Also known as accumulation.Cumulation is a provision which allows considering goods obtained in or processing taking place in one FTA thành viên country as originating in another.Cumulation is an integral part of trade agreements & enables production sharing within the FTA territory. It is one of the ways to lớn provide producers with a greater flexibility in terms of sourcing inputs & parts: it allows to use inputs và parts from suppliers located in FTA partner countries and treat them as originating for the purpose of determining the origin of the final hàng hóa.There are three main types of cumulation: bilateral, diagonal & full. The key difference between the three types is the amount of parties involved and what types of inputs (originating or non-originating) can be used as the basis for cumulation.In most cases two conditions need lớn be fulfilled for any of the above types of cumulation lớn be applied:1) There needs to lớn be a trade agreement or trade agreements between countries wishing to lớn cumulate origin; and2) All trade agreements within the cumulation zone should have sầu identical rules of originIn addition, a Mutual Administrative sầu Assistance Agreement need to be in place between all the countries involved lớn implement cumulation.

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Bilateral cumulation: is used in bilateral trade agreements và allows each thành viên of the agreement khổng lồ use products originating in the other without the final good losing its originating status. Goods produced from originating materials in one FTA country and further processed in the other, can then be exported bachồng khổng lồ the first country under preferential treatment. Without cumulation only the inputs originating in the exporting country could be counted towards the originating status.

Diagonal cumulation(also sometimes referred to lớn as regional cumulation): works in the same way as bilateral cumulation but is applied in agreements with more than two members. As is the case with bilateral cumulation, diagonal cumulation can only be applied to goods originating in an FTA thành viên country và further processed in another member country.

Full cumulation: allows cumulation to be applied between any number of countries lớn goods not originating in the FTA thành viên country & processed in the FTA territory. Full cumulation allows cumulating origin-counting processing added across the FTA territory even when the initial input đầu vào is not originating. Full cumulation is the most flexible type of cumulation.

Third buổi tiệc nhỏ cumulation (also referred khổng lồ as 3rd các buổi tiệc nhỏ, cross or extended cumulation): allows for any of the previous types of cumulation (most commonly bilateral and diagonal) between countries which are not linked by a trade agreement or are linked by a trade agreement with different rules of origin. It allows lớn use inputs from a third tiệc nhỏ country which is not a member of the applicable FTA và consider them originating provided that they meet the rules of origin under the relevant trade agreement. Cross cumulation is the most flexible type of cumulation of originating inputs và is often limited to lớn certain tariff Headings, Subheadings & codes or lớn certain types of products only.

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Examples:

Countries A, B and C are linked by a trade agreement with diagonal cumulation. A company located in country A exports originating inputs to lớn its subsidiary in country B. The inputs are further processed in country B và then sold to a client in country C. The goods are subject khổng lồ a value added rule based on a 60% regional value nội dung requirement. Without cumulation the subsidiary in country B could not cumulate the inputs from the parent company in country A with its added value. Diagonal cumulation under the A-B-C FTA allows the regional value in country A & B khổng lồ be added together when the good is exported lớn country C.

Under the same scenario with full cumulation, a company in country A imports a non-originating product from outside the FTA territory & processes it khổng lồ a degree which is not sufficient khổng lồ confer origin under A-B-C FTA. It then exports it khổng lồ its subsidiary in country B as non-originating product. The subsidiary processes the good further. If the cumulative sầu regional value content added by countries A and B during the separate processing stages exceeds 60%, the good can be exported to a client in country C under preferential tariff as originating in the FTA territory.

Under the same scenario, where countries A và B and B and C are linked by two trade agreements with different rules of origin, third các buổi tiệc nhỏ cumulation can be applied. A company located in country A exports originating inputs lớn its subsidiary in country B under the A-B FTA. The inputs are further processed in country B & then sold khổng lồ a client in country C. The goods are subject to a 60% regional value nội dung requirement under the B-C FTA. Without cross cumulation the 60% threshold requirement needs khổng lồ be fulfilled in country B without the ability khổng lồ count inputs from country A towards the originating content. Cross cumulation under the two FTAs allows inputs from country A khổng lồ be treated as originating under the B-C FTA under certain conditions specified in the agreement.


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