Publication: Market Access and Welfare under Free Trade Agreements : Textiles under NAFTA
Date
2005-12-29
ISSN
Published
2005-12-29
Author(s)
Cadot, Olivier
Carrere, Celine
de Melo, Jaime
Portugal-Perez, Alberto
Abstract
The effective market access granted to
textiles and apparel under the North American Free Trade
Agreement (NAFTA) is estimated, taking into account the
presence of rules of origin. First, estimates are provided
of the effect of tariff preferences combined with rules of
origin on the border prices of Mexican final goods exported
to the United States (U.S.) and of U.S. intermediate goods
exported to Mexico, based on eight-digit harmonized system
tariff-line data. A third of the estimated rise in the
border price of Mexican apparel products is found to
compensate for the cost of complying with NAFTA's rules
of origin, and NAFTA is found to have raised the price of
U.S. intermediate goods exported to Mexico by around 12
percent, with downstream rules of origin accounting for a
third of that increase. Second, simulations are used to
estimate welfare gains for Mexican exporters from
preferential market access under NAFTA. The presence of
rules of origin is found to approximately halve these gains.
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Citation
“Cadot, Olivier; Carrere, Celine; de Melo, Jaime; Portugal-Perez, Alberto. 2005. Market Access and Welfare under Free Trade Agreements : Textiles under NAFTA. World Bank Economic Review. © Published by Oxford University Press on behalf of the World Bank. http://hdl.handle.net/10986/16473 License: CC BY-NC-ND 3.0 IGO.”
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Cited 26 times in Scopus (View citations)