Geopolitical Interests And Preferential Access To U.S. Markets
AbstractThe United States imports around 25% of its merchandise under some form of preferential trade regime. This paper examines both the origins and the consequences of U.S. trade preferences in the context of the gravity model of international trade. The main contributions of the paper are threefold. First, it provides estimates of the impact of preferential trade regimes in terms of access to U.S. markets while controlling for geostrategic interests that determine the countries that are offered commercial preferences. Second, we consider not only country eligibility but also the extent of utilization of these programs. Third, we provide new estimates of the impact of transport and transactions costs beyond distance. In the standard gravity estimation, we find that beneficiaries of these preferences, except GSP, export between two and three times more than the excluded countries, after controlling for country and product characteristics. Nonetheless, the estimated effects of these programs are lower when controlling for utilization ratios and selection biases due to the correlation between geopolitical interests and the standard explanatory variables used in the gravity model of trade, such as countries' geographic distance from the United States. Copyright 2007 Blackwell Publishing Ltd..
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Bibliographic InfoArticle provided by Wiley Blackwell in its journal Economics & Politics.
Volume (Year): 19 (2007)
Issue (Month): 2 (07)
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Web page: http://www.blackwellpublishing.com/journal.asp?ref=0954-1985
Other versions of this item:
- Lederman, Daniel & Ozden, Caglar, 2005. "Geopolitical interests and preferential access to U.S. markets," Policy Research Working Paper Series 3531, The World Bank.
- TF0 - - - - - -
- FUN - International Economics - - - - -
- OPE - Economic Development, Technological Change, and Growth - - - - -
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