Export Competitiveness of Developing Countries and US Trade Policy

Abstract

Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in EconStor may AbstractThis paper examines the impact of the revocation of tariff exemptions on exports of developing countries using data from cases of the Competitive Needs Limits (CNL), a feature of the US Generalized System of Preferences (GSP). CNLs are arguably imposed on super competitive GSP beneficiaries and aim to reserve the GSP benefits for other "less competitive" GSP eligible countries. I find that being excluded from the GSP as a result of a CNL induces a large and significant drop in imports from affected countries, both in value and in their share in total US imports. Contrary to the policy objectives of CNLs, the excluded countries do not appear to be "super competitive."In addition, the findings suggest that much of the benefits of CNLs accrue to non-GSP countries, rather than other GSP beneficiaries.JEL Classifications: F13, F14, O12, O19

Accounting for underutilization of trade preference programs: The US generalized system of preferences

“…Lastly, an additional set of rules deals with the most competitive exporters and those who violate intellectual property rights and workers' rights. The preferential treatment of imports from such country‐product pairs is suspended (Hakobyan ). These country‐product pairs become de facto ineligible for GSP benefits and therefore are dropped from the current analysis…”

Special and Differential Treatment for Developing Countries

“…Moreover, in three-quarters of the former the country-products excluded were eligible to a waiver (but did not receive one) due to the low value of imports. Hakobyan (2014) shows that the negative effects of the exclusion are observed only when the CNL share threshold is reached.…”

The US Generalised System of Preferences in Principle and Practice

“…(GSP benefits were reinstated in 2006 after the Ukrainian parliament approved a package of important amendments to the Laser-readable Disc Law that strengthened Ukraine's licensing regime and enforcement capabilities to stem the illegal production and trade of optical media products.) Meanwhile, Belarus's beneficiary status was suspended in 2000 due to workers rights violations, and its 12 Indeed, 20 per cent is a lower boundif developing country exports increased with the expansion of duty-free access as robustly as one would expect (Hakobyan, 2012), the implied expansion of GSP market access would have been higher. 13 In 2008 Vietnam officially requested to receive trade benefits under the GSP as a beneficiary developing country after its accession to the WTO was finalised in 2007, but the decision is still pending.…”

“…Indeed, 20 per cent is a lower bound – if developing country exports increased with the expansion of duty‐free access as robustly as one would expect (Hakobyan, ), the implied expansion of GSP market access would have been higher.…”

“…They are those who have been left out' . According to Hakobyan (), when a developing country loses GSP access, its exports in affected industries fall by an average of 19 per cent in the year of exclusion, an additional 20 per cent in the first year, and are still 60 per cent below pre‐exclusion levels three years later.…”