WORLD TRADE  
ORGANIZATION  TN/MA/S/1/Add.2 
1 November 2004 
 
 (04-4633) 
Negotiating Group on Market Access  
  
 
ANNOTATED SELECTIVE BIBLIOGRAPHY OF RESEARCH ON MARKET ACCESS 
 
Note by the Secretariat
 
 
Addendum  
 
 
 
  
 
  The attached annotated bibliography of r esearch in market access updates and complements 
documents TN/MA/S/1 and TN/MA/S/1/Add 1 by:  
• including studies on the various topics within the mandate of the Negotiating Group on 
Market Access which became ava ilable after September 2002, and  
• extending its coverage to recent studies of non-preferential market access. 
 The studies are listed under the four following headings:  
I.
 GENERAL........................................................................................................................ .........2  
II. STUDIES ON SPECIFIC REGIONS OR COUNTRIES....................................................11  
III. NON-RECIPROCAL PREFERENCES ...............................................................................19  
IV. NON TARIFF MEASURES...................................................................................................27  
 
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   This document has been prepa red under the Secretariat's own 
responsibility and without prejudice to the positions of Members 
and to their rights and obligations under the WTO TN/MA/S/1/Add.2 
Page 2  
 
 I. GENERAL  
Anderson, J.E., and J.P. Neary (2004) Welfare vs . Market Access: The Implications of Tariff 
Structure for Tariff Reform. NBER Working Paper No. 10730, Cambridge, MA: NBER.   
This paper shows that the effects of tariff ch anges on welfare and import volume can be fully 
characterized by their effects on the generalized mean and variance of the tariff distribution. Using 
this result, the authors consider welfare- and market-access-improving tariff changes, which imply 
two "cones of liberalization" in price space. Because welfare is negatively but import volume positively related to the generalized variance, th e cones do not intersect, which poses a dilemma for 
trade policy reform. Finally, they show that gene ralized and trade-weighted moments are mutually 
proportional when the trade expenditure function is CES. 
 
Anderson, K. (2003) Measuring Effects of Trad e Policy Distortions: How Far Have We Come ? 
The World Economy, vol. 26, pp. 413-440.  
After a brief review of the literature to the ear ly 1970s, this paper assesses the contributions by 
economists during the past three decades to measuring the distortionary effects of trade policies. It does not pretend to be a comprehensive survey, but draws on selections from the literature that give a 
sense of the distance the profession has travelled fr om a trade policy practitioner's viewpoint since 
Corden's first paper on the subject in 1957. Phenom enal though that progress has been, there is ample 
room for further improvement in computing the ec onomic (and other) effects of  trade-related policies 
and their reform. The paper concludes with sugges tions of where the priorities should be in global 
modelling of trade policy reform, as the world moves into the next round of multilateral trade 
negotiations. 
 
Anderson, K. (2004) The Challenge of Redu cing Subsidies and Trade Barriers, CEPR 
Discussion Paper no 4592, London: CEPR. 
 
This is one of ten studies for the Copenhagen Cons ensus Project that sought to evaluate the most 
feasible opportunities to improve welfare globally a nd alleviate poverty in developing countries. It 
argues that phasing out distortionary government s ubsidies and barriers to international trade will 
yield an extraordinarily high benefit/cost ratio. A su rvey is provided of recent estimates, using global 
economy wide simulation models, of the benefits  of doing that via the current Doha round of 
multilateral trade negotiations. Even if adjustment costs are several times as  large as suggested by 
available estimates, the benefit-cost ratio from sei zing this opportunity exceeds 20. That is much 
higher than the rewards from regional or bilatera l trade agreements or from providing preferential 
access for least-developed countries' exports to  high-income countries. Such reform would 
simultaneously contribute to alleviating several of  the other key challenges reflected in the United 
Nations' Millennium Development Goals. 
 
Benerjee, A. and A. Newman (2004) Inequality, Growth and Trade Policy. Mimeo. Cambridge, 
MA: MIT.  
In this paper, a simple model of international trade that takes factor market imperfections seriously is 
built and used to analyse the impact  of trade liberalization. This model is a variant of the standard 
Ricardo-Viner model and clearly resists classification along the “for or against Globalization” dimension, at least under their most naive interpreta tions. What it does say, rather emphatically, is that 
from the point of view of poor countries liberal trade policies offer a rather harsh trade-off: In the long 
run, growth may indeed benefit from liberalizing trad e but at the cost of much short-run displacement. 
 
  TN/MA/S/1/Add.2 
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 Cernat, L., S. Laird and A. Turrini (2003) Back to Basics: Market Acc ess Issues in the Doha 
Agenda. Division of International Trade in Goods and Services, and Commodities. Geneva: 
UNCTAD.  
The aim of this paper is that of going “back to basics”, focusing on issues of market access in 
merchandise trade that developing countries will f ace in the next negotiations. Data on patterns of 
trade and protection in agriculture and manufacturing are analysed, the main results of the Doha WTO 
ministerial meeting are reviewed, and the likely impact of several liberalisation scenarios are evaluated. The broad conclusion of the analysis is that for developing countries as a whole, the 
potential gains from improved market access in me rchandise trade could be sizable, but the size and 
the distribution of these gains depend much on the ex tent to which developing countries will be active 
in the liberalization process and on the ag reed negotiation targets and modalities. 
 
Cline, W.R. (2004) Trade Policy and Global Poverty, Washington, DC: Institute for 
International Economics. 
 This book provides a comprehensive analysis of the potential for trade liberalization to spur growth 
and reduce poverty in developing countries. It quan tifies the impact on global poverty of industrial-
country liberalization, as well as liberalization by the developing countries. Half or more of the annual gains from trade w ould come from the removal of industrial-country 
protection against developing-country exports. By removing their trade barriers, industrial countries 
could convey economic benefits to developing coun tries worth about twice the amount of their annual 
development assistance. By helping developing coun tries grow through trade, moreover, industrial 
countries could lower costs to consumers for impor ts and realize other ec onomic efficiencies. The 
study estimates that free trade could reduce the nu mber of people earning less than $2 per day by 
about 500 million over 15 years. This would cut the world poverty level by 25  percent. Cline judges 
that the developing countries were right to risk collapse of the Doha Round at the Cancún ministerial 
meeting in September 2003 by insisting on much deeper liberalization of agriculture than the 
industrial countries were then willing to offer. The study calls for a two-track strategy: first, deep 
multilateral liberalization involving phased but comp lete elimination of in dustrial-county protection 
and deep reduction of protection by at least the middle-income developing countries, albeit on a more 
gradual schedule; and second, immediate free en try for imports from “high risk” low-income 
countries (heavily indebted poor countries, least developed countries, a nd sub-Saharan Africa), 
coupled with a 10-year tax holiday for direct investment in these countries. 
 
 Cordoba, F.S., S. Laird and D. Vanzetti (2004) Trick or Treat? Development Opportunities and 
Challenges in the WTO Negotiations on I ndustrial Tariffs. Mimeo. Geneva: UNCTAD. 
 
Development is at the centre of the Doha Ministerial Declaration of the WTO, but delivery on the development promise hinges on the negotiated outcome  and cannot be taken fo r granted. Industrial 
tariffs are a key element of these negotiations and we re one of the more divisive factors, along with 
agriculture and the Singapore issues, at the WT O Cancun meeting in the late 2003. Important 
opportunities arise to address protection against developing countries exports. While the more 
ambitious proposals hold out hopes of greater exports  and welfare gains (and hence make a greater 
contribution to poverty reduction overall), these gains are not evenly spread across countries or sectors. Moreover, the main proposal do not fully resolve problems of tariff escalation and peaks. The 
more ambitious proposals also imply greater imports, lower revenues, some labour market 
adjustments and reduced output, threatening key sectors in some developing regions. Proposals that 
take greater account of the need for special and differential treatment for developing countries seem 
less threatening, but also bring less export opportunities and welfare gains. If some way could be found to assist developing countries in coping with th e likely adjustment, then the negotiations would 
seem a little less "Trick or Treat?"   TN/MA/S/1/Add.2 
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 Edmonds, E. and N. Pavcnik (2004) The Effect s of Trade Liberalization on Child Labor. 
Journal of International Economics, forthcoming.   
The question of how trade liberalization affects th e employment of children in developing economies 
is at the core of the debate on globalization. This  paper examines the relationship between changes in 
the relative price of an exported commodity and chil d labor. In particular, the authors relate child 
labor to regional and intertemporal variation in  the real price of rice surrounding national and 
international rice market integration in Vietnam. Th ey find that higher rice prices are associated with 
declines in child labor. Income effects play an importa nt role in this relationship. Rice price increases 
are associated with the largest d eclines in child labor in househol ds that are large net producers of 
rice. These findings show that greater market inte gration can be associated with less child labor. 
Moreover, their results suggest that the use of punitive trade sanctions on exports from developing countries to eradicate child labor is unlikely to yield the desired outcome. 
 
Erdem, E. and J. Tybout (2003) Trade Polic y and Industrial Sector Responses: Using 
Evolutionary Models to Interpret the Eviden ce. NBER working paper No.  9947, Cambridge, 
MA: NBER.  
Firm- and plant-level empirical studies typically find that trade liberalization squeezes price-cost 
margins among import-competing firms, that th is heightened competitive pressure induces 
productivity gains among these same firms, and that fu rther efficiency gains come from market share 
reallocations. Using a computable industrial evol ution model to simulate the dynamic effects of 
import competition, the authors explore what typ es of managerial behaviour, long-term transition 
paths and welfare effects are consistent with this set of stylized facts. 
 
Francois, J. and W. Martin (2003) Formula A pproaches for Market Access Negotiations. CEPR 
Discussion Paper No. 3720, London: CEPR. 
 
This paper surveys a range of formula options and ex amines both targeted and flexible applications of 
the Swiss formula that target tariff escalation and peaks, and would allow policymakers to directly 
target how far they will move towards free trade,  while providing some flexibility for trading off 
reductions in peak tariffs against reductions in lo wer-tariff sectors. The key features of the market 
access landscape that will affect the choice of appr oaches to negotiations include large dispersion of 
average tariffs amongst the active participants in th e negotiations, and the large gaps between applied 
and bound tariff rates in many countries and sectors.  The Swiss formula approach used in the Tokyo 
Round is seen as particularly desirable. Unfortunately, it appears likely to be too restrictive to apply it 
with the same coefficient used in the Tokyo Round. To overcome this restrictiveness, this paper 
present two new options for consideration, a targ eted and a flexible Swiss formula approach. 
Essentially, this increase in flexibility would allow larger  cuts in smaller tariff rates to be used to 
compensate for smaller reductions in higher tariffs. A pplying this family of formulas suggests that 
only a bold cut, such as the 50 percent target used in the Kennedy Round, would make substantial progress in increasing market access in both developi ng and developed countries. In industrial 
products, they find that a 50 percent cut in aver age tariff bindings would bring about substantial 
reductions in average applied rates in each country , while particularly reducing peak tariffs and 
escalation. In agricultural products, binding overhang  is greater in many countries than it is for 
industrial products.  
Francois, J., H. van Meijl and F. van Tongeren  (2003) Trade Liberalization and Developing 
Countries Under the Doha Round, CEPR Disc ussion Paper No. 4032, London: CEPR.  
 
This paper explores the impact of multilateral liber alization, with emphasis on distributional effects 
across countries. The authors first develop a realistic ‘baseline’ that takes into account events such as 
the entry of China into the WTO and the enlargemen t of the EU, allowing us to focus on those effects  TN/MA/S/1/Add.2 
 Page 5 
 
 
 that are specifically attributable to  further trade liberalization in the Doha Round. They then employ a 
global applied general equilibrium model, featur ing capital accumulation and imperfect competition. 
Their Doha scenarios include agriculture, manufac tures, and services liberalization, and trade 
facilitation. With agglomeration, OECD agricultu ral liberalization is not uniformly positive for 
developing countries.  Francois, J. and W. Martin (2004) Commerci al Policy Variability, Bindings, and Market 
Access. European Economic Review, vol. 48(3), pp. 665-679.  
This paper argues that protection rates can vary  in response to a wide range of pressures for 
protection, and that these pressures are likely to cont inue to generate varying rates of protection even 
after the introduction of new tariff bindings. Accordi ngly, the authors characterize trade policy in the 
presence of a tariff binding as generating uncertain rates of protection subject to the limit imposed by the binding. The authors further show that improved ma rket access, in terms of reduced terms of trade 
uncertainty related to export market protection, has welfare implications that follow not only from the 
expected level of market access, but also from the stability of the conditions of access. 
 
Geithner, T. and G. Nankani (2002) Market Acce ss for Developing Countries Exports – Selected 
Issues. Paper prepared by the Staffs of the IMF and the World Bank, Washington, DC: World 
Bank and IMF.  
 This paper reviews the patterns of protecti on and considers policies that would support a 
development-oriented liberalization of the multilatera l trading system. Regarding the broad patterns of 
protection, it is suggested that priority should be given to phasing out tariff peaks and escalation, to 
tighter disciplines on trade remedy laws, and to the needs of developing countries in meeting 
proliferating product standards and regulations. It also endorses the extension of comprehensive duty- 
and quota-free access for exports from LDCs to all industrial country markets. Since agricultural 
markets are among the most heavily distorted, liberalization in both industrial and developing 
countries is likely to have long-term, dynamic effect s on developing country production and trade.  
 As in the case of agriculture the efficiency gains fro m liberalization of trade in this sector would likely 
be significant for developing and industrial countries alike. At the same time though, the removal of 
quota restrictions, already agreed under the Uruguay Round and set to be completed by 2005, may 
cause shifts in competitiveness, and, at least in the near term, affect the balance of payments positions 
of those exporters whose market access is effectively protected by the current system. 
 
Ghosh, M., C. Perroni and J. Whalley (2003) De veloping-Country Benefits from MFN Relative 
to Regional/Bilateral Trade Arrangements, Review  of International Economics, vol. 11(4), pp. 
712-728.  
Using a general-equilibrium model of world trade, this paper evaluates the benefits of most-favored-
nation (MFN) treatment to developing countries in mu ltilateral relative to bila teral or regional trade 
agreements, from three sources. First, developing coun tries may be able to free-ride on bilateral tariff 
concessions exchanged between larger countri es in MFN-based GATT/WTO rounds. Second, MFN 
benefits developing countries by restricting discr iminatory retaliatory actions by other countries, 
evaluated here by a non- cooperative Nash tariff game. Finally, MFN changes threat points in 
bargaining and hence affects the bargaining solu tion of multilateral MFN-based trade negotiation 
compared to a bilateral/regional arrangement. The authors find that the benefits to developing 
countries are small in the first case as the tariff rates are already low, and the benefits are small in the 
second case as the optimal tariffs under unconstrained retaliation are not very asymmetric. Benefits 
from the third case are large as large countries can  extract large side-payments if they bargain 
bilaterally. TN/MA/S/1/Add.2 
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 Goldberg, P. and N. Pavcnik (2003) The R esponse of the Informal Sector to Trade 
Liberalization. Journal of Development Economics, vol. 72, pp.463-496.  
Using data from two countries that experienced larg e trade barrier reductions in the 1980s and 1990s, 
Brazil and Colombia, the authors exam ine the response of the informal sector to liberalization. It is 
often claimed that increased foreign competition in de veloping countries leads to an expansion of the 
informal sector, defined as the sector that does not comply with labor market legislation. In Brazil, they find no evidence of a relationship between trade policy and informality. In Colombia, they do 
find evidence of such a relationship, but only for the period preceding a major labor market reform 
that increased the flexibility of the Colombian labor  market. These results point to the significance of 
labor market institutions in assessing the eff ects of trade policy on the labor market. 
 
Goldberg, P.K. and N. Pavcnik (2004) Trade, Inequality, and Poverty: What Do We Know ? Evidence from Recent Trade Liberalization Epis odes in Developing Countries, NBER Working 
Paper No. 10593, Cambridge, MA: NBER. 
 This paper reviews the empirical evidence on the rela tionship between trade liberalization, inequality, 
and poverty based on the analysis of micro data from several developing countries that underwent 
significant trade reforms in recent years. Despite many measurement and identification difficulties, 
and despite conflicting evidence on some issues, empirical work based on "country case studies" has 
established certain patterns that seem common acros s countries and trade liberalization episodes, and 
may hence be informative as to how deve loping countries adjust to trade reform. 
 
Guha-Khasnobis, B. (2004) Who Gains From Tariff Escalation ? Journal of Economic Integration, vol. 19(2), pp. 416-425. 
 With the help of a simple model of production and tr ade, this paper examines the differential impact 
of tariff escalation on skilled and unskilled wages in an economy. The findings provide a lobbying-based explanation of the prevalence of tariff escalat ion in developed countries. It also predicts the 
possible response of the developing country and shows how similar lobbying activity in that country can slow the pace of liberalization of service sector  trade. The conclusion is that skilled labour and 
capital owner are likely to gain from it. It seems reasonable to imagine that these two groups in any 
country have greater lobbying power, relative to uns killed labour. Therefore, one of the reasons why 
governments of developed countries may feel comp elled to preserve such differential rates of 
protection between stages of production, is lobbyi ng by skilled labour and capital owners. If skilled 
labour groups are equally influentia l in developing countries, the model predicts that liberalization of 
the service sectors in these countri es may be slow and difficult.  
 
Hoekman, B. (2004) Developing Countries a nd the WTO Doha Round: Market Access, Rules 
and Differential Treatment, Journal of Econ omic Integration, vol. 19(2), pp. 205-230. 
 
This paper discusses the challenges confrontin g developing countries seeking to use WTO 
negotiations to promote their economic growth and performance. Progress will require that major 
stakeholders within countries perceive the overall package to be beneficial. A number of possible 
focal points that could be used as benchmarks fo r negotiations are discussed, as is the issue of 
differential and more than favourable treatment for developing countries. A precondition for a good 
development outcome is a significant reduction in ba rriers to trade in goods and services. This will 
have a much greater beneficial impact than effo rts at multilateral rule-making in regulatory areas. A 
new approach towards special and differential trea tment that involves greater differentiation between 
members and is based on country-specific economic an alysis and criteria would help to enhance the 
development-relevance of the WTO.  
 
  TN/MA/S/1/Add.2 
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 International Monetary Fund (2002) Improving  Market Access: Toward Greater Coherence 
Between Aid and Trade. Issues Brief, Washington, DC: IMF.  
Integration into global markets offers the potentia l for more rapid economic growth, the creation of 
better-paid jobs, and poverty reducti on. However, many of the poorer developing countries have 
found it difficult to take full advantage of the oppor tunities of the global market. Supply response has 
been weak for a variety of structural reasons, in cluding weak institutional capacity, but also because 
policies are often not supportive. Industrial count ries have maintained market access barriers and 
agricultural policies that penalize typical devel oping country products. A coherent approach to 
development and trade calls for trade policies th at create market opportunities for developing 
countries, and for development policies that enable  them to respond to these opportunities. The key 
components of such an approach are: (i) Early, ge nerous and predictable market access for the exports 
of developing countries, especially the poorest, with in a framework of multilateral liberalization and 
combined with strong multilateral rules. (ii) De termined action to refo rm industrial country 
agricultural regimes, eliminating trade distortions that harm developing countries. (iii) Capacity-
building assistance that improves the ability of de veloping countries to take advantage of new 
opportunities for trade. (iv) Soun d and coherent trade and trade -related policies in developing 
countries themselves, which should be reflected wi thin development plans and strategies for poverty 
reduction. 
 
Kanji, N. and S. Barrientos (2002) Trade liberalization, Poverty and Livelihoods: 
Understanding the Linkages, IDS Working Paper, 159, Brighton: IDS. 
 
The main purpose of this paper is to review key an alytical approaches that are used to understand the 
linkages between trade, poverty and livelihoods, with a view to better understanding their linkages in 
the context of SSA. The authors explore two main  perspectives: mainstream economics takes an 
aggregate approach, measures poverty primarily on the basis of income, and is generally positive 
about the impacts of trade liberalisation on povert y. A wider socio-economic, livelihoods perspective 
focuses on micro-level complexity, employs multi- dimensional concepts of poverty and is less 
positive about the impact of trade liberalisation on poverty. A broad approach is of particular 
importance for SSA. From an analytical perspectiv e, they examine three separate approaches: value 
chain, gender and sustainable development perspectiv es. Each of these has been developed within its 
own sphere of interest, but each provides insights into the more complex interaction between trade 
and poverty at a macro, meso and micro level.  
 
Kletzer, L. (2004) Trade-related Job Loss and Wage  Insurance: A synthetic Review. Review of 
International Economics, vol. 12(5), pp. 724-748.  
 This paper seeks to promote further integration of  empirical and theoretical discussions of trade and 
worker adjustment. Kletzer develops a set of styli zed facts of trade-related job loss, with a focus on 
worker characteristics and labor market conseque nces. These stylized facts are relevant to any 
(credible) model of trade liberalization and adjustme nt costs. The author th en discuss the basic ideas 
of wage insurance and summarize the little that  is known about how a program might work if 
implemented in the U.S. A final section provides a list of issues for a model of trade that will be 
consistent with the empirical stylized facts, set s out questions for future research and concludes. 
 
Krueger, A. and A. Berg (2002) Trade, Growth and Poverty – A Selective Survey, Annual  Bank 
Conference on Development Economics, Washington, DC: World Bank. 
 This survey examines, through recent literature, th e importance of trade policy for poverty reduction. 
The authors consider the effects of openness on poverty in two components: the effect of openness on average income growth, and the effect on distributio n for a given growth rate. Evidence from a variety 
of sources supports the view that trade openness contributes greatly to growth. Moreover, trade TN/MA/S/1/Add.2 
Page 8  
 
 openness does not have systematic effects on the poor beyond its effect on overall growth. Trade 
policy is only one of many determinants of growth and poverty reduction. Trade openness has 
important positive spillovers on other aspects of reform , however, so that the correlation of trade with 
other pro-reform policies speaks to the advantages of making openness a primary part of the reform 
package.  Laird, S., S. Fernandez de Cordoba, and D. Vanzetti (2003) Market Access Proposals for Non-
Agricultural Products. CREDIT Research Pa per No. 03/08, Nottingham, UK: ESRC CREDIT. 
 
This paper explains and analyses various proposal s tabled in the WTO non-agricultural market access 
negotiations using a global general equilibrium m odel. The results show that proposals involving 
deeper tariff cuts imply greater increases in impor ts and exports, but greater losses in tariff revenues 
that will need to be made up in some way. They also show greater welfare gains in the longer term, 
resulting from the improved allocation of resources and changes in the terms of trade, but there are 
several qualifications to this finding. First, the overall numbers conceal important adjustments in 
individual sectors and countries, and these adjustments will normally occur in the first several years of 
the implementation of the tariff changes, while the overall benefits only start to accrue later. Second, 
no account is taken of the potential benefits deri ving from the use of tariffs for industrial policy 
purposes, in particular where there is a divergen ce between social and private costs and benefits 
(externalities), and the options for alternative polic ies have been limited by WTO agreements. Third, 
concomitant action is required on WTO rules and on market entry conditions to ensure that the 
potential benefits are realised. Under all proposal s the greater adjustments would be made by 
developing countries, and it may well be that the pr oposals for deeper cuts entail going too far, too 
fast for many developing countries. They could al so lead to increased use of contingency measures 
such as anti-dumping actions. If adjustment costs are too high, this could also endanger the reform 
process, and a more measured approach may be indicated – a case of "make haste slowly". 
 
Mayer, J. (2004) Export Dynamism and Market Access. Journal of Economic Integration, vol. 
19(2), pp. 289-316. 
 
Market access liberalization has influenced product- specific growth of world exports and contributed 
to the shift in the structure of world exports of manufactures towards electrical and electronic goods 
(including parts and components), goods that requi re high R&D expenditures, and labour-intensive 
products such as clothing. Multilateral trade lib eralization has strongly improved market access 
conditions for manufactures and partly explains why manufactures have experienced particularly 
strong growth in exports. The increased importance of vertical international production sharing and 
the associated preferential trading arrangement s between geographically close countries with 
significantly different wage rates have been a key determinant of difference in export-value growth 
across individual manufactured products, as well as of th e distribution of market shares for some of 
these products among developing countries. Projections  based on a standard trade model suggest that 
moving to full trade liberalization would lead to an increase in the share of agricultural products in 
total world trade by almost two percentage points an d give greater weight to the textile, clothing and 
automotive sectors within manufactured exports.   Organization for Economic Cooperation and Development (2003) The Doha Development 
Agenda: Welfare Gains from Further Multilatera l Trade Liberalization With Respect to 
Tariffs. Paris: OECD.  
 This paper aims at providing a broad perspective on the issue of potential tariff reductions under the 
DDA negotiations. To do this, it draws on two main approaches:  a review of a sample of recent literature and a quantitative assessment of a variety of scenarios. From the literature, it is clear that the 
multilateral trade liberalisation can offer substantia l gains with respect to further reductions in 
merchandise tariffs and to advancement of trad e facilitation. New studies released following the  TN/MA/S/1/Add.2 
 Page 9 
 
 
 WTO’s Doha Ministerial Conference have served to reinforce this view. The results from the second 
approach point to the importance of market access fo r all regions, particularly developing countries.  
While improved market access for agricultural pr oducts is found to yield substantial potential 
benefits, the results highlight that potential gains fr om further liberalisation with respect to industrial 
goods may be even larger.  The findings also indicate the potential welfare benefits from progress in 
trade facilitation, which can exceed the gains fro m tariff reduction for some regions under some 
scenarios.  Overall the study underscores the im portance to developing countries of both greater 
access to developed countries’ markets as well as their own engagement in making substantive commitments under the DDA.  To engage in such commitm ents is in their interest and in the interest 
of the multilateral trading system as a whole.  The stakes involved are indeed quite large and will 
influence development prospects for years into the future.   
 
Rama, M. (2003) Globalization and Workers in  Developing Countries, World Bank Policy 
Research Working Paper No. 2958, Washington, DC: World Bank.  
This paper reviews the academic literature on positive and negative effects of globalization on 
workers in developing countries, including sever al studies currently under way, and derives the 
implications for public policy. First, it deals with  the effects of openness to trade, foreign direct 
investment, and financial crises on average wages.  Second, it discusses the impact of exposure to 
world markets on the dispersion of wages by occupa tion, skill, and gender. Third, it describes the 
pattern of job destruction and job creation associat ed with globalization. Because these two processes 
are not synchronized, the fourth issue addressed is th e impact on unemployment rates. Fifth, the paper 
reviews the labor market policies that can be used  to offset the adverse effects of globalization on 
employment and labor earnings. Finally, it discusses how the in ternational community could 
encourage developing countries to adopt sound labor market policies in the context of globalization. 
 
Reimer, J. (2002) Estimating the Poverty Impa cts of Trade Liberalization, GTAP Working 
Papers No. 1163, West Lafayette, Indiana: Purdue University.  
This survey summarizes and classifies 35 studies regard ing how international trade affects the poor in 
developing countries into four methodological cat egories: cross-country regression, partial-
equilibrium/cost-of-living analysis, general-equilib rium simulation, and micro-macro synthesis. The 
conclusion is that any analysis of trade and poverty needs to be informed by both the bottom-up, such 
as econometric analysis of household expenditure data, and top-down, such as general equilibrium 
models based on national accounts data, perspectives.  Indeed, recent “two-step” micro-macro studies 
sequentially link these two types of frameworks, su ch that general equilibrium mechanisms are 
incorporated along with detailed household survey in formation. Another methodology similar in spirit 
and also increasingly used involves the incorporation of large numbers of surveyed households into a 
general-equilibrium simulation model. Although most  of these studies have so far been limited to a 
single region, these approaches can be readily adap ted for multi-region modeling so that trade-poverty 
comparisons can be made across countri es within a consistent framework.  
 
Suliman, O. (2003) Endogenous Restrictions for Least Developed Economies, Review of 
International Economics, vol. 11(2) pp. 423-434. 
 
The paper explores appropriate trade restrictions for least developed countries facing external terms-
of-trade disturbances in terms of minimizing vari ations in the real sphere of the economy. Two 
alternative models are explored: export-subsidy versus import-tariff endogeneity. The theoretical 
model indicates that the tariff regime is a more appropriate policy. Empirical evidence from Sudan 
(1950- 1991) suggests that, although there is some discernable evidence that Sudan followed the tariff 
regime, the country did not apply the policy correc tly, adjusting the tariff mainly in response to 
foreign import prices rather than foreign export prices, which are more unstable. 
 TN/MA/S/1/Add.2 
Page 10  
 
 Wacziarg, R. and J. Seddon Wallack (2004) Tr ade Liberalization and Intersectoral Labor 
Movements. Journal of International Economics, vol. 64(2), pp. 411-439.  
 
This paper examines the impact of trade liberaliza tion episodes on movements of labor across sectors. 
The aim is to assess empirically whether increased tr ade openness leads to increased structural change 
and, if so, to what extent. Results for a set of  25 liberalization episodes suggest weakly negative 
effects of liberalization on the extent of intersectoral  labor shifts at the economy-wide 1-digit level of 
disaggregation. They do uncover increased sectoral ch ange after liberalization at the 3-digit level 
within manufacturing, although the estimated effect s are statistically weak and small in magnitude. 
The effects of liberalization on labor shifts differ across individual countries, in a way related to the 
scope and depth of reforms.  
 
Walkenhorst, P. (2003) Liberalising Trade in Te xtiles and Clothing: A Survey of Quantitative 
Studies, Report No. TD/TC/WP(2003)2/FINAL, Paris: OECD.  
There is a considerable body of analysis available that aims to quantify the economic and trade effects 
of textile and clothing market liberalisation. A number of analysts at national and international 
institutions have provided their assessments. Different  tools and approaches have thereby been used to 
evaluate the impacts of textile trade reform at  the regional or global level. Given the economic 
importance of the textile and clothing sector in  some OECD and non-OECD countries and the 
resulting economy-wide repercussions that changes in the scale and pattern of textile production will 
tend to trigger, analysis using general equilibrium  models has been dominant. The modelling results 
consistently indicate considerable shifts in textiles and clothing production and trade as the 
Agreement on Textiles and Clothing (ATC) is implemented. There is pressure for a large-scale reallocation of resources, with production of tex tiles and clothing expanding in Asian and other 
developing countries. In parallel, textiles and cl othing production in industrialised countries is 
expected to contract significantly, while imports of textiles and clothing from developing countries 
increase. Concerning further regional integration, which has played a major role in textiles and 
clothing trade during the 1990s, the modelling results predict welfare benefits for the participating 
countries, while trade diversion is expected to adve rsely affect outsiders. All the reviewed studies 
foresee increases in global welfare as a result of AT C reform. But the estimates of welfare gains show 
considerable variation, with expected annual globa l benefits ranging from $6.5 billion to $324 billion. 
Some studies predict ATC reform to account for up to two-thirds of all gains from the Uruguay 
Round, while others put the contribution of textile and clothing liberalisation at merely 5 per cent. 
There is similar discrepancy with respect to the di stribution of welfare gains. A number of analysts 
see developing countries as the main beneficiaries of ATC reform, while others expect them in the aggregate to lose from the policy changes. There is also variation in the direction and magnitude of 
expected welfare impacts at the level of many individual developing countries.  
 
Winters, A., N. Mc Culloch, and A. Mc Kay (2 004) Trade Liberalization and Poverty: the 
Evidence so far, Journal of Economic Literature, vol. XLII, pp. 72-115.  
This paper assesses the current state of evidence on the impact of trade policy reform on poverty in 
developing countries. The authors summarize this evidence using an analytic framework addressing 
four key areas: economic growth and stability; hou seholds and markets; wages and employment and 
government revenue. They argue that there is no simple generalizable conclusion about the 
relationship between trade liberalization and poverty,  and the picture is much less negative than is 
often suggested. In the long run and on average, tr ade liberalization is likely to be strongly poverty 
alleviating, and there is no convincing evidence that it will generally increase overall poverty or 
vulnerability. But there is evidence that the poor ma y be less well placed in the short run to protect 
themselves against adverse effects and take  advantage of favorable opportunities. 
 
  TN/MA/S/1/Add.2 
 Page 11 
 
 
 II. STUDIES ON SPECIFIC REGIONS OR COUNTRIES 
Aggarwal, A. (2004) Impact of Tariff Reducti ons on Exports: A Quantitative Assessment of 
Indian Exports to the United States. Wo rking Paper No. 120, New Dehli: ICRIER. 
 
This paper quantitatively assesses lik ely changes in market access opportunities for Indian exports 
owing to tariff reductions by the USA. The study identifies particular products for India at the ISIC 4-
digit level of disaggregation, whic h could be considered tariff sensitive. Regression analysis  of the 
relationship between MFN tariff rates and India’s e xports to the US was used  to assess in quantitative 
terms the likely impact of tariff reduction that may be agreed in the Doha Round. This analysis suggests that tariff cuts are not expected to benefit India’s exports to the US in a major way. With the 
full implementation of the Chairman’s formula for tariff cuts, increase in India’s exports to the US 
would amount to 1.2% or 0.6% depending on the value of the B coefficient in the Chairman’s formula. The study also decomposes changes in India’ s total exports due to tariff reductions in the US 
into the competitive and market ef fects. The analysis suggests that the increase in India’s exports 
would be mainly due to the competitive effect.  Aghion, P., R. Burgess, S. Redding and F. Zilib otti (2003) The unequal effects of Liberalization: 
Theory and Evidence from India. LSE mimeo. London, UK: LSE.  
This paper exploits the 1991 Indi an liberalization to illustrate how such a reform may have unequal 
effects on industries and regions within a single country.  The authors find that the 1991 liberalization 
in India had strong inequalizing effects, by fost ering productivity growth and profits in 3-digit 
industries that were initially closer to the Indian pr oductivity frontier and in states with more flexible 
labor market institutions. These findings empha size that the initial level of technology and 
institutional context mattered for whether and to what  extent industries and states in India benefited 
from liberalization.  Ahmed, S. and Z. Sattar (2003) Trade Liberaliza tion, Growth and Poverty Reduction, the Case 
of Bangladesh, Report No IDP-90, Washington, DC: World Bank.  
This paper provides broad evidence that trade liber alization and economic deregulation in Bangladesh 
have contributed to growth of output and helped reduce poverty. Th e policy of deregulation and trade 
liberalization started in 1976, but gained moment um in the early 1990s. While the positive effects on 
output expansion was considerably larger in the 199 0s, corresponding broadly with a much faster pace 
of trade liberalization, the associated poverty re duction impact was higher in the 1976-90 phase of 
deregulation. This was because employment and real wage growth was slower in the 1990s as 
compared with 1976-90. Among the reasons for this out come is the lack of dynamism in agriculture 
due to slower reforms.  
 
Attanasio, O., P. Goldberg and N. Pavcnik (2004) Trade reforms and Wage Inequality in Colombia. Journal of Development Economics, vol. 74, pp. 331-366.   
This paper investigates the effects of the drastic tariff reductions of the 1980s and 1990s in Colombia 
on the wage distribution. The authors identify three main channels through which the wage 
distribution was affected: increasing returns to colle ge education, changes in industry wages that hurt 
sectors with initially lower wages a nd a higher fraction of unskilled wo rkers, and shifts of the labor 
force towards the informal sector that typically pays  lower wages and offers no benefits. Their results 
suggest that trade policy played a role in each of the above cases. The increase in the skill premium 
was primarily driven by skilled-biased technological  change; however, their evidence suggests that 
this change may have been in part motivated by  the tariff reductions and the increased foreign 
competition to which the trade reform exposed dome stic producers. With respect to industry wages, 
results suggest that wage premiums decreased by mo re in sectors that experienced larger tariff cuts. TN/MA/S/1/Add.2 
Page 12  
 
 Finally, the authors find some evid ence that the increase in the size of the informal sector is related to 
increased foreign competition.  
Chen, S. and M. Ravallion (2004) Welfare Impa cts of China's Accession to the World Trade 
Organization, World Bank Economic Review, vol. 18(1), pp. 29-57. 
 Data from China's national rural a nd urban household surveys are used to measure and explain the 
welfare impacts of changes in goods and factor pr ices attributable to accession to the World Trade 
Organization. The price changes are estimated sep arately using a general equilibrium model to 
capture both direct and indirect effects of the initia l tariff changes. The welfare impacts are first-order 
approximations based on a household model incorp orating own-production activities calibrated to 
household-level data and imposing minimum aggregation. The results show negligible impacts on 
inequality and poverty in the aggregate. However,  diverse impacts emerge across household types and 
regions, associated with heterogeneity in consump tion behavior and income sources, with possible 
implications for compensatory policy responses.   Das, D.K. (2003) Quantifying Trade Barriers: Ha s Protection Declined Substantially in Indian 
Manufacturing ? Working Paper No. 105, New Delhi: ICRIER.  
This study undertakes a quantification of trad e barriers for Indian manufacturing industries by 
examining both the tariff and the non-tariff barrier s. It documents the trade barriers for around 72 
industries belonging to intermediate, capital a nd consumer goods sectors for the period 1980-2000 
and the phases of trade reforms ther ein. The estimates suggest levels of effective rate of protection 
and percentage of imports subject to licensing d eclined during the nineties while import penetration 
rates show an increase only in the second half of the nineties. This suggests that there may be 
considerable lags between reduction of tariffs and non-tariff barriers and measurable impact on 
imports and on the economy.  
 
Elbehri, A., T.W. Hertel and W. Martin (2003) Estimating the Impact of WTO and Domestic Reforms on the Indian Cotton and Textile Sector s: A General Equilibrium Approach, Review of 
Development Economics, vol. 7, pp. 343-359.   
The agreement to abolish the quotas on textiles and clothing introduced under the Multi-fiber 
Arrangement (MFA) will create a new and much more  competitive world market for India's exports 
of textiles and clothing. India's inefficient and co stly policies, such as cotton export quotas, the hank 
yarn obligation, and the restrictive policies on foreig n investment that have held back productivity in 
the Indian apparel sector, will impose serious cost s. The authors consider the implications of 
reforming these policies in an open trading envi ronment using a multiregion, applied general-
equilibrium model. They find that the costs of th ese policies to India increase substantially following 
abolition of the MFA; the benefits to India from domestic reforms are considerably enhanced when 
there is global free trade in textiles and apparel. 
 
Evans, C.L. and J. Harrigan (2004) Tight Clothing: How the MFA Affects Asian Apparel 
Exports, NBER Working Paper No. w10250, Cambridge, MA: NBER. 
 
International trade in apparel and textiles is regul ated by a system of bilateral tariffs and quotas 
known as the Multifiber Arrangement or MFA. Using a time series of detaile d product-level data from 
the United States on the quotas and tariffs that co mprise the MFA, the authors analyze how the MFA 
affects the sources and prices of US apparel imports, with a particular focus on the effects on East 
Asian exporters during the 1990s. They show that wh ile a large fraction of US apparel is imported 
under binding quotas, there are many quotas that rema in unfilled. They also show that binding quotas 
substantially raise import prices, s uggesting both quality upgrading and rent capture by exporters. In 
contrast, tariffs reduce import prices. Lastly, they argue that the substantial shift of US apparel  TN/MA/S/1/Add.2 
 Page 13 
 
 
 imports away from Asia in favor of Mexico and th e Caribbean during the 1990s is only partly due to 
discriminatory trade policy: the other reason is an  increasing demand for timely delivery that gives a 
competitive advantage to nearby exporters. 
 
Fernandes, A.M. (2003) Trade Policy, Trade Volumes and Plant-Level Productivity in 
Colombian Manufacturing Industries. Mimeo. Washington, DC: World Bank. 
 
This paper explores Colombian trade policy during 1977-1991, a period of substantial variation in 
protection across industries, to examine whether in creased exposure to foreign competition generates 
plant-level productivity gains. Using a large panel of  manufacturing plants, the authors find a strong 
positive impact of tariff liberalization on consiste nt productivity estimates, controlling for plant and 
industry heterogeneity. This result is not driven by the endogeneity of protection nor by plant exit. 
The impact of tariff liberalization on productivity is stronger for large plants and for plants in less competitive industries. Qualitatively similar results  are obtained when using effective rates of 
protection and import penetration ratios as measures of protection.  Fontagné, L., T. Mayer and S. Zignago (2004) Tr ade in the Triad: How Easy is the Access to 
Large Markets ? CEPR Discussion Paper No. 4442, London: CEPR.  
This paper identifies the level of trade integrati on between the three largest economic powers of the 
world, often called the Triad: The United States,  the EU and Japan. The authors focus on measuring 
possible asymmetries in market access between me mbers of the Triad using border effects between 
each of those partners. They investigate trends of bilateral trade openness and show notably that there 
has been a deterioration of the relative access of  Japanese exporters on both the American and EU 
markets in the 1990s. Results also show which in dustries have the most asymmetric market access 
among the different combinations of those partners. The authors finally provide explanations for the 
estimated border effects using proxies for bilateral observed protection (tariffs and NTBs), home bias 
of consumers, product differentiati on and levels of FDI. Tariffs st ill matter in shaping trade patterns 
even in cases where those tariffs are low in magnitude . The explanations relate d to actual protection, 
home bias and substitutability of goods put together explain a large part of the border effect between 
blocs of the triad, although they do not explain the whole of the border effect puzzle. 
 
Francois, J. and D. Spinanger (2004) Regula ted Efficiency, World Trade Organization 
Accession and the Motor Vehicle Sector in Chin a, CEPR Discussion Paper No. 4439, London: 
CEPR.  
This Paper is concerned with the interaction of regulated efficiency and World Trade Organization 
(WTO) accession and its impact on China’s motor ve hicle sector. The analysis is conducted using a 
23-sector/25-region computable ge neral equilibrium model. Regulatory reform and internal 
restructuring are found to be critical. Restructuring is represented by a cost reduction following from consolidation and rationalization that moves costs toward global norms. Without restructuring, WTO 
accession means a surge of final imports, though imports of parts could well fall as production moves offshore. With restructuring, however, the final a ssembly industry can be made competitive by world 
standards, with a strengthened position for the industry. 
 
Gilbert, J. (2003) Trade Liberalization and Employment in Developing Economies of the 
Americas, Integration and Trade Journal No. 18, Buenos Aires: INTAL.   
Using an applied general equilibrium  model, this paper explores the potential effect of comprehensive 
trade liberalization in a selection of Latin American developing economies. Over the last decade many of these economies have suffered from high levels of  unemployment, and the consequences of reform 
on unemployment and of unemployment on the effects of reform are critical. The author takes the approach of utilizing alternative labor market clos ures, bounding the static effect of trade reform TN/MA/S/1/Add.2 
Page 14  
 
 between the neoclassical, which abstracts from unemployment issues, and a surplus 
labor/unemployment closure. The author also c onsiders a less common specification based on the 
neoclassical Harris-Todaro characterization of the dual economy. Our results indicate that the presence of unemployment may significantly expand the potential net welfare benefits of trade reform in the Americas.  Harrison, G.W., T.F. Rutherford,  D.G. Tarr and A. Gurgel ( 2003) Regional, Multilateral and 
Unilateral Trade Policies of MERCOSUR for Grow th and Poverty Reduction in Brazil, World 
Bank Policy Research Working Paper No. 3051, Washington, DC: World Bank.  
The paper employs a 16-region global computable  general equilibrium model to quantitatively 
examine the regional, unilateral and multilateral ar rangements. The model includes the Brazilian as 
well as the economies of Argentina, Uruguay, Chil e, Mexico, the United States, Canada, Central 
America, Venezuela, Colombia, Peru, Rest of the A ndean Pact, Rest of South America, the EU, Japan 
and an aggregate Rest of the World. The authors are thus able to estimate the impact on partner and 
excluded countries from each of the agreements that are evaluated. Results suggest that the FTAA, the 
EU-MERCOSUR agreement and multilateral trade polic y changes will all be beneficial for Brazil. 
The Brazilian government strategy of simultane ously negotiating the FTAA, the EU-MERCOSUR 
agreement while supporting multilateral liberalizati on through the Doha Agenda will increase the 
benefits of each of these policies. 
 
Haskel, J.E. and M.J. Slaughter (2003) Have Fa lling Tariffs and Transportation Costs Raised 
US Wage Inequality ? Review of International Economics, vol. 11(4), pp. 630-650.  
To gauge the effect of international trade on the rising US skill premium, the paper analyzes the sector 
bias of price changes induced by ch anges in US tariffs and transporta tion costs. It is found that, in 
both the 1970s and 1980s, cuts in tari ffs and transportation cost levels  were concentrated in unskilled-
intensive sectors. Despite this sugg estive evidence, the authors estimat e that price changes induced by 
tariffs or transportation costs mandated a rise in ineq uality that was mostly statistically insignificant. 
Thus, they do not find strong evidence that falling tariffs and transport costs, working through price 
changes, mandated rises in inequality. 
 
Hertel, T.W., P.V. Preckel, J.A.L. Cranfield and M. Ivanic (2003) Multilateral Trade 
Liberalization and Poverty in Brazil and Chile , Integration and Trade Journal No. 18, Buenos 
Aires: INTAL.  
Poverty reduction is an increasingl y important consideration in the deliberations over bilateral and 
multilateral trade liberalization. However, most  poverty studies have focused on a single country 
using detailed household survey data. When it co mes to multi-country, global trade liberalization 
analyses, researchers are forced to  resort to a discussion of average, or per capita effects. This 
severely limits their capacity to address the poverty question. This paper combines results from a 
newly available international, cross section consum ption analysis, with earnings data from household 
surveys from Brazil and Chile, to analyze the imp lications of multilateral trade liberalization for 
impoverished households in these two countries. The multilateral trade liberalization scenario that the 
authors examine involves complete elimination of  merchandise tariff barriers as well as textile and 
apparel quotas in place in 1997. This ignores the pot ential impact of other non tariff barriers as well as 
the significant barriers to trade and investment in services and trade distorting domestic farm policies. 
While this liberalization scenario is stylized, it offers a useful benchmark for assessing the potential 
poverty impacts of multilateral measures. The authors find that the aggregate poverty measure is 
reduced in the short run in both Brazil and Chile, fo llowing multilateral trade liberalization. However, 
this aggregate result does not do justice to the differential household impacts by earning specialization. Agriculture specialized households in both countries experience a very large reduction  TN/MA/S/1/Add.2 
 Page 15 
 
 
 in poverty, while non-agriculture profits-special ized and wage-labor households experience an 
increase in poverty following multilateral trade liberalization. 
 
Hinkle, L., A. Herrou-Aragon and K. Kubota ( 2003) How Far Did Africa's First Generation 
Trade Reforms Go? An intermediate Methodology for Comparative Analysis of Trade Policies, 
Volume I and II: Main Report, Africa Region Working Paper Series, No. 58, Washington, DC: 
World Bank.  
This paper presents an intermediate methodolog y for evaluating trade regimes in SSA. The 
methodology permits a quantitative instrument-by-inst rument assessment of the conventional border 
instruments of trade policy. The paper finds that, although the best practice countries in their sample 
had not yet caught up with all of the best practices observed elsewhere in the developing world, “first 
generation trade reforms” in the 1990s had led to significant liberalization. Despite progress in 
rationalizing tariff structures, however, lowering rate s and eliminating quantitative restrictions, trade 
policies maintain a bias in favour of import-competing activities over exports.   Hoda, A. and M. Verma (2004) Market Access Negotiations on Non-Agricultural Products: 
India and the Choice of Modalities, Working Paper No. 132, New Delhi: ICRIER.  
The paper aims at facilitating the process of develo pment of the position that would be in the best 
interest of India in future discussion on the moda lities for tariff negotiations. The authors have taken 
the view that there are good reasons for India to  be ambitious in its outlook and proactive in 
approaching the negotiations. India has liberalized its  tariffs at a pace that seemed unthinkable before 
the onset of economic reforms. There is harmony  in the views of the political executive and 
economists that the trend must be maintained. Indi a has a large repertoire of concessions that it can 
trade for getting reciprocal concessions in return. Further in the context of the wave of regional 
integration arrangements that is sweeping across th e world, steep reduction in the non-discriminatory 
tariffs is the only way in which non-participants in  major regional arrangements can alleviate the trade 
diversion effect of preferential arrangements. As for modalities, the authors recommend that a non-
linear formula which attaches weight to the tariff average of the country concerned would be in 
India’s best interest. They advocate that if particip ation in sectorial liberalization is to be mandatory, 
India must ask for the possibility for developing countr ies to retain the flexibility to set the tariff at 
five per cent. The authors do not favour placing great reliance on the concept of special and 
differential treatment. 
 
Ianchovichina, E. and W. Martin (2004) Impa cts of China's Accession to the World Trade 
Organization, World Bank Economic Review, vol. 18(1), pp. 3-27. 
 
This article presents estimates of the impact of China's accession
 to the World Trade Organization. 
China is estimated to be the biggest beneficiary (US$31 billion a year from trade reforms in 
preparation for accession and additional gains of $10 billion a year from reforms after accession), 
followed by its major trading partners that also undertake liberalization, including the economies in 
North America, Western Europe, and Taiwan (China). Accession will boost manufacturing sectors in 
China, especially textiles and apparel, which will be nefit directly from the removal of export quotas. 
Developing economies competing with China in third markets may suffer small losses. Accession will 
have important distributional conseque nces for China, with the wages of skilled and unskilled nonfarm 
workers rising in real terms and relative to those of farm workers. Possible policy changes, including 
reductions in barriers to labor mobility and improvements in rural education, could more than offset 
these negative impacts and facilitate the development of China's economy.  
 TN/MA/S/1/Add.2 
Page 16  
 
 Kulundu Manda, D. (2002) Globalization and the La bour Market in Kenya, Paper prepared as 
part of the DFID funded research project "Globa lization, Production and Poverty", Nairobi: 
Kippra. 
 
This paper analyses the effect of globalization on the labour market outcomes in Kenya using micro 
datasets complemented with secondary data. The an alysis shows that during the economic reform 
period employment creation dramatically increased in the informal sector, but most of the jobs created 
in the sector are more insecure due  to low survival rate of firms in the sector and pay less compared 
with jobs lost in the formal sector. Some jobs were created in the export processing zones. Labour 
force participation in the urban areas increased fo r both men and women but declined in the rural 
areas especially for women. Unemployment also  increased both in ru ral and urban areas and 
especially for women in the urban areas. The increase in unemployment and the expansion in the informal sector employment is partly due to retrenchment in the civil service, increased school dropout, collapse of some private firms and retr enchment in other private firms due to stiff 
competition from imports following trade liberalization.  The period also experienced a shift in labour 
demand in favour of highly skilled labour, a decline in permanent full-time workers and an increase in 
part-time workers and casual workers signalling a co st cutting strategy where firms replace permanent 
employees with part time and casual workers to make savings in terms of paying less benefits. Real earnings for all workers declined during the refo rm period until the mid-1990s when they started 
increasing again. Less skilled workers experienced losses in earnings compared with highly skilled 
workers as shown by increasing private returns  to  university education and declining returns to 
primary and secondary education. With increased une mployment especially for women, insecure jobs 
in the informal sector and declining earnings for th e majority of less skilled labour during the period, 
more people are likely to be poor. 
 
Litchfield, J. and N. McCulloch (2003) Povert y in Zambia: Assessing the Impacts of Trade 
Liberalization in the 1990s, PRUS Working Pap er No. 16, Brighton, UK: Poverty Research Unit 
at Sussex. 
 
This paper summarizes some of the key features of the changes in poverty between 1991 and 1998 in 
Zambia, disaggregating the findings by geographical  location and other socio-economic categories. 
The paper also summarizes some of the essential feat ures of the reforms in the 1990s and sets out a 
number of alternative approaches for analyzing the impacts of these reforms on poverty. Some 
preliminary results suggest that in urban areas, ope ning of markets to international imports did result 
in closures of businesses. In rural areas, redundancies resulting from privatization of parastatals had 
important impacts on living standards.  
 
Muendler, M.A. (2004) Trade, Technology, and Productivity: A Study of Brazilian Manufacturers, 1986-1998. University of California, San Diego.   
Brazil's trade liberalization betwee n 1990 and 1993, and its partial rever sal in 1995, are used to study 
how reduced inward trade barriers affect pr oductivity. The production function of Brazilian 
manufacturers is estimated at the ISIC3 two-digit level under various alternatives. Firm-level 
productivity is inferred and then related to trad e. Findings suggest that (1) foreign competition 
pressures firms to raise productivity markedly, whereas (2) the use of foreign inputs plays a minor 
role for productivity change. (3) The shutdown probability of inefficient firms rises with competition 
from abroad, thus contributing positively to a ggregate productivity. Counterfactual simulations 
indicate that the competitive push (1) is an important source of immediate productivity change, while the elimination of inefficient firms (3) unfolds its impact slowly. 
  TN/MA/S/1/Add.2 
 Page 17 
 
 
 Mujeri, M. and B. Khondker (2002) Poverty Implications of Trade Liberalization in 
Bangladesh: A General Equilibrium Approach,  Paper funded by DFID as part of the 
Globalization and Poverty Programme, Dhaka: University of Dhaka.  
The aim of the analysis is to contribute to be tter understanding of the rela tionships between trade 
liberalization policies and poverty in Bangladesh, and help identify policy options that are capable of 
promoting liberalization in a more equitable manner.  The analysis in the present study indicates that 
the gains are relatively small and these differ acro ss various household groups in the presence of 
structural bottlenecks and other c onstraints. In particular, the gains accrue more to the relatively 
welloff households while the extrem e poor households benefit less. This indicates that the full 
potential of globalization is not readily translated into poverty reduction in Bangladesh. In order to 
make the liberalization policies sufficiently pr o-poor, the process needs complementary measures 
aiming at strengthening the institutional capabiliti es, addressing the structural bottlenecks, and 
improving the anti-poverty policy regimes in the count ry. In addition to ensuring the consistency of 
the macroeconomic policy regime with the globalization efforts, this would require that the process be 
made sensitive to the social costs and shaped by domestic policy regimes,  be consistent with 
appropriately targeted social safety nets measures for the affected poor and guided by the institutional 
capacity to manage the transition process. 
 
Pandey, M. (2004) Impact of Trade Liberalizati on in Manufacturing Industry in India in the 
1980s and 1990s, Working Paper No. 140, New Delhi: ICRIER. 
 This study seeks to examine ev idence on the relationship between trade policy and industry 
performance for India during the 1980s and 1 990s, to assess whether changes in policy has 
significantly affected industry performance. The au thor takes a broad-based approach and considers 
the linkage between trade policy variables and a num ber of industry performance variables, including 
production, employment, labour, productivity, averag e wage, profitability, price-cost margin, export 
intensity and import penetration. An important issu e addressed is the quantification of trade policy 
variables. The study focuses on coverage ratios of non-tariff barriers, nominal and effective rates of 
protection as measures of trade policy. Although there is evidence of some impact of trade policy on industry performance, the study does not find any conclusive links between the two. 
 
Pavcnik, N. (2002) Trade Liberalization, Exit and Productivity Improvements: Evidence from 
Chilean Plants. Review of Economic Studies, vol. 69, pp. 245-76. 
 
This paper empirically investigates the effects of liberalized trade on plant productivity in the case of 
Chile. Chile presents an interesting setting to st udy this relationship since it underwent a massive 
trade liberalization that significantly exposed its plants to competition from abroad during the late 
1970s and early 1980s. Using plant- level panel data on Chilean manufacturers, the author find 
evidence of within  plant productivity improvements that can be attributed to a liberalized trade for the 
plants in the import-competing sector. In many cases, aggregate productivity improvements stem from the reshuffling of resources and output from less to more efficient producers. 
 
Pavcnik, N., A. Blom, P.K. Goldberg and N. Schady (2004) Trade Policy and Industry Wage 
Structure: Evidence from Brazil. World Bank Economic Review, forthcoming.   
 
This paper analyses the impact of the 1988-1994 tr ade liberalization in Brazil on the industry wage 
structure. Empirical results suggest that while industr y affiliation is in fact an important component of 
worker earnings, the structure of industry wage prem iums is relatively stable over time. The authors 
thus find no statistical association between changes in industry wage premiums and changes in trade 
policy. Furthermore, they do not find any relationship between industry-specific premiums to university graduates and trade policy. They concl ude that trade liberalization in Brazil did not TN/MA/S/1/Add.2 
Page 18  
 
 significantly contribute to increased wage inequa lity between the skilled and unskilled workers 
through changes in industry wage premiums.  
 
Porto, G. (2004) Using Survey Data to Assess th e Distributional Effects of Trade Policy. Mimeo. 
Washington, DC: World Bank. 
 The purpose of this paper is to de velop and apply a methodology to em pirically explore the effects of 
trade policies on the distribution of income and poverty in developing countries. The main finding of the paper is that Mercosur benefits the aver age Argentine household across the entire income 
distribution. There is evidence of a pro-poor bias of the regional trade agreement: on average, poor 
households gain more from the reform than middl e-income households, whereas the impacts on rich 
families are positive but not statistically significant.  The reason behind these results is that Argentine 
trade policy protected the rich over the poor, prior to the reform, and granted some protection to the poor, after the reform. As a result, the relative pre-Me rcosur tariff on the goods investigated in this 
paper is higher on relatively skill-intensive goods . This means that tariff removals would tend to 
benefit the poor over the rich. These findings indicate that trade reforms may actually help improve 
the distribution of income and reduce poverty in the country.  
 
Porto, G. (2004) Trade Reforms, Market Acce ss and Poverty in Argentina. Policy Research 
Working Papers, No. 3135, World Bank.  
The purpose of this paper is to empirically co mpare the relative poverty impacts of national and 
foreign trade reforms in Argentina. The national trade reforms investigated in this paper include tariff 
cuts on consumption goods and capital goods in Arge ntina. These policies gene rate a decline in the 
domestic relative price of these goods. Foreign trade reforms include the elimination, in developed 
countries, of agricultural subsidies and trade barriers on agricultural manufactures and industrial 
manufactures. These policies enhance the market acce ss of Argentine exports and cause an increase in 
the international (and hence in the domestic) relati ve price of these goods. It is found that national 
trade reforms have larger marginal effects than fore ign trade reforms. However, since there is greater 
room for foreign reforms, policy changes in deve loped countries would have, in the end, larger 
poverty impacts. Overall, a combination of own reforms and enhanced market access would cause 
poverty to decline by between 1.7 and 4.6 percentage points. With an actual initial head count ratio of 
25.7 percent, this evidence suggests that trade po licies can be important poverty-reducing instruments 
in Argentina. 
 
Ravallion, M. and M. Lokshin (2004) Gainers and Losers from Trade Reform in Morocco, 
World Bank Policy Research Working Paper No . 3368, Washington, DC: World Bank.  
 Ravallion and Lokshin use Morocco’s national survey of living standards to measure the short-term 
welfare impacts of prior estimates of the price cha nges attributed to various trade policy reforms for 
cereals. They find small impacts on mean consumpti on and inequality in the aggregate. There are both 
gainers and losers and (contrary to past claims) the rural poor are worse off on average after trade 
policy reforms. The authors decompose the aggr egate impact on inequality into a “vertical” 
component (between people at different pre-refo rm welfare levels) and a “horizontal” component 
(between people at the same pre-reform welfare level). There is a large horizontal component which 
dominates the vertical impact of full de-protection.  The diverse impacts reflect a degree of observable 
heterogeneity in consumpt ion behaviour and income sources, with implications for social protection 
policies.  
 Topalova, P. (2004) Trade Liberalization and Firm Productivity: The Case of India. IMF 
Working Paper No. 04/28. Washington, DC: IMF.   TN/MA/S/1/Add.2 
 Page 19 
 
 
 Using a panel of firm-level data, th is paper examines the effects of India's trade reforms in the early 
1990s on firm productivity in the manufacturing sect or, focusing on the interaction between this 
policy shock and firm and environment charact eristics. The rapid and comprehensive tariff 
reductions-part of an IMF-supported adjustment pr ogram with India in 1991-allow the author to 
establish a causal link between variations in inter-i ndustry and intertemporal tariffs and consistently 
estimated firm productivity. Specifically, reductions in trade protectionism lead to higher levels and 
growth of firm productivity, with this effect strongest  for private companies. Interestingly, state-level 
characteristics, such as labor regulations, investme nt climate, and financial development, do not 
appear to influence the effect of trade liberalization on firm productivity.  Virmani, A., B. Goldar, C. Veeramani and V. Bh att (2004) Impact of Tariff Reforms on Indian 
Industry: Assessment Based on a Multi-Sector  Econometric Model, Working Paper No. 135, 
New Delhi: ICRIER.  
This study is an attempt to gauge the impact of  reductions in tariffs on the Indian manufacturing 
sector using a multiple-equations dis-aggregated ec onometric model. The results of the study suggest 
that a substantial reduction in tariff rates, bri nging down the import-weighted average for industrial 
products from about 20 percent as prevailing in the beginning of 2003-2004 to about 10 percent 
would have only marginal impact on net exports , value of production and employment in the 
organised manufacturing sector. It seems no significant adverse impact would be there on the domestic industrial sector from the tariff cuts. Rather, a small increase in aggregate industrial 
production and employment might occur emanating fro m the efficiency enhancing effects of tariff 
reform. However, a detailed sector-wise analysis indicates that the impact of tariff reforms would be differentiated across products, with firms in some  industries gaining and firms in some other 
industries losing in terms of net exports , value of production and employment. 
 
 
III. NON-RECIPROCAL PREFERENCES 
Alexandraki, K., and H.-P. Lankes (2004) The Im pact of Preference Erosion on Middle-Income 
Developing Countries. IMF Working Paper No. 04/169, Washington, DC: IMF.  
Preference erosion has become an obstacle to multilate ral trade liberalization, as beneficiaries of trade 
preferences have an incentive to resist reductions  in most-favored-nation (MFN) tariffs. This study 
identifies middle-income developing countries that are vulnerable to export revenue loss from preference erosion. It concludes that the problem is  heavily concentrated in a sub-set of preference 
beneficiaries—primarily small island economies dependent on sugar, banana, and—to a lesser 
extent—textile exports. Accordingly, measures to help  mitigate the impact of preference erosion can 
be closely targeted at the countries at risk.  
Bartels, L. (2003) The WTO Enabling Clause and Positive Conditionality in the European 
Community's GSP Program. Journal of Internatio nal Economic Law, vol. 6(2), pp. 507-532.  
 
This paper examines the legality of positive condi tionality in the EC's GSP program. It can be 
concluded that, despite some ambiguity in the 2001 Doha Decision on Implementation, GSP trade 
preferences do have to meet the description of generalized, non-reciprocal and non- discriminatory in 
order to benefit from the Enabling Clause. This is pr imary because of the next of the Enabling Clause 
and the GSP Decision, but it is also supported by the public position of the EC and, through less 
conclusively, the U.S. What is still in dispute is  whether these three conditions present a legal obstacle 
for non-trade conditionality in a de veloped country GSP program.   
 
Brenton, P. (2003) Integrating the least Deve loped Countries into the World Trading System: 
The Current Impact of EU Preferences und er Everything But Arms. World Bank Policy 
Research Working Paper No. 3018, Washington, DC: World Bank. TN/MA/S/1/Add.2 
Page 20  
 
  
Trade preferences are a key element in industrial count ries’ efforts to assist the integration of least 
developed countries (LDCs) into the world economy. Brenton provides an initial evaluation of the impact of the European Union’s recently introdu ced “Everything but Arms” (EBA) initiative on the 
products currently exported by the LDCs. He show s that the changes introdu ced by the EBA initiative 
in 2001 are relatively minor for currently exported  products, primarily because over 99 percent of EU 
imports from the LDCs are in products which the EU had already liberalized, and the complete 
removal of barriers to the key remaining products —rice, sugar, and bananas—has been delayed. 
Brenton looks at the role EU preferences to LDCs in general have been playing and could play in 
assisting the integration of the LDCs. He shows that there is considerable variation across countries in 
the potential impact that EU preferences can have gi ven current export structures. There is a group of 
LDCs for whom EU trade preferences on existing exports are not significant since these exports are mainly of products where the most-favored-nation duty  is zero. Export diversification is the key issue 
for these countries. For other LDCs, EU preferences ha ve the potential to provide a more substantial 
impact on trade. However, the author shows that only 50 percent of EU imports from non-ACP 
(Africa, Caribbean, and Pacific) LDCs which are el igible actually request preferential access to the 
EU. The prime suspect for this low level of use are the rules of origin, both the restrictiveness of the 
requirements on sufficient processing and the cost s and difficulties of providing the necessary 
documentation. More simple rules of origin are likel y to enhance the impact of EU trade preferences 
in terms of improving market access and in stimula ting diversification towa rd a broader range of 
exports.  
 Brenton, P., and T. Ikezuki (2004) Preferen ce Utilization and Preference Margins – What do 
Variations Across Countries tell Us? Some In itial Observations. Mimeo. Washington DC: 
World Bank.  
 This paper presents information on the utilization of  non-reciprocal preferences granted by the EU, 
US and Japan to a common group of mainly LDC de veloping countries beneficiaries. The conclusions 
are that the utilization of trade preferences vary acr oss beneficiaries of particular schemes and across 
schemes for a particular beneficiary. This implies that the impact of preference erosion following multilateral negotiations to reduce MFN tariffs will fall more heavily on some countries (those with 
higher utilization rates) than others. Further, it is  argued that developing countries should provide 
greater flexibility in satisfying the requirements to  demonstrate that sufficient processing has be 
undertaken to justify preferential access. Rules of origin which provide for alternative methods for 
satisfying sufficient processing are more likely to lead to higher rates of utilisation of available 
preferences.  
 
Brenton, P., and T. Ikezuki (2004) The Initial and Potential Impact of Pref erential Access to the 
U.S. Market under the African Growth and Opportunity Act. World Bank Policy Research 
Working Paper No. 3262, Washington, DC: World Bank.  
The ability to export clothing products under preferences with liberal rules of origin is the key factor currently determining whether the African Growth and Opportunity Act (AGOA) has a significant 
impact on non-oil exporting African countries. At present only a small number of countries receive substantial benefits and least deve loped countries that do not receive preferences for clothing have yet 
to see an impact of AGOA on their overall exports. However, the benefits from exporting clothing 
under AGOA appear fragile in the face of the re moval of quotas in the United States on major 
suppliers, such as China, at the end of 2004, and the pl anned removal of the liberal rules of origin that 
allow for the global sourcing of fabrics from leas t-cost locations. To entrench and enhance the 
benefits of AGOA, it is important that the scheme be extended over a much longer period, if not made 
permanent, and the special liberal  rules of origin for clothing pr oducts be extended considerably 
beyond 2004. The effective inclusion of textile products and a number of high-duty agricultural  TN/MA/S/1/Add.2 
 Page 21 
 
 
 products would also help to broa den the range of opportunities for African exporters in the U.S. 
market. Nevertheless it is important that the oppor tunities created by AGOA are integrated into a 
broader framework for promoting trade and that it be recognized that if the opportunities offered by 
more open trade are to be exploited, there must be  concerted efforts to improve the environment for 
investment countries covered by AGOA.  Brenton, P., and M. Manchin (2002) Making EU Trade Agreements Work: The Role of Rules of 
Origin. CEPS Working Document No. 183, Brussels: CEPS.  
A key element of the EU’s free trade and preferential  trade agreements is the extent to which they 
deliver improved market access and so contribute to the EUs foreign policy objectives towards 
developing countries and neighbouring countries in Eu rope, including the countries of the Balkans. 
Previous preferential trade schemes have been ineffective in delivering improved access to the EU 
market. The main reason for this is probably the very  restrictive rules of origin that the EU imposes, 
coupled with the costs of proving consistency with  these rules. If the EU wants the ‘Everything but 
Arms’ agreement and free trade agreements with c ountries in the Balkans to  generate substantial 
improvements in access to the EU market for pr oducts from these countries then it will have to 
reconsider the current rules of origin and implem ent less restrictive rul es backed upon by a careful 
safeguards policy. 
 
Candau, F., L. Fontagné, and S. Jean (2004) Th e Utilization rate of Preferences in the EU. 
Prepared for the Technical Workshop on Tari ff Preferences and their Utilization, Geneva: 
WTO.  
 
This paper studies the effectiveness of EU's pref erential agreements in granting their partners 
improved market access. The utilization of preferences vary across receivers of particular markets and 
across markets for a particular receivers. In many LDC African countries, preferences are 
systematically underutilized. Its also pointed out in the paper that a preferential agreement never 
covers all products, and all produc t coverage varies widely across agreements. How each set of 
preferences is actually utilized is tightly associated to the sequence of  their implementation, and to the 
associated level of preference and administrative constraint.   Dean, M.J. (2003) Do Preferential Trade Agreem ents Promote Growth? An Evaluation of the 
Caribbean Basin Economic Recovery Act. Document No. 2002-07-A, Washington DC: U.S. International Trade Commission.  
The few empirical studies which examine the effects of preferential trade liberalization on growth find no direct relationship between membership in a PTA  and growth across countries. This is somewhat 
surprising, given the large literature which argues that  trade liberalization is likely to encourage more 
rapid growth. However, sensitivity analysis has show n that this link between freer trade and growth 
may be indirect, as freer trade strongly increases investment, and higher investment strongly increases 
growth. This paper tests for both direct and indire ct effects of preferential trade liberalization on 
growth and investment, by examining the impact of  the Caribbean Basin Economic Recovery Act--a 
non-reciprocal PTA implemented by the U.S. in 1984 to encourage growth and development in 
Caribbean and Central American countries. Results suggest that CBERA did not result in any “trade-
induced investment-led growth.” It may have had a direct impact on growth in the region, but the 
effect was small, and significant only when combined  with trade and foreign exchange reforms on the 
part of the beneficiary countries themselves. Howe ver, preferential trade liberalization through the 
production-sharing program, and unila teral and regional trade reforms in beneficiary countries and in 
the US did lead to investment-led growth, and to higher growth directly, in the CBERA countries. 
 TN/MA/S/1/Add.2 
Page 22  
 
 Estevadeordal, A., and K. Suominen (2004) Rul es of Origin: A World Map and Trade Effects. 
Paper prepared for the Seventh Annual Conference on Global Economic Analysis: Trade, Poverty, and the Environment, Washington, DC: World Bank. 
 
The paper focuses on capturing the effects of PTAs a nd rules of origin (RoO), a crucial yet poorly 
understood market access discipline included in  virtually every PTA. Five main findings are 
concluded. First, the most recent wave of PTA form ation that started swelling in the 1990s forged in 
regimes with unprecedently restrictive and comple x product-specific RoO - while compensating these 
features with relatively lenient regime-wide RoO.  Second, assessing the trade effects of RoO, the 
authors find that regimes with restrictive RoO a nd with high degrees of sectoral selectivity in RoO 
discourage aggregate trade flows. Third, regime-wide RoO that allow for flexibility in the application 
of product-specific RoO, such as cumulation and draw back, facilitate trade flows. As such, various 
regime-wide RoO provisions can counteract restri ctive product-specific Ro O’s negative effects on 
trade. Fourth, at the sectoral level, both r estrictive RoO and selectivity in RoO in final goods 
encourage trade in intermediate goods, and can thus entail trade diversion in inputs. Fifth, exporters 
and producers learn over time to comply with stringent product-specific RoO, and to take greater 
advantage of permissive regime-wide provisions: “RoO learning” gradually reduces “RoO interference”.  
 
Haveman, J.D. and H.J. Shatz (2004) Deve loped Country Trade Barriers and the Least 
Developed Countries: The Current situation. Journal  of Economic Integration, vol. 19(2), pp. 
230-270.  
In the 2001 Doha Development Round ministerial declaration, countries committed themselves "to 
the object of duty-free, quota-free market access fo r products originating from LDCs." In this light, 
this paper investigates the current tariff barrier s put in place and preferences granted by the Triad 
countries regarding products from LDCs. It first investigates preferences in policy - the simple 
average tariffs faced by LDCs - and then looks at ba rriers in practice, analysing the extent to which 
LDCs have been able to take advantage of the variety of preferences granted. It also explores the LDC 
tariff barrier against goods from other countries. It finds  that tariff barriers against LDC products have 
been fallen dramatically and are especially low in the EU. However, barriers remain against certain 
products in which LDC specialize, so that U.S.  import-weighted tariff for LDC good are actually 
higher than U.S. import-weighted tariffs for countri es subject to MFN tariffs. Furthermore, the LDC 
themselves tend to favour goods from the advanced  industrial countries. These results indicate that 
there is still much room for tariff reductions for LDC goods, especially in the U.S., and that such reductions must take account of LDC production capabilities.     Ianchovichina, E., A. Mattoo and M. Olarre aga (2001) "Unrestricted Market Access for Sub-
Saharan Africa: How Much is it Worth and Who Pays," World Bank Policy Research Working 
Paper No. 2595. Washington, DC: World Bank.  
Initiatives to improve market access for the poorest countries have recently been announced by the 
European Union, Japan, and the United States. Th is paper assesses the impa ct of these initiatives and 
others that might be taken on a subset of 37 Sub-Saharan African countries (SSA-37) of these 
initiatives and others that might be taken. The author s find that fully unrestricted access to all the 
QUAD countries would produce substantial gains for SSA -37, leading to a 14 percent increase in non-
oil exports ($2.5 billion) and boosting real incomes in SSA-37 by around 1 percent. Most of these 
gains would come from preferential access to the hi ghly protected Japanese and European agricultural 
markets. The smallness of SSA-37 ensures that th e costs of trade diversion for the QUAD, other 
developing countries and the world as a whole are negligible.   TN/MA/S/1/Add.2 
 Page 23 
 
 
 Inama, S. (2002) Market Access for LDCs - Issu es to Be Addressed. Journal of World Trade, 
vol. 36(1), pp. 85-116.  
 
This article provides suggestions on ways to ensu re that the actual initiatives for improved market 
access to the LDCs, result in trade preferences having the expected developmental effect. It points out 
that, notwithstanding the importance of expanding pref erences to cover all products, product coverage 
itself represents only one of the several dimensions  to substantially enhan ce market access conditions 
for LDCs’ exports. Equally, or more  important, is the utilisation of trade preferences and the factors 
currently impeding the full use of the available pref erences. In this regard, the following issues need 
to be addressed: (i) the form and legal modalities needed to impart stability to trade preferences 
granted under this initiative; (ii) the identifica tion of products where an expansion of product 
coverage would be required (obviously these prod ucts are the first candidates for a meaningful 
expansion of market access for LDCs); (iii) the im portance of rules of origin and other ancillary 
requirements in affecting the effective utilisati on of the preferences and how these requirements 
should be adapted in the light of the industrial capacity of LDCs; and possibly harmonised; and (iv) 
the need to provide LDCs with the necessary technical  assistance aimed at increasing the utilisation of 
trade preferences.  
Inama, S. (2003) Trade Preferences and the WT O Negotiations on Market Access. Mimeo. 
Geneva: UNCTAD. 
 This paper aims at clarifying some conceptual issu es on the value of trade preferences and aims at 
putting into focus future research on trade preferences . The paper concludes three issues in the context 
of ongoing multilateral negotiations. (i) Preferences "a la carte" and the enabling clause. (ii) Rules of 
origin under unilateral trade preferences. (iii) Gra duation under GSP schemes. Preferences "a la carte" 
are highly controversial among the developing countries. They are also costly for the preferences 
giving countries. Preferences, and even more, pref erences "a la carte", could become the tool for a 
"stick or a carrot" exercise in the hands of some  preferences giving countries. Seeking a multilateral 
agreement on graduation for GSP schemes may prov e to be impossible given the limited process on 
multilateral debates regarding special and differential treatment. However, in the long run this option 
may provide stability to unilateral trade preferences. Am id all of this, liberalization of rules of origin 
under unilateral trade preferences ar e almost ideal candidates for a win-win situation. This should be 
unanimously supported by all benefi ciary countries. Unfortunately ROOs are not a friendly object of 
negotiations given their complex nature.    
Inama, S. (2004) Utilization of Trade Preferences. Mimeo. Geneva: UNCTAD.  
 This paper assesses the value of trade preferen ces under the GSP schemes using non-traditional 
indicators. An examination of the different benc hmarks yields the conclusion that there is a 
tremendous scope for improving the u tilization of currently available preferences in the GSP schemes. 
The persistent low trend of the utilization rate holds for both LDC and non-LDC beneficiaries. The 
paper further concludes that the inclusion or ex clusion of oil dramatically changes the picture 
preferences utilization. One of th e prime suspects for the underscored utilization of trade preferences, 
are the rules of origin. Finally, the paper concludes that beneficiaries countries with low utility rate 
and low utilization rates will be likely to experien ce little loss on trade diversion effects from the 
reduction of preferential margins since their trade is taking place under MFN.   
International Monetary Fund (2003) Financ ing of Losses from Preference Erosion, 
Communication prepared for the WTO,  WTO document code WT/TF/COH/14. 
 
Losses from preference erosion, for LDCs as a whol e, as a result of MFN tariff reductions by the 
Quad countries, will probably be very small, likel y less than two per cent of exports. Only a few 
countries will face losses that are not insignificant. But here too the magnitudes are small in absolute TN/MA/S/1/Add.2 
Page 24  
 
 value and in relation to exports. Only one country is expected to face losses exceeding ten per cent of 
exports.  Three key distinguishing features of losses  from preference erosion are that they represent a 
permanent shock, they can be anticipated ex ante, a nd that their actual impact is spread out over time. 
Given the limited number of countries that will be seriously affected and the distinguishing features of 
losses from preference erosion, any financing is best done in the context of existing medium-term 
adjustment and program financing facilities. In any as sessment of the balance of payments need in the 
context of program discussions, Fund staff s hould take into account the potential losses from 
preference erosion as one of the elements that affect the external environment facing a country’s 
exports.  
 
Kee, L.H., M. Olarreaga and P. Silva (2004) Ma rket Access for Sale: Latin America’s Lobbying 
for U.S. Tariff Preferences. World Bank Policy Research Working Paper No. 3198, 
Washington: World Bank.  
This paper assesses the foreign lobbying forces behind the tariff preferences that the United States 
grants to Latin American and Caribbean countries. R esults suggest that return s to Latin American and 
Caribbean exporters lobbying for tariff preferences in the United States are around 50 percent. The 
reason for these large returns is the relatively low estim ated weight given to social welfare in the U.S. 
government’s objective function when deciding whethe r or not to grant tariff preferences to Latin 
American and Caribbean exporters. 
 
Mattoo, A., D. Roy, and A. Subramanian (2003)  The African Growth and Opportunity Act and 
Its Rules of Origin: Generosity Undermined? The World Economy, vol. 26(6), pp. 829-851.  
This paper describes the Africa Growth and Oppor tunity Act (AGOA) which the United States 
recently enacted and assesses its quantitative imp act on African exports. The AGOA expands the 
scope of preferential access of Africa's exports to the United States in key areas such as clothing. 
However, its medium- term benefits - estimated  at about US$100-$140 million, an 8-11 percent 
addition to current non-oil exports - would have been  nearly five times greater (US$540 million) if no 
restrictive conditions had been imposed on the terms of market access. The most important of these 
conditions are the rules of origin with which Afri can exporters of clothing must comply to benefit 
from duty- free access.  Olarreaga, M. and F. Ng (2002) Tariff Peaks and Preferences, in Hoekman, B., A. Mattoo, and 
P. English (eds) Development, Trade and the WTO: A Handbook, Washington, DC: World Bank.   
This chapter provides a brief description of the exte nt and importance of existing tariff peaks in the 
Quad, the preferential treatment granted to devel oping countries for these tariff peak products, and the 
prevailing pattern of developing  country exports. The gains from preferential access are conditional 
on the ability to redirect and expand exports. The benefits of preferential access are also heavily 
dependent on the extent to which other policies that affect market access constrain exports from 
LDCs. Rules of origin and the threat of contingent protection are examples of policies that can be so 
used as to greatly reduce the value of duty-free access. Rules of origin that require high levels of local 
value added can imply that developing countries are forced to pay the MFN tariff. The threat of 
instruments of contingent protection can also reduc e the incentive to undertake investments to benefit 
from duty- free access.   Özden, Ç., and E. Reinhardt (2002) The Perv ersity of Preferences: GSP and  Developing 
Country Trade Policies, 1976-2000. World Ba nk Policy Research Working Paper No. 2955, 
Washington: World Bank.   TN/MA/S/1/Add.2 
 Page 25 
 
 
 Industrial countries maintain special tariff preferenc es, namely the Generalized  System of Preferences 
(GSP), for imports from developing countries. Critics have highlighted the underachieving nature of 
such preferences, but developing countries continue to  place the GSP at the heart of their agenda in 
multilateral negotiations. What effect do such prefer ences have on a recipien t’s own trade policies? 
Özden and Reinhardt develop and t est a simple theoretical model of a small country’s trade policy 
choice, using a dataset of 154 developing countries from 1976 through 2000. They find that countries 
removed from the GSP adopt more liberal trade polic ies than those remaini ng eligible. The results, 
corrected for endogeneity and robust to numerous alte rnative measures of trad e policy, suggest that 
developing countries may be best served by full in tegration into the reciprocity-based world trade 
regime rather than continued GSP-style special preferences.  
 Özden, Ç., and E. Reinhardt (2004) First Do No Harm: The Effect of Trade Preferences On Developing Country Exports. Mimeo. Atlanta, GA: Emory University.  
This paper analyze a panel of GSP recipients from 1976 to 2000 and find that their export performance improves after they are removed from the United States GSP program. The results are 
robust to alternative export measures and to correc tion for endogeneity of GSP status. They conclude 
that, even on their own terms, nonreciprocal pr eference programs have failed. Developing countries 
would be better served by full integration into the reciprocity-based world trade regime than by the 
prevailing form of nonreciprocal trade preferences. 
 
Özden, Ç., and G. Sharma (2004) Price Effects of Preferential Market Access: The Caribbean 
Basin Initiative and the Apparel Sector. Worl d Bank Policy Research Working Paper No. 3244, 
Washington, DC: World Bank.   
Özden and Sharma analyze the impact of the unila teral preferences granted by the U.S. Caribbean 
Basin Initiative (CBI) on the prices received by eligib le apparel exporters. The authors find that CBI 
exporters only capture around two-thirds of their pr eference margin, despite the fairly competitive 
nature of the apparel market. This translates into  a 9 percent increase in the relative prices they 
receive, but these numbers vary across countries and years. Countries specializing in higher-value items capture more of the preference margin while  implementation of the North American Free Trade 
Agreement has a negative effect. The authors anal yze the effect of Multi-Fibre Agreement (MFA) 
quotas imposed on third countries (such as China) and find that the benefits of CBI preferences will 
be significantly reduced once the quotas are fully removed in 2005. 
 
Panagariya, A. (2002) EU Preferential Trade Arrangements and Developing Countries. The 
World Economy, vol. 25(10), pp. 1415-1432. 
 
This paper offers an overview and quantitative a ssessment of the EC PTAs with the developing 
countries. The main conclusion is that beyond the obvious rent transfers accompanying such preferences, a definite positive impact of these arrangements on developing countries is difficult to 
detect. To some degree, given the multi-layered Euro pean arrangements, it is not entirely clear what 
these preferences have meant. Ind eed, preferences to one set of developing countries have probably 
come at the expense of another. The preferences may have also reduced pressures for trade 
liberalization within the preference receiving-c ountries thereby undermining the internal policy 
reform that could have promoted faster expansion of trade and possibly growth.  
 
Romalis, J. (2003) Would Rich Country Trade Preferences Help Poor Countries Grow? 
Evidence from the Generalized System of Preferences. Mimeo, Chicago: University of Chicago.  
 
Would new trade preferences by the US, the European Union and other developed countries help the 
world’s poorest countries grow? This paper concludes that they would. It empirically examines this 
issue by studying the impact of the Generalized System of Preferences on the growth of developing TN/MA/S/1/Add.2 
Page 26  
 
 countries. In the 1970s most developed countries reduced or eliminated tariffs on thousands of 
products exported by most developing countries. Th e extent to which countries benefited on impact 
from these tariff reductions varied w ith the intensity of their trade with the developed world. This 
paper finds that the growth rate of countries that received the largest tariff reductions accelerated relative to the growth rate of countries that benefite d less. But the highest trad e barriers maintained by 
the developed world are still imposed on goods that  are disproportionately exported by the world’s 
poorest countries. This paper’s results suggest that eliminating these barriers would significantly improve the prospects of some of the world’s poorest people. 
 
Stevens, C. and J. Kennan (2003) Comparativ e Study of G8 Preferential Access Schemes. 
Interim Report, Brighton: Institute of Development Studies.   
This report provides some very preliminary fi nding for Phase I of a comp arison of preferential 
schemes offered by G8 to African exports. Further,  this report will set the scene for Phase II through 
identifying the preference agreements of most im portance for Africa and their principal differences. 
EU has the widest range of goods and preferential agreements, no fewe r than eight agreements apply 
to Africa. The other G8 have, compared to EU, far fewer agreements. The paper concludes several 
features that can effect the characteristics of the preference agreement. These features are: 
geographical coverage, depth of preference, tariff quotas, duration, legal basis, and rules of origin. 
Further, the paper concludes a hypothesis that the value to Africa of G8 trade preferences could be 
enhanced through one or both of changes: (i) harmon ization of exporters conditions (ii) improvement 
of specific provisions in some agreements. More over, the paper identifies which of the multiple 
agreements, for the LDC and the sub Saharan A frican countries, are the most preferential and 
effectively therefore, the one normally being used. A RoO comparisons are rather difficult since they 
have different systems. A genuine comparison betw een the G8 countries will have to wait the more 
country-/product-specific analyses. However, the pa per concludes that the EU and Canada have the 
most liberal rules followed by USA (except for the case of clothing under AGOA) and Japan.  
 
Stevens, C. and J. Kennan (2004) The Utiliza tion of EU Preferences to the ACP. Paper 
presented to the Technical Seminar on Tariff Preferences and their Utilization, WTO, Geneva, 31 March 2004. Brighton: Institute of Development Studies. 
 There are four main reasons why preferences mi ght not be fully utilised, with very different 
implications. This paper examines the extent of ea ch of the four. The data on whether or not EU 
imports from Africa are actually treated preferentia lly by customs are not good. But what is available 
suggest that any failure to claim preferences is trivial. Overwhelmingly the most important reason 
why EU imports from Africa do not receive preferences is that the items face duty- free Most 
Favoured Nation (MFN) access. Over two -thirds of imports by value fall into this category.  
 
 
United Nations Conference on Trade and Deve lopment (2001) Improving Market Access for 
Least Developed Countries, Geneva: UNCTAD.  
Among the various initiatives undertaken at the multila teral and international level to favour LDC’s 
exports, the European Union (EU) proposal, originally  made in the course of the preparations for 
Seattle by providing LDGs duty/quota-free treatment for "essentially all" products, is probably one of 
the most relevant. At present, the recently appr oved "Everything But Arms" (EBA) initiative is the 
most tangible implementation of such course of acti on. The original proposal was discussed in several 
forums including at the World Trade Organiza tion (WTO), where agreement was reached that 
duty/quota-free treatment would be "consistent with domestic requirements and international 
agreements". The "essentially all" qualification of  the offer may imply that some items would be 
excluded from the coverage of the initiative. More over the use of the word "consistent" with the 
existing requirements may imply that current rules of  origin and administrative procedures will not be  TN/MA/S/1/Add.2 
 Page 27 
 
 
 modified. The present paper contends that four b asic conditions should be fulfilled by these various 
initiatives to improve market access for LDGs: (i) ensu re security of the preferential treatment granted 
(e.g. to establish a commitment that imparts stability  of market access to the initiative); (ii) provide 
full product coverage at duty-free rate, limited pr oducts exceptions may be granted duty-free tariff 
quotas with a scheduled phase down; (iii) harmonize a nd devise origin requirements matched with the 
industrial capacity of LDGs; and (iv) strengthen t echnical cooperation to maximize utilization of trade 
preferences. Finally, this paper is limited to market  access constraints, in particular tariffs and issues 
related to rules of origin. Supply-side constr aints, determining LDGs' export capacity are not 
addressed, but should be taken into c onsideration in the context of any initiative directed at improving 
LDGs' participation in global trade flows.   IV. NON TARIFF MEASURES 
Anderson, J.E. and E. van Wincoop (2004) Trade costs. Journal of Economic Literature, vol. 
42(3), pp. 691-751.  
This paper is a survey of trade costs. Trade cost s are broadly defined as including all costs incurred in 
getting a good to a final user other than the margin al cost of producing the good itself: transportation 
costs, policy barriers (tariff and non-tariff), informati on costs, contract costs, enforcement costs, costs 
associated with the use of different currencies, lega l and regulatory costs, and local distribution costs. 
The authors use three different a pproaches to evaluate trade costs.  They first review evidence on 
international policy barriers, transport costs and wh olesale and retail distribution costs. Second, they 
infer estimates of trade costs from trade flows usi ng a gravity model. Third, they use prices as an 
indirect source of information about the magnitude of  trade costs. Results sugg est that trade costs are 
large and vary widely across countries and product lines. 
 
Bradford, S. (2003) Non Tariff Barriers in Rich Economies: Quantifying Them, Identifying 
Them, and Assessing their Impacts, mime o, Provo, UT: Brigham Young University 
 
This paper presents a new method for estimating tari ff equivalents of NTBs for final goods in OECD 
economies. The analysis exploits detailed, comprehe nsive, and careful price comparisons. Since this 
method does not identify policies, the author strives to supplement the numbers by presenting preliminary information on possible sources of the ba rriers. The authors then use an applied general 
equilibrium model to provide a broad-brushed asse ssment of the impact of these NTBs. The result 
imply that NTBs greatly restrict trade in OECD economies and that removing them would bring large gains to them and to developing countries.  
 
Dee, P. and M. Ferrantino (eds) (forthcoming in  2005) Quantitative Methods for Assessing the 
Effects of Non Tariff Measures and Trade Fac ilitation, World Scientific Publishing Co. 
 
As tariffs have fallen worldwide, the increasing importance of non-tariff policies for further trade 
liberalization has become widely recognized. The methods for assessing the potential effects of such 
liberalization have lagged significantly behind those available for analyzing tariffs. This book is the 
first volume that comprehensively addresses this ga p. It has been designed to be useful for both 
economists and policymakers, especially for t hose involved in communicating ideas and results 
between economists and policymakers.   This indispensable book contains cutting-edge discussi ons of the full range of methodologies used in 
this area, including business surveys, summary statis tics such as effective rates of protection and price 
gaps, time-series and panel econometrics, and si mulation methods such as computable general 
equilibrium. It covers the entire spectrum of po lices under discussion in current trade negotiations, 
including trade facilitation, services policies, quan titative measures, customs procedures, standards, 
movement of natural persons, and anti-dumping.  TN/MA/S/1/Add.2 
Page 28  
 
  
Evenett, J. S. and B. Hoekman (2004) Government Procurement: Market Access, 
Transparency, and Multilateral Trade Rules. World Bank Policy Research Working Paper no 
3195. Washington, DC: World Bank.   
This paper examines the effects on national welfare and market access of two public procurement 
practices, discrimination against foreign suppliers  of goods and services and non-transparency of the 
procedures used to allocate government contracts to firms. Both types of policies have become 
prominent in international trade negotiations, in cluding the Doha Round of WTO trade talks. The 
analysis concludes that greater domestic competition on procurement markets and greater 
transparency will improve economic welfare. However,  there is no clear-cut effect on market access 
of ending discrimination or improving transpar ency. This mismatch between market access and 
welfare effects may account for the slower progress  in negotiating procurement disciplines in trade 
agreements than for traditional border measures such as tariffs, given that market access is the driving 
force behind trade agreements.  Francois, J. and I. Wooton (2004) Market Stru cture in Services and Market Access in Goods. 
Tinbergen Institute Discussion Paper TI 2004-050/2, Rotterdam: Tinbergen Institute.  
This paper examines the interaction between trade in goods and the degree of market power exercised 
by the domestic trade and distribution sectors, the ma rgin sectors. The theoretical results point to an 
expected linkage between service sector competition a nd goods trade. At least in theory, the domestic 
service sector can serve as an effective import ba rrier. This is also supported by the econometric 
results. These point to statistically significant li nkages between effective market access conditions for 
goods, and the structure of the service sector. They also point to a qualitatively significant effect. 
Because of the implied interaction, at least across our sample of OECD countries, ignoring structure 
of the domestic service sector may lead to a substan tial underestimation of the direct impact of tariffs 
on trade flows.  
 
Hoekman, B., and K. Saggi (2004) Trading Mark et Access for Competition Policy Enforcement. 
World Bank Policy Research Working Paper No . 3188. Washington, DC: World Bank.  
 
Motivated by discussions in the World Trade Organization (WTO) on multilateral disciplines with 
respect to competition law, this paper develops a two-country model that explores the incentives of a 
less developed country (LDC) to offer increased mark et access (via a tariff reduction) in exchange for 
a ban on foreign export cartels by its  developed country (DC) trading partner. The authors show that 
such a bargain is feasible and can generate a globa lly welfare maximizing outcome. They also explore 
the incentives for bilateral cooperation when th e LDC uses transfers to “pay” for competition 
enforcement by the DC. A comparison of the two cases shows that there exist circumstances in which 
the stick (i.e. the tariff) is more  effective in sustaining bilateral cooperation than the carrot (i.e. the 
transfer). Furthermore, the scope  for cooperation is maximized when both instruments are utilized. An 
implication of the analysis is that LDCs have incentiv es to not bind tariffs in the absence of an explicit 
WTO prohibition of export cartels. 
 
Organization for Economic Cooperation and Development (2003) Non Tariff Measures 
Affecting EU Exports: Evidence from a Compla ints Inventory, Official Document ECO/WKP 
(2003)27, Paris: OECD.  
This study reports evidence on the prevalence of NT Ms based on an inventory of business complaints. 
The results suggest that natural resource based indus tries, such as agriculture and food, mining, and 
textiles, are most strongly affected by NTMs relative to their export volumes. Certification procedures, quantity control measures, and technical regulations are the types of NTM most frequently complained about. Complaints about do mestic governance practices, such as impediments  TN/MA/S/1/Add.2 
 Page 29 
 
 
 related to government procurement, investment rest rictions, or insufficient intellectual property rights 
protection account for almost a third of all NTM observations and are in most cases not sector-specific, but of a general nature. These complain ts are frequently associated with discriminatory 
practices or inappropriate regulations, while dela ys and obstructions are repeatedly mentioned in 
relation to customs and certification pr ocedures and technical regulations.  
 Organization for Economic Cooperation and De velopment (2004) Analysis of Non-Tariff 
Measures: The Case of Prohibitions and Quotas . Trade Policy Working Paper No. 6. Paris: 
OECD 
 This study, that investigates two specific types of  quantitative restrictions, namely import prohibitions 
and quotas, is part of a broad reflection aimed at learning more about the nature and scope of non-
tariff measures. The analysis reviews informa tion on these measures contained in the WTO Trade 
Policy Reviews, WTO notifications and in various ot her trade reports. The research revealed that the 
use of quotas and prohibitions for economic reasons has declined, but most countries use prohibitions 
as part of their regulatory frameworks for protecti ng human safety and health or the environment, and 
this tendency appears to be increasing. Traders w ould benefit from greater transparency of these 
measures. Also, there are import bans hampering the international trade in used goods, whose 
circumstances and appropriateness in terms of regulatory efficiency merit scrutiny. 
 
Organization for Economic Cooperation and Development (2003) Overview of Non-Tariff 
Barriers: Findings From Existing Surveys. Paris: OECD.   
This paper compiles and broadly analyses the findings  from survey-based resear ch that helps identify 
barriers perceived by exporters from various countries  and regions in foreign markets. It furthermore 
explores the extent to which different surveys repo rt the same types of barriers. From the above 
review of survey-based research it is clear that  businesses feel that numerous non-tariff barriers 
impact on their access to foreign markets. The vari ous business surveys provide a rich account of the 
types of constraints experienced by the exporting fi rms of a particular country or region. The cross-
survey analysis highlights the global dimension of  obstacles where different surveys carried out in 
different parts of the world all report such obstacl es as relatively often mentioned by respondents. 
More specifically, some concerns from the business community appear to be widely shared across 
countries and regions.  
 
Organization for Economic Cooperation and De velopment (2003) Analysis of Non-Tariff 
Measures: The Case of Export Restrictions. Paris: OECD.  
 This paper provides an overview of current di sciplines on export restrictions under the GATT/WTO, 
including the scope of exceptions. It also indicates the current situation regarding the implementation 
of notification obligations concerning quantitative r estrictions. The main questions that this paper 
deals with include: the nature of justifications invoked for exceptions, in particular in the case of 
economic reasons; whether current transparency disci plines are sufficient in terms of predictability; 
and whether there is room for strengthening disciplines in this area, on either a horizontal or a sectoral 
basis. 
 
Organization for Economic Cooperation and De velopment (2002) Analysis of Non-Tariff 
Measures: The case of Non-Automati c Import Licensing. Paris: OECD.  
 Non-automatic licensing systems are a means to control imports, depending on compliance with 
specific criteria. These schemes can be applied fo r a variety of purposes, according to both economic 
and non-economic regulatory goals. The use of these measures has been evolving over time, and with 
the significant reforms that have been undertaken ov er the years, the pattern of perceived problems 
associated with them has changed. The analysis  in the present report reviews and summarises on a TN/MA/S/1/Add.2 
Page 30  
 
 country basis the information contained in the WTO Trade Policy Reviews (TPRs), which generally 
permit identification of licensing measures used in  different countries and the broad product groups 
covered. In addition, the analysis draws on the on-going discussions at the WTO on trade facilitation, 
particularly highlighting the important link with import licensing. Import licensing schemes 
implemented for economic reasons ha ve the primary intent of limiting imports to protect domestic 
producers, thus having similar effects as import qu otas. In WTO Member countries, the use of these 
measures has largely been discontinued. By contr ast, import licensing implementing a wide variety of 
regulations related inter alia  to national security, protection of health, safety, and the environment, is 
widely used across both OECD and non-OECD countries. It is with respect to the procedural aspects 
that the question of trade impact of such li censing for non-economic reasons arises. Although the 
WTO provides far-reaching disciplines in the area of licensing procedures, particularly through the 
Agreement on Import Licensing (ILP), business concer ns suggest that traders are still experiencing 
problems with the way in which licensing systems ar e implemented and applied. Besides the need to 
fully implement existing commitments, there appe ar to be areas where further improvement of 
licensing-related disciplines might be warranted. This explains why licensing has been among the 
issue areas of the on-going WTO di scussions on trade facilitation.   
 
Organization for Economic Cooperation and De velopment (2003) Analysis of Non-Tariff 
Measures: The Case of Export Duties. Paris: OECD.  
 
WTO disciplines on export duties are not clearly defined and currently no member assumes 
obligations for scheduling and notification of export duties under the WTO. Meanwhile, it may be 
noted that more and more bilateral and regional trade agreements introduce disciplines to prohibit 
export duties and that the recent WTO accession process has led to certain concessions in this regard. 
This survey paper begins by clarifying the defi nition of export duties. Then it examines existing 
disciplines on export duties in the WTO in detail. It  also examines current trends with respect to 
disciplines at the regional level and in the WTO accession process. Finally, it analyses factual 
information on products subject to such duties b ased upon Trade Policy Review reports and describes 
key findings from them, including trade and economic implications to the extent possible. Certain trends concerning the use of export duties can be id entified from a review of the WTO’s  Trade Policy 
Review country reports. These are inter alia: Expor t duties are introduced mainly by developing and 
least developed countries; Outstanding examples of  items subject to export duties are forestry 
products, fishery products, mineral and metal products, leather and hide and skin products, and 
various agricultural products; The two main reasons for imposing export duties are 1) fiscal receipts 
or revenue and 2) promotion of downstream pr ocessing industries; Another alleged reason is 
environmental protection or preservation of natu ral resources or products; There is a growing 
tendency to abolish export duties notably in bilate ral and regional contexts, reflecting a recognition of 
their trade distortive effects. Detailed explanations  of these issues and other outstanding points are 
described in this paper.  Observations are also included on aspects of possibl e rule-making on export duties in the context of 
the on-going process of the Doha Development Agenda . Finally, the suggestion is put forward that it 
would be useful to undertake a wider analysis of export restrictions under the NTM project, as a 
further background contribution to the DDA. 
 
Piermartini, R. (2004) The Role of Export Taxes in the Field of Primary Commodities,  
WTO Discussion Paper No. 4, Geneva: WTO. 
 
This paper examines the economic effects of an export tax on commodity prices and the volume of 
exports. It examines how welfare resulting from an  export tax is redistributed among foreign and 
domestic consumers, producers and the government, and the effects of an export tax used as an 
instrument of trade policy to improve developi ng countries' terms of trade, favours economic 
diversification and help the poor. 
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