Divergent Integration

Wooton, Ian and Haaland, Jan I. (2021) Divergent Integration. Preprint / Working Paper. University of Strathclyde, Glasgow.

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Abstract

Trade liberalisation is often characterised as either preferential or nondiscriminatory but not all preferential trade agreements are the same. We focus on non-tariff measures that can constitute barriers to trade and that differ between free-trade agreements (FTAs) and customs unions (CUs). In particular, we investigate the role of rules of origin (RoO) in restricting market access for nations excluded from a CU. We develop a simple general equilibrium model characterised by trade in intermediate and final products and use this to examine the implications of binding RoO in an FTA on market outcomes and the welfare of agents in the economy. We highlight the phenomenon of “induced trade diversion” where RoO can result in countries losing from preferential market access.

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• Item metadata

  Item type:	Monograph(Preprint / Working Paper)
  ID code:	76369
  Dates:	Date Event 16 April 2021 Published
  Notes:	This working paper was published as part of Strathclyde Discussion Papers in Economics, No. 21-3. and in conjunction with Fraser of Allander Economic Commentary Vol45 no2. (ISSN 2046-5378)
  Subjects:	Social Sciences > Economic Theory
  Department:	Strathclyde Business School > Economics Strathclyde Business School > Fraser of Allander Institute
  Depositing user:	Pure Administrator
  Date deposited:	06 May 2021 14:57
  Last modified:	11 Apr 2024 02:54
  URI:	https://strathprints.strath.ac.uk/id/eprint/76369