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Rules of Origin and the EU-Med Partnership: The Case of Textiles


  • Patricia Augier
  • Michael Gasiorek
  • Charles Lai-Tong


This paper analyses the impact of rules of origin on patterns of trade in the context of the pan-European system of diagonal cumulation. The paper first highlights the importance of rules of origin in all preferential trading arrangements while arguing that those rules can easily lead to trade suppression and/or trade diversion. We then focus on the introduction of the pan-European system in 1997 and show evidence to suggest that the introduction of the system materially impacted on trade between the EU, and its CEFTA, EFTA and Baltic states partner countries. The main body of the paper then empirically explores the impact of the lack of cumulation in the textile industry on the countries of the Southern Mediterranean. The results suggest that rules of origin may indeed substantially constrain trade between non-cumulating countries, possibly by as much as 70-80 per cent in aggregate. While preferential trading agreements thus serve to increase intra-PTA trade through the liberalisation of trade barriers, they may also be doing so by effectively raising external barriers to trade through the use of constraining rules of origin. To the extent that they do so increases the likelihood of trade diversion and trade suppresion. Copyright 2004 Blackwell Publishing Ltd.

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  • Patricia Augier & Michael Gasiorek & Charles Lai-Tong, 2004. "Rules of Origin and the EU-Med Partnership: The Case of Textiles," The World Economy, Wiley Blackwell, vol. 27(9), pages 1449-1473, September.
  • Handle: RePEc:bla:worlde:v:27:y:2004:i:9:p:1449-1473

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    References listed on IDEAS

    1. Thomas F. Rutherford & E. Elisabet Rutstrom & David Tarr, 2014. "Morocco's free trade agreement with the EU: A quantitative assessment," World Scientific Book Chapters,in: APPLIED TRADE POLICY MODELING IN 16 COUNTRIES Insights and Impacts from World Bank CGE Based Projects, chapter 17, pages 405-437 World Scientific Publishing Co. Pte. Ltd..
    2. Deardorff, Alan V, 2001. "International Provision of Trade Services, Trade, and Fragmentation," Review of International Economics, Wiley Blackwell, vol. 9(2), pages 233-248, May.
    3. Robert C. Feenstra, 1998. "Integration of Trade and Disintegration of Production in the Global Economy," Journal of Economic Perspectives, American Economic Association, vol. 12(4), pages 31-50, Fall.
    4. Bernard Hoekman & Denise Konan & Keith Maskus, 1998. "An Egypt-U.S. Free Trade Agreement: Economic Incentives and Effects," Working Papers 199802, University of Hawaii at Manoa, Department of Economics.
    5. Hoekman, Bernard & Konan, Denise & Maskus, Keith, 1998. "An Egypt-United States Free Trade Agreement: Economic Incentives and Effects," CEPR Discussion Papers 1882, C.E.P.R. Discussion Papers.
    6. Konan, Denise Eby & Maskus, Keith E., 2000. "Joint trade liberalization and tax reform in a small open economy: the case of Egypt," Journal of Development Economics, Elsevier, vol. 61(2), pages 365-392, April.
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    Cited by:

    1. Alberto Amurgo Pacheco, 2006. "Preferential Trade Liberalization and the Range of Exported Products: The Case of the Euro-Mediterranean FTA," IHEID Working Papers 18-2006, Economics Section, The Graduate Institute of International Studies.
    2. Pelzman Joseph & Shoham Amir, 2010. "Measuring the Welfare Effects of Country of Origin Rules: A Suggested Methodology," Global Economy Journal, De Gruyter, vol. 10(1), pages 1-25, February.
    3. Patricia Augier & Michael Gasiorek & Charles Lai-Tong, 2007. "Multilateralising Regionalism: Relaxing the Rules of Origin Or Can Those Pecs Be Flexed?," CARIS Working Papers 03, Centre for the Analysis of Regional Integration at Sussex, University of Sussex.
    4. Innwon Park & Soonchan Park, 2011. "Best practices for regional trade agreements," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 147(2), pages 249-268, June.
    5. Cooke, Edgar F. A., 2012. "Is the impact of AGOA heterogeneous?," MPRA Paper 43277, University Library of Munich, Germany.

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