Why Don't All Exporters Benefit from Trade Agreements? Estimating Utilization Costs

November 1, 2012

This paper models FTA-utilization costs and estimates the evolution utilization costs for the FTA between the US and Chile. The model identifies costs by exploiting the indifference condition for the smallest firm that uses the treaty. The authors find that estimated costs are very heterogeneous across products, and small exporters that do not use the FTA could potentially be impacted negatively when large firms have the option of using the treaty.

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Topics: MOST FAVORED NATION (MFN) TARIFF LIBERALIZATION CUSTOMS PREFERENTIAL TRADE AGREEMENT (PTA)

Regions: CHILE

Authors: ALFIE ULLOA RODRIGO WAGNER

Publishing Institution: INTER-AMERICAN DEVELOPMENT BANK

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