DP7072 Rules of Origin, Preferences and Diversification in Apparel: African Exports to the US and to the EU

Author(s): Jaime de Melo, Alberto Portugal-PĂ©rez
Publication Date: December 2008
Keyword(s): AGOA, EBA, Regional Integration, Rules of Origin
JEL(s): F12, F13, F15
Programme Areas: International Trade and Regional Economics
Link to this Page: cepr.org/active/publications/discussion_papers/dp.php?dpno=7072

The EU and the US offer similar preferential market access for apparel exports to a group of African countries. These agreements differ in their product-specific rules of origin (PSRO). While EBA and Cotonou require yarn to be woven into fabric and then made-up into apparel in the same country or in a country qualifying for cumulation (double transformation), AGOA grants a special regime (SR) to ?lesser developed countries? allowing them the use of fabric from any origin and still meet the criteria for preferences (single transformation). Using several estimation methods, this paper contrasts export performance to the US and EU markets and attributes an increase in export volume of about 300% for the top seven beneficiaries of AGOA?s SR to differences in respective PSRO and also an increase in the number of products exported.