The basic economics of rules origin

Abstract

This paper studies certain aspects of rules of origin. Rules of origin are nothing but regulations used to identify the country of origin of the goods of international trade. Every country requires rules of origin for multiple purposes such as the collection of statistical data, the elaboration of market studies. The application of preferences in government procurements, the establishment of labeling rules, the assignment of export quotas, the application of antidumping tariffs, etc. However, this paper concentrates on the rules of origin that are employed to determine the eligibility of a product to reveive a certain tariff treatment. such as a "most favored nation” (MFN) tariff treatment under the General Agreement on Tariffs and Trade (GATT) or a preferential tariff treatment under a preferential international trade agreement.