44 Pages Posted: 3 Nov 2005
Date Written: October 2005
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: 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
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