local content rule

local content rule

or

rule of origin

the stipulation by a country that for a product to qualify as an authentic domestically manufactured product (that is, originating in that country) the product must be manufactured predominantly from locally supplied as opposed to imported components. Local content rules are used by governments mainly to prevent the operation of so called ‘screwdriver’ plants (plants producing final products from mainly imported components) established to circumvent TARIFFS, QUOTAS and anti-dumping duties imposed on imported final products. See DUMPING, CERTIFICATE OF ORIGIN.

local content rule

or

rule of origin

the stipulation by a country that for a product to qualify as an authentic domestically manufactured product (that is, originating in that country) the product must be manufactured predominantly from locally supplied, as opposed to imported, components. Local content rules are used by governments mainly to prevent the operation of so-called ‘screwdriver’ plants (plants producing final products from mainly imported components) established to circumvent TARIFFS, QUOTAS and COUNTERVAILING DUTIES imposed on imported final products.

The application of local content rules poses various problems - in particular, the proportion of the final product that has to be sourced domestically (see SOURCING) for the product to qualify as a locally produced one, and how the extent of local content is to be measured (number, value of components, etc.). See MULTINATIONAL COMPANY, PROTECTIONISM, CERTIFICATE OF ORIGIN.

References in periodicals archive ?
The local content rule requires a company operating in a foreign country to obtain a certain percentage of its materials and components from local suppliers.
Local content rules are applicable to all spheres of government, including state owned companies.
But, even though trade between the world's two largest democracies has grown fivefold since the turn of the millennium to around $100 billion, friction persists on areas from drug patents to local content rules for manufacturers.
Brazil has to avoid a scenario in which competitiveness is lost and the country deindustrializes faster than it reindustrializes (in sectors where local content rules have fostered investment).
India is furious about a decision by the Office of the United States trade representative to drag it before the WTO over the subsidies and local content rules it has set to promote solar power generation.
There is of course no guarantee that this legislation will actually be implemented in practice; that the oil income will be used to support growth in the wider economy; and that local content rules will be carried out as intended.
However, development of the fields must satisfy local content rules requiring companies to buy goods and services locally as part of a government policy to spur economic growth.
Strict local content rules and a rapid increase in labour costs have also taken their toll.
While maritime coatings imports currently provide 20 to 40 percent of the Brazilian maritime coatings demand, according to one Sinaval document, the country is considering local content rules that could reduce that share, prompting greater local coatings manufacturing invesments.
Quality control requirements and local content rules also constrain the supply market.
Writing about Australia's approaching negotiations for a free trade deal with the USA, Day more or less agreed with the American position that Australia's local content rules for TV are a distortion of the market and a barrier to unfettered consumption by Australians of American content.
Australians also place local content rules far and above agriculture or manufacturing in the negotiations.

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