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From Final Goods to Inputs: the Protectionist Effect of Rules of Origin

Author

Listed:
  • Paola Conconi
  • Manuel Garcia-Santana
  • Laura Puccio
  • Roberto Venturini

Abstract

Recent decades have witnessed a surge of trade in intermediate goods and a proliferation of free trade agreements (FTAs). FTAs use rules of origin (RoO) to distinguish goods originating from member countries from those originating from third countries. We focus on the North American Free Trade Agreement (NAFTA), the world's largest FTA, and construct a unique dataset that allows us to map the input-output linkages in its RoO. Exploiting cross-product and cross-country variation in treatment over time, we show that NAFTA RoO led to a sizable reduction in imports of intermediate goods from third countries relative to NAFTA partners.
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Suggested Citation

  • Paola Conconi & Manuel Garcia-Santana & Laura Puccio & Roberto Venturini, 2016. "From Final Goods to Inputs: the Protectionist Effect of Rules of Origin," Working Papers ECARES ECARES 2016-04, ULB -- Universite Libre de Bruxelles.
    • Handle: RePEc:eca:wpaper:2013/225345
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    More about this item

    Keywords

    trade agreements; rules of origin; input-output linkages;
    All these keywords.

    JEL classification:

    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • F53 - International Economics - - International Relations, National Security, and International Political Economy - - - International Agreements and Observance; International Organizations

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