Working Papers, Department of Economics, Lund University
EU Trade Preferences and Export Diversification
() and Fredrik Wilhelmsson
Abstract: Since at least the 1960s, the European Union (EU) has
offered various kinds of non-reciprocal trade preferences for developing
countries. Originally, these trade preferences had at least two policy
goals: (i) to increase export volumes for developing countries and thereby
boost their export earnings, and (ii) to facilitate export diversification.
While extensive research has confirmed that the first of these goals is
typically met, the second goal seems to have been largely forgotten by
researchers as well as in policy circles. The aim of this paper is
therefore to analyse the impact of the EUís non-reciprocal trade
preferences for developing countries on export diversification. Our
estimation results suggest that some trade preference programs, such as the
Generalised Scheme of Preferences (GSP), are associated with increasing
ranges of export products. By contrast, preferences offered to
Mediterranean countries typically have no significant effects, and African,
Caribbean and Pacific (ACP) preferences actually have negative effects
toward the end of our time period, suggesting that ACP countries may
respond to preferences by specializing into fewer goods.
Keywords: Export diversification; non-reciprocal trade preferences; GSP; ACP; EU; (follow links to similar papers)
JEL-Codes: F13; F15; O24; (follow links to similar papers)
31 pages, September 17, 2013
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