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.



Review of Trade Preference Schemes

The aim of this chapter is to ‘set the scene’, and explain which preferential trade arrangements are considered, identify the amount and type of developing country trade covered by the relevant preference schemes and establish current preference margins and, by implication, the scope for preference erosion. Section 2.1 briefly reviews the preferential schemes offered by the EU and USA. The trade coverage of these schemes by country and product and associated margins of tariff preference are outlined in Sections 2.2 and 2.3. Section 2.4 summarises the conclusions that can be drawn from the chapter.


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