Preference and Preferential Origin
Preference refers to a reduced or zero rate of customs duty applied to goods traded between countries that have a free trade agreement or other preferential arrangement in place.
To qualify for this reduced rate, goods must meet the rules of origin defined in the agreement, which is known as having preferential origin. It means the goods are either wholly obtained in the partner country (e.g. mined or grown) or have been sufficiently processed or manufactured there according to specific criteria.
Claiming preference usually requires proof of origin, such as a statement on origin, REX statement, or the use of the importer’s knowledge. If the requirements are met and correctly declared, importers can benefit from lower or zero duty rates on eligible goods.