Eliminating Excessive Tariffs on Exports of Least Developed Countries

52 Pages Posted: 20 Apr 2016

See all articles by Bernard Hoekman

Bernard Hoekman

Robert Schuman Centre for Advanced Studies; European University Institute - Robert Schuman Centre for Advanced Studies (RSCAS); Centre for Economic Policy Research (CEPR)

Marcelo Olarreaga

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

Francis Ng

World Bank - Development Research Group (DECRG)

Multiple version iconThere are 2 versions of this paper

Date Written: May 2001

Abstract

Average most-favored-nation tariffs in the Quad (Canada, the European Union, Japan, and the United States) have fallen to about 5 percent. But tariffs more than three times the average most-favored-nation duty are not uncommon in the Quad and have a disproportionate effect on exports of least developed countries. Giving the poorest countries duty-free access for peak-tariff products would increase their total annual exports by roughly $2.5 billion.

Most goods imported from developing countries enter Quad markets duty-free, and average tariffs in Quad markets are very low. But tariffs for some commodities are over 100 percent. Such tariff peaks are often concentrated in products developing countries want to export: agricultural and food products - especially such staples as sugar, cereals, and fish; fruits and vegetables; food products with a high sugar content; and tobacco and alcoholic beverages - and products from such labor-intensive sectors as apparel and footwear.

Giving least developed countries full duty- and quota-free access in the Quad for peak-tariff products would increase their total annual exports by 11 percent - or roughly $2.5 billion. Exports to Quad countries of peak-tariff products would expand by 30-60 percent. Considering that peak-tariff items account for only a small share of developing countries' exports, granting least developed countries duty-free access would have only a negligible impact on other developing countries. For the same reason, Quad imports increase only marginally, suggesting that this factor should not constrain implementation of duty-free access for the poorest countries.

This paper - a product of Trade, Development Research Group - is part of a larger effort in the group to analyze impediments to developing country export growth.

Keywords: Market access, least developed countries, trade preferences

JEL Classification: F13, F14, O19

Suggested Citation

Hoekman, Bernard and Olarreaga, Marcelo and Ng, Francis, Eliminating Excessive Tariffs on Exports of Least Developed Countries (May 2001). World Bank Policy Research Working Paper No. 2604. Available at SSRN: https://ssrn.com/abstract=632673

Bernard Hoekman (Contact Author)

Robert Schuman Centre for Advanced Studies ( email )

Fiesole, Tuscany
Italy

European University Institute - Robert Schuman Centre for Advanced Studies (RSCAS) ( email )

Villa La Fonte, via delle Fontanelle 18
50016 San Domenico di Fiesole
Florence, Florence 50014
Italy

Centre for Economic Policy Research (CEPR)

London
United Kingdom

Marcelo Olarreaga

University of Geneva ( email )

40 Boulevard du Pont-d'Arve
Genève, CH - 1205
Switzerland

Centre for Economic Policy Research (CEPR) ( email )

London
United Kingdom

Francis Ng

World Bank - Development Research Group (DECRG) ( email )

1818 H. Street, N.W.
MSN3-311
Washington, DC 20433
United States
202-473-8088 (Phone)
202-522-1159 (Fax)

HOME PAGE: http://econ.worldbank.org/staff/fng

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