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Rethinking Trade Preferences: How Africa Can Diversify its Exports

  • Collier, Paul
  • Venables, Anthony J

This paper argues that the contribution of trade preferences to economic development needs to be reappraised in light of the growth of globalized trade in manufactures. Trade preferences may be able to act as a catalyst for manufacturing exports, leading to rapid growth in exports and employment. To do so, preferences need to be designed to be consistent with international trade in fragmented ‘tasks’ (as opposed to complete products) and need to be open to countries with sufficient levels of complementary inputs such as skills and infrastructure. Recent experience with the African Growth and Opportunities Act shows that, in the right conditions, Sub-Saharan African countries have had large manufacturing export supply response to trade preferences.

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Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 6262.

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Date of creation: Apr 2007
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Handle: RePEc:cpr:ceprdp:6262
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  1. Gordon H. Hanson, 2003. "What Has Happened to Wages in Mexico since NAFTA?," NBER Working Papers 9563, National Bureau of Economic Research, Inc.
  2. Arvind Subramanian & Devesh Roy, 2001. "Who Can Explain the Mauritian Miracle; Meade, Romer, Sachs, or Rodrik?," IMF Working Papers 01/116, International Monetary Fund.
  3. Cadot, Olivier & Estevadeordal, Antoni & Suwa-Eisenmann, Akiko & Verdier, Thierry (ed.), 2006. "The Origin of Goods: Rules of Origin in Regional Trade Agreements," OUP Catalogue, Oxford University Press, number 9780199290482.
  4. Markusen, James R. & Venables, Anthony J., 2007. "Interacting factor endowments and trade costs: A multi-country, multi-good approach to trade theory," Journal of International Economics, Elsevier, vol. 73(2), pages 333-354, November.
  5. Arndt, Sven W. & Kierzkowski, Henryk (ed.), 2001. "Fragmentation: New Production Patterns in the World Economy," OUP Catalogue, Oxford University Press, number 9780199243310.
  6. Gene M. Grossman & Esteban Rossi-Hansberg, 2006. "The rise of offshoring: it's not wine for cloth anymore," Proceedings - Economic Policy Symposium - Jackson Hole, Federal Reserve Bank of Kansas City, pages 59-102.
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