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1. GSP in the "spaghetti bowl"; of trade preferences

Author:
Arne Melchior
Publication Date:
09-2005
Content Type:
Working Paper
Institution:
Norwegian Institute of International Affairs
Abstract:
The paper examines the relative position of GSP (tariff preferences for developing countries) compared to ordinary tariffs and free trade agreements in Norway, the EU and the USA. On average, ordinary GSP gives a tariff rebate of less than 50% in all countries. “Extended” GSP, given to the Least Developed Countries (LDCs) and others, implies zero tariffs in Norway and the EU, but only partial liberalisation in the USA. EU provides extended GSP for 119 countries, while the USA does so for 76 and Norway for 52. Considering the shares of trade rather than the number of countries, extended GSP covers 5% or less of total trade in all cases, and ordinary GSP is much more important. Compared to tariffs in free trade agreements, ordinary GSP is inferior in the USA and the EU, but not too far behind in Norway. This is due to recent cuts in MFN tariffs as well as improvements in the GSP system of Norway. For manufacturing, Norway has low tariffs and a generous GSP system. This is however not the case for agriculture.
Topic:
Development, International Trade and Finance, and Third World
Political Geography:
United States, Europe, and Norway

2. Trade policy differentiation between developing countries under GSP schemes

Author:
Arne Melchior
Publication Date:
09-2005
Content Type:
Working Paper
Institution:
Norwegian Institute of International Affairs
Abstract:
The paper reviews options with respect to differentiation between beneficiaries of GSP (tariff preferences for developing countries). It has for a long time been accepted that the Least Developed Countries (LDCs) may be treated better than other developing countries, but a recent WTO dispute indicates that discrimination beyond this is possible if it is based on objective criteria related to development. The paper discusses GSP differentiation in the light of this, and argues that the most generous preferences are given to a wider group of countries than the LDCs. A main reason is that LDCs constitute a small part of the developing world, and 4/5 of the world's poor live outside the LDCs. Preferences for the poorest should not become an obstacle for improved market access for the “second poorest”. The paper discusses possible reforms in Norway's GSP systems in this light. According to objective criteria, the special position of Botswana and Namibia in Norway's current GSP system could be questioned, since e.g. Botswana is now an upper middle income country.
Topic:
Development, International Cooperation, International Trade and Finance, and Third World
Political Geography:
Botswana