Developed Country Trade Barriers and the Least Developed Countries : The Economic Results of Freeing Trade

The Doha Ministerial Declaration emphasized that priority should be given to improving market access for products originating in the Least Developed Countries. In this paper, we analyze the importance of this proposition with respect to market access in the Triad economies. We first present a brief history of non-reciprocal preferences granted by the Triad. This covers GSP programs in each, and further preferences granted to ACP countries by the EU and preferences granted to Caribbean Basin, Andean, and African countries by the United States. This history is followed by an assessment of trade generated by these preferences in the year 2000, and of the extent to which LDC exports might be expected to increase should the preferences be made comprehensive. Preferences in 2000 are shown to have led to an increase of $3.5 billion in LDC exports, while a complete duty-free treatment could expand LDC exports by as much as $7.6 billion, 90 percent of which will be absorbed by the United States. As this represents a doubling of LDC exports to these countries, we interpret these results as an endorsement of this priority in the Doha Round of negotiations