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Diagonal Cumulation of Rules of Origin in South America

Author

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  • Laura da Costa Ferré

    (Departamento de Economía, Facultad de Ciencias Sociales, Universidad de la República)

Abstract

This paper provides a description of what Rules of Origin are, its economic effects, the main RoO types and the options for adding leniency to these rules by means of using the diagonal cumulation. Nowadays, cumulation of origin is studied in different trade agreements models in the Americas and the use of this practice among FTAs families of one or another style is imminent. According to evidence provided by several papers (Cornejo and Harris, 2007; Gasiorek, 2007; and Estavadeordal and Suominem, 2008), we estimate that taking measures for adding leniency to RoO structures will make it more attractive for regional firms to import from within the region. Finally, more flexible rules of origin will make the region more attractive to foreign investors and, as a consequence, will foster investment flows from abroad. We consider that South American countries have now an opportunity to define a strategy for cumulating origin norms among them. Therefore, it is necessary to negotiate the implementation of a single RoO regime for the region. In this negotiation we think MERCOSUR would be the leading PTA, due to the fact that it is the main player in the region.

Suggested Citation

  • Laura da Costa Ferré, 2009. "Diagonal Cumulation of Rules of Origin in South America," Documentos de Trabajo (working papers) 3009, Department of Economics - dECON.
    • Handle: RePEc:ude:wpaper:3009
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    File URL: https://hdl.handle.net/20.500.12008/2149
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    References listed on IDEAS

    as
    1. Patrick Georges, 2008. "Liberalizing NAFTA Rules of Origin: A Dynamic CGE Analysis," Review of International Economics, Wiley Blackwell, vol. 16(4), pages 672-691, September.
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    More about this item

    Keywords

    Rules of Origin; Diagonal Cumulation; Regional Integration.;
    All these keywords.

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F15 - International Economics - - Trade - - - Economic Integration
    • F59 - International Economics - - International Relations, National Security, and International Political Economy - - - Other

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