WCO publishes in-depth study on the cumulation of origin

The concept of “accumulation/cumulation” or “cumulative rules of origin” allows countries which participate to a free trade agreement (FTA) or a trade arrangement (e.g., a unilateral trade concession scheme like AGOA or the Generalized System of Preference), to share production and jointly comply with the relevant rules of origin provisions. In other words, it allows products of one country to be further processed or added to products in another party of that preferential trade agreement or arrangement, as if they originate in the latter party. In this way, the production may be aggregated with other countries’ inputs, thus offering additional opportunities to source input materials. This essentially widens the definition of originating products and provides flexibility to develop economic relations between countries within a preferential trade scheme. Accordingly, through the concept of accumulation/cumulation in a free trade agreement, the use of input materials and manufacturing processes within that FTA is encouraged. This promotes regional economic integration amongst members of a free trade area.

The World Customs Organization (WCO) has published an in-depth study on the cumulative rules of origin available in both English and French. This study aims at supporting WCO members by offering technical insights into cumulation rules and administrative management practices. It analyses the cumulation provisions in existing FTAs, including in some African FTAs and Customs Unions. The objective is to provide a detailed overview of origin cumulation schemes under the various FTAs, including the procedural requirements relating to cumulation and WCO Members’ practices in implementing these rules, with the related certification requirements and verification practices.

Already in 2017 the WCO published a Comparative Study on Preferential Rules of Origin (updated in 2020), which analyzed the Rules of Origin (ROO) provisions across major trading nations, examining cumulation rules within 47 FTAs. However, this study mainly focused on the provisions of these FTAs, without exploring the administrative management and implementation challenges, which are also considered among the most complex aspects of applying cumulation rules. The new study expands the research, by explaining the different types of accumulation/cumulation, such as bilateral cumulation, diagonal cumulation and full cumulation. Moreover, it gives practical examples on how to apply these schemes under various FTAs. To develop it, the WCO Secretariat conducted an extensive document review of 398 FTAs in force, using the WCO Trade Tools (Origin Database). In addition, input was providedfrom 29 Customs Administrations on origin cumulation implementation practices.

More precisely, the study covers the following three key ares:

1. Technical Explanation of Accumulation/Cumulation: provides detailed technical explanations and examples of cumulation, categorizing different types.
2. Overview of Document Review: summarizes the findings from the review of existing FTAs, detailing cumulation rules and procedural requirements.
3. Case Studies on Administrative Implementation: shows examples from Customs administrations on how cumulation rules are practically implemented.