Bulletin n. 1/2012
June 2012
CONTENTS
  • Section A) The theory and practise of the federal states and multi-level systems of government
  • Section B) Global governance and international organizations
  • Section C) Regional integration processes
  • Section D) Federalism as a political idea
    • Joshi, Vivek
    Preferential Tariff Formation: The Case of the European Union
    in Journal of World Trade , Volume 45 Issue 5 ,  2011 ,  901-952
    In this paper, we address the impact of Multilateral Trade Liberalization (MTL) on the preferential tariffs granted by the European Union (EU), which is one of the largest traders and one of the biggest contributors to MTL. We empirically address two important questions. First, if the Most Favoured Nation (MFN) tariff for a product is higher, does it lead to a higher or lower preferential tariff? Second, with the EU being a large trading partner in such agreements, does reciprocity matter for giving meaningful preferential access? For a given MFN tariff, we model the preferential tariff with a simple linear functional form. We draw three important conclusions. First, the products that are highly protected do not get high preferential access even at the regional level. Second, reciprocity plays only a limited role in granting better preferential access. Third, the generalized system of preference (GSP) preferences matters when the EU negotiates with the developed partners, but it does not matter when it negotiates with the developing partners.
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