IDEAS home Printed from https://ideas.repec.org/p/wbk/wbrwps/3244.html
   My bibliography  Save this paper

Price effects of preferential market access : the Caribbean Basin Initiative and the apparel sector

Author

Listed:
  • Ozden, Caglar
  • Sharma, Gunjan

Abstract

Preferential trade arrangements should be evaluated by analyzing their effect on prices, rather than the total value of trade, as emphasized in the theoretical literature but rarely implemented empirically. The authors analyze the impact of the unilateral preferences granted by the U.S. Caribbean Basin Initiative (CBI) on the prices received by eligible apparel exporters. They use fixed effects generalized least squares (GLS) estimation to isolate the effects of various other factors (such as quality, exchange rates, and transactions costs) and identify the effects of tariff preferences. The authors find that CBI exporters only capture around two-thirds of their preference margin, despite the fairly competitive nature of the apparel market. This translates into a 9 percent increase in the relative prices they receive, but these numbers vary across countries and years. Countries specializing in higher-value items capture more of the preference margin while implementation of the North American Free Trade Agreement has a negative effect. The authors analyze the effect of Multi-Fibre Agreement (MFA) quotas imposed on third countries (such as China) and find that the benefits of CBI preferences will be significantly reduced once the quotas are fully removed in 2005.

Suggested Citation

  • Ozden, Caglar & Sharma, Gunjan, 2004. "Price effects of preferential market access : the Caribbean Basin Initiative and the apparel sector," Policy Research Working Paper Series 3244, The World Bank.
  • Handle: RePEc:wbk:wbrwps:3244
    as

    Download full text from publisher

    File URL: http://www-wds.worldbank.org/external/default/WDSContentServer/WDSP/IB/2004/06/09/000009486_20040609115632/Rendered/PDF/wps3244market.pdf
    Download Restriction: no

    Other versions of this item:

    More about this item

    Statistics

    Access and download statistics

    Corrections

    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:wbk:wbrwps:3244. 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: (Roula I. Yazigi). General contact details of provider: http://edirc.repec.org/data/dvewbus.html .

    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.

    We have no references for this item. You can help adding them by using 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.