By Olivier Cadot, Antoni Estavadeoral, Akiko Suwa Eisenmann, Thierry Verdier
This booklet appears at principles of foundation in preferential buying and selling agreements and their transforming into value in alternate negotiations. The book's message is that ideas of beginning can act as robust limitations to alternate and feature been intentionally used as such.
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Additional resources for The Origin of Goods: Rules of Origin in Regional Trade Agreements (Centre for Economic Policy Research)
Example text
7 per cent of the value of shipment (Herin, p. 7). Such costs are reported to have resulted in a quarter of eligible EFTA exports to the EU paying the applied MFN duty rather than providing the needed documentation. 15 Assume that tariffs are levied on price that equals domestic cost. 26 Understanding Rules of Origin Price A C B (1+ t A) CB 0 E F D G a = a0 RB (a) C a = a2 B Quantity Fig. 2 Demand, price and cost in an FTA. worthwhile for it to accept the restriction and otherwise it is not. The price in A is, therefore, the minimum of RB(a) and CB(1 þ t A).
C. Syropoulos. 1996. The Size of Trading Blocs: Market Power and World Welfare Effects. Journal of International Economics 40 (3–4): 411–37. , M. Manchin. 2002. Making EU Arrangements Work: The Role of Rules of Origin. Working Document no. 183, Center for European Policy Studies. , J. de Melo, A. Suwa Eisenmann, B. Tumurchudur. 2002. Assessing the Effect of NAFTA’s Rules of Origin. Mimeo. , A. Panagariya. 1993. New Dimensions in Regional Integration, Cambridge University Press. , A. Panagariya.
All these are important questions awaiting crucial answers for the design of trade policy and FTAs. The purpose of the present work is to start to fill that gap, taking an industrial-organization perspective on the role of RoOs in the presence of multinational firms. More precisely, building on current research of our own (Thoenig and Verdier (2004a) and (2004b)), this chapter surveys two aspects of the international production fragmentation process. The first one is related to the idea that firms, in an imperfect competitive environment, have an incentive to use fragmentation or outsourcing of some intermediate input activities as a strategic variable (see, for instance, the recent work by Shy and Stenbarcka (2003a, 2003b)).