Rethinking Trade Preferences: How Africa can Diversify its Exports

20 Pages Posted: 29 Jul 2007

See all articles by Paul Collier

Paul Collier

University of Oxford - Blavatnik School of Government

Anthony J. Venables

University of Oxford; Centre for Economic Policy Research (CEPR)

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Abstract

This paper argues that the contribution of trade preferences to economic development needs to be reappraised in light of the growth of globalised 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.

Suggested Citation

Collier, Paul and Venables, Anthony J., Rethinking Trade Preferences: How Africa can Diversify its Exports. The World Economy, Vol. 30, No. 8, pp. 1326-1345, August 2007. Available at SSRN: https://ssrn.com/abstract=1003464 or http://dx.doi.org/10.1111/j.1467-9701.2007.01042.x

Paul Collier (Contact Author)

University of Oxford - Blavatnik School of Government ( email )

10 Merton St
Oxford, Oxfordshire OX1 4JJ
United Kingdom

Anthony J. Venables

University of Oxford ( email )

Mansfield Road
Oxford, Oxfordshire OX1 4AU
United Kingdom

Centre for Economic Policy Research (CEPR)

London
United Kingdom

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