Who Uses the EU's Free Trade Agreements? A Transaction-Level Analysis of the EU-South Korea FTA

Jonas Kasteng, Ari Kokko*, Patrik Gustavsson Tingvall

*Corresponding author af dette arbejde

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Abstrakt

The tariff preferences in FTAs do not apply automatically to all imports. Instead, importers can request to use the tariff preferences, but must then show that the imported goods fulfil the formal requirements (e.g. rules of origin) of the FTA. This is costly, which is a likely reason why tariff preferences are not always used. This research note examines preference utilization under the FTA between the EU and South Korea, which was formally ratified in 2015 (but had been provisionally applied from 2011). We use firm and transaction level data for Swedish imports from South Korea during November 2016 to answer the question ‘Who uses the EU's FTAs?’ With information on firm size, product category, import mode (direct imports or customs warehousing), preference margin, potential duty savings, and transaction size, we provide a detailed picture of when firms choose to utilize the tariff preferences. The results suggest that the differences across importers are not primarily related to firm size, as is sometimes suggested in extant literature. We also find that it is the size of the import transaction rather than the size of the preference margin that determines preference utilization.
OriginalsprogEngelsk
TidsskriftWorld Trade Review
Vol/bind21
Udgave nummer1
Sider (fra-til)93-108
Antal sider16
ISSN1474-7456
DOI
StatusUdgivet - feb. 2022

Bibliografisk note

Published online: 28 July 2021.

Emneord

  • F10
  • F13
  • F14
  • FTA
  • Tariff preferences
  • Preference utilization
  • Imports
  • Transaction-level data

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