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Product-specific rules of origin in EU and US preferential trading arrangements: an assessment

Published online by Cambridge University Press:  16 May 2006

OLIVIER CADOT
Affiliation:
HEC, University of Lausanne, BFSH 1, CH-1015, Lausanne-Dorigny, Switzerland. Email: Olivier.Cadot@unil.ch
CELINE CARRERE
Affiliation:
HEC, University of Lausanne, BFSH 1, CH-1015, Lausanne-Dorigny, Switzerland. Email: Celine.Carrere@unil.ch
JAIME DE MELO
Affiliation:
University of Geneva, 102 bd Carl Vogt, 1211 Geneva 4, Switzerland. Email: DeMelo@ecopo.unige.ch
BOLORMAA TUMURCHUDUR
Affiliation:
HEC, University of Lausanne, BFSH 1, CH-1015, Lausanne-Dorigny, Switzerland. Email: Bolormaa.TumurchudurKlok@unil.ch

Abstract

Building on earlier work by Estevadeordal (2000), we construct a synthetic index (R-index) intending to capture the restrictiveness of rules of origin in preferential trading agreements. The R-index is applied to NAFTA and the Single List of the EU's PANEURO system covering all of the EU's preferential trade agreements. The R-index highlights how a common set of rules of origin can affect countries differently depending on their export structures, and how their complexity varies across sectors. Having controlled for the extent of tariff preference at the tariff-line level, the R-index contributes to explain differences in the rate at which preferences are used. Finally, we compute estimates of the compliance costs associated with rules of origin under NAFTA and under PANEURO and find them to be between 6.8% of good value (NAFTA) and 8% (PANEURO).

Type
Research Article
Copyright
© Olivier Cadot, Celine Carrere, Jaime de Melo and Bolormaa Tumurchudur

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Footnotes

Without implicating them, we would like to thank Paul Brenton, Antoni Estevadeordal, Alberto Portugal, Kati Suominen and Fahrettin Yagci for helpful conversations, and participants at seminars at the University of Geneva and CERDI, two referees, and the editor for helpful comments on an earlier draft.

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