Preferential Market Access Design: Evidence and Lessons from African Apparel Exports to the US and to the EU

Abstract

Least developing countries (LDC) rely on preferential market access which is mechanically eroded by the tariff reductions by grantor countries to other countries. Effective market access depends on the severity of the Rules of Origin that have to be met to qualify for these preferences. These Rules of Origin have turned out to be complicated and burdensome for LDC exporters. Since 2001, under the US Africa Growth Opportunity Act (AGOA), 22 African countries exporting apparel to the US can use fabric from any origin and still meet the criterion for preferential access (single transformation), while the European Union continued to require yarn to be woven into fabric and then made-up into apparel in the same country (double transformation).
Citation

de Melo, J., and A. Portugal-Perez "Preferential Market Access Design: Evidence and Lessons from African Apparel Exports to the US and to the EU." Ferdi, Working paper P47, April 2012.