1. The starting observation
An exporter supplying five markets, four of them with preferential agreements.
The supply chain: three components from China, one from Japan, one from Korea.
2. The question
Which certificate should be used for which destination?
The answer depends on the origin rules, not on the destination’s geography.
3. What the analysis showed
Destination one
Required a tariff change that the Japanese component prevented, under the bilateral agreement.
Under RCEP, the Japanese component counted as originating, and the good qualified.
Destination two
The bilateral agreement qualified on value content.
RCEP’s value content threshold was higher, and the good failed.
Destination three
Neither qualified, because the processing was insufficient under both rule sets.
Destination four
Both qualified, and the bilateral rate was lower.
4. The lesson
Four destinations, four different answers, and the destination’s region was not the deciding factor.
The rule set and the supply chain together decided.
5. What the analysis required
The HS codes of all five components.
The product-specific rule under each agreement.
The value content calculation, done consistently.
6. The time it took
Two days for the first product.
Less for subsequent products, because the component data had been collected once.
7. What it changed
One destination received a preference it had not been receiving, and the saving was significant.
8. Closing view
The origin question has a different answer per product and per agreement.
Assuming one answer carries across a product line is where the value is lost.
*This article is based on the origin rules of China’s free trade agreements.*