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From final goods to inputs: the protectionist effect of rules of origin

Author

Listed:
  • Conconi, Paola
  • García-Santana, Manuel
  • Puccio, Laura
  • Venturini, Roberto
Abstract
Recent decades have witnessed a surge of trade in intermediate goods and a proliferation of free trade agreements (FTAs). FTAs use rules of origin (RoO) to distinguish goods originating from member countries from those originating from third countries. We focus on the North American Free Trade Agreement (NAFTA), the world’s largest FTA, and construct a unique dataset that allows us to map the input-output linkages in its RoO. Exploiting cross-product and cross-country variation in treatment over time, we show that NAFTA RoO led to a sizeable reduction in imports of intermediate goods from third countries relative to NAFTA partners. Even if external tariffs are unchanged, FTAs may thus violate multilateral trade rules, by substantially increasing the level of protection faced by non-members.

Suggested Citation

  • Conconi, Paola & García-Santana, Manuel & Puccio, Laura & Venturini, Roberto, 2017. "From final goods to inputs: the protectionist effect of rules of origin," LSE Research Online Documents on Economics 88676, London School of Economics and Political Science, LSE Library.
  • Handle: RePEc:ehl:lserod:88676
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    File URL: http://eprints.lse.ac.uk/88676/
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    References listed on IDEAS

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    More about this item

    Keywords

    instruction time; education reform; heterogeneous effects; charter schools;
    All these keywords.

    JEL classification:

    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • F53 - International Economics - - International Relations, National Security, and International Political Economy - - - International Agreements and Observance; International Organizations

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