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2007-06 The biggest losers (and winners) from U.S. trade liberalization

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posted on 2023-08-04, 07:40 authored by Kara ReynoldsKara Reynolds

Many development experts worry that continuing reductions of tariff levels in high-income countries will limit trade flows from developing countries that benefit from preferential trade programs because of “preference erosion.” Using a panel of U.S. import data between the years of 1997 and 2005, I find that reductions in preference margins will significantly diminish imports of some products, particularly from lowermiddle and low income countries; for example, a one percent reduction in the U.S. tariff on a product that is currently imported duty-free from developing countries will decrease imports of that product from lowermiddle countries by an average of 2.6 percent. However, many products produced by developing countries fail to qualify for preferential tariffs, thus a gradual reduction in all U.S. tariff rates is expected to have only a modest impact on trade flows from developing countries.

History

Publisher

American University (Washington, D.C.). Department of Economics

Language

English

Notes

Working Paper 2007-06. 33 pages.

Handle

http://hdl.handle.net/1961/4989

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