IDEAS home Printed from
   My bibliography  Save this paper

Are trade preferences a panacea? The African growth and opportunity act and African exports


  • Ana Margarida Fernandes
  • Hibret Maemir
  • Aaditya Mattoo
  • Alejandro Forero


Does "infant industry" preferential access durably boost export performance? This paper exploits significant trade policy changes in the United States (US) to address this question. The expansion of Generalized System of Preferences (GSP) products for less developed countries in 1997 and the African Growth and Opportunity Act (AGOA) in 2001 are used to assess whether preferential access boosts exports of eligible products in general and apparel specifically. The end of the Multi-Fiber Arrangement (MFA) in 2005 is used to assess whether apparel export expansions survived the erosion of preferences. To find a causal impact of these changes, we use a triple-differences regression and 26 years of newly constructed trade and tariff data at the country-product-year level (1992-2017). The analysis finds that AGOA boosted African apparel exports and the GSP expansion increased African exports of other eligible products. While the marginal impacts on African apparel exports grew sharply in the first AGOA years, they leveled off after 2005, when the MFA end unleashed competition from Asian countries. The illusion of sustained African apparel exports is created by late-bloomers in East Africa offsetting boom-bust patterns in Southern Africa and insignificant responses in Central and West Africa. Firm-level customs data reveal that even in East Africa the recent export growth was driven by new entrants rather than incumbent firms whose competitiveness might have been nurtured by the big preference margins in the early AGOA period. Preferential access per se was not sufficient but needed to be complemented by specific domestic reforms: tariff liberalization, reduced regulatory burden, and enhanced connectivity.

Suggested Citation

  • Ana Margarida Fernandes & Hibret Maemir & Aaditya Mattoo & Alejandro Forero, 2019. "Are trade preferences a panacea? The African growth and opportunity act and African exports," CESifo Working Paper Series 7672, CESifo Group Munich.
  • Handle: RePEc:ces:ceswps:_7672

    Download full text from publisher

    File URL:
    Download Restriction: no

    References listed on IDEAS

    1. Ornelas, Emanuel & Ritel, Marcos, 2018. "The not-so-generalized effects of the Generalized System of Preferences," CEPR Discussion Papers 13208, C.E.P.R. Discussion Papers.
    2. Paul Collier & Anthony J. Venables, 2007. "Rethinking Trade Preferences: How Africa Can Diversify its Exports," The World Economy, Wiley Blackwell, vol. 30(8), pages 1326-1345, August.
    3. Andrew K. Rose, 2004. "Do We Really Know That the WTO Increases Trade?," American Economic Review, American Economic Association, vol. 94(1), pages 98-114, March.
    4. Fernandes, Ana M. & Freund, Caroline & Pierola, Martha Denisse, 2016. "Exporter behavior, country size and stage of development: Evidence from the exporter dynamics database," Journal of Development Economics, Elsevier, vol. 119(C), pages 121-137.
    5. Ricardo Mora & Iliana Reggio, 2019. "Alternative diff-in-diffs estimators with several pretreatment periods," Econometric Reviews, Taylor & Francis Journals, vol. 38(5), pages 465-486, May.
    6. Justin Wolfers, 2006. "Did Unilateral Divorce Laws Raise Divorce Rates? A Reconciliation and New Results," American Economic Review, American Economic Association, vol. 96(5), pages 1802-1820, December.
    7. Rotunno, Lorenzo & Vézina, Pierre-Louis & Wang, Zheng, 2013. "The rise and fall of (Chinese) African apparel exports," Journal of Development Economics, Elsevier, vol. 105(C), pages 152-163.
    8. Sebastian Edwards & Simon Johnson & David N. Weil, 2016. "African Successes, Volume III: Modernization and Development," NBER Books, National Bureau of Economic Research, Inc, number afri14-3, March.
    9. Jaime de Melo & Alberto Portugal-Perez, 2014. "Preferential Market Access Design: Evidence and Lessons from African Apparel Exports to the United States and the European Union," World Bank Economic Review, World Bank Group, vol. 28(1), pages 74-98.
    10. Carol Newman & John Page, 2017. "Industrial clusters: The case for Special Economic Zones in Africa," WIDER Working Paper Series 015, World Institute for Development Economic Research (UNU-WIDER).
    11. Gil-Pareja, Salvador & Llorca-Vivero, Rafael & Martínez-Serrano, José Antonio, 2014. "Do nonreciprocal preferential trade agreements increase beneficiaries' exports?," Journal of Development Economics, Elsevier, vol. 107(C), pages 291-304.
    Full references (including those not matched with items on IDEAS)

    More about this item


    tariff preferences; Africa; AGOA; GSP; exports; MFA;

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F68 - International Economics - - Economic Impacts of Globalization - - - Policy
    • O20 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - General
    • O55 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Africa

    NEP fields

    This paper has been announced in the following NEP Reports:


    Access and download statistics


    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ces:ceswps:_7672. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Klaus Wohlrabe). General contact details of provider: .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.