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Reforming trade preferences for Least Developed Countries

Written by Massimiliano Cali, Sheila Page

A recent report by a Working Group on Global Trade Preference Reform convened by the Center for Global Development proposes a series of recommendations aimed at making trade preferences work more effectively for the LDCs. These include not only the expansion of the duty free quota free (DFQF) scheme to all exports from all LDCs, but extending the pool to some advanced developing countries (chosen by CGD). They also recommend the modification of existing rules of preference programmes, and call for a reduction in the costs of regulatory requirements in preference-giving countries and efforts to tackle supply-side constraints in poor countries.

While it is difficult to deny the advantages of these measures for LDCs’ exports, there are conceptual and political challenges for the implementation of some of these measures, which may undermine some of the proposed reforms.