DP7313 The Doha Round and Market Access for LDCs: Scenarios for the EU and US Markets

Author(s): Céline Carrère , Jaime de Melo

Publication Date: June 2009

Keyword(s): LDCs , Market Access , Rules of Origin

JEL(s): F13 , F15

Programme Areas: International Trade and Regional Economics

Link to this Page: www.cepr.org/pubs/dps/DP7313.asp.asp

LDCs hoped that the DOHA round would bring them greater market access in OECD countries than for non-LDCs. Using HS-6 tariff level data for the US and the EU for 2004, this paper estimates that, once the erosion from preferential access into the EU to non-LDCs is taken into account, LDCs have about a 3% preferential margin in the EU market. In the US market, in spite of preferences under AGOA, on a trade-weighted basis, LDCs are discriminated against. Under various “Swiss formulas” for tariff cuts, effective market access for LDCs in the EU will be negligible and still negative in the US. If the US were to apply a 97% rule (i.e. duty-free, quota-free access for all but three percent of the tariff lines), LDCs could increase exports by 10% or about $1billion annually. Effective market access is further reduced by complicated Rules of Origin (RoO) applied by the EU and the US. Furthermore, generally, the most restrictive RoO fall on products in which LDCs have the greatest preferential market access.