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Agricultural Trade Preferences and the Developing Countries

Listed author(s):
  • Wainio, John
  • Shapouri, Shahla
  • Trueblood, Michael A.
  • Gibson, Paul R.

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.

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Paper provided by United States Department of Agriculture, Economic Research Service in its series Economic Research Report with number 7258.

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Date of creation: 2005
Handle: RePEc:ags:uersrr:7258
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  1. Bernard Hoekman & Francis Ng & Marcelo Olarreaga, 2002. "Eliminating Excessive Tariffs on Exports of Least Developed Countries," World Bank Economic Review, World Bank Group, vol. 16(1), pages 1-21, June.
  2. Brenton, Paul, 2003. "Integrating the least developed countries into the world trading system : the current impact of EU preferences under everything but arms," Policy Research Working Paper Series 3018, The World Bank.
  3. Don P. CLARK, 1997. "A Diffusion Model Of The Process Of Implementing The Caribbean Basin Economic Recovery Act," The Developing Economies, Institute of Developing Economies, vol. 35(2), pages 185-195, 06.
  4. Loper, Nathan & Abbott, Philip C. & Foster, Kenneth A., 2003. "Preferential Trade Of Agricultural Commodities In The Caribbean Basin," 2003 Annual meeting, July 27-30, Montreal, Canada 22018, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
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