The Costs and Benefits of Duty-Free, Quota-Free Market Access for Poor Countries: Who and What Matters

Abstract

This paper examines the potential benefits and costs of providing duty-free, quota-free market access to the least developed countries (LDCs), and the effects of extending eligibility to other small and poor countries. Using the MIRAGE computable general equilibrium model, it assesses the impact of scenarios involving different levels of coverage for products, recipient countries, and preference-giving countries on participating countries, as well as competing developing countries that are excluded. The main goal of this paper is to highlight the role that rich and emerging countries could play in helping poor countries to improve their trade performance and to assess the distribution of costs and benefits for developing countries and whether the potential costs for domestic producers are in line with political feasibility in preference-giving countries.

Keywords: CGE Modeling, Trade Policy, Duty-Free Market Access, Technical Barriers to Trade, Preference Erosion

JEL Classification: D58, F13, F17