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How Much Market Access in FTAs? Textiles under NAFTA

44 Pages Posted: 3 Nov 2005  

Olivier Cadot

University of Lausanne - School of Economics and Business Administration (HEC-Lausanne); Centre for Economic Policy Research (CEPR); World Bank

Celine Carrere

Université d'Auvergne - Clermont 1 - CERDI

Jaime de Melo

University of Geneva - Department of Political Economics; Centre for Economic Policy Research (CEPR); World Bank

Alberto Portugal-Pérez

University of Geneva - Department of Political Economics

Date Written: October 2005

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.

Keywords: NAFTA, rules of origin, regional integration

JEL Classification: F10, F13, F15

Suggested Citation

Cadot, Olivier and Carrere, Celine and de Melo, Jaime and Portugal-Pérez, Alberto, How Much Market Access in FTAs? Textiles under NAFTA (October 2005). CEPR Discussion Paper No. 5264. Available at SSRN: https://ssrn.com/abstract=840847

Olivier Cadot (Contact Author)

University of Lausanne - School of Economics and Business Administration (HEC-Lausanne) ( email )

Unil Dorigny, Batiment Internef
Lausanne, 1015
Switzerland
+41 21 692 3463 (Phone)
+41 21 692 3495 (Fax)

Centre for Economic Policy Research (CEPR)

77 Bastwick Street
London, EC1V 3PZ
United Kingdom

World Bank ( email )

1818 H Street NW
Washington, DC 20433
United States

Celine Carrere

Université d'Auvergne - Clermont 1 - CERDI ( email )

65 Boulevard Francois Mitterrand
63000 Clermont-Ferrand Cedex 1
France

Jaime De Melo

University of Geneva - Department of Political Economics ( email )

40, boulevard du Pont-d'Arve
Geneva 4, CH-1211
Switzerland
+41 22 705 8273 (Phone)
+41 22 705 8293 (Fax)

HOME PAGE: http://www.unige.ch/ses/ecopo/demelo/Jaime.html

Centre for Economic Policy Research (CEPR) ( email )

77 Bastwick Street
London, EC1V 3PZ
United Kingdom

World Bank ( email )

1818 H Street, N.W.
Washington, DC 20433
United States

Alberto Portugal-Pérez

University of Geneva - Department of Political Economics ( email )

40, boulevard du Pont-d'Arve
Geneva 4, CH-1211
Switzerland

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