Preferential Tariff Formation -- The Case of the European Union

Vivek Joshi ()
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Vivek Joshi: IUHEID, The Graduate Institute of International and Development Studies, Geneva

No 05-2010, IHEID Working Papers from Economics Section, The Graduate Institute of International Studies

Abstract: In this paper, we address the impact of multilateral trade liberalisation (MTL) on the preferential tariffs granted by the EU, who is one of the top traders as well as biggest contributors to MTL. We empirically address two important questions. First, if the MFN tariff for a product is higher, does it lead to a higher or lower preferential tariff? Second, the EU being a large trading partner in such agreements, does reciprocity matter for giving meaningful preferential access? For a given MFN tariff, we model the preferential tariff with a simple linear functional form. We draw three important conclusions. First, the products that are highly protected do not get high preferential access even at the regional level. Second, reciprocity plays only a limited role in granting better preferential access. Third, GSP preferences matters when the EU negotiates with the developed partners but it does not matter when it negotiates with the developing partners.

Keywords: MFN tariffs; preferential tariffs; reciprocity; GSP (search for similar items in EconPapers)
JEL-codes: F13 F15 (search for similar items in EconPapers)
Pages: 54 pages
Date: 2010-03
New Economics Papers: this item is included in nep-eec and nep-int
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:gii:giihei:heidwp05-2010

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