How Much Market Access in FTAs? Textiles Under NAFTA

Olivier Cadot (), Celine Carrere (), Jaime de Melo () and Alberto Portugal-Perez ()

No 5264, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: 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; 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-int
Date: 2005-10
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