Using Utilization Rates to Identify Rules of Origin Reforms: The Case of EU Free Trade Area Agreements

Pramila Crivelli, Stefano Inama and Jonas Kasteng

No 2021/21, RSCAS Working Papers from European University Institute

Abstract: Governments are increasingly entering FTAs and mega-regionals to secure market access for their firms. Utilization rates are used to monitor whether firms are using these FTAs. This paper is part of a recent stream of studies to dash out enduring myths that preferences are not used when preferential MFN rates are low or for unknown or vague reasons. Contrary to this sort of conventional wisdom this study advocates that low utilization rate is a valuable and unequivocal sign that reform of rules of origin and related administrative procedures is needed to make the FTA attractive and meaningful to the private sector. By using a “repeated offender” methodology this paper identifies a series of product specific rules of origin (PSROs) causing low utilization rates. Such PSROs are the candidate for reforms towards more lenient requirements that are commercially viable for firms.

Keywords: Free Trade Agreements; Trade Preferences; Rules of Origin; Product-Specific Rules of Origin; Preference Utilization Rates (search for similar items in EconPapers)
JEL-codes: F13 F14 F15 (search for similar items in EconPapers)
Date: 2021-03
New Economics Papers: this item is included in nep-int
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Citations: View citations in EconPapers (6)

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