Impact of Free Trade Agreement Use on Import Prices
We examine the impact of free trade agreement (FTA) use on import prices. For this analysis, we employ establishment-level import data with information on tariff schemes, that is, the FTA and most-favored-nation schemes used for importing. Unlike previous studies, we estimate the effects of FTA use on prices by controlling for differences in importing-firm characteristics. There are three main findings. First, the effect of FTA use is overestimated when not controlling for importing firm-related fixed effects. Second, on average, firms’ FTA use reduces tariffs by 12 percentage points and raises import prices by 3.6–6.7 percent. Third, in general, we do not find a price rise resulting from the costs of complying with rules of origin.
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| Main Authors: | , , , |
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| Format: | Journal Article biblioteca |
| Published: |
Published by Oxford University Press on behalf of the World Bank
2019-10
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| Subjects: | FREE TRADE AGREEMENT, WORLD TRADE ORGANIZATION, FTA, WTO, TRADE LIBERALIZATION, IMPORT PRICE, TARIFFS, |
| Online Access: | http://hdl.handle.net/10986/35418 |
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