Utilization of GSP schemes as a political and economic determinant of the utilization of North-South FTAs

Postigo, Antonio (2022) Utilization of GSP schemes as a political and economic determinant of the utilization of North-South FTAs. Review of International Political Economy, 29 (5). pp. 1420-1447. ISSN 0969-2290

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Abstract

Many works have examined the variables driving the formation of North-South free trade agreements (FTAs) between developed and developing countries. This study analyzes the determinants shaping their utilization in the contexts of their political economy and of Generalized System of Preferences (GSP) schemes that are unilaterally granted by developed economies to developing countries’ exports. Most of the goods liberalized through GSP are liberalized from early on in North-South FTAs; however, since FTA concessions are legally binding, goods that are excluded or only partially liberalized in GSP will be also excluded or protected in FTAs. As GSP schemes are subject to unilateral restriction/elimination by the developed country, exporters using GSP tariffs will lobby for the non-removable liberalization of their exports through an FTA and subsequently will have a high FTA utilization. These scenarios result in North-South FTAs being used to a great extent to export goods covered by and exported through GSP, thus consolidating pre-FTA trade patterns. These arguments were tested by analyzing disaggregated and rarely accessed data on Thailand’s and Malaysia’s exports through the Japanese GSP and their bilateral FTAs with Japan, as well as interviews with key actors involved in the policymaking of these FTAs. Most sectors in Thailand and Malaysia that benefited from GSP lobbied for FTA liberalization with Japan. Goods previously exported through GSP account for most of FTA utilization and the previous use of GSP preferences has a higher predictive value of subsequent FTA utilization than FTA tariff savings.

Item Type:	Article
Official URL:	https://www.tandfonline.com/journals/rrip20
Additional Information:	© 2021 Informa UK Limited, trading as Taylor & Francis Group.
Divisions:	International Development
Subjects:	H Social Sciences > HF Commerce J Political Science > JZ International relations
Date Deposited:	13 Apr 2022 15:51
Last Modified:	09 Nov 2024 17:45
URI:	http://eprints.lse.ac.uk/id/eprint/114892

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