Impact of Rules of Origin on FTA Utilization in Korean FTAs

Hansung Daniel Kim () and Mee Jin Cho ()
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Hansung Daniel Kim: Independent
Mee Jin Cho: Korea Institute for International Economic Policy

No 10-8, Working Papers from Korea Institute for International Economic Policy

Abstract: Despite the intense interest concerning Rules of Origin (ROO) in every corner, research regarding ROO has been relatively limited. It is primarily due to the difficulties of performing systematic research on ROO. The importance of the role of ROO in FTA, however, cannot be overemphasized since the economic effect of concluding an FTA is determined by ROO, in particular with respect to the market access. This study aims to investigate the economic effect of ROO of Korean FTAs on its FTA utilization. Using restrictive index, margin of preferences and other relevant variables, we test the relation between FTA utilization and related variables. The results show that more restrictive ROO has a negative impact on the utilization rates, when we drop the products with zero utilization rates and control for industry-specific characters. It also shows that higher MOP promotes the use of the Korea-ASEAN FTA. On the other hand, we fail to show that the average value of imports per-application has a positive impact on the use of FTA.

Keywords: Rules Of Origin; FTA; Korea-ASEAN FTA; Restrictiveness Index (search for similar items in EconPapers)
JEL-codes: F15 (search for similar items in EconPapers)
Pages: 56 pages
Date: 2010-12-30
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Citations: View citations in EconPapers (2)

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