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5 - The Need for Better Disciplines on Rules of Origins in the WTO

Evidence from NAFTA

from Part I - New and Old Challenges

Published online by Cambridge University Press:  05 August 2019

By
Caroline Freund
Edited by
Manfred Elsig ,
Michael Hahn  and
Gabriele Spilker
Manfred Elsig
Affiliation:
Universität Bern, Switzerland
Michael Hahn
Affiliation:
Universität Bern, Switzerland
Gabriele Spilker
Affiliation:
Universität Salzburg
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Summary

This chapter shows that the rules of origin, which are meant to protect against the trans-shipment of foreign goods in free trade areas, are instead being used to promote particular industries. Strict rules of origin add to production costs by forcing firms to use more expensive parts and pay administrative costs. They also prevent firms from exporting to markets governed by different trade agreements and disproportionately hurt small firms. The ongoing renegotiation of NAFTA highlights the potential to expand the use rules of origin as a form of trade protection. The WTO currently has only limited disciplines on rules of origin. Clear and enforceable international regulations would help thwart the spread of complex rules.

Keywords

rules of originNAFTAWTOtrade protection
Type
Chapter
Information
The Shifting Landscape of Global Trade Governance
World Trade Forum
 , pp. 107 - 120
Publisher: Cambridge University Press
Print publication year: 2019

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References

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