Trade Preferences to Small Developing Countries and the Welfare Costs of Lost Multilateral Liberalization
Copyright policy )Trade Preferences to Small Developing Countries and the Welfare Costs of Lost Multilateral Liberalization
The proliferation of preferential trade liberalization over the past 20 years has raised the question of whether it slows down multilateral trade liberalization. Recent theoretical and empirical evidence indicates this is the case even for unilateral preferences that industrial countries provide to small and poor countries but there is no estimate of the resulting welfare costs. To avoid this stumbling block effect the authors suggest replacing unilateral preferences by a fixed import subsidy. They argue that this scheme would reduce the drag of preferences on multilateral liberalization and generate a Pareto improvement. More important, the authors provide the first estimates of the welfare cost of preferential liberalization as a stumbling block to multilateral liberalization. By combining recent estimates of the stumbling block effect of preferences with data for 170 countries and over 5,000 products they calculate the welfare effects of the United States, European Union, and Japan switching from unilateral preferences to the developing countries to the import subsidy scheme. Even in a model with no dynamic gains to trade the authors find that the switch produces an annual net welfare gain for the 170 countries ($4,354 million) and for each group: the United States, European Union, and Japan ($2,934 million), the developing countries ($520 million), and the rest of the world ($900 million).
- University of Maryland, College Park United States
- University of Geneva Switzerland
- World Bank United States
- University of Maryland, College Park United States
LEGAL PERSPECTIVE, CONCESSIONS, CUSTOMS, MARKET ACCESS, TRADE MODEL, PREFERENTIAL TREATMENT, GENERAL EQUILIBRIUM, TERMS OF TRADE EFFECTS, WORLD TRADE, MOST FAVORED NATION, DOMESTIC PRICE, TARIFF LINE, FREE-TRADE AGREEMENTS, PREFERENTIAL TRADE ARRANGEMENTS, PRICE SUPPORT, TERMS OF TRADE, EXTERNALITIES, EXPORT MARKETS, PRICE EFFECTS, TRADE DISTORTIONS, ACCORDS, PERFECT COMPETITION, GENERAL AGREEMENT ON TARIFFS, INDUSTRIALIZED COUNTRIES, TARIFF RATE, TRADE PREFERENCES, MULTILATERAL LIBERALIZATION, ENVIRONMENTAL STANDARDS, IMPORT TARIFFS, ABSOLUTE VALUE, INFANT INDUSTRY ARGUMENT, EXTERNALITY, WORLD TRADING SYSTEM, TARIFF REDUCTIONS, ECONOMIC RELATIONS, INFANT INDUSTRY, WORLD PRICE, EXPORT SPECIALIZATION, WORLD TRADE ORGANIZATION, GLOBAL TRADING, CONSTANT RETURNS TO SCALE, 330, WELFARE GAINS, IMPORT DUTIES, BALANCE OF PAYMENTS, WORLD MARKETS, PREFERENTIAL ~ TRADE AGREEMENTS, INTELLECTUAL PROPERTY PROTECTION, TARIFF PREFERENCE, EXPORTERS, PREFERENTIAL TARIFF, DIRECT TRANSFERS, GLOBAL ECONOMY, TRADE BARRIERS, NET EXPORTS, TF054105-DONOR FUNDED OPERATION ADMINISTRATION FEE INCOME AND EXPENSE ACCOUNT,Environmental Economics&Policies,Economic Theory&Research,Trade and Regional Integration,Export Competitiveness, WORLD PRICES, COMPETITIVE POSITION, WORLD MARKET, TARIFF REDUCTION, TRADE INTEGRATION, ELASTICITY, EXPORT REVENUE, TARIFF DATA, PREFERENTIAL AGREEMENTS, EXPORT PRICE, EQUILIBRIUM, HUMAN RIGHTS, FREE TRADE AGREEMENT, PREFERENTIAL TRADE AGREEMENT, INEQUALITY, MULTILATERAL TRADE, PREFERENTIAL TARIFFS, EXPORT SUPPLY, PREFERENTIAL TRADE AGREEMENTS, TAX RATE, AGRICULTURE, GENERALIZED SYSTEM OF PREFERENCES, UNILATERAL PREFERENCES, DEVELOPED COUNTRIES, FREE TRADE, PREFERENTIAL ~ TRADE, DEVELOPMENT ASSISTANCE, INTERNATIONAL TRADE POLICY, FUTURE RESEARCH, WTO, GDP, TRADING PARTNERS, NATIONAL BUREAU, MFN tariff concessions; multilateral trade negotiations; preference erosion; preferential trade agreements, FOREIGN PRODUCER, TRADE REFORM, POLITICAL ECONOMY, WORKER RIGHTS, SPECIALIZATION, EUROPEAN UNION, INTERNATIONAL ECONOMICS, EXPORTS, GLOBAL TRADE, DIFFERENTIAL TREATMENT, GENERAL EQUILIBRIUM MODEL, BENCHMARK, REGIONALISM, INTERNATIONAL TRADE, RECIPROCITY, MULTILATERAL TRADE LIBERALIZATION, REGIONAL INTEGRATION, PREFERENTIAL TRADE LIBERALIZATION, TARIFF CHANGES, PREFERENTIAL ACCESS, RULES OF ORIGIN, ECONOMIC POLICIES, TRADE FLOWS, INTELLECTUAL PROPERTY, AGRICULTURAL SECTOR, VALUE OF IMPORTS, BILATERAL TRADE, DEMAND ELASTICITIES, LDCS, TARIFF PREFERENCES, ECONOMIC POLICY, URUGUAY ROUND, TARIFF REVENUE, POLICY RESEARCH, DEVELOPING COUNTRIES, INTERNATIONAL BANK, AD VALOREM, TRANSPORT COSTS, TRADE EFFECT, LESS DEVELOPED COUNTRIES, PREFERENTIAL TRADE, MARKET INTEGRATION, PREFERENTIAL AGREEMENT, TRADE OBJECTIVES, PREFERENTIAL MARGINS, ADJUSTMENT ASSISTANCE, COMPARATIVE ADVANTAGE, PREFERENTIAL MARGIN, INTERNATIONAL TRADE COMMISSION, TRADE NEGOTIATORS, UNILATERAL TRADE, TRADE PREFERENCE, ECONOMIC RESEARCH, MULTILATERAL TARIFFS, jel: jel:D78, jel: jel:F13, jel: jel:F14, jel: jel:F15, ddc: ddc:330
LEGAL PERSPECTIVE, CONCESSIONS, CUSTOMS, MARKET ACCESS, TRADE MODEL, PREFERENTIAL TREATMENT, GENERAL EQUILIBRIUM, TERMS OF TRADE EFFECTS, WORLD TRADE, MOST FAVORED NATION, DOMESTIC PRICE, TARIFF LINE, FREE-TRADE AGREEMENTS, PREFERENTIAL TRADE ARRANGEMENTS, PRICE SUPPORT, TERMS OF TRADE, EXTERNALITIES, EXPORT MARKETS, PRICE EFFECTS, TRADE DISTORTIONS, ACCORDS, PERFECT COMPETITION, GENERAL AGREEMENT ON TARIFFS, INDUSTRIALIZED COUNTRIES, TARIFF RATE, TRADE PREFERENCES, MULTILATERAL LIBERALIZATION, ENVIRONMENTAL STANDARDS, IMPORT TARIFFS, ABSOLUTE VALUE, INFANT INDUSTRY ARGUMENT, EXTERNALITY, WORLD TRADING SYSTEM, TARIFF REDUCTIONS, ECONOMIC RELATIONS, INFANT INDUSTRY, WORLD PRICE, EXPORT SPECIALIZATION, WORLD TRADE ORGANIZATION, GLOBAL TRADING, CONSTANT RETURNS TO SCALE, 330, WELFARE GAINS, IMPORT DUTIES, BALANCE OF PAYMENTS, WORLD MARKETS, PREFERENTIAL ~ TRADE AGREEMENTS, INTELLECTUAL PROPERTY PROTECTION, TARIFF PREFERENCE, EXPORTERS, PREFERENTIAL TARIFF, DIRECT TRANSFERS, GLOBAL ECONOMY, TRADE BARRIERS, NET EXPORTS, TF054105-DONOR FUNDED OPERATION ADMINISTRATION FEE INCOME AND EXPENSE ACCOUNT,Environmental Economics&Policies,Economic Theory&Research,Trade and Regional Integration,Export Competitiveness, WORLD PRICES, COMPETITIVE POSITION, WORLD MARKET, TARIFF REDUCTION, TRADE INTEGRATION, ELASTICITY, EXPORT REVENUE, TARIFF DATA, PREFERENTIAL AGREEMENTS, EXPORT PRICE, EQUILIBRIUM, HUMAN RIGHTS, FREE TRADE AGREEMENT, PREFERENTIAL TRADE AGREEMENT, INEQUALITY, MULTILATERAL TRADE, PREFERENTIAL TARIFFS, EXPORT SUPPLY, PREFERENTIAL TRADE AGREEMENTS, TAX RATE, AGRICULTURE, GENERALIZED SYSTEM OF PREFERENCES, UNILATERAL PREFERENCES, DEVELOPED COUNTRIES, FREE TRADE, PREFERENTIAL ~ TRADE, DEVELOPMENT ASSISTANCE, INTERNATIONAL TRADE POLICY, FUTURE RESEARCH, WTO, GDP, TRADING PARTNERS, NATIONAL BUREAU, MFN tariff concessions; multilateral trade negotiations; preference erosion; preferential trade agreements, FOREIGN PRODUCER, TRADE REFORM, POLITICAL ECONOMY, WORKER RIGHTS, SPECIALIZATION, EUROPEAN UNION, INTERNATIONAL ECONOMICS, EXPORTS, GLOBAL TRADE, DIFFERENTIAL TREATMENT, GENERAL EQUILIBRIUM MODEL, BENCHMARK, REGIONALISM, INTERNATIONAL TRADE, RECIPROCITY, MULTILATERAL TRADE LIBERALIZATION, REGIONAL INTEGRATION, PREFERENTIAL TRADE LIBERALIZATION, TARIFF CHANGES, PREFERENTIAL ACCESS, RULES OF ORIGIN, ECONOMIC POLICIES, TRADE FLOWS, INTELLECTUAL PROPERTY, AGRICULTURAL SECTOR, VALUE OF IMPORTS, BILATERAL TRADE, DEMAND ELASTICITIES, LDCS, TARIFF PREFERENCES, ECONOMIC POLICY, URUGUAY ROUND, TARIFF REVENUE, POLICY RESEARCH, DEVELOPING COUNTRIES, INTERNATIONAL BANK, AD VALOREM, TRANSPORT COSTS, TRADE EFFECT, LESS DEVELOPED COUNTRIES, PREFERENTIAL TRADE, MARKET INTEGRATION, PREFERENTIAL AGREEMENT, TRADE OBJECTIVES, PREFERENTIAL MARGINS, ADJUSTMENT ASSISTANCE, COMPARATIVE ADVANTAGE, PREFERENTIAL MARGIN, INTERNATIONAL TRADE COMMISSION, TRADE NEGOTIATORS, UNILATERAL TRADE, TRADE PREFERENCE, ECONOMIC RESEARCH, MULTILATERAL TARIFFS, jel: jel:D78, jel: jel:F13, jel: jel:F14, jel: jel:F15, ddc: ddc:330
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