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The Erosion of Tariff Preferences: The Impact of U.S. Tariff Reductions on Developing Countries


  • Kara Reynolds

    (American University)


The Generalized System of Preferences (GSP), the program instituted in 1976 that allows developing countries to export thousands of products to the United States duty-free, is an important element of U.S. efforts to promote economic growth in the developing world. However, since the program's inception U.S. tariff rates have fallen significantly, thus potentially reducing the ability of the GSP program to encourage U.S. imports from beneficiary countries. This paper estimates the impact of U.S. tariff reductions on imports from the developing world using a panel of import data from 76 countries and 2,389 GSP-eligible products between 1998 and 2001. It finds that reductions in U.S. tariff rates have diminished imports from developing countries significantly, although some countries have been impacted more than others.

Suggested Citation

  • Kara Reynolds, 2005. "The Erosion of Tariff Preferences: The Impact of U.S. Tariff Reductions on Developing Countries," International Trade 0507001, University Library of Munich, Germany.
  • Handle: RePEc:wpa:wuwpit:0507001
    Note: Type of Document - pdf; pages: 22

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    References listed on IDEAS

    1. Baldwin, R E & Murray, Tracy, 1977. "MFN Tariff Reductions and Developing Country Trade Benefits under the GSP," Economic Journal, Royal Economic Society, vol. 87(345), pages 30-46, March.
    2. 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.
    3. Dennis G. Beckmann, 1987. "On Estimating the Static Effects of Preferential Tariffs," Eastern Economic Journal, Eastern Economic Association, vol. 13(4), pages 389-397, Oct-Dec.
    4. James Devault, 1996. "Competitive Need Limits And The U.S. Generalized System Of Preference," Contemporary Economic Policy, Western Economic Association International, vol. 14(4), pages 58-66, October.
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    Cited by:

    1. Sharma, Anupa & Grant, Jason & Boys, Kathryn, 2015. "Truly Preferential Treatment? Reconsidering the Generalized System of (Trade) Preferences," 2015 AAEA & WAEA Joint Annual Meeting, July 26-28, San Francisco, California 205890, Agricultural and Applied Economics Association.

    More about this item


    Generalized System of Preferences; GSP; Trade Diversion; Preferential Tariffs;

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F15 - International Economics - - Trade - - - Economic Integration
    • O1 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development

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