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Diagonal Cumulation of Rules of Origin in South America

Listed author(s):
  • Laura da Costa Ferré


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

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    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.

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    Paper provided by Department of Economics - dECON in its series Documentos de Trabajo (working papers) with number 3009.

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    Length: 45 pages
    Date of creation: Dec 2009
    Handle: RePEc:ude:wpaper:3009
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    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, 09.
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