Cadot, OlivierCarrere, Celinede Melo, JaimePortugal-Perez, Alberto2014-01-032014-01-032005-12-29World Bank Economic Reviewdoi:10.1093/wber/lhi019https://hdl.handle.net/10986/16473The 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.en-USCC BY-NC-ND 3.0 IGOACCOUNTINGAPPARELAPPAREL EXPORTSAPPAREL GOODSAPPAREL INDUSTRYAPPAREL PRODUCERSAPPAREL PRODUCTSAPPAREL SECTORAPPAREL TARIFFAVERAGE PRICEAVERAGE TARIFFBENEFITS OF TRADEBILATERAL CUMULATIONBORDER PRICEBRANDBRANDSBUDGETINGCAPTIVE MARKETCOMMERCECOMPETITION FRAMEWORKCOMPLIANCE COSTSCONSTANT ELASTICITY OF SUBSTITUTIONCONSTANT ELASTICITY OF TRANSFORMATIONCONSUMER PRICECONSUMER PRICESCONSUMERSCUSTOMSCUSTOMS OFFICIALSCUSTOMS PROCEDURESDEMAND CURVEDEVELOPED COUNTRIESDEVELOPING COUNTRIESDEVELOPING COUNTRYDEVELOPMENT POLICYDOMESTIC DEMANDDOMESTIC SALESDUMMY VARIABLESECONOMETRIC ESTIMATESECONOMIC POLICYECONOMIC RESEARCHECONOMIES OF SCALEELASTICITY OF DEMANDELASTICITY OF SUBSTITUTIONELASTICITY OF SUPPLYEQUILIBRIUMEXCHANGE RATEEXCHANGE RATESEXPORT PRICESEXPORT SALESEXPORT SUBSIDIESEXPORTERSEXPORTSFINAL GOODSFINISHED PRODUCTSFOREIGN GOODSFOREIGN PRODUCERFREE TRADEFREE TRADE AGREEMENTFREE TRADE AGREEMENTSFREE TRADE AREASFUNCTIONAL FORMSGOVERNMENT REVENUEIMPERFECT COMPETITIONIMPORT VALUESINCOME EFFECTSINPUT PRICESINTERMEDIATE GOODSINTERNATIONAL BANKINTERNATIONAL DEVELOPMENTINTERNATIONAL ECONOMICSINTERNATIONAL TRADEINTERNATIONAL TRADE COMMISSIONMARGINAL UTILITYMARKET ACCESSMARKET POWERMONOPOLISTIC COMPETITIONMOST FAVORED NATIONMULTILATERAL TRADEMULTILATERAL TRADE LIBERALIZATIONMULTILATERAL TRADE ~ LIBERALIZATIONOPPORTUNITY COSTSPERFECT COMPETITIONPERFECT SUBSTITUTESPOLITICAL ECONOMYPREFERENTIAL ACCESSPREFERENTIAL AGREEMENTSPREFERENTIAL MARGINSPREFERENTIAL MARKET ACCESSPREFERENTIAL RATESPREFERENTIAL REGIMEPREFERENTIAL RULESPREFERENTIAL RULES OF ORIGINPREFERENTIAL TARIFFSPREFERENTIAL TRADEPREFERENTIAL TRADE AGREEMENTSPREFERENTIAL TRADE ARRANGEMENTSPRICE COMPETITIONPRICE ELASTICITYPRICE INCREASEPRICE MARGINPRODUCER PRICEPRODUCER PRICESPRODUCT DIFFERENTIATIONPRODUCTION COSTSPROTECTIONISTPROTECTIONIST DEVICESQUANTITATIVE RESTRICTIONSQUOTASRATE OF TARIFF PREFERENCEREGIONAL INTEGRATIONREGIONAL TRADEREGIONAL TRADE AGREEMENTSREGIONAL VALUE CONTENTRULES OF ORIGINSAFEGUARD CLAUSESALESALESSIMULATION TECHNIQUESSOURCINGSPECIALIZATIONSPREADSTATISTICAL ANALYSISSUBSTITUTESUPPLIERSSUPPLY CURVESUPPLY ELASTICITYSURPLUSTARIFF CHANGESTARIFF CLASSIFICATIONTARIFF DATATARIFF LINETARIFF LINESTARIFF PREFERENCESTARIFF RATESTARIFF REDUCTIONTARIFF REDUCTIONSTARIFF REVENUETEXTILE IMPORTSTRADE AGREEMENTTRADE CLASSIFICATIONTRADE DATATRADE EXPANSIONTRADE FLOWSTRADE PERFORMANCETRADE PREFERENCESTRADINGTREASURYTREATYUNIT OF APPARELURUGUAY ROUNDVALUE ADDEDWELFARE GAINSWORLD TRADEWORLD TRADING SYSTEMJournal ArticleWorld Bank10.1596/16473