Rules of origin differ among overlapping free trade agreements, raising firm compliance costs, discouraging utilization of trade preferences, and hindering regional value chains.
This study exploits a unique dataset comparing the restrictiveness of product-specific rules of origin (PSRO) between the Regional Comprehensive Economic Partnership (RCEP) and other free trade agreements in Asia based on manufacturing requirements. Using maximum-likelihood models, the econometric analysis shows that economic sectors, political economy determinants, and negotiating capacities significantly influence PSRO stringency under the RCEP.