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The Trade Effects of Graduation in the EU’s GSP Scheme

Ring Eggers, Amanda LU (2017) NEKP01 20171
Department of Economics
Abstract
Graduation has been imposed in unilateral preferential trade agreements when product groups from beneficiaries or beneficiaries themselves are viewed as too competitive and developed. What happens to the product groups of the beneficiaries when the trade preferences are withdrawn?
This paper addresses the potential trade effects of graduation from the European Unions Generalized System of Preferences by using disaggregated data on HS chapter level. A gravity model with specific exporter-product linear time trend is estimated with an Ordinary Least Square estimator using fixed effects. The specific exporter-product linear time trends are included in order to deal with the endogeneity issue that arises and makes it possible to capture the... (More)
Graduation has been imposed in unilateral preferential trade agreements when product groups from beneficiaries or beneficiaries themselves are viewed as too competitive and developed. What happens to the product groups of the beneficiaries when the trade preferences are withdrawn?
This paper addresses the potential trade effects of graduation from the European Unions Generalized System of Preferences by using disaggregated data on HS chapter level. A gravity model with specific exporter-product linear time trend is estimated with an Ordinary Least Square estimator using fixed effects. The specific exporter-product linear time trends are included in order to deal with the endogeneity issue that arises and makes it possible to capture the real effect of graduation on imports. The estimated results indicate that the import of the graduated products to the EU12 decreases as a consequence of graduation. This goes in line with the theoretical prediction, which is that removed GSP benefits would have a negative effect on the trade flow due to increased trade costs. (Less)
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author
Ring Eggers, Amanda LU
supervisor
organization
course
NEKP01 20171
year
type
H2 - Master's Degree (Two Years)
subject
keywords
Graduation, GSP, Developing countries, EU, Gravity Model
language
English
id
8924339
date added to LUP
2017-09-12 11:52:29
date last changed
2017-09-12 11:52:29
@misc{8924339,
  abstract     = {Graduation has been imposed in unilateral preferential trade agreements when product groups from beneficiaries or beneficiaries themselves are viewed as too competitive and developed. What happens to the product groups of the beneficiaries when the trade preferences are withdrawn? 
This paper addresses the potential trade effects of graduation from the European Unions Generalized System of Preferences by using disaggregated data on HS chapter level. A gravity model with specific exporter-product linear time trend is estimated with an Ordinary Least Square estimator using fixed effects. The specific exporter-product linear time trends are included in order to deal with the endogeneity issue that arises and makes it possible to capture the real effect of graduation on imports. The estimated results indicate that the import of the graduated products to the EU12 decreases as a consequence of graduation. This goes in line with the theoretical prediction, which is that removed GSP benefits would have a negative effect on the trade flow due to increased trade costs.},
  author       = {Ring Eggers, Amanda},
  keyword      = {Graduation,GSP,Developing countries,EU,Gravity Model},
  language     = {eng},
  note         = {Student Paper},
  title        = {The Trade Effects of Graduation in the EU’s GSP Scheme},
  year         = {2017},
}