Rules of origin in north-south preferential trading arrangements with an application to NAFTA
AbstractAll preferential trading agreements (PTAs) short of a customs union use Rules of Origin (RoO) to prevent trade deflection. RoO raise production costs and create administrative costs. This Paper argues that in the case of the recent wave of North-South PTAs, the presence of RoO virtually limits the market access that these PTAs confer to the Southern partners. In the case of NAFTA, it is estimated that up to 40% of Mexicoâs preferential access to the US market in 2000 (estimated at 5%) was absorbed by RoO-related administrative costs with non-administrative costs for Mexican firms of about 3% US of import value. These findings are coherent with the view that North-South PTAs could well be viewed like a principal-agent problem in which the Southern partners are just about left on their participation constraint.
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Bibliographic InfoPaper provided by Laboratoire d'Economie Appliquee, INRA in its series Research Unit Working Papers with number 0406.
Length: 31 pages
Date of creation: Jan 2004
Date of revision:
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rules of origin; FTA; NAFTA;
Other versions of this item:
- José Anson & Olivier Cadot & Antoni Estevadeordal & Jaime de Melo & Akiko Suwa-Eisenmann & Bolormaa Tumurchudur, 2005. "Rules of Origin in North-South Preferential Trading Arrangements with an Application to NAFTA," Review of International Economics, Wiley Blackwell, vol. 13(3), pages 501-517, 08.
- Anson, José & Cadot, Olivier & de Melo, Jaime & Estevadeordal, Antoni & Suwa Eisenmann, Akiko & Tumurchudur, Bolormaa, 2003. "Rules of Origin in North-South Preferential Trading Arrangements with an Application to NAFTA," CEPR Discussion Papers 4166, C.E.P.R. Discussion Papers.
- F10 - International Economics - - Trade - - - General
- F11 - International Economics - - Trade - - - Neoclassical Models of Trade
- F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
This paper has been announced in the following NEP Reports:
- NEP-ALL-2004-07-18 (All new papers)
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