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Preferential Tariff Formation -- The Case of the United States

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Abstract

This paper addresses the impact of Multilateral Trade Liberalisation (MTL) on the preferential tariffs granted by the United States. For a given MFN tariff, we model the preferential tariff with a simple linear functional form. We take MTL of the US as known to the world by the end of Uruguay Round in 1994 and estimate its impact on preferential tariff negotiations during 1995 to 2007. We use a three dimensional panel data, which takes into account the partner, product and time variation of the data-set. To complete our data-set, we codify eight PTA legal agreements. We draw three important conclusions. First, the products that are highly protected do not get high preferential access even at the regional level. Second, reciprocity plays only a limited role in granting better preferential access. Third, irrespective of development level of the partner, the non-reciprocal GSP preferences always matter.

Suggested Citation

  • Vivek Joshi, 2010. "Preferential Tariff Formation -- The Case of the United States," IHEID Working Papers 06-2010, Economics Section, The Graduate Institute of International Studies, revised Mar 2010.
    • Handle: RePEc:gii:giihei:heidwp06-2010
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    References listed on IDEAS

    as
    1. Hummels, David, 1999. "Toward a Geography of Trade Costs," GTAP Working Papers 1162, Center for Global Trade Analysis, Department of Agricultural Economics, Purdue University.
    2. Nuno Limão, 2018. "Preferential Trade Agreements as Stumbling Blocks for Multilateral Trade Liberalization: Evidence for the United States," World Scientific Book Chapters, in: Policy Externalities and International Trade Agreements, chapter 13, pages 353-371, World Scientific Publishing Co. Pte. Ltd..
    3. Hummels, David, 1999. "Toward a Geography of Trade Costs," Working papers 283448, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    4. J. M. C. Santos Silva & Silvana Tenreyro, 2006. "The Log of Gravity," The Review of Economics and Statistics, MIT Press, vol. 88(4), pages 641-658, November.
    5. Limão, Nuno, 2006. "Preferential vs. multilateral trade liberalization: evidence and open questions," World Trade Review, Cambridge University Press, vol. 5(2), pages 155-176, July.
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    More about this item

    Keywords

    MFN tariffs; preferential tariffs; reciprocity; GSP;
    All these keywords.

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F15 - International Economics - - Trade - - - Economic Integration

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    This paper has been announced in the following NEP Reports:

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