Trade costs and free trade agreements: Implications for tariff complementarity and welfare

Author(s):  
Akihiko Yanase ◽  
Masafumi Tsubuku
2022 ◽  
pp. 1-18
Author(s):  
Chul Chung ◽  
Innwon Park ◽  
Soonchan Park

Abstract We investigate the effects of free trade agreements (FTAs), focusing on the impact of cumulative rules of origin (ROO) on trade costs. Using a gravity regression model, we estimate the effect of various cumulative ROO systems on the measured trade costs. We apply these estimates to static and capital accumulation computable general equilibrium models to compare the effects of mega-regional FTAs in the Asia-Pacific region—namely, the Regional Comprehensive Economic Partnership (RCEP), Comprehensive and Progressive Trans-Pacific Partnership (CPTPP), and Free Trade Areas in the Asia-Pacific (FTAAP). We find that mega-regional FTAs may not be a viable alternative to a multilateral trading system or bilateral FTAs unless less restrictive cumulative ROO are adopted. Successful FTAs depend on an appropriate cumulative ROO provision system rather than their membership expansion.


Author(s):  
Henning Grosse Ruse-Khan

This chapter focusses on how ‘Free Trade Agreements’ (FTAs) fit within the existing multilateral framework, primarily with the Trade Related Aspects of International Property Rights (TRIPS) Agreement which most FTAs take as basis and benchmark from which the contracting parties modify rules among another (inter-se). In this context, the most prominent issue is the effect the continuous strengthening of the standards of intellectual property (IP) protection and enforcement has on the optional provisions and flexibilities of the TRIPS Agreement. The chapter examines whether and how the TRIPS addresses such further increases in protection and enforcement. It also looks at conflict clauses in FTAs and how they perceive their relation with the multilateral IP rules, especially the TRIPS Agreement. The principal question here is whether rule-relations within the international IP system are still primarily determined by harmonious interpretation — or if conflict resolution rather functions by choosing one rule over another.


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