Country of origin

Categories: Business law | Marketing

Country of origin is the country of manufacture, production, or growth where the article is coming from.

Country of origin labeling

Many nations require Country of Origin Labeling (COOL) in order to provide consumers valuable information about the source of their food (or other merchandise). In the US new legislation demands that all beef, lamb, pork, fish, perishable agricultural commodities and peanuts most have a country of origin label.

Legislation requiring a country of origin labeling is however a heated topic, as opponents say it will lead to higher costs that will ultimately have to be paid by the consumers.

Country of Origin as a marketing strategy

From a marketing perspective, country of origin gives a way to differentiate the product from the competitors. It is believed that the country of origin has an impact on the willingness to buy a product, and studies have shown that consumers tend to have a relative preference to products from their own country (etnocentrism). The effect of country of origin is however debated as studies have shown that the country of design (for instance Apple computers or Nike shoes) can be more important than the country of origin.

Country of Origin in International trade

When shipping products from one country to another, the products have to be marked with country of origin in their export documents. Country of origin will affect its admissibility, the rate of duty, its entitlement to special duty or trade preference programs, antidumping, and government procurement.

Today, many products is an outcome of a large number of parts and pieces that come from many different countries, and that may then be assembled together in a third country. In these cases, it's very hard to know exactly what is the country of origin, and different rules apply as to how determine their "correct" country of origin. Generally, articles only change their country of origin if the work or material added to an article in the second country constitutes a substantial transformation, or, the article changes its name, tariff code, character or use (for instance from wheel to car).