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1、The Generalized System of Preferences How much does it matter for developing countries?The Generalized System of Preferences How much does it matter for developing countries?Geneva,2023ii 2023,United Nations All rights reserved worldwideRequests to reproduce excerpts or to photocopy should be addres

2、sed to the Copyright Clearance Center at .All other queries on rights and licences,including subsidiary rights,should be addressed to:United Nations Publications405 East 42nd StreetNew York,New York 10017United States of AmericaEmail:publicationsun.orgWebsite:https:/shop.un.org/The findings,interpre

3、tations and conclusions expressed herein are those of the authors and do not necessarily reflect the views of the United Nations or its officials or Member States.The designations employed and the presentation of material on any map in this work do not imply the expression of any opinion whatsoever

4、on the part of the United Nations concerning the legal status of any country,territory,city or area or of its authorities,or concerning the delimitation of its frontiers or boundaries.This publication has not been formally edited.United Nations publication issued by the United Nations Conference on

5、Trade and DevelopmentUNCTAD/DITC/TSCE/2023/1ISBN:978-92-1-101466-2eISBN:978-92-1-002623-9Sales No.23.II.D.8iiiAcknowledgmentsACKNOWLEDGMENTSThe study was prepared,under the supervision of Miho Shirotori,Acting Director,Division on International Trade and Commodities of the United Nations Conference

6、on Trade and Development(UNCTAD),by a team composed of Taisuke Ito,Mesut Saygili,Ebru Gokce-Dessemond and Federico Manto.A background paper was prepared by Ben Shepherd,UNCTAD consultant.Substantive comments were provided by the following UNCTAD staff:Bruno Antunes,Katalin Bokor,Marisa Henderson,Tae

7、 Hee Kim,Anar Mammadov,Graham Mott,Samuel Munyaneza,Alessandro Nicita,Khairedine Ramoul,Vincent Valentine and Dong Wu.The study benefited from extensive comments of three external reviewers:Daniel Anthony,Derk Bienen and Makong Tsotetsi.ivThe Generalized System of Preferences:How much does it matter

8、 for developing countries?ABBREVIATIONS AND ACRONYMSAGOA African Growth and Opportunity ActASEAN Association of Southeast Asian NationsEAEU Eurasian Economic UnionEBA Everything but armsFDI Foreign direct investmentFTA Free trade agreementGSP Generalized System of PreferencesGVC Global value chainHS

9、 Harmonized Commodity Description and Coding SystemLDC Least developed countryMFN Most favoured nationNTM Non-tariff measuresODA Official development assistanceTRAINS Trade Analysis Information SystemUSITC United States International Trade CommissionWITS World Integrated Trade SolutionWTO World Trad

10、e OrganizationvTable of contentsTABLE OF CONTENTSAcknowledgments.iiiAbbreviations and acronyms.ivExecutive summary.viiI.Introduction and the analytical framework.1I.1.Data .1I.2.Key indicators .2I.3.Limitations.5II.The GSP schemes of the Quad:A snapshot .7II.1.The Quad economies as the key providers

11、 of GSP preferences.7II.2.Imports under the GSP preferences.10II.3.The preference value.10II.4.The margin of tariff preference .11II.5.The preference coverage and utilization.12II.6.The preference margin,utilization,and values .14II.7.The value of preference and the rules of origin .15II.8.Major exp

12、orters and products that receive GSP preferences.16II.9.“Policy space”for trade preferences Preference erosion and dilution .18II.10.Summary.18III.Key indicators.20III.1.Effective country coverage.20III.2.Effective product coverage rate.22III.3.Distribution of preference margins.24III.4.Preference m

13、argins by product sector.28III.5.Preference coverage rate.35III.6.Preference utilization rate .37III.7.Value of preferences.39III.8.Distribution of value of preferences .41III.9.Major exporters by value of preferences.44III.10.Major exported products by value of preference.46IV.Conclusion and the wa

14、y forward.49References .52Appendix 1:Technical note on indicators used in the study.54Appendix 2:Preference margin groups used in constructing Figure 9.56viThe Generalized System of Preferences:How much does it matter for developing countries?FIGURESFigure 1:Diagram of preferential trade.3Figure 2:D

15、iagram of preferential trade(combined).3Figure 3:Distribution of exports from low-income and lower-middle-income country by markets(2021,per cent).8Figure 4:Share of tariff lines eligible for lower GSP rates in the general and LDC only schemes(2020).9Figure 5:Preferential imports under GSP schemes i

16、n Quad markets(20042018,US$billion).10Figure 6:“Effective”value of preference by the GSP schemes(2018,US$million).11Figure 7:Preference margin by scheme,simple and weighted average(2018,per cent).12Figure 8:Product coverage and utilization rates of the GSP schemes(2018,per cent).13Figure 9:Average p

17、reference utilization by the level of preference margin(2018,per cent).14Figure 10:Distribution of preference values “used”,“unused”and“non-covered”by GSP schemes(2018,per cent).15Figure 11:Utilization rate versus the value of preferences(European Unions GSP-LDC scheme,20042018,per cent)(2018,US$mil

18、lion).17Figure 12:Share of MFN duty-free products and the average applied rates(20002020).18Figure 13a:Effective country coverage of GSP schemes(2018,number of countries).20Figure 13b:Effective country coverage by economy(number of countries).21Figure 14a:Effective product coverage rate of GSP schem

19、es(2018,per cent).22Figure 14b:Effective product coverage rate by economy(per cent).23Figure 15a:Average preference margin(2004 and 2018,per cent).24Figure 15b:Distribution of preference margins by economy.25Figure 16:Preference margins by product sector by economy(per cent).29Figure 17a:Preference

20、coverage rate(per cent).35Figure 17b:Preference coverage rate by economy(per cent).36Figure 18a:Preference utilization rate(per cent).37Figure 18b:Preference utilization rate by economy(per cent).38Figure 19a:Tree map of value of preferences(2018,million USD$).39Figure 19b:Value of preferences by ec

21、onomy(US$million).40Figure 20a:Distribution of preference values “used”,“unused”and“non-covered”by GSP schemes(2018,per cent).41Figure 20b:Distribution of value of preferences by economy(per cent).42Figure 21:Major exporters by value of preferences by economy(US$million).45Figure 22:Major exported p

22、roducts by value of preferences by economy(US$million).47viiExecutive summaryEXECUTIVE SUMMARYThe Generalized System of Preferences(GSP)scheme is a voluntary trade measure implemented by developed countries that provide an advantageous,or“preferential”,tariff treatment to imports from developing cou

23、ntries.Different national GSP schemes were introduced following a resolution adopted at the second session of the United Nations Conference on Trade and Development(UNCTAD)in 1968.The scheme is expected to contribute to developing countries export growth particularly in the manufacturing sector.Five

24、 decades since its inception,the GSP stands at a crossroads.The effectiveness of tariff incentives as a tool to foster exports has eroded over time as trade liberalization processes proceed at multilateral,regional and unilateral levels,and as the relevance of tariffs to overall trade costs declines

25、.The question arises as to whether the relevance and effectiveness of tariff preferences remain valid today.Focusing on the GSP schemes of the Quad economies(Canada,European Union,Japan,and the United States of America),which accounted for about 50per cent of global imports on average in the period

26、between 2004 and 2018,the study provides an objective assessment of tariff advantages offered under the GSP by quantifying the economic“value”of preferential treatment and the obstacles to the realization of its full potential.While sharing the same objective of providing preferential market access

27、to imports from developing countries,the GSP schemes of different countries are non-homogeneous sets of national measures.Each GSP scheme is designed according to the granting countrys national interests.Across GSP schemes,there is no threshold or minimum requirement in terms of product/country cove

28、rage and the level of tariff advantages.Hence,the objective of the study is not to bring value judgment as to which scheme is better or worse relative to others but to take stock of the state of tariff preferences offered under the four representative schemes.The following points emerged from the st

29、udy.The preferential tariff rates offered under the Quad GSP schemes have generated tariff savings for importers,particularly for those who import products from least developed countries(LDCs).In 2018,some US$213billion worth of exports from selected developing countries were eligible for preferenti

30、al treatment in one or more of the Quad GSP schemes.About 61per cent of these eligible exports,or US$131billion,entered these markets and effectively received tariff preferences under various GSP schemes.The total tariff saving from the Quad GSP schemes amounted to US$8.8billion,of which US$5.1billi

31、on was thanks to the GSP schemes for LDCs.The GSP preferences applicable to imports from non-LDC developing countries,however,are becoming negligible.The GSP preferential margin for non-LDC developing countries has decreased over time,particularly through the proliferation of reciprocal free trade a

32、greements(FTAs)between the Quad economies and middle-income developing countries.Frequently,tariffs offered under FTAs are lower than preferential tariff rates under GSP schemes.Moreover,several Quad economies exclude upper middle-income countries from GSP eligibility.By contrast,we observe a signif

33、icant value and improvement in tariff advantages that LDCs receive from the Quad economies under their respective GSP-for-LDCs schemes.The European Union,Canada and Japan provide preferential tariffs to virtually all products exported by LDCs.The European Unions Everything-but-Arms(EBA)scheme for LD

34、Cs offers the largest tariff saving of all Quad GSP schemes in absolute terms.The benefits from GSP-for-LDCs preferences are however highly concentrated in a few countries and products.The largest five exporters and top five export products,which include apparel,footwear,leather,and fish,tend to acc

35、ount for nearly 70per cent of the total preference value in Quad markets.viiiThe Generalized System of Preferences:How much does it matter for developing countries?As far as the GSP-for-LDC schemes are concerned,the three largest exporters represent over 90per cent of the total preference value.A si

36、gnificant preference margin provides an incentive to importers to apply for the GSP preferences,according to the Quad import data under GSP-for-LDCs schemes.The rules of origin,which define the“nationality”of a product and allow importing country to determine the eligibility for GSP tariff advantage

37、s,also influence importers decision to apply for GSP preferences.Complying with the rules of origin could be costly and time consuming.The European Union example shows that the simplification of rules and flexibility given to exporters in meeting the origin requirements significantly increased the u

38、se of GSP preferences,particularly on apparel products.1I.Introduction and the analytical framework1I.Introduction and the analytical frameworkFor over 50 years,developed countries have offered preferential tariff treatment to imports from developing countries under the Generalized System of Prefere

39、nces(GSP).The GSP was established in 1968 through discussions within UNCTAD as a voluntary“autonomous”trade measure.1 It is aimed at promoting export growth,industrialization and economic development in developing countries by providing“generalized,non-reciprocal,non-discriminatory preferences”.“Gen

40、eralized”as preferential tariff advantages should in principle apply to all developing countries.“Non-reciprocal”as developed countries reduce tariffs“unilaterally”to imports from developing countries,without requiring similar market opening on the part of developing countries.“Non-discriminatory”as

41、 the same preferences apply to all beneficiary developing countries except least developed countries(LDCs)that receive even better treatment.2 The GSP allows developing countries to export using lower-than-ordinary,“preferential”,tariff rates.During the 1960s and 70s,developing countries were export

42、ing only a few natural resource-based products(e.g.,oil,coffee,sugar).Through this system,developed countries sought to support export diversification and industrialization efforts in developing countries.Today,sixteen economies operate GSP schemes.3 These schemes are non-homogeneous sets of nationa

43、l measures sharing certain common characteristics that each granting country can freely design(Arnau and Juan,2002).There is no threshold or minimum requirement in terms of product/country coverage and the level of tariff advantages(except for duty-free and quota-free market access conditions for LD

44、Cs).4 Most GSP schemes contain special(more beneficial)preferences for LDC beneficiaries in the form of lower preferential tariffs,often zero,for a greater number of products than non-LDC beneficiaries.To differentiate asymmetric levels of preferences applicable to non-LDC and LDC beneficiaries,the

45、study refers to GSP preferences available to non-LDCs as“general(GSP)scheme”and those available to LDCs as“GSP-LDC”or“LDC scheme”.I.1.Data The study is based on UNCTADs GSP database.5 The database compiles bilateral imports from the GSP beneficiary countries that entered the Quad markets to which pr

46、eferential GSP tariff rates are applied at the national tariff line level.For Canada and Japan,such import data were sourced directly from their governments.The import data for the United States of America and the European Union are compiled from publicly available data 1 The system was established

47、by the member States during the United Nations Conference on Trade and Developments(UNCTAD)second conference in 1968.2 The special treatment of the least developed countries(LDCs)is the only exception recognized from the onset in this regard.3 These are:Armenia(Eurasian Economic Union-EAEU),Australi

48、a,Belarus(EAEU),Canada,the European Union,Iceland,Japan,Kazakhstan(EAEU),Kyrgyzstan(EAEU),New Zealand,Norway,the Russian Federation(EAEU),Switzerland,Trkiye,United Kingdom of Great Britain and Northern Ireland,and the United States of America.4 The key parameters for the special treatment of LDCs we

49、re set out in the World Trade Organization Hong Kong Ministerial Decision(2005)that called upon developed and developing countries prepared to do so to provide duty free quota free(DFQF)market access for LDCs for“at least 97per cent of tariff lines.”Accordingly,various developed countries have enhan

50、ced their LDC preferences,and several developing countries instituted new LDC-specific preferential schemes.5 https:/unctad.org/topic/trade-agreements/trade-preferences-utilization2The Generalized System of Preferences:How much does it matter for developing countries?2sources operated by the United

51、States International Trade Commission6 and Eurostat.7 The data on tariff rates are drawn from the World Integrated Trade Solution UNCTAD TRAINS.The dataset analyzed in the report amounts to a total of 4.5million products traded bilaterally between the Quad economies and beneficiary countries between

52、 2004 and 2018.8I.2.Key indicators The study uses three sets of indicators;scope,relevance and value.The first set of indicators measures the“scope”of each GSP scheme in terms of:(i)Effective country coverage How many countries are reported as the GSP beneficiaries in the database.The indicator is m

53、easured as the number of countries that export at least one product that receives the GSP preferential tariff of the importing country.The“effective”country coverage can be less than the official number of beneficiary countries,as some countries may not have any record of exports of products that re

54、ceive the GSP preference.(ii)Effective product coverage rate The share of imported products that benefited from the GSP preferences in the total tariff lines.It is measured as the share of the products imported at least once under the GSP preferential treatment in the total tariff lines of an import

55、ing country.Again,as some GSP-eligible products may not be traded at all,the rate can be less than the share of all the GSP-eligible products in the total tariff lines.That is,the indicator measures the size of GSP schemes in terms of the number of“active products”being preferentially traded.Both in

56、dicators help us compare the scope of preferences across different GSP schemes.To introduce remaining two sets of indicators,a simple diagram is useful.Figure 1 provides a visual representation of the indicators.Assume that there are two different products(product1 and product2)imported by a Quad co

57、untry from a beneficiary country.Further,assume for simplicity that these two products are traded at the same world price.The y-axis provides the prices of the imported products,and the x-axis the quantities of imports of the products.On the y-axis:PW is the world price of a product;PPRE is the worl

58、d price plus the preferential tariff applicable to a product;PMFN is the world price plus the MFN tariff applicable to a product On the x-axis:Products 1 and 2 are imported at quantities Q1 and Q2 respectively.These two products receive different tariff treatment:Product 1 is covered by the GSP sche

59、me.The part of the imports(Q1Used)benefited from preferential rate(PPRE)instead of the MFN rate(PMFN).The remaining part of the covered imports(Q1Covered Q1Used)did not receive preferential rate but the MFN rate,either because beneficiary country could not or did not use the GSP preferences.Product

60、2 is not covered by the GSP scheme.All imports of this product(Q2Non-Covered)were subject to the MFN rate.6 The United States International Trade Commission Data Web(http:/dataweb.usitc.gov)7 Eurostat database(https:/ec.europa.eu/eurostat/web/main/data/database)8 The study uses the dataset covering

61、the period between 2004 and 2018 due to technical reasons pertaining to the subsequent years data.3I.Introduction and the analytical framework3Figure 1:Diagram of preferential tradeSource:Authors own elaboration.Figure 2:Diagram of preferential trade(combined)Source:Authors own elaboration.Product 1

62、:Covered product Product 2:Non-covered product Dutiable Product:Yes GSP Covered:Yes Dutiable Product:Yes GSP Covered:No L1 K1 J1 I1 H1 G1 F1 E1 C1 B1 A1 Price 11D1 Quantity D2 F2 E2 C2 B2 A2 Price 2Quantity N*M*L*J*I*H*G*F*C*B*A*PriceQuantity D*K*O Product 2Product 1 E*4The Generalized System of Pre

63、ferences:How much does it matter for developing countries?4These two diagrams for product 1 and product 2 can be combined into a single product market as in figure 2.The vertical axis is now the price of product 1 and 2,and the quantity is the sum of the number of product 1(QCovered)and product 2(QD

64、utiable QCovered).Both products are traded at the same world prices before import duties but subject to different GSP treatment.The product 1 is eligible for a lower preferential rate and thus can be imported at PPRE.However,the product 2 is subject to the MFN rate and thus imported at PMFN.Returnin

65、g to the remaining two sets of indicators,the second set of indicators measures the“relevance”of GSP preferences in enhancing beneficiaries exports to GSP-granting markets.The indicators used under this category include:(iii)Preference coverage rate The share of imports that are eligible for the GSP

66、 preferential tariffs(“covered imports”)in all imports that are subject to MFN tariff rates greater than zeroper cent(“dutiable imports”).The indicator measures the share of the value of GSP-covered imports in the value of the total dutiable imports in a preference-granting country.That is,the indic

67、ator measures the weight of preference-eligible imports in the total dutiable imports of the product.In Figure 2,the preference coverage rate corresponds to the ratio of area H*J*L*N*(the covered imports)to H*K*L*O*(the dutiable imports).9(iv)Preference utilization rate The share of imports that rec

68、eived GSP preferential treatment at the custom border of a preference-granting country in the total“covered imports”.The preference utilization rate compares the imports of a GSP-eligible product that actually received the preferential tariff treatment when entering the importing country to the impo

69、rts covered by the GSP scheme.In Figure 2,this indicator corresponds to the ratio of area H*I*L*M*to H*J*L*N*.This indicator shows the extent to which the GSP preferences are actually claimed by importers,thus,can be used to measure the usability of existing GSP preferences.The higher the preference

70、 utilization rate,the more“usable”the GSP preferences are to exporters and importers.The third set of indicators captures the“value of preferences”that can be measured based on:(v)Preference margins The difference between the preferential tariff rate and the MFN tariff rate of a product.The margin i

71、s calculated at the export-product line level.When the preference margin is sufficiently large,importing the product from GSP beneficiary countries would be more competitive than other countries product that is subject to an MFN tariff rate.Using the preference margin,we can calculate the value of p

72、reference as a“tariff preference rent”by multiplying the preference margin by the value of imports made under the preferential tariff treatment.This is a tariff revenue forgone for the importing countrys government or tariff savings achieved by importers.10(vi)“Effective”value of preference The valu

73、e of tariff expenditures that importers avoided from paying due to preferential tariffs.In figure 2 this corresponds to the shaded rectangle A*B*E*F*.(vii)“Potential”value of preference The higher level of tariff expenditure that importers could avoid from paying if all the preference-covered produc

74、ts are imported under the preferential tariff rates.The distinction is made between the“effective”and“potential”value of preferences because not all the products are imported using the preferential tariff rates.The rectangle A*C*E*G*corresponds to this indicator.9 Import statistics record value of i

75、mports inclusive of transportation costs,insurance,and freight(CIF)while customs duties are excluded.Therefore,PW is taken as the reference price instead of preferential PPRE or MFN PMFN prices in measuring import values in this study.10 For a discussion,see Brenton and Ikezuki,2004 and 2005;Brenton

76、 and Hoppe,2006;Candau and Jean,2005;Hoppe,2007;Hoekman,Martin and Braga,2009.5I.Introduction and the analytical framework5(viii)Further,the“unused”preference value is the difference between(vii)and(vi)and provides the value of preferences that were not utilized,corresponding to rectangle B*C*F*G*.I

77、n other words,the indicator provides a first measure of the scope of possible improvement in preference values by increasing preference utilization.(ix)“Maximum”value of preference The maximum benefit from preferences can be achieved by broadening product coverage to all products currently subject t

78、o positive(non-zero)MFN duties and eliminating all residual tariffs that may be applicable.In other words,this indicator represents the maximum possible preferential value arising from full duty-free treatment,full product coverage and full preference utilization.This is equal to the area of the rec

79、tangle A*D*H*K*.(x)The difference between the maximum value(ix)and potential value(vii)is the value of preference that is not offered by preference-granting countries on account of product exclusion or continued application of positive tariffs.This equals to the sum of rectangles C*D*J*K*(product ex

80、clusion)and E*G*H*J*(positive preferential tariffs).In other words,this“non-covered”preference value suggests the additional tariff savings(or the value of preference)that could be obtained by extending product coverage and eliminating remaining tariffs.Both“unused”and“non-covered”preference values

81、are important indicators for understanding the extent to which trade preferences are effectively used by,or offered to,beneficiary countries and can point to the areas and magnitude of potential improvements.I.3.LimitationsSeveral caveats are worth noting.First,the preference value is a static conce

82、pt and does not capture a dynamic effect.“Effective”,“potential”or“maximum”preference values above assume that the imports remain constant even if applicable tariff rates change.In reality,import quantity and prices will change as a result of new market opportunities from broader product coverage,gr

83、eater preference margin,or more significant preference utilization.Second,the above-defined preference value is not necessarily financial gains to the GSP-beneficiary exporters.In actual practice,preferential tariff is claimed by importing firms or individuals and considered as tariff savings.Nevert

84、heless,importers preference to save on tariff payments makes exports of the GSP beneficiary countries price competitive vis-vis imports of the same product from other countries.In economic welfare terms,who captures the benefits from tariff savings,or rents,depends on the relative bargaining power o

85、f importers and exporters,which would depend,among others,on the products supply and demand elasticities.Third,in the computation of the value of preference of a product,the benchmark used to derive the preference margin is the corresponding MFN rate.In this context,the value of preference should be

86、 considered as the upper limit in the possible range of effective and potential values of preference.This is because most importing countries and particularly the Quad economies provide preferential tariffs to countries under non-GSP preferential schemes such as bilateral or regional FTAs.In such ca

87、ses,GSP beneficiary countries competitive advantage over other countries can be smaller than what is estimated using the MFN tariff as the baseline(Low et al.2005 and 2006).On the other hand,if the granting of GSP preferential tariffs triggers new exports in products that had not been exported by GS

88、P-beneficiary countries in the first place,the economic benefits of the preferential scheme to exporters can far exceed the value of saved tariffs.In this case,the benefits of the preferential tariffs are the whole value of exports,along with other secondary benefits such as employment and domestic

89、production increases.The value of preferences also ignores other types of costs,including non-tariff measures(NTMs).Regulatory measures such as technical standards and requirements,as well as the GSP scheme-specific rules of origin requirements are also affecting the value importers and exporters de

90、rive from using preferential schemes.6The Generalized System of Preferences:How much does it matter for developing countries?6With these caveats in mind,the value of preference provides a useful measure of the economic significance of preferential market access under the GSP schemes.Combined with in

91、formation on preference coverage and utilization,it helps us measure the scope,usability and potential economic benefit of the GSP schemes.The study examines the GSP schemes of the Quad economies over a period between 2004 and 2018.The remainder of the report is organized as follows.Chapter 2 provid

92、es a synopsis of the major findings on preferential trade under the Quad economies GSP schemes.Chapter 3 presents a comparative assessment of Quad schemes over time by different quantitative metrics in terms of the scheme scope,preference coverage and utilization,and the value of preferences.Chapter

93、 4 concludes.7II.The GSP schemes of the Quad:A snapshot7II.The GSP schemes of the Quad:A snapshot II.1.The Quad economies as the key providers of GSP preferencesOut of sixteen countries that implement their GSP schemes,11 the study focuses on the schemes of the so-called Quad economies Canada,the Eu

94、ropean Union,Japan and the United States.Table 1:Summary of Quad GSP schemesCanadaEuropean UnionJapanUnited StatesMemo:AGOAStart date01/07/197401/07/197101/08/197101/01/197618/05/2000Valid until:31/12/202431/12/202331/03/203131/12/20201230/09/2025Beneficiary countries104(July 2021)66(January 2022)13

95、1(April 2022)119(February 2020)36(January 2022)Of which:In the general scheme55118675-In incentive scheme(GSP+)-8-In LDC scheme4947454424(Apparel benefit)Source:UNCTAD compilations.See UNCTAD 2016,2021a,2021b,and 2021c for further information.As of 2021/2022,the Quad GSP schemes provided preferentia

96、l market access to 11 to 86 non-LDC developing countries,and to most countries that are classified as LDCs under the criteria of the United Nations(table 1).13,14 The focus on Quad markets is based on the following reasons:The Quad represents a significant market for exports from developing countrie

97、s.Together,these markets were the destinations for 47per cent of global exports in 2021.They absorbed 37per cent of exports from low and lower-middle-income countries,and even more,46per cent of their manufactured goods exports(figure 3).Among the sixteen economies granting GSP tariff advantages,the

98、 Quad markets represented over 80per cent of exports from low and lower-middle-income countries to these markets.Focusing the analysis on the Quad markets,therefore,allows to capture a substantial proportion of trade under the GSP and identify general trends.11 In addition to the sixteen“developed”c

99、ountries granting GSP schemes,nine“developing”economies provides similar unilateral preferential tariff treatment specifically for LDCs:These are:Chile,China,India,Republic of Korea,Montenegro,Morocco,Taiwan Province of China,Tajikistan and Thailand.The Quad markets accounted for 40per cent of LDC e

100、xports to these 25 markets in 2021.12 The United States GSP expired on 1 January 2021.13 The latest list of beneficiary countries of different GSP schemes are available at official sources.For instance,see the European Commission,Generalised Scheme of Preferences(https:/policy.trade.ec.europa.eu/dev

101、elopment-and-sustainability/generalised-scheme-preferences_en)14 The United Nations Committee for Development Policy review the list of LDCs according to the criteria that cover income,human assets(including health and education),and economic and environmental vulnerability.8The Generalized System o

102、f Preferences:How much does it matter for developing countries?8Figure 3:Distribution of exports from low-income and lower-middle-income country bymarkets(2021,per cent)Source:UNCTADStat.The Quad schemes have strongly influenced the evolution of GSP schemes elsewhere.These economies have been the fr

103、ontrunners in GSP implementation and reforms,and their GSP schemes(especially that of the European Union)have provided a reference point for other schemes and influenced their evolution.The Quad economies provide comprehensive data on trade under GSP since 2004.As GSP schemes are voluntary initiativ

104、es not coordinated multilaterally,there has been a lack of full transparency on trade preferences under GSP.As a result,the real picture of trade under these schemes has not been widely known.Consistent and continuous preferential trade data of the Quad economies in UNCTADs GSP database allow richer

105、 statistical analysis of the Quad schemes.The product coverage of GSP schemes of the Quad differs as each countrys tariff structure varies.As figure 4 suggests,the number of GSP-eligible products is a function of that of products that are subject to MFN tariffs above zeroper cent.For example,in the

106、European Union,only 20per cent of its total tariff lines are zeroper cent on an MFN basis.In the remaining three-fourth of the tariff lines,the majority is eligible for GSP preferential treatment,thus bringing the GSP product coverage to 68per cent.In Japan and the United States,40per cent of total

107、tariff lines is duty-free on an MFN basis.In Japan,most of the remaining“dutiable”products are eligible for GSP-for-LDC preference and about the half in the United States.China 14.3UnitedArabEmirates3.4Canada 1.1Japan 3.8India 3.8Rest of the World 41.1United States 15.0European Union 17.59II.The GSP

108、 schemes of the Quad:A snapshot9Figure 4:Share of tariff lines eligible for lower GSP rates in the general and LDC only schemes(2020)CanadaEuropean UnionSource:UNCTAD calculations based on TRAINS database in WITS.Note:The products covered by the general GSP schemes for non-LDCs are not necessarily s

109、ubject to duty-free treatment in Canada,the European Union and Japan and can consist of positive(non-zero)duties.Preferential tariffs for LDCs are however usually duty free in all Quad markets.Therefore,LDCs are provided with duty-free treatment for those products covered by the general GSP scheme,a

110、s well those additional products covered by GSP-LDC.Preferential rates are always duty free in the case of the United States under all its GSP schemes.In addition to general GSP schemes for LDCs and non-LDC developing countries,the European Union provides a scheme called“GSP+”that grants more genero

111、us preferences to countries that comply with certain human rights,labour,and environmental standards that the European Union promotes.The United States maintains geographically focused preference schemes such as the African Growth and Opportunity Act(AGOA).15 15 AGOA has a regional focus on sub-Saha

112、ran Africa and grants duty-free access to an additional number of product lines along with the products eligible for duty-free access under the United States GSP scheme.MFNduty-free40%GeneralGSPcoverage32%AdditionalLDCcoverage26%AdditionalLDCcoverage10%GSP non-covered 2%GSP non-covered28%GeneralGSPc

113、overage17%GeneralGSPcoverage68%AdditionalLDCcoverage12%AdditionalLDCcoverage11%GSP non-covered 2%GSP non-covered 1%MFNduty-free20%GeneralGSPcoverage22%MFNduty-free40%MFNduty-free69%JapanUnited States10The Generalized System of Preferences:How much does it matter for developing countries?10II.2.Impor

114、ts under the GSP preferencesAfter peaking in 2008 and 2011 respectively,imports under the GSP schemes of the two largest Quad markets,namely the European Union and the United States,declined significantly(Figure 5).In the case of the European Union,the decline is partly due to the exclusion of upper

115、-middle income countries from the eligibility list.Recently,preferential imports are trending upwards in both markets mainly due to the recovery in the EBA and AGOA schemes.In 2018,developing countries exported about US$82billion in preferential rates to the European Union under its GSP scheme.The U

116、nited States GSP scheme(including AGOA)provided preferential duty-free treatment for about US$40billion worth of imports from beneficiary countries.16 In comparison,the preferential imports into Canada and Japan in value remained relatively low and constant.17Figure 5:Preferential imports under GSP

117、schemes in Quad markets(20042018,US$billion)Source:UNCTAD GSP database.II.3.The preference valueThe European Union provides three different GSP schemes;The GSP-LDC scheme called the Everything but Arms(EBA)initiative,the general GSP scheme,and the GSP+(GSP-plus)scheme.Among the three European Union

118、schemes,the EBA initiative stands out with the preference value(or the tariff savings)of US$3.7billion generated in 2018(figure 6).The three European Union GSP schemes 16 The much of the decline in preferential imports in the United States is attributable to the fall in the value of fossil fuel impo

119、rts under these preferential schemes.Available at https:/usatrade.census.gov/17 The European Union schemes register the highest share of preferential imports in total imports from beneficiary countries with 37per cent.Canadas scheme is the second largest with 22per cent,followed by the schemes of th

120、e United States and Japan with 12per cent and 3per cent respectively.020406080100120140200420052006200720082009201020112012201320142015201620172018CanadaEuropean UnionJapanUnited States11II.The GSP schemes of the Quad:A snapshot11account for US$6.2billion in effective preference value,with the GSP s

121、cheme generating US$1.4billion and the GSP+scheme creating US$1.1billion,respectively.The general GSP scheme of the United States also provides a similar preference value of around US$1billion.Figure 6:“Effective”value of preference by the GSP schemes(2018,US$million)Source:UNCTAD GSP database.The p

122、rominent size of the European Unions GSP schemes is due to its generous product coverage and preference margins.At the same time,the European Union presents the largest market for exports of many developing countries,particularly for LDCs.II.4.The margin of tariff preference Figure 7 plots the avera

123、ge preference margins across GSP schemes of the Quad in terms of the simple average(the x-axis)and the trade-weighted average(y-axis).The indicators measure the same statistics in slightly a different way.The simple average is the average of the preference margin across the board.It covers the produ

124、cts that receive preferential treatment but not necessarily imported.The trade-weighted average,on the other hand,indicates the average preference margins of the products that were imported.18 18 Caution should be exercised in comparing the simple and trade-weighted averages.GSP preferences can tilt

125、 the composition of imports in favour of products having high preference margins.Therefore,having a higher trade-weighted average preference margin over the simple average may not mean that GSP preferences were given mostly to products that matter most for the exports of developing countries.The exp

126、orts under GSP may be done mostly on goods with better preferential tariffs,not the ones that developing countries have the most competitive advantages and export potential.0 500 1 000 1 500 2 000 2 500 3 000 3 500 4 000European Union LDCEuropean Union GeneralEuropean Union GSP+United States General

127、 Japan LDC Canada LDCUnited States AGOA Japan GeneralUnited States LDC Canada General12The Generalized System of Preferences:How much does it matter for developing countries?12Along the y-axis,the highest trade-weighted average preference margin is 10.3per cent under Japans GSP-LDC scheme,followed b

128、y 6.9 and 5.3per cent of the GSP-LDC schemes of Canada and the European Union,respectively.By contrast,the trade-weighted average preferential margins for non-LDC developing countries are around 1per cent,which may be considered negligible as a preference margin when import values are low.19 Figure

129、7:Preference margin by scheme,simple and weighted average(2018,per cent)Source:UNCTAD GSP database.In Figure 7,the GDP-LDC schemes of Canada,Japan and the European Union are above the 45-degree line bisecting the graph,indicating that the products that beneficiary countries export to these markets t

130、end to receive larger preference margins than products that the beneficiaries rarely export.Indeed,products of export interest to LDCs tend to fall on products with relatively high MFN rates.II.5.The preference coverage and utilizationThe preference coverage and utilization rates of a GSP scheme are

131、 positively correlated(Figure 8).The preference coverage of the GSP-LDC schemes of Canada,the European Union,and Japan is nearly 100per cent,that is,GSP preferences are granted to almost all imports of products whose MFN tariffs are above zero.The European Unions GSP+scheme also reveals more than 95

132、per cent of the preference coverage.In regard to the GSP schemes of the United States,the AGOA registers the product coverage that is close to 100per cent.19 As shown in the following section,averages may hide variations in preference margins across product lines.Some product lines may still possess

133、 significant preference margins.02468101214160246810121416Weighted averageSimple averageCanada LDCJapan LDCEU LDCEU GSP+US AGOA13II.The GSP schemes of the Quad:A snapshot13The above-mentioned five GSP schemes with more than 95per cent of the preference coverage are also associated with the highest u

134、tilization rates,ranging between 75 and 95per cent.The preference coverage of other GSP schemes,except for the European Unions general GSP scheme,is less than 50per cent.A lower coverage may lead to mismatches between the GSP-eligible products and actual exports of the beneficiary countries.And this

135、 may be one of the reasons why the utilization rates of these schemes are relatively low.For example,the United States general scheme excludes textiles,apparel,and footwear,which are important products for developing countries exports(Congressional Research Service,2022).The GSP schemes with low cov

136、erage and utilization rates are the ones with low preference margins as shown in Figure 7.Relatively low utilization rates of specific GSP schemes may also be due to co-existing FTAs.Certain GSP-eligible developing countries may have FTAs with the Quad economies.FTAs generally offer larger product c

137、overage and greater preference margins than GSP schemes,as is the case for the members of the Association of Southeast Asian Nations(ASEAN)with Japan.Regarding the United States,a relatively low utilization rate of the GSP-LDC scheme is partly attributable to the fact that certain sub-Saharan Africa

138、n LDCs that are eligible for both schemes tend to prefer AGOA,which offers better product coverage and user-friendly rules of origin.20,21Figure 8:Product coverage and utilization rates of the GSP schemes(2018,per cent)Source:UNCTAD GSP database.Note:Dotted line shows linear fitted line.20 See WTO(2

139、019)for further information.21 Congressional Research Service(2022)suggests that GSP general and LDC scheme beneficiaries may receive more favourable treatment under AGOA and Caribbean Basin Initiative in some products.USA General 01020304050607080901000102030405060708090100Utilization rateCoverage

140、rateCanada GeneralJapan GeneralUSA LDCJapan LDCEU LDCEU GSP+USA AGOACanada LDCEU General14The Generalized System of Preferences:How much does it matter for developing countries?14II.6.The preference margin,utilization,and values It is intuitive that the larger the preference margin of a product,the

141、greater the incentive to importers of the product to apply for the GSP preference.In Figure 9,all the GSP-eligible imports of the Quad are classified into eight equal-sized groups according to the level of the preference margin in 2018,from the lowest(group 1)to the highest(group 8).22 Then the aver

142、age preference utilization rate for each group was computed.The resulting Figure 9 demonstrates that the average utilization rate goes up with the average preference margin in the GSP-LDC schemes of Canada,the European Union,and the United States.23 For example,the average utilization rate goes up f

143、rom about 30per cent for the lowest preference rates to about 65per cent for the highest preference rates.Figure 9:Average preference utilization by the level of preference margin(2018,per cent)Source:UNCTAD calculations based on the GSP database.Note:See appendix 2 for preference margin groups.Figu

144、re 10 presents the distribution of preference values that are(i)effectively used;(ii)unused;and(iii)not covered,as a share of the maximum preference value under different GSP schemes of the Quad(i.e.,preference values arising from duty-free treatment for all products with full preference utilization

145、).Under the GSP-LDC schemes of the European Union,Japan and Canada in 2018,over 90per cent of the maximum preference values arising for LDC imports to these markets were effectively used,as these imports benefited from GSP-LDC preferences.22 As the distribution of preference margins differs across c

146、ountries,each county may have different range of preference margins in each group.Yet,the ordering of the groups is the same across the countries.See Appendix 2 for preference margin groups.23 Figure 9 shows averages for a particular year for comparison to preclude any possible changes that may dist

147、ort the results due to time effects.To minimize possible beneficiary country heterogeneity effects,the figure only covers a particular type of scheme.The LDC schemes are similar in terms of country coverage and the way,roughly,the preferences are treated.0102030405060708090Group 1(lowest)Group 2Grou

148、p 3Group 4Group 5Group 6Group 7Group 8(highest)Preference utilization ratePreference marginCanadaEuropean UnionJapanUnited StatesAverage15II.The GSP schemes of the Quad:A snapshot15The orange segment represents the segment of preference values arising from those imports that were levied non-GSP tari

149、ffs rates even though GSP preferences were available.That is,these were the products whose GSP preferences were“unused”and the preference values(or tariff savings)were not captured at the customs border.Increasing the preference utilization rate is a practical way to improve the GSP schemes potentia

150、l benefits.For instance,by raising the utilization rate to 100per cent,the European Unions GSP-LDC scheme could increase its preference value from US$3.7billion to US$4billion,and from US$350million to US$409million in the case of the AGOA of the United States.Another way to increase the potential b

151、enefits of certain GSP schemes is to expand the product coverage.This is applicable to the GSP schemes for non-LDCs developing countries of Canada,Japan,and the United States.By increasing the utilization to 100per cent,the preference value from the general GSP scheme(the GSP-LDC scheme)of the Unite

152、d States can increase from US$974million to US$1.5billion(from US$92million to US$110million).If product coverage of these schemes were also expanded to cover all imported goods from beneficiary countries,the preference value under the general GSP scheme(the GSP-LDC scheme)would further rise to US$8

153、.4billion(US$1billion).Figure 10:Distribution of preference values “used”,“unused”and“non-covered”by GSPschemes(2018,per cent)Source:UNCTAD GSP database.II.7.The value of preference and the rules of origin Even if preference margins are sufficiently large to provide tariff incentives,specific eligib

154、ility requirements may hinder a full utilization of the GSP schemes and induce significant untapped(“unused”)value of preferences.Some Quad economies have taken steps to ease these conditions to facilitate imports from the LDCs.0102030405060708090100UsedCovered,not usedNot coveredEuropean Union LDCJ

155、apan LDCCanada LDCUnited States AGOAEuropean Union GSP+European Union GeneralUnited States GeneralUnited States LDCCanada GeneralJapan General16The Generalized System of Preferences:How much does it matter for developing countries?16For instance,the European Unions GSP-LDC scheme showed a remarkable

156、 progress in steadily improving utilization rates for LDCs(Figure 11).Between 2004 and 2018,the utilization rate of the European Unions GSP-LDC scheme rose from just over 40per cent to above 90per cent.Combined with a full product coverage for duty-free treatment,over 90per cent of the maximum prefe

157、rence value was effectively used under the European Unions GSP-LDC scheme in 2018.Behind this trend lies the reform of the European Unions GSP-LDC scheme rules of origin.In 2010,the European Union moved from a“double transformation”to a“single transformation”requirement for HS chapters 61 and 62 on

158、apparel articles,the leading product groups traded under the European Unions GSP preferences.The reform allowed the use of imported fabrics by the exporting LDCs to produce final products,rather than the use of imported yarns.24 Since most LDCs do not have the weaving capacity to meet the double tra

159、nsformation requirement,the reform facilitated the better use and,thus,the higher value of preferences under the scheme.Figure 11:Utilization rate versus the value of preferences(European Unions GSP-LDC scheme,20042018,per cent)Source:UNCTAD GSP database.II.8.Major exporters and products that receiv

160、e GSP preferencesThe distribution of the value of preferences of the Quad GSP schemes is highly concentrated in a small group of exporters and products.Five major exporters Bangladesh,Cambodia,India,Pakistan,and Viet Nam represent nearly 70per cent of total preference values in the Quad markets as a

161、 group.In the case of the relatively small markets of Canada and Japan,the corresponding figure reaches 97per cent and 92per cent,respectively(Table2).As far as the LDC schemes are concerned,only three largest exporters Bangladesh,Cambodia and Myanmar account for over 90per cent of the total prefere

162、nce values in the Quad markets.24 European Union,Commission Regulation(EU)No 1063/2010 of 18 November 2010.0102030405060708090100200420052006200720082009201020112012201320142015201620172018UsedUnusedNon-coveredUtilization17II.The GSP schemes of the Quad:A snapshot17Table 2:Major exporters under Quad

163、 GSP schemes by preference value(2018,US$million)Source:UNCTAD GSP database.Similarly,the largest five exported product groups,classified at the HS chapter(2-digit)level,represent between 65 and 95per cent of total effective preference values under the GSP schemes.The product composition is more div

164、ersified for the United States schemes,with the top five exports accounting for 45per cent(Table 3).Table 3:Major exported products under Quad GSP schemes by preference value(2018,US$million)Source:UNCTAD GSP database.CountryDevelopmentQuadCanadaEuropean UnionJapanUnited StatesStatusValueRankValueRa

165、nkValueRankValueRankValueRankBangladeshLDC26961200123531143.53.CambodiaLDC1195217327392208.317410IndiaDeveloping8973.61740.3302801PakistanDeveloping75342773330.5241815Viet NamDeveloping486513347251.117.MyanmarLDC44961142867137.541516IndonesiaDeveloping4177.30560.4261123PhilippinesDeveloping297835192

166、80.1401025KenyaDeveloping191903696110.621956Cote dIvoireDeveloping1831003418290.03450.342ConcentrationTop 5 countries share66%97%75%92%54%HS2ProductQuadCanadaEuropean UnionJapanUnited StatesCodeValueRankValueRankValueRankValueRankValueRank61Apparel and clothing accessories,knitted/crocheted252611981

167、206311053161262Apparel and clothing accessories,not knitted/crocheted196821332154521592131364Footwear,gaiters and the like74632835223191144263Apparel and clothing accessories,not knitted/crocheted3424234308422393042Articles of leather,etc323556120715718313Fish and crustaceans,molluscs etc29660282825

168、14906939Plastics and articles thereof242728112831697416Preparation of meat and fish or of crustaceans2148023202622193229Organic chemicals1469093222654471587Vehicles other than railway or tramway rolling-stock1341011176140.091577ConcentrationTop 5 product share65%95%73%76%45%18The Generalized System

169、of Preferences:How much does it matter for developing countries?18II.9.“Policy space”for trade preferences Preference erosion and dilution Successive trade liberalization at the global and regional levels has reduced the relative value of GSP preferences granted to LDCs and non-LDCs.During the last

170、two decades,the share of MFN duty-free products in total tariff lines rose to 25per cent worldwide(figure 12).The rise is more pronounced among the Quad economies.As the share of duty-free product lines of the Quad reached 42per cent by 2020,this technically excluded almost half of the Quads importe

171、d product lines from GSP preferential treatment.Falls in the MFN rates are reducing the GSP preference margins.The decline in the value of GSP preferences is more significant when the applied tariff rates are considered.While the MFN rates set the maximum tariff rate a WTO member state can levy on a

172、nother member state,countries can apply tariff rates lower than their MFN rates.Between two decades of 20002009 and 20102020,the world average applied tariff rates fell by 1.7 percentage points.Todays average applied rates are 5.7 for the world and 3.1per cent for the Quad,further reducing the value

173、 of GSP preferences.Figure 12:Share of MFN duty-free products and the average applied rates(20002020)Share of MFN duty-free products(per cent)Simple average applied rates(per cent)*Source:TRAINS database in WITS.*The United States figure excludes the year 2019 as the imposition of higher tariffs in

174、that year distorts the overall trend.II.10.SummaryThe GSP schemes of the Quad for the LDCs and non-LDCs(the general schemes)are trending in two opposite directions.On the one hand,the most GSP-LDCs schemes have extended product coverage and preference margins and are effectively used by LDC benefici

175、aries.In the European Union,Canada and Japan,preference coverage and utilization rates of these schemes are about 90100per cent,and their monetary preference value now exceeds that of their respective general GSP schemes.The European Unions EBA is the most extensive GSP scheme in terms of the absolu

176、te preference value.On the other hand,the general GSP schemes of the Quad became less impactful in facilitating developing country exports as the country coverage decreased and the level of tariff advantages diminished.The preference margins are in the ranges of 12per cent ad valorem,and their prefe

177、rence coverage and utilization rates are either moderate or low.This has resulted in a low level of effective preference values under these schemes.The benefits of the GSP schemes,as measured by the preference value,are highly concentrated in a few countries and products.The largest five exporters a

178、nd key export products(e.g.,apparel,footwear,leather,fish)account for nearly 66 and 65per cent of preference values in Quad markets,7.43.75.73.1012345678WorldQuad average20002009201020201015202530354045200020012002200320042005200620072008200920102011201220132014201520162017201820192020WorldQuad aver

179、age19II.The GSP schemes of the Quad:A snapshot19respectively.As far as the GSP-LDC schemes are concerned,the three largest LDC exporters account for over 90per cent of the total preference values in the Quad markets.The Quad import data of the GSP-LDC schemes suggests that GSP preferences with highe

180、r preferential margins tend to be utilized(i.e.,claimed by importers at the customs)more.Where preference margins are sufficiently large,rules of origin are an important determinant of preference utilization.The European Union example shows that the reform of rules of origin via relaxing processing

181、requirements for apparel products significantly improved the utilization of GSP preferences for LDCs exports.The less stringent rules of origin are also instrumental for the generally high utilization rates under the LDCs schemes of Canada and Japan,as well as under the AGOA scheme of the United Sta

182、tes.“Policy space”for tariff preferences has narrowed over time to a varying degree in Quad markets as the number of MFN duty-free tariff lines increased,and the average MFN rate decreased.This indicates a gradual dilution of the average preference margin,limiting the ability of Quad economies to ex

183、pand trade preferences.The proliferation of FTAs involving Quad and developing countries has led to preference erosion and dilution and reduced preference utilization,particularly for non-LDCs.The GSP preferences would be irrelevant to a GSP beneficiary when the country has alternative preferences a

184、vailable under parallel FTAs which offer a more advantageous market access condition.At the same time,the relative value of GSP preferences may have come down as other exporting developing countries competing with GSP beneficiaries are involved in FTAs with the Quad economies.20The Generalized Syste

185、m of Preferences:How much does it matter for developing countries?20III.Key indicatorsIII.1.Effective country coverageThe effective country coverage shows a large variation for the general schemes and a strong similarity for the LDC schemes(figure 13a).While Japan and the United States register a la

186、rge number of beneficiary countries actively using the general GSP preferences,the European Union,and Canada to a lesser extent,maintain a small number of active users for their general schemes.With only 14 beneficiaries,the European Unions general scheme is smallest.The number of LDC beneficiaries

187、are quite similar across Quad economies in the range of 4448 as the eligibility for LDC preferences is commonly based on the United Nations LDC definition.Figure 13a:Effective country coverage of GSP schemes(2018,number of countries)Source:UNCTAD GSP database.Definition“Effective country coverage”is

188、 the number of countries that receive preferential treatment on at least one product line for a given importing country and scheme.The indicator traces the size of GSP scheme in terms of the number of“active users”,i.e.,beneficiary countries effectively using GSP preferences.524814948104468244400204

189、06080100120GeneralLDCGeneralGSP+LDCGeneralLDCGeneralLDCAGOACanadaEuropean UnionJapanUnited States21III.Key indicators21Figure 13b:Effective country coverage by economy(number of countries)Figure 13b1:Canada Over the 20042018 period,the effective country coverage of the general scheme more than halve

190、d in 2015(figure 13b1).In that year,Canada decided to drop high-income and“trade-competitive”countries,essentially upper-middle-income countries,from the list of eligible countries.This,among others,resulted in the decline in the number of users of the scheme from 119 to 53 countries.Figure 13b2:Eur

191、opean UnionIn 2014,the European Union introduced a reform by excluding those countries that are classified by the World Bank as“upper-middle-income countries”for three consecutive years from eligibility(figure 13b2).This criterion,along with other adjustments,significantly reduced the number of user

192、s of the standard scheme from 127 in 2013 to 36 in 2014 and further down to 14 in 2018.Figure 13b3:JapanJapans GSP scheme has the broadest country coverage of all Quad schemes(figure 13b3).The effective country coverage remained roughly constant over time and as of 2018,104countries used the general

193、 and 46countries used the LDC schemes.Figure 13b4:United StatesThe number of effective users under the general GSP scheme of the United States declined slightly(figure 13b4).As of 2018,82 countries have a record of preferential exports under the general GSP scheme,and 44 LDCs,under the LDC scheme.In

194、 addition to those schemes,AGOA provides additional tariff incentives for 36 sub-Saharan African countries.Source:UNCTAD GSP database.02040608010012014016020042006200820102012201420162018General GSP SchemeLDC Scheme02040608010012014020042006200820102012201420162018General GSP SchemeGSP+SchemeLDC Sch

195、eme02040608010012014016020042006200820102012201420162018General GSP SchemeLDC Scheme02040608010012020042006200820102012201420162018General GSP SchemeLDC Scheme02040608010012020042006200820102012201420162018AGOA SchemeGeneral GSP SchemeLDC Scheme02040608010012020042006200820102012201420162018General

196、GSP SchemeLDC Scheme02040608010012014020042006200820102012201420162018General GSP SchemeGSP+SchemeLDC Scheme02040608010012014016020042006200820102012201420162018General GSP SchemeLDC Scheme02040608010012020042006200820102012201420162018General GSP SchemeLDC Scheme020406080100120200420062008201020122

197、01420162018AGOA SchemeGeneral GSP SchemeLDC Scheme22The Generalized System of Preferences:How much does it matter for developing countries?22III.2.Effective product coverage rateThe effective product coverage rate is high for the three European Union schemes in the range of 69and 76per cent(figure 1

198、4a).This implies a significantly large product coverage of European Union GSP schemes as up to three-fourths of total products are available for preferential treatment and such preferences are indeed used by beneficiaries.The rate is commonly higher under the LDC schemes than under the general schem

199、es,with the range of 45per cent for LDCs under GSP of Canada and Japan and 52per cent under AGOA of the United States,as LDCs usually enjoy a broader product coverage.25 Figure 14a:Effective product coverage rate of GSP schemes(2018,per cent)Source:UNCTAD GSP database.Definition“Effective product co

200、verage rate”is the share in the total tariff lines of those products that register at least one instance of imports with preferential treatment for a given importing country(across all exporting countries)and scheme.The indicator measures the size of GSP schemes in terms of the number of“active prod

201、ucts”that are preferentially traded under the scheme.25 The share of MFN duty-free tariff lines in the total can affect the effective product coverage.For example,Canadas effective product coverage rates are rather small compared to the European Union scheme.This is in part due to Canadas greater nu

202、mber of duty-free tariff lines on an MFN basis.2145697675324533355201020304050607080GeneralLDCGeneralGSP+LDCGeneralLDCGeneralLDCAGOACanadaEuropean UnionJapanUnited States23III.Key indicators23Figure 14b:Effective product coverage rate by economy(per cent)Figure 14b1:CanadaCanada witnessed a sizable

203、decline in effective product coverage rate in both schemes(figure 14b1).The falling coverage is partly due to the increase in the share of MFN duty-free product lines in Canadas tariff schedule from about 50per cent in 2004 to 70per cent in 2018.Figure 14b2:European UnionThe European Union records t

204、he highest effective product coverage rate among all Quad economies(figure 14b2).The rate improved over time under all schemes.In the European Union,the share of MFN duty-free tariff lines remained constant at around 20per cent,which had the effect of maintaining the overall level of preference marg

205、ins for beneficiary countries.Figure 14b3:JapanThe effective product coverage rate remained constant for the general GSP scheme and fluctuated under the LDC scheme(figure 14b3).Since the share of MFN duty-free tariff lines remained constant(at 40per cent),the changes are attributable to those in pro

206、duct coverage for the LDC scheme.Japan broadened the product coverage of its LDC scheme in 2007.Figure 14b4:United StatesThe effective product coverage remained stable at relatively low levels under the general and LDC schemes(figure 14b4).AGOA registered a jump in 2017 to over 50per cent.In mid-201

207、5,with the 10-year extension of the AGOA scheme,the number of preferential tariff lines increased from 2994 to 6441.The sudden jump in the AGOA figure is partly due to a change in procedures that allowed AGOA preferential tariff claims on products that are also eligible for other preferential scheme

208、s.Previously this was not possible.Source:UNCTAD GSP database.01020304050607020042006200820102012201420162018General GSP SchemeLDC SchemeGeneral GSP SchemeLDC Scheme010203040506070809010020042006200820102012201420162018GSP+SchemeLDC Scheme0102030405060702004200620082010201220142016201801020304050602

209、0042006200820102012201420162018AGOA SchemeGeneral GSP SchemeLDC SchemeGeneral GSP Scheme010203040506070809010020042006200820102012201420162018GSP+SchemeLDC SchemeGeneral GSP SchemeGeneral GSP SchemeLDC Scheme01020304050607020042006200820102012201420162018010203040506070200420062008201020122014201620

210、18General GSP SchemeLDC SchemeGeneral GSP SchemeLDC Scheme010203040506070809010020042006200820102012201420162018GSP+SchemeLDC Scheme01020304050607020042006200820102012201420162018010203040506020042006200820102012201420162018AGOA SchemeGeneral GSP SchemeLDC Scheme24The Generalized System of Preferenc

211、es:How much does it matter for developing countries?24III.3.Distribution of preference marginsLDCs tend to receive greater preference margins compared to non-LDCs using general GSP schemes(figure 15a).The highest average preference margins are provided through Japans LDC-only scheme with 10.3per cen

212、t,followed by Canadas and the European Unions LDC schemes with 6.9 and 5.3per cent respectively.The LDC preferences usually consist of duty-free treatment on covered products while preferences for non-LDCs often include positive tariff rates.Moreover,the products of export interest to LDCs tend to f

213、all on products that face relatively high MFN rates such as apparel,leather,fish,and agricultural products.General GSP schemes tend to provide low preference margins,in the region of one percentage point ad valorem.The small margin of preference implies that exporters do not have strong incentives f

214、or seeking GSP treatment.Figure 15a:Average preference margin(2004 and 2018,per cent)Source:UNCTAD GSP database.Note:2014 figure for GSP+is used for the 2004 statistics.Definition“Preference margin”refers to the difference between the MFN tariff and the preferential rate,calculated at the exporter-p

215、roduct line level.02468101220042018Canada GeneralCanada LDCEuropean Union GeneralEuropean Union GSP+European Union LDCJapan GeneralJapan LDCUnited States AGOAUnited States GeneralUnited States LDC25III.Key indicators25Figure 15b:Distribution of preference margins by economyCanadaFigure 15b1:General

216、schemeFigure 15b2:LDC schemeThere is a large mass of zero preference margins in both schemes due to the prevalence of zero tariffs on an MFN basis(figure 15b1 and figure 15b2).Preference margins are particularly low for the general scheme,below one percentage point on average.The LDC scheme preserve

217、s a substantial margin for its beneficiaries as a large mass of preference margins are found in the range of 1518per cent.European UnionFigure 15b3:General schemeFigure 15b4:LDC scheme010002000300040005000600070008000900010000Number of productsPreference margin(%)020040060080010001200140016001800200

218、0Number of productsPreference margin(%)0,11,22,33,44,55,66,77,88,99,1010,1111,1212,1313,1414,1515,1616,1717,1818,1919,20200,11,22,33,44,55,66,77,88,99,1010,1111,1212,1313,1414,1515,1616,1717,1818,1919,202001000200030004000500060007000Number of productsPreference margin(%)0500100015002000250030003500

219、400045005000Number of productsPreference margin(%)050010001500200025003000Number of productsPreference margin(%)0500010000150002000025000Number of productsPreference margin(%)0,11,22,33,44,55,66,77,88,99,1010,1111,1212,1313,1414,1515,1616,1717,1818,1919,20200,11,22,33,44,55,66,77,88,99,1010,1111,121

220、2,1313,1414,1515,1616,1717,1818,1919,20200,11,22,33,44,55,66,77,88,99,1010,1111,1212,1313,1414,1515,1616,1717,1818,1919,20200,11,22,33,44,55,66,77,88,99,1010,1111,1212,1313,1414,1515,1616,1717,1818,1919,20200,11,22,33,44,55,66,77,88,99,1010,1111,1212,1313,1414,1515,1616,1717,1818,1919,20200,11,22,33

221、,44,55,66,77,88,99,1010,1111,1212,1313,1414,1515,1616,1717,1818,1919,202026The Generalized System of Preferences:How much does it matter for developing countries?26Figure 15b5:GSP+schemeAll schemes record a high number of products with no or low preferential margin.Most of the preference margins for

222、 the general scheme were between zero and 8per cent.For the LDC scheme and GSP+,there is a high density of preference margins in the range of 1112per cent(figures15b315b5).JapanFigure 15b6:General schemeFigure 15b7:LDC schemeMany products in both schemes register an effective preference margin of ze

223、ro.About 40per cent of the product lines are MFN duty-free in Japan.Preference margins are substantially greater under the LDC scheme than under the general scheme.There is a high density of preference margins in the range of 7 11per cent for LDCs(figure 15b6 and figure 15b7).05001000150020002500300

224、0Number of productsPreference margin(%)0,11,22,33,44,55,66,77,88,99,1010,1111,1212,1313,1414,1515,1616,1717,1818,1919,2020010002000300040005000600070008000900010000Number of productsPreference margin(%)0200400600800100012001400160018002000Number of productsPreference margin(%)01000200030004000500060

225、007000Number of productsPreference margin(%)0500100015002000250030003500400045005000Number of productsPreference margin(%)050010001500200025003000Number of productsPreference margin(%)0500010000150002000025000Number of productsPreference margin(%)0,11,22,33,44,55,66,77,88,99,1010,1111,1212,1313,1414

226、,1515,1616,1717,1818,1919,20200,11,22,33,44,55,66,77,88,99,1010,1111,1212,1313,1414,1515,1616,1717,1818,1919,20200,11,22,33,44,55,66,77,88,99,1010,1111,1212,1313,1414,1515,1616,1717,1818,1919,20200,11,22,33,44,55,66,77,88,99,1010,1111,1212,1313,1414,1515,1616,1717,1818,1919,20200,11,22,33,44,55,66,7

227、7,88,99,1010,1111,1212,1313,1414,1515,1616,1717,1818,1919,20200,11,22,33,44,55,66,77,88,99,1010,1111,1212,1313,1414,1515,1616,1717,1818,1919,2020020040060080010001200Number of productsPreference margin(%)05000100001500020000250003000035000Number of productsPreference margin(%)05001000150020002500300

228、035004000Number of productsPreference margin(%)050010001500200025003000350040004500Number of productsPreference margin(%)0,11,22,33,44,55,66,77,88,99,1010,1111,1212,1313,1414,1515,1616,1717,1818,1919,20200,11,22,33,44,55,66,77,88,99,1010,1111,1212,1313,1414,1515,1616,1717,1818,1919,20200,11,22,33,44

229、,55,66,77,88,99,1010,1111,1212,1313,1414,1515,1616,1717,1818,1919,20200,11,22,33,44,55,66,77,88,99,1010,1111,1212,1313,1414,1515,1616,1717,1818,1919,202027III.Key indicators27United StatesFigure 15b8:General schemeFigure 15b9:LDC schemeFigure 15b10:AGOA schemeThe distribution of preference margins r

230、emained constant under the general and LDC schemes.Reflecting the generally low MFN rates,preference margins fall within the range between zero and 7per cent in these schemes.AGOA exhibits a greater dispersion of preference margins over 10percentage points(figures 15b815b10).Source:UNCTAD GSP databa

231、se.05000100001500020000250003000035000Number of productsPreference margin(%)05001000150020002500300035004000Number of productsPreference margin(%)050010001500200025003000350040004500Number of productsPreference margin(%)0,11,22,33,44,55,66,77,88,99,1010,1111,1212,1313,1414,1515,1616,1717,1818,1919,2

232、0200,11,22,33,44,55,66,77,88,99,1010,1111,1212,1313,1414,1515,1616,1717,1818,1919,202005001000150020002500300035004000Number of productsPreference margin(%)050010001500200025003000350040004500Number of productsPreference margin(%)0,11,22,33,44,55,66,77,88,99,1010,1111,1212,1313,1414,1515,1616,1717,1

233、818,1919,20200,11,22,33,44,55,66,77,88,99,1010,1111,1212,1313,1414,1515,1616,1717,1818,1919,20200,11,22,33,44,55,66,77,88,99,1010,1111,1212,1313,1414,1515,1616,1717,1818,1919,2020020040060080010001200Number of productsPreference margin(%)05000100001500020000250003000035000Number of productsPreferenc

234、e margin(%)05001000150020002500300035004000Number of productsPreference margin(%)050010001500200025003000350040004500Number of productsPreference margin(%)0,11,22,33,44,55,66,77,88,99,1010,1111,1212,1313,1414,1515,1616,1717,1818,1919,20200,11,22,33,44,55,66,77,88,99,1010,1111,1212,1313,1414,1515,161

235、6,1717,1818,1919,20200,11,22,33,44,55,66,77,88,99,1010,1111,1212,1313,1414,1515,1616,1717,1818,1919,20200,11,22,33,44,55,66,77,88,99,1010,1111,1212,1313,1414,1515,1616,1717,1818,1919,202028The Generalized System of Preferences:How much does it matter for developing countries?28III.4.Preference margi

236、ns by product sectorThe differences in average preference margins across product groups partly show the existing MFN tariff structures of the Quad economies(table 4).Food,textile,and apparel products have the highest preference margins across the board as they are often highly protected by importing

237、 countries through relatively high MFN rates.In contrast,ores and minerals often face lower import protection in these markets.Table 4:Median preference margin by scheme(2018,per cent)Source:UNCTAD GSP database.Note:Colour scale:White:low preference margin,Dark Green:high preference margin.Definitio

238、n“Preference margin”refers to the difference between the MFN tariff and the preferential rate,calculated at the exporter-product line level.CanadaCanadaEuropeanUnionJapanUnitedStatesEuropeanUnionUnitedStatesEuropean UnionJapanUnitedStatesGeneralGeneralGeneralGeneralGSP+AGOALDCLDCLDCLDCAgriculture0.1

239、1.20.71.33.31.00.93.43.41.5Ores,minerals and utilities0.00.00.02.30.00.00.00.00.02.0Food products and textile0.92.30.90.910.44.38.311.27.02.5Chemicals,plastic producsts etc1.62.11.10.42.62.42.32.00.01.4Machinery and equipment and metal products0.41.60.00.62.21.50.71.80.00.6CanadaEuropean UnionJapanU

240、nited StatesEuropean UnionUnited StatesCanadaEuropean UnionJapanUnited StatesGeneralGeneralGeneralGeneralGSP+AGOALDCLDCLDCLDC29III.Key indicators29Figure 16:Preference margins by product sector by economy(per cent)CanadaUnder the general scheme,preference margins are highest in sectors such as coal,

241、tobacco,rubber and plastics,and some chemicals(figure 16a1 and figure 16a2).The LDC scheme,by contrast,has the largest preference margins in textile,apparels and leather reaching up to 15per cent.There are typically only minor changes over time.Figure 16a1:GeneralFigure 16a2:LDC05101520OtherTranspor

242、t EquipmentMedical Appliances,Precision And Optical Instruments,Watches And ClocksRadio,Television And Communication Equipment And ApparatusElectrical Machinery And ApparatusOffce,Accounting And Computing MachinerySpecial Purpose MachineryGeneral Purpose MachineryFabricated Metal Products,Except Mac

243、hinery And EquipmentBasic MetalsWastes Or ScrapsFurniture;Other Transportable Goods N.E.C.Glass And Glass Products And Other Non-Metallic Products N.E.C.Rubber And Plastics ProductsOther Chemical Products;Man-Made FibresBasic ChemicalsCoke Oven Products;Refned Petroleum Products;Nuclear FuelPulp,Pap

244、er And Paper Products;Printed Matter And Related ArticlesProducts Of Wood,Cork,Straw And Plaiting MaterialsLeather And Leather Products;FootwearKnitted Or Crocheted Fabrics;Wearing ApparelTextile Articles Other Than ApparelYarn And Thread;Woven And Tufted Textile FabricsTobacco ProductsBeveragesGrai

245、n Mill Products,Starches And Starch Products;Other Food ProductsDairy ProductsMeat,Fish,Fruit,Vegetables,Oils And FatsOther MineralsStone,Sand And ClayMetal OresCrude Petroleum And Natural GasCoal And Lignite;PeatFish And Other Fishing ProductsForestry And Logging ProductsLive Animals And Animal Pro

246、ductsProducts Of Agriculture,Horticulture And Market Gardening2004201805101520OtherTransport EquipmentMedical Appliances,Precision And Optical Instruments,Watches And ClocksRadio,Television And Communication Equipment And ApparatusElectrical Machinery And ApparatusOffce,Accounting And Computing Mach

247、inerySpecial Purpose MachineryGeneral Purpose MachineryFabricated Metal Products,Except Machinery And EquipmentBasic MetalsWastes Or ScrapsFurniture;Other Transportable Goods N.E.C.Glass And Glass Products And Other Non-Metallic Products N.E.C.Rubber And Plastics ProductsOther Chemical Products;Man-

248、Made FibresBasic ChemicalsCoke Oven Products;Refned Petroleum Products;Nuclear FuelPulp,Paper And Paper Products;Printed Matter And Related ArticlesProducts Of Wood,Cork,Straw And Plaiting MaterialsLeather And Leather Products;FootwearKnitted Or Crocheted Fabrics;Wearing ApparelTextile Articles Othe

249、r Than ApparelYarn And Thread;Woven And Tufted Textile FabricsTobacco ProductsBeveragesGrain Mill Products,Starches And Starch Products;Other Food ProductsDairy ProductsMeat,Fish,Fruit,Vegetables,Oils And FatsOther MineralsStone,Sand And ClayMetal OresCrude Petroleum And Natural GasCoal And Lignite;

250、PeatFish And Other Fishing ProductsForestry And Logging ProductsLive Animals And Animal ProductsProducts Of Agriculture,Horticulture And Market Gardening2004201830The Generalized System of Preferences:How much does it matter for developing countries?30European UnionFigure 16a3:GeneralFigure 16a4:LDC

251、0102030OtherTransport EquipmentMedical Appliances,Precision And Optical Instruments,Watches And ClocksRadio,Television And Communication Equipment And ApparatusElectrical Machinery And ApparatusOffce,Accounting And Computing MachinerySpecial Purpose MachineryGeneral Purpose MachineryFabricated Metal

252、 Products,Except Machinery And EquipmentBasic MetalsWastes Or ScrapsFurniture;Other Transportable Goods N.E.C.Glass And Glass Products And Other Non-Metallic Products N.E.C.Rubber And Plastics ProductsOther Chemical Products;Man-Made FibresBasic ChemicalsCoke Oven Products;Refned Petroleum Products;

253、Nuclear FuelPulp,Paper And Paper Products;Printed Matter And Related ArticlesProducts Of Wood,Cork,Straw And Plaiting MaterialsLeather And Leather Products;FootwearKnitted Or Crocheted Fabrics;Wearing ApparelTextile Articles Other Than ApparelYarn And Thread;Woven And Tufted Textile FabricsTobacco P

254、roductsBeveragesGrain Mill Products,Starches And Starch Products;Other Food ProductsDairy ProductsMeat,Fish,Fruit,Vegetables,Oils And FatsElectricity,Town Gas,Steam And Hot WaterOther MineralsStone,Sand And ClayMetal OresUranium And Thorium OresCrude Petroleum And Natural GasCoal And Lignite;PeatFis

255、h And Other Fishing ProductsForestry And Logging ProductsLive Animals And Animal ProductsProducts Of Agriculture,Horticulture And Market Gardening20042018051015202530OtherTransport EquipmentMedical Appliances,Precision And Optical Instruments,Watches And ClocksRadio,Television And Communication Equi

256、pment And ApparatusElectrical Machinery And ApparatusOffce,Accounting And Computing MachinerySpecial Purpose MachineryGeneral Purpose MachineryFabricated Metal Products,Except Machinery And EquipmentBasic MetalsWastes Or ScrapsFurniture;Other Transportable Goods N.E.C.Glass And Glass Products And Ot

257、her Non-Metallic Products N.E.C.Rubber And Plastics ProductsOther Chemical Products;Man-Made FibresBasic ChemicalsCoke Oven Products;Refned Petroleum Products;Nuclear FuelPulp,Paper And Paper Products;Printed Matter And Related ArticlesProducts Of Wood,Cork,Straw And Plaiting MaterialsLeather And Le

258、ather Products;FootwearKnitted Or Crocheted Fabrics;Wearing ApparelTextile Articles Other Than ApparelYarn And Thread;Woven And Tufted Textile FabricsTobacco ProductsBeveragesGrain Mill Products,Starches And Starch Products;Other Food ProductsDairy ProductsMeat,Fish,Fruit,Vegetables,Oils And FatsEle

259、ctricity,Town Gas,Steam And Hot WaterOther MineralsStone,Sand And ClayMetal OresUranium And Thorium OresCrude Petroleum And Natural GasCoal And Lignite;PeatFish And Other Fishing ProductsForestry And Logging ProductsLive Animals And Animal ProductsProducts Of Agriculture,Horticulture And Market Gard

260、ening2004201831III.Key indicators31Under the general scheme,tobacco has the highest margin followed by fish and meat products.Under the LDC scheme,larger margins are found more frequently across categories.Dairy products have the highest margin,followed by tobacco and other agricultural products.The

261、 most significant preferences remain in textile and apparels with preference margins of around 10per cent.GSP+shows a pattern similar to the LDC scheme(figures 16a316a5).Figure 16a5:GSP+051015202530OtherTransport EquipmentMedical Appliances,Precision And Optical Instruments,Watches And ClocksRadio,T

262、elevision And Communication Equipment And ApparatusElectrical Machinery And ApparatusOffce,Accounting And Computing MachinerySpecial Purpose MachineryGeneral Purpose MachineryFabricated Metal Products,Except Machinery And EquipmentBasic MetalsWastes Or ScrapsFurniture;Other Transportable Goods N.E.C

263、.Glass And Glass Products And Other Non-Metallic Products N.E.C.Rubber And Plastics ProductsOther Chemical Products;Man-Made FibresBasic ChemicalsCoke Oven Products;Refned Petroleum Products;Nuclear FuelPulp,Paper And Paper Products;Printed Matter And Related ArticlesProducts Of Wood,Cork,Straw And

264、Plaiting MaterialsLeather And Leather Products;FootwearKnitted Or Crocheted Fabrics;Wearing ApparelTextile Articles Other Than ApparelYarn And Thread;Woven And Tufted Textile FabricsTobacco ProductsBeveragesGrain Mill Products,Starches And Starch Products;Other Food ProductsDairy ProductsMeat,Fish,F

265、ruit,Vegetables,Oils And FatsElectricity,Town Gas,Steam And Hot WaterOther MineralsStone,Sand And ClayMetal OresUranium And Thorium OresCrude Petroleum And Natural GasCoal And Lignite;PeatFish And Other Fishing ProductsForestry And Logging ProductsLive Animals And Animal ProductsProducts Of Agricult

266、ure,Horticulture And Market Gardening201832The Generalized System of Preferences:How much does it matter for developing countries?32Figure 16a6:GeneralFigure 16a7:LDCJapan0204060OtherTransport EquipmentMedical Appliances,Precision And Optical Instruments,Watches And ClocksRadio,Television And Commun

267、ication Equipment And ApparatusElectrical Machinery And ApparatusOffce,Accounting And Computing MachinerySpecial Purpose MachineryGeneral Purpose MachineryFabricated Metal Products,Except Machinery And EquipmentBasic MetalsWastes Or ScrapsFurniture;Other Transportable Goods N.E.C.Glass And Glass Pro

268、ducts And Other Non-Metallic Products N.E.C.Rubber And Plastics ProductsOther Chemical Products;Man-Made FibresBasic ChemicalsCoke Oven Products;Refned Petroleum Products;Nuclear FuelPulp,Paper And Paper Products;Printed Matter And Related ArticlesProducts Of Wood,Cork,Straw And Plaiting MaterialsLe

269、ather And Leather Products;FootwearKnitted Or Crocheted Fabrics;Wearing ApparelTextile Articles Other Than ApparelYarn And Thread;Woven And Tufted Textile FabricsTobacco ProductsBeveragesGrain Mill Products,Starches And Starch Products;Other Food ProductsDairy ProductsMeat,Fish,Fruit,Vegetables,Oils

270、 And FatsOther MineralsStone,Sand And ClayMetal OresUranium And Thorium OresCrude Petroleum And Natural GasCoal And Lignite;PeatFish And Other Fishing ProductsForestry And Logging ProductsLive Animals And Animal ProductsProducts Of Agriculture,Horticulture And Market Gardening200420180204060OtherTra

271、nsport EquipmentMedical Appliances,Precision And Optical Instruments,Watches And ClocksRadio,Television And Communication Equipment And ApparatusElectrical Machinery And ApparatusOffce,Accounting And Computing MachinerySpecial Purpose MachineryGeneral Purpose MachineryFabricated Metal Products,Excep

272、t Machinery And EquipmentBasic MetalsWastes Or ScrapsFurniture;Other Transportable Goods N.E.C.Glass And Glass Products And Other Non-Metallic Products N.E.C.Rubber And Plastics ProductsOther Chemical Products;Man-Made FibresBasic ChemicalsCoke Oven Products;Refned Petroleum Products;Nuclear FuelPul

273、p,Paper And Paper Products;Printed Matter And Related ArticlesProducts Of Wood,Cork,Straw And Plaiting MaterialsLeather And Leather Products;FootwearKnitted Or Crocheted Fabrics;Wearing ApparelTextile Articles Other Than ApparelYarn And Thread;Woven And Tufted Textile FabricsTobacco ProductsBeverage

274、sGrain Mill Products,Starches And Starch Products;Other Food ProductsDairy ProductsMeat,Fish,Fruit,Vegetables,Oils And FatsOther MineralsStone,Sand And ClayMetal OresUranium And Thorium OresCrude Petroleum And Natural GasCoal And Lignite;PeatFish And Other Fishing ProductsForestry And Logging Produc

275、tsLive Animals And Animal ProductsProducts Of Agriculture,Horticulture And Market Gardening127%20042018Only a handful of product categories attract large preference margins under the general scheme,such as beverages.Under the LDC scheme,certain agricultural categories(dairy,animal products and grain

276、s)register a particularly high margin due to high MFN rates.Preference margins for leather and apparel products among manufactured goods are also significant(figure 16a6 and figure 16a7).33III.Key indicators33United StatesFigure 16a8:GeneralFigure 16a9:LDC05101520OtherTransport EquipmentMedical Appl

277、iances,Precision And Optical Instruments,Watches And ClocksRadio,Television And Communication Equipment And ApparatusElectrical Machinery And ApparatusOffce,Accounting And Computing MachinerySpecial Purpose MachineryGeneral Purpose MachineryFabricated Metal Products,Except Machinery And EquipmentBas

278、ic MetalsWastes Or ScrapsFurniture;Other Transportable Goods N.E.C.Glass And Glass Products And Other Non-Metallic Products N.E.C.Rubber And Plastics ProductsOther Chemical Products;Man-Made FibresBasic ChemicalsCoke Oven Products;Refned Petroleum Products;Nuclear FuelPulp,Paper And Paper Products;P

279、rinted Matter And Related ArticlesProducts Of Wood,Cork,Straw And Plaiting MaterialsLeather And Leather Products;FootwearKnitted Or Crocheted Fabrics;Wearing ApparelTextile Articles Other Than ApparelYarn And Thread;Woven And Tufted Textile FabricsTobacco ProductsBeveragesGrain Mill Products,Starche

280、s And Starch Products;Other Food ProductsDairy ProductsMeat,Fish,Fruit,Vegetables,Oils And FatsOther MineralsStone,Sand And ClayMetal OresCrude Petroleum And Natural GasCoal And Lignite;PeatFish And Other Fishing ProductsForestry And Logging ProductsLive Animals And Animal ProductsProducts Of Agricu

281、lture,Horticulture And Market Gardening2004201805101520OtherTransport EquipmentMedical Appliances,Precision And Optical Instruments,Watches And ClocksRadio,Television And Communication Equipment And ApparatusElectrical Machinery And ApparatusOffce,Accounting And Computing MachinerySpecial Purpose Ma

282、chineryGeneral Purpose MachineryFabricated Metal Products,Except Machinery And EquipmentBasic MetalsWastes Or ScrapsFurniture;Other Transportable Goods N.E.C.Glass And Glass Products And Other Non-Metallic Products N.E.C.Rubber And Plastics ProductsOther Chemical Products;Man-Made FibresBasic Chemic

283、alsCoke Oven Products;Refned Petroleum Products;Nuclear FuelPulp,Paper And Paper Products;Printed Matter And Related ArticlesProducts Of Wood,Cork,Straw And Plaiting MaterialsLeather And Leather Products;FootwearKnitted Or Crocheted Fabrics;Wearing ApparelTextile Articles Other Than ApparelYarn And

284、Thread;Woven And Tufted Textile FabricsTobacco ProductsBeveragesGrain Mill Products,Starches And Starch Products;Other Food ProductsDairy ProductsMeat,Fish,Fruit,Vegetables,Oils And FatsOther MineralsStone,Sand And ClayMetal OresCrude Petroleum And Natural GasCoal And Lignite;PeatFish And Other Fish

285、ing ProductsForestry And Logging ProductsLive Animals And Animal ProductsProducts Of Agriculture,Horticulture And Market Gardening2004201834The Generalized System of Preferences:How much does it matter for developing countries?34Figure 16a10:AGOASource:UNCTAD GSP database.For the general scheme,the

286、largest margin is in tobacco products with about 170per cent.Others with relatively high preference margins include some agricultural and food products,rubber and plastics,and glass products,but these margins are in the region of 2per cent.The LDC scheme shows a similar pattern.Larger margins are mo

287、re frequently found under AGOA,particularly for some textile and apparel products.Moreover,preference margins improved almost across the board in AGOA while changes are more muted in the other schemes(figures 16a816a10).05101520OtherTransport EquipmentMedical Appliances,Precision And Optical Instrum

288、ents,Watches And ClocksRadio,Television And Communication Equipment And ApparatusElectrical Machinery And ApparatusOffce,Accounting And Computing MachinerySpecial Purpose MachineryGeneral Purpose MachineryFabricated Metal Products,Except Machinery And EquipmentBasic MetalsWastes Or ScrapsFurniture;O

289、ther Transportable Goods N.E.C.Glass And Glass Products And Other Non-Metallic Products N.E.C.Rubber And Plastics ProductsOther Chemical Products;Man-Made FibresBasic ChemicalsCoke Oven Products;Refned Petroleum Products;Nuclear FuelPulp,Paper And Paper Products;Printed Matter And Related ArticlesPr

290、oducts Of Wood,Cork,Straw And Plaiting MaterialsLeather And Leather Products;FootwearKnitted Or Crocheted Fabrics;Wearing ApparelTextile Articles Other Than ApparelYarn And Thread;Woven And Tufted Textile FabricsTobacco ProductsBeveragesGrain Mill Products,Starches And Starch Products;Other Food Pro

291、ductsDairy ProductsMeat,Fish,Fruit,Vegetables,Oils And FatsOther MineralsStone,Sand And ClayMetal OresCrude Petroleum And Natural GasCoal And Lignite;PeatFish And Other Fishing ProductsForestry And Logging ProductsLive Animals And Animal ProductsProducts Of Agriculture,Horticulture And Market Garden

292、ing2004201835III.Key indicators35III.5.Preference coverage ratePreference coverage generally improved over the past two decades in the Quad markets,both for the general and LDC schemes(figure 17a).LDC schemes generally saw a significant improvement,reaching practically 100per cent in all schemes but

293、 the one of the United States.For the latter,AGOA improved the coverage rate to 100per cent.The coverage rate of other schemes also saw notable progress,especially under the European Unions GSP and GSP+.Improvement was rather muted in other Quad general schemes.Figure 17a:Preference coverage rate(pe

294、r cent)Source:UNCTAD GSP database.Note:As European Unions GSP+scheme started in 2014,20142016 average is used for the initial period average for the scheme.Definition“Preference coverage rate”is the share of imports subject to preferential tariffs(“covered imports”)in the total“dutiable”imports,i.e.

295、,imports subject to non-zero MFN rates,in a preference-granting country.This is a measure of imports that are potentially eligible for preferential tariffs,irrespective of whether such preferential tariffs are actually used.1020304050607080901002004200620162018Canada GeneralCanada LDCEuropean Union

296、GeneralEuropean Union GSP+European Union LDCJapan GeneralJapan LDCUnited States GeneralUnited States LDCUnited States AGOA36The Generalized System of Preferences:How much does it matter for developing countries?36Figure 17b:Preference coverage rate by economy(per cent)Figure 17b1:CanadaThe coverage

297、rate is 100per cent under the LDC scheme since 2012 reflecting comprehensive product coverage(figure 17b1).For the general scheme,the coverage rate saw a significant drop in 2015 to below 50per cent,following the graduation of upper-middle-income countries.Figure 17b2:European UnionThe coverage rema

298、ined 100per cent for the LDC scheme(figure 17b2).The coverage for GSP+also reached 100per cent.The general scheme saw a substantial rise in 2015 following the graduation of upper-middle-income and other beneficiary countries.This appears to have increased product matches for the remaining beneficiar

299、ies.Figure 17b3:JapanThe coverage rate saw a significant jump in 20062007 to reach 100per cent for the LDC scheme as Japan expanded product coverage for duty-free treatment for LDCs(figure 17b3).The coverage rate also increased under the general scheme and stayed in the range of 4050 per cent.Figure

300、 17b4:United StatesThe coverage rates are relatively stable at different levels under all schemes.The rate is practically 100 per cent under AGOA(figure 17b4).This contrasts with the particularly low rate of the LDC scheme at around 50per cent,and that of the general scheme at 2030per cent.Source:UN

301、CTAD GSP database.01020304050607080901002004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018LDC schemeGeneral GSP scheme01020304050607080901002004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018LDC schemeGeneral GSP schemeGSP+scheme010203040506070809010020

302、04 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018LDC schemeGeneral GSP scheme01020304050607080901002004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018LDC schemeAGOA schemeGeneral GSP scheme01020304050607080901002004 2005 2006 2007 2008 2009 2010 2011 201

303、2 2013 2014 2015 2016 2017 2018LDC schemeGeneral GSP schemeGSP+scheme01020304050607080901002004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018LDC schemeGeneral GSP scheme01020304050607080901002004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018LDC schemeG

304、eneral GSP scheme01020304050607080901002004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018LDC schemeGeneral GSP schemeGSP+scheme01020304050607080901002004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018LDC schemeGeneral GSP scheme0102030405060708090100200

305、4 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018LDC schemeAGOA schemeGeneral GSP scheme37III.Key indicators37III.6.Preference utilization rate The preference utilization rate improved significantly for all GSP schemes of the European Union(figure18a).Yet,there is still room fo

306、r improvement in this indicator,particularly for the European Unions general scheme.Japans GSP-LDC scheme and the United Statess AGOA scheme remained roughly constant,while all other remaining schemes registered considerable declines over the analysis period.In general,the LDC schemes with the excep

307、tion of the United States have a more than 80per cent utilization rate during the 201618 period.AGOA and the European Unions GSP+schemes also registered about 80per cent rate.Canadas general scheme shows a preference utilization rate of slightly more than 40per cent while Japans general scheme and t

308、he United States LDC scheme registered utilization rates lower than 40per cent.Figure 18a:Preference utilization rate(per cent)Source:UNCTAD GSP database.Note:As European Unions GSP+scheme started in 2014,20142016 average is used for the initial period average for the scheme.Definition“Preference ut

309、ilization rate”is the share of preferential imports(i.e.,imports entering the markets with preferential treatment)in the total“covered imports”.This indicator measures the extent to which beneficiary countries(or importers)successfully utilized existing preferential tariffs.1002030405060708090100200

310、4200620162018Canada GeneralCanada LDCEuropean Union GeneralEuropean Union GSP+European Union LDCJapan GeneralJapan LDCUnited States GeneralUnited States LDCUnited States AGOA38The Generalized System of Preferences:How much does it matter for developing countries?38Figure 18b:Preference utilization r

311、ate by economy(per cent)Figure 18b1:CanadaThe utilization rate decreased moderately under both schemes(figure 18b1).The decline was more pronounced in the general scheme.The rate remained constantly higher in the LDC scheme even though it fell to 88 per cent during this period,8 percentage points be

312、low its 2004 level.Figure 18b2:European UnionThe European Unions schemes have high utilization rates reaching 93per cent in the LDC scheme,followed by GSP+(82per cent)and the general scheme(75per cent)(figure 18b2).The LDC scheme,as well as the general scheme,saw a remarkable and steady increase in

313、utilization rate during this period.Figure 18b3:JapanThe utilization rate is high and stable under Japans LDC scheme(figure 18b3).The general scheme saw a steady and significant fall in utilization during this period.One contributing factor is the increasing prevalence of parallel FTAs,which allowed

314、 these countries to choose between FTA and GSP.Figure 18b4:United StatesThe utilization rate varied significantly across the United States GSP schemes.The rate is constantly high under AGOA(figure 18b4).The general scheme also maintained relatively high levels.The utilization rate under the LDC sche

315、me saw a significant fall and stayed at low levels despite the recent upward turn.As discussed earlier in figure14b,the fall in the LDC scheme utilization rate is partly due to changes in regulations that allowed claming AGOA tariff rates when products are also covered under other preferential schem

316、es.Source:UNCTAD GSP database.010203040506070809010020042006200820102012201420162018General GSP schemeLDC scheme010203040506070809010020042006200820102012201420162018GSP+schemeGeneral GSP schemeLDC scheme010203040506070809010020042006200820102012201420162018010203040506070809010020042006200820102012

317、201420162018AGOA schemeGeneral GSP schemeLDC schemeGeneral GSP schemeLDC scheme010203040506070809010020042006200820102012201420162018GSP+schemeGeneral GSP schemeLDC scheme010203040506070809010020042006200820102012201420162018General GSP schemeLDC scheme01020304050607080901002004200620082010201220142

318、0162018GSP+schemeGeneral GSP schemeLDC scheme010203040506070809010020042006200820102012201420162018010203040506070809010020042006200820102012201420162018AGOA schemeGeneral GSP schemeLDC scheme010203040506070809010020042006200820102012201420162018General GSP schemeLDC scheme01020304050607080901002004

319、2006200820102012201420162018GSP+schemeGeneral GSP schemeLDC scheme010203040506070809010020042006200820102012201420162018010203040506070809010020042006200820102012201420162018AGOA schemeGeneral GSP schemeLDC schemeGeneral GSP schemeLDC scheme39III.Key indicators39III.7.Value of preferencesIn terms of

320、 absolute size,the European Unions LDC scheme stands out in generating the largest preferential value reaching US$3.7billion in 2018(figure 19a).This is followed by the European Unions general scheme and GSP+with the effective preference values of US$1.4 and US$1.1billion respectively.The United Sta

321、tess general scheme also provides significant preferences reaching about US$1billion in value.As compared to these schemes,the values generated by the Japans and Canadas schemes are smaller.Figure 19a:Tree map of value of preferences(2018,US$million)Source:UNCTAD GSP database.DefinitionThe value of

322、preference amounts to the notional tariff revenue forgone for the importing-countrys government due to preferences,or tariff savings realized by importers of the GSP granting economy due to preferences.Canada-General,20Canada LDC,391European Union General,1405 European Union GSP+,1122European Union

323、LDC,3707Japan General,190Japan LDC,547 United States AGOA,350 United States General,975 UnitedStates LDC,92 40The Generalized System of Preferences:How much does it matter for developing countries?40Figure 19b:Value of preferences by economy(US$million)Figure 19b1:CanadaThe value of preference of th

324、e general scheme plummeted in 2015 owing to the change in country coverage(figure 19b1).The exclusion of upper-middle-income countries coincided with those countries that received the most value of preferences.By contrast,the value of the LDC scheme increased over time.After 2015,it is more valuable

325、 than the general scheme.Figure 19b2:European UnionThe value of preference steadily increased for the LDC scheme,and its value is larger than other schemes since 2014(figure 19b2).The fall in the value of the general scheme is due to the change in country coverage in 2014.The countries that remained

326、 eligible in the general scheme continued to increase their value of preferences.Figure 19b3:JapanThe value of preference of the general scheme steadily declined(figure 19b3).Given the constant country and product coverage,the decline is due to the fall in preference utilization,including for reason

327、s of dual preferences under GSP and FTAs.The value of preferences for LDCs remained higher than the general scheme after 2009.Figure 19b4:United StatesMost of the preference value accrue in the general scheme,as different from other Quad economies(figure 19b4).AGOA captured a larger value than the L

328、DC scheme.Dual preferences available for AGOA-eligible LDC beneficiaries reduced the use of LDC preferences.Source:UNCTAD GSP database.05010015020025030035040045020042006200820102012201420162018General schemeLDC schemeGeneral schemeLDC schemeGeneral schemeLDC schemeGeneral schemeLDC scheme0200400600

329、8001000120014001600180020002004200620082010201220142016201805001000150020002500300035004000450020042006200820102012201420162018GSP+scheme02004006008001000120020042006200820102012201420162018AGOA scheme05010015020025030035040045020042006200820102012201420162018General schemeLDC schemeGeneral schemeLD

330、C scheme05001000150020002500300035004000450020042006200820102012201420162018GSP+scheme02004006008001000120020042006200820102012201420162018AGOA scheme05010015020025030035040045020042006200820102012201420162018General schemeLDC schemeGeneral schemeLDC schemeGeneral schemeLDC scheme0200400600800100012

331、0014001600180020002004200620082010201220142016201802004006008001000120020042006200820102012201420162018AGOA scheme05010015020025030035040045020042006200820102012201420162018General schemeLDC schemeGeneral schemeLDC schemeGeneral schemeLDC schemeGeneral schemeLDC scheme0200400600800100012001400160018

332、0020002004200620082010201220142016201841III.Key indicators41III.8.Distribution of value of preferences Under the LDC schemes of the European Union,Japan and Canada,about 90per cent of the total potential preferential value is effectively“used”as these schemes are marked with fuller preference covera

333、ge and utilization coupled with large preference margins(figure 20a).For these schemes,as well as for the European Unions GSP+and the United States AGOA,“unused”values still exist in the order 1025per cent of the full potential while there remain practically no“non-covered”values.In contrast,the general GSP schemes exhibit 8090per cent of their full potential value being“non-covered”to the benefic