Cadot, Olivierde Melo, JaimePortugal-Pérez, Alberto2012-06-262012-06-262006-09https://hdl.handle.net/10986/9025With free trade areas (FTAs) under negotiation between Japan and the ASEAN Free Trade Area (AFTA) members and between the Republic of Korea and AFTA members, preferential market access will become more important in Asian regionalism. Protectionist pressures will likely increase through rules of origin, the natural outlet for these pressures. Based on the experience of the European Union and the United States with rules of origin, the authors argue that, should these FTAs follow in the footsteps of the EU and the U.S. and adopt similar rules of origin, trading partners in the region would incur unnecessary costs. Using EU trade under the Generalized System of Preferences with Africa, Caribbean, and Pacific partners, the authors estimate how the use of preferences would likely change if AFTA were to veer away from its current uniform rules of origin requiring a 40 percent local content rate. Depending on the sample used, a 10 percentage point reduction in the local value content requirement is estimated to increase the utilization rate of preferences by between 2.5 and 8.2 percentage points.CC BY 3.0 IGOADMINISTRATIVE COSTSAGRICULTURAL PRODUCTSAPPARELAPPAREL SECTORAVERAGE TARIFFBILATERAL CUMULATIONCOMMODITY CLASSIFICATIONCOMPLIANCE COSTSCONFERRING ORIGINCONSUMER PRICESCONTENT REQUIREMENTCONTENT RULECONTENT RULESCUSTOMSCUSTOMS UNIONDIFFERENTIATED PRODUCTSDOMESTIC CONTENTDOMESTIC INDUSTRIESDOMESTIC PRODUCERSDUTY-FREE ACCESSECONOMETRIC ESTIMATESEXPORTERSEXPORTING MEMBER STATEEXPORTSEXTERNAL TARIFFFINAL PRODUCTFINAL PRODUCTSFREE ACCESSFREE TRADEFREE TRADE AREAFREE TRADE AREASGENERALIZED SYSTEM OF PREFERENCESGLOBAL TRADINGGLOBAL TRADING PATTERNSIMPORT PRICEIMPORTING COUNTRYIMPORTSINDUSTRIALIZATIONINDUSTRY TRADEINPUT COSTSINTERMEDIATE GOODSINTERMEDIATE PRODUCTSINTRA-ASEAN TRADEINTRA-REGIONAL TRADELOCAL CONTENTLOCAL VALUELOW TARIFFSLOW-INCOME COUNTRIESMANUFACTURING PROCESSMANUFACTURING PROCESSESMARGINAL EFFECTMARGINAL EFFECTSMARKET POWERMEMBER COUNTRYNON-ORIGINATING MATERIALSORIGIN REQUIREMENTSORIGINATING INPUTSOUTSOURCINGPARTNER COUNTRIESPATTERN OF TRADEPATTERNS OF TRADEPREFERENTIAL ACCESSPREFERENTIAL MARGINPREFERENTIAL MARGINSPREFERENTIAL MARKET ACCESSPREFERENTIAL RATESPREFERENTIAL REGIMEPREFERENTIAL STATUSPREFERENTIAL TARIFFPREFERENTIAL TARIFF RATEPREFERENTIAL TRADEPREFERENTIAL TRADE AGREEMENTSPREFERENTIAL TRADINGPREFERENTIAL TRADING AGREEMENTSPREFERENTIAL TRADING ARRANGEMENTSPREFERENTIAL TREATMENTPRIVATE SECTORPRODUCT LEVELPRODUCT PRICEPRODUCT-SPECIFIC RULESPRODUCTION COSTSPROFIT RATEPROTECTIONIST PRESSURESRATE OF TARIFF PREFERENCERATES OF PROTECTIONREGIONAL CONTENTREGIONAL INTEGRATIONREGIONAL TRADEREGIONAL TRADING AGREEMENTSREGIONAL VALUEREGIONAL VALUE CONTENTREGIONALISMRESTRICTIVE RULERULES OF ORIGINSUBSTANTIAL TRANSFORMATIONTARIFF CLASSIFICATIONTARIFF CUTSTARIFF ELIMINATIONTARIFF LINETARIFF LINESTARIFF PREFERENCESTARIFF RATETARIFF RATESTARIFF REDUCTIONSTARIFF REVENUETARIFF SCHEDULESTECHNICAL REQUIREMENTSTEXTILE PRODUCERSTRADE BLOCTRADE DEFLECTIONTRADE FLOWSTRADE POLICYTRADE POLICY INSTRUMENTTRADE VOLUMESTRADING ARRANGEMENTTRADING PARTNERSTRIPLE TRANSFORMATIONUNDETERMINED ORIGINVALUE ADDEDVALUE OF OUTPUTVOLUME OF TRADEWORLD ECONOMYWORLD TRADING SYSTEMWTOZERO PROFITSZERO TARIFFSNAFTAWorld Bank10.1596/1813-9450-4016