Ingo Borchert, Mattia Di Ubaldo, 11 January 2021

Uncertainty over the future course of trade policy really matters. Developing countries obtain non-reciprocal tariff reductions from many industrialised countries through Generalised Systems of Preferences, but the uncertainty surrounding the continuation of preferential treatment is likely to undermine the schemes’ effectiveness. This column studies the 2014 reform of the EU’s Generalised System of Preferences, which removed the uncertainty on preferences for a subset of beneficiary countries. It finds that the removal of uncertainty led to an increase in EU imports from affected countries by about 45% without any changes in other market access conditions. This average trade impact is driven by country-sector pairs that are most exposed to preferences uncertainty prior to the reform, for which trade increased by over 70%.

Ingo Borchert, Paola Conconi, Mattia Di Ubaldo, Cristina Herghelegiu, 05 May 2020

The EU often conditions preferential access to its market on the achievement of non-trade policy objectives such as sustainable development, human rights, and good governance. This column studies the evolution of such objectives in EU trade agreements and Generalised System of Preferences (GSP) schemes over time, and reveals the legal and economic limitations of imposing conditionalities in trade agreements compared to the GSP. The findings suggest that if the EU wishes to rely more on trade policy to promote such objectives, it should focus on GSP programmes.

Emanuel Ornelas, Marcos Ritel, 08 November 2018

Generalised System of Preferences programmes, a form of nonreciprocal tariff cuts, have proliferated since the 1970s. Using a well-documented dataset of international trade agreements, this column studies the effectiveness of the system on beneficiaries’ aggregate exports. It finds that nonreciprocal tariff preferences can have a strong positive effect on the exports of least-developed countries, provided that they are WTO members. Conversely, other developing economies enjoying nonreciprocal preferences are able to increase exports only if they are not WTO members. 

Javier López González, Michael Gasiorek, 30 July 2011

The EU is redesigning its rules on preferential trade access for developing and emerging economies. This column outlines the likely winners and losers and argues that in order to help developing countries integrate into the world economy much more creative policies are needed.

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