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GTAP Resource #3350

"The value of trade preferences"
by Mitaritonna, Maria Cristina

Global CGE assessment has followed a bi-polar approach. Before the integration of the MAcMapHS6 in the GTAP database, only MFN tariffs were considered with the few exceptions of regional agreements such as e.g. the EU and NAFTA. Therefore, the role of preferences for developing countries was discarded and the erosion of preferences was a non-problem by definition. The information on preferences contained in the MAcMapHS6 database has led to that assessments of multilateral trade liberalization have been improved, capturing the complexity of diverging interests among developing countries. However, the MAcMapHS6 dataset assume that preferences are fully used: exporters always benefit from the lowest tariff for which they are eligible. A wide econometric literature has emphasized the fact that in reality the rate of utilization of preferences is in many cases low. At the same time, exhaustive investigation conducted by other authors have proven that considering the whole set of overlapping preferential scheme, the overall rate of utilization of preferences is relatively high and problems concentrated in a limited number of cases (sectors or/and countries). By using a CGE and using disaggregated data and modeling at the HS6 level, the value of EU and US non-reciprocal schemes are assessed by considering alternatively a perfect use of preferences and an incomplete one, based on current utilization rate. The approach combines the advantages of the CGE framework in terms of theoretical robustness and capacity to provide global assessment and the importance to capture the absolute and relative value of preferential margins at the detailed level.

Resource Details (Export Citation) GTAP Keywords
Category: 2010 Conference Paper
Status: Published
By/In: Presented at the 13th Annual Conference on Global Economic Analysis, Penang, Malaysia
Date: 2010
Created: Mitaritonna, M. (4/15/2010)
Updated: Mitaritonna, M. (4/15/2010)
Visits: 1,558
No keywords have been specified.

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