The Impact of Rules of Origin On Trade Flows

Patricia Augier (), Michael Gaziorek and Charles Laitong
Additional contact information
Michael Gaziorek: Sussex University & GREQAM
Charles Laitong: Université de la Méditerranée CEFI
Authors registered in the RePEc Author Service: Charles Lai Tong

International Trade from University Library of Munich, Germany

Abstract: Within any preferential trade agreement (PTA) origin rules exist in order to prevent third countries from taking advantage of the PTA concessions. The rules thus are there to preserve the existing external protection of countries within the PTA. However, depending on their formulation, they can also increase that level of external protection, resulting in trade suppression and trade diversion. This paper provides the first serious empirical examination of the possible impact of rules of origin on patterns of trade in the European context. The methodology employed is that of an augmented gravity model where we focus on the impact within the Pan-european system of cumulation. The results suggest that rules of origin do indeed restrict trade, that the cumulation of such rules could increase trade in the order of 50%, and that the impact is greater on intermediate than manufacturing trade.

Keywords: international trade; rules of origin; gravity model (search for similar items in EconPapers)
JEL-codes: F (search for similar items in EconPapers)
Pages: 27 pages
Date: 2004-04-01
Note: Type of Document - pdf; pages: 27
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (41)

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Related works:
Journal Article: The impact of rules of origin on trade flows (2005)
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Persistent link: https://EconPapers.repec.org/RePEc:wpa:wuwpit:0404001

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