local content rule

(redirected from rule 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 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.