Measuring the costs of FTA utilization: evidence from transaction-level import data of Thailand

Kazunobu Hayakawa, Nuttawut Laksanapanyakul, Shujiro Urata

Research output: Contribution to journalArticle

Abstract

In this study, we measure the utilization costs of free trade agreement (FTA) tariff schemes. To do that, we use shipment-level customs data on Thai imports, which identify not only firms, source country, and commodity but also tariff schemes. We propose several measures as a proxy for FTA utilization costs. The example includes the minimum amount of firm-level savings on tariff payments, i.e., trade values under FTA schemes multiplied by the tariff margin, in all transactions. Consequently, the median costs for FTA utilization in 2008, for example, are estimated to be approximately US$2000 for exports from China, US$300 for exports from Australia, and US$1000 for exports from Japan. We also found that FTA utilization costs differ by rule of origin and industry.

Original languageEnglish
Pages (from-to)559-575
Number of pages17
JournalReview of World Economics
Volume152
Issue number3
DOIs
Publication statusPublished - 2016 Aug 1

Keywords

  • Fixed costs
  • FTA
  • Thailand

ASJC Scopus subject areas

  • Economics, Econometrics and Finance(all)

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