Measurement and Determination of Rules of Origin in Preferential Trade Agreements (PTA's)

Abstract

This dissertation explores the measurement and determinants of product-specific rules of origin (PSRO) in preferential trade agreements (PTAs). In order to study PSRO empirically it is necessary to be able to measure them in some objective way. We analyze in great detail the mechanisms for specifying PSRO in PTAs, propose a methodology for measuring their relative restrictiveness, and demonstrate that accounting for several previously overlooked factors can have important empirical implications. We then employ the proposed measurement methodology to analyze the determinants of restrictiveness in a panel dataset of five recent PTAs in the Western Hemisphere. Exploring four alternative hypotheses we find that, except in a few particular sectors, governments tend to negotiate less restrictive rules so as to assure market access rather than more restrictive rules that would serve as hidden protection.