Date: 2020
Type: Working Paper
Go ahead and trade : the effect of uncertainty removal in the EU’s GSP scheme
Working Paper, EUI RSCAS, 2020/15, Global Governance Programme-385, [Global Economics]
BORCHERT, Ingo, DI UBALDO, Mattia, Go ahead and trade : the effect of uncertainty removal in the EU’s GSP scheme, EUI RSCAS, 2020/15, Global Governance Programme-385, [Global Economics] - https://hdl.handle.net/1814/66268
Retrieved from Cadmus, EUI Research Repository
We estimate the trade effect of removing uncertainty about future trading conditions in the context of the 2014 reform of the Generalized System of Preferences (GSP) of the European Union (EU). EU GSP members receive non-reciprocal trade preferences (NRTPs), but only as long as they are not too competitive; i.e. they will graduate in case their share of EU GSP imports in a sector exceeds a certain threshold. However, the 2014 reform removed the threat of these competitiveness-related graduations for members of the GSP+, a sub-scheme of the main programme. We find that the reform increased EU imports from GSP+ countries by about 7% on average whilst tariffs stayed the same. This trade impact is driven by the country-sector pairs most exposed to NRTPs uncertainty pre-reform. The effect is robust to taking into account other aspects of the reform, such as the reduction in GSP membership and changes in tariff margins, respectively.
Cadmus permanent link: https://hdl.handle.net/1814/66268
ISSN: 1028-3625
Series/Number: EUI RSCAS; 2020/15; Global Governance Programme-385; [Global Economics]
Publisher: European University Institute
Keyword(s): GSP Trade preferences Trade policy uncertainty F13 F14
Other topic(s): Trade, investment and international cooperation European governance