Geopolitical interests and preferential access to U.S. markets

Daniel Lederman and Caglar Ozden

No 3531, Policy Research Working Paper Series from The World Bank

Abstract: The United States imports around 25 percent of its merchandise under some form of preferential trade regime. The authors examine both the origins and consequences of U.S. trade preferences in the context of the gravity model of international trade. First, they provide estimates of the impact of preferential trade regimes in terms of access to U.S. markets while controlling for geo-strategic interests that determine the countries that are offered commercial preferences. Second, the authors consider not only country eligibility but also the extent of utilization of these programs. Third, they provide new estimates of the impact of transport and transactions costs beyond distance. In the standard gravity estimation, the authors find that beneficiaries of these preferences, except GSP, export 2-3 times more than the excluded countries, after controlling for country and product characteristics. Nonetheless, the estimated effects of these programs are lower when controlling for utilization ratios and selection biases due to the correlation between geopolitical interests and the standard explanatory variables used in the gravity model of trade, such as countries'geographic distance from the United States.

Keywords: Trade and Regional Integration; TF054105-DONOR FUNDED OPERATION ADMINISTRATION FEE INCOME AND EXPENSE ACCOUNT; Economic Theory&Research; Trade Policy; Environmental Economics&Policies (search for similar items in EconPapers)
Date: 2005-03-01
New Economics Papers: this item is included in nep-int
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Citations: View citations in EconPapers (5)

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Related works:
Journal Article: GEOPOLITICAL INTERESTS AND PREFERENTIAL ACCESS TO U.S. MARKETS (2007)
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Persistent link: https://EconPapers.repec.org/RePEc:wbk:wbrwps:3531

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