Cumulation of Origin

Cumulation of Origin

Cumulation is a concept used in preferential trade agreements, which essentially widens the definition of originating products and helps manufactured goods to meet the relevant origin rule.

Cumulation allows products that have obtained originating status in one partner country to be further processed or added to products originating in another participating country as if they had originated in that latter country, without the finished product losing the benefit of preferential customs tariffs. It can only be applied between countries operating with identical origin rules.

An important point to remember is that in the case of cumulation the working or processing carried out in each partner country on originating products does not have to be ’sufficient working or processing’ as set out in the list rules.

Different types of Cumulation:

  • Bilateral cumulation operates between two countries where a free trade agreement or autonomous arrangement contains a provision allowing them to cumulate origin. This is the basic type of cumulation and is common to all origin arrangements. Only originating products or materials can benefit from it.
  • Diagonal cumulation operates between more than two countries provided they have Free Trade Agreements containing identical origin rules and provision for cumulation between them. As with bilateral cumulation, only originating products or materials can benefit from diagonal cumulation. Although more than two countries can be involved in the manufacture of a product it will have the origin of the country where the last working or processing operation took place, provided that it was more than a minimal operation.
  • Full cumulation dispenses with this requirement so that all goods, including those that originate outside the preferential area can be included; provided all work or processing required to confer origin status is carried out in the country with the preference.
  • Regional cumulation is a form of diagonal cumulation and operates between members of a regional group of beneficiary countries (e.g. ASEAN or AANZFTA).