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Modeling Modifications in Rules of Origin: A Partial Equilibrium Approach

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  • Fetzer, James J.
  • Rivera, Sandra A.

Abstract

In this paper we explore how changes in ROO have influenced trade flows with FTA partners and other trading partners. As tariffs become less important barriers relative to the implementation of nontariff measures, new and existing FTAs include modifications in rules of origin (ROO). While some work has examined the impact of ROOs on trade flows of intermediate and final goods, none has provided quantitative estimates of the impact of modifying ROO, which we do herein. Using a simple multi-market partial equilibrium model which accounts for linkages between intermediate and final goods, we provide a framework for analysis of the impact of ROO modifications on specific products. In applying this model to recent NAFTA ROO changes in the refined gold and scrap gold markets, trade flows for refined gold and gold jewelry follow expected patterns.

Suggested Citation

  • Fetzer, James J. & Rivera, Sandra A., 2005. "Modeling Modifications in Rules of Origin: A Partial Equilibrium Approach," Conference papers 331372, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    • Handle: RePEc:ags:pugtwp:331372
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