CEPII, Recherche et Expertise sur l'economie mondiale
The Unintended Consequences of High Regional Content Requirements
By Keith Head, Thierry Mayer and Marc Melitz

Rules of origin are a common feature of regional trade agreements that fall short of full custom unions. Two of the most important trade agreements, the North American Free Trade Agreement (NAFTA) and the European Union (EU), recently enacted major changes to those rules. The 2020 USMCA agreement replacing NAFTA made those rules much stricter. Meanwhile, following its exit from the EU customs union, Britain and the remaining EU27 had to draw up new rules of origin for the EU-UK Trade and Cooperation Agreement (TCA). This paper quantifies the main trade-offs involved in setting the strictness of rules of origin in the context of the automobile industry. A more stringent agreement can raise or lower regional parts production, but it inevitably raises prices.
 
Trade & Globalization
Competitiveness & Growth
Emerging Countries
Environment & Natural Resources
Europe
Migrations
Money & Finance
Economic Policy


  Just Released
CEPII Policy Brief
CEPII Working Paper
International Economics
International Economics
La lettre du CEPII
Panorama du CEPII
CEPII Region Profiles: indicators, databases and classifications
Pierre Cotterlaz, Matteo Gagliardi, Carl Grekou, Houssein Guimbard, Laurence Nayman, Erica Perego, Alix de Saint Vaulry, Gianluca Santoni & Deniz Ünal
CEPII Country Profiles: indicators, databases and classifications
Pierre Cotterlaz, Matteo Gagliardi, Carl Grekou, Houssein Guimbard, Laurence Nayman, Erica Perego, Alix de Saint Vaulry, Gianluca Santoni & Deniz Ünal

The Economic Impact of Deepening Trade Agreements
World Bank Economic Review
Lionel Fontagné, Nadia Rocha, Michele Ruta, Gianluca Santoni

An ex-ante evaluation of the French car feebate
Energy Policy
Louise Kessler, Florian Morvillier, Quentin Perrier, Keyvan Rucheton