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The initial and potential impact of preferential access to the U.S. market under the African Growth and Opportunity Act

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  • Brenton, Paul
  • Ikezuki, Takako

Abstract

The ability to export clothing products under preferences with liberal rules of origin is the key factor currently determining whether the African Growth and Opportunity Act (AGOA) has a significant impact on non-oil exporting African countries. At present only a small number of countries receive substantial benefits and least developed countries that do not receive preferences for clothing have yet to see an impact of AGOA on their overall exports. However, the benefits from exporting clothing under AGOA appear fragile in the face of the removal of quotas in the United States on major suppliers, such as China, at the end of 2004, and the planned removal of the liberal rules of origin that allow for the global sourcing of fabrics from least-cost locations. To entrench and enhance the benefits of AGOA, it is important that the scheme be extended over a much longer period, if not made permanent, and the special liberal rules of origin for clothing products be extended considerably beyond 2004. The effective inclusion of textile products and a number of high-duty agricultural products would also help to broaden the range of opportunities for African exporters in the U.S. market. Nevertheless it is important that the opportunities created by AGOA are integrated into a broader framework for promoting trade and that it be recognized that if the opportunities offered by more open trade are to be exploited, there must be concerted efforts to improve the environment for investment countries covered by AGOA.

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Bibliographic Info

Paper provided by The World Bank in its series Policy Research Working Paper Series with number 3262.

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Date of creation: 01 Apr 2004
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Handle: RePEc:wbk:wbrwps:3262

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Keywords: Markets and Market Access; Agribusiness&Markets; Economic Theory&Research; Water and Industry; Agricultural Knowledge&Information Systems; TF054105-DONOR FUNDED OPERATION ADMINISTRATION FEE INCOME AND EXPENSE ACCOUNT; Water and Industry; Agribusiness&Markets; Economic Theory&Research; Agricultural Knowledge&Information Systems;

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References

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  1. Ianchovichina, Elena & Mattoo, Aaditya & Olarreaga, Marcelo, 2001. "Unrestricted Market Access for Sub-Saharan Africa: How Much is it Worth and Who Pays?," CEPR Discussion Papers 2820, C.E.P.R. Discussion Papers.
  2. Daniel Lederman & Çaglar Özden, 2004. "U.S. Trade Preferences: All are not Created Equal," Working Papers Central Bank of Chile 280, Central Bank of Chile.
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Cited by:
  1. Mary Amiti & John Romalis, 2007. "Will the Doha Round Lead to Preference Erosion?," IMF Staff Papers, Palgrave Macmillan, vol. 54(2), pages 338-384, June.
  2. Garth Frazer & Johannes Van Biesebroeck, 2010. "Trade Growth under the African Growth and Opportunity Act," The Review of Economics and Statistics, MIT Press, vol. 92(1), pages 128-144, February.
  3. Denis Medvedev, 2010. "Preferential trade agreements and their role in world trade," Review of World Economics (Weltwirtschaftliches Archiv), Springer, vol. 146(2), pages 199-222, June.
  4. Lawrence Edwards & Robert Z. Lawrence, 2010. "AGOA Rules: The Intended and Unintended Consequences of Special Fabric Provisions," NBER Working Papers 16623, National Bureau of Economic Research, Inc.
  5. World Bank, 2007. "Nigeria - Competitiveness and Growth : Country Economic Memorandum, Volume 2. Main Report," World Bank Other Operational Studies 7824, The World Bank.
  6. Cooke, Edgar F. A., 2012. "Is the impact of AGOA heterogeneous?," MPRA Paper 43277, University Library of Munich, Germany.
  7. Cooke, Edgar F A, 2011. "The impact of trade preferences on exports of developing countries: the case of the AGOA and CBI preferences of the USA," MPRA Paper 31439, University Library of Munich, Germany.
  8. Walkenhorst, Peter & Cattaneo, Olivier, 2006. "Trade, Diversification and Growth in Nigeria," MPRA Paper 23735, University Library of Munich, Germany.

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