Working Paper: CEPR ID: DP7313
Authors: Cline Carrre; Jaime de Melo
Abstract: LDCs hoped that the DOHA round would bring them greater market access in OECD countries than for non-LDCs. Using HS-6 tariff level data for the US and the EU for 2004, this paper estimates that, once the erosion from preferential access into the EU to non-LDCs is taken into account, LDCs have about a 3% preferential margin in the EU market. In the US market, in spite of preferences under AGOA, on a trade-weighted basis, LDCs are discriminated against. Under various ?Swiss formulas? for tariff cuts, effective market access for LDCs in the EU will be negligible and still negative in the US. If the US were to apply a 97% rule (i.e. duty-free, quota-free access for all but three percent of the tariff lines), LDCs could increase exports by 10% or about $1billion annually. Effective market access is further reduced by complicated Rules of Origin (RoO) applied by the EU and the US. Furthermore, generally, the most restrictive RoO fall on products in which LDCs have the greatest preferential market access.
Keywords: LDCs; Market Access; Rules of Origin
JEL Codes: F13; F15
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Doha Round negotiations (F13) | LDCs' effective market access in the EU (F15) |
| Doha Round negotiations (F13) | LDCs' effective market access in the US (F13) |
| 97% duty-free quota-free access rule (F13) | LDC exports (F19) |
| rules of origin (ROO) (F13) | market access for LDCs (O19) |
| complicated ROO (Y90) | effective market access for LDCs (F13) |
| FTAs established by the US and EU (F15) | effective market access for LDCs (F13) |
| Doha Round negotiations (F13) | LDCs' preferential margin in the EU market (F14) |
| preferential access to non-LDCs (O19) | effective market access for LDCs (F13) |