The perversity of preferences: GSP and developing country trade policies, 1976–2000

Özden, Çağlar; Reinhardt, Eric

doi:10.1016/j.jdeveco.2004.08.007

Cited by 102 publications

(78 citation statements)

References 23 publications

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“…Few researchers have attempted to estimate the overall effect of the GSP+ One recent study by Ozden and Reinhardt finds that the U+S+ GSP is not associated with an increase in trade+ 27 We expand their analysis by surveying all preference schemes in a variety of political contexts+ This allows us to quantify the effect of GSP-type preferences around the world, and to study the interaction between the GATT0WTO and the GSP+ To summarize, the concepts of standing and embeddedness can help one understand when and for whom international institutions matter+ In the domain of trade, the GATT0WTO should promote exchange not merely among formal members, 26+ Viner 1950 introduced criteria for evaluating PTAs: agreements can be said to increase welfare if they lead to more trade creation than trade diversion+ His criterion was subsequently used in empirical studies; see, for example, Corden 1976;Bhagwati and Panagariya 1996;Frankel 1997;and Lawrence 1999, most of which found that PTAs increase trade when they lead to significant reductions in trade barriers and when the signatories trade extensively with each other+ For recent work on the political origins of PTAs, see Mansfield and Reinhardt 2003;andMilner 1999+ 27+ Ozden andReinhardt 2005+ but more broadly among all countries and territories with legal standing+ Moreover, the GATT0WTO should be evaluated along with other trade agreements+ The remainder of the article addresses these propositions+…”

Section: Unidirectional Trade Agreements: the Generalized System Of Pmentioning

confidence: 99%

Institutions in International Relations: Understanding the Effects of the GATT and the WTO on World Trade

2007

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The General Agreement on Tariffs and Trade~GATT! and the World Trade Organization~WTO! have been touted as premier examples of international institutions, but few studies have offered empirical proof+ This article comprehensively evaluates the effects of the GATT0WTO and other trade agreements since World War II+ Our analysis is organized around two factors: institutional standing and institutional embeddedness+ We show that many countries had rights and obligations, or institutional standing, in the GATT0WTO even though they were not formal members of the agreement+ We also expand the analysis to include a range of other commercial agreements that were embedded with the GATT0WTO+ Using data on dyadic trade since 1946, we demonstrate that the GATT0WTO substantially increased trade for countries with institutional standing, and that other embedded agreements had similarly positive effects+ Moreover, our evidence suggests that international trade agreements have complemented, rather than undercut, each other+ When and how do international institutions promote cooperation? Few questions are as fundamental to international relations or as salient for world leaders+ Due to the contributions of Keohane and others, we now have sophisticated theories about the emergence and effects of international institutions, but empirical research has not proceeded apace+ 1 As Frieden and Martin point out, "theoretical work on interAn earlier version of this article was presented at the

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Section: Unidirectional Trade Agreements: the Generalized System Of Pmentioning

confidence: 99%

Institutions in International Relations: Understanding the Effects of the GATT and the WTO on World Trade

2007

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“…Hence, the political balance shifts in favour of the import-competing sectors, which could result in slower progress toward the dismantling of trade barriers. Özden and Reinhardt (2005) offer empirical evidence in favour of this hypothesis. Looking at beneficiaries of the US GSP from 1976 to 2000 -and considering the potential endogeneity problems -they find that countries that are dropped from the GSP scheme adopt more liberal trade policies than countries that remain eligible.…”

Section: 3mentioning

confidence: 94%

“…Another potential negative effect of trade preferences, pointed out by Özden and Reinhardt (2005), is that they may slow down the developing countries' own trade liberalization. While import-competing sectors may have an incentive to lobby for trade barriers, this political pressure is often thought to be counteracted by the export sectors who can be expected to lobby for trade liberalization at home in order to achieve better market access in their export markets.…”

Section: 3mentioning

confidence: 99%

From Trade Preferences to Trade Facilitation: Taking Stock of the Issues

Persson

2012

Economics

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The objective of the paper is to explore and give an overview of two central policy alternatives to improve the integration between the European Union and developing countries by removing barriers to trade: trade preferences and trade facilitation. The author reviews the relevant literatures and discusses the issues which constitute problems or opportunities for practitioners and researchers in both areas. She concludes that while at least some trade preferences actually have been less of a failure than their reputation suggests, trade facilitation is a far more promising policy option for the future. IntroductionThe European Union (EU) is the largest trading partner for many of the world's developing countries, but there is nevertheless a large potential to expand that trade. Given that increased trade is widely believed to be one of the keys to alleviating poverty and improving standards of living in developing countries, from a policy perspective it is crucial to understand the options available for economic integration between the EU and developing countries. The objective of this paper is therefore to explore and give an overview of two central policy alternatives to improve the integration between the EU and developing countries by removing barriers to trade: trade preferences and trade facilitation. Nonreciprocal trade preferences for low-and middle-income countries have been used by the European Union since at least the 1960s, and have in a broader sense been at the heart of the North-South trade policy debate for the last half century. By contrast, trade facilitation, i.e. loosely speaking cutting red tape at the border, is a relatively new issue, but one that has quickly risen high on the policy agenda. The paper starts by defining what trade preferences are and what they are meant to achieve, and then puts this policy option into its historical context. Noting that many commentators tend to regard trade preferences as a failed policy -something which interestingly is not necessarily what the reviewed empirical research finds -the paper discusses several dimensions that may be important when determining preferences' trade-creating potential.The paper then moves on to discuss how to define trade facilitation, outline why and how inefficient trade procedures constitute costs for traders and give an overview of what the likely economic effects are of reform in the area. In particular, the empirical literature on trade facilitation is reviewed, including the few papers that explicitly link trade facilitation and European integration. This section also gives examples of concrete measures that governments could take to reduce transaction costs related to inefficient trade procedures, and it closes by considering how to properly measure trade facilitation, and what kind of data researchers would need to better be able to analyze the causal effects.The last section summarizes the historic shift from a focus on trade preferences in trade relations between industrialized and developing countries to a fo...

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“…Özden and Reinhardt (2003) argue that GSP schemes reduce the need for the export sector in beneficiary countries to oppose protectionist policies by their own government. Vested interests in both the export and import-competing sectors are created that resist change to the status quo, in particular further multilateral trade liberalization.…”

mentioning

confidence: 99%

“…Vested interests in both the export and import-competing sectors are created that resist change to the status quo, in particular further multilateral trade liberalization. Conversely, Özden and Reinhardt (2003) establish empirically that sometimes when GSP eligibility is withdrawn and access to export markets becomes conditional on a country's own trade policy on the basis of reciprocity, countries reduce their protectionist policies and reap associated gains in efficiency and competitiveness.…”

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confidence: 99%

Special and Differential Treatment in the WTO: Why, When and How?

Keck

Low

2004

SSRN Journal

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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 AbstractSpecial and differential treatment (S&D) for developing countries continues to be a defining feature of the multilateral trading system. This paper seeks to address key aspects of what has become an increasingly entangled and multi-faceted discussion. The paper begins by reviewing the historical context in which the relationship of developing countries with the multilateral trading system evolved, in order to shed some light on how the lines of the debate are drawn today. The paper distinguishes several elements in the case typically made for S&D. It argues that concerns about graduation -the definition of which countries qualify for special treatment -have complicated progress on this issue, suggesting that a focus on measures rather than on country status would obviate this difficulty, while at the same time increasing the analytical underpinning of the case for special and differential treatment. The paper explores various forms of S&D and develops arguments for particular approaches to the design and management of access to S&D. An illustration is provided of how a more analytical approach would work by defining eligibility automatically in relation to measures rather than countries.JEL classification: F13, O19, O24.

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The perversity of preferences: GSP and developing country trade policies, 1976–2000

Cited by 102 publications

References 23 publications

Institutions in International Relations: Understanding the Effects of the GATT and the WTO on World Trade

Institutions in International Relations: Understanding the Effects of the GATT and the WTO on World Trade

From Trade Preferences to Trade Facilitation: Taking Stock of the Issues

Special and Differential Treatment in the WTO: Why, When and How?

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