Measuring the Impact of Rules of Origin

ARE DIFFERENT RULES OF ORIGIN EQUALLY COSTLY? ESTIMATES FROM NAFTA": THE ORIGIN OF GOODS: RULES OF ORIGIN IN REGIONAL TRADE AGREEMENTS Cadot O., Estevadeordal A., Suwa A., Verdier T., eds., Vol. 2, Chapter 7, pp. 189-212, Oxford University Press, May 2006

Posted: 26 Apr 2007

See all articles by Céline Carrère

Céline Carrère

University of Geneva

Jaime de Melo

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

Date Written: May 2006

Abstract

Using data on preference and utilization rates of NAFTA for Mexican exports to the United States in 2001, this chapter proposes a method to estimate the likely costs of different Rules of Origin (RoO) for final and intermediate goods and compares these results with those obtained using the synthetic index proposed by Estevadeordal (2000). Econometric results indicate that changes in tariff classification are more costly for final goods than for intermediate ones and that technical requirement are the most constraining. For activities subject to regional value content minima, we carry out illustrative simulations indicating what tariff preference margin would be necessary to compensate for the import content minima. Overall, our cost estimates suggest, that at least in the case of NAFTA, preferential market access was quite small, leading us to speculate that these conclusions may carry over to other North-South preferential schemes.

Keywords: NAFTA, preference rates, utilization rates, costs of Rules of Origin, final and intermediate goods

JEL Classification: F13 , F15

Suggested Citation

Carrère, Céline and de Melo, Jaime, Measuring the Impact of Rules of Origin (May 2006). ARE DIFFERENT RULES OF ORIGIN EQUALLY COSTLY? ESTIMATES FROM NAFTA": THE ORIGIN OF GOODS: RULES OF ORIGIN IN REGIONAL TRADE AGREEMENTS Cadot O., Estevadeordal A., Suwa A., Verdier T., eds., Vol. 2, Chapter 7, pp. 189-212, Oxford University Press, May 2006, Available at SSRN: https://ssrn.com/abstract=982374

Céline Carrère (Contact Author)

University of Geneva ( email )

102 Bd Carl-Vogt
Genève, CH - 1205
Switzerland

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 )

London
United Kingdom

World Bank ( email )

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

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