Political forces drive stricter trade rules, raising costs and limiting benefits
Rules of origin in trade agreements are meant to prevent products from being re-exported to avoid tariffs. However, when influenced by special interest groups, these rules can become too strict. Political factors, especially from the United States, have significantly increased the strictness of rules of origin under NAFTA. Industries with strong political influences had stricter rules, leading to higher production costs and reducing the benefits of the trade agreement.