country of origin for that specific item.
For instance, the USMCA, which is a trade agreement between the United States, Mexico, and Canada, has specific rules of origin which decide what criteria imports have to meet, in order to be considered of a certain country. For example, according to the USMCA, the goods must be entirely produced and assembled in a USMCA country to claim USMCA as its country of origin.
** Recap: Country of Origin
A country of origin is where goods are produced or manufactured. When deciding the country of origin of a given product, ‘rules of origin’ play an indicative role to determine these countries for trade, import, and export purposes.