How Restrictive are ASEAN’s Rules of Origin?

Abstract

This paper uses a product-level gravity approach to estimate the effect of ASEAN's product-specific rules of origin (ROOs) on regional trade, using original data on rules applicable at the six-digit level of the harmonized system. We find that the average tariff ad valorem equivalent (AVE) of ASEAN's ROOs is 3.40 percent across all instruments and sectors. The trade-weighted average is 2.09 percent. This moderate estimate is in line with the existing literature. We also find fairly high AVEs for some sectors, however, including leather, textile and apparel, footwear, and automobiles. Additionally, we find that some rules appear more restrictive than others; in this regard, the textile rule seems to stand out as a relatively more trade-inhibiting rule than others.
Citation

Cadot, O. (2016). "How Restrictive are ASEAN’s Rules of Origin?", with Lili Yan Ing; Asian Economic Papers 15,115-134.