IDEAS home Printed from https://ideas.repec.org/p/chb/bcchwp/280.html
   My bibliography  Save this paper

U.S. Trade Preferences: All are not Created Equal

Author

Listed:
  • Daniel Lederman
  • Çaglar Özden

Abstract

The United States imports around 25% of its merchandise under some form of preferential trade agreement. This paper examines the relative impacts of these programs on the value of imports from different trading partners. We address four technical but policy-relevant issues: (1) We consider not only country eligibility in assessing impact of various programs, but also the extent of utilization of these programs, which depends on the relevant rules of origin and other compliance costs. (2) Trade preferences are granted for non-economic motivations that are correlated with variables included in gravity models. We provide new estimates that control for this potential source of selection bias. (3) We provide new estimates of the impact of transport and transactions costs beyond distance. (4) Finally, we control the censoring of trade flows at zero which tends to bias estimates of key coefficients in gravity models. In the standard gravity estimation, we find that beneficiaries of these preferences, except the GSP, export between 2-3 times more than the excluded countries. However, these levels go down considerably when utilization ratios and selection biases are taken into account. These results are robust to the various estimation techniques as well as endogenous treatment and Heckman-selection estimates that control for the selection biases mentioned above.

Suggested Citation

  • Daniel Lederman & Çaglar Özden, 2004. "U.S. Trade Preferences: All are not Created Equal," Working Papers Central Bank of Chile 280, Central Bank of Chile.
  • Handle: RePEc:chb:bcchwp:280
    as

    Download full text from publisher

    File URL: https://www.bcentral.cl/documents/33528/133326/DTBC_280.pdf
    Download Restriction: no
    ---><---

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Sylvanus Kwaku Afesorgbor & Kaleb Girma Abreha, 2015. "Preferential Market Access, Foreign Aid and Economic Development," Economics Working Papers 2015-04, Department of Economics and Business Economics, Aarhus University.
    2. Agostino, Maria Rosaria & Aiello, Francesco & Cardamone, Paola, 2007. "Analyzing the Impact of Trade Preferences in Gravity Models. Does Aggregation Matter?," Working Papers 7294, TRADEAG - Agricultural Trade Agreements.
    3. Elisa Gamberoni, 2007. "Do unilateral trade preferences help export diversification? An investigation of the impact of European unilateral trade preferences on the extensive and intensive margin of trade," IHEID Working Papers 17-2007, Economics Section, The Graduate Institute of International Studies.
    4. Brenton, Paul & Ikezuki, Takako, 2004. "The initial and potential impact of preferential access to the U.S. market under the African Growth and Opportunity Act," Policy Research Working Paper Series 3262, The World Bank.
    5. Hoekman, Bernard & Ozden, Caglar, 2005. "Trade preferences and differential treatment of developing countries : a selective survey," Policy Research Working Paper Series 3566, The World Bank.
    6. Cardamone, Paola, 2007. "A Survey of the Assessments of the Effectiveness of Preferential Trade Agreements using Gravity Models," Economia Internazionale / International Economics, Camera di Commercio Industria Artigianato Agricoltura di Genova, vol. 60(4), pages 421-473.
    7. Maria Cipollina & Luca Salvatici, 2022. "The Dark Matter of Bilateral Preferential Margins: An Assessment of the Effect of US Tariffs," Sustainability, MDPI, vol. 14(8), pages 1-16, April.
    8. Cardamone, Paola & Scoppola, Margherita, 2012. "Trade costs and the pattern of Foreign Direct Investment: evidence from five EU countries," 2012 First Congress, June 4-5, 2012, Trento, Italy 124106, Italian Association of Agricultural and Applied Economics (AIEAA).
    9. Francesco Aiello & Paola Cardamone & Maria Rosaria Agostino, 2010. "Evaluating the impact of nonreciprocal trade preferences using gravity models," Applied Economics, Taylor & Francis Journals, vol. 42(29), pages 3745-3760.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:chb:bcchwp:280. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Alvaro Castillo (email available below). General contact details of provider: https://edirc.repec.org/data/bccgvcl.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.