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Type: Journal article
Title: Preference Erosion and Multilateral Trade Liberalization
Author: Francois, J.
Hoekman, B.
Manchin, M.
Citation: World Bank Economic Review, 2006; 20(2):197-216
Publisher: World Bank Publications
Issue Date: 2006
ISSN: 0258-6770
Statement of
Joseph Francois, Bernard Hoekman, and Miriam Manchin
Abstract: Because of concern that tariff reductions in Organisation for Economic Co-operation and Development (OECD) countries will translate into worsening export performance for the least developed countries, the erosion of trade preferences may become a stumbling block for multilateral trade liberalization. An econometric analysis of actual preference use shows that preferences are underused because of administrative burdens—estimated to be equivalent to an average of 4 percent of the value of goods traded. To quantify the maximum scope for preference erosion, the compliance cost estimates are used in a model-based assessment of the impact of full elimination of OECD tariffs. Taking into account administrative costs eliminates erosion costs in the aggregate and greatly reduces the losses for countries most affected by preference erosion.
Rights: © The Author 2006. Published by Oxford University Press on behalf of the International Bank for Reconstruction and Development / THE WORLD BANK. All rights reserved. For permissions, please e-mail:
RMID: 0020102253
DOI: 10.1093/wber/lhj010
Appears in Collections:Economics publications

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