The WCO Study on the Origin Determination of Remanufactured and Recycled Goods analyses free trade agreements (FTAs) provisions related to recycled and remanufactured goods and provides key insights into the challenges met by Customs administrations in applying rules of origin which are primarily designed for new products to these categories of goods. While revealing significant gaps in FTAs origin-related provisions, the Study formulates recommendations for unlocking lower tariffs in free trade agreements for these types of goods. 

FTAs and circular economy principles

Many FTAs promote the transition to a circular economy where resources are used more efficiently and economic growth is decoupled from material inputs. For example, the draft trade agreements under negotiation between the European Union (EU) and several countries refers to this notion: the EU-Mexico agreement includes a provision on “inclusive green growth and Circular Economy”, while the agreements with Australia and New Zealand contain provisions aimed at increasing cooperation to promote “sustainable production and consumption, the Circular Economy, green growth and pollution abatement”.^[1]

Circular models are based on various industrial processes, including recycling and remanufacturing. Remanufacturing is a truly closed-loop industrial process that intentionally recaptures the value-added component of a product so that it may lead additional useful lives rather than being landfilled or recycled. Recycling reduces products into raw material, which can then be used again.

Some FTAs contain specific provisions aimed at boosting trade in recycled and remanufactured products, including through differential tariffs applied at the six-digit HS codes that specify recycled or remanufactured goods and/or subheadings containing both new and recycled/remanufactured goods.

For FTAs ambition to be reached, the terms recycled and remanufactured should be clearly defined

In 2026, WCO Members were invited to report via a questionnaire if they were applying any rules of origin to recycled and remanufactured goods, the trade agreements they were using to apply them, and the challenges they faced in doing so. 19 out of 78 Members (24.36%) responded.

Of the 19 Customs administrations which responded to the WCO survey, only a few said that their FTAs give a clear definition explaining which goods can be considered as recycled and remanufactured.

In most FTAs, these products are simply referenced under provisions relating to wholly obtained goods:

• by-products derived from the manufacturing process, e.g. metal offcuts or fabric scraps.
• used parts derived from the dismantling process, e.g. valuable parts of electronic discarded devices.
• remanufactured goods, such as laptops, restored to a functional performance comparable to that of new items.

Rules of origin specific to recycled and remanufactured goods should be developed

10 of the respondents to the WCO survey indicated that they are granting preference to the recycled and remanufactured goods, the remaining eight indicated that they are not due to a lack of proper procedures and rules of origin for those goods. The FTAs usually provide that those goods must be “goods wholly obtained or produced entirely in the territory of one or all Parties” to the agreement.

In as much as some have dedicated new separate Chapters dealing exclusively and holistically with the different aspects of the circular economy, issues of origin determination remain a grey area.

Difficulties faced by Customs include:

• identifying or differentiating normal or remanufactured goods during importation if there is no indication that they are remanufactured goods (some categories of recycled goods and remanufactured goods have their own dedicated HS codes, but most do not).
• proving the origin of materials, as they are old goods and there may not be any record of the initial production process.
• confirming whether recovered raw materials for a used product can qualify as being wholly obtained. 

Further recommendations to enable Customs to determine the origin of recycled/remanufactured goods

Rules of origin play the key role of unlocking lower tariffs in FTAs and can significantly influence production decisions. Properly designed, they can foster the development of entire supply chains among parties to preferential trade arrangements or market access instruments. 

The study therefore recommends:

• implementing traceability systems to document how materials are moved from collection to final product, using methods like mass balance, physical segregation, or controlled blending.
• developing clear specifications for input materials, and strict records maintained of waste origin (pre- or post-consumer, source) as they have the potential to reduce or even eliminate doubt as to the origin of materials.
• relying on third‑party certifications and standards to verify recycled content and product quality, thereby ensuring accurate and credible communication to stakeholders.
• Developing technical standards or certification systems to assure consumers that remanufactured products are safe and meet all technical requirements.
• In collaboration with the WCO, exchanging best practices to guide the determination of origin for recycled and remanufactured goods

(Source: https://www.wcoomd.org/en/media/newsroom/2026/july/origin-determination-of-remanufactured-and-recycled-goods-wco-publishes-new-study.aspx)