Rules of Origin in North-South Preferential Trading Arrangements with an Application to NAFTA
All preferential trading agreements (PTAs) short of a customs union use rules of origin (ROO) to prevent trade deflection. ROO raise production costs and create administrative costs. This paper argues that in the case of the recent wave of North–South PTAs, the presence of ROO virtually limits the m...
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| Veröffentlicht in: | Review of international economics 2005-08, Vol.13 (3), p.501-517 |
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| creator | Anson, José Cadot, Olivier Estevadeordal, Antoni Melo, Jaime de Suwa-Eisenmann, Akiko Tumurchudur, Bolormaa |
| description | All preferential trading agreements (PTAs) short of a customs union use rules of origin (ROO) to prevent trade deflection. ROO raise production costs and create administrative costs. This paper argues that in the case of the recent wave of North–South PTAs, the presence of ROO virtually limits the market access that these PTAs confer to the Southern partners. In the case of NAFTA, we find average compliance costs around 6% in ad valorem equivalent, undoing the tariff preference (4% on average) for a large number of tariff lines. Administrative costs amount to 47% of the preference margin. These findings are coherent with the view that North–South PTAs could well be viewed like a principal–agent problem in which the Southern partners are just about left on their participation constraint. |
| doi_str_mv | 10.1111/j.1467-9396.2005.00520.x |
| format | Article |
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| source | RePEc; Wiley Online Library Journals Frontfile Complete; Business Source Complete |
| subjects | Costs Data analysis Economic analysis Economic theory Economics and Finance Favoritism Humanities and Social Sciences International economics International trade NAFTA North American Free Trade Agreement North-South trade Preferences Principal-agent theory Rule of origin Studies Tariffs Trade agreements |
| title | Rules of Origin in North-South Preferential Trading Arrangements with an Application to NAFTA |
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