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Analyzing the Expiration of the United States Generalized System of Preferences and Its Impact on Imports from Developing Countries

Author

Listed:
  • Marius Fossum
  • Inga Heiland
  • Viktor Moulin

Abstract

Many developed countries grant preferential tariffs to exporters from developing countries through the Generalized System of Preferences (GSP), aiming to enhance growth through exporting. On December 31st, 2020, the US GSP expired because the US Congress failed to agree on renewing the program’s funding. We use the expiration as a natural experiment to analyze the trade effects of the GSP countries’ loss of preferential access to the US market. Using a triple difference approach, we find that the expiration caused a significant pain for previously eligible exporters from developing countries: US imports of eligible products from eligible countries dropped by 5-10% due to the expiration.

Suggested Citation

  • 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.
    • Handle: RePEc:ces:ceswps:_11509
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    References listed on IDEAS

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    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • O19 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - International Linkages to Development; Role of International Organizations

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