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This paper applies a partial equilibrium model to analyze the fiscal revenue implications of the prospective economic partnership agreement between the Economic Community of West African States (ECOWAS) and the European Union. The authors find that, under standard import price and substitution elasticity assumptions, eliminating tariffs on all imports from the European Union would increase ECOWAS' imports from the European Union by 10.5-11.5 percent for selected ECOWAS countries, namely Cape Verde, Ghana, Nigeria, and Senegal. This increase in imports would be accompanied by a 2.4-5.6 percent decrease in total government revenues, owing mainly to lower fiscal revenues. Tariff revenue losses should represent 1 percent of GDP in Nigeria, 1.7 percent in Ghana, 2 percent in Senegal, and 3.6 percent in Cape Verde. However, the revenue losses may be manageable because of several mitigating factors, in particular the likelihood of product exclusions, the length of the agreement's implementation period, and the scope for reform of exemption regimes. The large country-by-country differences in fiscal revenue loss suggest that domestic tax reforms and fiscal transfers within ECOWAS could be important complements to the agreement's implementation.

Applied Tariff --- Debt Markets --- Economic Theory and Research --- Exports --- Finance and Financial Sector Development --- Free Trade --- Gross Domestic Product --- Import Tariff --- International Economics & Trade --- International Trade and Trade Rules --- Macroeconomics and Economic Growth --- Public Sector Development --- Regional Trade --- Tariff Rates --- Tariff revenue --- Trade Agreement --- Trade Liberalization --- Trade Policy

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With free trade areas (FTAs) under negotiation between Japan and the ASEAN Free Trade Area (AFTA) members and between the Republic of Korea and AFTA members, preferential market access will become more important in Asian regionalism. Protectionist pressures will likely increase through rules of origin, the natural outlet for these pressures. Based on the experience of the European Union and the United States with rules of origin, the authors argue that, should these FTAs follow in the footsteps of the EU and the U.S. and adopt similar rules of origin, trading partners in the region would incur unnecessary costs. Using EU trade under the Generalized System of Preferences with Africa, Caribbean, and Pacific partners, the authors estimate how the use of preferences would likely change if AFTA were to veer away from its current uniform rules of origin requiring a 40 percent local content rate. Depending on the sample used, a 10 percentage point reduction in the local value content requirement is estimated to increase the utilization rate of preferences by between 2.5 and 8.2 percentage points.

Agricultural Products --- Economic Theory and Research --- External Tariff --- Free Trade --- Free Trade Area --- Free Trade Areas --- International Economics & Trade --- International Trade and Trade Rules --- Law and Development --- Macroeconomics and Economic Growth --- Preferential Market Access --- Preferential Trade --- Preferential Trade Agreements --- Protectionist Pressures --- Public Sector Development --- Regional Integration --- Regional Trade --- Regionalism --- Rules of Origin --- Tariff Classification --- Tariff Reductions --- Tariff Revenue --- Trade and Regional Integration --- Trade Deflection --- Trade Law --- Trade Policy --- Volume of Trade --- World Trading System

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An important issue in multilateral trade negotiations is the approach taken to reduce tariffs. Francois, Martin, and Manole believe that there are important advantages in formula approaches and survey a range of options between the sharply top-down Swiss formula and proportional cuts in tariffs. Over the range the authors consider, they find that the economic efficiency impacts for the importer are not greatly influenced by the extent to which higher tariffs face bigger cuts. However, top-down approaches appear to be more effective in reducing tariff escalation, and provide greater market access gains to poor countries. This paper is a product of the Trade Team, Development Research Group.

Agribusiness --- Agriculture --- Debt Markets --- Export Competitiveness --- Finance and Financial Sector Development --- Free Trade --- Import Volumes --- International Economics & Trade --- International Trade --- International Trade and Trade Rules --- Market Access --- Market Access Concessions --- Member Countries --- Multilateral Negotiations --- Multilateral Trade Negotiations --- Public Sector Development --- Regional Trade --- Set Of Tariffs --- Tariff --- Tariff Changes --- Tariff Negotiations --- Tariff Reduction --- Tariff Reductions --- Tariff Revenue --- Tariff Revenues --- Tariffs --- Trade Policy --- Trading Partners --- World Prices