DP6762 Disentangling Market Access Effects for ASEAN Members Under an ASEAN-EU FTA

Author(s): Céline Carrère, Jaime de Melo, Bolormaa Tumurchudur
Publication Date: March 2008
Keyword(s): ASEAN-EU FTA, Free Trade Agreements, Market Access, Rules of Origin
JEL(s): F13, F15
Programme Areas: International Trade and Regional Economics
Link to this Page: cepr.org/active/publications/discussion_papers/dp.php?dpno=6762

The paper develops two synthetic measures at the HS-10 level to depict effective market access for a country receiving preferential access and applies these to the market access ASEAN members would receive on impact following the implementation of an FTA with the EU. These measures reveal quite a different picture than one that would be gleaned from the more usual ex-ante aggregate approaches. First, the measures show that current effective market access for ASEAN EBA members is cut in half by the preferences granted by the EU to countries that compete with these countries in the EU markets. Second, the small value of preferences is reflected in the pattern of preferential margins, the ?significant? preferential margins almost always being for products that account for less than 1/10 of 1 percent of exports at the HS-10 level. Third the measures show that about one quarter of the preferential margin under the proposed FTA for EBA members would be lost as a result of preferential access granted to ASEAN GSP members. Fifth, disaggregated calculations on the restrictiveness of rules of origin not only confirm that rules are more restrictive for products with higher preferential margins, but also that, for a given preferential margin in the EU market, due to the product composition of their exports to the EU, ASEAN countries usually face tougher rules of origin in the EU.