GEP Research Paper 00/18
Rules of Origin as Commercial Policy Instruments
Rod Falvey and Geoff Reed
This paper was subsequently published in International Economic Review, Vol. 43 (2002)
Abstract
This paper examines the role of Rules of Origin as a commercial policy instrument which targets the input composition of imports. Using a three country, partial equilibrium structure, we demonstrate conditions under which the imposition of a binding Rule will be welfare improving for an importer facing competitive export suppliers. We further show that employing Rules of Origin in this way would be complementary to, rather than a substitute for, conventional optimal tariffs.
Issued in September 2000.
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