Assessing the Political Economy Factors on Trade Integration : Rules of Origin under NAFTA
Rules of origin (RoO) are legitimate policy instruments to prevent trade deflection in a Preferential Trade Agreement (PTA) short of a customs union. Yet, when captured by special interest groups, RoO can restrict trade beyond what is needed to prevent trade deflection. By how much do political economy factors account for the stringency of RoO? This study quantifies the impact of both determinants, those deemed as “justifiable” on the ground of preventing trade deflection and those arising from “political economy” forces, on the restrictiveness of RoO under NAFTA. The main finding is that political economy forces, especially from the US, significantly raised the restrictiveness of the RoO. Thus stricter RoO are associated with higher production costs reducing the potential benefits of enhanced market access initially pursued by the agreement.
To our knowledge, this item is not available for
download. To find whether it is available, there are three
1. Check below under "Related research" whether another version of this item is available online.
2. Check on the provider's web page whether it is in fact available.
3. Perform a search for a similarly titled item that would be available.
When requesting a correction, please mention this item's handle: RePEc:ris:integr:0538. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Jong-Eun Lee)
If references are entirely missing, you can add them using this form.