Trade Diversion under Selective Preferential Market Access

Through its diverse trade preference schemes, the European Union provides different groups of developing countries with different degrees of market access. This paper is the first to demonstrate empirically that such staggered market access induces...

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Main Author:	Borchert, Ingo
Format:	Policy Research Working Paper
Language:	English
Published:	World Bank, Washington, DC 2012
Subjects:	ACCORDS ACCOUNTING AD VALOREM AGRICULTURAL PRODUCTS APPAREL BALANCE OF PAYMENTS BANK POLICY BENEFICIARIES BENEFICIARY BILATERAL IMPORTS BUDGET CONSTRAINT CHECKS COMPARATIVE ADVANTAGE COMPARATIVE DISADVANTAGE COUNTRY × TARIFF CUSTOMS CUSTOMS UNION DERIVATIVE DEVELOPED COUNTRIES DEVELOPING COUNTRIES DEVELOPING COUNTRY DIFFERENTIAL TREATMENT DISCRIMINATORY MANNER DISPUTE SETTLEMENT DISPUTE SETTLEMENT SYSTEM DUMMY VARIABLES ELASTICITY OF SUBSTITUTION EQUIPMENT EUROPEAN UNION EXPENDITURE EXPORT OPPORTUNITIES EXPORT PERFORMANCE EXPORT VOLUME EXPORT VOLUMES EXPORTERS EXPORTING COUNTRY EXPORTS FINAL GOODS FREE MARKET ACCESS FREE TRADE FREE TRADE AGREEMENT GENERAL EQUILIBRIUM GENERALIZED SYSTEM OF PREFERENCES GLOBALIZATION IMPACT OF TRADE IMPACT OF TRADE DIVERSION IMPORT STATISTICS IMPORTING COUNTRIES IMPORTING COUNTRY INDUSTRIAL PRODUCTS INTERNATIONAL BANK INTERNATIONAL ECONOMIC LAW INTERNATIONAL ECONOMICS INTERNATIONAL TRADE INTERNATIONAL TRADE COMMISSION MEMBER COUNTRIES MULTILATERAL TRADE LIBERALIZATION NATIONAL INCOME NON-TARIFF BARRIERS OPTIMAL TARIFFS PACIFIC REGION PATTERN OF TRADE POLICY RESEARCH POSITIVE COEFFICIENT PREFERENTIAL MARGINS PREFERENTIAL MARKET ACCESS PREFERENTIAL RATE PREFERENTIAL REGIME PREFERENTIAL TARIFF PREFERENTIAL TARIFF RATE PREFERENTIAL TARIFFS PREFERENTIAL TRADE PREFERENTIAL TRADE ARRANGEMENTS PREFERENTIAL TREATMENT PRICE CHANGES PRICE INDEX PRICE SENSITIVITY PRODUCT DIFFERENTIATION PROTECTIONISM QUANTITATIVE RESTRICTIONS RECIPROCITY REGIONALISM RETURNS RULES OF ORIGIN SOURCING SPECIALIZATION SUSTAINABLE DEVELOPMENT TARIFF BARRIERS TARIFF CHANGES TARIFF DATA TARIFF EQUIVALENTS TARIFF LINE TARIFF LINES TARIFF PREFERENCES TARIFF RATE TARIFF RATES TARIFF REDUCTIONS TARIFF SCHEDULE TARIFF SCHEDULES TARIFF TREATMENT TERMS OF TRADE TERMS OF TRADE EFFECT TERMS OF TRADE EFFECTS TRADE AGREEMENT TRADE AGREEMENTS TRADE BARRIERS TRADE CONCESSIONS TRADE COSTS TRADE CREATING TRADE CREATION TRADE DATA TRADE DISTORTIONS TRADE DIVERSION TRADE EFFECT TRADE FLOWS TRADE LIBERALISATION TRADE POLICIES TRADE POLICY TRADE PREFERENCE TRADE PREFERENCES TRADE REDUCTION TRADE VOLUME TRADE VOLUMES TRADING TRANSPORT COSTS TREATY UNDUE INFLUENCE VOLUME OF TRADE WORLD MARKETS WORLD TRADE WORLD TRADE ORGANIZATION
Online Access:	http://documents.worldbank.org/curated/en/2008/09/9820612/trade-diversion-under-selective-preferential-market-access http://hdl.handle.net/10986/6991

id	okr-10986-6991
recordtype	oai_dc
spelling	okr-10986-69912021-04-23T14:02:32Z Trade Diversion under Selective Preferential Market Access Borchert, Ingo ACCORDS ACCOUNTING AD VALOREM AGRICULTURAL PRODUCTS APPAREL BALANCE OF PAYMENTS BANK POLICY BENEFICIARIES BENEFICIARY BILATERAL IMPORTS BUDGET CONSTRAINT CHECKS COMPARATIVE ADVANTAGE COMPARATIVE DISADVANTAGE COUNTRY × TARIFF CUSTOMS CUSTOMS UNION DERIVATIVE DEVELOPED COUNTRIES DEVELOPING COUNTRIES DEVELOPING COUNTRY DIFFERENTIAL TREATMENT DISCRIMINATORY MANNER DISPUTE SETTLEMENT DISPUTE SETTLEMENT SYSTEM DUMMY VARIABLES ELASTICITY OF SUBSTITUTION EQUIPMENT EUROPEAN UNION EXPENDITURE EXPORT OPPORTUNITIES EXPORT PERFORMANCE EXPORT VOLUME EXPORT VOLUMES EXPORTERS EXPORTING COUNTRY EXPORTS FINAL GOODS FREE MARKET ACCESS FREE TRADE FREE TRADE AGREEMENT GENERAL EQUILIBRIUM GENERALIZED SYSTEM OF PREFERENCES GLOBALIZATION IMPACT OF TRADE IMPACT OF TRADE DIVERSION IMPORT STATISTICS IMPORTING COUNTRIES IMPORTING COUNTRY INDUSTRIAL PRODUCTS INTERNATIONAL BANK INTERNATIONAL ECONOMIC LAW INTERNATIONAL ECONOMICS INTERNATIONAL TRADE INTERNATIONAL TRADE COMMISSION MEMBER COUNTRIES MULTILATERAL TRADE LIBERALIZATION NATIONAL INCOME NON-TARIFF BARRIERS OPTIMAL TARIFFS PACIFIC REGION PATTERN OF TRADE POLICY RESEARCH POSITIVE COEFFICIENT PREFERENTIAL MARGINS PREFERENTIAL MARKET ACCESS PREFERENTIAL RATE PREFERENTIAL REGIME PREFERENTIAL TARIFF PREFERENTIAL TARIFF RATE PREFERENTIAL TARIFFS PREFERENTIAL TRADE PREFERENTIAL TRADE ARRANGEMENTS PREFERENTIAL TREATMENT PRICE CHANGES PRICE INDEX PRICE SENSITIVITY PRODUCT DIFFERENTIATION PROTECTIONISM QUANTITATIVE RESTRICTIONS RECIPROCITY REGIONALISM RETURNS RULES OF ORIGIN SOURCING SPECIALIZATION SUSTAINABLE DEVELOPMENT TARIFF BARRIERS TARIFF CHANGES TARIFF DATA TARIFF EQUIVALENTS TARIFF LINE TARIFF LINES TARIFF PREFERENCES TARIFF RATE TARIFF RATES TARIFF REDUCTIONS TARIFF SCHEDULE TARIFF SCHEDULES TARIFF TREATMENT TERMS OF TRADE TERMS OF TRADE EFFECT TERMS OF TRADE EFFECTS TRADE AGREEMENT TRADE AGREEMENTS TRADE BARRIERS TRADE CONCESSIONS TRADE COSTS TRADE CREATING TRADE CREATION TRADE DATA TRADE DISTORTIONS TRADE DIVERSION TRADE EFFECT TRADE FLOWS TRADE LIBERALISATION TRADE POLICIES TRADE POLICY TRADE PREFERENCE TRADE PREFERENCES TRADE REDUCTION TRADE VOLUME TRADE VOLUMES TRADING TRANSPORT COSTS TREATY UNDUE INFLUENCE VOLUME OF TRADE WORLD MARKETS WORLD TRADE WORLD TRADE ORGANIZATION Through its diverse trade preference schemes, the European Union provides different groups of developing countries with different degrees of market access. This paper is the first to demonstrate empirically that such staggered market access induces sizable trade diversion to the detriment of relatively less preferred beneficiary countries. In particular, preferences granted to African, Caribbean and Pacific economies are shown to impair the export performance of seven developing countries whose products only qualify for basic preferences under the Generalized System of Preferences. Exports to the European Union decline by about 30 percent if the African, Caribbean and Pacific tariff falls by 10 percentage points. In terms of forgone trade volume, losses for these relatively disadvantaged countries amount on average to 9 percent of their total trade with the European Union, depending on the country and its main exports. These intra-developing country distortions are driven by highly substitutable, often labor-intensive commodities. 2012-06-04T15:51:40Z 2012-06-04T15:51:40Z 2008-09 http://documents.worldbank.org/curated/en/2008/09/9820612/trade-diversion-under-selective-preferential-market-access http://hdl.handle.net/10986/6991 English Policy Research Working Paper No. 4710 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank World Bank, Washington, DC Publications & Research :: Policy Research Working Paper Publications & Research
repository_type	Digital Repository
institution_category	Foreign Institution
institution	Digital Repositories
building	World Bank Open Knowledge Repository
collection	World Bank
language	English
topic	ACCORDS ACCOUNTING AD VALOREM AGRICULTURAL PRODUCTS APPAREL BALANCE OF PAYMENTS BANK POLICY BENEFICIARIES BENEFICIARY BILATERAL IMPORTS BUDGET CONSTRAINT CHECKS COMPARATIVE ADVANTAGE COMPARATIVE DISADVANTAGE COUNTRY × TARIFF CUSTOMS CUSTOMS UNION DERIVATIVE DEVELOPED COUNTRIES DEVELOPING COUNTRIES DEVELOPING COUNTRY DIFFERENTIAL TREATMENT DISCRIMINATORY MANNER DISPUTE SETTLEMENT DISPUTE SETTLEMENT SYSTEM DUMMY VARIABLES ELASTICITY OF SUBSTITUTION EQUIPMENT EUROPEAN UNION EXPENDITURE EXPORT OPPORTUNITIES EXPORT PERFORMANCE EXPORT VOLUME EXPORT VOLUMES EXPORTERS EXPORTING COUNTRY EXPORTS FINAL GOODS FREE MARKET ACCESS FREE TRADE FREE TRADE AGREEMENT GENERAL EQUILIBRIUM GENERALIZED SYSTEM OF PREFERENCES GLOBALIZATION IMPACT OF TRADE IMPACT OF TRADE DIVERSION IMPORT STATISTICS IMPORTING COUNTRIES IMPORTING COUNTRY INDUSTRIAL PRODUCTS INTERNATIONAL BANK INTERNATIONAL ECONOMIC LAW INTERNATIONAL ECONOMICS INTERNATIONAL TRADE INTERNATIONAL TRADE COMMISSION MEMBER COUNTRIES MULTILATERAL TRADE LIBERALIZATION NATIONAL INCOME NON-TARIFF BARRIERS OPTIMAL TARIFFS PACIFIC REGION PATTERN OF TRADE POLICY RESEARCH POSITIVE COEFFICIENT PREFERENTIAL MARGINS PREFERENTIAL MARKET ACCESS PREFERENTIAL RATE PREFERENTIAL REGIME PREFERENTIAL TARIFF PREFERENTIAL TARIFF RATE PREFERENTIAL TARIFFS PREFERENTIAL TRADE PREFERENTIAL TRADE ARRANGEMENTS PREFERENTIAL TREATMENT PRICE CHANGES PRICE INDEX PRICE SENSITIVITY PRODUCT DIFFERENTIATION PROTECTIONISM QUANTITATIVE RESTRICTIONS RECIPROCITY REGIONALISM RETURNS RULES OF ORIGIN SOURCING SPECIALIZATION SUSTAINABLE DEVELOPMENT TARIFF BARRIERS TARIFF CHANGES TARIFF DATA TARIFF EQUIVALENTS TARIFF LINE TARIFF LINES TARIFF PREFERENCES TARIFF RATE TARIFF RATES TARIFF REDUCTIONS TARIFF SCHEDULE TARIFF SCHEDULES TARIFF TREATMENT TERMS OF TRADE TERMS OF TRADE EFFECT TERMS OF TRADE EFFECTS TRADE AGREEMENT TRADE AGREEMENTS TRADE BARRIERS TRADE CONCESSIONS TRADE COSTS TRADE CREATING TRADE CREATION TRADE DATA TRADE DISTORTIONS TRADE DIVERSION TRADE EFFECT TRADE FLOWS TRADE LIBERALISATION TRADE POLICIES TRADE POLICY TRADE PREFERENCE TRADE PREFERENCES TRADE REDUCTION TRADE VOLUME TRADE VOLUMES TRADING TRANSPORT COSTS TREATY UNDUE INFLUENCE VOLUME OF TRADE WORLD MARKETS WORLD TRADE WORLD TRADE ORGANIZATION
spellingShingle	ACCORDS ACCOUNTING AD VALOREM AGRICULTURAL PRODUCTS APPAREL BALANCE OF PAYMENTS BANK POLICY BENEFICIARIES BENEFICIARY BILATERAL IMPORTS BUDGET CONSTRAINT CHECKS COMPARATIVE ADVANTAGE COMPARATIVE DISADVANTAGE COUNTRY × TARIFF CUSTOMS CUSTOMS UNION DERIVATIVE DEVELOPED COUNTRIES DEVELOPING COUNTRIES DEVELOPING COUNTRY DIFFERENTIAL TREATMENT DISCRIMINATORY MANNER DISPUTE SETTLEMENT DISPUTE SETTLEMENT SYSTEM DUMMY VARIABLES ELASTICITY OF SUBSTITUTION EQUIPMENT EUROPEAN UNION EXPENDITURE EXPORT OPPORTUNITIES EXPORT PERFORMANCE EXPORT VOLUME EXPORT VOLUMES EXPORTERS EXPORTING COUNTRY EXPORTS FINAL GOODS FREE MARKET ACCESS FREE TRADE FREE TRADE AGREEMENT GENERAL EQUILIBRIUM GENERALIZED SYSTEM OF PREFERENCES GLOBALIZATION IMPACT OF TRADE IMPACT OF TRADE DIVERSION IMPORT STATISTICS IMPORTING COUNTRIES IMPORTING COUNTRY INDUSTRIAL PRODUCTS INTERNATIONAL BANK INTERNATIONAL ECONOMIC LAW INTERNATIONAL ECONOMICS INTERNATIONAL TRADE INTERNATIONAL TRADE COMMISSION MEMBER COUNTRIES MULTILATERAL TRADE LIBERALIZATION NATIONAL INCOME NON-TARIFF BARRIERS OPTIMAL TARIFFS PACIFIC REGION PATTERN OF TRADE POLICY RESEARCH POSITIVE COEFFICIENT PREFERENTIAL MARGINS PREFERENTIAL MARKET ACCESS PREFERENTIAL RATE PREFERENTIAL REGIME PREFERENTIAL TARIFF PREFERENTIAL TARIFF RATE PREFERENTIAL TARIFFS PREFERENTIAL TRADE PREFERENTIAL TRADE ARRANGEMENTS PREFERENTIAL TREATMENT PRICE CHANGES PRICE INDEX PRICE SENSITIVITY PRODUCT DIFFERENTIATION PROTECTIONISM QUANTITATIVE RESTRICTIONS RECIPROCITY REGIONALISM RETURNS RULES OF ORIGIN SOURCING SPECIALIZATION SUSTAINABLE DEVELOPMENT TARIFF BARRIERS TARIFF CHANGES TARIFF DATA TARIFF EQUIVALENTS TARIFF LINE TARIFF LINES TARIFF PREFERENCES TARIFF RATE TARIFF RATES TARIFF REDUCTIONS TARIFF SCHEDULE TARIFF SCHEDULES TARIFF TREATMENT TERMS OF TRADE TERMS OF TRADE EFFECT TERMS OF TRADE EFFECTS TRADE AGREEMENT TRADE AGREEMENTS TRADE BARRIERS TRADE CONCESSIONS TRADE COSTS TRADE CREATING TRADE CREATION TRADE DATA TRADE DISTORTIONS TRADE DIVERSION TRADE EFFECT TRADE FLOWS TRADE LIBERALISATION TRADE POLICIES TRADE POLICY TRADE PREFERENCE TRADE PREFERENCES TRADE REDUCTION TRADE VOLUME TRADE VOLUMES TRADING TRANSPORT COSTS TREATY UNDUE INFLUENCE VOLUME OF TRADE WORLD MARKETS WORLD TRADE WORLD TRADE ORGANIZATION Borchert, Ingo Trade Diversion under Selective Preferential Market Access
relation	Policy Research Working Paper No. 4710
description	Through its diverse trade preference schemes, the European Union provides different groups of developing countries with different degrees of market access. This paper is the first to demonstrate empirically that such staggered market access induces sizable trade diversion to the detriment of relatively less preferred beneficiary countries. In particular, preferences granted to African, Caribbean and Pacific economies are shown to impair the export performance of seven developing countries whose products only qualify for basic preferences under the Generalized System of Preferences. Exports to the European Union decline by about 30 percent if the African, Caribbean and Pacific tariff falls by 10 percentage points. In terms of forgone trade volume, losses for these relatively disadvantaged countries amount on average to 9 percent of their total trade with the European Union, depending on the country and its main exports. These intra-developing country distortions are driven by highly substitutable, often labor-intensive commodities.
format	Publications & Research :: Policy Research Working Paper
author	Borchert, Ingo
author_facet	Borchert, Ingo
author_sort	Borchert, Ingo
title	Trade Diversion under Selective Preferential Market Access
title_short	Trade Diversion under Selective Preferential Market Access
title_full	Trade Diversion under Selective Preferential Market Access
title_fullStr	Trade Diversion under Selective Preferential Market Access
title_full_unstemmed	Trade Diversion under Selective Preferential Market Access
title_sort	trade diversion under selective preferential market access
publisher	World Bank, Washington, DC
publishDate	2012
url	http://documents.worldbank.org/curated/en/2008/09/9820612/trade-diversion-under-selective-preferential-market-access http://hdl.handle.net/10986/6991
_version_	1764401214568529920

Trade Diversion under Selective Preferential Market Access

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