The World Customs Organization (WCO), the International Trade Centre (ITC) and the World Trade Organization (WTO) should be lauded for trying to democratize international trade through their Rules of Origin Facilitator .
According to its website, the “Rules of Origin Facilitator is the first comprehensive global online resource on tariffs, trade agreements and rules of origin designed with SMEs in mind. The tool enables you in a few clicks to find out import duties in foreign markets applicable to your product, available duty savings, detailed rules of origin, and certification procedures.”
The WTO asserts that the Rules of Origin Facilitator “will be of particular benefit to small and medium-size firms by allowing them to access the (duty and rules of origin) information through an easy-to-navigate system.”(emphasis added)
“Governments and companies need reliable information about rules of origin,” said WTO Director-General Roberto Azevêdo. “And this information needs to be accessible for free, in simple, standardized language.
“The Facilitator fills a real gap,” he added. “We believe this tool will prove especially useful for smaller companies in developing and least developed countries. These are the companies that have greatest trouble navigating international trade requirements”
There are so many things right about the Rules of Origin Facilitator, but there is one glaring and insurmountable flaw: if a user does not know their product’s HS code, the tool will be almost useless to them.
Step-1 in finding reliable information about rules of origin, assessing tariff-preference eligibility and understanding international trade requirements is Harmonized System (HS) commodity classification. Unfortunately, HS classification is profoundly difficult… especially for such non-experts as the Rules of Origin Facilitator’s target users.
This important fact appears to have been overlooked by the tool’s developers.
The Rules of Origin Facilitator provides users with a “product code search”, but this does not offer much practical assistance. The tool searches indiscriminately for keywords – often yielding no matches whatsoever. When it stumbles upon an explicitly described keyword, the tool presents the user with a long list of mostly irrelevant “potential” matches.
To illustrate further, the following very simple searches of a few of Bangladesh’s major exports resulted in zero potential matches in the Rules of Origin Facilitator’s “product code search” tool:
- “Leather handbag”
- “Frozen shrimp”
- “jute sack”
- “Oolong tea”
So, unless an SME exporter of “woven jute floor mats” knows that their product’s HS code is associated to “Carpets and other textile floor coverings, woven, not tufted or flocked; Other, not of pile construction, made up; Of other textile materials”, their experience using the Rules of Origin Facilitator will feel like a trip through Dante’s nine circles of hell.
If the promoters of the Rules of Origin Facilitator really want to help SMEs in developing and least developed countries exploit preferential selling opportunities abroad, they will have to bridge the gap between how products are described commercially and how they are expressed in national tariff schedules. SMEs will only be able to understand and navigate the complex requirements of international trade when they are provided an easy and reliable way to determine their products’ HS codes.