A Political Economy Analysis of Rules of Origin Requirements of Korea-US FTA with a New Measure of the Requirements

Jaeyoun Roh and Jee-Hyeong Park
Additional contact information
Jaeyoun Roh: Seoul National University
Jee-Hyeong Park: Seoul National University

Korean Economic Review, 2014, vol. 30, 163-190

Abstract: Our paper contributes to the literature on the rules of origin (ROO) requirements of regional trade agreements by developing a new measure of ROO requirements and by modifying and testing an existing political economy model of ROO requirements with the data of the Korea-United States Free Trade Agreement (KORUS FTA). In explaining the utilization rates of KORUS FTA, Bindingness Index, the new measure of ROO requirements taking the status quo local content of a product into consideration, performs better than the existing measure proposed by Estevadeordal (2000). To reflect that the US has agreed to immediate and complete liberalization on most products in KORUS FTA, we modify the political economy model of ROO requirements of Cadot et al. (2006) by assuming that the preferential tariff rates are zero. This modification leads to testable predictions, some of which differs from the prediction of Cadot et al. (2006), and our empirical analysis supports the predictions of our modified political economy model.

Keywords: Korea-US Free Trade Agreement; Political Economy; Regional Trade Agreements; Rules of Origin (search for similar items in EconPapers)
JEL-codes: F1 F53 (search for similar items in EconPapers)
Date: 2014
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://keapaper.kea.ne.kr/RePEc/kea/keappr/KER-20140630-30-1-08.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:kea:keappr:ker-20140630-30-1-08

Access Statistics for this article

Korean Economic Review is currently edited by Kyung Hwan Baik

More articles in Korean Economic Review from Korean Economic Association Contact information at EDIRC.
Bibliographic data for series maintained by KEA ().