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Using Utilization Rates to Identify Rules of Origin Reforms: The Case of EU Free Trade Area Agreements

Author

Listed:
  • Pramila Crivelli
  • Stefano Inama
  • Jonas Kasteng

Abstract

Governments are increasingly entering FTAs and mega-regionals to secure market access for their firms. Utilization rates are used to monitor whether firms are using these FTAs. This paper is part of a recent stream of studies to dash out enduring myths that preferences are not used when preferential MFN rates are low or for unknown or vague reasons. Contrary to this sort of conventional wisdom this study advocates that low utilization rate is a valuable and unequivocal sign that reform of rules of origin and related administrative procedures is needed to make the FTA attractive and meaningful to the private sector. By using a “repeated offender” methodology this paper identifies a series of product specific rules of origin (PSROs) causing low utilization rates. Such PSROs are the candidate for reforms towards more lenient requirements that are commercially viable for firms.

Suggested Citation

  • Pramila Crivelli & Stefano Inama & Jonas Kasteng, 2021. "Using Utilization Rates to Identify Rules of Origin Reforms: The Case of EU Free Trade Area Agreements," RSCAS Working Papers 2021/21, European University Institute.
    • Handle: RePEc:rsc:rsceui:2021/21
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    File URL: https://cadmus.eui.eu/bitstream/handle/1814/70396/RSC%202021_21.pdf?sequence=1&isAllowed=y
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    File URL: https://hdl.handle.net/1814/70396
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    Citations

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    Cited by:

    1. Ornelas, Emanuel & Turner, John L., 2024. "The costs and benefits of rules of origin in modern free trade agreements," Journal of International Economics, Elsevier, vol. 147(C).
    2. Gourdon, Julien & Gourdon, Karin & de Melo, Jaime, 2023. "A (More) Systematic Exploration of the Trade Effect of Product-Specific Rules of Origin," World Trade Review, Cambridge University Press, vol. 22(3-4), pages 421-435, October.
    3. Dzmitry Kniahin & Jaime de Melo, 2022. "A Primer on Rules of Origin as Non-Tariff Barriers," JRFM, MDPI, vol. 15(7), pages 1-23, June.

    More about this item

    Keywords

    Free Trade Agreements; Trade Preferences; Rules of Origin; Product-Specific Rules of Origin; Preference Utilization Rates;
    All these keywords.

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F15 - International Economics - - Trade - - - Economic Integration

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