A Research On Trade Effect Of Rules Of Origin In Free Trade Agreements

Since joining the WTO in 2001,China has signed 17 FTAs with 24 countries,among which 15 FTAs are in effect.The vigorous development of trade liberalization has opened up a healthy and mutually beneficial road for trade between China and other countries.On July 1,2014,China-Switzerland free trade agreement came into being in the international context of trade liberalization.The signing of the agreement is to improve the economic environment of the member countries,and to enjoy preferential treatment at a certain preferential tariff rate.Rules of origin,which is an important part of FTA,have caused some obstacles to enterprises which apply for preferential tariffs because the preconditions for companies to use preferential tariffs for importing and exporting products are to satisfy the provisions of the rules of origin.To meet these terms,companies must pay a certain cost.The existence of rules of origin makes preferential tariffs less desirable and,to a certain extent,offsets the original intention of establishing free trade zones to promot trade liberalization.This article will quantify the rules of origin to obtain the restriction index of origin rules and analyze the trade effect between the restriction index of rules of origin and the member countries.This article is based on the 5260 products coded by HS 6 digits on the UN Comtrade database from 2010 to 2016,and studies the influence of rules of origin on the trade effects between China and Sweden,namely,the relationship between the ROO and China's exports to Switzerland.First of all,this paper defines the concept of ROO,as well as the content,the classification and the cost of ROO.Secondly,this paper introduces the restriction index of rules of origienterprises which apply for preferential tariffs because the preconditions for companies to use preferential tariffs for importing and exporting products are to satisfy the provisions of the rules of origin.To meet these terms,companies must pay a certain cost.The existence of rules of origin makes preferential tariffs less desirable and,to a certain extent,offsets the original intention of establishing free trade zones to promot trade liberalization.This article will quantify the rules of origin to obtain the restriction index of origin rules and analyze the trade effect between the restriction index of rules of origin and the member countries.This article is based on the 5260 products coded by HS 6 digits on the UN Comtrade database from 2010 to 2016,and studies the influence of rules of origin on the trade effects between China and Sweden,namely,the relationship between the ROO and China's exports to Switzerland.First of all,this paper defines the concept of ROO,as n and quantifies the rules of origin of legal provisions.Thirdly,this article will analyze the mechanism of the influence of the rules of origin on trade at the theoretical level.Fourth,in the qualitative analysis section,we use charts to analyze the relationship between the China-Sweden Rules of Origin Index and China's exports to Switzerland.Through the chart,we can see that there is a negative correlation between the limit of ROO and export value;Fifth,using the gravity model to analyze panel data at HS 6 digit product level in the empirical part.The regression results of the model further prove that the restrictive of rules of origin have negative correlation with the export value;finally,this article gives political suggestions to the government and enterprises on raising the preferential tariff utilization,that is,increasing the utilization rate of the free trade agreement.