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Measuring the costs of FTA utilization: evidence from transaction-level import data of Thailand

Kazunobu Hayakawa (), Nuttawut Laksanapanyakul and Shujiro Urata
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Nuttawut Laksanapanyakul: Thailand Development Research Institute
Shujiro Urata: Waseda University

Review of World Economics (Weltwirtschaftliches Archiv), 2016, vol. 152, issue 3, 559-575

Abstract: Abstract In this study, we measure the utilization costs of free trade agreement (FTA) tariff schemes. To do that, we use shipment-level customs data on Thai imports, which identify not only firms, source country, and commodity but also tariff schemes. We propose several measures as a proxy for FTA utilization costs. The example includes the minimum amount of firm-level savings on tariff payments, i.e., trade values under FTA schemes multiplied by the tariff margin, in all transactions. Consequently, the median costs for FTA utilization in 2008, for example, are estimated to be approximately US$2000 for exports from China, US$300 for exports from Australia, and US$1000 for exports from Japan. We also found that FTA utilization costs differ by rule of origin and industry.

Keywords: FTA; Fixed costs; Thailand (search for similar items in EconPapers)
JEL-codes: F15 F53 (search for similar items in EconPapers)
Date: 2016
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Handle: RePEc:spr:weltar:v:152:y:2016:i:3:d:10.1007_s10290-016-0248-y