Market Access and Welfare under Free Trade Agreements : Textiles under NAFTA
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 c...
| Main Authors: | , , , |
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| Language: | English en_US |
| Published: |
Published by Oxford University Press on behalf of the World Bank
2014
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/2005/09/17752524/market-access-welfare-under-free-trade-agreements-textiles-under-nafta http://hdl.handle.net/10986/16473 |
| Summary: | 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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