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The disagreements between the old and new trade powers in the WTO on market access issues that have deadlocked the Doha Round are in part a reflection of the "special and differential treatment" that developing countries have historically pursued in the WTO. A re-thinking of that approach is in order. This paper argues for greater effort and new approaches to use the WTO as a mechanism to help developing countries to reduce the trade and transactions costs that prevent firms and farmers from benefitting from trade opportunities. What is needed are processes for regular dialogue, peer review and independent assessment of the impacts of domestic policies, with active participation by firms that operate in the country concerned, and a focus on identification of good practices and priorities for reform and public investment

In this paper we examine to what extent developing countries export more as a result of having the official Least Developed Country (LDC) status. We estimate a gravity model of trade over the period 1973–2013, in which identification is achieved by exploiting the particularities and asymmetries of ‘inclusion’ and ‘graduation’ criteria of LDC status. As mechanisms through which LDCs might benefit, we evaluate the effectiveness of individual trade preference schemes for LDCs of the European Union, United States, Canada, Japan, Australia, New Zealand, Norway, and Turkey and the impact of LDC status on exports. We find that first, individual trade preference regimes are not always beneficial in terms of increased export values. Export promoting effects are found for the individual schemes of some developed countries and some sectors. Second, a country’s official designation as a LDC is associated with higher aggregated exports. This is particularly the case for LDCs that export agricultural goods and light manufacturing products, including textiles and leather after 1990. Third, the positive effect of LDC status is significant and sizable even when controlling for specific trade preference schemes suggesting that there are other benefits of LDC status that play a role in promoting exports.

The European Union (EU) supports developing countries with a unilateral trade preference scheme. The scheme underwent a major reform in 2014, in which many countries lost access to reduced tariff rates. We analyse how this radical step that removed preferences from 103 countries by 2018 fits into the EU's strategy to promote bilateral agreements and how it affected imports from the removed beneficiaries. Using the gravity model of trade with high-dimensional fixed effects, we show that the removal results in a significant decline in exports of affected developing countries. Some countries formed a bilateral free trade agreement with the EU, in which case the negative effect of removal of unilateral trade preferences is compensated but we do not find significant and consistent additional benefits. Thus, the threat of removal can be seen as a lever for beneficiaries that are about to become ineligible to negotiate a bilateral agreement with the EU.

The magnitude of returns to colonial-era investments in Africa has been addressed in an extensive literature, as have the nature and legacies of extractive colonial institutions. However, the link between these institutions and the profitability of firms remains unclear. We reconstruct the annual financial records of Sena Sugar Estates in Portuguese East Africa (today's Mozambique) over the period 1920-74 to probe the contributions of forced labour and preferential trade arrangements to the performance of the firm. We show that Sena Sugar Estates achieved stable and solid returns to capital, comparable in size to a range of domestic UK firms. Counterfactual simulations suggest that the firm's profitability was highly dependent on sustained access to cheap labour, but generally was not so dependent on trade preferences. At the same time, a production function analysis suggests that higher reliance on rents from forced labour was associated with lower total factor productivity at the Estates. This helps explain why extractive institutions did not translate into 'super-profits'.

Governments are increasingly entering FTAs and mega-regionals to secure market access for their firms. Utilization rates are used to monitor whether firms are using these FTAs. This paper is part of a recent stream of studies to dash out enduring myths that preferences are not used when preferential MFN rates are low or for unknown or vague reasons. Contrary to this sort of conventional wisdom this study advocates that low utilization rate is a valuable and unequivocal sign that reform of rules of origin and related administrative procedures is needed to make the FTA attractive and meaningful to the private sector. By using a “repeated offender” methodology this paper identifies a series of product specific rules of origin (PSROs) causing low utilization rates. Such PSROs are the candidate for reforms towards more lenient requirements that are commercially viable for firms.

Trade negotiations have been a great success since the 1950s and today virtually every country in the world is part of at least one trade treaty. Nowadays, there is widespread participation in multilateral trade agreements, with members of the World Trade Organization accounting for more than 95% of world trade. Also, there is widespread membership in preferential trade agreements, with each member of the WTO joining on average twenty other trade agreements that allow for deeper integration between countries. This dissertation investigates the causes and consequences of this phenomenon. The first chapter examines what motivates trade agreements. I challenge the view that trade treaties are necessary because countries have an incentive to unilaterally impose import tariffs to manipulate their terms-of-trade and obtain welfare gains at the expense of partners. This is a mainstream argument in economics, the so-called terms of trade theory. I evaluate whether predictions of this theory are consistent with the data by asking what import tariffs countries would choose if multilateral trade negotiations were designed according to its logic. Motivated by empirical evidence on tariffs and a theory of trade negotiations, I pursue this goal in the context of a quantitative gravity model that simulates partial cooperation inside the WTO. Matching the model to the data of 15 countries during the Uruguay Round, I find that counterfactual average tariffs are consistent with real negotiated outcomes for the EU, Japan, and the US, the main trade negotiators at the time. For other economies, tariff choices do not imply a sizable trade externality that can promote cooperation. The second chapter looks at the consequences of the rules of the world trading system for developing countries. It investigates the effects of the Generalized System of Preferences, a form of nonreciprocal tariff cuts which apply over exports from developing economies. I use an empirical gravity equation approach to study how those nonreciprocal preferences affect the exports of the beneficiary nations. In line with existing studies, I find that the average trade effect stemming from nonreciprocal preferences is highly unstable across econometric specifications. However, once I allow for heterogeneous effects, results become robust and economically important. Specifically, non-reciprocal preferences have a strong effect on the exports of beneficiaries when they are members of the World Trade Organization and are very poor. Not-so-poor beneficiaries also expand foreign sales, but only if they are not WTO members. For all others, the average export effects of NRTPs are mute. Acordos comerciais têm sido um grande sucesso desde a década de 1950. Atualmente, a maioria dos países participa de acordos comerciais multilaterais, com membros da Organização Mundial do Comércio hoje responsáveis por mais de 95 % do comércio mundial. Além disso, a maioria dos países também é membro de acordos preferenciais de comércio - cada membro da OMC adere, em média, a outros vinte outros acordos preferenciais de comércio que permitem uma integração mais profunda entre parceiros. Esta dissertação investiga causas e consequências desse fenômeno. O primeiro capítulo investiga o que motiva acordos comerciais. Eu questiona a visão de que acordos comerciais são necessários porque países têm um incentivos a impor unilateralmente tarifas de importação para manipular seus termos de troca e obter ganhos de bem-estar às custas dos parceiros. Este é um dos argumento dominante em economia, a chamada teoria dos termos de troca. Eu avalio se as previsões dessa teoria são consistentes com os dados perguntando quais tarifas de importação países escolheriam se negociações comerciais multilaterais fossem desenhadas dentro dessa lógica. Motivado por evidências empíricas sobre tarifas e uma teoria de negociações comerciais, eu conduzo essa análise através de um modelo de gravidade quantitativo que simula cooperação parcial dentro da OMC. Comparando o modelo com os dados de 15 países durante a Rodada do Uruguai, eu observo que as tarifas médias contrafactuais são consistentes com os dados da União Européia, do Japão e dos EUA, os principais negociadores à época. Para outras economias, as escolhas tarifárias não implicam externalidades que sejam capazes de promover cooperação. O segundo capítulo analisa as conseqüências das regras do sistema mundial de comércio para países em desenvolvimento. Eu investiga os efeitos do Sistema Geral de Preferências, uma tipo de preferências tarifárias não recíprocas que se aplicam às exportações de países em desenvolvimento. Eu utilizo uma abordagem empírica através de equações da gravidade para estudar como essas preferências não recíprocas afetam exportações de países beneficiários. Em acordo com estudos existentes, os resultados mostram que o efeito médio de preferências não recíprocas é altamente instável de acordo com as diferentes especificações econométricas. No entanto, uma vez que eu permito efeitos heterogêneos, os resultados se tornam robustos e economicamente importantes. Especificamente, preferências não recíprocas têm um forte efeito nas exportações de beneficiários quando eles são membros da Organização Mundial do Comércio e são muito pobres. Já beneficiários não tão pobres também expandem as suas exportações, mas apenas se não forem membros da OMC. Para todos os outros, os efeitos médios das exportações são nulos.

We estimate the trade effect of removing uncertainty about future trading conditions in the context of the 2014 reform of the Generalized System of Preferences (GSP) of the European Union (EU). EU GSP members receive non-reciprocal trade preferences (NRTPs), but only as long as they are not too competitive; i.e. they will graduate in case their share of EU GSP imports in a sector exceeds a certain threshold. However, the 2014 reform removed the threat of these competitiveness-related graduations for members of the GSP+, a sub-scheme of the main programme. We find that the reform increased EU imports from GSP+ countries by about 7% on average whilst tariffs stayed the same. This trade impact is driven by the country-sector pairs most exposed to NRTPs uncertainty pre-reform. The effect is robust to taking into account other aspects of the reform, such as the reduction in GSP membership and changes in tariff margins, respectively.

Economic self-interest has been central to explaining individual trade preferences. Depending on the theoretical trade model different variables influence individuals’ attitude towards globalization and existing research has come to different conclusions as to whether individuals’ preferences are dependent on skill level, income or the sector of employment. Other studies depart from economic self-interest by arguing that it is not self-interest that motivates individuals to form their preference, but country-level economic factors (sociotropic considerations) instead. We argue that one needs to approach trade preference formation from an information-based perspective and we test experimentally how people react if they are aware that they personally or nationally will gain or lose from trade and which of the two aspects are more important. By using survey experiments embedded in a representative national survey in the U.S. we are able to differentiate whether a person was triggered by ego- or sociotropic benefits/costs of free trade. published

This paper provides a forward-looking view of trade and its relevance for Lesotho’s medium- and long-term development. It does this through computable general equilibrium analysis of potential impacts based on specific trade-related scenarios. The scenarios include the potential loss of American Growth and Opportunities Act preferences and preference erosion against competitors through, for example, a United States–Vietnam Free Trade Area. An immediate loss of American Growth and Opportunities Act preferences would have a significant economic impact that far exceeds that of a potential future United States–Vietnam Free Trade Area. If these preferences were suspended in 2018, Lesotho would face a loss of 1 percent in income by 2020, relative to the baseline, and exports of textiles and apparel would drop by 16 percent. The computable general equilibrium simulations stress the need to strengthen efforts to support structural transformation leading to diversification of export products and markets, improving backward and forward linkages, and lowering trade costs. The simulations also indicate that trade facilitation measures leading to an average decrease in trade costs of 2 percent per year would eliminate the negative consequences of the loss of American Growth and Opportunities Act preferences in terms of the loss of income. The changing external environment is likely to offer new opportunities to Lesotho's export industries in the medium term, including through regional integration under the Continental Free Trade Area.

This paper examines individual-level support for trade liberalization, relates it to beliefs about trade, and measures its sensitivity to positive and negative framing. The data come from the 2018 Latinobarometro survey of eighteen countries, in which the authors embedded a survey experiment to study framing effects. It is found that respondents are generally favorable to increased trade with other countries, based on perceived trade benefits to employment, prices, and product variety. Support for trade is unaffected by positive framing but is highly sensitive downward to employment loss framing. Positive framing does shift upward respondent beliefs that trade increases product variety and reduces prices, but also raises concerns about low wages. Negative framing substantially reduces the prevailing beliefs that trade is associated with high employment, and there is no offsetting effect on the consumption side. Trade support levels and sensitivity display heterogeneity across education levels consistent with skill-based theories of trade, as well as interesting country, age, gender, and income heterogeneity.

Economic self-interest has been central to explaining individual trade preferences. Depending on the theoretical trade model different variables influence individuals attitude towards globalization and existing research has come to different conclusions as to whether individuals preferences are dependent on skill level, income or the sector of employment. Other studies depart from economic self-interest by arguing that it is not self-interest that motivates individuals to form their preference, but country-level economic factors (sociotropic considerations) instead. We argue that one needs to approach trade preference formation from an information-based perspective and we test experimentally how people react if they are aware that they personally or nationally will gain or lose from trade and which of the two aspects are more important. By using survey experiments embedded in a representative national survey in the U.S. we are able to differentiate whether a person was triggered by ego- or sociotropic benefits/costs of free trade. (VLID)4592594

Trade preferences provide a potential policy tool for supporting refugee employment in countries of first asylum. Thus, in the context of the EU-Jordan Compact agreed in 2016, the EU eased the rules of origin for Jordanian exporters employing a minimum share of Syrian refugees. The use of trade preferences to encourage the labour market integration of refugees is consistent with the new, developmental approach to refugee protection advocated by the recent literature and enshrined in the Comprehensive Refugee Response Framework adopted by the UN in 2016. The paper looks at the so-far disappointing impact of the EU-Jordan agreement on rules of origin, as well as the experience with two relevant U.S. preferential programmes (the Qualified Industrial Zones initiative for Egypt and Jordan and the African Growth and Opportunity Act) that have generated substantial export growth and employment. It then discusses the conditions under which trade preferences can prove an effective instrument for refugee integration and makes some concrete policy recommendations.

We use an empirical gravity equation approach to study how nonreciprocal trade preferences (NRTPs), enacted mainly through the Generalized System of Preferences, affect the exports of the beneficiary nations. In line with existing studies, the average trade effect stemming from nonreciprocal preferences is highly unstable across specifications. However, once we allow for heterogeneous effects, results become robust and economically important. Specifically, NRTPs have a strong effect on the exports of beneficiaries when they are members of the World Trade Organization and are very poor. Not-so-poor beneficiaries also expand foreign sales, but only if they are not WTO members. For all others, the average export effects of NRTPs are mute.

In this paper, we examine the extent to which developing countries export more as a result of being officially labelled as an LDC and consequently being eligible for a range of unilateral trade preferences. We estimate a gravity model of trade over the period of 1970 to 2013, in which identification is achieved by exploiting the particularities and asymmetries of "inclusion" and "graduation" criteria from LDC status. The main results show that inclusion in the official LDC list is associated with substantially higher exports. This is particularly the case for LDCs that also export manufactured and industrial goods and started to play a significant role after 1990. In addition, we evaluate the impact of developed countries' trade preferences on the exports of LDCs and the effectiveness of the trade preference schemes of the EU, the US, Canada, Japan, Australia, New Zealand, Norway and Turkey to better understand the mechanism at play. Unilateral preference regimes are, on average, not always beneficial in terms of increased export values for beneficiary developing countries but do have an impact on some sectors. They are mostly beneficial for agricultural goods and a few for manufactured goods, including textiles. As far as individual preference schemes are concerned, positive and statistically significant effects are found for the GSP schemes of Canada and Turkey. The positive effect of LDC status, however, is statistically significant and sizable even when controlling for trade preference schemes suggesting that other benefits of that status play a role in promoting exports.

En este trabajo analizamos el efecto que ejercen las preferencias comerciales garantizadas a marruecos para cuatro frutas y hortalizas (tomate, pepino, naranja y mandarina) en las exportaciones mensuales a distintos países de la unión Europea. Aplicamos una ecuación de gravedad que controla la endogeneidad potencial de las preferencias. Se introducen asimismo variables detalladas para representar los distintos tipos de preferencia con variabilidad sectorial y mensual, tanto en precio de entrada como en aranceles, considerando también las limitaciones cuantitativas. Los resultados de nuestras estimaciones indican que las preferencias comerciales incrementan las exportaciones desde marruecos (evidencia a favor de creación de comercio), y que la reducción en el arancel ad valorem conduce a menores exportaciones del resto del mundo a la unión Europea (evidencia a favor de desviación de comercio). Estos resultados podrían tener implicaciones políticas, con vistas a eventuales revisiones del Acuerdo de Asociación. También se hace una contribución metodológica al estudiar si las preferencias comerciales otorgadas a marruecos desvían comercio. En concreto, la variable dependiente de la ecuación de gravedad son las exportaciones del resto del mundo a la uE para cada uno de los productos específicos, mientras que las variables explicativas consideran las preferencias otorgadas a marruecos en estos productos. This paper analyzes the effect of trade preferences granted to morocco by the European union on monthly exports of four fruits and vegetables: tomatoes, cucumbers, oranges and mandarines. We rely on a gravity framework and we take into account the potential endogeneity of trade preferences. We consider sectoral and monthly variability of the reduced entry price and the preferential tariffs. Quantitative limits for these preferences are also accounted for. our results show that trade preferences are significant in determining positively the trade flows from morocco to the Eu (empirical evidence in line of trade creation); and that preferential tariffs decrease exports from the rest of the world to the European union (empirical evidence in line of trade diversion). These results could have implications in negotiations for eventual revisions of the Euro-mediterranean Agreements. This paper also makes a methodological contribution when studying whether trade preferences divert trade. Specifically, we take into account the exports of the rest of the world of specific products to the Eu as the dependent variable in the gravity equation, while preferences granted to morocco in these products are included in the right-hand-side of the equation.

Evidence indicates that trade costs are a much more substantial barrier to trade than tariffs are, especially in Sub-Saharan Africa. This paper decomposes trade costs into: (i) trade facilitation, (ii) non-tariff barriers, and (iii) the costs of business services. The paper assesses the poverty and shared prosperity impacts of deep integration to reduce these three types of trade costs in: (i) the East African Customs Union–Common Market of East and Southern Africa–South African Development Community "Tripartite" Free Trade Area; (ii) within the East African Customs Union; and (iii) unilaterally by the East African Customs Union. The analysis employs an innovative, multi-region computable general equilibrium model to estimate the changes in the macroeconomic variables that impact poverty and shared prosperity. The model estimates are used in the Global Income Distribution Dynamics microsimulation model to obtain assessments of the changes in the poverty headcount and shared prosperity for each of the simulations for the six African regions or countries. The paper finds that these reforms are pro-poor. There are significant reductions in the poverty headcount and the percentage of the population living in poverty for all six of the African regions from deep integration in the Tripartite Free Trade Area or comparable unilateral reforms by the East African Customs Union. Further, the incomes of the bottom 40 percent of the populations noticeably increase in all countries or regions that are engaged in the trade reforms. The reason for the poor share in prosperity is the fact that the reforms increase unskilled wages faster than the rewards of other factors of production, as the reforms tend to favor agriculture. Despite the uniform increases in income for the poorest 40 percent, there are some cases where the share of income captured by the poorest 40 percent of the population decreases. The estimated gains vary considerably across countries and reforms. Thus, countries would have an interest in negotiating for different reforms in different agreements.

Despite strong economic growth since 2000, Moldova remains one of the poorest countries in the region. Excessive reliance on remittances, export dependency on a few products, and insufficient domestic job creation make the Moldovan economy highly vulnerable to external conditions. As a small and open economy, Moldova’s development potential is linked to its trade and investment integration strategy. Moldova is situated between two large markets: the European Union (EU), which absorbs more than half of Moldova’s exports, and the Russian Federation. Reducing the economic distance to large regional markets and reaping the benefits of openness is key to overcoming Moldova's structural constraints and spurring export-led growth. The objective of the Moldova Trade Study is to contribute to a better understanding of the factors and challenges underlying Moldova’s foreign trade performance and to identify policy interventions that can enhance the competitiveness of Moldova’s exporting firms and the value added of their exports. . The rest of the note is structured as follows: (ii) section two summarizes the analysis of Moldova’s export performance; (iii) section three focuses on constraints on Moldova’s competitiveness; (iv) in section four, the authors consider alternative trade policy scenarios and their implications for the Moldovan economy; (v) section five synthetizes existing analysis on constraints for agriculture competitiveness and exports, while section six evaluates the performance of free economic zones in Moldova. In the final section, the authors present policy recommendations

Previous work has shown that a significant number of preference eligible goods are imported into the EU from developing countries at relatively small values and that the rate of preference utilisation of these imports are low and in many cases zero. This fact is unobserved in the aggregate figures because large flows have high utilisation rates, thereby pushing up the average preference utilisation rate. This paper examines this phenomenon further by using monthly data on EU imports from African LDCs at the lowest level of (publicly) available aggregation thereby coming close to transaction level data. It identifies the average value of preference eligible imports, utilising and not utilising preferences, by country and product category and test their empirical relevance for explaining the African LDCs’ preference utilisation rates.

The EU grants preferential access to its imports from developing countries under several trade agreements. The widest arrangement, in terms of country and product coverage, is the Generalised System of Preferences (GSP) through which, since 1971, virtually all developing countries have received preferential treatment when exporting to EU. This paper evaluates the impact of GSP in enhancing developing countries’ exports to EU markets. It is based on the estimation of a gravity model for a sample of 769 products exported from 169 countries to EU over the period 2001-2004. From an econometric point of view, the estimation methods take into account unobservable country heterogeneity and the potential selection bias which zero-trade values pose. Moreover, the empirical setting considers an explicit measure of trade preferences, the margin of preferences. The analysis offers new empirical evidence that the impact of GSP on developing countries’ agricultural exports to the EU is, on average, positive. - Sin dagli anni settanta l’Unione Europea (UE) garantisce accesso preferenziale alle sue importazioni provenienti dai paesi in via di sviluppo (PVS) attraverso una serie di accordi di preferenza commerciale. Tra questi, il più importante è il Sistema di Preferenze Generalizzate (SPG), che è adottato dall’UE su base unilaterale e garantisce ai paesi beneficiari la concessione di preferenze commerciali, tariffarie e non, alle esportazioni sul mercato comunitario. Lo scopo di questo articolo è di valutare se il SPG ha stimolato le esportazioni agricole dei PVS verso l’UE nel periodo 2001- 2004. L’analisi empirica è effettuata utilizzando un modello gravitazionale e considera i flussi commerciali di 769 prodotti agricoli provenienti da 169 paesi. Per valutare l’impatto delle preferenze garantite da tale accordo si utilizza una misura quantitativa del margine di preferenza commerciale e, da un punto di vista econometrico, si utilizza uno stimatore che permette di tener conto degli effetti sulle stime determinati dalla presenza di flussi commerciali nulli. Se da un lato i risultati mostrano che il SPG esercita, in media, un impatto positivo sulle esportazioni dei paesi beneficiari, dall’altro lato l’analisi evidenzia l’esistenza di sostanziali differenze di impatto da un settore all’altro.

This paper analyzes the likely impact of European preferences, in particular of its Rules of Origin (RoO), on the prospects for integration of West Africa in world trade. We show that West African trade has not yet achieved the structural transformation of countries having successfully established themselves as manufacturing assembly platforms. EU RoO are complex, restrictive and discriminatory, hampering this integration of African producers in world trade. The paper explores the consequences of moving to a single product-specific RoO which would allow a maximum foreign content (MFC) to satisfy the substantial transformation criterion. We suggest that the developmental objective of the EPAs would be satisfied with a MFC of 90%-95% for LDCs and a 60%-70% for non-LDCs. Such a differentiated treatment should allow the small african companies in West Africa to enter into cross-border production chains. With such a move, the EU would also “seize the agenda” in the much awaited move towards multilateralization of preferential RoO.

RésuméDepuis plus de quatre décennies, les Etats-Unis ont fait des préférences commerciales unilatérales une partie importante de leur politique économique étrangère. En effet, les préférences commerciales donnent, sans réciprocité, l’accès au marché américain à certaines marchandises des pays en développement comme ceux du bassin caribéen, en franchise de droit de douane ou aux tarifs réduits inférieurs à ceux obtenus grâce à la clause de la « nation la plus favorisée » (NPF).Le bassin caribéen tire bénéfice de ces préférences commerciales grâce au programme CBI (Caribbean Basin Initiative) ou CBERA (Caribbean Basin Economic Recovery Act) lancé en 1983 et étendu en 1990 à d’autres produits avec quelques réductions de tarifs douaniers additionnels. En 2000, les Etats-Unis ont lancé le CBTPA (Caribbean Basin Trade Partnership Act) comme une reconduction du CBERA avec la reconnaissance de l’importance de vêtements dans les exportations caribéennes en leur appliquant le traitement préférentiel. Il sera donc opportun d’étudier l’évolution de ces politiques appliquées à l’industrie des vêtements ainsi que l’impact économique de cette évolution sur le bassin caribéen.Depuis 1994, les Etats-Unis ont signé des accords de libre échange (ALE) comme l’ALENA (Accord de libre échange nord américain) et la CAFTA-DR (Dominican Republic - Central America - United States Free Trade Agreement) marquant un changement important dans leur politique commerciale et soulevant la question des pays qui bénéficient toujours des accords préférentiels unilatéraux.Cet article examine les finalités et les modalités du commerce entre la Caraïbe et les Etats-Unis. D’abord, en analysant l’évolution de cette coopération, ensuite en décrivant la règle d’origine qu’appliquent les États-Unis aux importations en provenance de la région et enfin en étudiant les effets et les perspectives de ce commerce bilatéral.AbstractFor over four decades, the United States of America made from the unilateral trade preferences an important part of their foreign economic policy. Indeed, trade preferences give access, without reciprocity, to U.S. market for certain goods from developing countries such as the Caribbean basin, free of customs duty or reduced rates lower than those obtained with the clause “Most Favored Nation (MFN)”.The Caribbean Basin benefits from these trade preferences through the CBI program (Caribbean Basin Initiative) or CBERA (Caribbean Basin Economic Recovery Act) launched in 1983 and expanded in 1990 to other products with some additional reductions of tariffs. In 2000, the United States launched the CBTPA (Caribbean Basin Trade Partnership Act) as an extension of CBERA with recognition of the importance of Caribbean apparel exports by applying preferential treatment. It would be appropriate to study the evolution of these policies applied to the apparel industry and the economic impact of this evolution on the Caribbean Basin.Since 1994, the United States signed some of free trade agreements (FTAs) as the NAFTA (North American Free Trade Agreement) and the CAFTA-DR (Dominican Republic - Central America - United States Free Trade Agreement), marking an important change in their trade policy and raising the issue of countries that still have unilateral preferential agreements.The purpose of this paper is to examine the determinants and terms of trade between the Caribbean and the United States. First, by analyzing the evolution of this trade, then by describing the rule of origin applied by the United States imports from the Caribbean region and finally by studying the effects and prospects of the bilateral trade.

Moldova’s recent Association Agreement with the European Union (EU), which includes a Deep and Comprehensive Free Trade Agreement (DCFTA), represents an important opportunity, as well as challenges. This analytical document has been commissioned by the World Bank Group to provide insights into potential outcomes of the DCFTA and of other trade options that Moldova has, using a Dynamic Computable General Equilibrium (DCGE) model calibrated to its economy. This paper begins by describing the general trends in economic relations between Moldova and the EU over the past 10 years, with an emphasis on trade, as well as Foreign direct investment (FDI) and labor migration. This section includes some additional facts and details that complement the Trade Competitiveness Diagnostic. In the second section, the paper presents the main elements of the DCFTA and highlights the trade commitments and concessions that the EU and Moldova undertook. It also includes a short review of available literature on the ex-ante or ex post impact assessments of other Association Agreements between the EU and third countries that have been done using CGE models. The third section presents key features of the DCGE and discusses the data used for assembling the Social Accounting Matrix (SAM). Then, the main features of the simulated trade scenarios are presented. Finally, this paper discusses the DCGE simulation results, including the effects of the various scenarios on welfare, trade, and economic activity level. Some distributional impacts are also brought into discussion. The final section concludes and makes several recommendations.

How do global supply chain linkages modify countries' incentives to impose import protection? Are these linkages empirically important determinants of trade policy? To address these questions, this paper introduces supply chain linkages into a workhorse terms-of-trade model of trade policy with political economy. Theory predicts that discretionary final goods tariffs will be decreasing in the domestic content of foreign-produced final goods. Provided foreign political interests are not too strong, final goods tariffs will also be decreasing in the foreign content of domestically-produced final goods. The paper tests these predictions using newly assembled data on bilateral applied tariffs, temporary trade barriers, and value-added contents for 14 major economies over the 1995-2009 period. There is strong support for the empirical predictions of the model. The results imply that global supply chains matter for trade policy, both in principle and in practice.

This paper argues that the contribution of trade preferences to economic development needs to be reappraised in light of the growth of globalised trade in manufactures. Trade preferences may be able to act as a catalyst for manufacturing exports, leading to rapid growth in exports and employment. To do so, preferences need to be designed to be consistent with international trade in fragmented ‘tasks’ (as opposed to complete products) and need to be open to countries with sufficient levels of complementary inputs such as skills and infrastructure. Recent experience with the African Growth and Opportunities Act shows that, in the right conditions, Sub-Saharan African countries have had large manufacturing export supply response to trade preferences.

This paper assesses the effects of reducing tariffs under the Doha Round on market access for developing countries. It shows that for many developing countries actual preferential access is less generous than it appears because of low product coverage or complex rules of origin. Thus, lowering tariffs under the multilateral system is likely to lead to a net increase in market access for many developing countries, with gains in market access offsetting losses from preference erosion. Furthermore, comparing various tariff-cutting proposals, the research shows that the largest gains in market access are generated by higher tariff cuts in agriculture. IMF Staff Papers (2007) 54, 338–384. doi:10.1057/palgrave.imfsp.9450009