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Revised Rules of Origin to augment textile exports
Dec '10
On November 18, the European Commission (EC) had revised the Rules of Origin (RoO) for those commodities which are imported under its generalized system of preferences (GSP).The new rule is likely to be effective from January 1, next year.

This revised rule is expected to enhance the textile exports from Nepal. The new RoO has special provisions for Least Developed Countries (LDCs) and Nepal can take advantage of these provisions, particularly the zero-duty facility.

Again, if the new RoO is judiciously followed then it is expected to generate a favorable atmosphere where textile factories can grow as well as function smoothly. It will also provide more employment opportunities.

The ongoing RoO is much more complicated against the revised one as the new RoO makes the rules and regulations much flexible, particularly for the least developed economies which want to take advantage of the preferential trade arrangements of European Union.

As per the ongoing RoO, countries like Nepal, Laos and Cambodia have derogation but these countries are bound to purchase raw materials from SAARC, ASEAN and several African nations. But the revised rule is simpler as it has no such provision which compels these nations to import raw materials from certain specific regions only.

Now, the major challenge for the country is that it has to compete with several other least developed economies, although it would be free to decide from where the raw materials should be imported. The production cost is likely to decline considerably if the raw materials are imported from China as well as Taiwan.

Fibre2fashion News Desk - India

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