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New Measures of FTA Liberalization Level

Discussion Papers

No.437

by Kazunobu HAYAKAWA, Nuttawut LAKSANAPANYAKUL
December 2013

ABSTRACT

This paper proposes new measures of the liberalization level of free trade agreements (FTAs). Our measures take three issues into account. First, in order to identify the differences in FTA liberalization level over time, we compute the annual liberalization level rather than the level during the whole period. Second, our measure includes information on tariff margins, i.e. the difference between FTA rates and most favoured nation rates. Third, the restrictiveness of rules of origin (RoOs) is also taken into account in order to penalize the liberalization level of products with more restrictive RoOs. In this paper, we compute such measures of FTA liberalization level for three FTAs in Thailand.


Keywords: Free trade agreement, rules of origin, FTA utilization
JEL classification: F10; F13; F15

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