Regional content requirements and market power: Lessons from CUSFTA

• 成果类型: Article
• 署名作者: Chung, Wanyu; Perroni, Carlo
• 署名单位: University of Birmingham; Centre for Economic Policy Research - UK; University of Warwick; Leibniz Association; Ifo Institut
• 刊物名称: JOURNAL OF INTERNATIONAL ECONOMICS
• ISSN/ISSBN: 0022-1996
• DOI: 10.1016/j.jinteco.2025.104097
• 发表日期: 2025
• 关键词: Free trade areas; Content requirements; Rules of origin; market power

摘要

Focusing on the 1989 Canada-United States Free Trade Agreement (CUSFTA), we examine how regional content requirements in Free Trade Areas (FTAs) affect competition and prices in intermediate goods markets. Content requirements in FTAs shelter firms from competition more than an equivalent trade-protection tariff would. We document patterns in US industry-level census data and Canadian product-level export data that align with theoretical predictions: stricter and binding content requirements are linked to higher prices and more firm entry. These results underscore the role of content requirements in shaping market structure and market power, with implications for the choice of preferential trade arrangements.