Origin of Goods - WTO Chief Explains
WTO DG, Pascal Lamy explained,
The concept of country of origin for manufactured goods has gradually become more challenging as the various operations, from the design of the product to the manufacture of the components, assembly and marketing have spread across the world.
The question of “who produces what for whom”, and “where the value added is accruing” are perhaps as important as the traditional concept of country of origin, which guides not only custom statistics, but the application of the core WTO principle of Most Favoured Nation.
In international trade theory, trade in goods is seen as a substitute for the movement of factors of production. Thus, a country's imports of goods from its trade partner are seen as additional suppliers of the partner country's labour and capital, which competes with the importing country's own workers and entrepreneurs. But with the fragmentation of production, the share of value added by factors of production of the origin country in traded products is considerably lower than in the past.