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Policy Responses to Trade Preference Erosion

Options for Developing Countries

image of Policy Responses to Trade Preference Erosion
It was hoped that trade preferences, offered to exports from developing countries by industrialised countries, would give greater economic benefits than has been the case. Now continuing multilateral tariff liberalisation threatens to further erode even those benefits that remain.



This study looks at how best developing countries should respond to this erosion of trade preferences, either through restructuring individual preference arrangements or by acting to offset the adverse effects of preference erosion.

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Introduction

Increased access to industrial country markets through reduced trade barriers has been and remains a major objective of developing countries and has been included in the Doha Round of WTO negotiations. However, such trade liberalisation is likely to have an uneven impact across developing countries. While most countries recognise the bene - fits of reducing barriers to trade in general, preference-dependent countries are apprehensive regarding the (potential) impact of recent further tariff reductions by industrial countries – the loses and adjustment costs associated with preference erosion. One of the core issues is that most of the G-90 group of developing countries already enjoy preferential market access for at least some of their exports to developed countries under various preference schemes.

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