Price Effects of Preferential Market Access : Caribbean Basin Initiative and the Apparel Sector

Ouml ; zden, Ç ; aglar ; Sharma, Gunjan

Oxford University Press on behalf of the World Bank

关键词: AGRICULTURE;    APPAREL;    APPAREL EXPORTS;    APPAREL MARKET;    APPAREL PREFERENCES;   

DOI  :  10.1093/wber/lhj008
RP-ID  :  77520

学科分类：社会科学、人文和艺术（综合）

来源: World Bank Open Knowledge Repository

【 摘 要 】

Preferential trade arrangements shouldbe evaluated by their effect on prices rather than by theireffect on the total value of trade. This point is emphasizedin the theoretical literature but rarely implementedempirically. This article analyzes the U.S. Caribbean BasinInitiative's (CBI's) impact on the prices receivedby eligible apparel exporters. The CBI's apparelpreferences are the most important and heavily usedunilateral preferences because of high trade barriersimposed on exports from the rest of the world. A fixedeffect generalized least squares (GLS) estimation is used toisolate the effects of other factors (such as quality,exchange rates, and transaction costs) and to identify theeffects of tariff preferences. CBI exporters capture onlyabout two-thirds of their preference margin despite the highdegree of competition among importers. This translates intoa 9 percent increase in the relative prices they receive,with some variance across countries and years. Countriesspecializing in higher value items capture more of thepreference margin, and the implementation of the NorthAmerican Free Trade Agreement (NAFTA) has a negative effect.Removing multifibre arrangement quotas significantly lowersthe benefits of CBI preferences.