Unrestricted Market Access for Sub-Saharan Africa : How Much is it Worth and Who Pays?

The European Union, Japan, and the United States have recently announced initiatives to improve market access for the poorest countries. How would these initiatives affect Sub-Saharan Africa and the rest of the world? The European Union, Japan, and the United States have recently announced initiatives to improve market access for the poorest countries. Ianchovichina, Mattoo, and Olarreaga assess the impact on Sub-Saharan Africa of these initiatives and others that might be taken. They find that fully unrestricted access to all the Quad countries (Canada, the European Union, Japan, and the United States) would produce substantial gains for Sub-Saharan Africa, leading to a 14 percent increase in non-oil exports ($2.5 billion) and boosting real incomes by about 1 percent ($1.8 billion). Most of these gains would come from preferential access to the highly protected Japanese and European agricultural markets, especially the heavily protected Japanese market for meat and certain cereal grains. The smallness of Sub-Saharan Africa's trade ensures that the costs of trade diversion for the Quad, other developing countries, and the world would be on the whole negligible. One concern, however, is that preferential access to protected markets might lead Sub-Saharan Africa to produce goods in which it does not have a global comparative advantage, and the future erosion of these preferences might lead to adjustment costs.This paper - a product of Trade, Development Research Group - is part of a larger effort in the group to understand the implications of improved market access for developing countries