Ana Fernandes, Alejandro Forero, Hibret Maemir, Aaditya Mattoo, 14 April 2021

Under the African Growth and Opportunity Act in 2001, the US allowed duty-free entry of apparel products from eligible African countries. However, the end of the Multi-Fiber Arrangement in 2005 re-exposed African countries to significant international competition from Asia. This column finds that countries in Southern Africa and firms in Kenya that boomed during the period of high initial trade preferences went bust when the Multi-Fiber Arrangement expired. Subsequent growth was driven by new countries, notably Ethiopia, and by new firms in Kenya. These results are consistent with the complementary role of domestic reforms rather than the ‘infant industry’ benefits of trade preferences alone.

Lorenzo Rotunno, Pierre-Louis Vézina, Zheng Wang, 14 October 2012

The surge in African apparel exports that followed the launch of new US trade preferences in 2000 gave hope that African industrialisation was around the corner. Ten years down the road, the success was all but forgotten. This column shows this is because US trade policies inadvertently turned Africa into a temporary trade corridor for China.

Jaime de Melo, Alberto Portugal-Perez, 29 May 2012

Joining a global supply chain is one of the few ways for low-income countries to industrialise in today’s competitive market. Rules on their use of imported fabric therefore have important consequences for development. This column exploits a quasi-experimental situation to show that the gains from rich nations applying more relaxed rules on imported inputs are huge – six times greater than the simple act of removing tariffs.

Garth Frazer, Johannes Van Biesebroeck, 07 August 2007

Recent research shows that the much-discussed African problems – poor infrastructure, poor public services, etc. – did not stop Africa from boosting its exports when the US lowered it tariffs and limited other subtle trade barriers. Other OECD countries should re-consider their trade policies towards Africa in this light.

Events

CEPR Policy Research