Preferential treatment, also referred to as preferential origin, is an agreement between different countries in which they offer each other exemptions or discounts on import duties. A well-known example of this is the Generalised System of Preferences (GSP), which grants reduced duties to developing nations.
To benefit from preferential trade terms, goods must meet specific criteria known as “rules of origin.” These rules vary depending on the free trade agreement and determine whether a product qualifies as originating from a particular country. A certificate of origin is often required as proof.
The Harmonised System (HS) is a global standard used by over 200 countries to classify products. It provides a foundation for establishing these rules of origin, outlining specific requirements for each product category. Businesses can use iCustoms’ product classification tool to ensure goods are correctly classified under the right HS codes.