Rules of origin and market power

Wanyu Chung, Carlo Perroni

Research output: Working paper/PreprintDiscussion paper


We study how regional content requirements in Free Trade Areas (FTAs) affect market power and market structure in concentrated intermediate goods markets. We show that content requirements increase oligopolistic markups beyond the level that would obtain under an equivalent import tariff, and we document patterns in Canadian export data and US producer price data that align with the model’s predictions: producers of intermediate goods charge comparatively higher prices when the associated final goods producers are more constrained by FTA origin requirements and by Most Favoured Nation (MFN) tariffs for both intermediate and final non-FTA goods.
Original languageEnglish
PublisherCenter for Economic Policy Research
Publication statusPublished - 8 Mar 2021


Dive into the research topics of 'Rules of origin and market power'. Together they form a unique fingerprint.

Cite this