Cumulation Rule

The Cumulation Rule is an important rule of origin in Free Trade Agreements (FTAs) that allows member countries, when determining the origin of a product, to cumulate the value of materials or components originating from other member countries and treat them as originating content of the final producing country. Usage scenarios: when a product is processed in multiple FTA member countries, cumulation helps the product meet origin criteria and thus enjoy tariff preferences. Notes: cumulation includes bilateral cumulation, diagonal cumulation, and full cumulation, and rules vary by agreement; it is necessary to ensure that materials come from FTA member countries and meet specific requirements; cumulation may be limited by 'minimal operations' provisions. Distinction from other terms: cumulation differs from the 'substantial transformation' criterion, which focuses on whether sufficient processing occurs in the exporting country; cumulation expands the scope of originating content and lowers the threshold for preferential treatment. Foreign trade practitioners need to be familiar with the cumulation provisions of specific FTAs to optimize supply chain layout and origin declarations.