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The impact of rules of origin on trade flows

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Author Info
Patricia Augier
Michael Gasiorek
Charles Lai Tong

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Abstract

"A great deal of post-war trade liberalization resulted from regional, preferential trade agreements. Preferential trade agreements cut tariffs on goods originating only in those nations that have signed the agreement. Therefore, they need 'rules of origin' to determine which goods benefit from the tariff cut. Rules of origin have long been ignored for two good reasons: they are dauntingly complex and at first sight appear mind-numbingly dull. The third standard reason for ignoring them - the assertion that they do not matter much - turns out to be wrong. We show that rules of origin are important barriers to trade. Moreover, such rules are emerging as an important trade issue for three additional reasons. First, preferential trade deals are proliferating worldwide. Second, the global fragmentation of production implies complex international supply chains which are particularly constrained and distorted by rules of origin. Third, the extent to which regionalism challenges the WTO-based trading system depends in part on incompatibilities and rigidities built into rules of origin." Copyright © CEPR, CES, MSH, 2005.

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File URL: http://www.blackwell-synergy.com/doi/abs/10.1111/j.1468-0327.2005.00146.x
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Publisher Info
Article provided by CEPR, CES, MSH in its journal Economic Policy.

Volume (Year): 20 (2005)
Issue (Month): 43 (07)
Pages: 567-624
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Handle: RePEc:bla:ecpoli:v:20:y:2005:i:43:p:567-624

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  3. Deardorff, Alan V, 2001. "International Provision of Trade Services, Trade, and Fragmentation," Review of International Economics, Blackwell Publishing, vol. 9(2), pages 233-48, May. [Downloadable!] (restricted)
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  16. Sapir, Andre, 1998. "The political economy of EC regionalism," European Economic Review, Elsevier, vol. 42(3-5), pages 717-732, May. [Downloadable!] (restricted)
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Full references

Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Productivity Commission, 2004. "Rules of Origin under the Australia–New Zealand CER Trade Agreement," International Trade 0410001, EconWPA. [Downloadable!]
  2. Beatriz Gaitan & Bernd Lucke, 2007. "The Barcelona initiative and the importance of NTBs: a dynamic CGE-analysis for Syria," International Economics and Economic Policy, Springer, vol. 4(1), pages 33-59, April. [Downloadable!] (restricted)
  3. Jong-Wha Lee & Innwon Park & Kwanho Shin, 2005. "Proliferating Regional Trade Arrangements: Why and Whither?," International Trade 0501010, EconWPA. [Downloadable!]
    Other versions:
  4. Cipollina, Maria & Salvatici, Luca, 2007. "EU and developing countries: an analysis of preferential margins on agricultural trade flows," Working Papers 7219, TRADEAG - Agricultural Trade Agreements. [Downloadable!]
  5. Asfaw, Solomon & Mithofer, Dagmar & Waibel, Hermann, 2007. "What Impact Are EU Supermarket Standards Having on Developing Countries Export of High-Value Horticultural Products? Evidence from Kenya," 105th Seminar, March 8-10, 2007, Bologna, Italy 7870, European Association of Agricultural Economists. [Downloadable!]
  6. Richard Baldwin, 2007. "Multilateralising Regionalism: Sphagetti Bowls as building Blocs on the Path to Global Free Trade," Working Papers id:1231, esocialsciences.com. [Downloadable!]
    Other versions:
  7. Jose Anson & Olivier Cadot & Antoni Estevadeordal & Jaime de Melo & Akiko Suwa-Eisenmann & Bolorma Tumurchudur, 2004. "Rules of origin in north-south preferential trading arrangements with an application to NAFTA," Research Unit Working Papers 0406, Laboratoire d'Economie Appliquee, INRA. [Downloadable!]
    Other versions:
  8. Asfaw, S. & Mithofer, D. & Waibel, H., 2008. "EU private agrifood standards in African high-value crops: pesticide use and farm-level productivity," 2008 International Congress, August 26-29, 2008, Ghent, Belgium 44145, European Association of Agricultural Economists. [Downloadable!]
  9. De Maria, Federica & Drogue, Sophie & Matthews, Alan, 2008. "Agro-Food Preferences in the EU's GSP Scheme: An Analysis of Changes between 2004 and 2006," Working Papers 6151, TRADEAG - Agricultural Trade Agreements. [Downloadable!]
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  10. Jean-Christophe Bureau & Raja Chakir & Jacques Gallezot, 2007. "The Utilisation of EU and US Trade Preferences for Developing Countries in the Agri-Food Sector," The Institute for International Integration Studies Discussion Paper Series iiisdp193, IIIS. [Downloadable!]
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  11. Cardamone, Paola, 2007. "A survey of the assessments of the effectiveness of Preferential Trade Agreements using gravity models," Working Papers 7282, TRADEAG - Agricultural Trade Agreements. [Downloadable!]
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  12. Baldwin, Richard, 2006. "Managing the Noodle Bowl: The Fragility of East Asian Regionalism," CEPR Discussion Papers 5561, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
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  13. Uttam Kumar Deb, 2006. "Rules of Origin and Non-Tariff Barriers in Agricultural Trade: Perspectives from Bangladesh and Cambodia," Working Papers 1206, Asia-Pacific Research and Training Network on Trade (ARTNeT), an initiative of UNESCAP and IDRC, Canada.. [Downloadable!]
  14. Anna Strutt and Allan N. Rae, 2008. "Assessing the impacts of prefenertial trade agreements in the Asian and Pacific region," Publication STUDIES IN TRADE AND INVESTMENT, in: Mia Mikic (ed.), Emerging Trade Issues for Policymakers in Developing Countries in Asia and the Pacific, chapter 9 Trade Policy Section, Trade and Investment Division, UNESCAP. [Downloadable!]
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