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How Restrictive Are ASEAN's RoO?

Author

Listed:
  • Olivier CADOT

    (University of Lausanne, CEPR and FERDI)

  • Lili Yan ING

    (Economic Research Institute for ASEAN and East Asia (ERIA) and University of Indonesia)

Abstract

This paper uses a disaggregated (product-level) gravity approach to estimate the effect of ASEAN’s product-specific rules of origin (RoO) on regional trade, using original data on rules applicable at the six-digit level of the harmonized system. Overall, we find that the average ad-valorem equivalent (AVE) of ASEAN’s RoO’s is 3.40 percent across all instruments and sectors. The trade-weighted average is 2.09 percent. This moderate estimate is in line with the existing literature. However, we also find fairly high AVEs for some sectors including leather, textile and apparel, footwear, and automobiles. We also find that some rules appear more restrictive than others; in this regard, the Textile Rule seems to stand out as a relatively more trade-inhibiting rule than others.

Suggested Citation

  • Olivier CADOT & Lili Yan ING, 2014. "How Restrictive Are ASEAN's RoO?," Working Papers DP-2014-18, Economic Research Institute for ASEAN and East Asia (ERIA).
  • Handle: RePEc:era:wpaper:dp-2014-18
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    File URL: http://www.eria.org/ERIA-DP-2014-18.pdf
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    References listed on IDEAS

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    12. Leamer, Edward E, 1974. "The Commodity Composition of International Trade in Manufactures: An Empirical Analysis," Oxford Economic Papers, Oxford University Press, vol. 26(3), pages 350-374, November.
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    Cited by:

    1. Lili Yan Ing & Shujiro Urata & Yoshifumi Fukunaga, . "How Do Exports and Imports Affect the Use of Free Trade Agreements? Firm-level Survey Evidence from Southeast Asia," Chapters, Economic Research Institute for ASEAN and East Asia (ERIA).
    2. Mari Pangestu & Sjamsu Rahardja & Lili Yan Ing, 2015. "Fifty Years Of Trade Policy In Indonesia: New World Trade, Old Treatments," Bulletin of Indonesian Economic Studies, Taylor & Francis Journals, vol. 51(2), pages 239-261, August.

    More about this item

    Keywords

    Rules of Origin; Gravity equation; International Trade; ASEAN; Global Value Chains;

    JEL classification:

    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F15 - International Economics - - Trade - - - Economic Integration

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