DP2747 Tariff Peaks in the Quad and Least Developed Country Exports

Author(s): Bernard Hoekman , Francis Ng , Marcelo Olarreaga

Publication Date: March 2001

Keyword(s): Market Access , Least Developed Countries , Trade Preferences

JEL(s): F13 , F14 , O19

Programme Areas: International Trade and Regional Economics

Link to this Page: www.cepr.org/pubs/dps/DP2747.asp

Although average tariffs in Quad markets are very low, tariff peaks and tariff escalation have a disproportional effect on exports from least developed countries (LDCs). Tariff peak products tend to be heavily concentrated in agriculture and food products and in labour-intensive sectors such as apparel and footwear. Full duty and quota free access for LDCs in the Quad for tariff peak products would result in an 11% increase in their total exports - in the order of $2.5 billion. Exports to Quad countries of tariff peak products would expand by 30-60%. Given that LDC exports of tariff peak items account for only a small share of total developing country exports, granting LDCs duty free access has a negligible impact on other developing countries. For the same reason, Quad imports increase only marginally, suggesting that this should not be a factor constraining implementation of duty free access for the poorest countries.