Preferential Market Access Design: Evidence and Lessons from African Apparel Exports to the US and the EU
Least developed countries rely on preferential market access. Proof of sufficient transformation has to be provided to customs in importing countries by meeting Rules of Origin requirements to benefit from these preferences. These Rules of Origin h...
| Main Authors: | , |
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| Language: | English en_US |
| Published: |
World Bank, Washington, DC
2013
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/2013/02/17273221/preferential-market-access-design-evidence-lessons-african-apparel-exports-eu http://hdl.handle.net/10986/13152 |
| Summary: | Least developed countries rely on
preferential market access. Proof of sufficient
transformation has to be provided to customs in importing
countries by meeting Rules of Origin requirements to benefit
from these preferences. These Rules of Origin have turned
out to be complicated and burdensome for exporters in the
least developed countries. Starting around 2001, under the
United States Africa Growth Opportunity Act, 22 African
countries exporting apparel to the United States can use
fabric from any origin (single transformation) and still
meet the criterion for preferential access (the so-called
Special Rule), while the European Union continued to require
yarn to be woven into fabric and then made into apparel in
the same country (double transformation). This paper uses
panel estimates over 1996-2004 to exploit this
quasi-experimental change in the design of preferences. The
paper estimates that this simplification contributed to an
increase in export volume of about 168 percent for the top
seven beneficiaries or approximately four times as much as
the 44 percent growth effect from the initial preference
access under the Africa Growth Opportunity Act without the
single transformation. This change in design also mattered
for diversity in apparel exports, as the number of export
varieties grew more rapidly under the Africa Growth
Opportunity Act special regime. |
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