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GTAP Resource #3226

"The Costs and Benefits of Duty-Free, Quota-Free Market Access for Poor Countries: Who and What Matters"
by Bouët, Antoine, David Laborde, Elisa Dienesch and Kimberly Elliott

The paper addresses the issue of the potential costs of a duty-free-quota-free given to the Least-Developed-Countries (LDCs) and the issue of the eligibility of other poor countries to this kind of preferential program.
Using the MIRAGE Computable General Equilibrium model, it assesses the impact of full liberalization given by high-income-countries members of OECD and the emerging markets, and estimate outcomes in terms of LDCs’ trade performance and giving-countries’ level of production.
This study also allows evaluating if some of the poorest countries will suffer from preference erosion, taking into account their initial preferential schemes, under different scenarios which differ from giving-countries and receiving-countries implied in partial (97% of tariff lines) or full liberalization (100% of tariff lines).
The main goal of this paper is to highlight the role that rich and emerging countries could play to help LDCs to improve their trade performance and to assess in which modalities the costs of such policy will be lowest for the developing world and in line with a political feasibility for giving-countries.
Our conclusions underscore that because of rich-country tariff peaks and LDCs exports concentration on a few sectors, only full product coverage offers significant benefits. Despite good access in its main markets, sub-Saharan Africa can still gain from 100 percent DFQF, particularly Malawi from elimination of remaining agricultural restrictions in the US markets, and others if the major emerging markets also adopt 100 percent DFQF market access. Extending preferential access to other Low-Income-Countries has little impact on LDCs preferences, but if the program is extended to Low-Middle-Income-Countries it will produce preference erosion, especially in the EU market where LDCs already have 100 percent (nominal) access. Finally, this study shows that rich countries which provide full market access have little impact on Welfare and production.

Resource Details (Export Citation) GTAP Keywords
Category: 2010 Conference Paper
Status: Published
By/In: Presented at the 13th Annual Conference on Global Economic Analysis, Penang, Malaysia
Date: 2010
Created: Dienesch, E. (4/8/2010)
Updated: Dienesch, E. (4/8/2010)
Visits: 2,494
- Preferential trading arrangements
- Economic development
- Dynamic modeling
- The GTAP Data Base and extensions

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