"The only way these big supply chain companies are going to commit themselves to Britain – and Nissan is the biggest – is that if they give them guarantees they are not going to be caught up in rules of origin problems, which is what happens if you leave the customs union".
Cable told the Guardian: "The only way these big supply chain companies are going to commit themselves to Britain – and Nissan is the biggest – is that if they give them guarantees they are not going to be caught up in rules of origin problems, which is what happens if you leave the customs union.
"We realize that just opening markets for our textiles and apparel exporters is not enough, so the export opportunities in this agreement go hand in hand with strong rules of origin and strong textiles enforcement mechanisms".
In the main, the rules of origin are complex and the paperwork time-consuming.
The TPP accounts for 36% of world GDP and its significance and impacts are profound, specifically affecting tariff reduction in the manufacturing sector, market entry in the service sector, and rules of origin requirements, as well as currency valuation, intellectual property rights, and even immigration.
So are good old-fashioned protectionist provisions such as one of the rules of origin in the apparel trade designed to ensure that, to avoid punitive American tariffs, low-cost garment-makers have to buy American yarn rather than non-TPP Chinese stuff.For a poor country such as Vietnam, or a tiny one such as Brunei, TPP negotiations place a huge strain on government capacity.
In this issue, the NAFTA rules of origin for the automotive sector established 62.5% of regional content, whereas TPP establishes 45% (mainly due to pressure from Japan).
Mexican products increasingly tend to be North American products, which makes them ineligible under the rules of origin in the EU agreement.
The TPP is a FTA, which involves tariff reductions in the manufacturing sector, market opening in the service sector, and strict rules of origin (ROO) requirements.
Trade for much of the Pacific and Atlantic regions will be governed by agreements, thousands of pages in length and replete with complex rules of origin that contradict basic principles of efficiency and the free flow of goods.
In recognition of this, AFTA's rules of origin are quite relaxed: a good qualifies even if only 40% of its value was added in the region, and that 40% can come from more than one member.Even so, ASEAN's success owes more to ambitious cuts in its MFN tariffs, which it applies to everybody.
