Borchert, Ingo2012-06-042012-06-042008-09https://hdl.handle.net/10986/6991Through its diverse trade preference schemes, the European Union provides different groups of developing countries with different degrees of market access. This paper is the first to demonstrate empirically that such staggered market access induces sizable trade diversion to the detriment of relatively less preferred beneficiary countries. In particular, preferences granted to African, Caribbean and Pacific economies are shown to impair the export performance of seven developing countries whose products only qualify for basic preferences under the Generalized System of Preferences. Exports to the European Union decline by about 30 percent if the African, Caribbean and Pacific tariff falls by 10 percentage points. In terms of forgone trade volume, losses for these relatively disadvantaged countries amount on average to 9 percent of their total trade with the European Union, depending on the country and its main exports. These intra-developing country distortions are driven by highly substitutable, often labor-intensive commodities.CC BY 3.0 IGOACCORDSACCOUNTINGAD VALOREMAGRICULTURAL PRODUCTSAPPARELBALANCE OF PAYMENTSBANK POLICYBENEFICIARIESBENEFICIARYBILATERAL IMPORTSBUDGET CONSTRAINTCHECKSCOMPARATIVE ADVANTAGECOMPARATIVE DISADVANTAGECOUNTRY × TARIFFCUSTOMSCUSTOMS UNIONDERIVATIVEDEVELOPED COUNTRIESDEVELOPING COUNTRIESDEVELOPING COUNTRYDIFFERENTIAL TREATMENTDISCRIMINATORY MANNERDISPUTE SETTLEMENTDISPUTE SETTLEMENT SYSTEMDUMMY VARIABLESELASTICITY OF SUBSTITUTIONEQUIPMENTEUROPEAN UNIONEXPENDITUREEXPORT OPPORTUNITIESEXPORT PERFORMANCEEXPORT VOLUMEEXPORT VOLUMESEXPORTERSEXPORTING COUNTRYEXPORTSFINAL GOODSFREE MARKET ACCESSFREE TRADEFREE TRADE AGREEMENTGENERAL EQUILIBRIUMGENERALIZED SYSTEM OF PREFERENCESGLOBALIZATIONIMPACT OF TRADEIMPACT OF TRADE DIVERSIONIMPORT STATISTICSIMPORTING COUNTRIESIMPORTING COUNTRYINDUSTRIAL PRODUCTSINTERNATIONAL BANKINTERNATIONAL ECONOMIC LAWINTERNATIONAL ECONOMICSINTERNATIONAL TRADEINTERNATIONAL TRADE COMMISSIONMEMBER COUNTRIESMULTILATERAL TRADE LIBERALIZATIONNATIONAL INCOMENON-TARIFF BARRIERSOPTIMAL TARIFFSPACIFIC REGIONPATTERN OF TRADEPOLICY RESEARCHPOSITIVE COEFFICIENTPREFERENTIAL MARGINSPREFERENTIAL MARKET ACCESSPREFERENTIAL RATEPREFERENTIAL REGIMEPREFERENTIAL TARIFFPREFERENTIAL TARIFF RATEPREFERENTIAL TARIFFSPREFERENTIAL TRADEPREFERENTIAL TRADE ARRANGEMENTSPREFERENTIAL TREATMENTPRICE CHANGESPRICE INDEXPRICE SENSITIVITYPRODUCT DIFFERENTIATIONPROTECTIONISMQUANTITATIVE RESTRICTIONSRECIPROCITYREGIONALISMRETURNSRULES OF ORIGINSOURCINGSPECIALIZATIONSUSTAINABLE DEVELOPMENTTARIFF BARRIERSTARIFF CHANGESTARIFF DATATARIFF EQUIVALENTSTARIFF LINETARIFF LINESTARIFF PREFERENCESTARIFF RATETARIFF RATESTARIFF REDUCTIONSTARIFF SCHEDULETARIFF SCHEDULESTARIFF TREATMENTTERMS OF TRADETERMS OF TRADE EFFECTTERMS OF TRADE EFFECTSTRADE AGREEMENTTRADE AGREEMENTSTRADE BARRIERSTRADE CONCESSIONSTRADE COSTSTRADE CREATINGTRADE CREATIONTRADE DATATRADE DISTORTIONSTRADE DIVERSIONTRADE EFFECTTRADE FLOWSTRADE LIBERALISATIONTRADE POLICIESTRADE POLICYTRADE PREFERENCETRADE PREFERENCESTRADE REDUCTIONTRADE VOLUMETRADE VOLUMESTRADINGTRANSPORT COSTSTREATYUNDUE INFLUENCEVOLUME OF TRADEWORLD MARKETSWORLD TRADEWORLD TRADE ORGANIZATIONWorld Bankhttps://doi.org/10.1596/1813-9450-4710