April 10, 2005

Who would be hit by preference erosion?

Many poor and developing countries get exemptions or partial exemptions from standard developed country tariff rates.  These exemptions, or "tariff preferences" are meant to give them a competitive edge,  and to help them grow.

Trade negotiations that reduce standard developed country tariff rates erode the effective size of these preferences, and the competitive advantages they provide ("preference erosion").  This could happen even if the preferences were left untouched.

These preferences may or may not be a good thing, economists and others are divided.  But they certainly create a practical problem for the WTO's current Doha Round of trade negotiations.   The WTO reaches decisions about reducing trade barriers on the basis of consensus among member countries.  Many of these countries receive preferences whose value could be eroded by tariff reductions.  Since they have a stake in high standard tariff rates, will they ever agree to a substantial liberalizing reform?  If not, how will the WTO's members reach a consensus?

So it's worthwhile taking a closer look at these preferences.

Two recent IMF studies suggest that the preference erosion issue is important to a relatively small number of countries, and for a smaller number of products. 

One study looked at the poorest countries, and the other looked at middle income countries.  Both studies look at potential impacts of changes in the tariff preferences provided by the "Quad" countries: the U.S., Europe, Canada, and Japan.  The studies used somewhat different methods, but both focus on the impact of a hypothesized 40% preference erosion in the Quad markets. The 40% is somewhat above the impact from the last major round of trade negotiations.  Both studies use methods that tend to provide upper bound estimates of the impact on the countries that get the preferences.

Poor countries

Arvind Subramanian looked at the impact of tariff preference erosion on the world's poorest countries (less developed countries, or LDCs) in the 2003 IMF report, "Financing of Losses From Preference Erosion." (To get this, use the WTO document search page, and type WT/TF/COH/14 - just like that - in the "document symbol" box)

Estimates of the losses from preference erosion for these countries are pretty small. He finds that 40% reductions in the standard manufacturing and agricultural tariffs of the Quad nations, would lead to a 1.7% reduction in the aggregate value of LDC exports. A low average could still conceal large impacts on individual countries.  In this case:

    "For 26 out of the 46 LDCs, export losses from preference erosion are estimated to be less than two per cent, and for another 15 countries less than five percent. Thus, only five countries may face losses exceeding five percent of exports. These are Malawi (11.5 per cent), Mauritania (8.8 per cent), Haiti (6.4 per cent), Cape Verde (6.3 per cent) and Sao Tome and Principe (5.2 per cent).  In absolute value, the largest likely losers are Bangladesh (US$222 million), Cambodia (US$54 million), Malawi (US$49 million), Mauritania (US$40.4 million) and Tanzania (US$29 million). Thus, only Malawi and Mauritania could face a loss that is large in absolute and relative terms."

In a survey paper this spring (see below), Alexandraki comments that Subramanian found that preference erosion would only be significant for a few products - tobacco, textiles, fisheries and cocoa.

Middle income countries

Katerina Alexandraki and Hans Peter Lankes looked at middle income countries.    The study itself is "The Impact of Preference Erosion on Middle-Income Developing Countries." (IMF Working Paper WP/04/169. September 2004). 

A summary of the results by Alexandraki, with background on the preference erosion issue, and policy implications, just came out in the March 2005 issue of the IMF's magazine,  Finance & Development"Preference Erosion: Cause for Alarm?".

Middle income countries had per capita gross national income between $766 and $9,385 (although the group examined excluded major oil exporters, and European Union accession countries).

Overall, a big reduction in the tariff preference had a small impact on middle income countries:

    "...results for the hypothetical case where trade liberalization in the Quad causes a 40 percent reduction in each beneficiary's aggregate preference margin. The impact of preference erosion is found to be small overall (between 0.5 and 1.2 percent of total exports of the middle-income countries considered, depending on elasticities of export supply)..."

    (and the authors feel that these estimates are biased upward)

Impacts would be concentrated on a few middle income countries. Of the 76 countries examined, 13 could see their total exports of goods drop by more than five per cent (under the same export elasticity assumption used by Subramanian).  Mauritius takes the biggest hit - a loss equal to 19.6 per cent of its goods exports.  Other countries taking hits over five percent: St. Lucia, Belize, St. Kitts and Nevis, Guyana, Fiji, Dominica, Seychelles, Jamaica, St. Vincent and the Grenadines, Albania, Swaziland, and Serbia and Montenegro.

And the problems were heavily concentrated on two commodities - sugar and bananas.  "Vulnerability to preference erosion is determined overwhelmingly by a country's export dependence on three products, namely sugar, bananas, and - to a far lesser extent - textiles..."  and  "Sugar and bananas alone explain three-quarters of the current preference margin of countries that have a total margin greater than 5 percent of the value of their exports."

So what?

Too much weight shouldn't be put on the exact percentages; these results are meant to be suggestive, rather than precise.

Alexandraki and Lankes note,

    "The discussion of preference erosion, for example in the context of theWorld Trade Organization (WTO), has rarely relied on numerical estimates of the size of the problem.  A majority of WTO members benefits from preferential market access in the Quad.  This has allowed the impression to prevail that vulnerability to preference erosion is a significant concern shared by a broad range of countries.

    The results of this study suggest that the problem is in fact heavily concentrated in a sub-set of products and preference beneficiaries.  Reforms in Quad preference regimes for just two products - sugar and bananas - may leave only a fraction of the current preference margins of some of the most vulnerable preference beneficiaries.  Accordingly, assistance to help countries cope with preference erosion can be closely targeted at the countries at risk.  Many of these are small island economies that may have serious difficulties to adjust."

Revised April 28: This post originally reported the estimate of the loss from preference erosion for Bangladesh as $22 million.  This is an error; the actual number is $222 million.  The error has been corrected in the post.  My thanks to Mr. Wasel Bin Shadat, of the Centre for Policy Dialogue Bangladesh, for pointing this out.

April 05, 2005

What Does Jaya Krishna Cuttaree Think?

Jaya Krishna Cuttaree, the Foreign and Trade Minister of Mauritius, is one of the four candidates for Director-General of the World Trade Organization (WTO).

Here is a favorable profile from the Inter Press Service of Johannesburg, March 10, by Stefania Bianchi, "Trade: Poor Countries' Man Makes a Strong Case", and here is his biography from the WTO web site: "Jaya Krishna Cuttaree".

Mauritius is a small island country in the Indian Ocean. A well governed democracy, it's had a remarkably good growth record. For some background, look at this article by Arvind Subramanian from the IMF magazine, Finance & Development: "Mauritius: A Case Study".

Cuttaree's candidacy has been endorsed by the African-Caribbean-Pacific (ACP) grouping of countries. This is a group of smaller developing countries with historical colonial ties to Europe; they benefit from European tariff preferences (tariff breaks).

In this post I've culled selections from a few of Cuttaree's speeches, to get a better idea of some of the things he stands for. The starting point for this post is a speech he gave to the Mauritius Chamber of Commerce and Industry this past March.

In this speech, he points to the importance of trade to developing countries, points to the problems many of these countries may have in taking advantage of trading opportunities that may open up to them, and argues for the importance of various measures to help them out. I've used other speeches to flesh out some of his points, and to shed light on his negotiating philosophy.

Trade is important to developing countries

In the Chamber speech, he explained the importance of trade to developing country growth.

He argues that trade isn't an end in itself, but promotes the underlying objective of better living conditions. From the point of view of the developing world, trade is one of several factors, which also include aid and debt-relief, for achieving sustainable development.

However, trade is the most important of these factors: "Trade can be a catalyst in developing a country's productive capacity and growth and lift millions out of poverty and the shackles of marginalisation."

So trade is extremely important to developing countries. The development of a rules-based trading system through the WTO may be more important to smaller developing countries, than to developed countries, or larger developing countries,

    "�an effective and equitable multilateral trading system is in the general interest of every Member. But it is even more vital for us, weak and vulnerable developing countries which have very little economic clout in the world economy. The major players have the option of negotiating bilateral FTA�s and choose those with whom they want to deepen integration. We do not have such options. Only a rule-based trading system will offer the best protection to the rights of small players� (quoting himself from an earlier speech)

Developing countries may need special help to take advantage of trade opportunities

In the same speech, he pointed out that more liberal trading rules will only help countries that have something to trade. Many developing countries, especially small ones, need help here. They can't "produce competitively"; they face "supply side constraints."

On January 26, after addressing the WTO General Council, he participated in a question and answer session sponsored by a group of NGOs. One of his answers, summarized by session organizers ("Minutes of Civil Society Hearing for WTO Director-General Candidates"), gives a better sense of the "supply constraint" issue. It also indicates that some developing countries have more difficulty with supply contraints than others:

    "However one also has to be extremely careful about proposing liberalization of agriculture trade. Because when people talk of developing countries producing more agriculture products if trade liberalized we make a fundamental mistake because developing countries are not a homogenous group. You take a country like Brazil and Mali, both developing countries, however capacity to produce to take account of increased market access are completely different. Africa lives off agriculture. Mostly peasant farmers, and those proponents of liberalized agricultural trade use Africa as an example of a continent which can benefit from increased market access. He says there is a big flaw in that statement because of the capacity to produce competitively in Africa. No roads, ports, refrigeration, SPS problems. Unless these supply side constraints are actually addressed the liberalization of markets in agricultural products is going to benefit a certain number of countries and certainly not the majority of people who we think are going to benefit from that liberalisation...He can see very easily in the case of poultry some large developing countries killing the poultry industry in many parts of Africa."

While small developing countries may need help with supply constraints, he says in his Chamber speech that, "...it is not WTO's role to address supply side constraints." The WTO does have a "duty to raise awareness of the problem..." and it is "imperative" to encourage meetings between the heads of WTO, the World Bank (WB), and the IMF, to encourage "collaboration" and program coherence. In the NGO session described above, he went on to discuss the role of the WTO, and that of other multilateral organizations, in addressing these supply constraints. From the minutes:

    "This is why he says that if you are looking at the liberalization of agriculture trade you must have a coherence between market access and capacity to produce, to have coherence between the WTO and institutions like the WB and development partners like the EU to ensure that the resources are there to build the capacity of these countries in Africa to be able to take account of this access..."

Special and differential treatment for developing countries

In the Chamber speech, he notes that countries differ, and the WTO should address the distinctive needs of developing countries. These countries need special and differential (S&D) treatment within multilateral WTO trade treaties.

S&D means more than "a system where developing countries were simply given more time to adapt to negotiated trade rules through temporary exceptions and exemptions." "Temporary exceptions and exemptions" could be things like slower implementation of tariff reductions.

Affirmative and longer term action is necessary. Measures are needed, "to establish rules that can foster development and to come up with measures that will enable developing countries to implement these rules and to reap the benefits of further trade liberalisation."

Examples of of these additional measures may be inferred from these Cuttaree remarks, from 2002, ("Rules Issues and Special and Differential Treatment"):

    "There are several instances where the WTO Agreements impose onerous obligations upon developing countries and restrict them from taking initiatives and measures to achieve industrial development (e.g. Subsidies, TRIMs and TRIPS).

    The Agreement on Subsidies curtails the right of developing countries to extend assistance and support for industrialization. It eliminates the acceptability of subsidies as a tool for economic development programmes, which however has been agreed to during the Tokyo Round.

    The Agreement on trade-Related Investment Measures (TRIMs) imposes an obligation on developing countries to eliminate the type of investment promotion policies that developing countries could use to promote domestic industry (i.e. obligation on foreign investors to indigenize part of domestic production)..."

Small developing countries need tariff preferences

Many of the least developed countries depend on exemptions or partial exemptions from normal developed country tariffs (tariff preferences) to give them a competitive boost. Negotiations that reduce normal developed country tariffs, erode the effective size of these preferences, and the competitive advantages they provide ("preference erosion").

An IMF publication titled, "Who Can Explain the Mauritian Miracle: Meade, Romer, Sachs, or Rodrik?" suggests that there is disagreement on the sources of Mauritian growth. However, this Cuttaree speech from the WTO Minister's meeting at Cancun in 2003, leaves no doubt that he attributes a lot of this growth to trade preferences granted to Mauritius: "Statement Circulated by the Honourable Jaya Krishna Cuttaree Minister of Industry and International Trade":

    "The positive economic development of Mauritius during the past three decades has been mainly due to a combination of factors, including a stable and democratic political system, good governance but above all due to the preferential market access that we have been enjoying on the EU and the United States markets both for agricultural and non-agricultural products. This access is absolutely essential to countries like mine which do not have the capacity to compete with larger, more resource-based countries.
    This preferential access has been instrumental in ensuring the economic development of Mauritius...

    From the Mauritian experience, it can be safely assumed that through the extension of preferential access, even the most vulnerable of countries can pursue a successful development and export oriented policy..."

Helpful as preferences are, in March he told the Mauritian Chamber of Commerce,

    "We have consistently explained that preferences cannot permanently be part of a trading system which will ultimately lead to free flow of goods and services across national borders. However, given the disparity among levels of development of WTO members and the importance of preferences to weak and vulnerable economies, preference erosion needs to be carefully sequenced so that it does not signal the end of these economies..."

If one point of the trade negotiations is to lower tariff levels, and if the preferences derive their value from the height of the tariffs, there is a problem. A 2003 Mauritian paper on preferences, submitted to the WTO, (TN/MA/W/21), suggests some ways out:

    "4. When examining the problem of preference erosion, it is essential to keep in view that, from the perspective of the exporting country, preference erosion would be particularly serious where exports are concentrated in a limited number of products on very few export markets. As a matter of fact, this is the most important feature characterising exports under preferences. While preference schemes, in principle, could cover most, if not all the chapters and tariff lines..., in practice, however, exports are limited to very few products and a limited number of tariff lines.

    5. Consequently, addressing preference erosion would effectively mean maintaining tariffs over a certain level for a very narrow range of products, especially since the export basket of the preference beneficiary countries is almost the same...

    6. ... products which are of specific interest to the preference beneficiary countries, in particular textiles and clothing, leather products, footwear and fish and fish products. ..only a limited number of specific tariff lines within these broad product categories are of direct concern to these countries. It is proposed that these tariff lines be identified by the countries concerned and a list compiled by the WTO Secretariat. It is further proposed that such tariff lines be either excluded from tariff reduction or that a maximum tariff reduction of 10% on each tariff line so identified be staggered over 10 annual instalments on developed country markets...

    8. Necessary technical assistance should urgently be provided, particularly in regard to the identification of the tariff lines referred to...

    9. We are further reiterating our proposal for the setting up of a competitiveness fund in the context of global coherence policy making by international financial institutions in order to assist the industrial restructuring and adjustment of countries most affected by the reductions/phasing out of tariffs."

One advantage of this approach is that, "the momentum of tariff liberalisation would not be disturbed since only a very narrow range of products would be excluded from the process..."

Approach to negotiations

I thought these remarks to the ACP country trade ministers, shortly before the July 2004 Geneva meetings suggested an attractive combination of principle, pragmatism, and respect for other parties to the negotiations. They're not connected to the Chamber speech, but I'll pass them along: "Speech at the Opening Ceremony of the 8th Africa-Carribbean-Pacific Trade Ministers� Meeting, 11 July 2004":

    "A negotiation has two dimensions � it involves a process and it has a substance...As regards our negotiating substance, I shall refrain from making any elaborate comment at this stage...

    ...I would like to make a few comments on the process, a consideration that is often neglected although the process may have a significant bearing on the substance. First, at our own level, it is important that we understand that a negotiation is a dynamic process and in a multilateral setting, it will demand constant adjustment and trade-offs. It is therefore important that we transcend our declaratory postures to move into a negotiating mode. It is important that we learn from the lessons of Cancun so as not to be pinned down in the blame game once again. We have the numbers but this is not enough. We must know how we utilise our strength and how we might bargain and persuade and avoid being only negative. We must also learn to seek and broaden our alliances at the WTO so as not to remain isolated.

    It is therefore important that we infuse in our stance the right measure of tactical flexibility that will avoid us becoming prisoners of our strategy thus preventing us from participating meaningfully in the negotiations. Of course we must define the red lines below which we are not prepared to cross. But at the same time we must be aware that our partners have their compulsions as well. It is therefore important that we adopt a problem-solving approach as a negotiation cannot be a one track affair nor can there be a winner-takes-all outcome.

    Another important aspect is how we focalise on our core issues and prioritise our concerns. In this regard we must put to profit our meeting here to-day. We know what our concerns are and as I said earlier, we have spelt them out in several declarations. As we move towards the writing of the Framework Agreement, it is important that we prioritise those issues, prepare fallback positions and trade-offs and most importantly request our trade experts to develop the sort of language that we would like to see on our concerns in the framework text. It is important that in so doing, we do not open the pandora�s box. Whatever be our convictions, the point of departure of these negotiations remains the Doha mandate to which we have all subscribed. It is important for us to be credible and not to seek to unravel a document which is a delicate compromise and to which we were a party. Success for us will depend on the perception that we are not a Group that just has the numbers to block consensus but, on the contrary, that we have in us the capacity for constructive engagement to put forward ideas and solutions.

    As we engage in our deliberations at the level of the ACP, we must be conscious how our meeting dovetails with other processes in which we will be involved. In two days time, we shall move into the larger G-90 Group and from there on we must interface with the larger process on-going in Geneva. In both these instances, we shall have to integrate the concerns of other negotiating groups which may have the same defensive interests as ours but also certain offensive interests which may not be quite ours. We must be able to reconcile those contradictions in a creative manner so that we ensure a balanced outcome with no losers.

    In the final analysis, however, I would also like to make one thing clear. In as much as we would like to be constructive and show the required flexibility, we cannot be flexible or be constructive in a process if it is not transparent. We can only do so if the bigger process at the WTO is an inclusive one and we are allowed to participate."

April 26, 2004

Do trade preferences help developing countries?

A country that imposes tariffs on imports deters supplies from abroad, increases the prices paid by its consumers, and increases profits for its producers.

Sometimes, developed countries will give poor countries a break on tariffs, allowing some exports from these countries to enter at reduced tariff rates.  Producers in the poor country would enjoy the higher prices in the developed country, without paying the higher tariffs required from other foreign suppliers.  This "preferential access" can encourage the location of industry and the creation of jobs in the poor country.

The U.S. African Growth and Opportunity Act (AGOA), is an instance of this sort of tariff break.  Last week the Boston Globe carried a story (by Carter Dougherty) on the impact of AGOA on Lesotho.  The thrust of the story was that AGOA has been good for Lesotho, creating industry and jobs, but that these will be lost if a key provision of AGOA is not extended.

In general, the potential impacts of preferential tariff arrangements are more complex.  Vernon Topp, of the Australian Bureau of Agricultural and Resource Economics (ABARE), outlines the potential downsides in "Are trade preferences helpful in advancing economic development?"  (I appreciate Peter Gallagher letting me know about Topp's paper.)  Topp is really skeptical about the use of these preferences.  Key elements of his critique:

  • The preferences tend to be underutilized.  Perhaps because the costs of learning about them, meeting their conditions (for example, limits on foreign content), and working with them, are often greater than the benefits.

  • Poor country producers get a high price for their exports to the developed country.  The high price for the exports would attract poor country resources into the production of that good. If the country puts a disproportionate number of its industrial eggs in a single basket, it may become more vulnerable to economic shocks.

  • The people who benefit from the preference are likely to be the people who own the fixed resources needed to compete in the industry at the time the preference becomes available.  If the land that can be used is in fixed supply, or the licenses needed to compete are in fixed supply, the owners of these inputs should receive the bulk of the benefits.  New entrants would have to buy access to these fixed resources in order to enter the business.  Their potential future profits would be incorporated into the price they pay for entry to the business.  The benefits from the program go to the people who were in when the program was set up.  People who buy in later pay for the future benefits they will receive.

  • Note that the capitalization of the benefits of the preferences into the land, increase its market price and increase the cost of land to the nation's other industries.  The increased costs could reduce the competitiveness of these industries in other export markets, and reduce national diversification even more.

  • The firms that are receiving the artificially high price for the export good would have relatively weak incentives to keep their costs down.  Firms that might not be able to compete profitably at world prices may be drawn into the business.  The poor countries high cost producers would not be able to compete outside of the protected market of the preference granting importer.

  • Poor workers are unlikely to be beneficiaries of these programs.  Only the poor who own land or capital will benefit.  Other poor will only benefit if the "direct beneficiaries" of the program buy consumption goods and services from the poor with the additional income they earn from the preferences.  The benefits of this "trickle down" effect will be even smaller if the owners of the capital and land live in other countries and spend their income at home.

With respect to this last point, the Globe story suggests that many workers in Lesotho benefit more directly from AGOA's tariff preferences:

    "If the fabric rule is not extended, people like Chen's employee Litabe will feel the worst pinch. Litabe earns about $89 per month sewing labels, while others in the factory make as much as $121. Though measly by American standards, the job gives Litabe an annual income of $1,068, roughly double what the World Bank calculated as Lesotho's per capita income in 2002.

    About 52,000 other people in Lesotho enjoy similar income levels thanks to AGOA..."

Rethabile Masilo commented on a post of mine last week, and suggested the same thing:

    "A lot of people in Lesotho have jobs because of the legislation and the bringing down of trade tariffs. These same people today are able to go home and face their families, because today they can buy basic foodstuffs and so on. These same people are,on the other hand, often maltreated and subjected to bad working conditions by factory owners that are in Lesotho precisely because of Agoa. It's hard to embrace Agoa, yet harder, even, to dismiss it and seek its withdrawal."

The first point above noted that the complexity of the tariff and preference arrangements might pose a barrier to their use.  The Globe story suggests that the cost of using these provisions may be high:

    "...American officials note that the government of Lesotho played an important role in making AGOA work. It built factory space that companies could then lease, and by working closely with the US Customs service to follow detailed American import regulations.

    But the presence in Lesotho of experienced managers like Chen was crucial, because they understood the garment sector, which is governed by a Byzantine array of rules, and which requires timely sourcing of raw materials and punctual delivery to demanding customers..."

Look at the role of foreign direct investment:

    " Many Taiwanese began small-scale manufacturing in Lesotho two decades ago. Chen arrived in 1989.

    When the US law came into force, she was able to seize the opportunity in a matter of months. She merged her company into the operations of Carry Wealth Holding, a Hong Kong-based company that provided capital to expander her operations in Lesotho. Chen soon nearly quadrupled the size of her factory in Lesotho..."

April 17, 2004

AGOA III

The African Growth and Opportunity Act (AGOA) reduced U.S. barriers to imports from most sub-Sahara African countries for the years 2000 to 2008.

Today's Boston Globe has a story by Carter Dougherty on the beneficial impact of AGOA on the clothing industry in Lesotho.

    "...That Litabe has a job at all can be chalked up to an American law, passed in 1999, that withdrew the quotas and tariffs that inhibited trade with the United States. The Africa Growth and Opportunity Act has become so well known that business and government leaders across the continent nod knowingly when someone pronounces the acronym: AGOA ("ah-GO-uh").

    The law is credited with stimulating industry in some of the poorest countries in the world. In a few countries, such as Lesotho's neighbor, Swaziland, the island nation of Mauritius, Uganda, and Botswana, factories have sprung to life over the past few years. Most of these countries have jumped into clothing manufacturing, but a few have sold other products in the United States, such as handmade baskets or environmentally friendly cosmetics..."

The story notes that some of this is threatened by a sunset provision built into the law:

    "...But the plant owners and workers in Africa say the good times could come to a screeching halt soon. A key provision of the American law, which lets African factories use fabric from Asia, expires Sept. 30, and plants like Shining Century are expecting bad news from retail giants such as The Gap and Kmart, which order their products from Lesotho months in advance...

    ...The rule embodied the hope that, during the first four years of AGOA, African countries would develop their own fabric industry to feed the clothing sector. In reality, Chen points out, it has not worked that way.

    Setting up this industry would be an expensive undertaking, requiring advanced machinery and skilled operators.

    Now, with the rule set to expire, Chen and others in Lesotho would have to either seek out nonexistent African-made fabric or use Asian material and lose the duty-free privilege that makes the American law worthwhile. Chen is under no illusions about what will happen.

    "We will lose," she said. "We cannot compete." She expects that African manufacturing will shift to Asia if the rule is not extended..."

Dougherty's story is a nice anecdotal piece about how the program has worked in Lesotho. A casual web search didn't turned up academic work evaluating the success of the program. Anyone have a suggestion?

The legislation Dougherty refers to, the AGOA Acceleration Act, or AGOA III, was introduced on April 1, 2004 as HR 4103. AGOA III includes provisions to extend the AGOA through 2015, and

    "...extends 3rd country fabric provision for three years, from September 2004 until 2007, including a phase down of benefits in year three. Under current law, least-developed AGOA beneficiary countries can use third country fabric in qualifying apparel until 2004. This flexibility was included in AGOA I, because few of these countries have fabric-making capacity. The LDCs have expressed a strong desire to extend the third-country fabric provision, because sufficient fabric-making capacity still does not exist in the region, and because the countries are expecting a significant drop in orders with the elimination of world-wide apparel quotas in 2005."

The link above provides considerably more detail on the background of the legislation and its other provisions.

November 14, 2003

African Growth and Opportunity Act

Marc Lacey in today's New York Times has a nice article on the benefits, to Africa, of the African Growth and Opportuntiy Act (AGOA): "U.S. Trade Law Gives Africa Hope and Hard Jobs". The article uses Uganda as a case study of the benefits flowing to African's from this act which reduced tariffs and quotas on some 1,800 items.