Policy Responses to Trade Preference Erosion

Options for Developing Countries

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It was hoped that trade preferences, offered to exports from developing countries by industrialised countries, would give greater economic benefits than has been the case. Now continuing multilateral tariff liberalisation threatens to further erode even those benefits that remain.

This study looks at how best developing countries should respond to this erosion of trade preferences, either through restructuring individual preference arrangements or by acting to offset the adverse effects of preference erosion.




This publication explores trade preferences, their erosion and the ability of recipient countries to benefit from them. Trade preferences have constituted a long-standing and potentially powerful mechanism to assist developing countries to access industrialised country markets, offering recipient countries the prospect of a discernible trading advantage over competitors when exporting to preference-granting countries; in doing so, they open up opportunities for substantial export growth and associated improvement in recipient countries’ development prospects. In consequence, a range of developing countries currently enjoy preferential access to developed country markets for their exports under a variety of trade preference schemes, including the Generalised System of Prefer - ences, the African Growth and Opportunity Act; the European Union’s Everything But Arms arrangement and the Cotonou Agreement.


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