Trade Preferences to Small Developing Countries and the Welfare Costs of Lost Multilateral Liberalization

Limã ; o, Nuno ; Olarreaga, Marcelo

Oxford University Press on behalf of the World Bank

关键词: ABSOLUTE VALUE;    ACCORDS;    AD VALOREM;    ADJUSTMENT ASSISTANCE;    AGRICULTURAL SECTOR;   

DOI  :  10.1093/wber/lhj013
RP-ID  :  77521

学科分类：社会科学、人文和艺术（综合）

来源: World Bank Open Knowledge Repository

【 摘 要 】

The proliferation of preferential tradeliberalization over the last 20 years has raised thequestion of whether it slows multilateral tradeliberalization. Recent theoretical and empirical evidenceindicates that this is the case even for unilateralpreferences that developed countries provide to small andpoor countries, but there is no estimate of the resultingwelfare costs. This stumbling block effect can be avoided byreplacing the unilateral preferences with a fixed importsubsidy, which generates a Pareto improvement. Moreimportantly, this paper presents the first estimates of thewelfare cost of preferential liberalization as a stumblingblock to multilateral liberalization. Recent estimates ofthe stumbling block effect of preferences with data for 170countries and more than 5,000 products are used to calculatethe welfare effects of the European Union, Japan, and theUnited States switching from unilateral preferences forleast developed countries to an import subsidy scheme. In amodel with no dynamic gains to trade, the switch produces anannual net welfare gain for the 170 countries that addsabout 10 percent to the estimated trade liberalization gainsin the Doha Round. It also generates gains for each group:the European Union, Japan, and the United States ($2,934million), least developed countries ($520 million), and therest of the world ($900 million).