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Agricultural Trade Preferences and the Developing Countries

Author

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  • Wainio, John
  • Shapouri, Shahla
  • Trueblood, Michael A.
  • Gibson, Paul R.

Abstract

Nonreciprocal trade preference programs originated in the 1970s under the Generalized System of Preferences (GSP) as an effort by high-income developed countries to provide tariff concessions for low-income countries. The goal of the programs was to increase export earnings, promote industrialization, and stimulate economic growth in the lower income countries. This study analyzes detailed trade and tariff data for the United States and the European Union (the two largest nonreciprocal preference donors) to determine the extent to which the programs have increased exports from beneficiary countries. For those products where the margins of preference are large and where beneficiaries have a comparative advantage and the capacity to expand production, these programs can create adequate incentives leading to a growing export market. The analysis finds that the programs offer significant benefits for some countries, mostly the higher income developing countries. Economic benefits in the least developed countries have been modest. An unanswered question is whether these gains will continue after the incentives are reduced.

Suggested Citation

  • Wainio, John & Shapouri, Shahla & Trueblood, Michael A. & Gibson, Paul R., 2005. "Agricultural Trade Preferences and the Developing Countries," Economic Research Report 7258, United States Department of Agriculture, Economic Research Service.
    • Handle: RePEc:ags:uersrr:7258
    DOI: 10.22004/ag.econ.7258
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    References listed on IDEAS

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    1. Acar, Mustafa, 1999. "What is Next for Turkey? Implications of Incorporating Agriculture into the Customs Union with the EU," Conference papers 330884, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    2. Bureau, Jean-Christophe & Jean, Sebastien & Matthews, Alan, 2006. "The Consequences of Agricultural Trade Liberalization for Developing Countries," 2006 Annual Meeting, August 12-18, 2006, Queensland, Australia 25471, International Association of Agricultural Economists.
    3. Jevtić, Stojan & Stanković, Vojislav & Vučković, Slobodan, 2007. "Export Growth of Agricultural Products as Factor of Agricultural and Rural Development in Serbia," 100th Seminar, June 21-23, 2007, Novi Sad, Serbia and Montenegro 162400, European Association of Agricultural Economists.
    4. Aiello, Francesco & Demaria, Federica, 2009. "Do trade preferential agreements enhance the exports of developing countries? Evidence from the EU GSP," MPRA Paper 20093, University Library of Munich, Germany.
    5. Kelly Ruth, 2010. "EU and U.S. Non-Reciprocal Preferences: Maintaining the Acquis," The Law and Development Review, De Gruyter, vol. 3(1), pages 1-39, April.
    6. DeMaria, Federica & Drogue, Sophie & Matthews, Alan, 2008. "Agro-Food Preferences in the EU's GSP Scheme: An Analysis of Changes between 2004 and 2006," Working Papers 6151, TRADEAG - Agricultural Trade Agreements.
    7. Laaksonen, Kalle & Maki-Franti, Petri & Virolainen, Meri, 2007. "Lome Convention, Agriculture and Trade Relations between the EU and the ACP Countries in 1975-2000," Working Papers 18853, TRADEAG - Agricultural Trade Agreements.

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