Rules of Origin and Local Content in East Asia

Rules of Origin (RoO) are an integral part of all trade rules. In order to be eligible for Common Effective Preferential Tariffs (CEPT) under AFTA and similar arrangements under the ASEAN-China FTA, a product must satisfy the conditions relative to local content. The paper tries to calculate local content as well as cumulative local content in East Asian economies, with use of the Asian International Input-Output Tables; it also investigates factors of change in local content by applying decomposition analysis. The paper finds that the cumulation rule increased local content of the electronics industry more significantly than local content of the automotive industry, and the contribution of the cumulation rule increased in the period 1990-2000, due to rising dependency on neighboring ASEAN countries and China.

Customary land tenure, inheritance rules, and smallholder farmers in Malawi

Based on information derived from six villages in various parts of rural Malawi, this paper examines the interrelationship between smallholder strategies to obtain land on the one hand, and customary land tenure and inheritance rules on the other. The paper revealed that although the majority of land transactions followed customary land tenure systems and inheritance rules, in a good number of cases land transactions deviated from the basic rules. One factor behind such deviation was the unique personal relationships that were developed between original landholders and heirs. Another factor was the seemingly increasing cases of returning wives in patrilineal villages. Still another factor was the intensifying land scarcity that encouraged villagers to adopt strategies to obtain land from any source by any means. On the other hand, there were also some cases in which the same land-scarcity problem induced villagers to countercheck the practice of flexible land transfer to prevent their lineage land from being alienated to non-kin members. These facts suggest that, in a land scarce situation, an individual strategy to obtain land rights from any possible sources by deviating from customary rules may occasionally be in conflict with a lineage strategy to countercheck such tendency.

Impacts of common rules of origin on FTA utilization

This paper examines empirically the impacts of sharing rules of origin (RoOs) with other ASEAN+1 free trade agreements (FTAs) on ASEAN-Korea FTA/ASEAN-China FTA utilization in Thai exports in 2011. Our careful empirical analysis suggests that the harmonization of RoOs across FTAs play some role in reducing the costs yielded through the spaghetti bowl phenomenon. In particular, the harmonization to "change-in-tariff classification (CTC) or real value-added content (RVC)" will play a relatively positive role in not seriously discouraging firms’ use of multiple FTA schemes. On the other hand, the harmonization to CTC or CTC&RVC hinders firms from using those schemes.