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How Much Market Access in FTAs? Textiles under NAFTAOlivier CadotUniversity of Lausanne - School of Economics and Business Administration (HEC-Lausanne); Centre for Economic Policy Research (CEPR) Celine CarrereUniversité d'Auvergne - Clermont 1 - CERDI Jaime De MeloUniversity of Geneva - Department of Political Economics; Centre for Economic Policy Research (CEPR); World Bank Alberto Portugal-PérezUniversity of Geneva - Department of Political Economics October 2005 CEPR Discussion Paper No. 5264 Abstract: This paper estimates the effective market access granted under NAFTA in textiles and apparel by combining two approaches. First, we estimate the effect of tariff preferences and rules of origin on the border prices of Mexican final goods exported to the US and of US intermediates exported to Mexico. We find that one third of the estimated rise in the border price of Mexican apparel products compensates for the cost of complying with NAFTA's rules of origin. We also find that the price of US intermediates exported to Mexico is raised significantly by the presence of rules of origin downstream. Second, simulations from a structural model inspired by our econometric estimates, suggest little market access improvement for Mexican exporters.
Number of Pages in PDF File: 44 Keywords: NAFTA, rules of origin, regional integration JEL Classification: F10, F13, F15 working papers seriesDate posted: November 3, 2005Suggested CitationContact Information
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