Hostname: page-component-cd9895bd7-mkpzs Total loading time: 0 Render date: 2024-12-26T18:32:36.177Z Has data issue: false hasContentIssue false
  • English
  • Français

What Are OECD Trade Preferences Worth to Sub-Saharan Africa?

Published online by Cambridge University Press:  23 May 2014

Alexander J. Yeats
Get access Rights & Permissions [Opens in a new window]

Extract

A problem which has complicated multilateral trade negotiations like GATT's Uruguay Round is that OECD countries have adopted important departures from the most-favored-nation (MFN) principle in their trade regimes. Recently these departures have taken the form of regional trade preferences, such as the Canada-United States Free Trade Arrangement, NAFTA, the Australia-New Zealand Free Trade Arrangement or European Community and EFTA preferences for Eastern Europe. Developing countries receive important trade preferences under the OECD countries' Generalized System of Preference (GSP) schemes, and through preferences extended under the EEC Lomè Convention and the US Caribbean Basin Initiative (CBI).

Since the Uruguay Round will lower trade barriers on an MFN basis it poses a dilemma for preference-receiving countries. Specifically, MFN tariff reductions will erode these countries' margins of preference and cause their competitive position to deteriorate vis-à-vis other suppliers. Trade losses will occur as some preference-receiving goods are displaced (diverted) by exports from other (non-preference receiving) countries. As a result, preference-receiving countries could justifiably try to minimize reductions in MFN tariffs. Overall, the strategy which these countries might adopt vis-à-vis the multilateral trade negotiations could be determined by an assessment of whether the likely trade gains from lower MFN tariffs on their non-preference receiving goods would offset the expected losses from their preference-receiving exports.

This study examines the problem of preference erosion from the perspective of Sub-Saharan African countries. Sub-Saharan Africa (SSA) was selected for analysis due to the extensive multiple tariff preferences these countries receive in OECD markets (i.e., GSP, Lomè Convention and, in many cases, least developed country preferences), and the fact that the region's export growth has been below that of most other countries (World Bank 1992).

Type
Research Article
Information
African Studies Review , Volume 38 , Issue 1 , April 1995 , pp. 81 - 101
Copyright
Copyright © African Studies Association 1995

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

Ahmad, Jaleel. 1978. Tokyo Rounds of Trade Negotiations and the Generalized System of Preferences, The Economic Journal, vol. 88, pp. 285–95.Google Scholar
Baldwin, Robert and Murray, Tracy. 1977. “MFN Tariff Reductions and Developing Country Trade Benefits Under the GSP,” The Economic Journal, vol. 87, pp. 30–46.Google Scholar
Braga, Carlos Primo and Yeats, Alexander. 1992. “How Minilateral Trading Arrangements May Affect the Post-Uruguay Round World,” World Bank Policy Research Working Paper, September.Google Scholar
Clague, Christopher. 1971. “The Trade Effects of Tariff Preferences,” Southern Economic Journal, vol. 38, pp. 379–89.CrossRefGoogle Scholar
Erzan, Refik and Svedberg, Peter. 1991. “Protection Facing Exports from Sub-Saharan Africa in the EC, Japan and US,” in Trade and Development in Sub-Saharan Africa, edited by Frimpong-Ansah, Jonathan et al, Manchester: Manchester University Press.Google Scholar
Erzan, Refik and Yeats, Alexander. 1992. “Free Trade Agreements with the United States—What's in it for Latin America,” World Bank Policy Research Working Paper Number 827, Washington: World Bank.Google Scholar
Laird, Samuel and Yeats, Alexander. 1987. “Tariff Cutting Formulas and Complications,” in The Uruguay Round: A Handbook for the Multilateral Trade Negotiations, edited by Finger, J. Michael and Olechowski, Andrzej. Washington: World Bank.Google Scholar
Laird, Samuel and Yeats, Alexander. 1989. “Nontariff Barriers of Developed Countries, 1966-1986,” Finance and Development, vol. 26, no. 1, March.Google Scholar
Laird, Samuel and Yeats, Alexander. 1991. Quantitative Methods for Trade Barrier Analysis, London: Macmillan Press.Google Scholar
Pomfret, Richard. 1986. “The Effects of Trade Preferences for Developing Countries,” Southern Economic Journal, vol. 53, pp. 18–26.Google Scholar
Sapir, Andre and Baldwin, Robert. 1983. “India and the Tokyo Round, World Development, vol. 11, pp. 565–74.Google Scholar
Schott, Jeffrey. 1989. More Free Trade Areas? Washington: Institute for International Economics, May.Google Scholar
Thomas, Vinod and Nash, John. 1991. Best Practices in Trade Policy Reform, Oxford: Oxford University Press for the World Bank.Google Scholar
UNCTAD. 1982. Assessment of the Results of the Multilateral Trade Negotiations, (TD/B/778/Rev. 1), New York: United Nations.Google Scholar
UNCTAD. 1987. Handbook of Trade Control Measures of Developing Countries: A Statistical Analysis of Trade Control Measures of Developing Countries 1987, (UNCTAD/DDM/Misc 2), Geneva: UNCTAD.Google Scholar
Varangis, Panayotis, Braga, Carlos A. Primo and Takeuchi, Kenji. 1993. “Tropical Timber Trade Policies: What Impact will Eco-Labeling Have?,” World Bank Policy Research Working Paper No. 1156, Washington: World Bank, July.Google Scholar
Walter, Ingo. 1969. “Nontariff Barriers and the Free-Trade Area Option,” Banca Nazionale del Lavoro Quarterly Review, vol. 22 March.Google Scholar
Walter, Ingo. 1972. “Nontariff Protection Among Industrial Countries: Some Preliminary Empirical Evidence,” Economia Internazionale, vol. 25, May.Google Scholar
World Bank. 1992. Global Economic Prospects and the Developing Countries, 1992, Washington: World Bank, April.Google Scholar
World Bank. 1993. Global Economic Prospects and the Developing Countries, 1993, Washington: World Bank, April.Google Scholar
Yeats, Alexander. 1987. “The Escalation of Trade Barriers,” in Finger, J. Michael and Olechowski, Andrzej eds., The Uruguay Round: A Handbook for the Multilateral Trade Negotiations, Washington: World Bank.Google Scholar
Yeats, Alexander. 1990. “On the Accuracy of Economic Observations: Do Sub-Saharan Trade Statistics Mean Anything?,” The World Bank Economic Review, Volume 4, No. 2, May.Google Scholar
Yeats, Alexander. 1992. “Can a Manufactured Good Cease to be a Manufactured Good Merely by Crossing a National Frontier?”, Bulletin of Economic Research, vol. 44, no. 3, July.Google Scholar