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The role of the Generalised System of Preferences (GSP) in determining carnation demand in the United Kingdom: implications for Colombian and Kenyan exports

Author

Listed:
  • Muhammad, Andrew
  • Ngeleza, Guyslain K.

Abstract

The goal of this paper was to assess how the EU Generalised System of Preferences incentive scheme to combat drugs production and trafficking (GSP+) affected carnation imports in the United Kingdom (UK). Colombian carnations enter the EU duty-free under the GSP+ incentive scheme which is less secure than the trade agreement between the EU and Kenya. If the EU withdrew preferences from Colombia, would Kenyan flower exporters be better off in the UK carnation market? The results of study showed that Colombian exports benefited from tariff-free access to the UK where the benefit was due to both trade creation and trade diversion. Additionally, the competition between Colombian and Kenyan carnations was found to be insignificant and there was no evidence that GSP+ negatively affected Kenyan carnations. The results showed that competing exporters (Kenya, the Netherlands and Spain) could actually be better off when Colombian carnations are given duty-free to the EU.

Suggested Citation

  • Muhammad, Andrew & Ngeleza, Guyslain K., 2009. "The role of the Generalised System of Preferences (GSP) in determining carnation demand in the United Kingdom: implications for Colombian and Kenyan exports," Agrekon, Agricultural Economics Association of South Africa (AEASA), vol. 0(Issue 3), pages 1-16, September.
  • Handle: RePEc:ags:agreko:55133
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    File URL: http://ageconsearch.umn.edu/record/55133/files/5.%20Muhammad%20_%20Ngeleza.pdf
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    References listed on IDEAS

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    1. Beach, Charles M & MacKinnon, James G, 1979. "Maximum Likelihood Estimation of Singular Equation Systems with Autoregressive Disturbances," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 20(2), pages 459-464, June.
    2. Barten, A. P., 1969. "Maximum likelihood estimation of a complete system of demand equations," European Economic Review, Elsevier, vol. 1(1), pages 7-73.
    3. Sanyal, Kalyan K & Jones, Ronald W, 1982. "The Theory of Trade in Middle Products," American Economic Review, American Economic Association, vol. 72(1), pages 16-31, March.
    4. Terry L. Kastens & Gary W. Brester, 1996. "Model Selection and Forecasting Ability of Theory-Constrained Food Demand Systems," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 78(2), pages 301-312.
    5. Andrew Muhammad, 2009. "Would African Countries Benefit from the Termination of Kenya's Economic Partnership Agreement (EPA) with the EU? An Analysis of EU Demand for Imported Roses," Journal of Agricultural Economics, Wiley Blackwell, vol. 60(1), pages 220-238.
    6. Washington, Andrew A. & Kilmer, Richard L., 2002. "The Production Theory Approach To Import Demand Analysis: A Comparison Of The Rotterdam Model And The Differential Production Approach," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 0(Number 3), pages 1-3, December.
    7. Seale, James L., Jr. & Sparks, Amy L. & Buxton, Boyd M., 1992. "A Rotterdam Application To International Trade In Fresh Apples: A Differential Approach," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 0(Number 1), pages 1-12, July.
    8. Andrew Muhammad, 2007. "The impact of increasing non-agricultural market access on EU demand for imported fish: implications for Lake Victoria chilled fillet exports," European Review of Agricultural Economics, Foundation for the European Review of Agricultural Economics, vol. 34(4), pages 461-477, December.
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    Cited by:

    1. Shah Mehmood WAGAN, 2015. "Export boost of textile industry of Pakistan by availing EU’s GSP Plus," Journal of Economics Library, KSP Journals, vol. 2(1), pages 18-27, March.
    2. Wagan, Shah Mehmood, 2015. "Export boost of Textile Industry of Pakistan by availing EU’s GSP Plus," EconStor Open Access Articles, ZBW - German National Library of Economics, pages 18-27.

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    International Relations/Trade;

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