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GTAP Resource #1581

"MFN Tariff Cuts and U.S. Agricultural Imports Under Nonreciprocal Trade Preference Programs"
by Wainio, John and Mark Gehlhar

U.S. trade preference programs, including the Generalized System of Preferences (GSP), the Caribbean Basin Economic Recovery Act (CBERA), the Andean Trade Preferences Act (ATPA), and the African Growth and Opportunity Act (AGOA), are designed to stimulate economic growth and alleviate poverty in developing countries by increasing exports to the U.S. market. Even as these programs have expanded in size and scope in recent years, the United States is involved in trade negotiations within the World Trade Organization (WTO) that have as one objective the significant reduction of most-favored-nation (MFN) agricultural tariff levels.
Some developing countries are concerned that MFN tariff reductions will injure their export position because of the concomitant erosion of existing preference margins. This would appear to be a narrow concern, at least in the U.S. market, insofar as it does not consider the larger export gains that could occur through further opening of markets not granted preferential access under nonreciprocal programs. One of the pertinent conclusions from our analysis is that developing countries stand to gain in the U.S. market from substantial MFN tariff liberalization. Ample MFN liberalization thus appears to be a better option for program beneficiaries than would be the continuation of current preference schemes with no MFN liberalization.

Resource Details (Export Citation) GTAP Keywords
Category: 2004 Conference Paper
Status: Published
By/In: Presented at the 7th Annual Conference on Global Economic Analysis, Washington DC, USA
Date: 2004
Created: Wainio, J. (5/14/2004)
Updated: Wainio, J. (5/14/2004)
Visits: 2,092
No keywords have been specified.

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