Aiello, Francesco and Demaria, Federica (2009): Do trade preferential agreements enhance the exports of developing countries? Evidence from the EU GSP.
Download (306kB) | Preview
The EU grants preferential access to its imports from developing countries under several trade agreements. The widest arrangement, in terms of country and product coverage, is the Generalised System of Preferences (GSP) through which, since 1971, virtually all developing countries have received preferential treatment when exporting to world markets. This paper evaluates the impact of GSP in enhancing developing countries’ exports to EU markets. It is based on the estimation of a gravity model for a sample of 769 products exported from 169 countries to EU over the period 2001-2004. While, from an econometric point of view, the estimation methods take into account unobservable country heterogeneity as well as the potential selection bias which zero-trade values pose, the empirical setting considers an explicit measure of trade preferences, the margin of preferences. The analysis offers new empirical evidence that the impact of GSP on developing countries’ agricultural exports to the EU is positive.
|Item Type:||MPRA Paper|
|Original Title:||Do trade preferential agreements enhance the exports of developing countries? Evidence from the EU GSP|
|Keywords:||Trade Preferences, Developing Countries, Agricultural Trade|
|Subjects:||F - International Economics > F1 - Trade > F13 - Trade Policy; International Trade Organizations
C - Mathematical and Quantitative Methods > C3 - Multiple or Simultaneous Equation Models; Multiple Variables > C33 - Models with Panel Data; Longitudinal Data; Spatial Time Series
|Depositing User:||Aiello Francesco|
|Date Deposited:||18. Jan 2010 10:56|
|Last Modified:||13. Feb 2013 03:44|
Agostino M., Aiello F., and Cardamone P. (2008). “Evaluating the Impact of Non-Reciprocal Trade Preferences Using Gravity Models”. Applied Economics, DOI: 10.1080/00036840802314614
Anderson, J. E., and Neary, J. P. (2005). Measuring the Restrictiveness of International Trade Policy. MIT Press, New York.
Anderson, J.E., and Van Wincoop E. (2003). “Gravity with Gravitas: a Solution to the Border Puzzle”, American Economic Review, 93(1), 170-192.
Anderson, J., and Van Wincoop, E. (2004). “Trade Costs”. Journal of Economic Literature, 42(3), 691–751.
Baltagi, B.H., Egger, P., and Pfaffermayr, M. (2003). “A Generalized Design for Bilatera1 Trade Flow Models”. Economic Letters, 80(3), 391-397.
Brenton, P. (2003). “Integrating The Least Developed Countries into the World Trade System: The Current Impact of EU Preferences Under Everything But Arms”. Journal of World Trade, 37(3), 623-46.
Brenton, P. and Ikezuki, T. (2005). "The Impact of Agricultural Trade Preferences, With Particular Attention to the Least-Developed Countries", in Global Agricultural Trade and Developing Countries, M. Ataman Aksoy and John C. Beghin (eds.), World Bank, Washington, DC.
Bureau, J-C., and Gallezot, J. (2004). “Assessment of Utilisation and Motives for Under-Utilisation of Preferences in Selected Least Developed Countries”, COM/AGR/TD/WP(2004)12/REV2, OECD, Paris.
Bureau, J.C., Chakir, R., Gallezot, J. (2007). The Utilisation of Trade Preferences for Developing Countries in the Agri-Food Sector. Journal of Agricultural Economics, 58(2), 175–198.
Burger, M., Van Oort, F., Linders, G.J. (2009), On the Specification of the Gravity Model of Trade: Zeros, Excess Zeros and Zero-Inflated Estimation. Spatial Economic Analysis, 4(2), 167-190.
Candau, F., and Jean S. (2005). What are the EU preferences worth for Sub-Saharan Africa and other developing countries. CEPII WP 2005-19.
Cardamone, P. (2009). Preferential Trade Agreements Granted by the European Union: an Application of the Gravity Model Using Monthly data. PUE&PIEC WP09/6 (http://www.ecostat.unical.it/anania/PUE&PIEC%20Working%20Papers.htm)
Carrère , C. (2004). “Revisiting the Effects of Regional Trade Agreements on Trade Flows with Proper Specification of the Gravity Model”. European Economic Review, 50(2), 223-247.
Cipollina, M., Salvatici, L. (2007). “EU and Developing Countries: an Analysis of Preferential Margins on Agricultural Trade Flows.” TradeAg Project WP 07/11.
Cipollina, M., Salvatici, L. (2008). “Measuring protection: mission impossible?” Journal of Economic Surveys, 22(3), 577-616.
Demaria, F., Droguè. S., and Matthews, A. (2008). “Agro-food Preferences in the EU’s GSP Scheme: an Analysis of Changes Between 2004 and 2006”. Development Policy Review, 26(6), 693-712.
Egger, P., and Pfaffermayr, M. (2003). “The Proper Panel Econometric Specification of the Gravity Equation: A Three-Way Model with Bilateral Interaction Effects”. Empirical Economics, 28(3), 571–580.
Emlinger, C., Chevasuss Lozza, E., and Jacquet, F. (2009). “Tariffs and other trade costs: Assessing obstacles to Mediterranean countries' access to EU15 fruit and vegetable markets” European Review of Agricultural Economics, 35(4), 409-438.
European Commission (2009). The EU Scheme of Generalized System of Preferences. New EC Regulation No. 732/2008. http://ec.europa.eu/trade/wider-agenda/development/generalised-system-of-preferences/#_regulations
Haveman, J., and Hummels, D. (2004). “Alternative Hypotheses and the Volume of Trade: The gravity equation and the extent of specialization”. Canadian Journal of Economics, 37(1), 199–218.
Helpman, E., Melitz, M., Rubinstein, Y. (2008). Estimating trade flows: Trading Partners and Trading Volumes. The Quarterly Journal of Economics, 123(2), 441-487
Hoekman B., F. NG and M. Olarreaga (2001). “Eliminating Excessive Tariffs on Exports of Least Developed Countries”, World Bank Policy Research, WP 2604.
Inama, S. (2004). “Trade Preferences and the World Trade Organization Negotiations on Market Access”. Journal of World Trade, 37(5), 959-76
Manchin, M. (2005). “Preferences Utilization and Tariff Reduction in EU Imports from ACP Countries”, The World Economy, 29 (9), 1243-1266.
Martinez-Zarzoso, I., NowakLehmann, F., and Vollmer, S. (2007). “The Log of Gravity Revisited” . CeGE Discussion Papers 64, University of Goettingen, Germany.
Martin, W., and Pham, C. S., (2008). "Estimating the Gravity Equation when Zero Trade Flows are Frequent," MPRA Paper 9453, University Library of Munich, Germany.
Nilsson, L. (2002).“Is The Roadmap from Lome to Cotonou Correct?” Applied Economics, 34 (11), 439-452.
OECD (2005). Preferential Trading Arrangements in Agricultural and Food Markets: The case of the European Union and the United States, Paris, ISBN 92-64-00932-9.
Oguledo, V.I., and MacPhee, C.R. (1994). “Gravity Models: a Reformulation and an Application to Discriminatory Trade Arrangements”. Applied Econometrics, 26(2), 107-120.
Persson, M. (2005). “Everything But Drugs. Export Effects of the European Union Trade Preferences for Drug producing and Least Developed Countries”, mimeo, Lund University (http://www.snee.org/publikationer_show.asp?id=251).
Persson, M,. and Wilhelsson, F. (2007). “Assessing the Effects of EU Trade Preferences for Developing Countries.” Paper presented at the ETSG annual meeting, Dublin, Ireland.
Pishbahar, E., and Huchet-Bourdon, M. (2009). “European Union’s Preferential Trade Agreements in Agricultural Sector: a gravity approach” AgFoodTrade WP 2009-05.
Santos Silva, J., Tenreyro, S. (2006). The Log of Gravity. The Review of Economics and Statistics, 88 (4), 641-658.
Santos Silva, J., Tenreyro, S. (2009). Further Simulation Evidence of the Performance of the Poisson Pseudo Maximum Likelihood Estimator, CEP Discussion Paper #933, London School of Economics, London.
Sapir, A. (1981). Trade Benefits Under the EEC Generalized System of Preferences. European Economic Review, 15, 339–55.
Serlenga, L., and Shin, Y. (2007). “Gravity Models of Intra-EU Trade: Application of the CCEP-HT Estimation in Heterogeneous Panels with Unobserved Common Time-specific Factors". Journal of Applied Econometrics, 22 (2), 361-81.
Stevens, C., and Kennan, J. (2004). “Comparative study of G8 preferential access schemes for Africa”. DFID-commissioned Study. Institute of Development Studies. April 2004.
Subramanian, A. and Wei, S. J. (2007). The WTO Promotes Trade, Strongly but Unevenly,. Journal of International Economics, 72(1), 151–175.
Tangermann, S. (2002). “The Future of Preferential Trade Agreements for Developing Countries and The Current Round of WTO Negotiations on Agriculture”. FAO Geneva Round, Discussion Paper #3.
Tinbergen, J. (1962). Shaping the World Economy: Suggestions for and International Economic. Policy The Twentieth Century Fund, New York.
Verdaja, L. (2006). “EU Preferential Trade Agreements with Developing Countries Revisited”. Mimeo, University of Nottingham (http://www.etsg.org/ETSG2005/papers/verdeja.pdf)
Wainio, J., Shapouri, S., Trueblood, M., and Gibson, P. (2005). “Agricultural Trade Preferences and the Developing Countries”. ERS-USDA Report #6.