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  • P-ISSN 2586-2995
  • E-ISSN 2586-4130
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KDI Journal of Economic Policy. Vol. 45, No. 1, February 2023, pp. 33-68

https://doi.org/10.23895/kdijep.2023.45.1.33

× KDI Open Access is a program of fully open access journals to facilitate the widest possible dissemination of high-quality research. All research articles published in KDI JEP are immediately, permanently and freely available online for everyone to read, download and share in terms of the Creative Commons Attribution 4.0 International License.

Effects of the Utilization of Non-Reciprocal Trade Preferences Offered by QUAD Countries on Economic Growth in Beneficiary Countries†

SENA KIMM GNANGNON

Author & Article History

Manuscript received 26 February 2022; revision received 03 March 2022; accepted 14 June 2022.

Abstract

The present article investigates empirically whether non-reciprocal trade preferences (NRTPs) offered by QUAD countries (Canada, the European Union, Japan, and the United States) to developing countries have helped to promote economic growth in the beneficiary countries. Two main blocks of NRTPs are considered here: Generalized System of Preferences (GSP) programs and other trade preferences programs. The analysis used a set of 90 beneficiary countries of NRTPs that are concurrently recipients of development aid over the period of 2002-2018. Using the two-step system generalized method of moments, the analysis indicated that while a higher degree of utilization of each of these two blocks of NRTPs has been associated with a high economic growth rate, development aid enhances this positive effect. This highlights the need for donors to support a development strategy based on the provision of both development aid and NRTPs if they are to help beneficiary countries to promote economic growth. Finally, when the positive economic growth effect of the utilization of NRTPs is higher, the result is a greater country’s share of exports (under preferential tariffs) to QUAD countries out of their total merchandise exports.

Keywords

Utilization of Non-reciprocal Trade Preferences, Economic Growth, QUAD Countries, Developing Countries

JEL Code

F13, F43, F35, O10

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