Preferential Trade Arrangements and the Pattern of Production and Trade when Inputs are Differentiated

Joseph Francois

No 5144, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: This paper is concerned with rules of origin when intermediate goods are differentiated. An analytical model emphasizes trade patterns and the relative importance of trade in intermediates given trade preferences. Econometric evidence based on intra-OECD trade in motor vehicles and motor vehicle parts points to a systematic impact of trade costs and FTA membership, following from rules of origin and reduction in border measures, on the role of intermediates and their relative importance in production and trade. These results are consistent with a conceptual framework involving rules-base trade costs and two-way trade in differentiated intermediate goods and final goods.

Keywords: Rules of origin; Trading costs; Trade in intermediates; Industry location (search for similar items in EconPapers)
JEL-codes: F13 F15 (search for similar items in EconPapers)
Date: 2005-07
New Economics Papers: this item is included in nep-int
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Citations: View citations in EconPapers (6)

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Working Paper: Preferential Trade Arrangements and the Pattern of Production and Trade when Inputs are Differentiated (2005)
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