How do rules of origin work?

The Congressional Research Service provides a report on rules of origin in international trade, and the World Trade Organization serves as a repository for international agreements on rules of origin. The Center for Strategic and International Studies reports on the impact of rules of origin on supply chains using USMCA’s auto rules as a case study. A recent paper from Keith Head, Thierry Mayer, and Marc Melitz in the Journal of International Economics describes the Laffer curve for rules of origin. Ed Gresser of the Progressive Policy Institute finds US auto production unchanged since the introduction of USMCA rules.

Mentioned publications

International Trade: Rules of Origin – Vivian C. Jones and Liana Wong, Congressional Research Service, March 3, 2020
A primer on rules of origin in international trade agreements and under US practice.
Rules of origin – World Trade Organization
The WTO’s landing page for resources on rules of origin.
The Impact of Rules of Origin on Supply Chains: USMCA’s Auto Rules as a Case Study – William Alan Reinsch, Jack Caporal, Madeleine Waddoups, and Nadir Tekarli, Center for Strategic and International Studies, April 2019
CSIS estimates the impact of rules of origin changes on the North American auto supply chain.
The Laffer curve for rules of origin – Keith Head, Thierry Mayer, and Marc Melitz, Journal of International Economics, February 25, 2024
A recent paper finds that more restrictive rules of origin may reduce incentives to source parts within a free trade area.
Trade Fact of the Week: U.S. auto production unchanged since 'USMCA' replaced 'NAFTA' in 2020 – Ed Gresser, Progressive Policy Institute, May 15, 2024
Despite rules of origin intended to relocate production to the US, not much has changed.