A Guide to Graduating from Least Developed Country Status

The Trade in Global Value Chains Perspective

image of A Guide to Graduating from Least Developed Country Status

There is a need for more focused impact assessments of the potential costs and benefits arising from transitioning from Least Developed Country (LDC) status. This includes a deeper understanding of how LDCs are positioned within global value chains. In view of the fragmented nature of trade and the relative positions of countries within global value chains, the competitiveness challenges arising from the loss of preferential market access must be better identified and targeted. A Guide to Graduating from Least Developed Country Status provides research methods to analyse the trade-related effects of tariff preference loss as well as, how to integrate private sector consultations and survey methods to take in the perspectives of lead firms and buyers. It is essential reading for policy-makers and development partners who are supporting LDCs to adapt to the competitiveness challenges arising from graduation and enhance trade-related performance, which is so vital for export diversification and the achievement of sustainable development.



Assessing Trade Policy Changes Induced by Graduation

There are few studies that specifically look at the potential effects arising from graduation from preferential trade regimes. Instead, most of the literature focuses on changes in preferential tariffs and resultant trade effects. This chapter provides an analytical framework that recognises how firms set their pricing in a given market and consider the actions of other exporters, as well as how a firm's market share, in turn, influences its price-setting policy. This is because the potential for trade shifts to arise as a response to price changes depends on the price elasticities of demand and firms' market shares.


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