Is Erosion of Preferences a Serious Concern

This paper aims to clarify the specific issues raised by trade preferences, in particular non-reciprocal ones, as they pertain to the Doha round. We evaluate the extent of tariff preferences through both a measure of the "true" preferential margin and an assessment of tariff-rate quota rents. We find that the threat of preference erosion following the Doha round is real, insofar as trade preferences are now playing a key role in the world trading system, and in particular in the pro-poor policies undertaken by rich countries. Although the problem is focused on a handful of products and on a limited number of countries, our analysis suggests that the magnitude of forthcoming difficulties for poor countries could be significant in many cases