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Multilateralising Regionalism: Relaxing the Rules of Origin Or Can Those Pecs Be Flexed?

Author

Listed:
  • Patricia Augier
  • Michael Gasiorek
  • Charles Lai-Tong

    (Centre for the Analysis of Regional Integration at Sussex, Department of Economics, University of Sussex)

Abstract

In this paper we first explain why rules of origin are a necessary feature of preferential trading arrangements, but why they also serve to distort trade and can therefore be used for protectionist purposes, and why they have a powerful natural impetus towards strengthening the spaghetti bowl effect in international trade. Secondly, we then examine the impact of the relaxation of the potential constraining impact of rules of origin in the European context which was achieved through the introduction of the Pan-European Cumulation system (PECS). We provide empirical evidence at both the aggregate and sectoral level which reveals the positive impact of the relaxation of rules of origin via the introduction of “diagonal cumulation” arrangements between the EU and its’ trading partners. Thirdly, the discussion turns to a consideration of appropriate policy options designed both to minimise the spaghetti bowl effect, and to maximise the benefits from regionalism for developing countries.

Suggested Citation

  • 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.
    • Handle: RePEc:ari:wpaper:03
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    File URL: http://www.sussex.ac.uk/Units/caris/wps/cariswp03.pdf
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. 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.
    2. Michael Fuenfzig & Pietro Maggi & Corine Besseling & Anne Winkel & Michael Flickenschild & Przemysław Kowalski & Katarzyna Sidło & Anna Malinowska & Marek Peda & Christopher Hartwell & Patricia Augier, 2021. "Ex-post Evaluation of the impact of trade chapters of the Euro-Mediterranean Association Agreements with six partners: Algeria, Egypt, Jordan, Lebanon, Morocco and Tunisia," Working Papers hal-03435264, HAL.
    3. Estevadeordal, Antoni & Suominen, Kati & Harris, Jeremy & López Córdova, José Ernesto, 2008. "Gatekeepers of Global Commerce: Rules of Origin and International Economic Integration," IDB Publications (Books), Inter-American Development Bank, number 262, March.
    4. Patrick Georges, 2010. "Dispensing with NAFTA Rules of Origin? Some Policy Options," The World Economy, Wiley Blackwell, vol. 33(11), pages 1606-1637, November.
    5. Patrick Georges, 2009. "Dispensing with NAFTA Rules of Origin? Some Policy Options for Canada," Working Papers 0904E, University of Ottawa, Department of Economics.
    6. Georges, Patrick & Mérette, Marcel, 2011. "Trade Diversification Away from the U.S. or North American Customs Union? A Review of Canada’s Trade Policy Options," Conference papers 332084, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    7. Antoni Estevadeordal & Kati Suominen & Jeremy Harris & José Ernesto López Córdova, 2008. "Gatekeepers of Global Commerce: Rules of Origin and International Economic Integration," IDB Publications (Books), Inter-American Development Bank, number 16558, February.
    8. Sonmez, Yontem & McDonald, Scott & Walmsley, Terrie, 2011. "Augmenting the GTAP Database: Are the Data on Intra Institutional Transactions Important?," Conference papers 332085, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    9. Pamela Bombarda & Elisa Gamberoni, 2013. "Firm Heterogeneity, Rules Of Origin, And Rules Of Cumulation," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 54(1), pages 307-328, February.
    10. Park, Innwon & Park, Soonchan, 2009. "Consolidation and Harmonization of Regional Trade Agreements (RTAs): A Path Toward Global Free Trade," MPRA Paper 14217, University Library of Munich, Germany, revised 23 Mar 2009.
    11. Honggue Lee, 2013. "The Effects of Preferential Rules of Origin on Trade Flows," Korean Economic Review, Korean Economic Association, vol. 29, pages 379-403.
    12. Sangkyom Kim & Innwon Park & Soonchan Park, 2013. "Trade-creating regime-wide rules of origin: a quantitative analysis," Applied Economics Letters, Taylor & Francis Journals, vol. 20(11), pages 1056-1061, July.
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