Lesotho’s integration into the world economy: challenges and opportunities

Guillermo Arenas, Jakob Engel and Maryla Maliszewska

No 332863, Conference papers from Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project

Abstract: A changing external environment will bring more competitive pressure for Lesotho’s exports in the medium term. Future export growth will be challenged by the emergence of new low-wage competitors like Myanmar and the expected erosion of preferential market access in main export destinations over the next decade. In the United States, the Trans-Pacific Partnership (TPP) has been abandoned, but a potential US-Vietnam FTA based on the TPP commitments could grant duty free entry to apparel products from Vietnam - the highly efficient producer that competes against Lesotho in similar apparel products. Additionally, the current re-authorization of AGOA will expire in 2025. Although a new re-authorization of AGOA is not ruled out, its potential phase out or replacement is of key importance for Lesotho since, in the absence of this preferential program, its apparel exports will have to compete on equal footing against low-wage competitors like Bangladesh, Cambodia, and Myanmar that currently face high tariffs in the U.S. (16.3%, 17.8%, and 13.7%, respectively). The main objective of this analysis is to propose policies that enhance export competitiveness and deepen Lesotho’s integration in global and regional value chains in goods and services.The analysis of the current policy and institutional framework, as well as of tariffs and NTMs will provide a current picture of protection faced by the domestic producers, but also the tariff and non-tariff costs of importing inputs to support domestic value chains. The goal of this analysis is to provide the policy recommendations regarding liberalization of key products needed to support the development of local value chains.

Keywords: Political; Economy (search for similar items in EconPapers)
Date: 2017
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Persistent link: https://EconPapers.repec.org/RePEc:ags:pugtwp:332863

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