Fisheries Economics

7.7.2. Preference erosion

Preference erosion is defined as the decrease in the margin between a preferential tariff rate and MFN tariff rate due to multilateral trade liberalization.

In order to provide market access for products from LDCs, the Generalized System of Preferences (GSP) schemes were introduced by the western countries. Although the GSP helped to some extent, it was not fully beneficial to the LDCs as the “Stringent rules of origin” prohibited exports from the LDCs. If NAMA is adopted then preferential treatments, however less utility it may have provided, enjoyed by the LDCs will suffer.