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GSP expiration and declining exports from developing countries

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  • Shushanik Hakobyan

Abstract

This paper investigates whether the 2011 expiration of the most comprehensive trade preference program (Generalized System of Preferences or GSP) offered by the US had a detrimental impact on the exports from developing countries. The effect of GSP expiration is examined with a triple difference‐in‐differences estimation that controls for both country‐ and product‐level export changes. Even though the duties collected during the period of expiration are ultimately refunded after GSP is reauthorized, the findings of this paper suggest that the expiration of GSP had a considerable impact on the level of exports to the US. On average exports dropped by 3% in 2011, with exports of agricultural products and textiles and clothing declining as much as 5% and 9%, respectively. The decline is increasing in the tariff rates and rates of utilization. The effect appears to be persistent over time as exports do not fully recover by 2012. The 2011 expiration is also found to be similar in magnitude to the 1995–1996 and 2013–2015 expirations, the longest episodes of expiration in the history of the GSP. Résumé. Suspension du SGP et baisse des exportations en provenance des pays en voie de développement. Cet article cherche à déterminer si la suspension en 2011 du Système Généralisé de Préférences (SGP) proposé par les États‐Unis eut des conséquences négatives sur les exportations en provenance des pays en voie de développement. Nous étudions l’effet de la suspension du SGP grâce à une estimation basée sur la méthode des triples différences tenant compte des changements en matière d’exportation, à la fois au niveau des produits mais aussi des pays. Même si les droits perçus au cours de la période d’interruption du SGP furent finalement restitués au moment de sa réintroduction, les conclusions de cet article suggèrent que la suspension du SGP engendra des répercussions considérables quant au niveau des exportations vers les États‐Unis. En moyenne, les exportations chutèrent de 3% en 2011; les exportations de produits agricoles et les exportations de textiles et de vêtements chutèrent quant à elles de 5% et 9% respectivement. Cette baisse entraîna une hausse des droits de douane et des taux d’utilisation. Ces effets semblent persister dans le temps puisque les exportations en 2012 ne retrouvèrent pas totalement les niveaux antérieurs. Il apparaît que la suspension du SGP en 2011 fut de même ampleur que les interruptions de 1995–1996 et de 2013–2015, les plus longues de l’histoire du SGP.

Suggested Citation

  • 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.
    • Handle: RePEc:wly:canjec:v:53:y:2020:i:3:p:1132-1161
    DOI: 10.1111/caje.12454
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    References listed on IDEAS

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