Why OECD Countries Should Reform Rules of Origin
With preferential trade agreements on the rise worldwide rules of origin—which are necessary to prevent trade deflection—are attracting increasing attention. At the same time, preference erosion for Generalized System of Preferences (GSP) recipients is increasing resistance to further multilateral n...
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World Bank
2012
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| Online Access: | http://hdl.handle.net/10986/4416 |
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okr-10986-44162021-04-23T14:02:17Z Why OECD Countries Should Reform Rules of Origin Cadot, Olivier de Melo, Jaime customs unions export protection external tariff external tariffs free trade free trade agreements intermediate goods market access multilateral negotiations preferential access preferential trade preferential trade agreements regionalism rules of origin tariff revenue trade deflection trade facilitation world trade world trade organization world trading system With preferential trade agreements on the rise worldwide rules of origin—which are necessary to prevent trade deflection—are attracting increasing attention. At the same time, preference erosion for Generalized System of Preferences (GSP) recipients is increasing resistance to further multilateral negotiations. Drawing on different approaches, this article shows that the current system of rules of origin that is used by the European Union and the United States in preferential trade agreements (including the GSP) and that is similar to systems used by other Organisation for Economic Co-operation and Development countries should be drastically simplified if developed economies really want to help developing economies integrate into the world trading system. In addition to diverting resources for administrative tasks, current rules of origin carry significant compliance costs. More fundamentally, it is becoming increasingly clear that they are often been designed to force developing economies to buy inefficient intermediate products from developed economies to "pay for" preferential access for the final product. The evidence also suggests that a significant share of the rents associated with market access (net of rules of origin compliance costs) is captured by developed economies. Finally, the restrictiveness of rules of origin is found to be beyond the levels that would be justified to prevent trade deflection, suggesting a capture by special interest groups. The article outlines some alternative paths to reforms. 2012-03-30T07:12:33Z 2012-03-30T07:12:33Z 2008-03-01 Journal Article World Bank Research Observer 1564-6971 http://hdl.handle.net/10986/4416 CC BY-NC-ND 3.0 IGO http://creativecommons.org/licenses/by-nc-nd/3.0/igo/ World Bank World Bank Journal Article Uruguay Tunisia |
| repository_type |
Digital Repository |
| institution_category |
Foreign Institution |
| institution |
Digital Repositories |
| building |
World Bank Open Knowledge Repository |
| collection |
World Bank |
| topic |
customs unions export protection external tariff external tariffs free trade free trade agreements intermediate goods market access multilateral negotiations preferential access preferential trade preferential trade agreements regionalism rules of origin tariff revenue trade deflection trade facilitation world trade world trade organization world trading system |
| spellingShingle |
customs unions export protection external tariff external tariffs free trade free trade agreements intermediate goods market access multilateral negotiations preferential access preferential trade preferential trade agreements regionalism rules of origin tariff revenue trade deflection trade facilitation world trade world trade organization world trading system Cadot, Olivier de Melo, Jaime Why OECD Countries Should Reform Rules of Origin |
| geographic_facet |
Uruguay Tunisia |
| description |
With preferential trade agreements on the rise worldwide rules of origin—which are necessary to prevent trade deflection—are attracting increasing attention. At the same time, preference erosion for Generalized System of Preferences (GSP) recipients is increasing resistance to further multilateral negotiations. Drawing on different approaches, this article shows that the current system of rules of origin that is used by the European Union and the United States in preferential trade agreements (including the GSP) and that is similar to systems used by other Organisation for Economic Co-operation and Development countries should be drastically simplified if developed economies really want to help developing economies integrate into the world trading system. In addition to diverting resources for administrative tasks, current rules of origin carry significant compliance costs. More fundamentally, it is becoming increasingly clear that they are often been designed to force developing economies to buy inefficient intermediate products from developed economies to "pay for" preferential access for the final product. The evidence also suggests that a significant share of the rents associated with market access (net of rules of origin compliance costs) is captured by developed economies. Finally, the restrictiveness of rules of origin is found to be beyond the levels that would be justified to prevent trade deflection, suggesting a capture by special interest groups. The article outlines some alternative paths to reforms. |
| format |
Journal Article |
| author |
Cadot, Olivier de Melo, Jaime |
| author_facet |
Cadot, Olivier de Melo, Jaime |
| author_sort |
Cadot, Olivier |
| title |
Why OECD Countries Should Reform Rules of Origin |
| title_short |
Why OECD Countries Should Reform Rules of Origin |
| title_full |
Why OECD Countries Should Reform Rules of Origin |
| title_fullStr |
Why OECD Countries Should Reform Rules of Origin |
| title_full_unstemmed |
Why OECD Countries Should Reform Rules of Origin |
| title_sort |
why oecd countries should reform rules of origin |
| publisher |
World Bank |
| publishDate |
2012 |
| url |
http://hdl.handle.net/10986/4416 |
| _version_ |
1764391265662664704 |