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Do Preferential Trade Policies (Actually) Increase Exports? An analysis of EU trade policies

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  • Cipollina, Maria
  • Laborde, David
  • Salvatici, Luca

Abstract

Trade preferences have been used by the European Union and most developing countries can export with preferential market access under different schemes. We study the trade impact of these policies using highly disaggregated 8-digit data in a theoretically grounded gravity model framework. We provide an explicit measure of preferential tariff margins, using alternative definitions based on a comparison between bilateral applied tariffs and two different reference points: the MFN duty or a CES price aggregator. From a policy perspective, preferential schemes have a significant impact on volumes of trade, although with significant differences across sectors. From the methodological point of view, our results show that the definition of the margin has a significant impact on the assessment of the policy impact.

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Bibliographic Info

Paper provided by Agricultural and Applied Economics Association in its series 2013 Annual Meeting, August 4-6, 2013, Washington, D.C. with number 150177.

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Date of creation: 2013
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Handle: RePEc:ags:aaea13:150177

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Keywords: Theoretical Gravity Model; Preferential trade agreements; Trade cost elasticity Sectoral trade flows; Agricultural and Food Policy; International Relations/Trade; F13; F14;

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