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How Preferential is Preferential Trade?

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dc.contributor.authorEspitia, Alvaro
dc.contributor.authorMimouni, Mondher
dc.contributor.authorPichot, Xavier
dc.contributor.authorRocha, Nadia
dc.contributor.authorMattoo, Aaditya
dc.date.accessioned2018-05-23T19:25:13Z
dc.date.available2018-05-23T19:25:13Z
dc.date.issued2018-05
dc.description.abstractWorld trade is increasingly ruled by preferential trade agreements (PTAs), but their precise nature remains relatively opaque. This paper assesses a central dimension of these agreements, the significance of tariff preferences, using a new data set on preferential and non-preferential or Most Favored Nation (MFN) applied tariffs, constructed by the International Trade Center and the World Bank. The data set covers 5,203 products, 199 reporters, and 239 partners, representing approximately 97 percent of world imports in 2016. There are three main findings. First, PTAs have significantly widened the scope of tariff-free trade. Whereas 42 percent of the total value of trade traded free under MFN rates in 2016, PTAs have fully liberalized an additional 28 percent of global trade. Second, the extent of preferential liberalization varies significantly across countries and sectors. Around 70 percent of countries have reduced trade-weighted average preferential tariffs to less than 5 percent, but PTAs have not been able to eliminate the high levels of protection in some low-income countries and in agricultural products, textiles, and footwear. Third, while the average preferential margin for trade covered by PTAs is low because one-fifth of world trade under preferential agreements is already duty free, more than a quarter of world trade is subject to an average preference margin of 7.4 percent. Considering competition from preferential and non-preferential sources, however, only 5.2 percent of global exports benefited from a preferential advantage of over 5 percent and only 3.3 percent of global exports suffered from a preferential disadvantage higher than 5 percent. Furthermore, data for a subsample of importers reveal that not all eligible imports take advantage of preferences, because of impediments such as restrictive rules of origin, and therefore actual preference margins are generally lower than potential margins.en
dc.identifierhttp://documents.worldbank.org/curated/en/655601526483739564/How-preferential-is-preferential-trade
dc.identifier.doi10.1596/1813-9450-8446
dc.identifier.urihttps://hdl.handle.net/10986/29854
dc.languageEnglish
dc.publisherWorld Bank, Washington, DC
dc.relation.ispartofseriesPolicy Research Working Paper;No. 8446
dc.rightsCC BY 3.0 IGO
dc.rights.holderWorld Bank
dc.rights.urihttp://creativecommons.org/licenses/by/3.0/igo
dc.subjectREGIONAL TRADE
dc.subjectPREFERENTIAL TRADE AGREEMENTS
dc.subjectPREFERENTIAL TARIFFS
dc.subjectMOST-FAVORED NATION
dc.subjectTARIFF PREFERENCE
dc.subjectGLOBAL TRADE
dc.titleHow Preferential is Preferential Trade?en
dc.typeWorking Paperen
dc.typeDocument de travailfr
dc.typeDocumento de trabajoes
dspace.entity.typePublication
okr.crossref.titleHow Preferential Is Preferential Trade?
okr.date.disclosure2018-05-16
okr.date.doiregistration2025-04-07T09:03:50.627144Z
okr.date.doiregistration2025-04-08T16:33:15.340436Z
okr.date.doiregistration2025-04-09T03:13:36.587514Z
okr.doctypePublications & Research
okr.doctypePublications & Research::Policy Research Working Paper
okr.docurlhttp://documents.worldbank.org/curated/en/655601526483739564/How-preferential-is-preferential-trade
okr.guid655601526483739564
okr.identifier.doi10.1596/1813-9450-8446
okr.identifier.externaldocumentum090224b085aaca6a_1_0
okr.identifier.internaldocumentum29898343
okr.identifier.reportWPS8446
okr.importedtrueen
okr.language.supporteden
okr.pdfurlhttp://documents.worldbank.org/curated/en/655601526483739564/pdf/WPS8446.pdfen
okr.statistics.combined7341
okr.statistics.dr655601526483739564
okr.statistics.drstats6610
okr.topicInternational Economics and Trade::Access to Markets
okr.topicInternational Economics and Trade::International Trade and Trade Rules
okr.topicInternational Economics and Trade::Trade Policy
okr.topicInternational Economics and Trade::Trade and Multilateral Issues
okr.topicInternational Economics and Trade::Trade and Regional Integration
okr.unitDevelopment Research Group, Development Economics; and the Macroeconomics, Trade and Investment Global Practice
relation.isAuthorOfPublication1e63409b-8428-4de9-8942-70e823b051f4
relation.isAuthorOfPublication.latestForDiscovery1e63409b-8428-4de9-8942-70e823b051f4
relation.isSeriesOfPublication26e071dc-b0bf-409c-b982-df2970295c87
relation.isSeriesOfPublication.latestForDiscovery26e071dc-b0bf-409c-b982-df2970295c87
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