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Did the least developed countries benefit from duty-free quota-free access to the Japanese market?

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  • Ito, Tadashi
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    Abstract

    Countries classified as least developed countries (LDCs) were granted duty-free quota-free (DFQF) access to the Japanese market. This study examines the impact of that access and finds that, in general, it did not benefit the LDCs. The construction of concordance tables for Japan's 9 digit tariff line codes enables analysis at the tariff line level, which overcomes a possible aggregation bias. The exogenous nature of DFQF access mitigates the endogeneity problem. Various estimation models, including the triple difference estimator, show that in general the LDCs did not benefit from DFQF access to the Japanese market. The total value of imports from LDCs has been increasing, but the imports granted both zero tariffs and substantial preference margins over non-LDC countries were not successful. These findings suggest that for LDCs the tariff barrier is a relatively small obstacle: Trade is affected more strongly by other factors, such as infrastructure, nontariff barriers, geographic distance, and cultural differences.

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    File URL: http://ir.ide.go.jp/dspace/bitstream/2344/1286/1/ARRIDE_Discussion_No.434_ito.pdf
    File Function: First version, 2013
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    Bibliographic Info

    Paper provided by Institute of Developing Economies, Japan External Trade Organization(JETRO) in its series IDE Discussion Papers with number 434.

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    Date of creation: Dec 2013
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    Publication status: Published in IDE Discussion Paper. No. 434. 2013.12
    Handle: RePEc:jet:dpaper:dpaper434

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    Related research

    Keywords: Developing countries; Japan; International trade; Trade policy; Foreign investments; Tariff; Export platform FDI;

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    1. Joao Santos Silva & Silvana Tenreyro, 2005. "The log of gravity," LSE Research Online Documents on Economics 3744, London School of Economics and Political Science, LSE Library.
    2. Garth Frazer & Johannes Van Biesebroeck, 2007. "Trade Growth under the African Growth and Opportunity Act," Working Papers tecipa-289, University of Toronto, Department of Economics.
    3. Roberto Álvarez & Hasan Faruq & Ricardo A. López, 2010. "Is Previous Exporting Experience Relevant for New Exports?," Working Papers Central Bank of Chile 599, Central Bank of Chile.
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