NAFTA as a means of raising rivals' costs: A comment

The purpose of this comment is to clarify and extend a recent paper entitle d "NAFTA as a Means of Raising Rivals Costs''. The paper indicates that the complexity of complying with the rules of NAFTA may lead to a decrease in competition in the domestic market. The comment shows that the complexity o f NAFTA is related to the rules of origin which are a part of virtually any free-trade agreement. Since rules of origin are a necessary part of virtua lly any trade agreement, the conclusions of the paper are not restricted to NAFTA but can be generalized to a large part of international trade.