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The biggest losers (and winners) from US trade liberalization


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  • Kara Reynolds


Many development experts worry that continuing reductions of tariff levels in high-income countries will limit trade flows from developing countries that benefit from preferential trade programs because of 'preference erosion.' Using a panel of US import data between the years of 1997 and 2005, I find that reductions in preference margins will significantly diminish imports of some products, particularly from lower-middle and low income countries; for example, a 1% reduction in the US tariff on a product that is currently imported duty-free from developing countries will decrease imports of that product from lower-middle income countries by an average of 2.6%. However, many products produced by developing countries fail to qualify for preferential tariffs, thus a gradual reduction in all US tariff rates is expected to have only a modest impact on trade flows from developing countries.

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Article provided by Taylor & Francis Journals in its journal The Journal of International Trade & Economic Development.

Volume (Year): 18 (2009)
Issue (Month): 3 ()
Pages: 421-442

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Handle: RePEc:taf:jitecd:v:18:y:2009:i:3:p:421-442

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Keywords: Generalized System of Preferences; trade diversion; preferential tariffs;

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