Working Paper: CEPR ID: DP2747
Authors: Bernard Hoekman; Francis Ng; Marcelo Olarreaga
Abstract: Although average tariffs in Quad markets are very low, tariff peaks and tariff escalation have a disproportional effect on exports from least developed countries (LDCs). Tariff peak products tend to be heavily concentrated in agriculture and food products and in labour-intensive sectors such as apparel and footwear. Full duty and quota free access for LDCs in the Quad for tariff peak products would result in an 11% increase in their total exports - in the order of $2.5 billion. Exports to Quad countries of tariff peak products would expand by 30-60%. Given that LDC exports of tariff peak items account for only a small share of total developing country exports, granting LDCs duty free access has a negligible impact on other developing countries. For the same reason, Quad imports increase only marginally, suggesting that this should not be a factor constraining implementation of duty free access for the poorest countries.
Keywords: least developed countries; market access; trade preferences
JEL Codes: F13; F14; O19
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| granting full duty-free access for LDCs to tariff peak products in Quad markets (F13) | increase in total LDC exports (O19) |
| increase in total LDC exports (O19) | increase in exports to Quad countries (F10) |
| granting full duty-free access for LDCs to tariff peak products in Quad markets (F13) | increase in exports in sectors like apparel (F10) |
| granting full duty-free access for LDCs to tariff peak products in Quad markets (F13) | trade diversion from other developing countries (F29) |
| granting full duty-free access for LDCs to tariff peak products in Quad markets (F13) | substantial gains for LDCs (O54) |