Country-of-origin rules : its origin, nature, and directions for reform

In a world of increasing specialization and division of labour, the designation of one country of origin to a product is becoming increasingly out of touch with reality and is getting more and more costly in terms of the investment and trade-diversion effects that country-of-origin rules (COR) cause. This paper proposes an extension of the Lloyd (1993) proposal, formalizing it into a multiple country-of-origin rule and recommending it on the basis of the more accurate information content it provides and the greater economic efficiency that results.