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Rules of Origin under Regional Trade Agreements

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  • Ram Upendra Das

    (Research and Information System for Developing Countries)

Abstract

Rules of origin (ROO) have emerged as an area in which consensus is hard to achieve among negotiating countries within an RTA. Disagreements over rules of origin have often deferred the implementation of several trade agreements. One of the reasons for this is because ROO are viewed as those obstructing trade. Most of the literature on the subject too argues that ROO reduce efficiency costs in production and restrict market access. It is argued in this paper that both the negotiations and the analytical literature pertaining to ROO display a lack of sound understanding of the implications of rules of origin. Developing a comprehensive view on the subject, with a developmental perspective of ROO, could help prevent wastage of negotiating-time, avoid cumbersome procedures and implement the agreements with the intention to reap the economic benefits of ROO. The paper highlights the economics of ROO, focuses on the issue of near-optimum ROO formulation, presents a factual account of ROO as evolved in South Asia, empirically estimates of the effects of ROO on trade in an FTA and finally makes new policy suggestions relating to ROO implementation and enforcement.

Suggested Citation

  • Ram Upendra Das, 2010. "Rules of Origin under Regional Trade Agreements," Trade Working Papers 22791, East Asian Bureau of Economic Research.
  • Handle: RePEc:eab:tradew:22791
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    References listed on IDEAS

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    1. Paul Brenton & Miriam Manchin, 2003. "Making EU Trade Agreements Work: The Role of Rules of Origin," The World Economy, Wiley Blackwell, vol. 26(5), pages 755-769, May.
    2. Patricia Augier & Michael Gasiorek & Charles Lai Tong, 2005. "The impact of rules of origin on trade flows," Economic Policy, CEPR;CES;MSH, vol. 20(43), pages 567-624, July.
    3. Rod Falvey & Geoff Reed, 2002. "Rules of Origin as Commercial Policy Instruments," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 43(2), pages 393-408, May.
    4. VR Panchamukhi & Ram Upendra Das, 2001. "Conceptual and Policy Issues in Rules of Origin: Implications for SAPTA and SAFTA," South Asia Economic Journal, Institute of Policy Studies of Sri Lanka, vol. 2(2), pages 253-279, September.
    5. Kala Krishna, 2005. "Understanding Rules of Origin," NBER Working Papers 11150, National Bureau of Economic Research, Inc.
    6. Cadot, Olivier & Melo, Jaime de, 2007. "Rules of Origin for Preferential Trading Arrangements: Implications for the ASEAN Free Trade Area of EU and US Experience," Journal of Economic Integration, Center for Economic Integration, Sejong University, vol. 22, pages 256-287.
    7. Rupa Duttagupta & Arvind Panagariya, 2007. "Free Trade Areas And Rules Of Origin: Economics And Politics," Economics and Politics, Wiley Blackwell, vol. 19(2), pages 169-190, July.
    8. Céline Carrère & Jaime de Melo, 2015. "Are Different Rules of Origin Equally Costly? Estimates from NAFTA," World Scientific Book Chapters,in: Developing Countries in the World Economy, chapter 12, pages 277-298 World Scientific Publishing Co. Pte. Ltd..
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    Rules of origin; trade; South Asia;

    JEL classification:

    • F00 - International Economics - - General - - - General
    • F10 - International Economics - - Trade - - - General
    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations

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