Economic impacts on the least developed countries of the elimination of import tariffs on their products

Abstract

Several initiatives aimed at reducing trade barriers for Least Developed Countries have been proposed recently. These include the EU decision to provide duty-free and quota-free access on an autonomous basis for all products except arms when imported from the Least Developed Countries, and a proposal from the WTO General Director to bind all tariffs on imports from Least Developed Countries at zero rates in the World Trade Organisation. The purpose of this study is to evaluate the economic impacts for the Least Developed Countries of duty-free and quota-free access in their export markets. The main focus is on the QUAD markets (Canada, the EU, Japan, and the USA). The report documents the significance of existing trade barriers and evaluates the economic consequences of removing these barriers. The impact of supply capacity constraints in Least Developed Countries on their ability to utilise preferential trade arrangements is also investigated. Moreover, the report evaluates the significance for Least Developed Countries of certain crucial aspects of preferential trading arrangements, such as the extent of product coverage, the question of binding tariffs and procedures, the use of safeguard measures in importing countries, graduation procedures and rules of origin.