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Trade preferences and differential treatment of developing countries : a selective survey


  • Hoekman, Bernard
  • Ozden, Caglar


Nonreciprocal trade preferences and provisions in the GATT/WTO that allow developing countries greater leeway to retain or use protectionist policies are two of the central planks of so-called special and differential treatment (SDT) for developing countries in the multilateral trading system. The authors survey the literature on the rationales, institutional features, and economic effectiveness of SDT. A large literature has emerged on SDT in the past 50 years, by both proponents and opponents. They summarize a number of key contributions on the subject, with a special emphasis on the evaluation of the impact of SDT, especially preferential market access. The issue of SDT has become very topical again, following a period during which it was viewed as an outdated concept for the multilateral trading system. The authors therefore devote attention as well to a number of recent contributions that discuss (1) whetherthere is a continued need for SDT, and (2) how this might be designed from both a development (recipient) objective and from the perspective of the trading system more generally. A major theme of the survey is that most of the issues that are debated today were already being discussed in the 1960s. The authors conclude that those who questioned the value of unilateral preferences have proven to be prescient.

Suggested Citation

  • Hoekman, Bernard & Ozden, Caglar, 2005. "Trade preferences and differential treatment of developing countries : a selective survey," Policy Research Working Paper Series 3566, The World Bank.
  • Handle: RePEc:wbk:wbrwps:3566

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    References listed on IDEAS

    1. Kiichiro Fukasaku, 2000. "Special and Differential Treatment for Developing Countries: Does It Help Those Who Help Themselves?," WIDER Working Paper Series wp-2000-197, World Institute for Development Economic Research (UNU-WIDER).
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    3. Mari Pangestu, 2000. "Special and Differential Treatment in the Millennium: Special for Whom and How Different?," The World Economy, Wiley Blackwell, vol. 23(9), pages 1285-1302, September.
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    5. Keck, Alexander & Low, Patrick, 2004. "Special and differential treatment in the WTO: Why, when and how?," WTO Staff Working Papers ERSD-2004-03, World Trade Organization (WTO), Economic Research and Statistics Division.
    6. Finger, J M, 1975. "Tariff Provisions for Offshore Assembly and the Exports of Developing Countries," Economic Journal, Royal Economic Society, vol. 85(338), pages 365-371, June.
    7. Hoekman, Bernard & Djankov, Simeon, 1997. "Determinants of the Export Structure of Countries in Central and Eastern Europe," World Bank Economic Review, World Bank Group, vol. 11(3), pages 471-487, September.
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    9. Brown, Drusilla K, 1989. "Trade and Welfare Effects of the European Schemes of the Generalized System of Preferences," Economic Development and Cultural Change, University of Chicago Press, vol. 37(4), pages 757-777, July.
    10. Arvind Panagariya, 2003. "Miracles and Debacles: Do Free-trade Skeptics have a Case?," International Trade 0308013, University Library of Munich, Germany.
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    12. 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.
    13. Aaditya Mattoo & Devesh Roy & Arvind Subramanian, 2003. "The Africa Growth and Opportunity Act and its Rules of Origin: Generosity Undermined?," The World Economy, Wiley Blackwell, vol. 26(6), pages 829-851, June.
    14. Aitken, Norman D & Obutelewicz, Robert S, 1976. "A Cross-Sectional Study of EEC Trade with the Association of African Countries," The Review of Economics and Statistics, MIT Press, vol. 58(4), pages 425-433, November.
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    17. Christopher S Adam & Stephen A O'Connell, 2004. "Aid versus Trade Revisited: Donor and Recipient Policies in the Presence of Learning-by-Doing," Economic Journal, Royal Economic Society, vol. 114(492), pages 150-173, January.
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    19. Pelzman, Joseph & Schoepfle, Gregory K, 1988. "The Impact of the Caribbean Basin Economic Recovery Act on Caribbean Nations' Exports and Development," Economic Development and Cultural Change, University of Chicago Press, vol. 36(4), pages 753-796, July.
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