IDEAS home Printed from https://ideas.repec.org/a/bla/worlde/v45y2022i9p2977-3000.html
   My bibliography  Save this article

The impact of trade preferences removal: Evidence from the Belarus Generalized System of Preferences withdrawal

Author

Listed:
  • Hinnerk Gnutzmann
  • Arevik Gnutzmann‐Mkrtchyan

Abstract

Under the Generalized System of Preferences (GSP), high‐income countries grant unilateral trade preferences to developing countries. These preferences are subject to political conditionality, but little is known about the trade impact of loss of preferential access. We study the EU's complete withdrawal of GSP preferences from Belarus in 2007 in response to labour rights violations to fill this void. The withdrawal caused a significant drop in trade for affected products (25%–27% trade decline) and some trade reduction at the extensive margin. For products where trade was affected at the intensive margin, there is some evidence of adjustment through falls in quantities but also through prices for larger export sectors. The impact was uneven across sectors, with textiles and plastics particularly strongly affected by the withdrawal.

Suggested Citation

  • Hinnerk Gnutzmann & Arevik Gnutzmann‐Mkrtchyan, 2022. "The impact of trade preferences removal: Evidence from the Belarus Generalized System of Preferences withdrawal," The World Economy, Wiley Blackwell, vol. 45(9), pages 2977-3000, September.
    • Handle: RePEc:bla:worlde:v:45:y:2022:i:9:p:2977-3000
    DOI: 10.1111/twec.13265
    as

    Download full text from publisher

    File URL: https://doi.org/10.1111/twec.13265
    Download Restriction: no
    File URL: https://libkey.io/10.1111/twec.13265?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Bown, Chad P. & Crowley, Meredith A., 2006. "Policy externalities: How US antidumping affects Japanese exports to the EU," European Journal of Political Economy, Elsevier, vol. 22(3), pages 696-714, September.
    2. Anderson, James E. & Yotov, Yoto V., 2016. "Terms of trade and global efficiency effects of free trade agreements, 1990–2002," Journal of International Economics, Elsevier, vol. 99(C), pages 279-298.
    3. Shushanik Hakobyan, 2020. "GSP expiration and declining exports from developing countries," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 53(3), pages 1132-1161, August.
    4. Shushanik Hakobyan, 2017. "Export Competitiveness of Developing Countries and US Trade Policy," The World Economy, Wiley Blackwell, vol. 40(7), pages 1405-1429, July.
    5. 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.
    6. Gassebner, Martin & Gnutzmann-Mkrtchyan, Arevik, 2018. "Politicized trade: What drives withdrawal of trade preferences?," Economics Letters, Elsevier, vol. 167(C), pages 10-13.
    7. Emanuel Ornelas, 2016. "Special and Differential Treatment for Developing Countries," CESifo Working Paper Series 5823, CESifo.
    8. Daniel Lederman & Çaglar Özden, 2007. "Geopolitical Interests And Preferential Access To U.S. Markets," Economics and Politics, Wiley Blackwell, vol. 19(2), pages 235-258, July.
    9. Bown, Chad P. & Crowley, Meredith A., 2007. "Trade deflection and trade depression," Journal of International Economics, Elsevier, vol. 72(1), pages 176-201, May.
    10. Baier, Scott L. & Bergstrand, Jeffrey H., 2007. "Do free trade agreements actually increase members' international trade?," Journal of International Economics, Elsevier, vol. 71(1), pages 72-95, March.
    11. Thomas Zylkin, 2019. "Verifying the Existence of Maximum Likelihood Estimates in Generalized Linear Models," 2019 Stata Conference 47, Stata Users Group.
    12. Baier, Scott L. & Bergstrand, Jeffrey H. & Feng, Michael, 2014. "Economic integration agreements and the margins of international trade," Journal of International Economics, Elsevier, vol. 93(2), pages 339-350.
    13. Hoekman, Bernard & Ozden, Caglar, 2005. "Trade preferences and differential treatment of developing countries : a selective survey," Policy Research Working Paper Series 3566, The World Bank.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Marius Fossum & Inga Heiland & Viktor Moulin, 2024. "Analyzing the Expiration of the United States Generalized System of Preferences and Its Impact on Imports from Developing Countries," CESifo Working Paper Series 11509, CESifo.
    2. Ingo Borchert & Mattia Di Ubaldo, 2024. "The Trade Impact of Surprise Graduations from the EU’s GSP scheme," Working Paper Series 1224, Department of Economics, University of Sussex Business School.
    3. Gnutzmann-Mkrtchyan, Arevik & Volmer, Maximilian, 2022. "EU trade policy reform: towards reciprocal concessions with developing countries," Hannover Economic Papers (HEP) dp-697, Leibniz Universität Hannover, Wirtschaftswissenschaftliche Fakultät.
    4. Krishna, Kala & Salamanca, Carlos & Suzuki, Yuta & Volpe Martincus, Christian, 2025. "Learning to use trade agreements," Journal of Development Economics, Elsevier, vol. 174(C).
    5. Suttner, Stefan, 2023. "Issue linkage and trade policy uncertainty: Evidence from trade preferences for developing countries," FAU Discussion Papers in Economics 07/2023, Friedrich-Alexander University Erlangen-Nuremberg, Institute for Economics.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Emanuel Ornelas & Marcos Ritel, 2020. "The not‐so‐generalised effects of the Generalized System of Preferences," The World Economy, Wiley Blackwell, vol. 43(7), pages 1809-1840, July.
    2. Forge, Fabien & Garred, Jason & Kwon, Kyae Lim, 2024. "When are tariff cuts not enough? Heterogeneous effects of trade preferences for the least developed countries," Journal of International Economics, Elsevier, vol. 152(C).
    3. Besedes, Tibor & Kohl, Tristan & Lake, James, 2020. "Phase out tariffs, phase in trade?," Journal of International Economics, Elsevier, vol. 127(C).
    4. Ingo Borchert & Mattia Di Ubaldo, 2024. "The Trade Impact of Surprise Graduations from the EU’s GSP scheme," Working Paper Series 1224, Department of Economics, University of Sussex Business School.
    5. Gnutzmann, Hinnerk & Gnutzmann-Mkrtchyan, Arevik, 2020. "The Impact of Trade Preferences Removal," Hannover Economic Papers (HEP) dp-663, Leibniz Universität Hannover, Wirtschaftswissenschaftliche Fakultät.
    6. Fernandes, Ana M. & Forero, Alejandro & Maemir, Hibret & Mattoo, Aaditya, 2023. "Are trade preferences a Panacea? The export impact of the African growth and Opportunity Act," World Development, Elsevier, vol. 162(C).
    7. Gnutzmann-Mkrtchyan, Arevik & Volmer, Maximilian, 2022. "EU trade policy reform: towards reciprocal concessions with developing countries," Hannover Economic Papers (HEP) dp-697, Leibniz Universität Hannover, Wirtschaftswissenschaftliche Fakultät.
    8. Swati Dhingra & Rebecca Freeman & Hanwei Huang, 2023. "The Impact of Non‐tariff Barriers on Trade and Welfare," Economica, London School of Economics and Political Science, vol. 90(357), pages 140-177, January.
    9. Nuno Limão, 2016. "Preferential Trade Agreements," NBER Working Papers 22138, National Bureau of Economic Research, Inc.
    10. Gnangnon, Sèna Kimm, 2022. "Effect of the utilization of non-reciprocal trade preferences offered by the QUAD countries on beneficiary countries' economic complexity," Journal of the Japanese and International Economies, Elsevier, vol. 65(C).
    11. Katharina Längle, 2020. "Upgrading of Exports: Does the Integration into Trade Agreements Pave the Way to Product Upgrading?," Documents de travail du Centre d'Economie de la Sorbonne 20006, Université Panthéon-Sorbonne (Paris 1), Centre d'Economie de la Sorbonne.
    12. Scott L. Baier & Narendra R. Regmi, 2023. "Using Machine Learning to Capture Heterogeneity in Trade Agreements," Open Economies Review, Springer, vol. 34(4), pages 863-894, September.
    13. Tyazhelnikov, Vladimir & Romalis, John, 2024. "Russian counter-sanctions and smuggling: Forensics with structural gravity estimation," Journal of International Economics, Elsevier, vol. 152(C).
    14. Ornelas, Emanuel & Tovar, Patricia, 2022. "Intra-bloc tariffs and preferential margins in trade agreements," Journal of International Economics, Elsevier, vol. 138(C).
    15. Emiliano Magrini & Pierluigi Montalbano & Silvia Nenci, 2013. "Are the EU trade preferences really effective? A Generalized Propensity Score evaluation of the Southern Mediterranean Countries' case in agriculture and fishery," Working Papers 2/13, Sapienza University of Rome, DISS.
    16. Sang-wook (Stanley) Cho & Hansoo Choi & Julián P. Díaz, 2018. "Do Free Trade Agreements Increase the New Goods Margin? Evidence from Korea," Open Economies Review, Springer, vol. 29(5), pages 1095-1122, November.
    17. Byungyul Park & John Beghin, 2023. "Exploring the impact of economic integration agreements through extreme bounds analysis," Review of International Economics, Wiley Blackwell, vol. 31(1), pages 35-59, February.
    18. Salvador Gil-Pareja & Rafael Llorca-Vivero & José Antonio Martínez-Serrano, 2019. "Reciprocal vs nonreciprocal trade agreements: Which have been best to promote exports?," PLOS ONE, Public Library of Science, vol. 14(2), pages 1-15, February.
    19. Bergstrand, Jeffrey H. & Larch, Mario & Yotov, Yoto V., 2015. "Economic integration agreements, border effects, and distance elasticities in the gravity equation," European Economic Review, Elsevier, vol. 78(C), pages 307-327.
    20. Gnangnon, Sèna Kimm & Iyer, Harish, 2021. "Effect of Aid for Trade and Foreign Direct Investment Inflows on the Utilization of Unilateral Trade Preferences offered by the QUAD countries," EconStor Preprints 238211, ZBW - Leibniz Information Centre for Economics.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:worlde:v:45:y:2022:i:9:p:2977-3000. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: http://www.blackwellpublishing.com/journal.asp?ref=0378-5920 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.