Tariff Law 2 – Tariff Commission Practice Exam

What is the role of Rules of Origin (ROO) in tariff treatment under free trade agreements?

They determine whether goods qualify for preferential rates under FTAs They set the general statutory duty rates They determine value for duty They grant import licenses

Correct Answer:

They determine whether goods qualify for preferential rates under FTAs

Explanation:

Rules of Origin determine whether a product qualifies for the preferential tariff treatment under a free trade agreement. They set the criteria—such as substantial transformation, changes in tariff classification, or a minimum regional value content—that a good must meet to be considered originating in a member country and thus eligible for reduced or zero tariffs. If the product meets these rules, it can enjoy the preferential rates; if not, it is treated as non-originating and faces the standard tariff. These rules don’t set general duty rates—that’s handled by the tariff schedule. They also don’t determine the value for duty—that’s a separate customs valuation process. And they don’t grant import licenses, which is a separate regulatory step.

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