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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.

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Bibliographic Info

Paper provided by The World Bank in its series Policy Research Working Paper Series with number 3977.

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Date of creation: 01 Aug 2006
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Handle: RePEc:wbk:wbrwps:3977

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Related research

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

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  1. Hans P. Lankes & Katerina Alexandraki, 2004. "The Impact of Preference Erosionon Middle-Income Developing Countries," IMF Working Papers 04/169, International Monetary Fund.
  2. Arvind Panagariya, 2003. "EU Preferential Trade Policies and Developing Countries," International Trade 0308014, EconWPA.
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Cited by:
  1. 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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