Preference Erosion and Multilateral Trade Liberalization
Because of concern that tariff reductions in Organization for Economic Co-operation and Development (OECD) countries will translate into worsening export performance for the least developed countries, the erosion of trade preferences may become a stumbling block for multilateral trade liberalization. An econometric analysis of actual preference use shows that preferences are underused because of administrative burdens-estimated to be equivalent to an average of four percent of the value of goods traded. To quantify the maximum scope for preference erosion, the compliance cost estimates are used in a model-based assessment of the impact of full elimination of OECD tariffs. Taking into account administrative costs eliminates erosion costs in the aggregate and greatly reduces the losses for countries most affected by preference erosion.
Main Authors: | , , |
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Format: | Journal Article biblioteca |
Language: | English en_US |
Published: |
Oxford University Press on behalf of the World Bank
2006-05-22
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Subjects: | trade liberalization, trade preferences, preference erosion, tariff reductions, OECD, GATT, WTO, |
Online Access: | http://documents.worldbank.org/curated/en/2006/05/17753358/preference-erosion-multilateral-trade-liberalization https://hdl.handle.net/10986/16423 |
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Summary: | Because of concern that tariff
reductions in Organization for Economic Co-operation and
Development (OECD) countries will translate into worsening
export performance for the least developed countries, the
erosion of trade preferences may become a stumbling block
for multilateral trade liberalization. An econometric
analysis of actual preference use shows that preferences are
underused because of administrative burdens-estimated to be
equivalent to an average of four percent of the value of
goods traded. To quantify the maximum scope for preference
erosion, the compliance cost estimates are used in a
model-based assessment of the impact of full elimination of
OECD tariffs. Taking into account administrative costs
eliminates erosion costs in the aggregate and greatly
reduces the losses for countries most affected by preference erosion. |
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