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Quantifying the value of U.S. tariff preferences for developing countries

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  • Dean, Judith M.
  • Wainio, John

Abstract

In recent debates, trade preference erosion has been viewed by some as damaging to developing countries, and by others as insignificant, except in a few cases. But little data have been available to back either view. The objective of this paper is to improve our measures of the size, utilization, and value of all U.S. nonreciprocal trade preference programs in order to shed light on this debate. Highly disaggregated data are used to quantify the margins, coverage, utilization, and value of agricultural and nonagricultural tariff preferences for all beneficiary countries in the U.S. regional programs and in the Generalized System of Preferences. Results show that U.S. regional tariff preference programs are generally characterized by high coverage of beneficiary countries'exports, high utilization by beneficiary countries, and low tariff preference margins (except on apparel). For 29 countries, the value of U.S. tariff preferences was 5 percent or more of 2003 dutiable exports to the United States, even after incorporating actual utilization. Most of this value is attributable to nonagricultural tariff preferences, and to apparel preferences in particular. These results suggest that preference erosion may be significant for more countries than many had thought.

Suggested Citation

  • Dean, Judith M. & Wainio, John, 2006. "Quantifying the value of U.S. tariff preferences for developing countries," Policy Research Working Paper Series 3977, The World Bank.
    • Handle: RePEc:wbk:wbrwps:3977
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    References listed on IDEAS

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    1. Mr. Hans P Lankes & Miss Katerina Alexandraki, 2004. "The Impact of Preference Erosionon Middle-Income Developing Countries," IMF Working Papers 2004/169, International Monetary Fund.
    2. Arvind Panagariya, 2003. "EU Preferential Trade Policies and Developing Countries," International Trade 0308014, University Library of Munich, Germany.
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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. Bchir, Hedi & Chemingui, Mohamed & Hammouda, Hakim ben & Karingi, Stephen, 2006. "The Potential Payoffs of implementing the Hong Kong Deal on Agriculture for African Countries: a multilevel analysis," Conference papers 331514, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    3. Bureau, Jean-Christophe & Chakir, Raja & Gallezot, Jacques, 2006. "The Utilisation of EU and US Trade Preferences for Developing Countries in the Agri-Food Sector," Working Papers 18867, TRADEAG - Agricultural Trade Agreements.
    4. Koopmann, Georg & Hoekstra, Ruth, 2010. "Aid for trade and the political economy of trade liberalization," HWWI Research Papers 2-22, Hamburg Institute of International Economics (HWWI).

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    Keywords

    Free Trade; Trade Policy; Insurance&Risk Mitigation; Economic Theory&Research; Agribusiness&Markets;
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