Working Paper: CEPR ID: DP6762
Authors: Cline Carrere; Jaime de Melo; Bolormaa Tumurchudur
Abstract: The paper develops two synthetic measures at the HS-10 level to depict effective market access for a country receiving preferential access and applies these to the market access ASEAN members would receive on impact following the implementation of an FTA with the EU. These measures reveal quite a different picture than one that would be gleaned from the more usual ex-ante aggregate approaches. First, the measures show that current effective market access for ASEAN EBA members is cut in half by the preferences granted by the EU to countries that compete with these countries in the EU markets. Second, the small value of preferences is reflected in the pattern of preferential margins, the ?significant? preferential margins almost always being for products that account for less than 1/10 of 1 percent of exports at the HS-10 level. Third the measures show that about one quarter of the preferential margin under the proposed FTA for EBA members would be lost as a result of preferential access granted to ASEAN GSP members. Fifth, disaggregated calculations on the restrictiveness of rules of origin not only confirm that rules are more restrictive for products with higher preferential margins, but also that, for a given preferential margin in the EU market, due to the product composition of their exports to the EU, ASEAN countries usually face tougher rules of origin in the EU.
Keywords: ASEAN-EU FTA; Free Trade Agreements; Market Access; Rules of Origin
JEL Codes: F13; F15
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| EU preferences granted to competing countries (F55) | Current effective market access for ASEAN EBA members (F15) |
| Proposed FTA (F15) | Market access for ASEAN partners (F15) |
| Stricter rules of origin (F55) | Higher preferential margins (F12) |