Silva, Peri2012-06-222012-06-222005-02https://hdl.handle.net/10986/8838This paper investigates the role played by domestic importers and foreign exporters in improving preferential access to the domestic market. To this end, the framework used in this paper extends the protection for sale analysis to explicitly model the role of domestic importers and foreign exporters in the determination of preferential trade treatment. The predictions of the model are tested using data on preferential trade between the United States and Latin American countries. The results suggest that Latin American exporters and U.S. importers' lobbying efforts have a significant and important role in determining the extent of preferential access granted by the United States. More interestingly, these findings also show that U.S. importers capture a very substantial share of the rents generated by tariff preferences. These results therefore shed a pessimistic view on preferential trade schemes as a reliable source of gains for developing countries.CC BY 3.0 IGOAGRICULTURAL GOODSAGRICULTUREAPPAREL PRODUCTSCHAMBERS OF COMMERCECONSTANT RETURNS TO SCALECONSUMER SURPLUSCONSUMERSCUSTOMSDOMESTIC MARKETDOMESTIC PRICESDOMESTIC PRODUCERSECONOMIC ANALYSISECONOMIC EFFECTSELASTICITIESELASTICITYEMPIRICAL ANALYSISEMPIRICAL EVIDENCEEQUILIBRIUMEQUILIBRIUM PRICESEQUILIBRIUM TARIFFEXPORTERSEXPORTING COUNTRIESEXPORTSFOREIGN EXPORTERSFOREIGN PRODUCERSFORMAL ANALYSISFREE TRADEFREE TRADE AREAIMPORT PENETRATIONIMPORTED GOODSIMPORTING COUNTRYIMPORTSINCOMEINCOME DISTRIBUTIONINSURANCEINTERNATIONAL TRADELABOR COSTSLATIN AMERICANMARKET ACCESSMARKET POWERMULTIPLIERSPOLICY INSTRUMENTPOLITICAL DISCUSSIONSPOLITICAL ECONOMYPOSITIVE EXTERNALITIESPREFERENTIAL ACCESSPREFERENTIAL TARIFFPREFERENTIAL TARIFFSPREFERENTIAL TRADEPREFERENTIAL TREATMENTPRODUCERSPRODUCTION PROCESSPROFIT FUNCTIONSQUOTA RENTSSUBSTITUTION EFFECTTARIFF PREFERENCETARIFF PREFERENCESTARIFF REVENUETARIFF REVENUESTRADE DIVERSIONTRADE LIBERALIZATIONTRADE POLICIESTRADE POLICYTRADE PREFERENCESTRADE REGULATIONSTRADE RESTRICTIONSUTILITY FUNCTIONWELFARE FUNCTIONWorld Bank10.1596/1813-9450-3518