Rules of Origin for Preferential Trading Arrangements: Implications for the ASEAN Free Trade Area of EU and US Experience

Olivier Cadot and Jaime de Melo
Authors registered in the RePEc Author Service: Alberto Portugal-Perez

Journal of Economic Integration, 2007, vol. 22, 288-319

Abstract:

With free trade areas (FTAs) under negotiation between Japan and the ASEAN Free Trade Area (AFTA) members and between the Republic of Korea and AFTA members, preferential market access will become more important in Asian regionalism. Protectionist pressures will likely increase through rules of origin, the natural outlet for these pressures. Based on the experience of the European Union and the United States with rules of origin, this paper argues that, should these FTAs follow in the footsteps of the EU and the US and adopt similar RoO, trading partners in the region would incur unnecessary costs. Using EU trade with GSP and ACP partners, the paper estimates how the utilization of preferences would likely change if AFTA were to veer away from its current uniform RoO requiring a 40% local content rate. Depending on the sample used, a 10 percentage point reduction in the local value content requirement is estimated to increase the utilization rate of preferences by between 2.5 and 8.2 percentage points.

Keywords: Rules of Origin; Preferential Trade Agreements; Market Access; NAFTA; PANEURO; AFTA; ASEAN (search for similar items in EconPapers)
JEL-codes: F13 F15 (search for similar items in EconPapers)
Date: 2007
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Citations: View citations in EconPapers (5)

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Related works:
Journal Article: Rules of Origin for Preferential Trading Arrangements: Implications for the ASEAN Free Trade Area of EU and US Experience (2007)
Working Paper: Rules of origin for preferential trading arrangements: implications for the ASEAN Free Trade Area of EU and U.S. experience (2006)
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Persistent link: https://EconPapers.repec.org/RePEc:ris:integr:0395

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