Measuring the usage of preferential tariffs in the world

Kazunobu Hayakawa, Fukunari Kimura and Laksanapanyakul Nuttawut

No 595, IDE Discussion Papers from Institute of Developing Economies, Japan External Trade Organization(JETRO)

Abstract: The preference utilization ratio, i.e., the share of imports under preferential tariff schemes out of total imports, has been a popular indicator for measuring the usage of preferential tariffs vis-à-vis tariffs on a most-favored-nation basis. A crucial shortcoming of this measure is the data requirements, particularly for import value data classified by tariff schemes, which are not available in most countries. This study proposes an alternative measure for preferential tariff utilization, termed the "tariff exemption ratio." This measure offers the unique advantage of needing only publicly available data, such as those provided by the World Development Indicators, for its computations. We can thus calculate this measure for most countries for an international comparison. Our finding is that tariff exemption ratios differ widely across countries, with a global average of approximately 50%.

Keywords: Tariff; International trade; International agreements; Preferential trade agreements; General system of preferences; Utilization of preferential arrangements; Tariff revenues (search for similar items in EconPapers)
JEL-codes: F15 F53 (search for similar items in EconPapers)
Date: 2016-04-01
New Economics Papers: this item is included in nep-int
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Published in IDE Discussion Paper = IDE Discussion Paper, No. 595. 2016-04-01

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Journal Article: Measuring the usage of preferential tariffs in the world (2018)
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