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Abstract

Evidence on the efficacy of development-oriented non-reciprocal trade preferences (NRTPs) in promoting the exports of agricultural and food products from preference beneficiaries to preference donors has been mixed. We investigate the impacts of NRTPs on such trade in a structural gravity setting at a highly disaggregated product level. To this end, we compile a detailed dataset on bilateral trade and tariffs for 23 individual agricultural commodities prominent in developing countries’ export baskets, which together accounted for roughly $519 billion of trade as of 2018. Based on estimates from our commodity-level structural gravity model, we utilize the structural foundation of the gravity framework to quantify the trade impacts of such preference schemes in a counterfactual simulation analysis. The results of this analysis show that NRTPs were responsible for around $1.4 billion in expanded exports from NRTP beneficiary countries to donor countries as of 2018, with significant heterogeneity in the countries and commodities that undergo the largest impacts.

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