Further Analysis of the Effects of Offshore Assembly Provisions on the US Tariff Structure

This article conceptually extends a previous analysis of the impact of Offshore Assembly Provisions (OAP) upon Effective Rates of Protection (ERPs). Allowance is made for the fact that the OAP incentive to foreign assemblers to use US components will bid up the price of the components. Expressions are obtained for the relationship between the “standard” ERP, the ERP with OAP in effect, and the nominal rate of protection.