Free Trade Areas and Rules of Origin : Economics and Politics

Incorporating intermediate inputs into a small-union general-equilibrium model, this paper first develops the welfare economics of preferential trading under the rules of origin (ROO) and then demonstrates that the ROO could improve the political viability of Free Trade Agreements (FTAs). Two intere...

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Main Author: Panagariya, Arvind
Other Authors: Duttagupta, Rupa
Format: eBook
Language:English
Published: Washington, D.C. International Monetary Fund 2003, 2003
Series:IMF Working Papers; Working Paper
Subjects:
Hc
Online Access:
Collection: International Monetary Fund - Collection details see MPG.ReNa
Summary:Incorporating intermediate inputs into a small-union general-equilibrium model, this paper first develops the welfare economics of preferential trading under the rules of origin (ROO) and then demonstrates that the ROO could improve the political viability of Free Trade Agreements (FTAs). Two interesting outcomes are derived. First, a welfare reducing FTA that was rejected in the absence of the ROO becomes feasible in the presence of these rules. Second, a welfare improving FTA that was rejected in the absence of the ROO is endorsed in their presence, but upon endorsement it becomes welfare inferior relative to the status quo
Physical Description:30 p.
ISBN:1451875495
9781451875492