Working Paper: CEPR ID: DP6372
Authors: Mary Amiti; John Romalis
Abstract: This paper assesses the effects of reducing tariffs under the Doha Round on market access for developing countries. It shows that for many developing countries, actual preferential access is less generous than it appears because of low product coverage or complex rules of origin. Thus lowering tariffs under the multilateral system is likely to lead to a net increase in market access for many developing countries, with gains in market access offsetting losses from preference erosion. Furthermore, comparing various tariff-cutting proposals, the research shows that the largest gains in market access are generated by higher tariff cuts in agriculture.
Keywords: developing countries; market access; preference erosion; tariffs; WTO
JEL Codes: F12; F13; F15
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Tariff reductions under the multilateral system (F13) | net increase in market access for many developing countries (F63) |
| Lowering tariffs (F13) | gains from lower MFN tariffs offset losses from preference erosion (F14) |
| Simulated uniform cut of 40% in tariffs (F17) | overall increase in import demand of 21% on average across all countries (F10) |
| Simulated uniform cut of 40% in tariffs (F17) | increase of 85% in import demand for non-African least developed countries (LDCs) (O55) |
| Simulated uniform cut of 40% in tariffs (F17) | slight loss of 0.1% in demand for African LDCs (O55) |
| Higher tariff cuts in agriculture (Q17) | larger gains in market access for developing countries (F63) |
| Existing preference schemes (D11) | developing countries pay higher average tariffs than developed countries (F14) |
| Small number of developing countries losing market access (F69) | those benefiting significantly from existing preferential arrangements (F55) |