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Preferential Tariff Formation -- The Case of the United States

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    Abstract

    This paper addresses the impact of Multilateral Trade Liberalisation (MTL) on the preferential tariffs granted by the United States. For a given MFN tariff, we model the preferential tariff with a simple linear functional form. We take MTL of the US as known to the world by the end of Uruguay Round in 1994 and estimate its impact on preferential tariff negotiations during 1995 to 2007. We use a three dimensional panel data, which takes into account the partner, product and time variation of the data-set. To complete our data-set, we codify eight PTA legal agreements. We draw three important conclusions. First, the products that are highly protected do not get high preferential access even at the regional level. Second, reciprocity plays only a limited role in granting better preferential access. Third, irrespective of development level of the partner, the non-reciprocal GSP preferences always matter.

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    File URL: http://repec.graduateinstitute.ch/pdfs/Working_papers/HEIDWP06-2010.pdf
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    Bibliographic Info

    Paper provided by Economics Section, The Graduate Institute of International Studies in its series IHEID Working Papers with number 06-2010.

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    Length: 51 pages
    Date of creation: Mar 2010
    Date of revision: Mar 2010
    Handle: RePEc:gii:giihei:heidwp06-2010

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    Keywords: MFN tariffs; preferential tariffs; reciprocity; GSP;

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    1. J. M. C. Santos Silva & Silvana Tenreyro, 2006. "The Log of Gravity," The Review of Economics and Statistics, MIT Press, vol. 88(4), pages 641-658, November.
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