Heterogeneous Trade Agreements and Adverse Implications of Restrictive Rules of Origin

Download or read book Heterogeneous Trade Agreements and Adverse Implications of Restrictive Rules of Origin written by Raymond Robertson and published by . This book was released on 2023 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: We revisit the heterogeneous effects of regional trade agreements (RTAs) using a PPML gravity model and comparing apparel and total trade. The politically-sensitive apparel sector has specialized, usually restrictive, rules of origin (ROOs) clauses that vary considerably across RTAs. Our RTA estimates have a significantly higher variance for apparel trade than total trade, and ending temporary exceptions to apparel ROOs in U.S. trade agreements is associated with less apparel trade. We further illustrate how RTAs can be effective development policy instruments. For example, updating ROOs in the Dominican Republic-Central America Free Trade Agreement (CAFTA-DR) can significantly reduce Central American emigration.