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NAMA Negotiations in the WTO and Preference Erosion


  • Mustafizur Rahman
  • Wasel Bin Shadat

    (Mustafizur Rahman is Research Director and Wasel Bin Shadat is Senior Research Associate at the Centre for Policy Dialogue, House 40\C, Road 11, Dhanmondi R\A, Dhaka–1209, Bangladesh. E-mail:


The on-going negotiations on non-agricultural market access (NAMA) in the World Trade Organization (WTO) are expected to lead to substantive reductions in MFN tariff rates on industrial goods in both the developed and developing countries. Although the LDCs are not required to undertake any tariff reduction commitment under the Doha Round, they are likely to suffer substantive tariff preference erosion as a consequence of these negotiations since any reduction of MFN tariffs by the developed countries will result in a reduction in the preferential margins currently enjoyed by LDCs under the various GSP schemes operated by those developed countries. In this context this article undertakes the following: (a) reviews relevant literature dealing with the issue, (b) examines the importance of preference erosion for LDCs, and particularly for Bangladesh, (c) makes an attempt to estimate, under various scenarios, the range of preference erosion which Bangladesh is likely to suffer given her current trade pattern and the preferential treatment she currently enjoys as a beneficiary of the EU and US GSP schemes, and (d) presents a number of possible solutions to address the issue of preference erosion. In this context the article also reviews the WTO Ministerial Decision in Hong Kong as regards the duty free, quota free market access as articulated in Annex F of the Decision on S&D treatment for LDCs, and also subsequent developments with respect to NAMA negotiations in Geneva and examines their possible implications in terms of preference erosion for LDCs.

Suggested Citation

  • Mustafizur Rahman & Wasel Bin Shadat, 2006. "NAMA Negotiations in the WTO and Preference Erosion," South Asia Economic Journal, Institute of Policy Studies of Sri Lanka, vol. 7(2), pages 179-203, September.
  • Handle: RePEc:sae:soueco:v:7:y:2006:i:2:p:179-203
    DOI: 10.1177/139156140600700202

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    References listed on IDEAS

    1. Roberta Piermartini & Patrick Low & Jurgen Richtering, 2005. "Multilateral Solutions to the Erosion of Non-Reciprocal Preferences in NAMA," Working Papers id:289, eSocialSciences.
    2. Joseph Francois & Bernard Hoekman & Miriam Manchin, 2006. "Preference Erosion and Multilateral Trade Liberalization," The World Bank Economic Review, World Bank Group, vol. 20(2), pages 197-216.
    3. Mustafizur Rahman, 2005. "Ongoing WTO Negotiations and the Issue of Preference Erosion: Concerns of Asia-Pacific LDCs," ARTNeT Policy Briefs 1, United Nations Economic and Social Commission for Asia and the Pacific (ESCAP).
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    Cited by:

    1. Raihan, Selim & Razzaque, Mohammad A, 2007. "WTO and regional trade negotiation outcomes: quantitative assessments of potential implications on Bangladesh," MPRA Paper 38475, University Library of Munich, Germany.
    2. Fahmida Khatun & Debapriya Bhattacharya & Mustafizur Rahman, 2013. "Revisiting the PRSP Experience in Bangladesh: Perspectives on Representation, Accountability and Inclusiveness," CPD Working Paper 105, Centre for Policy Dialogue (CPD).
    3. Mustafizur Rahman, 2014. "Trade Benefits for Least Developed Countries: the Bangladesh Case Market Access Initiatives, Limitations and Policy Recommendations," CDP Background Papers 018, United Nations, Department of Economics and Social Affairs.

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    More about this item


    JEL: F10; JEL: F13; JEL: F17; WTO; NAMA; Preference Erosion; LDCs;
    All these keywords.

    JEL classification:

    • F10 - International Economics - - Trade - - - General
    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F17 - International Economics - - Trade - - - Trade Forecasting and Simulation


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