Finally, to whom do these countries offer bilateral tariff preferences? Figure 8 illustrates the export recipients in 2014; consider again the data for the European Union. The EU offered a bilateral tariff preference to developing country exporters in 89 percent of these preference possible products and to middle income countries in 95 percent of products.<sup>43</sup> On the other hand, it offered a tariff preference to high-income countries in only 32 percent of available products.

In general, high-income economies in Figure 8 tend to provide the largest share of their realized offerings of preference possible products to developing countries, primarily through GSP-type programs (see again Table 3) but also increasingly through FTAs. With the exception of Australia, high-income economies offer the fewest preferences to other high-income economies; they offer much more to emerging and developing countries. Indeed, Japan (and Saudi Arabia) offered zero tariff preferences to other high-income economies in these data. However, this pattern may also change if the Trans-Pacific Partnership (TPP) (which includes Australia, Canada, Japan, and the US) and the Transatlantic Trade and Investment Partnership (which includes the EU and US) negotiations result in FTAs that include the standard comprehensive reciprocal tariff reductions between members.

Figure 8 also reveals substantial variation for the bilateral preferences offered by emerging economies. India has the most preference possible products and yet offers the fewest preferences overall (see again column 3 of Table 4). Argentina and Brazil also tend to offer relatively few bilateral preferences to the countries in this sample; on the other hand, China and Turkey offered the most preferences in the set of emerging economies and have levels of offerings comparable to some high-income countries. Mexico, on the other hand, stands out by way of the concentration of its tariff preferences toward high-income economy exporters - recall its NAFTA participation (with the US and Canada) and its bilateral FTAs with the EU and Japan.

The lowest panel of Figure 8 reveals the pattern of bilateral tariff preferences that developing countries offered in 2014. Overall, they offered fewer bilateral preferences across all exporter recipient groups. Their limited preferential offerings go toward other developing countries; these frequently arise through PSAs, or in the case of African countries, through customs unions like the East African Community or COMESA. Colombia, Egypt and the countries involved in ASEAN are the only ones offering tariff preferences to high-income economy exporters, and these are primarily through FTAs.

Before concluding this section, we briefly describe research that has begun to explore the _determinants_ of bilateral tariffs. In particular, Blanchard, Bown and Johnson (2016) focus on global supply chain determinants and use a sample of 14 high-income and emerging economies over 19952009. They find that bilateral final goods tariffs are decreasing in the amount of domestic value added embodied in foreign production and the amount of foreign value added embodied in domestic production. In related work, Blanchard and Matschke (2015) examine US bilateral tariff

> 43Note that this ordering is reversed for most of the other high income countries which tend to offer preferences in more products to poorer countries. The EU’s results stem from its FTAs with Mexico and South Africa, and its customs union with Turkey. Furthermore, unlike the United States in 2014, for example, the EU also offered GSP eligibility to Argentina, China and Russia. These countries were removed from EU GSP program in 2015.

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