The Impact of Preference Erosionon Middle-Income Developing Countries

Hans Lankes and Katerina Alexandraki

No 2004/169, IMF Working Papers from International Monetary Fund

Abstract: Preference erosion has become an obstacle to multilateral trade liberalization, as beneficiaries of trade preferences have an incentive to resist reductions in mostfavored- nation (MFN) tariffs. This study identifies middle-income developing countries that are vulnerable to export revenue loss from preference erosion. It concludes that the problem is heavily concentrated in a sub-set of preference beneficiaries-primarily small island economies dependent on sugar, banana, and-to a lesser extent-textile exports. Accordingly, measures to help mitigate the impact of preference erosion can be closely targeted at the countries at risk.

Keywords: WP; unit price; Trade; preferences; preference margin; EU price; export supply elasticity; EU market duty-free; EU-ACP Cotonou Agreement; undiversified export base; margin vis-à-vis; major export product; EU regime; Exports; Agricultural commodities; Tariffs; Export earnings; Supply elasticity; Caribbean (search for similar items in EconPapers)
Pages: 34
Date: 2004-09-01
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Citations: View citations in EconPapers (29)

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