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The Impact of Preference Erosionon Middle-Income Developing Countries


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  • Hans P. Lankes
  • Katerina Alexandraki
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    Preference erosion has become an obstacle to multilateral trade liberalization, as beneficiaries of trade preferences have an incentive to resist reductions in mostfavored- nation (MFN) tariffs. This study identifies middle-income developing countries that are vulnerable to export revenue loss from preference erosion. It concludes that the problem is heavily concentrated in a sub-set of preference beneficiaries-primarily small island economies dependent on sugar, banana, and-to a lesser extent-textile exports. Accordingly, measures to help mitigate the impact of preference erosion can be closely targeted at the countries at risk.

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    Paper provided by International Monetary Fund in its series IMF Working Papers with number 04/169.

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    Length: 34
    Date of creation: 01 Sep 2004
    Date of revision:
    Handle: RePEc:imf:imfwpa:04/169

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    Keywords: Trade; Multilateral trade negotiations; preference erosion; exporters; export supply; preferential access; trade liberalization; exporter; export value; value of exports; total exports; export revenues; export markets; preference schemes; rules of origin; merchandise exports; tariff structures; trade preferences; world prices; world market; world price; exporting countries; mfn tariffs; preferential trade; exports of goods; oil exporters; international trade; export loss; export price; trade barriers; tariff preferences; most-favored-nation; elasticity of export; multilateral liberalization; export losses; preferential tariffs; trade policies; export products; competitive advantage; preferential tariff; duty-free access; agricultural exports; export concentration; export dependence; export diversification; export shock; tariff lines; world market price; domestic price; beef exports; commodity trade; tariff rate; regional trade agreements; partial equilibrium; diversification of export; export market; bilateral agreements; trade agreements; multilateral trade; export values; trade diversion; bargaining power; clothing exports; exchange rate regime; export structure; trade negotiations; imported goods; trade data; preferential scheme; regional trade; trade protection; trade-weighted average; exchange rate regimes; quota ? tariff; preferential market access; import quotas; domestic producers; exports of beef; export base; trade reforms; export revenue; country of origin; protection measures; domestic goods; quota-free access; multilateral trade liberalization; countries ? exports; world trading system; world trade organization; product differentiation; diversification of exports; accession countries; world economy; trade creation; world demand; external tariff; trading system; terms of trade; market integration; quota tariff; trade policy review; domestic demand; unilateral liberalization; most- favored-nation; trade agreement; tariff equivalents; world trade; re-exports; trade arrangements; world markets; changes in trade; imports of textiles; trading partners; preferential trade agreements; preferential trade arrangements; import restrictions; elasticity of exports; domestic prices; terms of trade effects; developing countries ? exports; agricultural trade; multilateral agreement; total export; export unit; trade restrictions; value of imports; perfect substitutes; value of trade; trade effects;

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    1. Aitken, Norman D & Obutelewicz, Robert S, 1976. "A Cross-Sectional Study of EEC Trade with the Association of African Countries," The Review of Economics and Statistics, MIT Press, vol. 58(4), pages 425-33, November.
    2. repec:rus:hseeco:123712 is not listed on IDEAS
    3. Baldwin, Robert E., 1984. "Trade policies in developed countries," Handbook of International Economics, Elsevier, in: R. W. Jones & P. B. Kenen (ed.), Handbook of International Economics, edition 1, volume 1, chapter 12, pages 571-619 Elsevier.
    4. Brenton, Paul, 2003. "Integrating the least developed countries into the world trading system : the current impact of EU preferences under everything but arms," Policy Research Working Paper Series 3018, The World Bank.
    5. Yamazaki, Fumiko, 1996. "Potential erosion of trade preferences in agricultural products," Food Policy, Elsevier, Elsevier, vol. 21(4-5), pages 409-417.
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