Nothing to Declare: Duty-free access to imports from LDCs

Developed countries have agreed to provide duty free and quota free access to imports from LDCs covered by 97 per cent of tariff lines. However, LDCs would like to extend the agreement to 100 per cent coverage, since 3 per cent of tariff lines can cover a substantial proportion of LDC exports. Products of major interest include textiles and clothing and agricultural goods such as rice, oilseeds, sugar and bananas. The potential trade and welfare impacts of expanding the coverage are analysed using a global general equilibrium model. Updated estimates indicate LDCs stand to gain $4.2 billion in additional exports, the bulk of which accrues to Bangladesh, Cambodia and West Africa. A further $1.8 billion increase in exports could be obtained if LDCs had duty free access to the markets of China, India, Brazil and South Africa. However, non-LDC developing countries are likely to become worse off as a result of extension of preferences to LDCs.