Rules of Origin as Export Subsidies

Olivier Cadot (), Antoni Estevadeordal and Akiko Suwa Eisenmann
Authors registered in the RePEc Author Service: Akiko Suwa-Eisenmann

No 4999, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: The paper estimates the effect of NAFTA’s rules of origin (ROO) on Mexican access to the US market treating explicitly the endogenous determination of ROOs. The first equation determines Mexico’s NAFTA (preferential) exports to the US as a function of tariff preference and Estevadeordal’s qualitative ROO index. The second equation determines ROO strictness on the basis of a Grossman-Helpman model identifying channels through which lobbying by US intermediate-good producers leads to deep preferences and stiff rules of origin in downstream sectors. The estimates suggest that the creation of a captive market for upstream intermediate-good producers is indeed one of their political determinants.

Keywords: NAFTA; regional integration; rules of Origin (search for similar items in EconPapers)
JEL-codes: F10 F13 F15 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-pol
Date: 2005-04
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Working Paper: Rules of origin as export subsidies (2004)
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