Table 6: PECS and change in imports from RoW and Spokes (with EFTA and Turkey)

|Dep Var:||Change in|log Imports||
|---|---|---|---|---|
||(1)|(2)|(3)|(4)|
|weighted IO-RoO_j_|-0.138***|-0.139***|||
||(0.008)|(0.014)|||
|IO-RoO_j_|||-0.099***|-0.084***|
||||(0.011)|(0.020)|
|∆_τj_||-2.773***||-2.821***|
|||(0.485)||(0.489)|
|Observations|125,392|28,710|125,392|28,710|
|R-squared|0.078|0.121|0.076|0.119|
|Importer FE|Yes|Yes|Yes|Yes|
|Exporter FE|Yes|Yes|Yes|Yes|

_Notes_ : OLS estimation. The dependent variable is the difference between log change in each Spoke’s imports of intermediate j from non-participating countries between 1995 and 2002, and the corresponding change in imports from the other Spoke countries (including EFTA and Turkey), ∆ _impj,srow −_ ∆ _impj,ss_ . ∆ _τj_ is the log change in preferential tariff (where we use MFN in case of missing preferential tariff). IO-RoO _j_ and weighted IO-RoO _j_ represent our simple and weighted average measures respectively. Importing countries include: Czech Republic, Estonia, Hungary, Lithuania, Latvia, Poland, Romania. The group of Spokes exporting countries include: Czech Republic, Estonia, Hungary, Lithuania, Latvia, Poland, Romania, EFTA and Turkey. EFTA include Iceland, Norway, and Switzerland.

All our results remain unchanged and become even stronger when considering the change in imports from the extended group of Spoke exporting countries (with EFTA and Turkey) and the change in imports from the EU15. Now the coefficient of the simple average IO-RoO is always positive and significant. The same happens to the coefficient for the relative change in tariffs. Table 7 reports the results.

Table 7: PECS and change in imports from Spoke and EU 15 (with EFTA and Turkey)

|Dep Var:||Change in lo|g Imports||
|---|---|---|---|---|
||(1)|(2)|(3)|(4)|
|weighted IO-RoO_j_|0.117***|0.135***|||
||(0.017)|(0.018)|||
|IO-RoO_j_|||0.024|0.061**|
||||(0.024)|(0.024)|
|∆_τj_||0.772*||1.145**|
|||(0.440)||(0.447)|
|Observations|24,391|14,649|24,391|14,649|
|R-squared|0.027|0.034|0.026|0.031|
|Importer FE|Yes|Yes|Yes|Yes|

_Notes_ : OLS estimation. The dependent variable represents changes in log imports of intermediate goods of each Spoke country from the rest of the Spoke countries compared to change of imports from the EU15, ∆ _impj,ss −_ ∆ _impj,sEU_ 15. ∆ _τj_ is the change in preferential tariff (where we use the applied MFN in case of missing preferential tariff information). IO-RoO _j_ and weighted IO-RoO _j_ represent our simple and weighted average measures of the restrictiveness in RoO respectively. Importing countries include: Czech Republic, Estonia, Hungary, Lithuania, Latvia, Poland, Romania, EFTA and Turkey.

# **6 Conclusion**

Between 1950 and 2017, 288 Regional Trade Agreements entered into force with FTAs representing the clear majority of the category. RoOs and RoCs are a crucial part of EU-FTA. RoOs, by determining the origin of a product, define whether a good qualifies for preferential access. RoCs define whether a firm can use imported intermediate goods from a specific country such that the final product of the importing firm does not lose the originating status.

From the theoretical point of view, various papers have already shown the distortionary 19