Global Economy

Congress carried out an unplanned tariff-hike experiment last year by letting GSP expire. China looks like the beneficiary.

The Generalized System of Preferences, known for short as “GSP,” expired on July 30th, 2013. A year of this unplanned experiment suggests results as follows: (a) smaller developing countries’ share of imports has fallen; (b) China’s share has grown, and (c) overall import trends are unchanged.

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Agreements & Legislation

African real GDP has doubled since 2000.

AGOA’s role in Africa’s boom shouldn’t be exaggerated, but it has made an important contribution. Its successes, though, aren’t really the light-industry and clothing exports its designers expected in 1999 and 2000. America’s fastest-growing imports from Africa by dollar value have been in energy, driven by high global demand rather than tariff policies or economic reforms. The next version should focus on trade facilitation and capacity-building.

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Agreements & Legislation

Testimony to the International Trade Commission: AGOA at 14

We are now approaching a decade likely to pose more challenges for Africa than did the last – commodity prices are down, the U.S. becoming more self-sufficient in energy, and Chinese growth rates fading a bit – and in which Africa will likely need to rely more heavily on domestic demand and exports of value-added good than it has since 2000. The next version of AGOA should thus focus on areas that the first generation missed. This in particular should be trade facilitation.

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