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Trade Preference Erosion : Measurement and Policy Response

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Author Info

  • Bernard Hoekman
  • Will Martin
  • Carlos A. Primo Braga

Abstract

The multilateral trade system rests on the principle of nondiscrimination. The most-favored-nation (MFN) clause embodied in article one of the General Agreement on Tariffs and Trade (GATT) was the defining principle for a system that emerged in the post, Second World War era, largely in reaction to the folly of protectionism and managed trade that contributed to the global economic depression of the 1930s. From its origins, however, the GATT has allowed for exemptions from the MFN rule in the case of reciprocal preferential trade agreements. It also permits granting unilateral (nonreciprocal) preferences to developing countries. To provide some background for the debate on the potential extent and implications of preference erosion, the chapters in this volume review the value of preferences for beneficiary countries, assess the implications of preference erosion under different global liberalization scenarios, and discuss potential policy responses. One set of chapters focuses on the nonreciprocal preference schemes of individual industrial countries, particularly, Australia, Canada, Japan, the United States, and the member states of the European Union (EU). A second set of chapters considers sectoral features of these preference schemes, such as those applying to agricultural and nonagricultural products, and the important arrangements for textiles and clothing. A final set of chapters considers the overall effects of preferences and the options for dealing with preference erosion resulting from nondiscriminatory trade liberalization.

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Bibliographic Info

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This book is provided by The World Bank in its series World Bank Publications with number 9437 and published in 2009.

ISBN: 978-0-8213-7707-9
Handle: RePEc:wbk:wbpubs:9437

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Postal: 1818 H Street, N.W., Washington, DC 20433
Phone: (202) 477-1234
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Web page: https://openknowledge.worldbank.org
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Related research

Keywords: Macroeconomics and Economic Growth - Economic Theory & Research Private Sector Development - Emerging Markets International Economics and Trade - Free Trade International Economics and Trade - Trade Policy Law and Development - Trade Law International Economics and Trade Law and Development Private Sector Development Macroeconomics and Economic Growth;

References

References listed on IDEAS
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  1. Joseph Francois & Bernard Hoekman & Miriam Manchin, 2006. "Preference Erosion and Multilateral Trade Liberalization," World Bank Economic Review, World Bank Group, vol. 20(2), pages 197-216.
  2. Marcelo Olarreaga & Çaglar Özden, 2005. "AGOA and Apparel: Who Captures the Tariff Rent in the Presence of Preferential Market Access?," The World Economy, Wiley Blackwell, vol. 28(1), pages 63-77, 01.
  3. Amiti, Mary & Romalis, John, 2007. "Will the Doha Round Lead to Preference Erosion?," CEPR Discussion Papers 6372, C.E.P.R. Discussion Papers.
  4. Baybars Karacaovali & Nuno Limao, 2005. "The Clash Of Liberalizations: Preferential Vs. Multilateral Trade Liberalization In The European Union," International Trade and Finance Association Conference Papers 1037, International Trade and Finance Association.
  5. Jose Anson & Olivier Cadot & Antoni Estevadeordal & Jaime de Melo & Akiko Suwa-Eisenmann & Bolorma Tumurchudur, 2004. "Rules of origin in north-south preferential trading arrangements with an application to NAFTA," Research Unit Working Papers 0406, Laboratoire d'Economie Appliquee, INRA.
  6. Rodrik, Dani, 2004. "Industrial Policy for the Twenty-First Century," Working Paper Series rwp04-047, Harvard University, John F. Kennedy School of Government.
  7. Nuno Limao, 2006. "Preferential Trade Agreements as Stumbling Blocks for Multilateral Trade Liberalization: Evidence for the United States," American Economic Review, American Economic Association, vol. 96(3), pages 896-914, June.
  8. Paul Brenton & Miriam Manchin, 2003. "Making EU Trade Agreements Work: The Role of Rules of Origin," The World Economy, Wiley Blackwell, vol. 26(5), pages 755-769, 05.
  9. André Sapir & Rolf Langhammer, 1987. "Economic impact of generalized tariff preferences," ULB Institutional Repository 2013/8090, ULB -- Universite Libre de Bruxelles.
  10. Limão, Nuno & Olarreaga, Marcelo, 2005. "Trade Preferences to Small Developing Countries and the Welfare Costs of Lost Multilateral Liberalization," CEPR Discussion Papers 5045, C.E.P.R. Discussion Papers.
  11. Joseph Francois & Ian Wooton, 2000. "Trade in International Transport Services: The Role of Competition," Tinbergen Institute Discussion Papers 00-057/2, Tinbergen Institute.
  12. Howard Pack & Kamal Saggi, 2006. "Is There a Case for Industrial Policy? A Critical Survey," World Bank Research Observer, World Bank Group, vol. 21(2), pages 267-297.
  13. Antoine Bouët & Yvan Decreux & Lionel Fontagné & Sébastien Jean & David Laborde, 2004. "A Consistent, Ad-Valorem Equivalent Measure of Applied Protection Across the World: The MAcMap-HS6 Database," Working Papers 2004-22, CEPII research center.
  14. Pack, Howard & Saggi, Kamal, 2006. "The case for industrial policy : a critical survey," Policy Research Working Paper Series 3839, The World Bank.
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Citations

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Cited by:
  1. Marco Fugazza & Alessandro Nicita, 2011. "On The Importance Of Market Access For Trade," UNCTAD Blue Series Papers 50, United Nations Conference on Trade and Development.
  2. Valentina Raimondi & Margherita Scoppola & Alessandro Olper, 2012. "Preference erosion and the developing countries exports to the EU: a dynamic panel gravity approach," Review of World Economics (Weltwirtschaftliches Archiv), Springer, vol. 148(4), pages 707-732, December.

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