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Learning to use trade agreements

Author

Listed:
  • Krishna, Kala
  • Salamanca, Carlos
  • Suzuki, Yuta
  • Volpe Martincus, Christian

Abstract

Meeting Rules of Origin (ROOs) in order to obtain lower tariffs in a Preferential Trading Area (PTA) is costly both in terms of production costs and fixed documentation costs. Using a model-based approach that corrects for endogeneity and a unique exporter–importer matched transaction-level customs dataset from Latin American countries, we show that preference usage patterns suggest that these fixed costs fall with exporters’ experience in preference utilization, particularly that in the same product and with the same partner, indicating both the existence and channel of learning. Exploiting a natural experiment, we also show that newly covered products have much more learning as might be expected.

Suggested Citation

  • Krishna, Kala & Salamanca, Carlos & Suzuki, Yuta & Volpe Martincus, Christian, 2025. "Learning to use trade agreements," Journal of Development Economics, Elsevier, vol. 174(C).
    • Handle: RePEc:eee:deveco:v:174:y:2025:i:c:s0304387824001731
    DOI: 10.1016/j.jdeveco.2024.103424
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    Cited by:

    1. Marius Fossum & Inga Heiland & Viktor Moulin, 2024. "Analyzing the Expiration of the United States Generalized System of Preferences and Its Impact on Imports from Developing Countries," CESifo Working Paper Series 11509, CESifo.
    2. Tresnawati Tresnawati & Pan Lindawaty Suherman Sewu & Callista Rachelia, 2025. "Rules of Origin Within ASEAN and RCEP: Has It Been Resolved?," Journal of Politics and Law, Canadian Center of Science and Education, vol. 18(1), pages 1-1, February.
    3. Sonali Chowdhry & Gabriel Felbermayr, 2023. "Trade liberalization along the firm size distribution: The case of the EU‐South Korea FTA," Review of International Economics, Wiley Blackwell, vol. 31(5), pages 1751-1792, November.
    4. 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).
    5. Head, Keith & Mayer, Thierry & Melitz, Marc, 2024. "The Laffer curve for rules of origin," Journal of International Economics, Elsevier, vol. 150(C).
    6. 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.
    7. Legge, Stefan & Lukaszuk, Piotr, 2024. "The firm-level costs of utilizing free trade agreements," International Economics, Elsevier, vol. 178(C).

    More about this item

    Keywords

    Trade agreements; Rules of Origin; Preference utilization; Firms;
    All these keywords.

    JEL classification:

    • F02 - International Economics - - General - - - International Economic Order and Integration
    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F68 - International Economics - - Economic Impacts of Globalization - - - Policy
    • N76 - Economic History - - Economic History: Transport, International and Domestic Trade, Energy, and Other Services - - - Latin America; Caribbean

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