Working Paper: CEPR ID: DP6262
Authors: Paul Collier; Anthony J. Venables
Abstract: This paper argues that the contribution of trade preferences to economic development needs to be reappraised in light of the growth of globalized trade in manufactures. Trade preferences may be able to act as a catalyst for manufacturing exports, leading to rapid growth in exports and employment. To do so, preferences need to be designed to be consistent with international trade in fragmented ?tasks? (as opposed to complete products) and need to be open to countries with sufficient levels of complementary inputs such as skills and infrastructure. Recent experience with the African Growth and Opportunities Act shows that, in the right conditions, Sub-Saharan African countries have had large manufacturing export supply response to trade preferences.
Keywords: AGOA; EBA; Export Diversification; Rules of Origin; Trade Preferences
JEL Codes: F12; F13; F14; O14
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| trade preferences (F14) | manufacturing exports (L60) |
| design of preferences (D11) | effectiveness of trade preferences (F13) |
| complementary inputs (D10) | manufacturing exports (L60) |
| relaxed ROOs for apparel (L67) | increase in exports (F10) |
| ability to import necessary inputs without restrictive tariffs (F14) | participation in global production networks (F60) |