IDEAS home Printed from
   My bibliography  Save this paper

Playing by the Rules? The Development of an Amended Index to Measure the Impact of Rules of Origin on Intra-PTA Trade Flows


  • Sinéad Kelleher


Rules of Origin (RoO) are essential components of any preferential trade agreement (PTA) short of a full customs union. The recent proliferation of PTAs has led to increased interest in the effects of RoO with empirical estimates consistently showing that they act as barriers to intra-PTA trade. However, this paper argues that the indices of RoO restrictiveness currently used in empirical analysis are flawed as they focus solely on product specific RoO and do not incorporate information on regime wide provisions, that is, those rules that apply across all goods in a particular agreement. As such, they do not capture fully the effective restrictiveness of a given RoO. In order to address this issue, this paper weights the Harris Index of RoO restrictiveness by three regime wide provisions; the size of the Cumulation Zone, the de minimis allowance, and certification type. The resulting new measure, the Regime Weighted Harris Index (RWHI), is then each used in both OLS and IV regressions to measure the impact of RoO on intra-PTA trade flows. Across an eleven year panel of 90 country-pairs, a negative effect of RoO on intra-PTA trade is found using OLS. However, the results of an IV regression suggest that the situation is somewhat more complicated, with RoO actually promoting trade flows in certain product groups. This is the first attempt in the literature to develop an instrument for RoO restrictiveness which constitutes a second source of value added for this paper.

Suggested Citation

  • Sinéad Kelleher, 2012. "Playing by the Rules? The Development of an Amended Index to Measure the Impact of Rules of Origin on Intra-PTA Trade Flows," Working Papers 201222, School of Economics, University College Dublin.
  • Handle: RePEc:ucn:wpaper:201222

    Download full text from publisher

    File URL:
    File Function: First version, 2012
    Download Restriction: no

    References listed on IDEAS

    1. Baldwin, Richard & Taglioni, Daria, 2006. "Gravity for Dummies and Dummies for Gravity Equations," CEPR Discussion Papers 5850, C.E.P.R. Discussion Papers.
    2. James E. Anderson & Eric van Wincoop, 2004. "Trade Costs," Journal of Economic Literature, American Economic Association, vol. 42(3), pages 691-751, September.
    3. Joseph Francois & Bernard Hoekman & Miriam Manchin, 2006. "Preference Erosion and Multilateral Trade Liberalization," World Bank Economic Review, World Bank Group, vol. 20(2), pages 197-216.
    4. repec:idb:brikps:16558 is not listed on IDEAS
    5. James E. Anderson & Eric van Wincoop, 2003. "Gravity with Gravitas: A Solution to the Border Puzzle," American Economic Review, American Economic Association, vol. 93(1), pages 170-192, March.
    6. David Hummels & James Levinsohn, 1995. "Monopolistic Competition and International Trade: Reconsidering the Evidence," The Quarterly Journal of Economics, Oxford University Press, vol. 110(3), pages 799-836.
    7. repec:idb:idbbks:262 is not listed on IDEAS
    8. Peter Egger & Michael Pfaffermayr, 2003. "The proper panel econometric specification of the gravity equation: A three-way model with bilateral interaction effects," Empirical Economics, Springer, vol. 28(3), pages 571-580, July.
    9. Portugal-Perez, Alberto, 2009. "Assessing the impact of political economy factors on rules of origin under NAFTA," Policy Research Working Paper Series 4848, The World Bank.
    10. 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.
    Full references (including those not matched with items on IDEAS)

    More about this item


    Rules of origin; International trade agreements; Nontariff barriers; Certificates of origin; Commercial treaties; Non-tariff trade barriers;

    NEP fields

    This paper has been announced in the following NEP Reports:


    Access and download statistics


    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ucn:wpaper:201222. 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: (Nicolas Clifton). General contact details of provider: .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.