Transient global value chains and preferential trade agreements: rules of origin in US trade agreements with Jordan and Egypt

Abstract

The impact of rules of origin (RoOs) in limiting the ability of developing countries to benefit from preferential trade agreements (PTAs) has been highlighted in the literature. One of the few US trade agreements that deviate permanently from the restrictive ‘yarn forward’ RoOs in textile and garments is the qualifying industrial zone (QIZ) agreement with Egypt and Jordan and the subsequent Free Trade Agreement (FTA) with Jordan. The more flexible RoOs of these agreements have contributed to a dramatic increase in exports especially from Jordan. Examining this through the lenses of global value chains (GVCs), this paper argues that these RoOs facilitated the integration of the two locations, particularly Jordan, in the highly contingent transient GVCs of Asian producers raising questions about the developmental impacts of such integration