Working Paper: CEPR ID: DP2820
Authors: Elena Ianchovichina; Aaditya Mattoo; Marcelo Olarreaga
Abstract: Initiatives to improve market access for the poorest countries have recently been announced by the European Union, Japan and the United States. This Paper assesses the impact on Sub-Saharan Africa (SSA) of these initiatives and others that might be taken. We find that fully unrestricted access to all the QUAD countries would produce substantial gains for SSA, leading to a 14% increase in non-oil exports ($2.5 billion) and boosting real incomes in SSA by around 1%. Most of these gains would come from preferential access to the highly protected Japanese and European agricultural markets. The smallness of SSA ensures that the costs of trade diversion for the QUAD and other developing countries are negligible.
Keywords: Duty-free access; Least developed countries; Sub-Saharan Africa
JEL Codes: F11; F13
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| unrestricted market access to all Quad countries (F13) | increase in non-oil exports (F10) |
| increase in non-oil exports (F10) | boost in real incomes in SSA (O55) |
| unrestricted access to U.S. market for SSA products (F13) | minimal impact on non-oil exports (F69) |
| Japan's proposal for free access to industrial products (F13) | smaller gains for SSA (H55) |
| unrestricted access proposal for EU market (L17) | significant gains for SSA (H55) |
| complete liberalization of Quad markets (F10) | largest gains for SSA (H55) |