The Biggest Losers (and Winners) from U.S. Trade Liberalization

Kara Reynolds

No 2007-06, Working Papers from American University, Department of Economics

Abstract: Many development experts worry that continuing reductions of tariff levels in high-income countries will limit trade flows from developing countries that benefit from preferential trade programs because of “preference erosion.” Using a panel of U.S. import data between the years of 1997 and 2005, I find that reductions in preference margins will significantly diminish imports of some products, particularly from lowermiddle and low income countries; for example, a one percent reduction in the U.S. tariff on a product that is currently imported duty-free from developing countries will decrease imports of that product from lowermiddle countries by an average of 2.6 percent. However, many products produced by developing countries fail to qualify for preferential tariffs, thus a gradual reduction in all U.S. tariff rates is expected to have only a modest impact on trade flows from developing countries.

Keywords: Generalized System of Preferences; Preference Erosion; Preferential Tariffs (search for similar items in EconPapers)
JEL-codes: F13 F15 O1 (search for similar items in EconPapers)
Pages: 33 pages
Date: 2007-07
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https://doi.org/10.17606/bvbp-b017 First Version, 2007 (application/pdf)

Related works:
Journal Article: The biggest losers (and winners) from US trade liberalization (2009)
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Persistent link: https://EconPapers.repec.org/RePEc:amu:wpaper:0607

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