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Falvey, Rod; Reed, Geoff (1997)
Publisher: Copenhagen: University of Copenhagen, Economic Policy Research Unit (EPRU)
Languages: English
Types: Article
Subjects: ddc: ddc:330
This article examines the role of rules of origin as a commercial policy instrument that targets the input composition of imports. Using a three-country, partial equilibrium structure, we demonstrate conditions under which the imposition of a binding rule will be welfare improving for an importer facing competitive export suppliers. We further show that employing rules of origin in this way would be complementary to, rather than a substitute for, conventional optimal tariffs. Copyright Economics Department of the University of Pennsylvania and the Osaka University Institute of Social and Economic Research Association
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    • Dixit, A. K. and G. M. Grossman (1982) “Trade and Protection with Multistage Production”, Review of Economic Studies, XLIX, 583-594.
    • Falvey, R. E. and G. V. Reed (1997) “Economic Effects of Rules of Origin” Presented at IESG Conference, Nottingham, September.
    • Grossman, G. M. (1981) “The Theory of Domestic Content Protection and Content Preference” Quarterly Journal of Economics 96, 583-603
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    • Krueger, A. O. (1993) “Free Trade Agreements as Protectionist Devices: Rules of Origin” NBER Working Paper No. 4352
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    • Spencer, B. and R. W. Jones (1989) “Raw materials, processing activities, and protectionism” Canadian Journal of Economics 22, 467-486
    • Spencer, B. and R. W. Jones (1991) “Vertical foreclosure and international trade policy” Review of Economic Studies 58, 153-170
    • Spencer, B. and R. W. Jones (1992) “Trade and protection in vertically related markets” Journal of International Economics 32, 31-55
    • Vermulst, E. A. (1992) “Rules of Origin as Commercial Policy Instruments - Revisited” Journal of World Trade 26(2), 61-102.
    • Vermulst, E. A. P. Waer and J. Bourgeois (eds) (1994) Rules of Origin in International Trade: A Comparative Study The University of Michigan Press, Ann Arbor
    • Vousden, N. (1987) “Content protection and tariffs under monopoly and competition” Journal of International Economics, 23, 263-282.
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