"De facto convergence" in product-specific rules of origin refers to the practical alignment of these rules across different trade agreements, despite variations in their formal wording.
This convergence is happening because many agreements now use similar criteria, such as regional value content, technical requirements, and changes in tariff classification.
Proof of origin procedures are also simplifying, leading to increased use of free trade agreements, though some complexity remains
This study argues that the international trading community should take stock of the positive developments occurring on rules of origin based on a "de facto" analysis carried out in this study.
Using an innovative approach the analysis shows that major FTAs have convergent product-specific rules of origin (PSRO) on the majority of PSRO at HS six-digit level as high as 60.3%, equivalent to 54% of dutiable intra-FTA trade.
This study advocates that the results of this analysis should be used to hold a series of informed sessions at intergovernmental level among WTO and WCO members to further discuss the areas of convergence and later share it with the wider community as a useful toolbox or compendium of PSROs and proof of origin to facilitate compliance and reduce costs.
Further analysis is being undertaken on proof of origin, another fundamental part of rules of origin, complementing the present publication.