Bolormaa Tumurchudur

Product Specific Rules of Origin in EU and US Preferential Trading Arrangements: An Assessment

Building on earlier work by Estevadeordal, we construct a synthetic index (R-index)intending to capture the restrictiveness on market access due to product specific rules of origin (PSRO)that apply at the tariff-line level. The R-index is constructed for rules of origins under NAFTA and under the single list applying to PANEURO, the new regime applying to all EU preferential trade agreements. The R-index highlights how identical PSRO have different impacts across countries, and how the complexity of PSRO varies across sectors. Having controlled for the extent of tariff preference at the tariff-line level, the R-index contributes to account for differences in utilization rates at the tariff line level. The index is then used to assess composition effects across countries subjected to some set of PSRO and to compute estimates of the compliance costs associated with rules of origin under both regimes

Disentangling Market Access Effects of Preferential Trading Arrangements with an Application for ASEAN Members Under an ASEAN–EU FTA

The paper develops two synthetic measures at the HS-10 level to depict effective market access for a country receiving preferential access and applies these to the market access ASEAN members would receive following the implementation of an FTA with the EU. First, the measures show that current effective market access for ASEAN EBA members is cut in half by the preferences granted by the EU to countries that compete with these countries in the EU markets. Second, the measures show that about one-quarter of the preferential margin under the proposed FTA for EBA members would be lost as a result of preferential access granted to ASEAN GSP members. Third, disaggregated estimates of the restrictiveness of rules of origin confirm that rules are more restrictive for products with higher preferential margins and that ASEAN countries usually face tougher rules of origin in the EU because of the composition of their exports.

Disentangling Market Access Effects for ASEAN Members under an ASEAN-EU FTA

The paper develops two synthetic measures at the HS-10 level to depict effective market access for a country receiving preferential access and applies these to the market access ASEAN members would receive on impact following the implementation of an FTA with the EU. These measures reveal quite a different picture than one that would be gleaned from the more usual ex-ante aggregate approaches. First, the measures show that current effective market access for ASEAN EBA members is cut in half by the preferences granted by the EU to countries that compete with these countries in the EU markets. Second, the small value of preferences is reflected in the pattern of preferential margins, the “significant” preferential margins almost always being for products that account for less than 1/10 of 1 percent of exports at the HS-10 level. Third the measures show that about one quarter of the preferential margin under the proposed FTA for EBA members would be lost as a result of preferential access granted to ASEAN GSP members. Fifth, disaggregated calculations on the restrictiveness of rules of origin not only confirm that rules are more restrictive for products with higher preferential margins, but also that, for a given preferential margin in the EU market, due to the product composition of their exports to the EU, ASEAN countries usually face tougher rules of origin in the EU.